9911796707
TMI Blog2016 (3) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... and residential premises. Accordingly we are not inclined to interfere in the order of the ld. CIT. - Decided against assessee Commission expenses unverified - Held that:- It is settled law that the commissioner of income tax can exercise his jurisdiction u/s 263 of the Act only in cases where no enquiry is made by the Assessing Officer. In the instant case, it is admitted by the Income Tax Department that the Assessing Officer had made some enquiries though according to them it was not a proper enquiry. In our view of the fat that some enquiry was made is sufficient to debar the authorities from exercising the powers u/s 263 of the Act. The Tribunal was accordingly justified in setting aside the order passed u/s 263 of the Act. We do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements submitted to the bank and submitted to the income tax office. The assessee declared the debtors in its balance-sheet submitted to the bank for an amount of ₹ 30,48,968.00 whereas the same amount of labour charges was not reflecting in its profit and loss account and balance sheet submitted to the income tax office. The ld. CIT also observed that the assessee is following mercantile system of accounting. Accordingly, Ld. CIT issued show cause notice under section 263 of the Act for the clarification of discrepancy as stated above. 1.1 In compliance to the notice, the assessee submitted that it follows the cash system of accounting. The said income for the amount of ₹ 30,48,968/- has been duly recognized in the subseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of West Bengal as to whether there was the involvement of any middle person in relation to the award of the contract and settling the transaction for the same. There was also a need to establish whether the commission expenses have been incurred wholly and exclusively for the purpose of the business. 2.1 In response to the notice issued under section 263 of the Act, the assessee submitted that the AO has made detailed enquiry by issuing notice under section 133(6) of the Act to the commission agent. In fact the commission payment was duly supported with the agreement and same was confirmed from the parties. Besides the above the commission agents were working in the capacity of the subcontractors but the transaction has just been term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT assessee came in appeal before us. Shri K.M.Ray, Ld. Authorized Representative appearing on behalf of assessee and Shri S.Srivastava, Ld Departmental Representative appearing on behalf of Revenue. 4. At the outset the ld. DR objected that the grounds raised by the assessee are not clear and they are non-speaking ground of appeal. We find that it is a valid point raised by Ld. DR as the grounds raised in appeal are not speaking grounds. However we admitted the grounds as submitted before us by Ld. AR in the interest justice and fair play. So we decided to hear the appeal on merit. 4.1 We have heard rival contentions of both the parties and perused the materials available on record. Ld. AR submitted before us that labour charges inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. DR submitted that Ld. CIT(A) granted relief to assessee on a different footing on the ground of genuineness of expenses. There is no doubt about the payment made and about genuineness of the parties. However, AO has not verified whether the expenses were incurred wholly and exclusively for the purpose and in connection with the business of the assessee. Therefore, the order of Ld. CIT passed u/s. 263 for holding the order of AO erroneous and prejudicial to the interest of revenue is correct. Ld. DR vehemently relied on the order of Ld. CIT. 4.3 From the aforesaid discussion, we find that AO could not make the verification for the amount of ₹30,48,968/- towards the income of labour charges which was not disclosed by assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of the business. The assessee failed to produce the necessary details for the actual services provided by the parties in connection with the business of the assessee. This matter was also examined by the AO and travelled up to ld. CIT(A) but the issue was altogether different. Here the ld. CIT held the issue has not been examined by the AO so as to ascertain whether the expenses were incurred wholly and exclusively for the business of the assessee. The AO has also not confirmed from the Government of West Bengal which awarded the contract to the assessee by issuing notice u/s 133(6) of the Act to ascertain what services were rendered by the commission agent. Accordingly the ld. CIT held the order of the AO erroneous in so far as p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
