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TMI Blog2019 (12) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... 40A(2)(b) and issue of allowability of expenses debited in P&L A/c in the from of bank guarantee commission and bank guarantee renewal. 3. It is therefore prayed that above order passed by Pr. CIT u/s. 263 may please be quashed or modified as your honour deem it proper." 3. Brief facts of the case are that the assessee is engaged in the business as a government contractor for construction works during the year and consideration. The assessee company filed its Return of Income on 17.11.2014 for the A.Y. 2014-15 by declaring total income of Rs. 7,45,67,950/-. The Scrutiny assessment was finalized u/s.143(3) on 28.12.2016 by determining the total income at Rs. 7,46,90,940/- by way of making addition of Rs. 1,22,994/- on account of disallowance of various expenses. 4. Subsequently, ld.Pr.CIT on scrutiny record had observed that there were various payments made by the assessee company to the persons covered u/s.40A(2)(b) of the Act in the form of director remuneration, rent expenses and purchase payments. However, no proper verification has been made by the AO in respect of these payments. 5. Ground No.1: The Authorised Representative (AR) reiterated the same arguments as raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00000 3600000 3600000 6. It was further submitted that the ld.Pr.CIT had stated that the AO has failed to invoke the provisions of Section 40(A)(2) of the Act, however it is wrong to state the same as the assessee had filed all the documents and books of accounts and there was nothing on record to suggest that assessee had made any excessive payment to related. It was further submitted that in fact in this case, the provision of domestic transfer pricing were applicable for the year under consideration. In this regard, The assessee had also duly furnished the report from expert in Form 3CEB as required by law wherein all the details of payment made to related party were mentioned viz. Name of person with whom specific domestic transaction has been entered into, Description of transaction along with quantitative details if any, Total amount paid or payable in the transaction as per books and as computed by assessee having regard to arm's length price, Method used for determining the arm's length price. Further, the AO was satisfied with the report and hence, the assessment order cannot be termed as erroneous on this issue. Also, the assessment order cannot be considered as prej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are possible and assessing officer has adopted one of the views in favour of the assessee, the assessment order cannot be revised u/s. 263 as held by Honourable Supreme Court In case of Malabar industrial Co. v/s. CIT - 243 ITR 0083 (SC). The decision of the Supreme court was followed in the case of CIT vs. Max India Ltd. - 295 ITR 0282 (SC) and by the Gujarat High Court in the case of CIT vs. Arvind Jewellers - 259 ITR 0502. It was submitted that in view of the above submission it is clear that the order passed by Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue and requested to drop proceedings initiated u/s. 263. 9. On the other hand, the ld.Departmental Representative(DR) relied upon the orders of the ld.Pr.CIT. 10. We have heard the Counsels of both the parties and we also perused the material placed on record and orders passed by the Revenue Authority as well as the judgments cited by the party. As per the facts of the present case, the assessee company is engaged in the business of government contractor for construction works during the year under consideration. The original assessment was completed u/s.143(3) by the AO thereby assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act which is at page 29 to 30 of the paper book. The assessee had furnished a letter dated 30.05.2016 thereby explaining the details and also placing on record all the documents in the form of Annexures it is Annex at page no 27 to 28 of the paper book. The AO had again issued notice u/s.142(1) of the Income Tax Act dated 03.11.2016 which is at page 24 to 26 and in this respect the reply was also filed by the assessee before the AO which is at page no.20 to 23 and had filed all the replies along with documents and participated into the enquiry proceedings being carried out by the AO. We, further noticed that since the assessee has filed the audited reports containing all the details regarding related parties u/s.40A(2)(b) along with name, PAN, Relations, nature of transactions and payments made. Even otherwise, the assessee has also duly furnished the report from expert in Form 3CEB as required by Law, wherein all the details of payment made related to party were mentioned i.e. name of persons with whom specifically domestic transactions as entered into, description of transaction along with quantitative details if any. Total amounts paid or payable in the transaction as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries-In facts of case, Tribunal rightly interfered with such order-Appeal dismissed. In the case of CIT Vs. Arvind Jewellers 259 ITR 0502 (Guj HC) wherein it has been held that Enquiry by ITO-Finding of fact given by the tribunal that the assessee had produced relevant material and offered explanation in pursuance of the notices issued under s. 142(1) as well as s. 143(2)- ITO has come to a definite conclusion after considering those material and explanation-Mere fact that a different view could be taken cannot be a basis for an action under s. 263-Tribunal was justified in setting aside the order passed by the CIT under s. 263 and in the case of CIT Vs. Nirav Modi 390 ITR 0292 (Bom. HC) wherein it has been held that Commissioner in his order of revision, did not indicate any doubt in respect of genuineness of evidence produced by assessee - Moreover, satisfaction of Assessing Officer on basis of documents produced was not shown to be erroneous -Whether on facts, it was a case where a view had been taken by Assessing Officer after making proper enquiry and, thus, Tribunal was justified in setting aside impugned revisional order - Held, yes" in the case of CIT Vs. DG Housing Project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.263 of the Act, merely because he has a different opinion in the matter. Further, in the case of Narayan Tatu Rane Vs. ITO [2016] 70 taxmann.com 227 (Mum Trib) AND Shanti Krupa Estate Pvt. Ltd., Vs. ACIT in ITA No.1252/Ahd/2015, Ahmedabad Tribunal has held as under : "7. Shri Anil Kumar, learned C.I.T. (D.R.) at this stage relies upon section 263 Explanation 2 inserted in the Act by the Finance Act 2015 w.e.f. 01.06.2015 envisaging exercise of revision jurisdiction even when an assessment is framed without any enquires and verification which should have been, in the opinion of revisional authority, deemed to be erroneous in so far as prejudicial to the interest of the revenue. He cites a co-ordinate bench decision of Crompton Greaves Limited vs. CIT - ITA No.1994/Mum/2013 and 2836/Mum/2014 decided on 01.02.2016 holding the above explanation to section 263 of the Act as retrospective in nature. The assessee at this stage informs us that another coordinate bench in ITA nos.870 & 1234/Ahd/2014 decided on 20.05.2016 in the case of Jayanth Murthy vs. DCIT holds the above stated former decision as per incuriam and section 263 Explanation 2 to be only having prospective operation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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