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2021 (10) TMI 651 - AT - Income TaxRevision u/s 263 by CIT - other expenses claimed in the “P&L account” been not examined properly by the ld. AO during assessment proceedings by conducting necessary enquiry. Ld. Pr. CIT observed that the ld. AO has not examined the original evidences nor has issued any summon u/s 131 of the Act - HELD THAT:- Case of the assessee was selected for limited scrutiny in which one of the criteria was large expenses claimed in the P&L account - notice u/s 142(1) of the Act was issued to the assessee by the AO calling various information from the assessee which ld. Pr. CIT has himself referred in the impugned order. The assessee having filed a reply has also been accepted by the Pr. CIT. Further, ld. Pr. CIT has also appreciated that notices u/s 133(6) of the Act were issued in the case of four parties to verify the genuineness of transport expenditure. We notice that expense of transportation have doubled, but there increase is in consonance to the increase in turnover. Whether Ld. AO has examined the large expenses? - In reply to the notice u/s 142(1) of the Act, the ld. AO has mentioned that the details have been filed, some other details were asked to be filed including para-wise details of transportation charges paid, copy of PAN card. This query of the ld. AO was satisfied by the assessee by filing the necessary details. Ld. AO has also issued notices u/s 133(6) of the Act to some of the persons to whom the assessee has paid the transportation charges. All these exercises at the end of the AO are sufficient enough to show that specific information were asked by the ld. AO regarding large expenses. Reply was filed by the assessee. Thereafter, some more information was called for by the ld. AO. Again there was a detailed reply filed by the assessee. AO has conducted enquiry by issuing notice u/s 133(6) of the Act. Ld. AO also made disallowance of expenses appearing in the P&L account. All these exercises indicate that there is proper application of mind by the AO on the issue referred in the impugned notice. It cannot be said to be a case of no enquiry. The documents placed before uswhich remains uncontroverted at the end of the ld. D/R are sufficient enough to show that sufficient enquiry was conducted by the AO for examining the issue of large expenses claimed in the P&L account. Since the issue referred in the impugned notice forming basis of invoking provision of Section 263 of the Act has been thoroughly examined by the AO leave no room for Ld. Pr. CIT to assume jurisdiction u/s 263 of the Act without undertaking any enquiry at its end to show that the order of the ld. AO is erroneous and prejudicial to the interest of the Revenue. - Decided in favour of assessee.
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