2010 (9) TMI 351 - HC - Income Tax

Revision – Commissioner (A) has passed an order under Section 263 of the Act set aside the assessment order of the Assessing Officer describing the same as erroneous and prejudicial to the interest of the Revenue with direction to the AO to conduct fresh assessment after giving proper opportunity to the assessee – The assessee preferred the appeal before the Income-Tax Appellate Tribunal in which he succeeded - Issues on which the Commissioner exercised his revisionary powers under Section 263 of the Act, pertains to the claim of deduction by the assessee under Section 80HHC of the Act – Assessee contended that all the records pertaining to claim has been lost.

Commissioner has not doubted the statement of finished goods in the closing stock furnished by the assessee. He has only remarked that there should have been a deeper probe by calling for more details. This is neither here nor there. - Regarding insurance claim, Tribunal has observed that insurance clam was lodged for the goods lost in transit. The assessee at that time had merely filed a claim with the insurance company. This claim had not been approved as the insurance company had neither accepted the same nor given any assurance for making payment. Therefore, no income had "accrued" which could be taxed. - In respect of deduction u/s 80HHC, it was totally uncalled for on the part of the Commissioner to say that the AO did not make requisite inquiries because of the simple reason that the AO had, in fact, declined and rejected this claim of the assessee. If the AO himself disallowed the deduction claimed by the assessee on this account under Section 80 HHC of the Act, we fail to understand what further inquiries were needed by the AO. - In respect of income of Rs. 1.61 crores, The Commissioner has only observed that in the immediate previous year no such gain was shown and therefore, it needed examination by the AO. However, the moot question would be examination for what purpose?

In the entire order emphasis laid by the Commissioner is that in respect of four issues mentioned by him, no queries were raised by the AO - Decided in favour of The assessee and against the Revenue