TMI Blog2020 (12) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... ofessional fees of ₹ 2,35,000/- towards cash payment, we observe that the AO has not made proper enquiry into the matter and, therefore, the Pr. CIT is justified in directing the AO to revise the assessment order. This omission by the AO tagged the impugned assessment order as erroneous and prejudicial to the interest of the revenue. Since the assessment has already been set aside and the AO has been directed by the ld PCIT to re-frame it afresh after giving opportunity to the Assessee and after considering assessee s explanation and all relevant material in accordance with law, therefore, we agree with the CIT and in our opinion, no interference is called for in the order of ld Pr. CIT. We dismiss the appeal filed by the assessee by upholding the order passed u/s 263. However, we may note that while passing the fresh assessment order, the AO should take into consideration the repayment of loan of ₹ 10,00,000/- by the assessee to the loan creditor, as is reflected in the ledger copy furnished by the assessee. Regarding other two addition, the AO will enquiry into the matter and pass order accordingly. - ITA No. 265/CTK/2018 - - - Dated:- 10-12-2020 - SHRI CHAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmined the total income at ₹ 17,39,400/-, inter disallowing the claim of the assessee under the various heads as under: i) Disallowance of ground loss : ₹ 5,25,500/- ii) Disallowance of mining expenses: ₹ 4,32,036/- iii) General Expenses : ₹ 2,35,994/- iv) Registrar of companies expenses: ₹ 12,700/- Thereafter, Learned Pr. Commissioner of Income Tax (PCIT), on verification of assessment record noticed that there are some discrepancies in the assessment order, which rendered the order erroneous and prejudicial to the interest of the revenue. He noted the following discrepancies: i) Unsecured loan of ₹ 10,00,000/- taken from creditor Shri Pradip Mandal. ii) Rent of ₹ 80,000/- paid by the assessee to M/s. Kwality Confront Pvt Ltd., iii) Professional fees of ₹ 2,35,000/- paid in excess of ₹ 20,000/- on different dates. Therefore, the Pr. CIT on 18.7.2017, required the assesse to show cause as to why the assessment order so allowing the claim not be subjected to revision under section 263. In response to show cause notice, it was submitted by the assessee as under: i) As regards uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ip Mandal of ₹ 10,00,000/-. He would conduct necessary inquiries to satisfy himself about the genuineness and creditworthiness of the creditor. In case, the assessee fails to satisfy him, the AO would invoke section 68 of the Act and made necessary addition. ii) With regard to security deposit of ₹ 80,000/-, the AO would disallow the same as the amount was refundable and thus capital expenditure in nature, unless the assessee is able to prove its claim of pre-mature termination and forfeiture of deposit. iii) With regard to violation of provisions of section 40A(3), amounting to ₹ 2,35,000/-, the AO would call for necessary bills and vouchers with documentary proof and find out whether the claim of the assessee falls within the exceptional circumstances mentioned in Rule 6DD of the I.T.Rules, 1962. Otherwise, he would make necessary disallowance. 5. Ld counsel submitted that the Assessing Officer issued statutory notices u/s.143(2) and 142(1) of the Income tax Act, 1961 (in short the Act ), which was served on the assessee for necessary compliance and in response to the said notices, the assessee filed reply and also submitted books of account an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, loan from directors, their relatives and associates and other loan advances and in Q. No.15, the AO asked the assessee to produce the ledger of expenses made by the assessee on various issues including rent, rates and taxes and professional fees, therefore, the AO has raised queries on all three issues. Ld counsel further drew our attention towards pages 10 to 14 of APB and submitted that the assessee filed all relevant documents before the AO explaining all three issues, therefore, it is a clear case of adequate enquiry and merely because Pr. CIT has not agreed to the view taken by the AO, which was a sustainable view, as per the facts and circumstances of the case, the revisionary authority does not have valid jurisdiction to revise the assessment order u/s.263 of the Act. Ld counsel also placed reliance on the decision of Hon ble Gujarat High Court in the case of ITO vs Arvind Jewllers, 259 ITR 502 (Guj) and submitted that since the materials are there on the record and same has been considered by the AO and a particular view was taken, the mere fact that a different view can be taken, should not be the basis for an action under section 263 of the Act and it cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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