TMI Blog2017 (2) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... e has to keep in mind the distinction between lack of enquiry and inadequate enquiry . If there was any enquiry, even thought inadequate it would not in itself empower CIT to invoke provisions of section 263 of the Act merely because he had different opinion in the matter. It is only in cases of lack of enquiry that such a course of action would be available to CIT. Cross objections filed by revenue u/s 253(4) - We find that the AO or assessee on receipt of notice that an appeal against the order of Deputy Commissioner (Appeal) or Commissioner (Appeal) has been preferred by either party and then the other party can file the cross objections. In the present case, the order passed by the CIT u/s 263 has not been passed by Deputy Commissioner (Appeal) or the Commissioner (Appeal) and rather it has been passed by Principal Commissioner and therefore the provisions relating to cross objections as contained in section 253(4) are not applicable and hence, the cross objections filed by revenue are not maintainable. - I.T.A No.324(Asr)/2016, Cross Objection No. 22 (Asr)/2016 Arising out of ITA No.324(Asr)/2016 - - - Dated:- 27-2-2017 - SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR had no objection to condone the issue of delay and therefore delay was condoned and Ld. AR was directed to proceed with his arguments. 8. The Ld. AR, at the outset submitted that assessee was engaged in the business of running immigration consultancy agency and was working as sub-agent on commission basis with certain agents. It was submitted that money collected from students used to be deposited in the bank account and the money was sent to the agents for whom the assessee was working and in case of non-grant of visa to students, the money was refunded to students. It was submitted that assessee was asked by Assessing Officer to explain the deposits in the bank and in this respect our attention was invited to para 2 of the assessment order. The Ld. AR, further took us to copy of order sheet of Assessing Officer placed at page 17 to 20. Our specific attention was invited to order sheet entry dated 04.03.2014 wherein the Assessing Officer had required the assessee to explain the deposits in banks. We were also taken to order sheet dated 07.03.2014, wherein the Assessing Officer had noted the reply of the assessee stating that the deposits represented the business receipts bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SSIONER OF INCOME TAX vs. DESIGN AUTOMATION ENGINEERS (BOMBAY) (P) LTD. HIGH COURT OF BOMBAY (2008) 13 DTR (Bom) 145 : (2010) 323 ITR 632 : (2009) 177 TAXMAN (e) COMMISSIONER OF INCOME TAX vs. MUNJAL CASTINGS HIGH COURT OF PUNJAB HARYANA (2008) 2 DTR (P H) 20 : (2008) 303 ITR 23 : (2008) 168 TAXMAN 241) (f) COMMISSIONER OF INCOME TAX vs. MAHENDRA KUMAR BANSAL HIGH COURT OF ALLAHABAD (2008) 214 CTR (All) 349 : (2008) 297 ITR 99 (All) (g) COMMISSIONER OF INCOME TAX vs. DEEPAK MITTAL HIGH COURT OF PUNJAB AND HARYANA (2010) 37 DTR 0008, (2010) 324 ITR 0411 (h) COMMISSIONER OF INCOME TAX vs. LEISURE WEAR EXPORTS LTD. HIGH COURT OF DELHI (2010) 46 DTR 0097, (2012) 341 ITR 0166 (i) NARAIN SINGLA VS. PR. CIT , 62 TAXMAN.COM 225 (CHD. TRIB.) In view of the above judicial precedents and facts and circumstances, the Ld. AR argued the order passed u/s 263 be quashed. 9. The Ld. DR, on the other hand, relied on the order of Ld. CIT and submitted that the Assessing Officer had accepted the request of assessee to compute income a the rate of 10 per cent of deposits without keeping into and making further enquiries, therefore, the order passed by Assessing Officer was pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment proceedings had explained before Assessing Officer that money collected from various students was deposited in bank and some was given to agents by cheques and if no work was done for any person money was refunded to that person. In this respect the reply of the assessee during assessment proceedings to Assessing Officers placed on paper book page at 46 is quite relevant wherein the assessee vide letter dated 26.02.2014 had submitted as under: The assessee is engaged in the business of immigration consultancy. The assessee is not engaged directly in immigration business. He is having contracts with various persons who used to send people abroad. Person interested to go abroad contract assessee and assessee got the work done through agents after collecting money from the persons. Money collected from various persons is deposited in bank accounts maintained by assessee. If the work is done amount is paid to agents otherwise it is returned to person from whom it was received. The assessee receive commission from agents. The assessee has not maintained books of accounts thus he cannot produce documentary evidence. The assessee further reiterated the same position vide lett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tea in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the ITO, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order, of the AO, cannot be treated as prejudicial to the interests of the Revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law. From the above observations made by the Supreme Court, it is clear that the provisions of section 263 cannot be invoked to correct each and every type of mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been noticed by the CIT himself in his order- Thus, it cannot be said that it is a case of 'lack of enquiry'-Further, even the CIT was not clear as to whether the said expenditure is to be treated as capital or revenue expenditure-Dyes used by the assessee, a manufacturer of car parts, are the components of the machines and need constant replacement as their life span is not more than a year-With the replacement of such tools and dyes, no new asset comes into existence, nor there is benefit of enduring nature-It does not enhance the life of the existing machine or increase its production capacity-Therefore, the view taken by the AO was one of the possible views and the assessment order passed by the AO could not be held to be prejudicial to the Revenue. In the present case from the order sheet and other material placed on record, we have observed that Assessing Officer had made sufficient enquiries and had also examined the bank statements and in view of that had taken one of the possible views that the deposits represented business receipt and therefore keeping in view the judicial precedents relied on by assessee, the provisions of section 263 were not applicable. In vie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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