TMI Blog2015 (1) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondent : Shri T.P. Krishnakumar, CIT-DR ORDER Per Shri N. S. Saini, Accountant Member: This is an appeal filed by the assessee against the order of the Commissioner of Income-Tax, Gandhinagar dated 11.03.2013 for Assessment Year 2008-09. 2. The assessee has raised following grounds of appeal:- 1. That on facts and in law, the learned CIT has grievously erred in assuming jurisdiction u/s 263 of the Act. 2. That on facts and in law, the entire order u/s 263 of the Act is invalid as there is neither any error nor prejudice to the interest of revenue, as the assessment order is passed u/s 143(3) of the Act after detailed inquiry and after considering all details filed. 3. That the learned CIT is not justified in setting aside the order u/s 143(3) of the Act, without pointing out as to how the order is erroneous and prejudicial to the interest of revenue. 4. The appellant craves leave to add, alter, amend any ground of appeal. 3. The CIT-Gandhinagar, Ahmedabad issued a notice to the assessee vide No.GNR/263/SKB/2010-11 dated 13.10.2010 u/s 263 of the Act, which is reproduced hereunder:- No. GNR/263/SKB/2010-11 Date: 13.10.2010 To, Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here were following payments: (i) Rajaram 23-4-07 ₹ 33000 (ii) Ranchhodbhai 24-4-07 ₹ 80000 (iii) Gayatri Corporation 7-5-07 ₹ 70000 (iv) Ramnivas Bhardwaj 12-5-2000 ₹ 40000 (v) Dr. Kanaramji 12-5-2000 ₹ 55230 (vi) RamuRam 24-7-2007 ₹ 50540 (vii) Kanchan Enterprise 2-8-2007 ₹ 65000 (viii) Hemant Tyre 26-7-2007 ₹ 21500 (ix) Charnunda Trading 2-8-2009 ₹ 100000 (x) Gayatri Corporation 11-9-2007 ₹ 45000 (xi) Dr. Suresh Patel 8-11-2007 ₹ 15000 (xii)Dr. Bhagwati Transport 13-11-2007 ₹ 10000 (xiii)Dr. Swaminarayan 14-11-2007 ₹ 50000 Construction (xiv)Dr. Gayatri Corporation 15-11-2007 ₹ 50000 (xv) Maheshwari Profile 15-12-2007 ₹ 9500 (xvi) Uma agro Ind. 11-03-2008 ₹ 12000 (xvii) Ashutosh Marketing 11-03-2008 ₹ 1180000 (xviii)Nareshbhai 18-3-2008 ₹ 45000 (xix) Navjivan Quarry Works 18-3-2008 ₹ 150000 (xx) Chamunda Trading Co. 19-3-2008 ₹ 125000 (xxi) Aashutosh Markting 19-3-2008 ₹ 75000 (xxii) Babulal Sharma 31-3-2008 ₹ 50000 Why aforesaid payments were made is not ascertainable and copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under: 1. Reply to Para 3 : As Per Notice u/s 142 (1) of Act dated 22/02/2010 (Refer para 4) Assessee has submitted on dated 17/03/2010 details of Raw Materials Expenses, Diesel and Fuel Expenses, Labour Exp, Spare Parts Exp, Site Exp, Salary to Staff, Site Rent Exp, Office Rent Exp, Bonus to Staff, Office Exp. And Water Exp. which has been examined and verified by Assessing Officer and found Correct as per books of accounts and records. For your ready reference, We again Submit aforesaid details for your kind verification.(Refer Page No: 1 to 15) 2. Reply to Para 3/A: As Per Notice u/s 142(1) of Act dated 22/02/2010 (Refer Para 3) Assessee has submitted on dated 17/03/2010 Copy of Ledger A/c with Contra Confirmation of Ketan Construction co, Gayatri Corporation, Ashutosh Marketing, Ashokkumar, Santish V patel, Swamy Narayan Construction, and Audit fees which has been examined and verified by Assessing Officer and found Correct as per books of accounts and records. For your ready reference, we again submit aforesaid details for your kind verification. (Refer Page No: 16 to 27) 3. Reply to Para 4 : As Per Notice u/s 142 (1) of Act dated 22/02/2010 (Refer Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Act dated 22/02/2010, (Refer Para 5) Assessee has submitted on dated 17/03/2010 Copy of Tractor Rent And Machinery Rent with party to whom payment where made with contra Accounts which has been examined and verified by Assessing Officer and found Correct as per books of accounts and records. For your ready reference, We again Submit afore said details for your kind verification. (Refer Page No: 94 to 117 and 118 to 143) (A)THE ORDER IS NOT ERRONEOUS AND PREJUDICIAL TO INTEREST OF REVENUE BECAUSE OF : (1) In the recent decision in the case of Malabar Industrial Company Ltd. Vs. CIT (243 ITR 83), the Honourable Supreme Court observed a bare reading of section 