TMI Blog2018 (9) TMI 1323X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner (Appeals). Commissioner (Appeals) substantially confirmed the view of the Assessing Officer but placed the matter back before the Assessing Officer for recomputation of scheme or project-wise profit at the same rate of 15% of net profit ratio. In terms of the Clause (c) in Explanation 1 to subsection 1 of Section 263, the powers of the Commissioner would extend to such matters as had not been considered and decided in an appeal arising out of such order of assessment. In the present case, this issue having been subject matter of appeal and duly discussed by the Appellate Authority, was beyond the purview of the Commissioner's revision powers. Addition of statutory payments Assessing Officer had taken a holistic picture and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent assessee is a private limited company and is engaged in the business of real estate development. On 5.12.2012, the assessee was subjected to a survey operation. During the course of survey proceedings, several documents were seized and impounded. Statements of the representatives of the company were recorded. During assessment, notices were issued. Several details were called for from the assessee in such notices. Assessing Officer put the assessee to notice about not being satisfied with the declaration of profit by the assessee in which he referred to the impounded documents which included loose papers indicating cost of construction, cost of land, money received etc., in the hand writing of the representative of the company. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of assessment was challenged by the assessee before the CIT (Appeals) mainly contending that the estimate of income at the rate of 15% of the receipt was erroneous as against rate of 12.5% offered by the assessee. CIT (Appeals) passed a detailed order dated 9.3.2017 in which he confirmed the Assessing Officer's application of net profit at the rate of 15% of the turn over or total receipts as gathered from the impounded materials. He however gave certain consequential directions for recomputing such net profit. 3. After this order was passed by the Appellate Commissioner, the Commissioner of Incometax in exercise of his powers under Section 263 of the Incometax Act, 1961 ('the Act' for short) passed an order on 31.3.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to the statutory provision contained in Section 263 of the Act and several leading decisions primarily suggesting that the power of the Commissioner to revise an order of assessment could be exercised only if the same is found to be erroneous and prejudicial to the interest of Revenue and further that a case of insufficient or defective inquiry cannot be equated with total lack of inquiries. The Tribunal recorded that unless the Commissioner holds and records the reasons how the assessment is erroneous, he cannot set aside the same merely on the ground that the Assessing Officer had not conducted proper inquiry. The Tribunal also noted that as the issue of determination of the assessee's undisclosed income had travelled to the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer had made detailed inquiry with respect to all aspects of the matter including the TDS required to be deducted on the payments made by the assessee. The Commissioner without recording any reasons asked the Assessing Officer to examine the claim of expenditure of statutory liabilities in the context of actual deposit of such amounts with the Government revenue. He submitted that essentially, the Commissioner has ordered a fishing inquiry. 8. Having heard learned counsel for the parties and having perused documents on record we find that the first issue on which the Commissioner of Incometax found fault with the Assessing Officer was not available for examination in the revision proceedings. We may recall, his ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9. With respect to the statutory payments, a ground on which the Commissioner desired that further inquiries be made, for several reasons, the order cannot be sustained. Firstly, the Assessing Officer had taken a holistic picture and arrived at the net profit percentage that the assessee could be reasonably expected to have earned out of the ventures. While doing, so he had also examined various aspects, including the payments such as for commission, for interest etc., and whether the assessee had deducted tax at source on such payments. Thus, the element of disallowing certain expenditure was in the mind of the Assessing Officer. It is true that with respect to statutory payments which may have bar of Section 43B of the Act on claimin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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