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TMI Blog2014 (1) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of manufacturing of automobile leaf springs. For the assessment year 2007-08 return of income was filed on 27th October 2004, declaring total income of Rs. 1,82,62,200. The assessee's case was selected for scrutiny and in response to notice under section 143(2) and 142(1), the assessee produced books of account along with bills and vouchers. After examining the same, the Assessing Officer accepted the return income and completed the assessment at Rs. 1,82,62,200, vide order dated 19th November 2009. Thereafter, the Commissioner issued show cause notice under section 263 on 4th October 2005, after examining the records on the following points:- "(i) On verification of the records, it is seen that you have claimed labour c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure. (iv) Lastly, it appears from the nature of activity, that you undertook work contract rather than contract for sale. Accordingly, the receipts you had showed should have been subject to TDS as per provisions of section 194C and as such TDS should have been deducted by your clients such as General Motors, Mahindra & Mahindra etc. This details should have been intimated by the AO to the TDS section for necessary action." 3. The assessee, in response to the show cause notice, submitted and stated as under:- "3. In response to the said notice, the assessee filed letter dated 09/11/2010 stating as under: (1a) Discrepancy in the Labour Statement submitted to A.O.: The assessee has debited labour charges of Rs. 59,73,178. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur kind perusal. (b) Raw Material purchased from sister concern The raw material purchased from sister concern has been at commercial term and this purchase is hardly 3% of total steel purchase. Moflex Suspension (P) Ltd is also tax paying company in highest tax bracket. Thus, both have no apparent tax benefit in the transactions. A ledger copy and Income tax acknowledgement of Moflex Suspension Pvt. Ltd. alongwith Computation are enclosed for your kind perusal. 3. Purchase of Furnaces During the year assessee has purchases furnace of Rs. 11,49,242/- from Dynatch Furnaces Bombay (P) Ltd. The same has been capitalized in Plant & Machinery after netting out the CENVAT and excise-credit as permissible by the law. A ledger a/c of Dynatc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been elaborated at Page-5 of the impugned order. In view of this finding, he held that the Assessing Officer, while completing the assessment, has not gone through the submissions of the assessee or has carried out any enquiry whatsoever. He has also not applied his mind on the details furnished by the assessee and, therefore, the assessment order is not only erroneous but also prejudicial to the interests of Revenue. Accordingly, he set aside the assessment order to be framed afresh after examining each and every issue as highlighted by him in detail. 5. Before us, the learned Counsel for the assessee, at the outset, submitted that in the set aside proceedings passed by the Assessing Officer in pursuance of directions given under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of the issues raised by the Commissioner in his order under section 263, has been accepted by the Assessing Officer in the set aside proceedings after examination, this does not mean that the order passed by the Commissioner under section 263, which has been done after examining the assessment records is not correct. The original assessment order passed by the Assessing Officer is a non-speaking order and does not reflect in any manner that he has examined any of the expenses debited under Profit & Loss account. The Commissioner has merely brought out apparent defects in some of the expenses which could not be clarified by the assessee before the Commissioner. If, on examination of record, prima-facie, it is found by the Commissioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has raised a query or carried out any enquiry for examining these details. If the assessee otherwise is able to demonstrate that there is no error on the issues raised in the show cause notice and the learned Commissioner is unable to point out any such error on the issues raised by him that they are erroneous and prejudicial to the interests of the Revenue, then the order under section 263 cannot be sustained. In the present case, it is not so, which is evident from the specific defects pointed out by the learned Commissioner which remained un-reconciled at the stage of revisionary proceedings under section 263. As regards the argument of the learned Counsel that most of the issues have been accepted by the Assessing Officer in set a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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