TMI Blog2015 (10) TMI 1883X X X X Extracts X X X X X X X X Extracts X X X X ..... er and above the funds available etc - Held that:- Assessing Officer neither called for any details with regard to various issues raised by the Commissioner of Income Tax in the show cause notice nor made any enquiries before allowing the claims of the assessee while completing the assessment. In the case of M/s. Malabar Industrial Co.Ltd., (2000 (2) TMI 10 - SUPREME Court ), the as held that “an incorrect assumption of facts or incorrect application of law will satisfy the requirement of the order being erroneous. Similarly, orders passed without applying the principles of natural justice or without application of mind are also erroneous”. In the instant case, the Assessing Officer while completing the assessment under section 143(3) ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer failed to examine various issues regarding contracts entered into with M/s. IJM (India) Infrastructure Ltd. and Madras Cements Ltd., diesel expenses incurred by the assessee in respect of excavator, lease hire charges paid to Smt. A.Saraswathi, Pondicherry, Mr. K.S.Subbaraman, Tindivanam and Mr. S.Navaneethakrishnan, Tindivanam @ ₹ 6,00,000/- each and ₹ 1,90,25,860/- debited to income and expenditure account by the assessee in respect of hire charges paid by the assessee and the applicability of provisions of section 40(a)(ia) on such payments, excess funds flow over and above the funds available etc. The assessee furnished explanation to the show cause notice issued by Commissioner of Income Tax vide letters dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for diesel expenses incurred are self-made vouchers. Counsel for the assessee submits that Assessing Officer in fact called for all the details in respect of the issues raised and he has formed an opinion and allowed the claims of the assessee therefore the assessment order passed is neither erroneous nor prejudicial to the interests of the Revenue. The Assessing Officer has taken one of the views possible and the Commissioner of Income Tax is not justified in invoking the provisions of section 263 of the Act. In support of his submissions, counsel for the assessee relied on the following decisions:- i) CIT Vs. Fine Jewellery (India) Ltd. in ITA No.263 of 2013 dated 03.02.2015 (Bombay) ii) Deepchand Surana Vs. CIT (163 TTJ 238) (Jodhp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amined various issues raised by the Commissioner of Income Tax in the order. Even before us, the assessee could not establish that Assessing Officer has called for details in respect of various issues like contracts entered into with M/s. IJM (India) Infrastructure Ltd. and Madras Cements Ltd., diesel expenses incurred by the assessee in respect of excavator, lease hire charges paid to Smt. A.Saraswathi, Pondicherry, Mr. K.S.Subbaraman, Tindivanam and Mr. S.Navaneethakrishnan, Tindivanam @ ₹ 6,00,000/- each and ₹ 1,90,25,860/- debited to income and expenditure account by the assessee in respect of hire charges paid by the assessee and the applicability of provisions of section 40(a)(ia) on such payments, excess funds flow over a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the order passed by the Assessing Officer without application of mind is certainly an erroneous order and is prejudicial to the interests of the Revenue. The Hon ble Allahabad High Court in the case of Mannulal Matadeen Vs. CIT (277 ITR 346) held that the Income Tax Officer had not made necessary enquiries before allowing the deduction of interest to Mannulal Matadeen on the credit balance and therefore, the order passed was erroneous and prejudicial to the interests of the Revenue. 7. The Hon ble jurisdictional High Court in the case of CIT Vs.Seshasayee Paper and Boards Ltd. (242 ITR 490) while examining the powers of Commissioner of Income Tax under section 263 observed as under:- That the Commissioner found that the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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