TMI Blog2018 (9) TMI 1619X X X X Extracts X X X X X X X X Extracts X X X X ..... gh lack of enquiry is a reason for taking up the case for revision, inadequate enquiry does not give any scope for invoking the jurisdiction u/s 263. Therefore, we cancel the order u/s 263 and restore the assessment order. - decided in favour of assessee. - I.T.A.No.161/Viz/2018 - - - Dated:- 17-8-2018 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri G.V.N.Hari, AR For the Respondent : Shri Deba Kumar Sonowal, DR ORDER PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: This appeal is filed by the assessee against the order passed u/s 263 by the Principal Commissioner of Income Tax (Pr.CIT)-1, Vijayawada dated 27.03.2018 for the assessment year 2014-15. 2. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment order for redoing the assessment for re verification of the issues referred above, i.e. large expenses debited to P L account and large increase in sundry creditors outstanding. 3. Aggrieved by the order of the Ld.Pr.CIT, the assessee is in appeal before this Tribunal. During the appeal hearing, the Ld.AR argued that the AO has taken up the case for scrutiny under CASS and verified the books of accounts, vouchers, bills etc. which was produced before the AO. Large amount of expenses as well as the trade creditors was duly accounted in the books of accounts with party-wise ledgers. Similarly, all the expenses were duly accounted in the books of accounts and the books of accounts were audited u/s 44AB of the Act. On complete v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %, and argued that the income estimated by the AO at 5% is in accordance with the precedence of ITAT, as fair and reasonable. The Ld.Pr.CIT though held that estimation of profit @7% is reasonable he did not bring any other case law on identical facts of the assessee. Similarly, since large sundry creditors and the large amount of expenses was verified and conscious decision was taken by the AO to resort for estimation of income, the Ld.Pr.CIT is not permitted to take up the case for revision u/s 263, hence argued that the order passed u/s 263 is required to be quashed. 4. On the other hand, the Ld.DR supported the orders of the Ld.Pr.CIT. 5. We have heard both the parties and perused the material placed on record. We have also gone th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e circumstances of the assessee s case. The trade creditors are part of the unpaid expenses and the same forms part the books of accounts which were duly supported by the bills and vouchers and audited u/s 44AB of the Act. The AO having verified the books of accounts and given his findings in the assessment order, the conclusion of the Ld.Pr.CIT that the AO has not at all carried out any enquiry or verification of large expenses and increase in trade creditors is incorrect observation, not based on the facts on the assessment record. The AO has already given a finding that the books of accounts were not amenable for verification, hence rejected the books of accounts and estimated the income. As held by the Tribunal in the case of G.V.R.Asso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the income is estimated on gross turnover, the AO is not permitted to make any other addition on account of trade creditors. Therefore, we do not find any erroror caused prejudice to the interest of the revenue from the order of the AO. Therefore, we hold that the Ld.Pr.CIT has invoked jurisdiction without any material to support his view. At best, it can be called as inadequate enquiry, but not lack of enquiry. Though lack of enquiry is a reason for taking up the case for revision, inadequate enquiry does not give any scope for invoking the jurisdiction u/s 263. Therefore, we cancel the order u/s 263 and restore the assessment order. 6. In the result, appeal of the assessee is allowed. The above order was pronounced in the open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
