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TMI Blog2013 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts and in law the notice of CIT is bad in law and void as it orders on surmises and conjectures. The material for alleged consideration that order was erroneous or prejudicial was not on record. 2. That the order passed by the CIT u/s 263 of the Act is bad in law and void ab initio. The appellant craves leave to alter, amend, and or withdraw all or any of the grounds of appeal at or before the time of hearing of the appeal. 2. The brief facts of the case are that assessment in this case was finalized u/s 143(3) vide order dated 10.11.2008. The proceedings u/s 263 was initiated by CIT vide issue of show cause notice u/s 263 dated 4th September, 2009. The CIT in his show cause notice has alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this Tribunal. 4. At the outset, the Ld AR took us to page 1 of the paper book wherein copy of show cause notice was placed and invited our attention to pages 41-42 of paper book wherein detail of expenses claimed were placed in the form of part of tax audit report and as a part of computation of income. The Ld AR also took us to pages 3-12 of paper book wherein reply to show cause notice was placed. In view of the above, the Ld AR argued that detail of all these expenses were there before Assessing Officer and Assessing Officer had examined that during assessment proceedings. Continuing his arguments he further stated that a total sum of Rs.95 lakhs was paid as syndication fees in assessment year 2005-06 against which only Rs.37,63,014/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company and full details were furnished before the Assessing Officer and therefore the order u/s 263 was not justified. He further argued that Ld CIT has given his order without going into the reply filed by the assessee and invited our attention to pages 61 to 70 of paper book wherein the assessee had filed detailed submissions against the show cause notice. He further argued that M/s Oscar Investment Ltd. was not a related party as it had already sold its shares in the assessee company. Reliance was placed on the judgment in the case of Eicher Ltd. 294 ITR 310 (Del.). The Ld AR further stated that the above judgment of Hon'ble Delhi High Court has been upheld by Hon'ble Supreme Court vide judgment in 320 ITR 561. Reliance was also placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing assessment proceedings were relating to part of preceding year expenses and no current year expenditure of guarantee fee were explained. The Ld DR further argued that during assessment proceedings, the assessee had explained only first amount of Rs.54,41,096/- and had not fully explained the further payment of Rs.33,06,000/- and Rs.77,14,000/-. He further argued that Assessing Officer neither raised any question on rest of items and nor the assessee submitted anything and hence there was no enquiry by the Assessing Officer and the assessee had explained only part of syndication fees and guarantee commission was not explained at all. Continuing his arguments, the Ld DR argued that no paper has been brought on record which could prove tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the basis of reply to show cause notice has to consider merits of the objections and he cannot just delegate the power to ITO and direct him to make a fresh assessment. 7. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that Assessing Officer had completed assessment u/s 143(3) and vide questionnaire dated 29th August 2007, copy placed at page 40 of paper book had asked vide question No.9 regarding detail of commission and syndication fee with nature of services rendered and assessee vide reply dated 20th December, 2007 vide para 2 on page 37 of paper book had replied to that query. The Assessing Officer asked for commission and syndication fees and the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the observations of Ld CIT that assessment order was erroneous and prejudicial to the interest of revenue is correct. In view of the above facts, we are of the view that Ld CIT had rightly initiated proceedings u/s 263 of the Act as the assessment order was both erroneous and prejudicial to the interest of revenue. But the action of the Ld CIT in not considering the merits of objections raised by assessee vide reply dated 11.1.2010 placed at pages 3 to 12 of paper book and just remitting back to Assessing Officer for re-adjudication was not appropriate. 8. In view of the above, we feel it appropriate to remit the file back to the office of Ld CIT for adjudication and recording his findings on the objections to show cause notice which we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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