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2015 (4) TMI 825 - AT - Income TaxRevision of assessment order - CIT observed huge amount of withdrawn, transfers & receipts from different accounts - CIT must have strong material/evidence before him, which could indicate that non-consideration of those issues has not only made the assessment order erroneous, but, has also caused prejudice to the interests of revenue - Held that:- On a perusal of revision order, we find that CIT in specific terms has not disapproved the rejection of books of account by AO. The CIT has pointed out various issues, which according to him was not examined by AO in course of assessment proceeding. However, when the books of account were found to be not reliable and rejected by AO and he invoked the provisions of section 145(3), it is not understood how and why AO should have gone into the specific issues on the basis of books of account. Further, CIT himself has observed in para 5.6 of the order that though AO has called upon assessee in his letter dated 06/01/11 to furnish various information but assessee did not comply to the same. In our view, that itself is reason enough for the AO to reject books of account and estimate the income. When assessee has failed to furnish informations/evidences to support the entries made in the books of account, there is no other course left open to AO, but, to compute the income of assessee on estimate basis. Once, AO rejected the books of account there is no need to again refer to the very same books of account for deciding the individual issues of expenditure/deduction claimed. Therefore, in our view, CIT was not justified to invoke power u/s 263 of the Act by holding the assessment order as erroneous and prejudicial to the interests of revenue. Further, CIT though raised certain issues, which according to him were not examined by AO during assessment proceeding, but, he has not established or substantiated with facts and materials that non-consideration of those issues has adversely affected the interests and revenue or has made the assessment order erroneous. While conducting assessment proceeding, AO is the best judge of the situation and has to proceed for completing assessment according to his own wisdom. Unless there are material to indicate to that effect, assessment order cannot be held to be erroneous and prejudicial to the interests of revenue empowering CIT to revise it u/s 263. In this context, a reference can be made to the judgment of the Hon’ble Delhi High Court in case of Jyothi Foundations [2013 (7) TMI 483 - DELHI HIGH COURT] wherein the Hon’ble Delhi High Court after analyzing several other decisions held that if the revising authority feels that AO has not conducted proper/adequate enquiry, then, he himself should have conducted enquiry to record a finding that the assessment order was erroneous. He should not have set aside the order and directed the AO to do the said enquiry. In the facts of the present case, there is no doubt that AO after examining the books of account and other materials on record has come to a definite conclusion that books of account are not reliable, hence, after rejecting the same has estimated the profit. In fact, the CIT himself observed that AO vide letter dated 06/01/11 had called upon assessee to produce evidences and to clarify certain issues. That being the case it cannot be said that AO has not conducted any enquiry and there is non-application of mind by AO. Further, CIT while setting aside the assessment order has also not given any specific direction, but, has simply directed the AO to re-do the assessment denovo after examining the issues. This, in our considered view, is nothing but in the nature of roving and fishing enquiry. Further, one more aspect needs to be mentioned, as rightly pointed out by learned AR, CIT in para 5.1 of the order has considered the P&L account and figures relating to assessment year 2008-09 whereas he is in session of revision proceeding for AY 2009- 10. This itself shows non-application of mind by learned CIT. For this reason alone, revision order becomes vulnerable and can be held to be invalid. - Decided in favour of assessee.
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