TMI Blog2014 (11) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... and start re-examination and fresh enquiries in matters which have already been concluded under the law. If AO takes a possible view, then the assessment order cannot be said to be erroneous and the Commissioner is not entitled to exercise jurisdiction u/s 263 of the Act, as decided in Malabar Industrial Co. Ltd. v. CIT [2000 (2) TMI 10 - SUPREME Court] - whether there was application of mind before allowing the expenditure in question has to be seen, if there was an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec. 263 merely because he has a different opinion in the matter - it is only in cases of lack of inquiry that such a course of action would be open - an assessment order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, the order should have been written more elaborately – Decided in favour of assessee. - ITA No. 223/Hyd/2014 - - - Dated:- 13-10-2014 - Shri B. Ramakotaiah And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Sri P. Murali Mohan Rao For the Respondent : Sri P. Soma Sekhar Reddy ORDER Per Asha Vijayaraghavan, J. M. This appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you In the return of Income. This issue was not examined by the AO and the difference was not considered as Income while completing the assessment. 4. Consequent to survey proceedings, you were requested to explain the sources of cash deposit of ₹ 950000 made In ICICI bank account on 2.3.2009. In response to this, it was explained that for the fin. Year 2008-09, the AO completed the assessment after verifying the books of account. However, it IS found from the record that this Issue was not examined and there is no Information available on record explaining the sources for the above mentioned cash deposit. 5. During the financial year under consideration the company has introduced ₹ 32,36,030/- towards share capital. Consequent to the survey proceedings, you were requested to furnish complete information with regard to the details of Investors along with confirmation letters. However, you had not produced any details In respect of the below mentioned amounts claimed to have been received from the following investors during the financial year 2008-09. ARV Prasad-Rs. 315600 Asif Riaz -Rs. 50000 K Purshotham Rao -Rs. 315600 During the asst. proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008, 76/Hyd/2008, 234/Hyd/2009 dated 19.6.2010. 6. However, the CIT u/s. 263 held that the contention of the assessee is not acceptable and in the instant case the claims made by the assessee were accepted by the AO without making any enquiry and without bringing on record any supporting material to explain the view taken by the AO in the assessment order. The CIT, therefore, held that the assessment order is erroneous and prejudicial to the interests of the revenue. The CIT held that the assessee is not carrying on any agricultural activities and R D activity undertaken by the assessee is collection of germplasm from several sources which is not produced or manufactured or cultivated by the assessee but collected from outside sources. 7. The CIT further observed at para 3.8 that gross agricultural income of ₹ 47,34,213 was claimed in the return and after claiming deduction for cultivation expenses of ₹ 16,48,022, net agricultural income of ₹ 30,86,191 was returned. The CIT stated that during the asst. proceedings, details of cultivation expenses was called for, in response to which, the assessee furnished copy of the ledger extract of the said expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the submission made by the assessee is contrary to the remark made in the Tax Audit report. Accordingly, he was of the view that this issue is required to be examined afresh in the light of the remarks made in tax audit certificate and the information filed during revision proceedings. 11. The next issue relates to unaccounted sale of ₹ 1,52,05,415. In the revisionary proceedings, the assessee explained that the amount of unaccounted sales mentioned in the show cause notice is nothing but the sum of export sales and cultivation income which was disclosed in the P L account. Accordingly, it was contended that there were no unaccounted sales as pointed out in the show cause notice. The CIT observed that in this case, a survey u/s 133A was carried out on 29.8.2011. During the survey proceedings, incriminating material was impounded. Subsequent to the survey, assessment for this year was completed on 30.12.2011. In the impounded material marked as Annexure MABPL/2 , information regarding domestic sales made in the financial year 2008-09 is available. The CIT pointed out that as per the said information. the details of group-wise, product- wise quantity sold by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AR filed only some of the confirmation letters and no details of these investors were furnished even subsequently also. The CIT pointed out that the AO completed the assessment on 30/12/2011 without making any addition towards unexplained cash credit even though neither information letters, nor any other details showing that these three persons had really invested capital in the company were filed by the assessee. The CIT concluded that having issued a show cause notice proposing to treat the unexplained share capital as cash credit, the amount claimed to have been invested by the said three persons should have been assessed as unexplained cash credit when the assessee failed to prove the investment by furnishing necessary evidence and hence, on this count also, the assessment order has become both erroneous and prejudicial to the interests of the revenue. 15. Aggrieved, the assessee is in appeal before us. 16. The learned counsel for the assessee Sri P. Murali Mohan Rao stated that the AO had undertaken the survey proceedings in which a detailed questionnaire was answered by the assessee and brought our notice pages 103 and 104 of the Paper Book. At page 110 of the Paper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee by arguing that mere filing of details by the assessee will not make the order u/s. 263 invalid but one has to see whether the Assessing Officer has made an error in passing his order. 20. We have heard both the parties. It is settled law that the Assessing Officer in the assessment order is not required to give detailed reasons and once it is clear that there was application of mind by an enquiry, the respondent, merely because he entertains a different opinion in the matter, cannot invoke his powers under section 263 of the Act. It is, therefore, not correct to say that there was no proper enquiry by the Assessing Officer. In the instant case, the Assessing Officer had not only taken a possible view but in the circumstances the only view possible and, therefore, his order could not have been termed as erroneous or prejudicial to the revenue warranting exercise of revisional jurisdiction under section 263 of the Act by the respondent. The respondent had no different or new material to take different view from the one taken by the Assessing Officer and the reasons given by him to reopen the assessment and sustain the revision are totally unacceptable. The respondent i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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