Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (4) TMI 901 - AT - Income TaxRevision u/s 263 by CIT - assessee company has not included the financials of Bhilai in the audited financial statements prepared for the AY 2013-14 - As submitted that the Bhilai unit of the assessee company was under control of Sh. Sunil Aggarwal, younger brother of Sh. Anil Aggarwal. Since, Sh. Sunil Aggarwal had obtained restrain order from CLB, the assessee company managed by Sh. Anil Aggrawal was not allowed to interfere with functioning of the Bhilai Unit. Therefore, the assessee company was not having financial details of the said unit - HELD THAT:- Admittedly, the assessee has its unit in Bhillai and the assessee has not included the financials of its Bhilai unit in the audit financial statements prepared by it for the AY 2013-14 due to alleged dispute between the promoters. As pointed out by the CIT, the AO issued notice u/s 133 (6) of the Act for obtaining financial statements of Bhilai unit from the other promoter of the assessee company. However, no details were received by the AO. We further notice that the AO has not mentioned any reason for not making any addition in respect of Bhilai unit. As pointed out by the Ld. counsel, addition of 5% of the turnover made from the AY 2004-05 to 2007-08 and 2010-11 to 2012-13, however in the assessment year under consideration, the AO has not made any addition whereas in the assessment year 2014-15 and 2015-16 the AO had made ad-hoc addition. AO has not given any reason in the assessment order or even not discussed about the financial statements of Bhilai unit which shows that the AO has failed to exercise due diligence to determine the income arising from the operations of assessee’s company at its Bhilai unit. Since, the AO has passed the assessment order without conducting proper enquiry in respect of Bhilai Unit, the same is erroneous as well as prejudicial to the interest of the revenue. As has been laid down by the Hon’ble Supreme Court in the case of Malabar Industries Company Ltd. vs. Commissioner of Income Tax [2000 (2) TMI 10 - SUPREME COURT], if due to an erroneous order of the AO revenue is losing tax lawfully payable by the assessee, the order passed by the AO is prejudicial to the interest of the revenue. Therefore, in our considered view, since the order passed by the AO is erroneous as well as prejudicial to the interest of the revenue, the Ld. Pr. CIT has rightly revised the assessment order passed by the AO. - Decided against assessee.
|