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Vemula Laxminarayana, Warangal Versus The Asst. Commissioner of Income Tax, Circle-I, Warangal

2015 (7) TMI 869 - ITAT HYDERABAD

Revision u/s 263 by CIT(A) - amount of income covered by TDS was not offered to tax, disallowance of deprecation and unaccounted personal drawings - Held that:- In this case, there was survey during the course of accounting year itself and also on the basis of the survey, the case was selected for scrutiny. The TDS made on behalf of assessee was itself reflected in 26AS of the department and the same amount was given credit. In view of this, the Ld. CIT’s presumption that this amount of income c .....

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ncern business cannot be doubted.

Personal drawings at ₹ 20,000/- per month, the same was also found debited in the personal account. In view of the above, considering the fact that AO has completed the assessment u/s. 143(3) after issuing the show cause notice dt. 15-02-2013 u/s. 142(1) calling various details under 11 heads including confirmation of loans and advances in respect of cheques discounted, source of advances made in the finance business etc. These indicate that al .....

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do indicate that he has applied his mind to the issues. If there was an enquiry, even if it is inadequate that would not by itself give occasion to the CIT to pass order u/s. 263. Respectfully following the principles laid down Spectra Shares and Scrips Pvt. Ltd., Vs. CIT [2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT ] proper case has not been made out by the Ld. CIT in exercising jurisdiction u/s. 263. Not only that considering the explanation given by assessee, he should have dropped proceedin .....

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ed on 20-03-2013. 2. Briefly stated, assessee filed return of income for AY. 2010-11 on 28-02-2011 admitting total income of ₹ 2,21,540/-. In the financial year relevant for the assessment year, a survey operation u/s. 133A had been conducted on 22-12-2009 and the case was selected for scrutiny. In the scrutiny assessment completed, Assessing Officer (AO) disallowed various amounts thereby determined the total income at ₹ 11,63,000/-. This order of AO is subject matter of appeal befo .....

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AO has not considered this issue while completing the assessment. On the above grounds, a notice u/s. 263 dt. 25-09-2013 was issued to assessee to show cause as to why the assessment should not be revised or set aside. 2.1 Assessee submitted that TDS amount claimed was on the interest received by assessee in the business of bill discounting and submitted that the entire commission as well as interest income was offered to tax. It was submitted that an amount of ₹ 3,21,540/- was income adm .....

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issues emanating from the show cause notice u/s. 263 of the I T Act. It is clarified by the Authorized Representative that the amount of ₹ 12,01,742/- disclosed in the profit & loss account including the interest income of ₹ 2,81,210/-. Therefore, there is no cause for revisiting the same issue in the present proceedings initiated u/s. 263 of the Income Tax Act. However, on perusal of the assessment record, it is noticed that the assessee never disclosed the interest income of &# .....

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iny proceedings and completed the assessment without examining whether the assessee has disclosed interest income or not. 6.1 The next issue is in respect of personal drawings. In the course of revision proceedings, the assessee has filed capital account for the financial year 2009-10 showing drawings of ₹ 3,08,760/-, hence it is suffice to the personal drawings of the assessee. But, the details are not made available to the AO nor called for by the AO at the time of scrutiny proceedings s .....

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r: i. Rampyari Devi Sarogi Vs CIT (SC) 67 ITR 84 ii. Malabar Industrial Co. Ltd Vs CIT (SC) 243 ITR 83 iii. Swarup Vegetable Products Industries Ltd Vs CIT(All) 187 ITR 412 iv. Gee Vee Enterprises Vs Addl. CIT & Ors (Del) 99 ITR 375 v. Rajalakshmi Mills Ltd Vs ITO (ITAT, SB-Chennai) 121 ITD 343, 313 ITR(AT) 182. vi. SRM Systems & Software Pvt. Ltd. Vs ACIT 2010-TIOL-646- HC-MAD-IT. vii. Deloitte Haskins & Sells, Chennai V. DCIT ITA No. 1164/Mds/12 dtd. 4.7.2013. Accordingly, the asse .....

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ture of salaries and interest paid. AO in the scrutiny assessment disallowed the salaries and also an amount of ₹ 6,41,462/- u/s. 40(a)(ia). It was further submitted that the TDS claim was made in the return of income and the same is also figuring in the departmental data base and the AO has given credit as per 26AS. He also referred to the detailed submissions made before CIT, particularly to page 20 of the Paper Book, wherein it was submitted that assessee had commission amount of ₹ .....

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02-2013. He also referred to the assessment order wherein AO has given a finding that after examining the material furnished, total income returned by assessee was computed. Ld. Counsel further submitted that CIT cannot direct to make roving enquiries, as considered by the Andhra Pradesh High Court in the case of Spectra Shares and Scrips Pvt. Ltd., Vs. CIT [354 ITR 35] (AP). 4. Ld. CIT in reply however, submitted that assessee has not given any information about the receipts and AO also has not .....

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accounting year itself and also on the basis of the survey, the case was selected for scrutiny. The TDS made on behalf of assessee was itself reflected in 26AS of the department and the same amount was given credit. In view of this, the Ld. CIT s presumption that this amount of income covered by TDS was not offered to tax and assessee s concealed income cannot be accepted. With reference to the depreciation claimed of ₹ 5,698/- it was the contention that assessee purchased a scooter and th .....

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eted the assessment u/s. 143(3) after issuing the show cause notice dt. 15-02-2013 u/s. 142(1) calling various details under 11 heads including confirmation of loans and advances in respect of cheques discounted, source of advances made in the finance business etc. These indicate that all aspects have been examined by the AO. Therefore, the CIT s observation that AO has not examined these issues does not have any basis. Moreover, when assessee has pointed out the same before the CIT in the proce .....

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of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue - recourse cannot be had to Sec.263 (1) of the Act. b) Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income .....

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sons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show that the and must irresistibly lead to the conclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons in res .....

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ficer called for interference and revision. e) The Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation because of new views they entertain on facts or new circumstance; that if this is permitted, litigation would have no end except when legal ingenuity is exhausted. f) Whether there was application of mind before allowing the expenditure in qu .....

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