Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Sri T. Naga Mohan Reddy Versus ACIT, Circle-2 (1) , Rajahmundry

2016 (10) TMI 925 - ITAT VISAKHAPATNAM

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 disallowance in the consequential proceedings towards ca .....

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 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 passed by the A.O. u/s 143(3) of the Act. - 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

ndent : 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 declaring total income of ₹ 17,02,790/-. 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

ards 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 records, certain omissions and commissions were .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

med 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 assessment order shall not be revised under the provisio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

how 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 A.O. after verified with the books of accounts .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er 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 the details furnished by the assessee, accepted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 by the assessee, which shows that the A.O. has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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, secured and unsecured loans and applicability of 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

ssee. 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 completion of assessment. The A.R. further submit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at 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 aside the evidences filed by the assessee and invok .....

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 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, submitted that when the assessee does not have an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 completed the assessment without examining the issues .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 examined by the A.O. at the time of assessment by a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ific 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, the revision order passed by the CIT is incorre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he 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 assessment by making adhoc disallowance of ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

xcept 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 assessment order u/s 263 of the Act, but to invoke 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

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 conducted detailed enquiry and also examined all th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

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

Go to Mobile Version