TMI Blog2014 (1) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no error in the issues raised in the show cause notice issued under section 263. Once that is so, the Commissioner (Appeals) is justified in canceling the assessment order under his revisionary jurisdiction under section 263. The facts and the reasoning given by the Commissioner for canceling the original assessment order inasmuch is erroneous inasmuch it is prejudicial to the interests of the Revenue appears to be justified. We do not find any merits in the contention raised by the learned Counsel that the impugned order passed by the learned Commissioner is merely for carrying out roving and fishing enquiry, as the Commissioner has clearly pointed out the various discrepancies in the submissions made by the assessee before him in Para-4 and 5. Accordingly, we affirm the impugned order and the grounds raised by the assessee are treated as dismissed. - ITA no. 779/Mum./2011 - - - Dated:- 24-1-2014 - SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER Assessee by: Mr. Anuj Kisnadwala Revenue by : Mr. Rajesh Ranjan ORDER Amit Shukla, Judicial Member The present appeal has been preferred by the assessee challenging the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 242/-. As furnace forms part of capital asset and expenditure should have been treated as capital expenditure and accordingly should have been disallowed as revenue 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 ₹ 59,73,178. During the course of assessment proceedings, statements of labour charges were submitted. However, due to totaling error, figures of 1st three rows got omitted while totaling the amount column. This error was pointed out during the assessment proceedings but it seems that the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets as submitted to the A.0. during the course of assessment. 4. After considering the assessee's submissions, the learned Commissioner noted that the assessee's submissions with regard to the discrepancy in labour charges and discrepancy in freight charges are not supported by any documentary evidence. The very fact that there were discrepancies in figures of manufacturing expenses and job work, the Assessing Officer has not verified or examined the same. With regard to the purchase made from the sister concern M/s. Moflex Suspension Pvt. Ltd., he observed that such huge purchases made by the sister concern has been accepted without any examination or verification. Even the labour charges paid to this concern, have not been properly examined by the Assessing Officer. Mere fact that the said sister concern is paying tax does not preclude from examining the applicability of section 40A(2)(b) and 40(a)(ia). Besides this, certain other discrepancies have also been pointed out with regard to the purchases of furnaces made by the assessee from Dynatch Furnaces Bombay Pvt. Ltd., which has been elaborated at Page-5 of the impugned order. In view of this finding, he held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 that the Assessing Officer has not examined a particular issue or has not carried out any requisite enquiry, then it can be inferred that the assessment order passed by the Assessing Officer is not only erroneous but also prejudicial to the interests of Revenue. In support of his contention, he relied upon the decision of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83. 7. We have heard the rival contention, perused the relevant findings of the learned Commissioner in the impugned order and the material available on record. In the present case, on a perusal of the original assessment order, it is seen that the Assessing Officer has acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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