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TMI Blog2012 (9) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... f comparing the incomplete data with audited accounts and without brining on record any material to show any infirmities in audited accounts. 2) The CIT Central has erred in not appreciating the fact that the then AO had already compared and verified the details of incomplete data with that of the audited accounts and that assessment was completed on the basis of such audited and complete accounts and hence the said order could not be treated as erroneous or for that matter prejudice to the interest of the revenue and therefore his action of cancelling the assessment u/s 263 should be set aside/struck off." 3) The CIT Central has erred in not allowing proper opportunity to present its case and to explain the alleged difference which was already explained before the AO and thereby has violated the principles of natural justice and as such his order u/s 263 should be struck off. 4) On perusal of the order it is seen that the Commissioner of Income Tax Central-1, Mumbai has reopened the case merely on suspicion and not on the basis of any material which could lead to any base to ascertain that income had escaped the assessment. And therefore the action of the CIT Central-1 in in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has verified the details then merely because there is no mention in the assessment order by itself is not sufficient to hold the order as erroneous and prejudicial to the interest of revenue. 3.4 Learned AR has submitted that in the Mazharnama dated 21-3-2006, a copy of which has been placed at page No.57 of the paper book, it has been clearly mentioned that the ACIT/AO opened the seal of the floppies allegedly containing the second set of books of accounts in the presence of two witnesses and after taking out the computer back up, were again sealed and signed before the witnesses. Thus, the Assessing Officer has applied his mind whereas the Commission has not carried out proper enquires or verification on his own but merely relied upon the letter of DDIT. Hence, the CIT cannot revise the order merely because he disagreed with the conclusion of the Assessing Officer. In support of his contention, learned AR of the assessee has relied upon the decision of the Hon'ble jurisdictional High Court in the case of Gebrial India Limited, reported in 203 ITR 108 as well as the decision of Hon'ble Allahabad High Court in the case of CIT Vs. Goyal Private Family Specific Trust, reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the group concerned subjected to the same search and seizure action. The Tribunal after considering the detail arguments of the assessee has adjudicated the issue in para 6 as under :- "6. We have considered the rival contentions and carefully perused the records. In the assessment order, the AO has recorded that the A.R. of the assessee appeared in response to the notice from time to time and filed details called for, produced the books of account and explanation. As far as the issue of inflation of the expenditure, which is the subject matter of the revision order, is concerned, it is evident from the assessment order that the AO has not discussed this issue at all. There is no trace of any examination of this issue by the AO while passing the assessment order. There is no doubt that when two views are possible on an issue and the AO has taken one of the possible views, then, while exercising the jurisdiction u/s.263, the CIT cannot take a different view on the issue. While framing the assessment, the AO has not discussed anything with regard to addressing the issue of inflated expenditure. Even from the records, it is clear that the AO has not even made any enquiry on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue. Accordingly, the said decision is not applicable to the facts of the present case. The appeal of the assessee is devoid of merits." 3.7 When the assessment order is silent and does not indicate that the Assessing Officer has applied its mind on the issue which is subject matter of the revision order then it cannot be said that the Assessing Officer has taken a view of this issue. We further note that no query was raised by the Assessing Officer regarding the difference of the expenditure booked by the assessee in final accounts and the accounts found in the floppy at the time of search. Further, no such explanation was furnished by the assessee before the Assessing Officer during the original assessment passed under Section 153A r.w.s. 143(3) explaining the difference of expenditure booked by the assessee in the final accounts and how it is different from the accounts found in the floppy. Therefore, there is no material on record to suggest that this issue of inflated expenditure in the final accounts in comparison to the accounts found in the floppy was either considered, verified, examined or adjudicated by the Assessing Officer. In view of the above facts, we do not find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) being had in law be deleted. 2. The order passed by the Ld. CIT(A) lacks sanctity and being violative of natural justice should be struck off. 3. The appellant craves the right to add, amend, alter, modify and or substitute any or all the grounds of appeal at the time of hearing." 4.1 The main contention of the learned AR of the assessee is that while making the addition under Section 143(3), the Assessing Officer has not verified and examined the alleged inflation of expenditure and has not given a finding that the expenditure shown in the final audited accounts are not actually incurred and are bogus. The Assessing Officer has simply gone by the comparison of the expenditure recorded in the accounts as found in the floppy, which were not complete accounts. Therefore, to make the addition on this ground, the Assessing Officer was required to give a finding that the expenditure as booked by the assessee are not genuine but bogus one and, hence, no disallowance can be made on the basis of incomplete accounts as contained in the floppy. On the other hand, learned DR has submitted that when the assessee has not appeared before the Assessing Officer and no explanation w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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