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2021 (7) TMI 733 - AT - Income TaxRevision u/s 263 - under-reporting of sales turnover in respect of yarn and said under-reporting has been worked out on the basis of closing stock declared by the assessee and quantitative details of goods produced and sold in Form 3CD - HELD THAT:- Principal CIT first arrived at average selling price of yarn on the basis of quantity of yarn declared in Form 3CD and value of closing stock in the profit & loss account. Further, he has compared sales figure declared by the assessee to estimate sales worked out by himself on the basis of sale of quantity of yarn declared in Form 3CD. As the explanation of the assessee before the Principal CIT that quantity of sales of yarn declared in column no.35B(b) of tax audit report includes quantity of yarn transferred to clothing division. If we exclude quantity of yarn transferred to clothing division, then sales quantity of yarn declared in Form 3CD and value of sales declared in books of account does not have any difference. This fact has been explained before the Principal CIT by filing reconciliation of quantitative details of goods produced and sales declared in books of account. The Principal CIT, ignoring all evidences filed by the assessee has simply arrived at difference in sales purely by estimating sales figure without pointing out how sales declared in books of account is incorrect. Therefore, we are of the considered view that the Principal CIT has erred in revision of assessment order by making certain general observations based on suspicion and wrong working of sales and without specifying errors which are prejudicial to the interests of revenue, contrary to the settled principles of law that assessment order cannot be revised merely on suspicious and surmises grounds We are of the considered view that assessment order passed by the Assessing Officer is neither erroneous nor pre-judicial to the interests of revenue which can be subject matter of proceedings u/s.263 of the Income Tax Act, 1961. Hence, we quash revision order passed by the Pr.CIT and restore assessment order passed by the Assessing Officer u/s.143(3). - Decided in favour of assessee.
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