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TMI Blog2020 (11) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... re titled Foreign Exchange Premium amounting to Rs. 98S9746/-. The AO has allowed the said claim without application of mind and without making any proper and due enquiries and verification in this regard. 2.2 An assessment order passed without application of mind and/or without making proper enquiries and verification of facts and the law on the subject makes such order erroneous and prejudicial to the interest of Revenue in terms of clause(a) of Explanation II appended to Section 263 of the IT Act.. I therefore intend to revise the same u/s 263 of IT Act. " In response to the aforesaid notice, the assessee has filed written submissions reproduced as under:- "1. It has been stated at para 1of the assessment order u/s. 143(3) dated 22.3.2016 determining total income at Rs. 697550/- for AY 2013-14 is erroneous and prejudicial to the interest of the revenue. The reason for holding that the order is given at para 2.1 of the letter under reply wherein it has been stated that "the assessee had claimed an expenditure titled foreign exchange premium amounting to Rs. 9889746/-, the AO has allowed the said claim without application of mind and without making any proper and due enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails with regard to other expenses. As mentioned earlier, the other expenses, as per Note 26 of the audited P&L account included the amount of Rs. 98,89,746/-claimed by the assessee under the head forward exchange premium. Therefore, it is clear beyond any shadow of doubt that the AO had made necessary enquiries with respect to the claim of expenditure of Rs. 98,89,746/- on account of forward exchange premium. In response to notice u/s. 142(1) the assessee had filed submission dated 2.9.2015 which was submitted before the AO on 3.9.2015. Vide sr. no. 35 of the said letter, the assessee has clearly stated to the effect that breakup of other expenses, repairs to building and insurance given in the attached statement. Thus it is an irrefutable that in course of assessment proceedings the AO had made enquiries with regard to the expenditure in question and compliance thereto the assessee had furnished details of such expenditure before the AO. Therefore, the allegation that the AO had allowed the said claim without application of mind and without making any proper and due enquiries and verification in this regard is far removed from truth. At the cost of repetition, the assessee once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been accepted in A.Y.2012-13 to undertake revision proceedings for A.Y.2013-14 on the same issue would not been justifiable. Furthermore, the facilities in question are used for purchasing diamonds and other stock in trade and not for any capital expenditure. For the purpose of invoking the provisions of section 263 the twin conditions must be satisfied: a. The order in question must be erroneous, and b. It should be prejudicial to the interest of the revenue. Both the conditions must be satisfied in conjunction. Mere satisfaction of any one condition cannot be the reason for invoking revision proceedings. It can thus, be seen that the view adopted by the Assessing Officer was after proper scrutiny of relevant facts and clearly a plausible view was adopted and therefore, was not open to revision at the hands of the Commissioner. It is 'well settled proposition of law as well as facts that if after proper inquiries, the Assessing Officer has adopted a view which is a plausible one, the view would not be open to revision by the Commissioner. [Para 10] as was held in the case of Micro Inks Pr. CIT (2017) 85 taxman. com 310(Gujarat) Therefore, the conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and duly accepted. There is no lack of inquiry as has been wrongly presumed. The ratio laid down in the above referred case is squarely applicable and therefore the revision proceedings in e case of the assessee company may kindly be dropped." The assessee has explained in above referred submission that the Assessing Officer had passéd the assessment order u/s. 143(3) dated 22.03.2016 after making proper enquiries and due verification of the books of account and relevant records. The Assessing Officer had issued a detailed notice u/s. 142(1) as per Sr. No. 35 of the said questionnaire, the Assessing Officer has specifically asked to furnish complete break up and details of other expenses which included the complete details of Rs. 98,89,746/- claimed by the assessee under the head forward exchange premium. The Assessing Officer had made enquiries with regard to the expenditure and in compliance the assessee had furnished details of such expenditure. The Assessing Officer had allowed the claim after examination and verification of the details filed. The ld. Pr. CIT has not accepted the submission of the assessee. He was of the view that assessee had not shown any expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es which also included the amount of Rs. 98,89,746/- claimed by the assessee under the head forward exchange premium. In compliance, the assessee had submitted relevant details of such expenditure before the Assessing Officer. The Assessing Officer has not pointed out any discrepancy in the admissibility of the claim of expenditure of Rs. 98,89,746/-. It is further noticed from the Profit and Loss Account Note no. 27 that such foreign exchange premium expenses was of recurring nature and same was also claimed in A.Y. 2012-13. During the course of proceeding u/s. 263 of the Act before the Ld. PCIT, the assessee has furnished copies of the relevant documents explaining that the Assessing Officer has duly considered the claim of expenditure and explained that assessee has availed the credit facility with respect to the foreign current loan on which the premium was charged. In this facility, the bank has granted a limit of Rs. 15 crore which was subsequently enhanced to Rs. 18 crores and from this facility, the assessee has availed credit facility for purchase of U.S. $ at predetermined rate to cover the risk of foreign exchange fluctuation, the premium was charged by the bank so that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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