9911796707
TMI Blog2012 (10) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... .95 passed by the Assessing Officer (AO)under Section 143(3) of the Act as erroneous and prejudicial to the interest of revenue. 2. Briefly the facts giving rise to the appeal are that the assessee during the relevant assessment year was engaged in the business of manufacturing HDPE woven sacks and was also doing the job work of converting HDPE granules into HDPE tape for its sister concern, namely, M/s. Plasto Packs International Private Limited, which is ultimately used as yarn in weaving HDPE fabric. The return of income for the relevant assessment year was filed by the assessee on 31.12.92 disclosing the income at Rs.11,98,404/-. The assessment was completed by AO u/s 143(3) of the Act on 28.2.95 assessing the income at Rs.23,62,540/. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.94 and therefore, the assessment order passed by the AO u/s 143(3) is erroneous in so far as it is prejudicial to the interests of the revenue and accordingly, initiated the proceedings for revision of the order by issuing notice to the assessee u/s 263 of the Act. 4. The notice was responded by the assessee by filing a reply thereto taking the stand that the assessee had not issued any debit note for Rs.8 lacs to M/s. Plasto Packs International Pvt. Ltd. However, it was not denied that a request was made on behalf of the assessee for payment of disputed amount of Rs.8 lacs but its sister concern M/s. Plasto Packs International Pvt. Ltd. refused to make payment. According to the assessee, it was done in the light of undertaking dated 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved by the order passed by the CIT as aforesaid, the appellant preferred an appeal before ITAT which stands dismissed by the order impugned. Hence, this appeal. 7. Learned counsel for the appellant contended that CIT and ITAT have failed to appreciate the position of law in correct perspective. It is submitted that two different companies; one assessee and the other M/s. Plasto Packs International Pvt.Ltd. cannot be considered as one company for the reason of their inter se business while passing the assessment order under the provisions of the Act. Learned counsel submitted that the communication dated 21.3.92 requiring M/s. Plasto Packs International Pvt. Ltd. to make immediate payment of Excise Duty leviable on the product of job wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction u/s 263(1) to correct an error committed by the AO. Needless to say that the conclusion regarding the order passed by AO being erroneous and prejudicial to interest of the revenue has to be arrived at by the CIT after examination of the record of the proceedings taken by AO objectively. Once the CIT is satisfied that order passed by the AO is erroneous and prejudicial to the interest of the revenue, the appropriate order thereon including an order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment, as the circumstances of the case justify, could be passed by the CIT only after giving the assessee an opportunity of being heard and making or causing to be made such inquiry as he deems n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sister concern towards the assessee in Excise Duty account so as to determine the liability of tax, if any, in the hands of the assessee against the said amount during the relevant assessment year i.e. 1992-93. In considered opinion of this court, omission on the part of AO in not including the amount of Rs.8 lacs to the income of the assessee without making appropriate inquiry, while passing the assessment order in the case of assessee for the relevant assessment year was undoubtedly erroneous and prejudicial to the interest of the revenue. Obviously, since the assessee was making the payment to the Excise Department on the goods manufactured under the job work, the reimbursement of the Excise Duty paid by the assessee's sister concern, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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