TMI Blog2016 (6) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny and the Assessing Officer had carried sufficient enquiries in this respect. Therefore, these are not the cases where no enquiry has been done. In the present cases, the Assessing Officer has completed the assessments after accepting the submissions of the assessee that the bank deposits reflected the turnover from retail business whereas in the opinion of the learned Commissioner of Income-tax the additions should have been made under section 69 of the Act. The honourable Supreme Court in the case of Max India Ltd. [2007 (11) TMI 12 - Supreme Court of India ] has held that where two views are possible and the Assessing Officer has taken one of the views with which the Commissioner does not agree it cannot be treated as erroneous or prejudicial to the interest of the Revenue unless the view taken by Assessing Officer is unsustainable in law. THus we are in agreement with the arguments of learned authorised representative that the Assessing Officer had passed orders after due application of mind and these are not the cases fit for action under section 263. - Decided in favour of assessee - I. T. A. Nos. 67 and 68/(Asr)/2012 - - - Dated:- 18-3-2016 - A. D. Jain ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing details of business in respect of which income was declared under section 44AF and in response the assessee submitted his reply, vide letter dated September 14, 2010. The learned authorised representative submitted that the assessee filed another reply wherein he submitted that in view of the provisions of section 44AF which opens with a non obstante clause, the provisions of section 28 to section 43C for computation of income under the head Business were not applicable to the assessee. The learned authorised representative further invited our attention to the paper book pages 68 to 70 where a copy of the letter dated November 11, 2010, written to the Assessing Officer was placed and submitted that the assessee had relied upon the decision of the honourable Income-tax Appellate Tribunal Amritsar Bench in ITA No. 548 (Asr)/2008, for the proposition that where the assessee had offered for taxation the income under the presumptive provisions of section 44AF no further inquiry was needed and, therefore, after the Assessing Officer was satisfied with the applicability of the provisions of section 44AF, he passed the order on November 30, 2010, and, therefore, the initiation of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned authorised representative also placed his reliance on the decision of the honourable Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT reported in [2000] 243 ITR 83 (SC), for the proposition that every loss of the revenue in an assessment order passed by the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue and further for the proposition that the provisions of section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer. 4. As regards the assessment order 2007-08, the learned authorised representative submitted that the learned Commissioner of Income-tax has not passed a separate order and has passed order for the assessment year 2007-08 holding that the facts of the case for the assessment year 2007-08 are similar to the assessment year 2008-09 and, therefore, this order cannot be said to be valid order. 5. The learned Departmental representative, on the other hand, submitted that the assessee after coming to know that the Assessing Officer had certain information had filed the revised returns which were beyond the statutory period of time and the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2007-08 and the assessment year 2008- 09. The show-cause notice is reproduced as under : In your case, two separate assessments for the assessment years 2007-08 and 2008-09 have been completed by the Income-tax Officer, Ward 5(4), Amritsar, vide two separate orders dated December 30, 2010, and November 30, 2010, at an income of ₹ 3,40,197 and ₹ 5,09,510, respectively. The proposal has now been received from the Income-tax Officer, Ward 5(4), Amritsar, under section 263 of the Income-tax Act, 1961, stating that the assessment framed is erroneous as well as prejudicial to the interests of the Revenue. 2. The report submitted by the Assessing Officer has been considered. I have also perused the assessment records for the above mentioned two assessment years. The following facts emerge there from : (i) The original return for the assessment year 2008-09 was filed on December 31, 2008, declaring an income of ₹ 1,06,870. (ii) The case for the said assessment year was selected for scrutiny on the basis of CASS and notice under section 143(2) was issued on August 17, 2009, i.e., to verify your bank deposits in the IDBI Bank. (iii) You h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings for both the assessment years 2007-08 and 2008-09 for which the onus laid upon you to appear and to produce evidence in support of your revised return filed on June 24, 2011. The vital issue of the case has, therefore, remained totally untouched and the assessment has been framed in haste. 3. In view of the above, the assessments for the assessment years 2007-08 and 2008-09 framed by the Income-tax Officer, Ward 5(4), Amritsar, vide orders dated December 30, 2010, and November 30, 2010, being erroneous in so far as it is prejudicial to the interests of the Revenue are, therefore, required to be revised. You are hereby given an opportunity of being heard and to submit your reply in the matter on December 7, 2011'. To the abovesaid notice the assessee filed a reply wherein he reiterated that in the case the income is offered under section 44AF, no further questions are required to be asked as none of the provisions of section 28 to section 43(c) are applicable for determination of income from profits of business as the assessee is not required to maintain any books of account as required under section 44AA of the Act. However, the learned Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of sales tax and state ment. In reply, I submit as under : I have already stated in paragraph 2 of my letter October 18, 2010, about the non-applicability of section 44AA regarding the maintenance of books of account which have been specifically excluded as per section 44AF. Further, the non obstante clause at the beginning of section 44AF also excludes the applicability to section 28 to section43C. Therefore, permit me to say with all due respect that your queries with regard to business income offered under section 44AF are not legally called for. We are supported in this contention by the decision of the Amritsar Bench of the Income-tax Appellate Tribunal in the case of Smt. Saviti alias Sweety Sekhir v. ITO (ITA No. 548 (Asr)/2008) for the assessment year 2005-06. Your attention is invited to paragraph 4 to 4.3 of the said order which is being reproduced hereunder : '4. The learned counsel drew our attention to section 44AF of the Income-tax Act and submitted that section 44AF is applicable to the assessee engaged in retail trade in any goods or merchandise whose turnover was more than ₹ 40 lakhs and the assessee is required to offer a sum not less than f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished details of payments received under section44AF then such assessee has to maintain books of account and other documents as required under section 44AA of the Act. In the present case, the assessee admittedly, stated before the lower authorities that the assessee is engaged in the business of retail sale of textile/fabrics and turnover is less than ₹ 40 lakhs and profit declared at five per cent. of the total turnover to be accepted as income of the assessee. The Assessing Officer accepted this portion of the assessee. Later on the Assessing Officer cannot go against this and made further addition on account of deposit in the bank account. The assessee when said that the deposit in the bank account represent the turnover and the only five per cent. is income as per section44AF, the Assessing Officer is not justified in treating the entire deposit in the bank account as income of the assessee unless having any evidence that the assessee is not retail trader. The Assess ing Officer never said that the assessee is not entitled for the benefit of section 44AF. After accepting the income of the assessee under section 44AF, it was not possible for the Assessing Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Commissioner, the order should have been written more elaborately. In the case of Roshan Lal Vegetable Products Pvt. Ltd. v. ITO [2011] 9 ITR (Trib) 431 (Amritsar) in ITA No. 6(Asr)/2010 (ITAT-Amritsar) it has been held that where the relevant issues have been duly adjudicated by the Assessing Officer while making the assessment, the Commissioner of Income-tax is not competent to readjudicate the same issue by invoking the provisions of section 263. The honourable Supreme Court in the case of CIT v. Max India Ltd. reported in [2007] 295 ITR 282 (SC) has held that where two views are possible and the Assessing Officer has taken one of the views with which the Commissioner does not agree it cannot be treated as erroneous or prejudicial to the interests of the Revenue unless the view taken by Assessing Officer is unsustainable in law. We find that in the present cases the Assessing Officer had made sufficient enquiries and on the basis of the reply of the assessee and his reliance on the case of the Income-tax Appellate Tribunal, Amritsar Bench in the case of Smt. Saviti alias Sweety Sekhir v. ITO (supra) has completed the assessment and has accepted the claim of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income-tax Act. As noted above, the submission of the learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expend iture in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on this issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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