9911796707
TMI Blog2011 (7) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT though the order was erroneous and prejudicial to the interest of revenue on account of improper and inadequate scrutiny by the A.O.?" 3. The facts, in brief, necessary for adjudication as narrated in the appeal, are that the respondent-firm filed its return of income for the assessment year 2004-05 on 27.10.2004 showing income of Rs.8.53,480/-. Thereafter, assessment was made by the assessing officer, under Section 143(3) of the Act on 21.8.2006 assessing the income of the assessee at Rs. 8,73,480/- when an addition on account of disallowance of Rs. 20,000/- out of telephone expenses and other un-vouched expenses was made. The Commissioner of Income-tax {in short "the CIT"}, vide order dated 26.6.2008 passed under Section 263 of the Act, held that the assessment framed by the assessing officer was erroneous in-so-for as it was prejudicial to the interest of the revenue. The CIT set aside the order of the assessing officer with a direction to the assessing officer to pass a fresh order after considering and examining the issues mentioned in his order. Dissatisfied with the order of the CIT, the assessee preferred appeal to the Tribunal, which was allowed vide the order impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses being of personal or unverifiable nature. In view of above discussion, income is computed as under: Returned income Rs. 8,53,480/- Addition of Rs. 20,000/- As discussed above. Rs. 20,000/- Total income Rs. 8,73,480/- Assessed at income of Rs. 8,73,480/-. Charge interest u/s 234D and 234C of the Income Tax Act. ITNS 150 is enclosed as a part of this order. Issue demand notice and challan. Sd/- ( B.R. Madaan ) Asstt. Commissioner of Income-tax, Circle, Khanna." 7. He urged that a perusal of the assessment order clearly spells out the manner in which the accounts of the assessee appear to have been scrutinized. 8. Learned counsel further submitted that the CIT in the revisional order had noted various details which had not been verified by the assessing officer before accepting the returned income of the assessee. In terms of order of CIT dated 26.6.2008, the following issues had not been verified by the assessing officer while making assessment under Section 263 of the Act: "(A) The G.P. rate shown by the assessee in this A.Y. was only 2.45% whereas the G.P. rate shown in A.Y. 2002-03 was as high as 4.08%. The Assessing Officer in perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 lakh merely on the basis of a letter of the police which only stated that the accused were let off and discharged by the court from the criminal proceedings in the absence of evidence. The Assessing Officer failed to collect details of FIR and examine the fact that the FIR was against unknown persons. The Assessing Officer also did not obtain copy of the Court's order releasing the accused made by the police and examine all the facts. The assessee had claimed the deduction of Rs. 3 lakhs based on the Court's order on criminal proceedings. The Assessing Officer failed to examine when actually the sum had become irrecoverable. The Assessing Officer also did not examine the statement of Shri Kamal Talwar and Sh. Jaswinder Singh and their subsequent retraction. The Assessing Officer did not examine the fact when the sum had become irrecoverable. No enquiry in this regard from the police was made nor evidence was collected by the Assessing Officer on this point. Mere decision of the Court in the criminal proceeding can not be the sole deciding factor to pinpoint the time of irrecoverability of the theft amount. The Assessing Officer has failed to examine the issue and collect details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer without verification. In the 'show cause notice' issued u/s 263 dated 21.11.2007, the Commissioner observed that the theft had taken place on 9.6.2000 and, therefore, being an expenditure of an earlier assessment year, could not be allowed during the year under consideration. The assessee explained that the amount was written off in the books of account on the basis of a report from the police, which mentioned that the Hon'ble Civil Court had acquitted the accused on 11.7.2003 and no recovery has been made. Since, the issue was settled by the Civil Court on 11.7.2003, the amount in question was claimed as a deduction during the year under consideration. On the fact of such explanation, there is no finding of the Commissioner as to how the assessment order dated 21.8.2006 was erroneous wherein the said amount was allowed. The Commissioner has merely set aside and required the Assessing Officer to examine the issue. Similarly, the Commissioner has referred to the low GP during the year in comparison to the GP rate declared of two years earlier i.e. for assessment year 2002-03. When the assessee explained that the GP rate during the year was 2.45% as against ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
