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2019 (12) TMI 144

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..... ch two replies were filed by the assessee and the same were subject matter of consideration by Ld. AO. After satisfying himself with the details furnished by the assessee, the assessment was framed. The Ld. Pr.CIT finding shortcomings in the verification made by AO, set-aside the order and directed AO to framed assessment de-novo. As already noted by us, AO had appreciated the details submitted by the assessee and chose not to make any additions on the basis of details furnished by the assessee. Therefore, the order could not be branded as erroneous or prejudicial to the interest of the revenue simply because the revisional authority felt that further verifications should have been done in the matter and more aspects were to be considered while framing the assessment. If that be so, there would be no end to assessment proceedings and the matter would never attain finality. CIT, in our opinion, could not be clothed with unbridled power to undo each and every assessment merely because, in his opinion, further verifications were required to be made unless it was shown that the order under consideration was not passed in accordance with law. Therefore, we are of the considered opinion .....

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..... Ltd. (295 ITR 282). Similar principal has been followed by jurisdictional High Court in Grasim Industries Ltd. V/s CIT (321 ITR 92). 1.2 The Hon ble Delhi High Court, CIT V/s Vikas Polymers (supra), further observed that as regards the scope and ambit of the expression "erroneous", Hon ble Bombay High Court in CIT vs. Gabriel India Ltd. [1993 203 ITR 108 (Bombay)], held with reference to Black's Law Dictionary that an "erroneous judgment" means "one rendered according to course and practice of Court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles" and thus it is clear that an order cannot be termed as "erroneous" unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as "erroneous" by the Commissioner simply because, according to him, the order should have been written differently or more elaborately. The Section does not visualize the substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is not in accordance with .....

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..... ill be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasijudicial controversies as it must in other spheres of human activity [Parashuram Pottery Works Co. Ltd. vs. ITO, (1977) 106 ITR 1 (SC)]. It was further observed as under: - "From the aforesaid definitions as it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualized where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income .....

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..... oneous and prejudicial to the interest of the revenue is the basic pre-condition for exercise of jurisdiction under section 263. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the section to give the assessee an opportunity of being heard. Further, there could be no doubt that so long as the view taken by the Assessing Officer is a possible view, the same ought not to be interfered with by the Commissioner under Section 263 merely on the ground that there is another possible view of the matter. Permitting exercise of revisional power in a situation where two views are possible would really amount to conferring some kind of an appellate power in the revisional authority. This is a course of action that must be desisted from. 1.6 The Hon ble Bombay High Court in Moil Ltd. Vs. CIT [81 Taxmann.com 420] observed that if a query is raised during the assessment proceedings which was responded to by the assessee, the mere fact that the query was not dealt with in the assessment order th .....

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..... rder which note that notice u/s 142(1) dated 15/06/2016 was issued along with questionnaire which was responded to by the assessee and details were furnished. Another observation in the order is that books of account along with bills and vouchers were produced which were subjected to test check. 2.3 Subsequently, Ld. Pr.CIT, after perusal of case records, noted that the case was selected for scrutiny under CASS on certain parameters (10 in number) which have already been enumerated in the opening paragraph of impugned order. It was observed that reply with respect to questionnaire covering all the points was not submitted by the assessee and scrutiny assessment was completed on the basis of limited records only. It was, inter-alia, observed that complete detail of project wise profitability as per project completion method was not submitted and the same remained to be verified. Further the compliance of Section 43CA remained unverified. Since the WIP was converted into stock in trade, payment of ₹ 25.30 Crores u/s 194C would require verification. Gross Profit rate was stated to be not as per industry average and further, correctness of sale of land and development rights rema .....

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..... e in couple of replies which are placed on page nos. 23 to 117 of the paper book. In one of the replies, the assessee has, inter-alia, explained its nature of business, details of projects undertaken by the assessee, along with details of bank accounts. In another reply, the assessee filed several details which were called for by Ld.AO. These details would, inter-alia, include complete details of sundry creditors, party wise deposits and advances, details of loans & interest paid, party wise details of unsecured loans, party wise details of purchases, details of salary, addition to fixed assets, reconciliation of contract receipts, details of inventory held by the assessee, details of other income credited to Profit & Loss A/c, details of Land cost along with the copy of agreement, details of TDS deducted, sub-contract payments, details of sale / booking, sources of capital, details of expenses capitalized etc. Thereafter, the assessment was framed by Ld. AO on 03/12/2016. Prima facie, no other details have been called from the assessee at any stage after submission of two replies. Therefore, it is difficult to accept the fact that various details as filed by the assessee i .....

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