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TMI Blog2013 (5) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... Ostwal group on 21.2.2007. Simultaneously, there was also a survey action u/s 133A of the Act at some of the office premises of the group. The assessment was completed u/s 143(3) r.w.s 153B of the I T Act on 31.12.2008. Consequently, on examination of the assessment proceedings, the Commissioner was of the view that the assessment order was erroneous and prejudicial to the interest of revenue. He, therefore, proposed to invoke his powers u/s 263 of the Act to set aside or modifying the assessment order by issuing show cause notice on 15.10.2009. The Commissioner proposed to revise the order of assessment on the ground that there was a difference between the income assessed by the Assessing Officer and undisclosed income required to be assessed as per records and information available on the file. 2.1 As manifest from the reasons in the show cause notice, the Commissioner noted that during the assessment proceedings, the Assessing Officer failed to correlate the statement given by Shri Deepak Vasant Accountant of M/s Ostwal Builders Udaipur regarding the receipt of on-money by the assessee for the project completed at Udaipur and the evidences found during the course of search, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before the Assessing Officer, which were duly considered by the Assessing Officer as mentioned in para 2 of the assessment order passed on 31.12.2008, then in the absence of twin conditions i.e erroneous as well as prejudicial to the interest of the revenue, the Commissioner cannot invoke the provisions of sec. 263 of the I T Act. 3.1 He has further contended that, if a particular query raised by the Assessing Officer has been answered to his satisfaction; but it has not been mentioned in the assessment order, that itself does not call the order erroneous, as held by the Hon ble Delhi High Court in the case of CIT vs Vikash Polymers reported in 341 ITR 537. He has further submitted that when the Assessing Officer has considered various documents and after considering the same and discussing with the Authorised Representative of the assessee had framed the assessment order, then it cannot be said that the order is without any proper enquiry. Merely because the Assessing Officer should have gone deeper into the matter or should have made more elaborate discussion could not be a ground for exercising power u/s 263 of the I T Act. In support of his contention, he has relied upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w. 3.5 Even otherwise, the cash found was not undisclosed; but the cash book clearly shows the entries for such cash and it is completely accounted for in the books of account, which has been accepted by the Assessing Officer in the assessment proceedings. Thus, the ld AR has pleaded that the impugned revision order is not sustainable and liable to be set aside. 3.6 On the other hand, the ld DR has submitted that the statement recorded u/s 133A after administering the oath is a good evidence which has been ignored by the Assessing Officer; therefore, there is complete lack of enquiry on the part of the Assessing Officer on this point. He has further submitted that during the proceedings before the Commissioner u/s 263, the assessee first time filed an affidavit of Shri Deepak Vasant which is an afterthought and retraction is after passing of the assessment order; therefore, the said affidavit cannot be accepted. He has further submitted that when in the statement of Shri Deepak Vasant has stated that the same has been made without any cohesion or pressure and the same is voluntary, then the retraction of the said statement after the assessment order and even after the show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the flats and the shops which were constructed by M/s Ostwal Builders, Udaipur in the Project - Osiwal Plaza-I. Further, Shri Deepak Vasant also stated that this cash received by Shri Umraosingh Oswal was carried by him personally to Mumbai Headquarters. During the course of search incriminating documents were found with an entry indicating cash being transferred to the Headquarters. As per the documents found, the following amounts were transferred to the Headquarters: S.No. Date on the seized documents Amount transferred to the headquarters Refer party No. AR-1 Bundle No.-1 Page No. 17/12/2006 Rs.5,70,000/- 36 16/02/2007 16/02/2007 Rs.30,00,000/- ₹ 14,00,000/- 38 17/02/2007 Rs.11,00,000/- 39 During the course of search proceedings, when Shri Umraosingh Ostwal was confronted with these documents in the statement recorded u/s. 132(4) on 2 1/02/2007, in reply to Q.No. 10 he refus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us queries including the query regarding the seized material at pages 36, 38 39 as under: Page 36: This page reflects an entry of `. 5,70,000/- against HO . It appears that cash of rs. 5,70,000/ is transferred to head office on 17.12.2006. Please explain the entry made on this page and whether the same is accounted for in your regular books of accounts. Please explain the source of this cash of `. 5,70,000/- Page 38: On perusal of this page, it is seen that there are entries of ₹ 30 lacs and ₹ 14 Iakhs against dtd. 16/02/2007 made on this page. You have refused to explain anything in respect of the entries on this paper in your statement dtd. 21/02/07. You are once again given an opportunity to explain the entries made on this page and whether the same are reflected in the books of accounts. It may please be noted that in absence of any convincing reply, the same will be brought to tax as an unaccounted income. Page 39:An entry of ₹ 11 lacs against dtd.1.7/0212007 is made on this page. You have refused to explain anything in respect of the same in your statement dtd. 21102/07. You are once again given an opportunity to explain the entries made on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted same reply by our letter no.UPO/IT/CC/001 dated 3.6.2008 4.6 It is manifest from the queries raised by the Assessing Officer and the reply given by the assessee that the issue of on-money receipt and the related seized material at pages 36, 38 39 has been duly enquired by the Assessing Officer and after considering the reply of the assessee, the Assessing Officer was satisfied and accordingly did not make any addition. 4.7 It is pertinent to note that the assessee has explained in the reply to the specific query that the transaction was shown in the cash book and the copy of the cash book also annexed with the reply for the consideration of the Assessing Officer. Once the Assessing Officer was satisfied with the reply and the relevant record in the shape of cash book, then it cannot be said that there was no enquiry at all on the issue. It is settled proposition of law that no addition can be made solely on the basis of statement recorded u/s 133A without corroborative evidence. 4.8 In the case in hand, the statement of the Accountant of M/s Ostwal Builders Ltd was recorded u/s 133A wherein it was stated that the assessee has received on money in respect of the proj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Delhi High Court has considered an identical issue and held in para 18 as under: 18. This distinction must be kept in mind by the Commissioner of Income tax while exercising jurisdiction under section 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interests of the Revenue, exercise of jurisdiction under the said section is not sustainable. In most cases of alleged inadequate investigation , it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is erroneous, without the Commissioner of Income-tax conducting verification/inquiry. The order of the Assessing Officer may be or may not be wrong. The Commissioner of Income-tax cannot direct reconsideration on this ground but only when the order is erroneous. An order of remit cannot be passed by the Commissioner of Income-tax to ask the Assessing Officer to decide whether the order was erroneous. This is not permissible. An order is not erroneous, unless the Commissioner of Income-tax hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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