TMI Blog1995 (5) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... s generally allowed to the dealers. During the year under consideration the assessee paid commission on sale of tractors at Rs. 1,89,850. From the details available on record the assessee paid commission ranging from Rs. 400 to Rs. 500 per tractor and thus the total commission would come to Rs. 72,000 only and there was thus an excess claim of Rs. 1,17,850. It was also noticed that there were 37 creditors. Some of the payments were made in cash and as such the provisions of s. 40A(3) were violated. The order of assessment passed by the ITO for the asst. yr. 1987-88 therefore appeared to be erroneous in so far as it is prejudicial to the interests of the Revenue". In response to show-cause notice, as regards commission payments it was subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 to Rs. 500 on each tractor which comes to Rs. 60,000 to 70,000 whereas the assessee claimed commission payment at Rs. 1,89,850. He further observed that the genuineness of loans has not been properly examined by the AO. The assessment was made hastily at the end of the financial year without making inquiries and verification of the details. He, therefore, set aside the assessment and directed the ITO to make fresh assessment after giving the assessee an opportunity of being heard and as per law. This has been challenged by the assessee. 3. Shri B.M. Gupta, the learned counsel for the assessee, submitted that the relevant accounting period of the assessee ended on Diwali, 1986. For the accounting year relevant to the asst. yr. 1987-88 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment hastily and without proper verification of the issues involved. He, therefore, submitted that the CIT was not justified in holding that the order passed by the AO was erroneous and prejudicial to the interests of Revenue and, therefore, the impugned order deserves to be quashed. Shri Vijayvargiya, the learned Departmental Representative, on the other hand, supported the order of the CIT. He led us through the assessment order dt. 30th March, 1988, and highlighted the point that the assessment was summarily completed without much discussion. The AO allowed the claim of commission payment without any enquiry and also accepted the loans as genuine without properly examining them. He pointed out that the proposal under s. 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less it is not in accordance with law. In the case of CIT vs. Gabriel India Ltd. (1993) 114 CTR (Bom) 81 : (1993) 203 ITR 108 (Bom) their Lordships of Bombay High Court have held as under: "This section does not visualise a case of substitution of the judgment of the CIT for that of the ITO, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where the ITO while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The CIT, on perusal of the records, may be of the opinion that the estimate made by the Officer concerned was on the lower side ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts produced before him were subjected to test check by him and that the assessment is being completed on the basis of information submitted, examination of books of accounts and after discussion with the assessee's representatives. We find that the relevant details were furnished to the AO along with the assessee's reply dt. 15th Feb., 1988. In our opinion, merely because the AO has not meticulously dealt with the issue of commission payment and genuineness of the credit entries while completing the assessment, it cannot be said that there was no application of mind by him to the facts and details before him. Mere non-mention of certain facts should not be taken as omission on the part of the AO. It is quite possible that because of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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