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2016 (11) TMI 712 - ITAT HYDERABAD

2016 (11) TMI 712 - ITAT HYDERABAD - TMI - Revision u/s 263 - Held that:- As held by the Hon'ble Delhi High Court in the case of ITO Vs. D.G. Housing Projects Ltd., (2012 (3) TMI 227 - DELHI HIGH COURT ), the CIT has to make enquiries himself to arrive at the conclusion that the assessment order is both erroneous as well as prejudicial to the interest of the Revenue. CIT cannot direct the AO to make enquiries as to whether the assessment order is erroneous as well as prejudicial to the interest .....

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/2013 - Dated:- 19-10-2016 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For : Assessee Shri P. Murali Mohan Rao, AR For : Revenue Smt. G.V. Hemalatha, DR ORDER Per Smt. P. Madhavi Devi, J. M. This is assessee s appeal against the order of the Commissioner of Income Tax-II, Hyderabad, dated 25-03-2013 passed u/s. 263 of the Income Tax Act [Act]. 2. Brief facts of the case are that there was a survey operation u/s. 133A of the Act on 06-02-2008. Thereafter, .....

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7; 62,13,730/-, the assessee has only shown an amount of ₹ 44,90,295/- in the return of income as the income offered u/s. 133A. AO therefore, asked the assessee to explain as to why the difference of ₹ 17,23,435/- should not be treated as escaped income and added to the assessee s returned income. The assessee submitted his explanation, but AO was not convinced with the same and brought the difference of the amount to tax and also made various other additions. Aggrieved, the assessee .....

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partners to the tune of ₹ 15,51,650/-. He observed that the AO did not call for the details of the sources and the same remained unexplained. Therefore, he was of the opinion that the assessment order was erroneous and prejudicial to the interest of the Revenue. He therefore issued a show cause notice to the assessee u/s 263 of the Act. The assessee vide letter dt. 13- 03-2013, explained that the additional income of ₹ 44,90,295 offered by the assessee u/s. 133A in his return of inco .....

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ance with the directions of the CIT. Against this order of CIT, assessee is in appeal before us. 3. The Ld. Counsel for the assessee submitted that the assessee, in his return of income, has offered a sum of ₹ 44,90,295/- as additional income u/s. 133A of the Act. He submitted that in the computation of income itself, the assessee has given a note stating that this additional income consists of the value of difference in stock found at the Head Office and Branch Office at Panjagutta and al .....

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ned the sources of the additional capital but without verifying the same has held that the assessment order is prejudicial to the interest of the Revenue. According to him the CIT cannot revise the order only on the ground that it is erroneous, without giving a finding as to how the assessment order is also prejudicial to the interest of Revenue. He submitted that the CIT cannot direct the AO to make fresh enquiries to arrive at the conclusion that the assessment order is erroneous and prejudici .....

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has never admitted any income towards introduction of additional income by the partners and therefore, the same cannot be the basis for making any addition during the course of assessment without any further corroborative evidence. Further, he has also drawn our attention to the statement of Shri Naganath Mashetty u/s. 133A of the Act to justify the above contention. Thus, according to him, the order of CIT u/s. 263 is not sustainable. 4. The Ld. DR, on the other hand, supported the order of th .....

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gard to the rival contentions and the material on record, we find that there was a survey u/s. 133A and during the course of survey, the assessee had admitted about the difference in stock found at the time of survey and the stock in the books of account. The assessee has been able to explain the source of the stock to an extent and on the value of the balance, he offered to pay tax. The value of the excess of stock offered during the course of survey was ₹ 26,59,315/-. In the computation .....

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