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TMI Blog2022 (10) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue and hence, the order passed under section 263 of the Act dated 30.03.2022 is bad-in-law and liable to be quashed. 2. The Ld. Pr. CIT failed to appreciate that during the course of assessment proceedings, the AO has verified and examined all the issues considered in proceedings u/s.263 of the Act including confirmation letters of lenders supported by their IT Returns, and hence, the order passed under section 263 of the Act dated 30.03.2022 is contrary to factual position and thus, bad in law and liable to be quashed. Without prejudice to the above: 3. The Ld. Pr. CIT erred in directing the AO the make fresh assessment order and not limiting the fresh assessment order in respect of issues considered in 263 proceedings and hence, the order passed u/s.263 of the Act dated 30.03.2022 is bad in law and needs to be quashed." 03. In fact, the grounds of appeal challenge the validity and findings of the order of the PCIT. 04. The fact shows that assessee is an individual engaged in the business of trading in iron and steel in a proprietary concern of M/s Siddhi Enterprises. Assessee filed his return of income on 1st November, 2017 at Rs.1,34,36,914/-. The return was picked ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, it was submitted that there is no error in the order of the learned Assessing Officer as same was passed after the detail enquiries. 09. The learned PCIT held that the order passed by the learned Assessing Officer is erroneous and prejudicial to the interest of the Revenue On the issue of (i) unsecured loan of Rs.7.45 crores and interest expenses thereon of Rs.1.46 crores, (ii) verification of sundry debtors of Rs.9.35 crores, (Iii) expenses of Rs.79.53 lacs and (iv) deduction on brokerage of Rs.1.36 crores. Consequently, order under Section 263 of the Act was passed on 30thMarch 2022 holding that assessment order passed by the learned Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. The learned Assessing Officer was directed to remake the assessment order. 010. The learned Authorized Representative referred to the paper book of 386 pages. He first referred to page no. 323 of the Paper Book which is a show cause notice dated 4.3.2022 under Section 263 of the Act and referred to page no. 325 to page no. 346 which is also reply of the assessee before the PCIT. Coming to the assessment proceedings, he referred to the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer was submitted. He also stated that all expenses details were also submitted vide page no.314 to 335 of paper book before the learned Assessing Officer. Therefore, he submitted that all the details were verified by the learned Assessing Officer therefore, it cannot be stated that the order passed by the learned Assessing Officer suffers from any inadequate enquiry or lack of inquiry. He further relied on the decision of the co-ordinate bench in ITA No. 2690 & 2691 /Mum/2016 in case of Shri Narayan Tatu Rane dated 6.5.2016 to show that in such case all the orders passed by the learned Assessing Officer could be held to be erroneous on whims and fancy of the revisionary authorities. 011. The learned Departmental Representative vehemently supported the order of the learned PCIT. He specifically referred to page no. 381, wherein the report of the learned Assessing Officer dated 16thMarch 2022 is placed in the paper book. He specifically stated that no confirmation letters and bank statement are found in the scrutiny folder and in the ITBA system of the relevant parties to whom interest has been paid and therefore, the learned PCIT is correct in holding that the order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us. Same is also placed at page no.386 of the Paper Book and also submitted before the learned PCIT vide letter dated 23rdMarch 2022 which remains un-rebutted. Further, with respect to the brokerage expense assessee has given details of brokerage charges stating the name, address, PAN no. account of brokerage paid, tax deduction at source of these parties starting from page no.64 to page no.79 of the Paper Book. Therefore, it cannot be said that the learned Assessing Officer has not inquired and examined the same. The learned Assessing Officer has categorically asked for the details of all the expenditure party wise and head wise. With respect to purchase and sales, the learned Assessing Officer enquired about all the parties from whom such transaction is in excess of Rs.10 lacs. Assessee complied with giving the list of such Sundry Debtors and Sundry Creditors along with their names and address as well as the bank statement of the Assessee wherever the payments are made and receipts are shown. Similarly, with respect to all the expenditure, the details are submitted before the learned Assessing Officer. 013. The details submitted and examined by the learned Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee. The Assessing Officer failed to do so." 014. On careful examination of the same, we find that the learned Assessing Officer has called for all the information required for making assessment, have perused the relevant details filed by the assessee, wherever the details are not coming forth the requisite penalty notices were issued and the balance information was obtained and verified. The learned PCIT has also called for the report of the learned Assessing Officer where the learned Assessing Officer has also shown that requisite notices under Section 133(6) of the Act were issued and replies were obtained from lenders. It is not the case of the learned PCIT that the learned Assessing Officer has allowed the claim of the assessee or not made addition/ disallowances, which should have been made as per law. Only reason for holding the order of the learned Assessing Officer erroneous is that interest was not examined if same were utilized for the purpose of the business, the expenses were correct or genuine and whether for brokerage expenses services were rendered or not. The learned PCIT did not find single instances despite having all the information available with hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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