| The Tax Publishers2019 TaxPub(DT) 8270 (Kol-Trib) INCOME TAX ACT, 1961
Section 263
Since AO after thorough examination of details and documents and explanations submitted by assessee as per requisitions sought for by AO under section 142(1) and as deemed fit for computing true taxable income assessment was completed under section 147/143(3) and therefore, it was not a case of inadequate scrutiny.
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Revision under section 263 - Erroneous and prejudicial order - CIT took the view that higher G.P. shown in individual capacity should have been considered for GP in case of partnership-firm - AO having made adequate enquiry
Pr. CIT noticed that while in case of Jabibur Rahaman, Individual, who was running identical business gross profit (GP) rate as disclosed by him was at 4.68%, whereas in case of assessee partnership-firm M/s. Jabibur Rahaman, GP rate declared was only 0.96% on sales. Pr. CIT exercised judication under section 263 on the alleged ground that G.P. shown by assessee @ 4.68% on sales made in individual capacity should have been considered for G.P. in the case of partnership-firm, i.e., [assessee under consideration]. Held: There was no dispute to the fact that assessee partnership firm came into existence with effect from 23-3-2007 vide Partnership Deed dated 30-3-2007. Therefore, firm started functioning from financial year 2007-08 relevant to concerned assessment year 2008- 09. and therefore, comparison of rate of G.P. of individual business of Jabibur Rahman with that of partnership firm was premature, inasmuch as individual business had been carrying on since long past and goodwill/reputation in the market was settled. Furthermore, there was no dispute about recording purchases, sales and other incidental expenses in the books of account and relevant bank account. Books of account of partnership firm (assessee) were duly audited under section 44AB. AO after thorough examinations of details and documents and explanations submitted by assessee as per requisitions sought by AO under section 142(1) and as deemed fit for computing true taxable income assessment was completed under section 147/143(3) and, therefore, it was not a case of inadequate scrutiny and accordingly, assessee order could not be held as erroneous and prejudicial especially when section 263 does not permit substituting one opinion by another opinion.
Relied:CIT v. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del) : 2011 TaxPub(DT) 0088 (Del-HC) and Chroma Business Ltd. v. Dy. CIT (2004) 82 TTJ 540 (Cal) : 2004 TaxPub(DT) 1000 (Kol-Trib). Supported by:CIT v. Vikas Polymers (2012) 341 ITR 537 (Del) : 2010 TaxPub(DT) 2189 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
IN THE ITAT, KOLKATA BENCH
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