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TMI Blog2012 (9) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... e insofar as the facts leading to claim of bad debt and allowance of discount were closely linked as observed by the AO cannot leave any room for doubt as sought to be assumed by CIT u/s.263 insofar as he has not given any direction to the AO which would lead to the finding that the order of the AO was erroneous coupled with the fact that it was prejudicial to the interest of revenue. Further, Commissioner while setting aside assessment u/s.263 should not give specific direction to the Assessing Officer to complete assessment in a particular manner. See Development Construction & Allied Services (India) P. Ltd v. ITO (2011 (3) TMI 850 - ITAT, MUMBAI ). Assessment u/s 263 is quashed – Decided in favor of assessee. - ITA No.226/CTK/2012 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Rs.1,51,242 is inadmissible U/s. 40(a) of the I.T. Act at page-14 under Annexure-1 of P.B. and at the same time confused himself by treating the same as indirect tax as revealed from Clause-21 of Audit report in page-15 of paper book as allowable expenditure. Hence, it is a prima facie mistake ought to be rectified U/s. 154 of the IT Act for which there is no necessity to invoke Sec-263 of I.T. Act being a mistake apparent from record. Further he submitted that as per record, the fringe benefit tax at Rs.1,312 has already been added back with the net income computed at page-29 under Annexure-1 of the paper book. Hence, it is not at all justified to invoke Sec-263 for making further addition of Rs.1,312 which has already been added with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary evidence like report from the laboratory or from a competent valuer, the assessee had in fact written off a debt almost unilaterally without completing the formalities. Thus, the claim of this allowance which is in the nature of writing off debt is not only against the interest of the company but also against the interest of revenue and as such shall not be allowed and consequently it shall be added to the total income of the assessee. Taking into consideration the above discussion materials gathered during the course of assessment proceedings, and keeping in view the fact and circumstances of the case, the total income of the assessee company is computed as under : Net loss as per P L Account Rs.2,16,49,784.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 Page-35 of paper book under Annexure-3. iii Apex Trading Company Rs.3,99,999.60 Page-38 of Paper book under Annexure-4. iv IDCOL Ferro Alloys Ltd. Rs.209.91 Page-39 of paper book under Annexure-5. v IDCOl Ferro Alloys Ltd. Rs.2,00,000.00 Page-40 of paper book under Annexure-6. The AO has allowed the expenses claimed under discount allowed to the above mentioned parties at Rs.20,37,506. Whereas the learned CIT in 263 proceedings has taken a contrary view by stating the same as bed debts whereas the entire ledger A/cs. of the said parties clearly disclosed the same as discount. On the above facts, the learned Counsel for the assessee argued that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... com 327 (Mum ITAT)]. 3.2. The learned Counsel for the assessee prayed that the impugned order passed by the Ld. CIT, Cuttack u/s.263 may be quashed. 4. The learned DR supported the order of the learned CIT u/s.263. He submitted that the learned CIT was within his jurisdiction to consider the treatment given to the debtors as discount allowed adjustment which cannot be claimed u/s.36(1)(vii). It means that the debt which became bad when the sales were yet to be completed. He therefore, directed the Assessing Officer to examine the details of expenditures claimed under the head discount allowed against which the assessee is not able to establish the proper facts. Similarly it was to be verified from the obtaining the copies of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had in fact written off a debt almost unilaterally without completing the formalities .Thus, the claim of this allowance which is in the nature of writing off debt is not only against the interest of the company but also against the interest of revenue and as such shall not be allowed and consequently it shall be added to the total income of the assessee. This clearly indicates that it was the case of the learned CIT to further verify the order of the Assessing Officer when he has already noted that the claim was the loss of the Revenue and shall not be allowed. The learned Counsel for the assessee has already submitted that the issue has been settled by the learned CIT(A) by way of a separate appeal therefore cannot be further consider ..... X X X X Extracts X X X X X X X X Extracts X X X X
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