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2023 (3) TMI 673 - HC - Income TaxRevision u/s 263 - Large ‘other expenses’ claimed in profit and loss account, Payments made to related parties under Section 40(A)(2)(b), Current liabilities, Payments made to the contractors and Payment made towards stamp duty - ITAT set aide order passed by the PCIT - HELD THAT:- Tribunal with regard to inquiry not being held by the AO under Section 133(6) of the Act, we are of the opinion, that the Tribunal was right, for two reasons. Firstly, this was the most pragmatic view, given the fact that in the construction industry, labourers do move from one worksite to another, quite frequently.Secondly, and this is in our view a more important aspect, the job work was carried out in 2014-15, and therefore, to commence an inquiry after nearly three years would have not led to any fruitful results. In our view, if the facts obtaining in the case are juxtaposed with the admitted fact, that the total value of contract receipts was Rs.141.89 crores, against which the expenses incurred towards job work was only Rs.10.87 crores, the absence of inquiry vis-a-vis job works would not render the assessment order passed by the AO, in these facts, erroneous. The expense incurred on job work was only 7.6% of the total contract value. It is not disputed, that in the preceding period, the expenditure towards job work as percentage of the contract value worked to 8.61%. PCIT, in our view, has in a sense attempted a reappreciation of the material placed before the AO and concluded that the examination of issue at hand should have been conducted in a particular manner. Having regard to the factors referred to hereinabove i.e., the manner in which the payments were made, production of bills, deduction of withholding tax, the amount which was claimed as expenditure when compared with the contract receipts, in our view, the AO’s approach could not have been found flawed with by the PCIT, while exercising powers u/s 263 of the Act. A close perusal of the same would show, that they arose in a different fact situation. The judgment of the Division Bench of this Court in Commissioner of Income-tax vs. Ashok Logani [2011 (5) TMI 564 - DELHI HIGH COURT] was concerned with a situation, where in a search action conducted against the assessee, Rs.62,30,300/- was found at his residence. At that juncture, the assessee had offered for tax, out of the total amount recorded, Rs.61.30 lakhs as undisclosed income. However, when the return was filed for the period in issue, the same was not offered for tax. AO overlooked this fact, and accepted the return filed by the assessee. It is in these circumstances, that the proceedings u/s 263 of the Act were initiated. According to us, the facts in the said case are, as noted above, clearly distinguishable from those obtaining in the instant case. Likewise, in the case of Commissioner of Income-tax, Central-I, Kolkata vs. Maithan International [2015 (4) TMI 479 - CALCUTTA HIGH COURT] the situation that arose was starkly different. Revenue Appeal dismissed.
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