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TMI Blog2017 (3) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... consequential assessment order passed pursuant thereto respectively. ITA No.1475/Ahd/2011 - AY 2006-07 2. We shall therefore first address the issues arising out of the order of the CIT passed u/s 263 assailed by the assessee. 3. The assessee filed return of income for AY 2006-07 declaring total income of Rs. 8,77,710/-. Assessment u/s 143(3) was completed on a total income of Rs. 9,38,990/-. Subsequently, on examination of the assessment records, it was observed by the Commissioner that the TDS (Tax Deducted at Source) Certificates (Form 16A) filed by the assessee showed labour charges receipt amounting to Rs. 1,10,82,073/-. However, in the Profit & Loss Account, the labour charges received were declared at Rs. 94,78,552/-. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent year i.e. FY 2005-06 relevant to AY 2006-07. The TDS was accordingly deducted in the subsequent year by the deductor. The difference in the accounting treatment between by the assessee (payee) qua the payer has resulted in the aforesaid difference of Rs. 16,03,521/-. While the assessee has accounted for the aforesaid income in the AY 2005-06, the payer namely M/s. Setco Automotive Ltd. has recorded the expenditure in the subsequent year. Therefore, in essence, there is no under assessment but the difference is owing to recording of income in the different financial year than what is controverted by the CIT. The TDS credit has been, albeit, claimed in the subsequent year which ought to have been granted in the AY 2005-06 in ter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, recourse under Section 263 of the Act cannot be taken unless the twin conditions of order being (i) erroneous as well as (ii) prejudicial to the interests of the Revenue is satisfied. Both the conditions are cumulative and to be satisfied simultaneously. In the background of the aforesaid mandate of law, we shall now test the action of the Commissioner u/s 263 of the Act. We note the facts marshaled on behalf of the assessee that the income towards differential amount of Rs. 16,03,521/- noticed by the Commissioner has been already offered for taxation in the year prior to the impugned AY 2006-07. The TDS has been claimed in the current assessment year as per certificate issued by the deductor as per its books of accounts. This has giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interests of the Revenue' is also not satisfied. Therefore, none of the vices have been shown to be existing to enable the Commissioner to take recourse to Section 263 of the Act. In these circumstances, we have no hesitation to hold that the action of the Commissioner in assuming the jurisdiction is wrongful and contrary to Section 263 of the Act and is thus liable to be quashed. We do so accordingly. 8. In the result, appeal of the assessee in ITA No.1475/Ahd/2011 is allowed. ITA No.1366/Ahd/2014 - AY 2006-07 9. In this appeal, the assessee is aggrieved by the consequential order passed u/s 143(3) pursuant to the directions of the CIT under Section 263 of the Act. 10. As noted earlier, in terms of order in ITA No.1475/Ahd/2011, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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