| The Tax Publishers2021 TaxPub(DT) 6395 (Sur-Trib) INCOME TAX ACT, 1961
Section 263
Assessee produced books of account along with vouchers and supporting evidence in the course of assessment proceedings. After verification, AO accepted assessee's return of income making addition of Rs. 1,40,000 as disallowance of labour and carting expenses. The books of account of assessee were audited under section 44AB and return of income was also supported by audit report in Form Nos. 3CB and 3CD. Therefore, it was not a case of no enquiry on AO's part as regards assessee's claim for other expenses and, therefore, assessment order could not be held to be erroneous and prejudicial to the interest of Revenue.
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Revision under section 263 - Erroneous and prejudicial order - No lack of enquiry on AO's part -
Pr. CIT treated order passed by AO as erroneous and prejudicial to the interest of revenue on the ground that assessee's case was selected for scrutiny under CASS for reason that assessee had claimed in Profit and Loss Account' large other expenses, however, no enquiry was made by AO as regards thereto. Held: Assessee produced books of account along with vouchers and supporting evidence in the course of assessment proceedings. After verification, AO accepted assessee's return of income making addition of Rs. 1,40,000 as disallowance of labour and carting expenses. The books of account of assessee were audited under section 44AB and return of income was also supported by audit report in Form Nos. 3CB and 3CD. In support of the expenses, assessee furnished bank statement, details of expenses exceeding Rs. 5 lakhs debited in trading account and details of expenses exceeding Rs. 1 lakh claimed in Profit and Loss account. Further, assessee furnished details of sundry creditors along with PAN and address. In the course of assessment proceedings, assessee also furnished details of turnover with gross profit and net profit along with gross profit and Net Profit ratio for the concered year as well as preceding two years. The gross profit ratio and net profit ratio was more than ratio of last two years. From the above facts, it was clear that assessee had filed complete details and also produced books of account along with the vouchers of supporting documents. AO had made proper inquiry which was adequate. If there was any inquiry even inadequate that by itself would give no occasion to CIT to pass orders under section 263 merely because he had a different opinion in the matter. Therefore, assessment order could not be held to be erroneous and prejudicial to the interest of Revenue.
Relied:Malabar Industries Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC), Pr. CIT Delhi Airport Express (P) Ltd. ITA No. 705/2017) 2017 TaxPub(DT) 4058 (Del-HC), CIT v. G. M. Mittal Stainless Steel (P) Ltd. (2003) 130 Taxman 67 (SC) : 2003 TaxPub(DT) 812 (SC) and CIT v. Jain Construction Co. (2013) 257 CTR 336 (Raj) : 2013 TaxPub(DT) 954 (Rah-HC), CIT v. Gabriel India Ltd. (1993) 203 ITR 108 (Bom-HC) : 1993 TaxPub(DT) 1357 (Bom-HC) and CIT v. Vikas Polymers (2012) 341 ITR 537 (Del-HC) : 2010 TaxPub(DT) 2189 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
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