9911796707
TMI Blog2013 (5) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... n so far as it is prejudicial to the interests of the Revenue, he issued a show-cause notice under section 263 of the Act on January 11, 2012 raising the following points : (i) As per balance sheet you have shown creditors of Rs. 10.96 lakhs during the year under consideration. Confirmation in this record are placed on record, but no further enquiry with reference to source, creditworthiness and genuineness has been made in respect of fresh loans taken. As per the balance sheet, sundry debtors of Rs. 33,55,662 are appearing and on perusal of interest account, it is gathered that the amount of Rs. 57,795 is credited which includes Rs. 25,000 as interest from bank. Thus, the remaining amount of Rs. 33,795 has been charged by you from various persons who appears to be farmers. On the other side, you have paid interest of Rs. 2,28,400 on the loan borrowed. Considering the quantum of debtors (farmers) of Rs. 33,55,662 the interest received of Rs. 32,795 is meager amount which leads to the conclusion that the assessee has charged interest from the farmers but not accounted for in the books of account. The Assessing Officer has also not examined this case properly nor collected the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired along with their complete addresses. The date-wise details of the transactions undertaken on behalf of farmers by the assessee would have helped the Assessing Officer in finding out as to whether the outstanding creditors/debtors are old or recent. If the outstanding creditors/debtors are very old it is to be ascertained as to why they are not pressing for payments. This fact can be verified only if the farmers are identified and transactions with them are cross-verified. For identifying them other details such as their complete residential address, etc., are required. But these details have admittedly been not furnished. The Assessing Officer, even though had asked for these details in the course of hearing, has completed the assessment without obtaining them and verifying them. This makes the assessment order passed by him erroneous in the sense that it is prejudicial to the interests of the Revenue. The amount involved is large and therefore, the chances of findings out bogus creditors/ debtors are more. (C) I am satisfied that the sundry creditors/debtors have not at all been verified by the Assessing Officer regarding their identity and genuineness of transactions and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all been verified by the Assessing Officer to detect violation of TDS rules, if any, which certainly makes the Assessing Officer erroneous as well as prejudicial to the interests of the Revenue. (G) Therefore, the assessment order dated March 18, 2009 is set aside to be made afresh after following and directions given above and properly verifying the receipts from commission of the assessee and the propriety of the tax deduction at source on these commission payments. (H) The third point is that the assessee has claimed loss in trading account in various agriculture items. However, the Assessing Officer has not examined the reasonableness and genuineness of this claim as the record is completely silent in this regard. The assessee itself in its reply to show-cause notice has stated that at least in trading account for makka there was a gross loss of Rs. 730.25. This clearly means that this point has not at all been verified by the Assessing Officer. Hence, the order of the Assessing Officer is also found to be erroneous and prejudicial to the interests of the Revenue on this issue as well because the Assessing Officer has not examined the claim of loss in trading account claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous or is prejudicial to the interests of the Revenue. In the present case in appeal, neither in the show-cause notice dated January 11, 2012 nor in the subsequent show-cause notice dated January 11, 2012 nor even in any proceedings under section 263 of the Act, had he afforded an opportunity to the assessee on the issue of verification of the genuineness of the outstanding creditors of Rs. 35,27,224 or debtors amounting to Rs. 33,55,662. The learned Commissioner of Income-tax, however, travelled beyond the issues contained in the notices and thus his order on that count was not in accordance with the spirit of the provisions of section 263 of the Act in that regard. In view of the aforesaid finding and having regard to the judgment by the hon'ble Delhi High Court in the case of CIT v. Ashish Rajpal [2010] 320 ITR 674 (Delhi) are set aside the order on these issues. 7. In so far as the issue of outstanding credit of Rs. 10.96 lakhs is concerned, it is admitted that the appellant has placed on record confirmations in assessment proceedings before the Assessing Officer. The learned Assessing Officer did not make any enquiry thereon and accepted the fact on its face value. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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