TMI Blog2011 (7) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the provisions of sec. 263 and setting aside the assessment with a direction to the AO to make fresh assessment in respect of inflation of expenditure. 3. There was a search seizure action u/s.132 of the I.T. Act on 15-10-2003 which was finally concluded on 02-12-2003. Survey operations u/s.133 of the I.T. Act were also carried out at the business premises of the group concerns of the assessee. During the search survey action, a floppy drive was found and seized containing the accounts of the assessee. The assessment was famed u/s.153A read with sec.143(3) on 27-03-2006 by determining the total income of the assessee at 33,55,326/-. Subsequently, the CIT proposed to revise the assessment primarily on the ground that in the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tware accounting as on the date of search. It was further pointed out that certain expenses are accounted only at the end of the year and, therefore, the data found in the floppy drive at the time of search cannot be compared with the final audited accounts of the assessee. The ld. A.R. has forcefully contended that the assessee has furnished all the details before the AO during the assessment proceedings and the AO duly verified all the expenses and other details filed with the return of income. He has referred to para 4 of the assessment order and submitted that the AO has acknowledged the fact of filing the details, production of books of account and explanation by the assessee. The ld. A.R. has asserted that once the AO has duly examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure. The CIT has relied upon and considered the seized material Annexure A-6 while passing the impugned order. The ld. D.R. has forcefully contended that the seized material is very much positive material on the point and, therefore, the CIT has considered a relevant and positive evidence/material while passing the impugned order. He has relied upon the impugned order. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that towing, salary, wages labour expenses are booked only at the end of the financial year. The nature of the expenses is such that they are incurred on day to day basis of the business transactions and, therefore, they are recorded on day to day basis. Therefore, when these expenses were not found recorded at the time of search, there is sufficient ground with the CIT in holding that in the absence of any enquiry and verification by the AO, the assessment order is erroneous in so far as it is prejudicial to the interests of Revenue. When the AO has not at all discussed or given any finding on these issues and there is nothing in the assessment to suggest or exhibit any thought process on the part of the AO in addressing the issues in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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