TMI Blog2015 (1) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... s best the case against the assessee was one short assessment which had already been taken care of by the Assessing Officer by adding a substantial amount to the income of the assessee. - Decided against Revenue. - ITA No. 248 of 2012. - - - Dated:- 24-12-2014 - Rajive Bhalla And B. S. Walia,JJ. For the Appellant : Mr. Denesh Goyal, Advocate For the Respondent : Ms. Radhika Suri, Senior Advocate with Ms. Rinku Dahiya ORDER Rajive Bhalla, J. The revenue is before us challenging order dated 03.04.2012 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the 'Tribunal'), Amritsar Bench, Amritsar allowing an appeal filed by the assessee and as a consequence, setting-aside order dated 29.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 inspite of the fact that the A.O's order was incorrect and prejudicial to the interest of revenue as the A.O. had erroneously made an estimated addition of ₹ 29,80,453/- by adopting G.P. rate of 23% instead of making an addition of ₹ 56,29,470/- which was to be made on the basis of survey record and production Records/document available with the Department? Counsel for the assessee submits that admittedly, the Assessing Officer, rejected account books, applied a gross profit rate of 23% and on the basis of the record pertaining to finished, unfinished goods (different types of blankets) and raw material added ₹ 29,80,453/- to the income of the assessee. The assessee filed an appeal against this order but in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case on 22.12.2004. Subsequently, assessment u/s 143(3) was completed vide order dated 19.12.2007, by rejecting the books of account and applying the G.P. rate of 27% as against that shown by you at 19.74% and an addition of ₹ 29,80,453/- was made. While the above action of the Assessing Officer was examined it was found to be erroneous for the following reasons. While the assessee could not prove genuineness of it's trading A/c, the correct course for the A.O. was to prepare separate correct course for the A.O. was to prepare separate correct quantitative details for the period upto the date of survey and for remaining part of the financial after the date of survey. When this exercise is done, the following portion emerges fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. Therefore, instead of applying GP rate on estimate basis, the A.O. should have quantified the amount duly supported by the aforesaid analysis, thereby calling for an addition of ₹ 56,29,470/- instead of ₹ 29,80,453/-. Thus the closing stock is, therefore, short by ₹ 56,29,470/-. It, therefore, is apparent that the above stock has been produced using the raw material and incurring other expenses which have already been debited to P L account and, therefore, the addition should have been at ₹ 56,29,470/- instead of ₹ 29,80,453/- made by the A.O. The order of the A.O. therefore, is erroneous as well as prejudicial to the interest of revenue on this account. I, therefore, propose to take action u/s 263 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n tally by the AO available at PB 30 to 32. Therefore, the Ld. CIT on perusal of records may be of the opinion that the addition made by the AO is on the lower side and the ld. CIT may be of the opinion that income could be estimated at a higher amount, then such opinion cannot be subject matter of section 263 of the Act and the Ld. CIT is not vested with the power to re-examine the amount and determine the figure at higher figure. In the present case, when the AO in his quasi-judicial power had conducted extensive inquiry and had made the addition, then the Ld. CIT(A) is not empowered to re-examine the matter, which is not erroneous and prejudicial to the interest of the revenue. In our opinion, no fresh inquiry can be made at the instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue. A perusal of the order passed by the CIT reveals that its suffers from an error relating to computation of the number of finished blankets. The CIT inferred that the assessment order is erroneous and prejudicial to the interest of the revenue by holding that the assessee has manufactured 25687 blankets. A perusal of the inventory regarding finished goods reveals that finished blankets are 13822 pieces, but while arriving at the figure of 25687 of finished blankets, the CIT included unfinished goods and raw material. We have also perused a copy of the paper book filed before the ITAT which contains the inventory of finished, unfinished goods and raw material that prove the factual error committed by the CIT. The Tribunal has af ..... X X X X Extracts X X X X X X X X Extracts X X X X
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