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2015 (10) TMI 1883 - ITAT CHENNAI

2015 (10) TMI 1883 - ITAT CHENNAI - TMI - Revision u/s 263 - as per CIT(A) AO 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 accoun .....

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trial 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) never applied his mind to various issues as pointed out by the Commissioner of Inco .....

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peal is filed by the assessee challenging the order of the Commissioner of Income Tax, Puducherry dated 28.02.2014 passed under section 263 of the Act in invoking provisions of section 263 and holding that assessment order passed under section 143(3) dated 31.12.2011 for the assessment year 2009-10 is erroneous and prejudicial to the interests of the Revenue and setting aside the same with a direction to do the assessment de novo. 2. Brief facts are that assessee, an individual, engaged in the b .....

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. 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 .....

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ile completing the assessment and therefore assessment order passed under section 143(3) of the Act dated 31.12.2011 is erroneous and prejudicial to the interests of the Revenue and thus set aside the assessment with a direction to redo the assessment de novo examining all the issues raised in the show cause notice and order passed under section 263 of the Act. 3. Counsel for the assessee before us contends that necessary details in respect of the issues raised in the show cause notice were furn .....

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diesel expenses incurred by the assessee in respect of excavators hired by the assessee for the reason that vouchers submitted 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 Office .....

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y supports the order of the Commissioner of Income Tax in invoking provisions of section 263 of the Act in setting aside the assessment for de novo consideration. Departmental Representative submits that Assessing Officer has not called for any details in respect of various issues raised by the Commissioner of Income Tax in the order except a portion of diesel expenses was disallowed for want of proper vouchers. Departmental Representative submits that none of the issues were examined during the .....

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ers are missing. We also find that since there is a difference in sundry advances with reference to the books of account and balance sheet filed in respect of transport business for a difference of ₹ 1,00,000/- which was offered to tax by the assessee. There is nothing in the assessment order to suggest that Assessing Officer has called for details and examined various issues raised by the Commissioner of Income Tax in the order. Even before us, the assessee could not establish that Assess .....

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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. and the assessee has submitted all these details in the course of assessment proceedings. Therefore, since the Assessing Officer has not called for any such details in respect of various issues raised in the 263 order and in the absence of any clarification / submissions made in the course of assessment proceedings, it cannot be held that Assessing Of .....

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rt 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) never applied his mind to various issues as pointed out by the Commissioner of Income Tax in his order. The Assessing Officer has passed th .....

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it 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 Incometax Officer was not correct in granting relief with respect to some of the items considered in the original assessment proceedings and from the in .....

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