TMI Blog2015 (10) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts and material on record and detailed submissions made by the assessee, find that the directions of the Ld. CIT on various issues are in the nature of starting roving and fishing enquiry which is not permissible under section 263 as held inter alia in the case of CIT vs. Gabriel India Ltd., [1993 (4) TMI 55 - BOMBAY High Court ]. CIT has no material before him to consider the assessment order to be erroneous and prejudicial to the interests of the Revenue on the issues pointed out by him. A perusal of the discussion made by him in this regard shows that his actions are more like an A.O. in session of assessment proceedings rather than revisional authority exercising power under section 263. It is settled law that the powers under section 263 are required to be exercised by the Ld. CIT sparingly and in genuine cases when due to error committed by the A.O. there is loss to the revenue. Thus no errors in the order of the A.O. passed under section 143(3) as alleged by the Ld. CIT calling for any revision under section 263. - Decided in favour of assessee. - ITA.No.1080/Hyd/2014 - - - Dated:- 4-9-2015 - SHRI P.M. JAGTAP, ACCOUNTANT MEMBER For The Assessee : Mr. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has preferred this appeal before the Tribunal. 3. The Ld. Counsel for the assessee, at the outset, took us through the impugned order passed by the Ld. CIT under section 263 to point out that a detailed reply was filed by the assessee offering his explanation in respect of each and every issue raised by the Ld. CIT in the notice issued under section 263. He also prepared and furnished a tabular statement giving the details of explanation offered by the assessee in respect of each and every issue raised by the Ld. CIT in the notice issued under section 263 as under : Issues raised by the Ld. CIT in his Section 263 proceedings. Submissions and explanations furnished by the Assessee. Issue No.1 : As per the balance sheet as on as on 31.03.2008, the fixed assets are shown at ₹ 15,75,680/- and depreciation on the Plant Machinery at ₹ 49,252/- and the WDV was shown at ₹ 6,07,447/-. In the Balance Sheet as on 31.03.2009, the opening WDV was shown at ₹ 6,07,447/-, fixed assets at ₹ 12,75,680/- as against the closing WDV of ₹ 2,61,330/- and a sum of ₹ 3,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer, regarding the marginal fall in the profits and issue of debit notes by M/s. Nirma as one of the reasons for the fall in the profit. The Assessee, firm is a distributor for the Nirma Products , The copy of the submissions made in this regard before the AO during the assessment proceedings is place, at Page No.105 1- 106 of the paper book. The letter submitted to AO also contained the detailed reasons for the slight fall in the profits. Issues examined thoroughly by the A.O. cannot be subjected revision u/s.263. Low profit cannot be the reason for ordering revision u/s.263. ISSUE NO.3: In the Balance Sheet as on 31/03/2008, the unsecured loan creditors was shown at ₹ 30,60,468/-, whereas the same has come down to ₹ 8,66,093/- in the Balance Sheet for the year ending 31/03/2009. The AO did not call for and examined the relevant payment details and the scope of application of provisions of Sec.269T to such payments, if any. ASSESSEE'S REPLY: The Assessee submitted both before the Assessing Officer during the Assessment proceedings and also to the Ld, CIT, during his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated the assessment order as erroneous on this issue. The relevant ledger extracts are placed in the Paper Book for your honours ready reference at Page No.05-18. The account balance is ₹ 33,27,419.22/- debit in M/s. Nirma Ltd books of accounts and the same amount is credit in the ledger account of M/s. Nirma in the books of the Assessee firm. ISSUE No.5 : In the Balance Sheet as on 31.03.2008, the secured loans were at ₹ 14,75,676/- whereas as per the balance as on 31.03.2009, the same were at ₹ 16,14,455/-. Further, on verification of the details, a sum of ₹ 2,12,845/- was repaid to Kotak Mahindra Bank Ltd., Vijayawada. The A.O. did not call and obtained the relevant details and did not examine the same. ASSESSEE S REPLY : The assessee has explained to the Ld. CIT that, the issue of secured loans has been examined by the A.O. and has called for the account copies of the banks and verified the same (Please refer to Page No.105-106 of the Paper Book). The Assessee submitted the following reply to the Ld. CIT during 263 proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verter by the Ld. Commissioner of Income Tax and ordered revision of the Assessment order on sheer suspicion and surmise. He could not pin point the error except stating that, the AO did not call for and examined the reasons for the cash withdrawals. He could not even state in his Revision Order the events of misappropriation of cash or erroneous claims of expenses in the accounts. ISSUE NO.7 : The AO did not call for and examined the details of rent paid of Rs.l,20,000/- for shop Godown as to whether or not such payment attracts the provisions of Sec.40(a)(ia) of the Act. ASSESSEE S REPLY : The assessee submitted before the Ld. CIT that, the rent of ₹ 1,20,000/- is the aggregate of the amount of rents paid to more than 1 person and therefore, payment of rent to any individual was less than ₹ 1,20,000/-. Since the rental amount is less than ₹ 1,20,000/- paid to each individual, the provisions of Sec.194I for TDS are not applicable. Further, it was also submitted before the Ld. CIT that the A.O. has examined this issue and found that, the provisions of sec.194-I are not applicable. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh assessment by going deeper into the matter. He also relied on the decision of Hon ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (HC) (Del.) and the decision of Hon ble Allahabad High Court in the case of Janardhan Prasad Ashok Kumar vs. CIT 193 ITR 186 (HC) (All.) wherein it was held that the order passed by the Ld. CIT under section 263 without considering the relevant material available on record or those furnished by the assessee could not be sustained. 5. The learned D.R. on the other hand, strongly relied on the impugned order of the Ld. CIT passed under section 263 in support of Revenue s case that the assessment order passed by the A.O. under section 263 being erroneous and prejudicial to the interests of the Revenue as pointed out by the Ld. CIT, the same has been rightly set aside/revised by exercising the powers conferred under section 263. 6. I have considered the rival submissions and also perused the relevant material on record. It is observed from the notice issued by the Ld. CIT under section 263 and the detailed reply filed by the assessee to the said notice that most of the issues raised by the Ld. CIT were not only enquired by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suo motu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. (d) 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 versions which they present as to what should be the inference or proper inference either of the facts disclosed or the weight of the circumstance; that if this is permitted, litigation would have no end except when legal ingenuity is exhausted (e) Wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 203 ITR 108. In my view, the Ld. CIT has no material before him to consider the assessment order to be erroneous and prejudicial to the interests of the Revenue on the issues pointed out by him. A perusal of the discussion made by him in this regard shows that his actions are more like an A.O. in session of assessment proceedings rather than revisional authority exercising power under section 263. It is settled law that the powers under section 263 are required to be exercised by the Ld. CIT sparingly and in genuine cases when due to error committed by the A.O. there is loss to the revenue. If there is no evidence which could prima facie demonstrate that assessment order passed by the A.O. is erroneous and prejudicial to the interests of the Revenue, the Ld. CIT cannot revise the same on trivial or non-existent issues merely on the basis of doubt and suspicion. It appears from the record of the present case that the enquiries on the relevant issues were made by the A.O. during the course of assessment proceedings though the same might not have been referred to in the assessment order. 7. For the reasons stated above, I am of the view that there were no errors in the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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