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2019 (11) TMI 413 - HC - Income TaxRevision u/s 263 - case of assessee was selected for scrutiny and assessment was completed under Section 143(3) of the Act - Disallowance of genuineness of salary and other expenses - payment of huge salary in cash - HELD THAT:- AO while making assessment had considered the Tax Audit Report filed in Form 3CB enclosed with the return. AO disallowed six expenses claimed under the heads electricity and water expenses, miscellaneous expenses, staff welfare expenses, telephone expenses, travelling expenses and wage and freight expenses. CIT while exercising power under Section 263 of the Act had remanded the matter back to AO on the ground that necessary enquiries were not conducted and he failed to apply his mind in all perspective on the issues mentioned in Paras 3(I), 3(II), 3(III) and 3(IV) of the show-cause notice dated 17.03.2008, as such the assessment order was set aside restoring file to AO for further verification. Tribunal while dealing with first substantial question of law as regards deposits introduced by members of AOP has recorded a categorical finding and held that CIT has not considered the assessment order as erroneous and prejudicial to the interest of revenue on the basis of these deposits at the time of examination of records and application of his mind thereto, it cannot be relevant to hold now that assessment order is erroneous and prejudicial to the interest of revenue.Thus, the first question raised is finding of fact, and no interference is required. Allowance of expenses by AO without proper verification - Assessment order does not reveal the fact that the AO had made any verification of the allowances as claimed by assessee and the CIT had rightly remanded the matter so far as the verification of salary, rent and expenses in respect of wages and freight incurred by assessee and allowed by assessing authority, is concerned - matter needs to be remitted to the assessing authority only on question of verification of salary, rent and wages and freight expenses incurred by assessee for verification.
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