9911796707
TMI Blog2012 (12) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... ember - This appeal of the assessee for Assessment year 2009-10 is directed against the order of the ld. CIT, Ajmer dated 28/03/2012 passed u/s 263 of the Income Tax Act, 1961 ('the Act for short"). 2. Briefly stated, the facts of the case are that the assessee-firm filed its return of income (ROI) on 29.09.2009 declaring total income at Rs. 'NIL'. The books of accounts of the firm are duly audited u/s 44AB and the report in form No 3 CA and 3CB dated 26/09/2009 were filed alongwith the ROI. The assessee-firm derives its income from sale of Petrol and Diesel and also from transport business. The A.O has completed his order u/s 143(3) on 7.1.2011. 3. Subsequently, ld. Commissioner called for the records of this assessment order and found that this order is erroneous and prejudicial to the interest of the revenue in respect of the following issues :- (i)transportation receipts (ii)scrap value of the closing stock of tyres and tubes. (iii) Expenses under the head "Maruti Penalty Expenses" After issuing show-cause notice u/s 263 and after hearing the objection of the assessee, the ld. CIT has found the order as such and has, thus, set it aside, to that extent, with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is empowered to pass an order as the circumstances of the case may warrant. He may pass an order enhancing the assessment or he may modify the assessment. He is also empowered to cancel the assessment and direct to frame a fresh assessment. He is empowered to take recourse to any of the three courses indicated in section 263. So, it is clear that the CIT does not have unfettered and unchequred discretion to revise an order. The CIT is required to exercise revisional power within the bounds of the law and has to satisfy the need of fairness in administrative action and fair play with due respect to the principle of audi alteram partem as envisaged in the Constitution of India as well as in section 263. An order can be treated as 'erroneous' if it was passed in utter ignorance or in violation of any law; or passed without taking into consideration all the relevant facts or by taking into consideration irrelevant facts. The 'prejudice' that is contemplated under section 263 is the prejudice to the Income Tax administration as a whole. The revision has to be done for the purpose of setting right distortions and prejudices caused to the Revenue in the above context. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT issued a show cause notice dated 06.03.2012 on the above issues to the assessee-firm. A detailed reply dated 20.03.2012 given by the assessee reads as under:- "1. Difference in Transportation Receipts as per TDS detail and as per Profit & Loss Account: It is submitted that the department has given observation that details of Transportation Receipt available on record was Rs. 7,53,08,733/- and Transportation Receipt as per Profit & Loss Account was Rs. 7,24,21,780/-. The difference of Rs. 28,86,953/-. We humbly submit that this difference is arise due to accounting treatment adopted by M/s Tata Motors Ltd. and M/s TML distribution Ltd. Assessee issued Transportation bill in the month of April 2009 & May 2009 but in TDS certificate of M/s Tata Motors Ltd. and M/s TML distribution Ltd. it was taken in the period from 01/03/2009 to 31/03/2009 while in TDS certificate date of payment/amount credited was shown April 2009 & may 2009 month which was falling in next financial year 2009-10. As such Assessee issued Transportation bill in the month of April 2008 & May 2008 but in TDS certificate of M/s Tata Motors Ltd. and M/s TML distribution Ltd. it was taken in the period from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p value. Tyre & Retreading (Old Tyre Purchases & Retreading Expenses) - This type of expenses was old tyre purchases & retreading expenses. Assessee purchased old tyre 'and retreaded them, for the old tyres was made serviceable similar to the new tyres. In view of above submission, explanation, it is humbly submitted that assessee purchased tyre & tubes and consumed them so there was no closing stock of tyre & tubes. When a tyre depreciated or damaged then it retreaded. When retreaded tyre damaged or fully depreciated, it has negligible scrap value. So there was negligible scrap income which was shown in other income in Profit & Loss Account. 3. Maruti Penalty Expenses : It is submitted that the department has given observation that the assessee firm has claimed expenses of Rs. 1,01,5661/- under the head of Maruti Penalty Expenses in Profit & Loss Account, since the expenses are of the nature of penalty, the same are required to be fully disallowed. We humbly submit that the assessee-firm has claimed expenses of Rs. 1,01, 566/-under the head of Maruti Penalty Expenses in Profit & Loss Account. Nature of this expenses describe as follows: When assessee 's transportatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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