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TMI Blog2015 (10) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken into account that if the Assessing Officer while passing the Assessment order has erroneously done the same and which is prejudicial to the interest of the revenue then only the revision of orders u/s 263 of the Act be passed by the Commissioner of Income Tax. The provision under Section 263 of the Act does not give powers to the Commissioner to make enquiry again for the issue which has been decided after verifying all the documents on record by the Assessing Officer. In fact the scope of Section 263 of the Act is in respect of the order passed by the assessing officer which is erroneous in so far as it is prejudicial to the interest of the revenue. In the present case, the Assessing Officer has verified all the documents in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed u/s 36(1) (ii) of the Act, as it was paid to the two Managing Directors. The Commissioner also observed that assessee had booked majority of expenses against the unit carrying out trading operations and thereby had inflated profits of the manufacturing unit for claiming exemption u/s 80IC of the Act, whereas expenses booked for eligible unit u/s 80IC of the Act were lesser than the amount as against expenses on account of trading activities. 5. The Commissioner in his order observed that the assessment made by the Assessing Officer accepting such commission payment without verifying as to whether provisions of Section 36 (1) (ii) of the Act are attracted, was set aside on this issue with a direction to the Assessing Officer to veri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to apportionment of common expenditure was specifically gone into and examined by the Assessing Officer, who was fully satisfied with the apportionment made. Thus, it was not a case of no enquiry but specific and pointed enquiries by the Assessing Officer. The said finding and apportionment could have been set aside and negated only with the finding by the Commissioner, that the Assessing Officer was erroneous and wrong. The Commissioner should have examined and gone into the question of apportionment on merits. Mere statement that it was possible that the Assessing Officer was erroneous, is not sufficient and does not meet the requirement stipulated by law. 9. Therefore, only one issue remains to be looked into relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire paper book with the relevant documents to Assessing Officer and after going through all the documents the Assessing Officer has passed reasoned assessment order. The assessee had booked majority of the expenses against the unit carrying out trading operations and thereby have inflated profits of the manufacturing unit exempt u/s 80IC of the Act expenses book for the eligible unit u/s 80IC of the Act were only ₹ 12,31,78,274/- as against expenses of ₹ 37,26,60,316/- booked against trading activities. The Hon'ble High Court in this respect has quoted para 6 of the CIT's order. 10. The AR submitted that the commission paid was duly approved by the shareholders of the company, and therefore, Section 36 (1) (ii) was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble High Court. The Hon'ble High Court has given a direction in respect of examining the scope of Section 36 (i) (ii) of the Act after taking into account various documents. Secondly, the enclosures supplied by the assessee to the Assessing Officer were actually given to the Assessing Officer and there was no proof given by the DR that at no point of time, that the documents were not available with the Department. The third aspect that AO has not applied his mind does not come in the purview of Section 263 of the Act. The scope of Section 263 of the Act has to be taken into account that if the Assessing Officer while passing the Assessment order has erroneously done the same and which is prejudicial to the interest of the revenue then ..... X X X X Extracts X X X X X X X X Extracts X X X X
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