TMI Blog2011 (1) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... iny, it was incumbent on the Assessing Officer to make inquiries into genuineness of book profits and credits. Nothing like that has been done. Relying on the decision in the case of Gee Vee Enterprises, the order of the CIT was upheld. The facts of our case are in pari-materia with the facts of our case on this point. On consideration of these cases, we are of the view that the learned CIT was right in exercised her revisionery jurisdiction. Appeal is dismissed. - ITA. No.2595/D/2009 - - - Dated:- 21-1-2011 - SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER For the Petitioner : Shri P.S. Kashyap, FCA For the Respondent : Smt. Reena Sinhapuri, CIT- DR ORDER PER K.G. BANSAL: The assessee had filed the return on 31.10. 2005 declaring total income of ₹ 3,41,860/-. The return was processed u/s 143(1) of the Income-tax Act, 1961. Subsequently, the case was selected for scrutiny and a notice u/s 143(2) was served on the assessee on 30.10.2006. Thereafter notices u/s 142(1) were also issued. The assessee had debited expenses under the head traveling and conveyance, vehicle repairs and maintenance, telephone and depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessed on 31.10.2005. The assessment order had been passed on 30.05.2007. The learned CIT had issued notice u/s 263 on 26.02.2010 and finally the order has been passed on 26.03.2010. 4.1 It is further submitted that confirmations had been filed in respect of loans and creditors before the Assessing Officer. These confirmations were again filed in the course of revisionary proceedings. The loan confirmations have now been placed in the paper book on page Nos. 20 to 25. These pertain to Hanumain, Krishna Rani, Narendra Gupta, Pramila Gupta, Rinky Gupta and Vivek Gupta in respect of ₹ 7,41,009.60; ₹ 2,66,004/-; ₹ 2,20,000/-; ₹ 75,777/-; ₹ 64,813/-; and ₹ 1,51,418/- respectively. It is further submitted that confirmations in respect of sundry creditors have been placed in the paper book on page Nos. 26 to 39. It has been argued that all the confirmations had been filed in the course of assessment proceedings, which were examined by the Assessing Officer. 4.2 Our attention has been drawn towards paragraph Nos.6, 12, 13 of the revionary order. In paragraph No.6, it has been inter alia mentioned that the assessment order is sketchy and stereotyp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... response to notice dated 01.03.2007. None attended in response to notice dated 04.04.2007. Finally, the assessee was required to file the details on 10.05.2007. These details were filed on 07.05.2007. The order was passed on 30.05.2007. It is obvious from the aforesaid history that there was no time left with the Assessing Officer to examine the details filed by the assessee. The case was selected for scrutiny in respect of low net profit and high unsecured loans, sundry creditors and sundry advances. These matters were accepted without making any inquiry into the details. Mere production of books of account is not sufficient to satisfy the condition that requisite inquiry as called for on the facts and in the circumstances of the case, has been made by the Assessing Officer. The fact of the matter is that there was no time for making any inquiry whatsoever. Therefore, a sketchy order was passed in which a part of the expenses was disallowed on an ad hoc basis. Our attention has been drawn towards various confirmations, which do not mention the permanent account numbers. The case of M/s Vikas Polymers has been distinguished on facts. Therefore, it is strongly argued that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being ₹ 15,52,78,515/- (Rs. 27,46,18,000 - ₹ 11,93,39,485). The CIT held that in order to take a final view further examination of books of account would be necessary which can be done by the Assessing Officer only. Therefore, he set aside the assessment for the verification of the accounting to the commission. Various arguments were made before the Hon ble Court in this matter. It is mentioned that the Tribunal had opined that the Assessing Officer asked the assessee to explain why the commission received by him from airlines which had been passed to the customers by way of discount should not be added to the total income. The assessee had furnished explanation in this regard, which was accepted by the Assessing Officer. Therefore, it was held that there was no error in the assessment and, there cannot be any prejudice caused to the revenue as to assessment had been framed after proper application of mind. The Hon ble Court held that the commissioner really made an effort to cause a routine inquiry to be made with regard to a matter which had been concluded, which means that he thought that he had the power to begin a fresh litigation because of the view entertained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1922 for revising the order passed for assessment years 1952-53 to 1960-61. In the show cause notice, it was mentioned that you have neither resided nor carried on any business from the address mentioned in the return of income. Further, the Assessing Officer was not justified in accepting the initial capital, gifts received, sale of jewellery, and income from business without making any inquiry. Thereafter, the Commissioner cancelled the order directing the Assessing Officer to make fresh assessment order. The matter traveled upto the Hon ble Supreme Court. The Hon ble Court upheld the order by making the following observations:- In our view, the High Court was right in overruling the contention of the assessee. The order of the Commissioner is a detailed order. There is no doubt that he does mention some facts which were not indicated or communicated to the assessee and which the assessee had had no opportunity of meeting. For instance, in paragraph 9 it is stated: It has been ascertained that the Income Tax Officer, D Ward, Howrah, had no jurisdiction over the assessee and hence all the assessments made by him are ab initio null and void. It has also been learnt from lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfy himself passed the assessment order on March 30, 1961, for the assessment years 1952-53 to 1957-58, and on April 26, 1961, for the assessment years 1958-59 to 1960-61. No bank account or any proper books of account were maintained by the assessee or produced before the Income Tax Officer. A short stereo-typed assessment order was made for each assessment year. As a sample, the Commissioner has reproduced the assessment order for the ay 1952-53 in his order. Profit for speculation was shown as ₹ 3,085/- and interest ₹ 600, and ₹ 500 was added for want of books of account and evidence. No evidence whatsoever was produced in respect of the money-lending business done and interest income shown to have been received by the assessee. No names were given as to the parties to whom the loans were advanced, with amounts and rate of interest and as to when the interest income was received. 6.4 Further, reliance has been placed on the decision in the case of Smt. Tara Devi AggarwaL (supra), in which the finding of the court in the case of Rampyari Devi Saraogi was followed to the effect that an assessment made in an undue hurry leads to an assessment order which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had furnished an explanation, which was found satisfactory by the Assessing Officer. The Tribunal further opined that the revenue could not point out any defect in the system of accounting followed by the assessee in respect of commission received and discount paid to the customers. Therefore, the court came to the conclusion that the Commissioner, it appears wanted to start a fresh litigation. The facts of this case are distinguishable. There is no show cause or explanation on record regarding low net profit. Although the assessee has filed confirmations, no verification was made which was called for in view of the reasons for taking up the case for scrutiny. Coming to the case of M/s Vikas Polymers, the finding of the Hon ble Court is that the exercise carried out by the Commissioner was in the nature of making roving and or fishing inquiry. He proceeded on the assumption that the details furnished before him were not filed at the time of assessment. It was mentioned that the Assessing Officer has not examined cash credits of partners or deposits of chit fund. This may make the order erroneous but how it can be prejudicial to the interest of revenue has not been stated by h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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