263(1) makes it clear that the prerequisite to exercise of jurisdiction by the commissioner suo motu under it, is that the order of the ASSESSING OFFICER is erroneous in so far as it is prejudicial to the interest of the revenue. The commissioner has to be satisfied with twin conditions, namely, (a) the order of the ASSESSING OFFICER sought to be revised is erroneous, and (b) it is prejudicial to the interest of the revenue. If one of them is absent- if the order of the ASSESSING OFFICER is erroneous but is not pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Honourable Gujarat High Court in the case of CIT Vs. M.M. Khambatwala (198 ITR 144) held that the commissioner can exercise the power of revision even in a case where the issue is debatable. It further held that revisional power under section 263 is not comparable with a power of rectification of mistake under section 154. However, the Honourable Supreme Court in the case of Malabar Industrial Company Ltd .Vs. CIT ( supra) has held that when assessing officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the assessing officer has taken one view with which the commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue, unless the view taken by the assessing officer is unsustainable in law. After this decision, the questions of law decided by the assessing officer by choosing one line of judgments against the other line of judgments cannot be a subject matter of revisional jurisdiction under section 263 of the Act. (6) (Rayon Silk Mills Vs. CIT (221 ITR 155) (Guj.)). In the third stage the commissioner is required to give an opportunity of a personal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 13/10/2010 a) Expenditure on account of raw material, Diesel and fuel, salary to staff etc. b) Creditors confirmation, c) Accounts of Saraswati Construction, Saraswati Builders. d) Banks accounts. e) The amount paid as per TDS Certificate is not verifiable as to in which bank amount is deposited. The assessment order was therefore erroneous and prejudicial to the interest of revenue. It was therefore proposed to pass necessary orders U/s.263 as the facts and circumstances of the case justified. The assessee was given an opportunity of hearing by letter dated 13/10/2010, 03/11/2011, 26/12/2012 final notice on 26/02/2013 to explain its stand in case it had any objection to the proposed action. Shri V. S. Patel, C.A. attended and was heard. Written submissions dated 08/12/2011 have been filed which have been duly considered. 2. The learned counsel for the assessee contended that all necessary information was submitted during the assessment proceedings as required by the Assessing Officer along with the details in connection with the Tractor rent and machinery rent. It was contended that the order u/s 143(3) dated 19/04/2010 not to treat erroneous an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e set aside the assessment order dated 19.04.2010 passed U/s.143 (3) of the Act and AO is directed to do the assessment de novo after giving proper opportunity to the assessee. 6. The contention of the assessee is that the CIT has passed the impugned order u/s 263 of the Act without considering the submissions made before him. He also contended that all the issues raised by the CIT were raised by the Assessing Officer in his notice dated 22.02.2010 issued u/s 142(1) of the Act and in reply to the same, the assessee filed all details which were verified by the Assessing Officer and after being satisfied, he passed the order u/s 143(3) of the Act dated 19.04.2010. Therefore, he submitted that the order of the CIT u/s 263 should be cancelled. 7. The Departmental Representative supported the order of the CIT. 8. We find that the CIT passed the impugned order without dealing with various submissions made by the assessee before him. In our considered view, the CIT cannot pass an order u/s 263 of the Act without controverting the submissions of the assessee made before him. Considering the entire facts and circumstances of the case, in our considered view it shall be just and fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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