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TMI Blog2015 (11) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of stock register the books are liable for rejection. ii. Sundry creditors of Rs. 1423436/- have not been inquired properly by AO iii. Unsecured loan of Rs. 10565133/- have not been inquired properly by AO iv. Total Interest was disallowable as no TDs has been made by assessee, AO has not inquired in these aspect. v. Based on the TDS, gross receipts shown by assessee is lower than what it should have been. 03. On 11/3/2013 assessee submitted its reply in response to above notice stating that all the details with respect to above issues were submitted before AO and same were examined properly and after that assessment order is passed. It was further submitted that order is neither erroneous and nor prejudicial to the interest of revenue. 04. However Ld. CIT was of the view that order passed by AO is erroneous and prejudicial to the interest of the revenue On some issues directions were given and on some issues additions were made as under :- i. Rejecting the books of accounts in absence of stock register to take on sales of Rs. 12466181 net profit rate of 8 % i.e. Rs. 997294/- and on job work receipt of Rs. 2026651/- net profit rate @ 20 % i.e. Rs. 350335/-. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 19.07.2010 submitted before the assessing officer has made absolutely clear with respect to all the details regarding repair charges earned by the assessee, gross profit and net profit. The reason for falling the net profit is because of payment of interest was also explained therefore, the finding of the CIT that AO has not verified or inquired into all the about details is devoid of any merit. Therefore, the contention of the AR was that AO has made inquiry on this issue and after that accepted the book results. ii. Sundry Creditors of Rs. 14,23,436/- Ld. CIT has stated that AO has not verified the sundry creditors of Rs. 1423436/- properly. Regarding this AR of appellant submitted that during the course of assessment proceedings vide para no. 5 of the notice dated 10th May, 2010, AO has asked for the confirmation of sundry creditors along with their PAN etc. In respect of to this vide letter dated 20th May, 2010, assessee has submitted complete details of sundry creditors and submitting their ledger accounts for the nine creditors. Assessee submitted copy of the account of those creditors from the books of the assessee as well as confirmation of major creditors st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of Revenue Several Decision of coordinate bench were cited wherein the above view has been considered. 08. In response to this Ld. DR submitted that details were not thoroughly examined by assessing officer but he has just taken the details on record and did not conduct any verification of those details. He further submitted that order also does not show fact of inquiry conducted. He submitted that even a single error found in the order of assessing officer CIT can revise that order. For various contentions raised, he relied on decision of Hon'ble Delhi High Court in case of Gee Vee enterprises vs. Additional CIT 99 ITR 375 (Delhi). 09. We have carefully considered the rival submissions as well as the order passed by the assessing officer u/s 143(3), perused the details submitted during the course of assessment proceedings and order passed by Ld. CIT u/s 263 of the Act. It is an admitted position of law that CIT has been conferred with wide revisionary powers u/s 263 of the Act for calling for and examination of such records in order to find out that whether the order passed by the assessing officer is erroneous and prejudicial to the interest of revenue. However, Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made requisite inquiry on this aspect, Hence, considering the totality of the facts, We are of the view that Ld. CIT was not justified in making addition of Rs. 13,20,978/- on account of gross profit. We do not find any error in the order of assessing officer on this count. (b) Regarding verification of sundry creditors on unsecured loan. During the course of assessment proceedings AO has asked for the confirmation of sundry creditors of Rs. 14,23,436/-. This issued was inquired by AO vide letter dated 28th May, 2010. The creditors were duly confirmed by the assessee during the course of assessment proceedings further when the bills and vouchers of such purchases are produced before AO, We are of the view that such bills are contemporaneous confirmation given by the sundry creditors. When copies of accounts of such creditors from their books stating permanent account numbers and address is provided and in absence of any suspicion, AO is justified in accepting the same. Assessee has produced all such submission in paper books and same were also not controverted by Ld. DR. Hence, we are of the opinion that order of assessing officer is not erroneous and further Ld. CIT has also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of assessment proceedings shows various TDS certificates issued by various government agencies. Further when third party confirmations are obtained by AO for TDS and on verification of them AO did nto find any infirmity in this certificates, We are of the view that CIT is not justified to estimate turnover based on applying the TDS rates and thereby making an addition of Rs. 3,91,600/-. In our view this cannot be approved of in view of details available in assessment proceedings. In view of this order of ld. CIT holding that order of AO is erroneous is not correct. 10. We are further of the view that all the issues involved in order of Ld. CIT, AO has made some inquiry and Ld. CIT is of the view that proper inquiry has not been made by AO, therefore this case is not the case of lack of inquiry. Ld. CIT has also not mentioned that in the facts and circumstances of the case what further inquiries AO should have made. In the case of CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167 (Delhi), the Delhi High Court was considering this aspect, when there is no proper or full verification, and it was held as under (page 179) : "We have considered the rival submissions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity (See Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) at page 10) . . . From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TDS credit given to assessee AO has made inquiries from third parties. Further ld. CIT is under belief that sundry creditors and lenders remains unconfirmed which fact is not borne out from submission made by assessee and not controverted by revenue. Therefore order passed after such verification cannot be termed as erroneous. 11. Regarding non-mentioning of the inquiry in order Hon. Delhi high court In CIT v. Vikas Polymers 341 ITR 537 has held that : "This is for the reason that if a query is raised during the course of scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer was reflected in the assessment order, that would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision." 12. Hon Bombay High court in Income Tax Appeal No. 296 of 2013 (CIT v. Fine Jewellery (India) Ltd. [2015] 372 ITR 303 (Bom)) decided on February 3, 2015, following its earlier decision in Idea Cellular Ltd. v. Deputy CIT [2008] 301 ITR 407 (Bom) has taken a similar view that : ". . . if a query is raised during the assessment proceedings and responded to by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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