TMI Blog2016 (5) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under section 143(3) and such lack of enquiry made the assessment order passed by the AO under section 143(3) erroneous as well as prejudicial to the interest of the Revenue giving jurisdiction to the ld. CIT under section 263 to set aside the same with a direction to the AO to make the assessment afresh. We therefore, uphold the impugned order of the ld. CIT passed under section 263 - Decided against assessee. - ITA No.1123/Kol/2013 - - - Dated:- 22-4-2016 - Shri P. M. Jagtap, A.M. Shri N.V.Vasudevan, J.M. For The Appellant : Shri Subash Agarwal, Advocate For The Respondent : Shri Rajat Subhra Biswas, CIT,DR ORDER Shri P.M.Jagtap, A.M. This appeal filed by the assessee is directed against the order of ld. CIT-XIX, Kolkata, dated 06.03.2013 passed under section 263 of the Income Tax Act for the assessment year 2008-09. 2. The assessee in the present case is an individual who is carrying on the business as insurance agent. The return of income for the year under consideration was filed by him on 15.07.2008 declaring total income of ₹ 8,15,179/-. In the assessment completed under section 143(3) vide an order dated 27.12.2010, the total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewelleries [11 pieces of gold chains worth ₹ 1,17,543/- and two pieces of bracelets and a chain worth ₹ 60,432/-] in this connection were available therein. These jewelleries appeared to be quite unusual for business promotion activity in connection with the assessee's line of business i.e. the LIC commission agency. The AO seems to have failed to examine this aspect. On the contrary, the A.O. only disallowed a sum of ₹ 20,000/- on estimate basis for which no rationale was discernable It is pertinent to mention that for a commission agent of LIC the question of incurring business promotion expenditure generally does not arise. (e) The assessee's total claim of expenditure under the head salary and bonus stands at R.4,28,000/-. Details of such expenditure furnished by the assessee during the assessment proceeding revealed that the assessee required an average salary payment of ₹ 31,000/- (approx.) per month, but in the month of March the assessee had claimed salary expenditure of ₹ 82,000/-. The AO. is found to have not enquired about the rationale behind such abrupt increase in the salary expenditure during the last month of the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Likewise, the expression erroneous has not been defined in the Act. But it's plain meaning is that the term 'erroneous' involves error or deviation from law. Therefore, an assessment order made by complying the provision of Law cannot be branded as erroneous by the CIT simply because according to him the same should have been passed or framed in a different manner. In the present case of the assessee the A.O has examined all the required documents furnished by the assessee in detail during the scrutiny proceeding. The AO has conducted detailed scrutiny proceeding and called for all the documents and vouchers relating to the expenses incurred by the assessee. Additions have also been made by the A.O under several heads of expenses. Thus the order of the AO cannot be said to be erroneous, as all expenses have been examined by the AO in detail including the expenses and purpose mentioned by your goodself in the notice issued. Reference is made to the judicial pronouncement by the ITAT, Jodhpur Bench in Pawan Kumar vs. Assessing Officer (2007) 106 TT J 494 where it was held that where the AO had fully verified the purchase/sale of goods and examined the aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... potential and existing policy holders to inform them about the new policies and plans. Huge expenses are incurred in distribution and circulation of pamphlets and circulars to communicate about the new policies to various customers. All payments under this head are being made by cash/cheques against bills and vouchers. These payments are made wholly and exclusively for the purpose of this LIC business. 3. Printing and Stationery Expenses :- Printing and stationery expenses are incurred for the purpose of printing of various pamphlets, brochures, envelopes, visiting cards, letter heads etc. Huge papers and stationeries are regularly required to run the day, to day operation. Printing papers are regularly required for various proposals and correspondences to various customers. Greeting cards on various occasions such as Diwali, New Years eve and Birthday of clients etc. are to be given to all policy holders to maintain a regular relationship with them. Sometimes free COs are to be distributed to highlight the details of the new Lie policy plans etc. Huge payments are incurred for photocopy of all documents of new policy proposal before submitting to LIC office every month. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the assessee to render different categories of services to the policyholders. However, now-a-days, smart and educated staffs having good working knowledge of computers are only available against hefty salary payments. Thus, from the above explanation it can be clearly observed that the said expenses have been incurred for the purpose of the business of the assessee. Almost all payments have been made through account payee cheques to genuine parties. Supporting documents and invoices were available for verification in case of all payments. Necessary details of all the heads of expenses were submitted for verification during the course of assessment proceedings. Thus under the facts and circumstances of the case, the assessee has shown a moderate income of 20 % of total receipt during the A.Y. 2008-09. He has paid an Income Tax amount of ₹ 2,00,000/-(approx.). There is no loss to revenue. Hence the assessment order passed for A.Y. 2008-09 is not erroneous and prejudicial to the interest of the revenue. I, therefore, request your honour to drop the proceedings u/s 263 of Income Tax Act, 1961 . 4. The above explanation offered by the assessee was not found accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal. 5. The ld. Counsel for the assessee submitted that the so-called errors in the order of the AO have been pointed out by the ld. CIT in his impugned order passed under section 263 on the basis of details and documents furnished by the assessee during the course of assessment proceedings. He contended that the fact that these documents and details were available on record before the AO itself shows that the errors pointed out by the ld. CIT were duly examined by the AO during the course of assessment proceedings and on such examination, the assessment was completed by him under section 143(3). He contended that adequate enquiries thus were made by the AO during the course of assessment proceedings on all the relevant issues and even if the ld. CIT was of the view that the enquiries made by the AO were not adequate, that cannot be a ground for revising the assessment by exercising powers conferred upon him under section 263. He relied on the decisions of the Hon ble Delhi High Court in the case of DIT-vs- Jyoti Foundation 357 ITR 388 (Del.) and in the case of CIT-vs- Sunbeam Auto ltd. 332 ITR 167 (Del.) as well as the decision of the Coordinate bench of this Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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