TMI Blog2019 (4) TMI 1777X X X X Extracts X X X X X X X X Extracts X X X X ..... . If any of the twin conditions is absent, the Commissioner cannot exercise jurisdiction u/s 263 of the Act. The order passed by the Assessing officer since cannot be said to be erroneous, hence, the Ld. PCIT was not authorised to invoke his powers u/s 263 of the Act and cancel the assessment order. Therefore, the order passed by the Ld. PCIT is quashed on this score alone. Even on merits, assessee has invited our attention to the trading account of the assessee for the year ended on 31.3.2012 i.e. for the assessment year under consideration to show that the assessee during the year did not make any sales. That all the payments / expenditure during the year was part of the closing stock (work in progress). That since there was no sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g his revision powers u/s 263 of the Income-tax Act, 1961 (in short 'the Act'). 3. There is a delay of 265 days in filing the present appeal. A separate application has been moved for Condonation of Delay which has also been supported with the affidavit of Shri Amarjit Garg, partner of the assessee firm. It has been explained in the application that the tax matters of the assessee firm were looked into by his counsel namely Shri Varinder Garg, Advocate. That the partners of the assessee firm were not well-versed with the procedure and technicalities of the tax matters and were dependent on the counsel, Shri Varinder Garg. That when the notice of the proceedings u/s 263 was received by the assessee, the same was suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel has also invited our attention to the impugned order passed u/s 263 of the Act to submit that even the earlier counsel did not the appear before the PCIT in the proceedings carried out u/s 263 of the Act and that the said order passed by the Ld. PCIT u/s 263 of the Act was an ex-parte order. The averments made in the application have been further corroborated with the affidavit of Shri Amarjit Garg, partner of the assessee firm. The Ld. Counsel for the assessee has further relied on the two decisions of the Coordinate Bench of the Tribunal, firstly, the decision of Kolkata Bench of the Tribunal dated 22.11.2018 in the case of Sahalbuddin Quadiri Vs. DCIT ITA No. 1617/Kol//2016 and secondly on the decision dated 3.12.2018 of the Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in filing the present appeal is condoned. We order accordingly. 7. Now coming to the merits of the case. The Ld. PCIT noted from the assessment order that the assessee had claimed expenditure of ₹ 1,59,45,020/- in the trading account as land cost . He further noted that while purchasing the said land, out of total consideration, the assessee had made cash payment of ₹ 73,68,000/- twice vide receipt Nos. 2065 2066 respectively on 9.8.2011 to the seller. Further, from the perusal of the ledger account, the Ld. PCIT noted that the assessee had made cash payment of ₹ 62,762/- on account of expenditure in respect of Job Work charges to M/s Dhiman Aluminum and Interior Decorator on 3.3.2012 and Building Mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that the return filed by the assessee was originally processed u/s 143(1) of the Act, however, the case was later selected for limited scrutiny under the CASS to verify the large increase in unsecured loans raised during the year. The enquiries of the Ld. Assessing officer were, therefore, limited to the aspect of the genuineness and verification of unsecured loans, the details and explanation regarding which were duly supplied to the Assessing officer and the Assessing officer being satisfied with the evidences given by the assessee competed the assessment at the returned loss of ₹ 10,21,815/- That neither the Assessing officer was authorised nor there was any occasion to the Assessing officer to scrutinize and make enqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . PCIT is quashed on this score alone. 11. Even on merits, the Ld. Counsel for the assessee has invited our attention to the trading account of the assessee for the year ended on 31.3.2012 i.e. for the assessment year under consideration to show that the assessee during the year did not make any sales. That all the payments / expenditure during the year was part of the closing stock (work in progress). That since there was no sales made during the year, hence, there was no question of booking any expenditure against any profit or loss against any sales. That since the assessee has not claimed any expenditure during the year, hence, there was no question of disallowance of any expenditure under the provisions of section 40A(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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