TMI Blog2020 (3) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... We hold that the assessment order was framed under section 143(3) of the Act after due verification by the AO. Accordingly, we are of the view that the order of the AO cannot be held as erroneous insofar prejudicial to the interest of Revenue on account of non-verification of the facts as stated above. We conclude that the assessment was framed by the AO after considering the various details filed by the assessee. Therefore, we are not inclined to uphold the finding of the learned ld. Pr.CIT with respect to the items as discussed above. Accordingly, we quash the order passed by the Ld. Pr.CIT under section 263. - ITA No.699/Ahd/2015 (Assessment Year: 2010-11) - - - Dated:- 12-12-2019 - SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER Appellant by: Shri S.N. Soparkar, AR Respondent by: Shri O.P. Sharma, CIT-DR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Assessee against the order of the Pr. Commissioner of Income Tax 3, Ahmedabad [Pr.CIT in short] dated 25/02/2015 arising in the assessment order passed under s. 143(3) of the Income Tax Act, 1961(hereinafter ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vis a vis nature of loss whether bogus or genuine or speculative. (viii) Verify revenue impact vis a vis proceeds from deposits, transactions covered u/s.40A(2)(b), cash credits, current liabilities etc. 5. Ld. CIT ought to have appreciated that silence on issues accepted by AO after proper scrutiny need not mean order as erroneous or prejudicial to the interest of revenue. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. The issue raised by the assessee is that the learned Pr. CIT erred in holding the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial to the interest of revenue under the provisions of section 263 of the Act. 3. The facts in brief are that the assessee in the present case is a limited company and engaged in the business of manufacturing and sale of edible and non-edible oil products/byproducts. The assessee has also shown the income drawn from the activity of hiring the vehicles. The assessee for the year under consideration filed its return of income dated 29th September 2010 declaring tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits 2046.48 lacs 2. Payment with related parties covered u/s.40A(2)(b), including job work charges, purchase of services, etc. The amount runs in hundred of crores of rupees 3. Introduction of cash credits in the books of accounts without PAN of the respective lenders 6,29,76,901 4. Current liabilities 1,84,26,09,426 6. The learned Pr.CIT in view of the above issued show cause notices under section 263 of the Act dated 3rd September 2014 and 3rd February, 2015 proposing the order of the AO as erroneous insofar prejudicial to the interest of revenue. 6.1. In compliance to the above show cause notices, the assessee made its reply vide letter dated 10th October 2014 and 5th November 2014 by submitting that the auditor has also commented in his report that considering the size and nature of the fixed assets, physical verification of such fixed assets once in 3 years is reasonable. 6.2. The assessee also submitted that non-verification of the fixed assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished the requisite details about the unsecured loan taken from the various parties including the confirmation from them. The learned AR in support of his contention drew our attention on pages 8, 9, 135 and 178 to 199 where the details of the unsecured loan were placed. The learned AR also claimed that if the assessee has not complied with the provisions of section 58A of the companies Act 1956 or the directive issued by the reserve Bank of India then it does not mean that there is an error in the order of the AO causing prejudice to the interest of revenue under the Income Tax Act. 7.2. Regarding the transactions covered under section 40A(2) of the Act the learned AR claimed that the assessee has carried out the transactions with the related parties at the prevailing market rate. The learned AR further claimed that all the details were furnished to the AO during the assessment proceedings and further drawn our attention on pages 295 to 671 where the details of the transactions with the related parties were placed. The learned AR further claimed that this fact was duly verified by the AO during the assessment proceedings. 7.3. Regarding the unsecured loan taken from variou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Whether Additional Depreciation u/s.32(iia) claimed If any extra charges like insurance, carriage, interest etc. have been incurred for the purchase of these assets, please provide bills. The assessee is response to such notice filed the reply vide letter dated 5th November 2012. The relevant extract of the letter is reproduced as under: 9. The details of addition to fixed assets i.e. description of asset, date put to use and value of the asset is already given in Annexure-3A to the audit report under form 3CD. 9.2. We also find that the assessee in response to the above notice has also filed the details of the assets for each block of assets which are placed on pages 141 to 149 of the paper book. Thus after perusal of the details of the fixed assets which were available before the AO during the assessment proceedings, we find that the AO after due application of mind framed the assessment under section 143(3) of the Act. 9.3. Similarly, we note regarding the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evailing market rate. This may be verified from the purchase invoices from the said parties and thir parties produced for your verification. Therefore the question of applicability of Section 40A92)(b) does not arise. 9.6. We also note that the assessee has filed the complete copies of the ledgers of the transactions carried out with the related parties which are placed on pages 295 to 671 of the paper book. 9.7. Similarly, we note, regarding the current liabilities that the AO during the assessment proceedings has required the assessee to furnish the details in the notice issued under section 142(1) of the Act dated 22- 10-2012. The relevant extract of the notice is reproduced as under: 15. Give details of outstanding provisions in the following Proforma: Provision made for Amount If payment made subsequently, date of discharge of liability 16. Provide a complete list of all your sundry creditors for AY 2010-11 in the following Proforma: Name Nature of the creditor (Goods, other etc.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation for loss of agricultural income. He accepted the entry in the statement of the account filed by the appellant in the absence of any supporting material and without making any inquiry. On these facts the conclusion that the order of the ITO was erroneous was irresistible. Therefore, the High Court had rightly held that the exercise of the jurisdiction by the Commissioner under section 263(1) was justified. 9.12. Hon ble Gujarat High Court in the case of CIT Vs. Kamal Galani reported in 95 taxmann.com 261, wherein it was held as under: 21. The Assessing Officer having carried out such detailed inquiries, it was not open for the Commissioner to thereafter reopen the issues on mere apprehension and surmises. His two fundamental objections were that the Assessing Officer did not verify whether the remittances were from the own income or sources of the assessee and his brother or were merely by way of hawala transactions. In the process, he was also critical of the Assessing Officer not insisting on collecting the details of the accounts from which the foreign remittances were made to the Indian account of the said two persons. Without any material without any ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to correct each and every type of mistake or error committed by the Assessing Officer, and it is only when the order is erroneous that the section will be attracted. When two views are possible and the Assessing Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue unless the view taken by the Assessing Officer is unsustainable in law. It was not shown how the method followed by the assessee to divide the expenses for the purpose of claiming relief under section 80HH was improper or unacceptable. The Assessing Officer as well as the Tribunal had found that the expenses were apportioned on a rational basis and it would not be open for the Court to go beyond that finding which appeared to have been reached on the basis of the material on record which showed that in the earlier years the same proportion for dividing the expenses was consistently followed. The department had not been able to show that for those earlier two years any objection was raised against such apportionment. 9.15. Hon ble Gujarat High Court in the case of CIT Vs. Amit Corporation 213 taxman 19, wherein it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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