9911796707
TMI Blog2015 (12) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... ered sale deeds is declared by the assessee company and therefore, the same is assessed in its hands as it is voluntarily declared by the assessee company and protective assessment in the hands of the respective assignees has already been made. It was, after considering these aspects, that the A.O. estimated the income of the assessee. This itself clearly demonstrates that the A.O. has applied his mind to the facts of the case before him before estimating the income of the assessee. As regards the issue as to whether, the assessment order passed by the A.O. after due application of mind, can be revised under section 263 of the I.T. Act, we find that in the case of Spectra Shares & Scrips P. Ltd., vs. CIT-III, Hyd. (2013 (6) TMI 173 - ANDHRA PRADESH HIGH COURT) has considered the judicial precedents on the issue in detail and has culled out the following principles as to the exercise of jurisdiction of the CIT under section 263 of the Act.Applying the above principles to the facts of the case before us as brought out in detail in the above paragraph, we hold that the assessment order under section 143(3) read with section 153C could not be revised under section 263 of the Act. - Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount relied upon by the assessee and estimating the income of the assessee @ 16% of the gross receipts. Thereafter, on perusal of the assessment records under section 263 of the I.T. Act, the Ld. CIT was of the opinion that the A.O. has not carried out proper enquiry with regard to the investments made and therefore, the assessment orders were erroneous and prejudicial to the interests of the Revenue. He accordingly, issued a show cause notice dated 17.08.2012 under section 263 of the I.T. Act. In reply thereto, the assessee filed its written submissions stating that the accounts of the assessee were referred for Special Audit under section 142(2A) of the I.T. Act and it is after verifying the information furnished and after taking into consideration the special audit report, that the A.O. completed the assessment accepting the total income admitted by the assessee. Therefore, according to him, the assessment order was not erroneous and prejudicial to the interests of the Revenue and the revision proceedings were not warranted. The Ld. CIT however, was not convinced with the contentions of the assessee and held that no worthwhile enquiry has been conducted by the A.O. before accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the assessment order cannot be erroneous in so far as it is prejudicial to the interests of revenue. 7. The Ld.Pr.CIT (Central), ought to have appreciated that as assessment U/s 143(3) rws 153C was framed after considering the special audit report and hence invoking of provisions of section 263 is not correct. 8. The Ld.Pr.CIT (Central), ought to have appreciated that the assessee has submitted all the details related to Income Expenditure which were duly verified by the AO. 9. The Ld.Pr.CIT (Central), ought to have appreciated that the assessee had provided the complete details in respect of Advance received and Current liabilities to the Special Auditor, In fact verification of sale and purchase of lands was one of the point of reference and no adverse finding was made by the Special Auditor for such. 10. The Ld.Pr.CIT (Central), ought to have appreciated that the assessee had provided the complete details in respect of Taxation in the hands of legal owners to Special auditor and no adverse finding was made by the Special Auditor after verification of such. 11. The Ld. Pr. CIT (Central), erred in considering that the verification in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the A.O. has taken one of the possible views and therefore, it was not erroneous in so far as it is prejudicial to the interests of the Revenue and hence, it was not revisable under section 263 of the I.T. Act. 4. The Ld. D.R., on the other hand, supported the order of the Ld. CIT (Central) for all the relevant assessment years. 5. Having regard to the rival contentions and material on record, we find that an assessment order can be revised under section 263 of the Act by the CIT only if the assessment is erroneous in so far as it is prejudicial to the interests of the Revenue. Both the conditions have to be satisfied. In the case before us, the assessment was completed under section 143(3) read with section 153C of the I.T. Act consequent to the search under section 132 of the I.T. Act in the hands of the group company of the assessee i.e., M/s. MBS Jewelers P. Ltd. During the assessment proceedings, the A.O. had required the assessee to explain the business activity of the assessee. The assessee had filed its replies dated 9th July, 2012 stating that the main objects of the company was real estate and investment activity. The details as regards its income was also mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue - recourse cannot be had to Section 263 (1) of the Act. (b) Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue: or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is unsustainable in law. (c) To invoke suo motu revisional powers to reopen a concluded assessment under Sec.263, the Commissioner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous insofar as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show that the enhancement or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were call ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner is entitled to examine any other records which are available at the time of examination by him and to take into consideration even those events which arose subsequent to the order of assessment. 5.1. Applying the above principles to the facts of the case before us as brought out in detail in the above paragraph, we hold that the assessment order under section 143(3) read with section 153C could not be revised under section 263 of the Act. In addition to the above legal ground, the Ld. Counsel for the assessee has also raised an argument that where the income is estimated, no other addition can be made to the income of the assessee. In support of this contention, the Ld. Counsel for the assessee, has relied upon the judgment of the Hon ble A.P. High Court in the case of Indwell Constructions (1998) 232 ITR 776 (AP) and also the decision of ITAT, Hyderabad Bench in the case of M/s. Shanti Transport, Kothagudem vs. ITO, Ward-1, Kothagudem in ITA.No.995/H/2014 dated 10.10.2014. 5.2. We find that in the case of the assessee, the A.O. has rejected the books of the assessee and has estimated the income @ 16% of the gross receipts and the CIT under section 263 is seeki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case before us, we find a slight distinction. In the case of Indwell Constructions (supra), the CIT therein sought to add interest and salary to the estimated income, which was found to be unsustainable, whereas, in the case before us, the CIT is not satisfied with the head of income under which the A.O. has accepted the income of the assessee and also is not satisfied with the non-examination of the accounts of the assessee before accepting the business income of the assessee. Therefore, the above judgment is not exactly applicable to the case of the assessee. 5.4. The Ld. Counsel for the assessee has further submitted that the assessment under section 143(3) read with section 153C was passed after getting approval of Addl. CIT under section 153D of the I.T. Act and therefore such an assessment cannot be revised without revising the directions of the Addl. CIT under section 153D of the I.T. Act. The Ld. Counsel for the assessee, has relied upon the decisions of this Tribunal in the case of Ch. Krishna Murthy vs. ACIT, C.C.3, Hyderabad in ITA.No.766/Hyd/2012 dated 13.02.2015 and also the decision of Lucknow Bench of ITAT in the case of Mehtab Alam 288/Luck/2014 dated 18.11.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
