Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 925 - ITAT VISAKHAPATNAM

2016 (10) TMI 925 - ITAT VISAKHAPATNAM - TMI - Revision u/s 263 - an order prejudicial and erroneous to the revenue - Held that:- It is a general presumption of law that the A.O. has considered all the details before completion of assessment and the CIT cannot presume that the enquiries conducted by the A.O. is insufficient and also the A.O. has not applied his mind, unless CIT categorically proves that the assessment order passed by the A.O. is erroneous. Though, the A.O. made further disallowa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der, wherein the A.O. has specifically discussed about the work contract expenditure. Under the provisions of section 263 of the Act, the CIT can assume jurisdiction once the assessment order passed by the A.O. is erroneous and also it is prejudicial to the interest of the revenue. In the present case on hand, though the order passed by the A.O. is prejudicial to the interest of the revenue but it is not erroneous, therefore, the CIT cannot assume jurisdiction to revise the assessment order pass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ellant : Shri C. Subrahmanyam, AR For The Respondent : Shri M.B. Reddy, DR ORDER PER G. MANJUNATHA, Accountant Member: This appeal filed by the assessee is directed against order of the CIT, Rajahmundry u/s 263 of the Income Tax Act, 1961 (hereinafter called as 'the Act') for the assessment year 2010-11. 2. The brief facts of the case are that the assessee, an individual engaged in the business of civil contracts filed his return of income for the assessment year 2010-11 on 29.9.2010 dec .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aking adhoc disallowance of ₹ 4 lakhs towards expenditure like gravel purchase, labour charges and sand purchased for want of bills and vouchers. 3. The CIT, Rajahmundry issued a show cause notice dated 5.2.2015 and asked to explain why the assessment order passed by the assessing officer u/s 143(3) of the Act dated 9.1.2013 shall not be revised under the provisions of section 263 of the Act. The CIT, proposed to revise the assessment order for the reason that on examination of assessment .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nses claimed by the assessee, depreciation claimed on mobile phones, details of unsecured and secured loans, sub contract works received from GVPR Engineers Limited, and amount advanced to M/s. M.R. Constructions. The A.O. without examining above issues, simply completed assessment by making certain adhoc disallowances which rendered the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. Therefore, issued show cause notice and asked to explain why assessmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ormation before the A.O., the A.O. has issued show cause notices on various occasions and specifically asked details about the expenditure debited in the profit & loss account, such as work contract expenses, details of depreciation claimed on fixed assets, secured and unsecured loans, sub contract details and loans and advances given to various parties. The assessee further submitted that as regards sub contract work expenses and other expenses debited in the Profit & loss account, the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oan accounts along with bank statements, wherever the secured loans are borrowed from bank. Similarly, with regard to advance given to M/s. M.R. Constructions, the assessee has given an amount of ₹ 5 lakhs on 26.3.2010, however your allegation that an amount of ₹ 45 lakhs was withdrawn in the name of M/s. M.R. Constructions through cheque no.46685 is not correct, as the said amount of ₹ 45 lakhs was selfwithdrawn by the assessee vide cheque no.46685. The A.O. after considering .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to examine the issues pointed out in the show cause notice with reference to books of accounts and relevant details. The CIT, further, observed that the A.O. has completed assessment by making adhoc disallowance of expenditure of ₹ 4 lakhs without examining the specific points referred to in the show cause notice with regard to work contract expenses, depreciation of fixed assets, secured and unsecured loans, loans and advances, applicability of TDS provisions and low net profit declared .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the A.O. u/s 143(3) of the Act and directed the A.O. to re-do the assessment on the lines discussed in his order within the time allowed after giving opportunity of being heard to the assessee. 6. The Ld. A.R. submitted that the assessment order passed by the A.O. u/s 143(3) of the Act, is not erroneous in so far as it is prejudicial to the interest of the revenue, as the A.O. has examined all the issues pointed out by the CIT, right from verification of expenditure to loans and advances, secure .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

accepted the return of income filed by the assessee. The A.R. further submitted that the CIT has failed to point out any specific defects in the assessment order to invoke the jurisdiction u/s 263 of the Act. Without pointing out any specific defects, as to the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue, simply directed the A.O. for further verification of the issues which have been already examined by the A.O. at the time of co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dences. As regards the allegation of the CIT that the assessee has purchased a different asset and claimed depreciation of some other assets, the assessee submitted that the assessee has purchased an air compressor for an amount of ₹ 6,40,000/-, however by oversight mentioned as cell phone in the schedule of depreciation. But, the fact is that the assessee has purchased an air compressor for which a copy of bill issued by the supplier has been furnished to the CIT, the CIT has brushed asid .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

10,27,780/- under the head contract work expenses by invoking the provisions of section 40A(3) of the Act by stating that the assessee has made cash payments beyond the specified limit provided under the Act. Except this, the A.O. has accepted the explanation with regard to the other issues pointed out by the CIT, therefore, the revision order passed by the CIT is incorrect. 8. On the other hand, the Ld. D.R. strongly supported the order of CIT. The D.R. referring to the consequential order, su .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d be upheld. 9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The CIT assumed jurisdiction to revise the assessment order for the reason that the A.O. has not conducted proper enquiry before completion of assessment, thereby the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of the revenue. The CIT revised the assessment order for the reason that the A.O. has complet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icability of TDS provisions and low net profit declared by the assessee. The A.O. not only failed to examine the issues, but also failed to apply his mind on various issues which rendered the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. 10. It is the contention of the assessee that the A.O. has examined the issues pointed out by the CIT in the show cause notice. The assessee further contended that all the issues pointed out by the CIT, have been exami .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessment order without pointing out any specific defects in the assessment order passed by the A.O. The CIT has not spelt out as to how the order passed by the A.O. is erroneous and prejudicial to the interest of the revenue. Without making any allegation as to the order of the A.O. to say that it is erroneous and also prejudicial to the interest of the revenue, the CIT simply assumed jurisdiction for further verification of the issues which have already been examined by the A.O., therefore, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssment. On perusal of the paper book filed by the assessee, we find that the assessee has listed out the issues pointed out by the CIT in the show cause notice in a tabular form. On further verification of the details filed by the assessee, we noticed that the assessee has submitted all the details with regard to each and every issues raised by the CIT in the show cause notice and explained before the A.O. The A.O. after satisfied with the explanations furnished by the assessee completed the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ses for which the assessee s A.R. has agreed. Except this, the A.O. has accepted all the issues pointed out by the CIT, therefore, we are of the view that the CIT is incorrect in holding that the A.O. has not conducted proper enquiry of the issues before completion of assessment. In our considered view, the issues pointed out by the CIT have been thoroughly examined by the A.O., therefore, there is no reason for the CIT to revise the assessment order. 12. The CIT has power to revise the assessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be erroneous, but it may not be prejudicial to the interest of the revenue or vice versa. Unless the order passed by the A.O. is erroneous and prejudicial to the interest of the revenue, the CIT cannot assume jurisdiction to revise the assessment order, this is because the twin conditions i.e. the order is erroneous and the same is prejudicial to the interest of the revenue are co-exist. 13. In the present case on hand, on perusal of the facts available on record, we find that the A.O. has cond .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version