Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (7) TMI 1133 - AT - Income TaxRevision u/s 263 - “lack of enquiry” v/s “lack of investigation” - as per PCIT discrepancy in the revised and original audit report,no enquiry in case of unsecured loans and no enquiry in case of sundry creditors and debtors - HELD THAT:- In the first issue of discrepancies in the revised and original audit report, assessee has referred to various pages of the paper-book and shown to us that revision was done due to change in the depreciation and some figures in original balance-sheet, mentioned erroneously under wrong heads, which were later on observed and rectified. Once the assessee has revised his return within the permissible period, then said return substitute the original return of income for all purposes and the original return is to be ignored. The assessee has already filed revised audit report, which in itself is self-explanatory as how the loss claimed by the assessee has been reduced due to the reduction in claim of the depreciation. We also find that the revised return the assessee has reduced the loss as compared to the original return and hence there was no occasion of any suspicion of excess claim, which warrant comparison of the figures with the original return. Before the PCIT, the assessee has produced all the details of the original return and revised return along with enclosures, but PCIT has not pointed out any error in the said explanation of the assessee. He has merely directed the Assessing Officer to obtain all the details and take necessary action. This action of the Learned PCIT is not justified in view of the precedents discussed above. Unsecured loans - Assessee filed all the confirmations of unsecured loans before the Learned PCIT and detailed in respect of addition to loan during the year under consideration. Though PCIT has mentioned that no bank statement or Copy of IT return has been filed in respect of the lenders and therefore directed the Assessing Officer to verify and take appropriate action. PCIT has not pointed out as which loans have been accepted erroneously by the Assessing Officer. Similarly, on the issue of sundry creditors, it was submitted by the assessee before the Learned PCIT that once trading results are accepted by the Assessing Officer, no addition can be made for sundry creditors under section 68 of the Act. It has been submitted by assessee that entire audited books of accounts were produced before the Assessing Officer. The Learned PCIT, though mentioned in his order that no address or PAN of sundry creditors were provided to him, however, he himself did not verify as to which creditor was prime facie not genuine. We also note from the submission of the assessee before the Learned PCIT that the information in respect of claim of the depreciation, unsecured loans and sundry creditors in prescribed perform were duly filed by the assessee. The copy of query letter issued by the Assessing Officer on 17.10.2017. In the said query letter, he has inquired about confirmation of unsecured loans and also inquired as why there was increase in interest on unsecured loans. The reply of assessee in respect of the above query raised by the AO - In said reply, the assessee has complied the direction of the AO and even justified reasons for increase in interest on unsecured loan. Moreover, in the year under consideration, loan was added in case of Sh. B.K. Gupta, Sh. K.L. Gupta, Sh. N.K. Gupta and Sh. Tanuj Datta. All these persons are either director or relative of director and assessed under the same Assessing Officer, and thus all information in respect of these parties were already available with the AO and he was not required to call for such information from the Assessing Officer. We find that the Assessing Officer has accepted the trading results of the assessee and ld. PCIT has also not pointed out any error. When the ld. AO has accepted the trading results, it is deemed that he has verified the sundry creditors/debtors. Thus, to alleged that no enquiry was done by the AO as regard to sundry creditor is not correct. Moreover, the addition cannot be made for sundry creditor, without disallowing purchase as held in the case of Ritu Anurag Agarwal (supra). In the case of assessee, trading results are accepted and no purchase are disallowed. In the circumstances, it cannot be said that no inquiry has been done by the AO, which should have been done in the case. PCIT has failed to point out any specific error in the order of the Learned Assessing Officer and in absence of which twin conditions of section 263 of the Act are not satisfied and therefore we quash the finding of the Ld. PCIT and set aside the said order of the PCIT. - Decided in favour of assessee.
|