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TMI Blog2017 (1) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... w had been taken by the assessing officer. We find that all the above stated facts prove that the assessing officer has not verified the genuineness of the transactions by not obtaining the Article 2 which was the material condition for receipt of US$ 1.5 million. Whether the order passed by CIT u/s. 263 was bad in law as the show cause notice given by him was on a point other than the one for which he hold the order passed by assessing officer as erroneous or prejudicial to the revenue? - Held that:- As gone through the assessment order made u/s143(3) of the act by the assessing officer and noticed that at para 3 of the assessment order the assessing officer stated that reduction in the profit of the assessee company had been occurred mainly because of claim of foreign exchange loss. We find that claim of foreign exchange loss indeed was the main issue in the assessment order and the Ld.CIT had issued the show cause related to the issue of foreign exchange loss, therefore, the contention of the assessee mentioned in the additional ground is not found to be correct. - Revision u/s 263 sustained - Decided against assessee - ITA No. 1586/Ahd/2014 - - - Dated:- 17-1-2017 - S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was never a liability and was not to be returned or adjusted; ii) such advance was never a liability on revenue account; and iii) such advance amount received was for settling the dispute between the appellant and its customer and not for future purchases and hence was not a trading liability. 4. Without prejudice to the foregoing, assuming without accepting the finding of learned CIT that the advances of US$ 15,00,000 was not on revenue account, then the same has to be on capital account. Accordingly, the amount of US$ 15,00,000 writtenback by the appellant in the subsequent AY i.e. 2010-11 should not be taxed in the said year being capital in nature. It is submitted that it be so held now and direction be given to deduct the same while computing total income of A.Y. 2010-11. 5. The learned CIT failed to appreciate that Article 2 bearing page no. 5 of the agreement dated June 8, 2000 was inadvertently missed by the appellant while furnishing the copy of the aforesaid agreement before the learned AO and the learned CIT. Further, even if the aforesaid Article 2 is produced, it would not have any impact on the facts of the case or the character of the adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctuation loss. The assessee had also stated before the Ld. CIT that the assessing officer had made enquiry in respect of claim of the company and the assessing officer had applied the mind to the submission made by the assessee during the course of assessment proceedings and the assessing officer had allowed the claim of the assessee in view of the judgment of the hon ble Supreme Court in the case of Woodward Governor India Pvt. Ltd. 3.1 The CIT has not accepted the explanation of the assessee and held that the order of the assessing officer was erroneous and also prejudicial to the interest of revenue. He therefore set aside the order of the assessing officer and directed to pass a speaking order after making complete investigation into the nature of amount received, the nature of dispute between the assessee and DOW and the nature of rights and claims waived by the assessee against the DOW. 4. During the course of appellate proceedings before us, the ld. counsel contended that order passed by the assessing officer was neither erroneous nor prejudicial to the interest of revenue. He further contended that assessing officer has taken a possible view after duly making necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that by virtue of Article 5 the liability to supply goods against the advance had expired on June 30, 2001. The Ld. CIT concluded that the amount received was never a liability and was primarily consideration for all the signatories to waive their claim on DOW. DOW never asked back for money no interest was provided as per the terms of the agreement. We find that because of not producing Article 2 by the assessee before the assessing officer he failed to make proper enquiries to ascertain the true nature of the amount received. We have also considered the contention of the Ld. counsel of the assessee stating that the assessing officer had taken one possible view after conducting necessary inquiries as with the case of Malabar Industrial Company Ltd. 243 ITR 83. In this connection, we have perused the assessment order made by the assessing officer and the other related materials as per record. We find that the assessing officer had neither elaborated any kind of inquiry conducted in the assessment order nor given any kinds of findings as per which any possible view had been taken by the assessing officer. 6.1 We find that all the above stated facts prove that the assessing of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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