TMI Blog2022 (11) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... he same at less in the P L account and there is under assessment of interest income which the AO failed to enquire. Therefore, the order passed by the AO in our opinion has become erroneous and prejudicial to the interest of the revenue for which the PCIT is justified in invoking the provisions of section 263 of the I.T.Act. Accordingly, the same is upheld. Directions given by the ld.PCIT to recompute the total income of the assessee by disallowing excess purchases debited to the P L account and directing the AO to add the interest income in our opinion is not in accordance with law. PCIT should have either examined himself or should have given direction to the AO to recompute the income after verifying the details and decide the issue by giving an opportunity of being heard to the assessee. We, therefore, modify the order of the ld.PCIT to this extent and direct the AO to examine the details and pass appropriate order as per law after giving due opportunity of being heard to the assessee and without being influenced by the direction given by the ld.PCIT at para 8 of this order. Appeal filed by the assessee is dismissed. - ITA No.743/Hyd/2019 - - - Dated:- 16-11-2022 - S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount and short admission of interest income, which are not verified by the AO. Further, the questionnaire called for by the AO for examination does not show that AO has raised any issue on which the proceedings are taken up now. Since, the assessee firm had not furnished any proper explanation regarding the discrepancies in the purchases as disclosed in the P L account and purchases as disclosed in the VAT return, therefore, the purchases are over cast by Rs.53,08,139/- which the AO should have disallowed. Similarly, since the assessee has admitted interest income of Rs.39,311/- as against Rs.43,320/- as per the Form 26AS, therefore, the balance amount of Rs.4,009/- also should have been brought to tax by the AO. Relying on the decision of Hon ble Supreme Court in the case of Malabar Industrial Company Ltd. vs CIT reported in 243 ITR 83, the ld.PCIT held that the order passed by the AO is erroneous and prejudicial to the interest of the revenue. He, therefore directed the AO to recompute the total income of the assessee by disallowing excess purchases debited to the P L account at Rs.53,08,139/- and adding interest income of Rs.4,009/-. 5. Aggrieved with such order of the Ld.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he details furnished as available with him. 12. The Ld. Pr.CIT has grossly erred in passing the revisionary order without satisfying the twin conditions that the order should be both erroneous and prejudicial to the interest of the revenue. 13. The appellant may add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal. 6. The ld.counsel for the assessee strongly objected to the order passed by the ld.PCIT by invoking the provisions of section 263 of the I.T.Act. Referring to the order passed u/s. 143(3) r.w.s. 263 of the I.T.Act on 20.11.2019, the ld.counsel for the assessee drew the attention of the Bench to para 6.2 of the order, where the AO has reproduced the details furnished by the assessee during the original assessment proceedings according to which the total month wise purchases for all twelve months is Rs.51,80,57,530/-. Referring to paper book page 59 60, the ld.counsel for the assessee drew the attention of the Bench to the ledger account of the purchase register according to which the purchases are shown at Rs.52,33,65,668/- for the FY 2013-14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxmann 329 (Bom.HC) viii. CIT vs. D.S.Gopta Gowda reported in 34 tamxan 154 (Kol.HC) ix. Pravardhan Seeds Pvt.Ltd. vide ITA No.667/Hyd/2017 (ITAT.Hyd) x. Visu International Ltd. vide ITA No.394/Hyd/2017 (ITAT.Hyd) 10. Referring to the following decisions, he submitted that if the AO has taken one of the possible view for the issue under consideration, then the assessment order cannot be said to be erroneous or prejudicial to the interest of the revenue. i. Manisha Agro Biotech Pvt.Ltd. vide ITA No.223/Hyd/2014 (ITAT.Hyd) ii. Zelan Project Pvt.Ltd. vide ITA No.1361/Hyd/2016 (ITAT.Hyd) 11. Referring to the following decisions, he submitted that Explanation 2 of the proviso to section 263 introduced by the Finance Act, 2014 w.e.f. 01.06.2015 does not have retrospective effect. i. Brahma Centre Development Pvt.Ltd. vs. PCIT vide ITA No.4341 4342/Del/2018 (ITAT.Del) ii.M/s.Arun Kumar Garg HUF vs. PCIT vide ITA No.3391/Del/2018(ITAT.Del) iii.Smt.Surinder Kaur Brar vs. ITO vide ITA Nos.204 to 205/Asr/2017 (ITAT.Amrt) iv.M/s.Indust Best Hospitality Realtors Pvt.Ltd. vs. PCIT vide ITA No.3125/Mum/2017 (ITAT.Mum) 12. He accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purchases debited at Rs.52,33,65,669/- and the purchases as per VAT returns at Rs.51,80,57,530/- duo to which the difference in the purchases to the tune of Rs.53,08,139/-, remained to be added to the total income of the assessee. Similarly, the assessee has debited interest income of Rs.39,311/- as against Rs.43,320/- shown as per Form 26AS and there is under assessment of interest income to the tune of Rs.4,009/-. It is the submission of the ld. counsel for the assessee that the assessee had filed the VAT returns at the time of original assessment, wherein total purchases reflected was Rs.51,80,57,530/- and the total purchases as per purchase register was Rs.52,33,65,669/- and the difference is due to exempt purchases and other purchases. So far as the difference in the interest income is concerned, it is the submission of the ld.counsel for the assessee that whatever interest was received after TDS, the same has been accounted for and therefore, the ld.PCIT was not justified in invoking the provisions of section 263 of the I.T.Act. 15. We do not find any merit in the above argument of the ld.counsel for the assessee. A perusal of the assessment order clearly shows that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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