9911796707
TMI Blog2022 (4) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... owing grounds: "1. That the order u/s. 263 of the I.T. Act, 1961 is illegal, uncalled for, and without any basis. 2. That no order shall be made u/s. 263 (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. The order u/s. 143 (3) was passed on 16-11-2011. Therefore the order u/s. 263 is barred by limitation, - because though the date of order is purported to have been passed on 30.03.2014, but the same assessee has not been received by the assessee as yet even, after the assessee has requested to supply the same vide letter dtd 14.10.2014. This appeal is being filed only on the basis of xerox copy obtained from ITO's office. 3. That it is settled law that an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g so, the order is illegal. 6. That the learned AO should have considered that where two views are possible and the CIT does not agree with that view taken by the AO and the same has resulted in loss of revenue, it cannot be treated as erroneous and prejudicial to the interest of the revenue. 7. That other grounds if any will urged at the time of hearing of appeal.." 4. The assessee has also raised additional ground of appeal, as under: "1. That the communication is a condition precedent and an order takes effect only on communication. Since the order u/s. 263 was not issued to the assessee within the period of limitation, the same is barred by limitation as has been decided by Supreme Court of India, High Courts and Co-ordinate Benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT regarding the genuineness of the same. So as to set-a-aside the issue again to the A.O. for roving enquiry which is not permissible under law. So far as the claim of deduction of sales tax payment is concerned, it was submitted that the same has been deducted at source out of the gross bills of contract works and since the assessee has taken the gross bill receipt figure in the Profit & Loss Account and debited the sales tax payment, there was absolutely no error for invoking section 263 because the learned AO has completed the assessment after due scrutiny, verification and examination of accounts. It was submitted that the assessment was subject matter of appeal before the Ld. CIT(A) and after passing the first appellate order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 263 shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. In the instant case, the estimated disallowance of expenditure made by the AO in the assessment order was the subject matter of appeal before the CIT(A), who vide his appeal order directed to limit such disallowance to 5% of the total claim instead of 10% of the claimed disallowed by the AO. Therefore, issues raised in the show letter issued for the purpose of section 263 were not the subject matter of appeal before the Ld. CIT(A) and hence, the principles of doctrine of merge do not apply. After carefully examining the case record and submissions made on behalf of the assessee, it is noted that the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of expenses claimed. Once the AO has resorted to estimate the expenses on ad hoc basis, it is an implied way of rejection of books of account, therefore, there can be no further addition made in the hands of the assessee relying on the same grounds. For this proposition, Ld. A.R. has relied on the decision of Hon'ble A.P. High Court in the case of Indwell Construction vs. CIT, 232 ITR 776 (AP) and also the decision of the Tribunal in the case of Teja Construction, 129 TTJ 57. Ld. counsel pointed out that as per judgment reported in A Venkat Rao vs. CIT, 203 ITR 64, the written reply in compliance to notice u/s. 263 of the Act should have been judicially considered by the Ld. CIT and he is duty bound to examine the points raised and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, we clearly observe that the AO has not rejected books of account of the assessee but has made disallowance of 10% of claim of expenses on account of failure of the assessee to produce details of bills and vouchers in support of such claim of expenses made in the profit and loss account. Therefore, the contention that no further addition can be made on the basis same account, being devoid of merits, is dismissed. 14. So far as non-consideration of reply to notice u/s. 263 of the Act is concerned, on careful and vigilant reading of order dated 30.3.2014 u/s. 263 of the Act, we are of the considered view that the CIT has given thoughtful consideration to the submission of the assessee in para 6 and also noted that the Ld. A.R. has not give ..... X X X X Extracts X X X X X X X X Extracts X X X X
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