9911796707
TMI Blog2016 (10) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... T noticed that as per computation of income assessee had claimed TDS of Rs. 3,16,99,286/- as against the professional income of Rs. 29,19,49,163/- shown by the assessee in the Profit & Loss A/c. (P&L A/c.). As per ld.CIT, on the basis of TDS certificates, the gross income should have been Rs. 31,69,92,860/- and thus according to ld.CIT assessee had shown less income to the extent of Rs. 2,50,43,697/- (Rs.31,69,92,860 - Rs. 29,19,49,163). He accordingly issued notice to the assessee asking to show-cause as to why appropriate order u/s.263 of the Act be not passed. In response to notice, assessee inter-alia submitted that the inference drawn by ld.CIT of showing less income to the extent of Rs. 2.5 crores (rounded off) is factually incorrect because the TDS was deducted on the amount of bill including service tax. Since service tax was not the income of the assessee, assessee was not crediting or debiting service tax to its P&L A/c. Assessee also inter-alia objected to the initiation of proceedings u/s.263 of the Act. The submission of the assessee was not found acceptable to ld.CIT. He held that assessee had not disclosed the income corresponding to the amount of TDS claim of Rs. 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,70,763/- from which the payer has deducted tax at source is not includible in the total income of the appellant company and that the appellant company has not included the same in the receipts and also that the appellant has not separately claimed deduction for the service tax by separately debiting it to the Profit & Loss Account. The learned Principal Commissioner of Income Tax-1, Ahmedabad has erred in law and on facts of the case in passing the impugned order without appreciating the fact that in the course of assessment proceedings for A.Y. 2010-11, the AO has made detailed enquiries and the issue with respect to the income from all operations were called for by the AO along with necessary evidence. The learned Principal Commissioner of Income Tax-1, Ahmedabad has erred in law and on facts of the case in passing the impugned order ignoring the fact that as per Sr. No. 37 of the questionnaire, the AO has asked the appellant "to furnish the details in respect of income from all operations along with necessary evidence" and incompliance therefore the appellant had vide written submission dated 27/11/2012 furnished the requisite information. Thus, the issue with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer has made assessment on total income of Rs. 10,68,65,351/- after making addition/disallowance of Rs. 3,02,52,701/-. b) The learned Principal Commissioner of Income Tax-1, Ahmedabad has erred in law and on facts of the case in passing the impugned order without appreciating the fact that the Assessing Officer had made proper enquiries before passing the assessment order u/s. 143(3) dated 28/03/2013, notice u/s. 143(2) was issued on 24/08/2011 and detailed questionnaire and notice u/s. 142(1) were issued and the Assessing Officer had made enquiries in accordance with the provisions of the Income Tax Act. The claim of credit for tax deducted at source and the corresponding income relating to such TDS was also examined by the AO in the course of assessment proceedings. It is therefore prayed that the impugned order may please be cancelled. 4. The learned Principal Commissioner of Income Tax-1, Ahmedabad has erred in law and on facts of the case in passing the impugned order in utter disregard to the fact that the issue with respect to quantification of total income for A.Y. 2010-11 was a subject matter of appeal before the CIT (Appeals), who has passed appellate ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of invoices raised, the income was booked at the time of raising of invoice itself and the payments was received later on and in such situation the question of not recognizing the revenue did not arise. He further submitted that the service tax collected by the assessee does not constitute income chargeable to tax and therefore the amount of service tax was rightly excluded by the assessee in its Profit & Loss A/c. while crediting the professional service income. He submitted that the assessee was consistently following the same accounting method even in earlier years and no addition was made to the professional income in earlier years. With respect to charging of interest u/s.220(2) of the Act he submitted that section 220(2) comes into play only in a case where there is failure on the part of the assessee to pay the amount specified as tax payable in a notice of demand issued u/s.156 of the Act. In the present case for AY 2010-11, at the time of passing the assessment order u/s.143(3) of the Act there was no tax payable by the assessee pursuant to notice of demand issued u/s.156 of the Act or an intimation issued u/s.143(1) for that year and therefore the question of chargin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 263 of the Act, had been examined by the AO. 4.5. As far as the 2nd issue namely charging of interest u/s.220(2) is concerned, there is nothing on record to demonstrate that at the time of passing of order u/s.143(3) of the Act, there was any tax that was payable by the assessee pursuant to the notice u/s.156 of the Act and that there was failure on the part of assessee to pay the tax. 4.6. On the issue of what orders can be termed as erroneous and prejudicial to the interest of Revenue, we would like to refer to the decision of Hon'ble Bombay High Court in the case of CIT vs. Gabrial India Ltd (1993) 203 ITR 108 (Bom) where the Hon'ble Bombay High Court has held as under:- "An order cannot be termed as erroneous unless it is not in accordance with law. If an ITO acting in accordance with law makes certain assessment, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the Commissioner for that of the ITO, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where ITO while mak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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