9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (5) TMI 1186 - AT - Income TaxRevision u/s 263 - lack of enquiry by the AO - Held that - A perusal of order passed by the AO under section 143(3) clearly shows that there is no discussion whatsoever on the various issues pointed out by the ld. CIT in the notice issued under section 263. The ld. Counsel for the assessee also has not been able to bring anything on record to show that the enquiries as warranted in the facts and circumstances of the case were actually made by the AO during the course of assessment proceedings. The mere fact that the errors on the part of the AO in not conducting enquiries in respect of relevant issues while completing the assessment were pointed out by the ld. CIT on the basis of details and documents available on record by itself cannot prove that such enquiries were actually conducted by the AO during the course of assessment proceedings. There is nothing brought on record to show that such enquiries were indeed conducted by the AO. We therefore, find ourselves in agreement with the ld. DR that it was a case of lack of enquiry on the part of the AO while completing the assessment under section 143(3) and such lack of enquiry made the assessment order passed by the AO under section 143(3) erroneous as well as prejudicial to the interest of the Revenue giving jurisdiction to the ld. CIT under section 263 to set aside the same with a direction to the AO to make the assessment afresh. We therefore, uphold the impugned order of the ld. CIT passed under section 263 - Decided against assessee.
Issues Involved:
1. Computer Stationery Expenses 2. Forms and Circulars Expenses 3. Printing and Stationery Materials 4. Business Promotion Expenses 5. Salary and Bonus Detailed Analysis: 1. Computer Stationery Expenses: The assessee claimed ?3,99,778 under "computer stationery expenses," which included a purchase of spare parts worth ?2,03,000 from M/s. Hindusthan Sales Corporation as of 31-3-2008. The CIT found that the AO neither made any enquiry nor called for any explanation regarding this purchase, and the reasonableness of the expenditure was not examined. The CIT noted that part of this expenditure constituted capital expenditure, but the entire claim was shown as revenue expenditure. The Tribunal upheld the CIT's view, agreeing that the AO's lack of enquiry rendered the assessment order erroneous and prejudicial to the Revenue. 2. Forms and Circulars Expenses: The assessee's claim of ?1,57,325 under "forms and circulars expenses" included a purchase of ?1,08,825 in March 2008. The CIT observed that the AO did not enquire about the business expediency of such bulk purchases in the last month of the financial year. The Tribunal found that the AO's failure to investigate the disproportionate increase in these expenses justified the CIT's revision under section 263. 3. Printing and Stationery Materials: The claim of ?2,05,129 under "printing and stationery materials" included purchases worth ?1,04,129 from M/s Hindusthan Sales Corporation on 03-12-2007. The CIT noted that the AO did not enquire about the nature of the stationery purchase or its consumption during the relevant financial year. The Tribunal agreed with the CIT that the AO's omission to verify the reasonableness of this expenditure made the assessment order erroneous and prejudicial to the Revenue. 4. Business Promotion Expenses: The assessee claimed ?5,78,269 under "business promotion," which included purchases of jewellery (11 pieces of gold chains worth ?1,17,543 and two bracelets and a chain worth ?60,432). The CIT found these purchases unusual for business promotion in the context of the assessee's LIC commission agency business. The AO only disallowed ?20,000 on an estimate basis without a rationale. The Tribunal upheld the CIT's finding that the AO's failure to examine the nature and reasonableness of these expenses justified the revision under section 263. 5. Salary and Bonus: The assessee's total claim under "salary and bonus" was ?4,28,000, with an abrupt increase to ?82,000 in March 2008. The CIT observed that the AO did not enquire about this sudden increase. The Tribunal agreed that the AO's lack of enquiry made the assessment order erroneous and prejudicial to the Revenue. Conclusion: The Tribunal upheld the CIT's order under section 263, agreeing that the AO's lack of enquiry on the relevant issues rendered the assessment order erroneous and prejudicial to the interest of the Revenue. The appeal filed by the assessee was dismissed.
|
