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2019 (11) TMI 1385 - AT - Income TaxRevision u/s 263 - case of the assessee company was selected for scrutiny for the purposes of verification of large commission expenditure claimed while filing its return of income - HELD THAT:- In the instant case, where there are commission payments which constitute 32.15% of assessee’s turnover which seems quite unusual in the assessee’s line of business and rate of commission within the same project/scheme various from ₹ 100/sq yard to ₹ 400/sq yd and the commission payment have been made to over 70 parties mostly outside the city of Jaipur and more so, when the matter was selected for the precise reason of examination of such huge commission payments, it is ordinarily expected that the AO examine these transactions thoroughly rather than just relying on the information submitted by the assessee company. It is not a question of kind and extent of enquiry and hence, a difference of approach and methodology of examination of a particular transaction as done by the AO and as suggested by the ld Pr CIT. No doubt every AO has his unique style of functioning and no hard and fast rule can be laid down as to how he should conduct the enquiry in discharge of his statutory functions. Where the factual scenario of a case prima facie indicates abnormalities and cry for looking deep into it, then a mere collection of documents cannot be held as conducting an enquiry. In our considered view, it is a clear case of lack of enquiry on part of the Assessing officer and the order thus passed is clearly erroneous and prejudicial to the interest of the Revenue. Where the AO shuts his eyes and the PCIT discovers the glaring discrepancies leading to non-satisfaction of cardinal test of admissibility and allowability of commission expenditure during the course of his examination of records, we donot think there is any infirmity or illegality in ld Pr CIT exercising her revisionary jurisdiction u/s 263 - It is not a case where the Pr. CIT has set-aside the assessment order rather she has examined these transactions and has carried out broad analysis of the documentation so submitted by the assessee company and has come to a conclusion, that the AO has failed to carry out adequate enquiries which he should have conducted especially in light of glaring discrepancies in the documentation so submitted by the assessee company. We accordingly upheld the order passed by the ld Pr CIT u/s 263 of the Act setting aside the assessment order passed by the Assessing officer for the limited purposes of examining the allowability of the commission expenses claimed by the assessee company. - Decided against assessee.
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