TMI Blog2017 (1) TMI 1591X X X X Extracts X X X X X X X X Extracts X X X X ..... Referring to the second limb of arguments on behalf of the assessee that the amendment to section 115JB as per clause(i) thereto has been made with retrospective effect after filing of the return of income and therefore the assessment passed based on the return of income as per the law as stood at the time of filing of the return could not have been disturbed by the AO we do not find any merit in this line of argument either. The record for the purpose of section 263 as per Explanation-1 thereof would mean all records relating to assessment proceedings available at the time of examination by the Commissioner. Therefore, any development in law which has taken place even after the assessment also can be taken cognizance of by the CIT in exercise of power under section 263 of the Act. - Decided against assessee. - IT Appeal No. 1427 (Ahd.) of 2013 - - - Dated:- 12-1-2017 - Rajpal Yadav, Judicial Member And Pradip Kumar Kedia, Accountant Member S.N. Soparkar , AR for the Appellant. Shankerlal Meena, CIT - DR for the Respondent. ORDER Pradip Kumar Kedia, Accountant Member This appeal by the Assessee is directed against the order of the Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal assessment order was passed under section 143(3) r.w.s. 144-C of the Income Tax Act, 1961 (hereinafter referred to as the Act ) on 24/02/2011, whereby the income under head business and profession was computed at ₹ 2,65,81,620/- and book profit under section 115JB was at ₹ 25,85,56,391/-. Subsequent to the assessment, on verification of records, it was found by the Commissioner that the assessee had provided for several provisions of ₹ 1,01,94,000/- in P L Account which inter alia includes provision of ₹ 40,08,000 towards on loss on assets for disposal which was disallowed and added to the total income but the same was not added to the book profit computed under section 115JB of the Act. It was also observed by the CIT that this amount was also not added to the book profit assessed under section 143(3) r.w.s. 144-C appealed under section 250 of the Act. The CIT accordingly noted that book profit for the purposes of section 115JB was under-assessed by an amount of ₹ 40,07,558/-. Accordingly, a show-cause notice (SCN) dated 14/02/2012 was issued to the assessee seeking explanation in this regard. The assessee filed written submission dated 17/07/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of Tarajan Tea Co. (P.) Ltd. v. CIT [1994] 205 ITR 45 wherein it was held that a decision taken without considering the relevant aspect of a particular point would certainly be erroneous and such a decision in favour of the assessee without such consideration would be prejudicial to the interest of revenue so as to empower the Commissioner to exercise his revisional powers U/s.263 of the Act. Simply because the facts have been disclosed by the assessee in the course of assessment proceedings, it does not give him the immunity from the revisional jurisdiction which the Commissioner can exercise U/s.263 of the Act. In the case of mannulal Mataden v. CIT reported at [2005] 277 ITR 346 (All.), the Hon'ble Allahabad High Court had held that the order of revision was valid as the A.O. had not made necessary enquiriries before allowing deduction of interest. The ITAT, Mumbai in the case of Arvee International v. Addl.CIT (101 ITD 495) decided as under: The CIT may consider an order of the AO to be erroneous not only when it contains some apparent error of reasoning or of law or of fact on the fact of it but also when it is a stereotyped order which sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous such an inquiry has not been made and not because there is anything wrong with the orders if all the facts stated therein are assumed to be correct. 5. The various submissions made by the assessee on the above-mentioned issues have been carefully considered and are not found acceptable. The details available on the assessment record show that the AO did not at all examine the issues. 6. In view of the detailed discussions given herein above and the legal views of various High Courts, the order passed by the Assessing Officer without making proper enquiries is held to be erroneous and prejudicial to the interest of revenue. Therefore, the order passed by the A.O. U/s.143(3) of the Act dated 18.02.2011 is hereby set aside and the A.O. is directed to reframe the assessment as per the directions given herein above and also after granting sufficient opportunities of hearing to the assessee.' 3. Aggrieved by the order of the CIT passed under section 263 of the Act dated 14/03/2013, the assessee preferred an appeal before the Tribunal. 4. The Ld.AR for the assessee Mr.S.N. Soparkar, at the outset, submitted that the ingredients of section 263 of the Act is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts held for disposal and the assessment order was passed after due application of mind. It was pleaded that the scope of interference under section 263 of the Act is not to set aside merely unfavourable orders and bring to tax some more money to the exchequer. An alternative contention was also raised to say that even if the provision for loss of asset held for disposal is considered in the nature of provision and not actual loss of the assets for a moment, then too its disallowance by way of revision of the original assessment is not valid. In this regard, it was submitted that Finance (No.2), Act 2009 had inter alia incorporated clause (i) in section 115JB which states that for the computation of book profit, the profit as per Profit Loss Account should be increased by the provision for diminution in the value of assets and was made effective retrospective from 01/04/2001. However, as per law prevailing at the time of filing of the return, for computation of book profit under the provision of section 115JB, no disallowance was required to be made for the provision in diminution in the value of assets . The assessment order was framed taking into consideration the law prevail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in dispute. The nature of provision and explanation of the assessee on merits is also not discernible from the financial statements. No explanation on the assertion that the impugned amount is in the nature of actual write off contrary to relevation of it being provision in financial statement is available on the record before CIT while exercising power under section 263 of the Act. We simultaneously note that AO while making enquiry about host of provisions made by the assessee has omitted to make any reference to impugned provision of ₹ 40,08,000/- appearing in the financial statement. Thus, on the conspectus of aforesaid circumstances, we are of the view that the AO has failed to make any enquiry on the aforesaid provision in the course of the assessment and has merely accepted the provision made perfunctorily and without any application of mind. This is not to say that the claim of the assessee is incorrect or otherwise. The pertinent question here is whether when there is total absence of enquiry on an adjustment declared in the nature of provision which has a bearing on the ultimate book profit, is it open to the CIT to invoke jurisdiction under section 263 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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