TMI Blog2016 (4) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... tion statement shows addition of credit note to Purchases in order to reconcile the figure of total purchases. Similarly, sales have been reconciled by adding a figure under the nomenclature “Sale High Seas” (not part of VAT return) and no reason whatsoever for such addition has been given nor any evidence was produced. Reconciliation of bank balance as on 31.3.2010 as per the Bank Statement the book of account as there appeared to be a huge difference in respect of assesse’s bank account in HDFC Bank and State Bank of Patiala is concerned, we find that in a Bank reconciliation statement various cheques issued by the assessee but not presented in bank as well as cheques received but not encashed by the assessee, these entries requires verification from the bank account of the assessee in various banks, however, AO has not made any attempt to verify/examine the same.CIT has rightly set aside the issue in dispute to the file of the AO to examine the same afresh Various loans amounting to ₹ 9 crores is concerned, we find that the same was also not enquired into and verified by the AO during the assessment proceedings. On this issue, the assessee has furnished copies of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts on the file in as much as he was not justified to set aside the order dated 31-12-2012 passed u/s 143(3) of the Income-tax Act, 1961 by the Deputy Commissioner of Income-Tax, Central Circle-I, Faridabad and direct the Assessing Officer to:- a) examine the admissibility of the amount of ₹ 50,85,988/- on account of Brokerage expenses claimed in the Profit Loss Account; b) reconcile the figures of sale and purchase for fresh consideration de novo covering all factual aspects as there is difference in sales and purchase as per the purchase/sales register vis-a-vis the VAT returns and the purchases and sales disclosed in the profit and loss account c) reconcile bank account with the bank balances in various accounts of the Appellant Company for fresh consideration as reconciliation of bank balance figure as on 31.03.2010 as per the bank statement vis-a-vis the books of account appeared to disclose huge differences in respect of assessee's bank account in HDFC and State Bank of Patiala f) verify the dates, cheque number and amount from the bank account of the Lender and tally it with the entries in the books of account as well as bank account of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of the Act in respect of purchases made from MIs Star Wire (I) Ltd, a related enterprise, and payment of salary of ₹ 40,000/- per month to Shri Surendra Kumar Gupta. 4. In compliance of the Notice dated 07.3.2014 assessee filed its reply dated 14.11.2014 and stated that no exercise of the revisionary powers u/s. 263 of the Act is called for since all the relevant details with respect to the issues laid out in the impugned notice were duly filed before the AO and corresponding conclusion drawn by him based on the relevant facts and it cannot be said that the order passed by the AO is erroneous so as to be prejudicial to the interest of justice. In its reply it was further stated that the issues in question were duly examined and a conclusion drawn by the AO on the basis of an analysis of all the relevant facts and examination of the evidence filed and as such the order passed by him u/s. 143(3) of the Act cannot be considered to be erroneous whereby one of the mandatory tenets for the provisions of Section 263 to come into play are not satisfied. 5. After examination of the Reply of the Assessee and documentary evidences, Ld. CIT passed the impugned order u/s. 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant facts and it cannot be said that the order passed by the AO is erroneous so as to be prejudicial to the interest of revenue. However, separate contentions with respect to each of the issues were made as under:- (a) With regard to brokerage expenses, it was submitted that the Assessee Company is basically engaged in trading of steel wherein payment of brokerage is not only required but also essential not only to generate sales by identifying customers and their requirements but also sometimes to facilitate in the collection of dues and guarantee the recovery of the outstanding. Brokerage is an integral part of the Assessee Company's business activities and has been allowed as an expenditure in the assessment in earlier years. (b) With regard to the perceived differences between the purchase and sales registers and copy of VAT return are available on record, it was submitted that reconciliation statement reconciling the same have been prepared whereby variations in these figures stand automatically verified. (c) With regard to the alleged vast difference in the bank balance figures shown in the Balance Sheet and those reflected in the bank statements, the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT dated 18.3.2015 because the assessment order passed by the AO was held to be erroneous as well as prejudicial to the interest of revenue by the Ld. CIT. The main contention of the Ld. DR was that the AO has not made proper enquiries on the issues in dispute, hence, the Ld. CIT has rightly set aside the issues in dispute to the file of the AO to examine the same denovo, after giving the assessee a reasonable opportunity of being heard and also observed that AO is free to arrive at any conclusion in the light of the evidence adduced by the Assessee and as per the provisions of Income Tax Act without being guided by any observations made in the impugned order. 9. We have heard the rival contentions and considered the Paper Book alongwith case laws cited by the assessee and orders of the authorities below. We find that the AO has not even made any attempt to make any enquiry before accepting the claim of the assessee and accepted the claim in a hurry manner without applying mind. From the records, it reveals that the AO has not even appropriately appreciated the evidence on record either failed to examine or if examined, did not arrive at the correct logical conclusion on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and State Bank of Patiala is concerned, we find that in a Bank reconciliation statement various cheques issued by the assessee but not presented in bank as well as cheques received but not encashed by the assessee, these entries requires verification from the bank account of the assessee in various banks, however, AO has not made any attempt to verify/examine the same. Therefore, in our considered opinion, Ld. CIT has rightly set aside the issue in dispute to the file of the AO for fresh consideration, which does not need any interference on our part, hence, we uphold the order of the Ld. CIT on this issue. d) Apropos Issue relating to various loans amounting to ₹ 9 crores is concerned, we find that the same was also not enquired into and verified by the AO during the assessment proceedings. On this issue, the assessee has furnished copies of bank account of the lenders as well as their assessment details, but the same was not verified entry wise from the books of account as well as bank account of the assessee. Therefore, in our considered opinion, Ld. CIT has rightly set aside the issue in dispute to the file of the AO with the direction to verify the dates, cheque num ..... X X X X Extracts X X X X X X X X Extracts X X X X
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