9911796707
TMI Blog2021 (7) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... determining total income at Rs. 10.68 crores. The ld. CIT invoked section 263 of the Act by noticing that the AO did not carry out enquiries or examination in respect of five issues, namely, (i) trade payable at Rs. 12.16 crores; (ii) advances receivable at Rs. 47.98 crores & short term borrowings at Rs. 5.60 crores; (iii) Inventory at Rs. 25.75 crores; (iv) salary to directors increased from Rs. 63.95 lakh to Rs. 1.73 crores; and (v) bad debts written off at Rs. 86.31 lakhs. The assessee submitted reply, which has been incorporated in the impugned order at pages 3 to 7, giving details of the enquiries conducted by the AO on such issues, copious details of the replies filed by the assessee during the course of assessment proceedings and jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply furnished by the assessee giving the mechanism and details of advances receivable from customers amounting to Rs. 47.98 crores which were duly adjusted against the final bills. As regards Short term borrowings of Rs. 5.60 crores, the assessee, on enquiry by the AO, submitted that it was bank balance as on 31.03.2012 against cash credit limit for which proper reconciliation was also filed. As regards the third point of 'Inventory' of Rs. 25.75 crores, it was shown to the ld. CIT that the AO did make enquiry on this and the assessee also submitted necessary details of the same. On the fourth issue of hike in remuneration to the directors, the assessee, as stated before the ld. CIT, put forth before the AO that salary paid to the director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in an erroneous manner causing prejudice to the interest of the revenue because of non-application of mind by the AO. 8. Third, where the AO makes enquiries and the assessee furnishes his explanation. There can be two outcomes of this exercise viz., one where the AO does not get satisfied and makes addition and where the AO gets satisfied with the assessee's reply and does not make any addition. In the first outcome, the matter rests there itself from the angle of revision. The second outcome of the AO getting satisfied with the assessee's reply and not making any addition can happen in two ways. One, in which the AO discusses the issue in the assessment order, albeit briefly, accepting the assessee's claim. Two, in which the AO does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an uphill task, thereby giving needless length to the assessment order. Revision will be possible in the second way again on the CIT expressly pointing out how the assessment order was erroneous in facts or in law and how the prejudice was caused to the revenue. This can be done either on the basis of some circumstantial evidence or some concrete evidence hinting or showing that the per se acceptance of the assessee's claim by the AO led to the passing of an erroneous order which caused prejudice to the revenue. To put simply, there should be something specific and positive, apart from a generalized view of the CIT, to elaborate how and where the AO went wrong in accepting the claim of the assessee, which is a pedestal different from the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f view of the assessee without making any separate discussion in the assessment order. In such a panorama, the onus was upon the ld. CIT to show as to how the acceptance of the assessee's claims by the AO led to the passing of an erroneous order thereby causing prejudice to the interest of revenue. The only raison d`etre given by him for the revision is that: "In the present case the AO has not verified all the relevant issues to deduce the correct taxable income and therefore the order passed by the Assessing Officer is prima-facie found to be erroneous in so far as it is prejudicial to the interest of revenue". It is manifest on a bare perusal of the impugned order that, apart from relying on certain decisions justifying the revisionary e ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
