TMI Blog2018 (12) TMI 1878X X X X Extracts X X X X X X X X Extracts X X X X ..... ollected the charges for shipping from consumer, which are freight and terminal handling charges out of freight and terminal handling charges, no handling charges is liable to be service tax and freight is exempt from payment of service tax. The service tax is collected and paid on such income on behalf of the agent. Therefore, the income of principle is included in the service tax return of assessee. The assessee is an agent earned fixed percentage of commission on export and import on freight. The assessee also collected documentation and other charges which service is taxable income. Thus, we have seen that the assessee has furnished complete details to the Assessing Officer. The Assessing Officer after his satisfaction and without mentioning anything about the issue accepted the contention of assessee. Hon ble jurisdictional High Court in CIT vs. Gabriel India [ 1993 (4) TMI 55 - BOMBAY HIGH COURT] held that when the Income Tax Officer (ITO) made enquiries with regard to the expenditure incurred by assessee. The assessee furnished detailed explanation in this regard by a letter in writing. All are part of the record of the assessee and the claim was allowed by ITO on being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome, acknowledgement of return and Agency agreement etc, same were furnished before Pro CIT, also the fact that same inquiry was made in AY 2012-13 also, therefore to treat the assessment order as erroneous and prejudicial to the interest of revenue is not justified, therefore the order u/s. 263 is bad in law. 2. Brief facts of the case are that the assessee-company is engaged in the business of Shipping and forwarding agent, filed its return of income for Assessment Year 2011-12 on 30.09.2013 declaring total income of ₹ 98,61,652/-. The assessment was selected for scrutiny. Statutory notice under section 143(2) dated 05.09.2014 and notice under section 142(1) dated 10.07.2014 was issued and served on the assessee. After taking the submission and explanation on record, the assessment was completed under section 143(3) on 05.03.2016. The Assessing Officer while passing the assessment order made adhoc disallowances @ 15% of total expenses of ₹ 12,75,945/- in the assessment order passed under section 143(3) of the Act. The assessment order was revised by ld. PCIT by exercising the power under section 263 on 28.02.2018. Before revising the assessment order, the ld. PCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined and verified by the Assessing Officer. The ld. AR of the assessee submits that the Assessing Officer vide its notice under section 142(1) dated 18.12.2015 and in question no. 19 raised specific question for seeking re-conciliation that turnover reported in service tax return is more than the income tax return. The assessee vide its reply dated 29.01.2016 furnished the details of re-conciliation of income as per the service tax return and income tax return. Thus, the Assessing Officer fully verified the fact and after dissatisfaction accepted the reply of assessee as correct. The original assessment order passed by Assessing Officer is neither erroneous nor prejudicial to the interest of revenue. The order of Assessing Officer is in accordance with law. The ld. AR of the assessee submits that proceeding under section 263 is required. Moreover, similar issue under section 263 in preceding Assessment Year for Assessment Year 2012-13 was concluded as accepted as the assessee s contention. The ld. PCIT while giving his finding has not given any finding as to how the order is erroneous or prejudicial to the interest of revenue, therefore, the order passed under section 263 is bad-in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods Pvt. Ltd. vs. PCIT (2008) 63 ITR (Trib) 355 (Delhi Trib.). (viii) Lack of enquiry vs. Inadequate inquiry. 8. In further alternative submission that ld. PCIT must record a finding that order is erroneous by conducting his own enquiry and give clear conclusion that the order is erroneous. The ld. AR of the assessee submits that in Hon ble Delhi High Court in Jyoti Foundation [357 ITR 388 (Del. HC)], held that where there is an identical enquiry but no lack of enquiry, the Commissioner must record the finding that order is erroneous. 9. On the other hand, the ld. CIT-DR for the revenue relied upon the order of ld. PCIT. The ld. DR further submits that the Assessing Officer has not referred anything in the assessment order about the enquiries conducted with regard to service tax return. Thus, the present case is clearly covered by the Explanation 2 of section 263(1) of the Act. 10. We have considered the rival submission of parties and have gone through the orders of authorities below. We have noted that in the assessment order, the Assessing Officer has not discussed the issue, which is sought to be revised by ld. PCIT. However, the Assessing Officer during the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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