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TMI Blog2010 (12) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee during the assessment proceedings and also had failed to record any firm finding based thereon. Further, no cogent reasons have been assigned for accepting the retraction of the assessee from the earlier surrender of income of Rs. 14,00,000/- made by it during the survey conducted on 11/12.3.1999. Thus, the Tribunal erred in nullifying the order passed by the CIT under Section 263 of the Act. - Decided in favor of revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier made be not cancelled. The Commissioner of Income Tax (in short "the CIT") in the order dated 30.3.2004, passed in revisional proceedings, observed that the order of the assessing officer passed under Section 143(3) was erroneous and prejudicial to the interest of the Revenue and accordingly set aside the said order with a direction to make fresh assessment after affording full opportunity of hearing to the assessee. The CIT in its order passed under Section 263 had noticed certain short-comings in the order of the assessing officer. The observations made by the said revisional authority, insofar as the same are relevant for adjudication of the issue, are as under: "The perusal of assessment record and other relevant documents/ ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he trading account prepared as per books of account on 11.3.1999, the wages were taken at a figure of Rs. 1,41,279/-. In the return filed, these expenses have been shown at Rs. 2,28,279/- as on 31.3.1999. The books of account had been written up to 8.3.1999 as per the statement recorded on the date of survey and as actually seen at that time. Within 22 days, wages of Rs. 86,792/- had been paid. This aspect has not been examined to see if these expenses debited to the trading account were genuine. These facts revealed that the Assessing Officer had not applied his mind to the facts and material before him and the results arrived at stemmed from miscarriage of justice due to incorrect application of facts, wrong understanding and application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the interests of the revenue. The admitted facts in this case are that during the course of survey conducted on 11/12.3.1999, the survey party found certain discrepancies and detected a g.p. of Rs. 13,13,958/-. To cover up the discrepancies, the partner of the assessee-firm surrendered an additional income of Rs. 14 lacs. However, the assessee in its return has declared an income of Rs. 3,81,400/- only. During the course of assessment proceedings, the assessee produced the details, documents and evidence before the AO, duly reconciling the difference earlier found at the time of survey conducted on 11/12.3.1999. Now, we find from the record that the AO completed the assessment u/s 143(3) after only verifying the details, i.e. relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income, a sum of Rs. 3,81,400/- only had been surrendered and disclosed as its income. No plausible explanation had been furnished by the assessee for retraction from its earlier statement made during survey. In the absence thereof, there was, prima facie, no justification for accepting the surrendered income of Rs. 3,81,400/- instead of Rs.14,00,000/-. A perusal of the aforesaid order of the Tribunal shows that the Tribunal had not discussed the material produced by the assessee during the assessment proceedings and also had failed to record any firm finding based thereon. Further, no cogent reasons have been assigned for accepting the retraction of the assessee from the earlier surrender of income of Rs. 14,00,000/- made by it du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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