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2018 (9) TMI 1323 - HC - Income TaxRevision u/s 263 - as assessee itself having offered net profit at 27.48%, the Assessing Officer could not have computed profit at the rate of 15% of the total receipt - Held that:- AO had after detailed inquiry, come to the conclusion that the assessee's projection of 12.5% of profit on the gross receipts was not substantiated. He therefore rejected the assessee's accounts and proceeded to estimate the net profit independently. That is how he came to the conclusion that 15% would be a reasonable profit and that is how he taxed the assessee. Assessee who was aggrieved by this order and carried the matter before the Commissioner (Appeals). Commissioner (Appeals) substantially confirmed the view of the Assessing Officer but placed the matter back before the Assessing Officer for recomputation of scheme or project-wise profit at the same rate of 15% of net profit ratio. In terms of the Clause (c) in Explanation 1 to subsection 1 of Section 263, the powers of the Commissioner would extend to such matters as had not been considered and decided in an appeal arising out of such order of assessment. In the present case, this issue having been subject matter of appeal and duly discussed by the Appellate Authority, was beyond the purview of the Commissioner's revision powers. Addition of statutory payments Assessing Officer had taken a holistic picture and arrived at the net profit percentage that the assessee could be reasonably expected to have earned out of the ventures. While doing, so he had also examined various aspects, including the payments such as for commission, for interest etc., and whether the assessee had deducted tax at source on such payments. Thus, the element of disallowing certain expenditure was in the mind of the Assessing Officer. It is true that with respect to statutory payments which may have bar of Section 43B of the Act on claiming without actual deposit with the Government revenue, there was no direct inquiry during the assessment or discussion in the order of assessment. Commissioner merely referred to some possibility on such expenditure not being allowable without collecting proof of payment in the Government revenue. He did not even prima facie come to the conclusion that in absence of such deposit the expenditure was not allowable. His order exercising revisional powers therefore on such grounds cannot be sustained. - Decided against revenue.
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