9911796707
TMI Blog2024 (3) TMI 519X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee company has filed it's return of income for the A.Y. 2012-13 on 14.10.2012, declaring total income at Rs. 36,46,500/-. Subsequently, the case was selected for scrutiny under CASS and assessment u/s 143(3) of the Act was completed on 18.09.2014 by assessing the total income at Rs. 43,57,275/-. The assessment records were called for and examined by the Ld.PCIT under the powers vested u/s 263 of the Act. On perusal of the record, the Ld.PCIT noticed that the enquiries conducted by the DDIT(Inv), Unit-III(1), Visakhapatnam revealed that the assessee had booked bogus expenditure towards sub-contract payments made to the following persons who were previously employed in the assessee's company as supervisors / garage in-charge for mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. The Ld.PCIT observed that the details of the sub-contracts given by the assessee company have not been called for by the AO to verify the genuineness of the sub-contractors and the claims of the assessee in this regard were accepted by the AO in a perfunctory manner without any inquiry or verification. Thus, held that the assessment order dated 18.09.2014 passed u/s 143(3) of the Act is prima facie erroneous and prejudicial to the interest of the revenue as the same was passed without making any inquiries or verification regarding genuineness of subcontractors and hence proposed for revision u/s 263 of the Act. Accordingly issued show cause letter dated 13.05.016 to the assessee and it was asked to show cause as to why the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons from the alleged sub contractors, sub contract agreements, if any or copies of their income tax returns or statements of account is furnished and in the absence of which it is not possible to verify the genuineness of the alleged sub-contractors. The Ld.PCIT held that the order passed by the AO is not only erroneous but also prejudicial to the interest of revenue and the twin conditions for invoking jurisdiction u/s 263 read with Explanation-2 of the section are satisfied in the case of the assessee. Accordingly, set aside the assessment to the file of the AO with a direction to verify the correctness and genuineness of the sub-contract charges of Rs. 25.72 crores debited to P&L a/c under the head "Direct Expenses" in the light of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) dated 18.09.2014 is neither erroneous nor prejudicial to the interest of the revenue. He, therefore, pleaded to quash the order passed by the Ld.PCIT u/s 263 of the Act. 5. Per contra, the Ld.DR has submitted that the AO has never verified the genuineness of the sub contract payments during the course of assessment proceedings. He further submitted that the claim of the assessee was accepted without making any enquiries or verification. The AO should have made enquiries about the sub contract expenditure claimed by the assessee. He, therefore, submitted that without proper enquiries, the Ld.AO has allowed the entire expenditure of Rs. 25,72,91,502/- claimed under the head "Sub Contract Charges" erroneously. The Ld.DR further submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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