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TMI Blog2014 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... erified the claim of expenditure on the basis of disallowance u/s 40(a)(ia) of the Act and also on the basis of expenditure incurred when the nature of personal expenses could not be ruled out. He restricted the loss u/s 143(3) of the Act to Rs.41.04 lakhs. The assessee as filed a separate appeal before the First Appellate Authority for disallowances when a show cause notice was issued by the ld. C.I.T. noting the following : "On verification of the assessment record it is noticed that the assessee-firm paid Rs.1,48,618/-, Rs.1,20,000/- and Rs.1,00,000/- to M/s. Uma Engineering, Shri Prasanta Kumar Nayak and to Sk.Sirajuddin, respectively during the financial year in question as Hire charges, i.e. Rs.3,68,618/- in total. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und no specific defects or matters erroneous and prejudicial to the interest of the Revenue the ld. CIT in his order has tried to reconsider the option to the AO, in so far as, after having established that the facts of the assessee's case clearly indicate invoking the provision of chapter XVII B whether could proceed with the consequent disallowance u/s 40(a)(ia) of the Act was deliberated upon by the ld. CIT in the impugned order when the ld. CIT has tried to justify the assuming of the jurisdiction u/s 263 of the Act by him by holding a view that the AO never ever considered to have combined the committing of error as well as loss to the revenue. The ld. CIT quoted several directions without distinguishing the facts, in so far as, the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was explained before the Ld. Commissioner that the appellant required certain machineries in pursuance of its activities as a contractor which were simply hired from the three parties, namely M/s. Uma Engineering, Sri Prasanta Kumar Nayak and Sk.Serajuddin. The payments made by the appellant under these heads to them in the sum of Rs.1,48,618/- Rs.1,20,000/- and Rs.1,00,000/- respectively aggregating to an amount of Rs.3,68,618/- constituted the cost of hire of such machines and were not on account of any contractual obligation with the owners. It was further explained that transport carriage charges of Rs. 98,254/- and Rs.57,286/- against vehicle nos.WB-23A5887 and WB-37A7865 respectively, aggregating to a sum of Rs.1,55,540/- was paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich revision proceedings were initiated, the same is indeed not sustainable in law for the very elementary reason that the grounds on which order was subjected to revision are different, vis-à-vis the grounds on which revision proceedings were actually initiated [VESUVIUS INDIA LIMITED -VS- C.I.T. (2012) 25 TAXMANN.COM 425 (KOL). It is settled that exercise of revision powers, on the grounds other than the grounds of revision as set out in the show cause notice, could not be sustained in law [TATA CHEMICALS LTD. -VS- D.C.I.T.(I.T.A.NO.3127/MUM/10 DATED 30-06-2011)]. In other words, in the impugned revision order passed u/s 263 of the Act, the Ld. Commissioner has not decided on the issues raised in the show cause notice, which was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voking the provisions of s.263 of the Act not having been satisfied, the action of the Ld. Commissioner of assuming jurisdiction thereunder is in contravention of the settled position in this regard." 5. For this proposition he has filed a copy of the order of the ITAT 'B' Bench reported in 25 Taxmann.com 425 (Kol) in the case of Vesuvius India Limited vs CIT which is directly on the issue that a reasoning whether could be thrust upon the AO was to be material for assuming jurisdiction u/s 263 of the Act for the purpose of holding the order erroneous and should be adjudicated as prejudicial to the interest of the Revenue was different in so far as the AO had also considered the same without actually adjudicating on it in a detailed manner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a)(ia) of the Act whether could be considered for disallowance u/s 40A(3) of the Act was to be disallowed against which a separate appeal has also been filed before the first appellate authority. In other words, reasoning by the ld. CIT for re-examination and re-verification by the AO on the impugned order is a fact which the ld. CIT himself is not clear to the extent that his justification in assuming jurisdiction u/s 263 of the IT Act it was not the issue as per show cause of the ld. CIT that adequate enquiry had not been carried out. It was only a matter of explaining the claim of expenditure on the basis of the facts as brought on record by the AO wherein the view taken by him was sustainable under law. The view as taken by the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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