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TMI Blog2019 (9) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... otice as well, however the Pr. CIT, without considering the material available on record, facts and circumstances of the case and contentions of the assessee, cancelled the entire original assessment order dated 20.07.2014 with a direction to the A.O. to the frame the assessment fresh after giving due opportunity to the assessee. Pr. CIT neither make any exercise for examining the record nor gave plausible reason(s) as to why the assessment order is erroneous and prejudicial to the Revenue while coming to the conclusion before initiating and concluding the proceedings u/s 263 therefore, on this aspect as well, the order under challenge cannot sustain. As the original assessment order is based upon detailed enquiry, therefore the Ld. Pr. CIT could not have assumed jurisdiction under the law to revise the Assessment Order in this case, hence we do not have any hesitation to quash the impugned order as the same is unjustifiable and suffers from perversity and impropriety, consequently the same is quashed. Appeal filed by the assessee stands allowed. - ITA No.274(Asr)/2017 - - - Dated:- 3-9-2019 - Sh. Vikram Singh Yadav, Accountant Member And Sh. N.K. Choudhry, Judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 30,000/- on each tractors to increase the sales. Then firm M/S Mahavir tractors, Zira deputed one of his employee Sh. Babu Singh and said employee used to collect the funds from the farmers directly and make the DD in the name of Mahindra and Mahindra Co., direct and the sale bills were also issued directly by the Mahindra and Mahindra and Co. the photo copies of all the DDs purchased and Bank statement of the State Bank of India, Ferozepur both are also attached. Which will clear the picture of the all the transactions. 2. That the I have duly made the compliance though late on the same letter as and when received. Thanking you, Yours faithfully, Dated:24.01.2013 (BABU SINGH) S/O SH. HARMANDER SINGH, V.P.O MARKHAI, TEHSIL ZIRA.. DISTT., FEROZEPUR. The assessee in support of its contention also filed copy of bank statement of the assessee with State Bank of India, Firozepur for the period of 01.04.2009 to 31.03.2010 and the copies of demand d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculturist. The list of agriculturist along with description of purchase of DD from the bank in the name of company MAHINDERA AND MAHINDERA LTD., (FES), SWARAJ DIVISION af ter deposited the cash in my saving account on behalf of the purchases farmers. (Copy attached). 2. That I have made available the direct purchases from the company Mohinder and Mohindera LTD., (FES), SWARAJ DIVISION on behalf of the 28 agriculturist nearly numbers of 28 tractors. The copy of Bill issued by the company of all the tractors was issued directly in the name of the agriculturist. (Photo copy of bills Issued by the company direct of all the 28 tractors issued are also attached herewith). 3. That I used to receive the cash from the farmers and deposited the same in my account and purchased the DD from the bank in the name of the same Agriculturist from SBI, Basti Machhian, Zira who used to give the cash for the purchase of Tractors. (Copy DD and Copy purchase bills issued by the company are attached herewith) I hope the aforesaid explanation will satisfy your good self , however, if any further information is required that will be dul y supplied. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That it is correct that 1 have prepared a true account and f iled my income tax returns in response to the notice under section 148 of the Income Tax Act, 1961 on the basis of the deposits in the my saving account No. 11321388010 (Copy of bank statement along with accretion statement both are attached herewith See Page to11. That all major deposits in my bank account are on account of advances received from the farmers for purchasing the DD from the STATE BANK OF INDIA for the purchase of Sawraj Tractors from company Mohindera Mohindera directly from the company by the farmers through me as farmers. I used to collect cash from the farmers and deposited in my saving account No.1132138810 and from this bank account I purchased all the DD in the name of individual farmers in whose name bill of tractors was issued. All the DDs purchased from SBI, Zira were sent to the company, on behalf of the farmers, MOHINDERA AND MOHINDERA LTD. (FES), SWARAJ DI VISION (Photo Copy of DD along with Photo copy of bill issued by the company directly in the name of farmers are attached herewith. Since recipient of cash and payer of cash both are agriculturist and by d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our income. 2. Furnish copy of ITR alongwith trading account, profit loss account and balance sheet for the assessment year 2010-11. Also produce copy of ITR for the assessment year 2009-10. 3. Give details of the books of account maintained and produce the same with bills/vouchers and the bank pass books. 4. Furnish statement of all the bank accounts maintained by you for the period 01.04.2010 to 31.03.2011 and original bank pass books be produced for verification. 5. Source of all the credit entries bearing in the above bank accounts alongwith documentary evidence as well as narration thereof. Further, details of utilization of debit/withdrawals be also explained. 6. Details of expenditure/investment made by you during the financial year 2010- 11 i.e. period 01.04.2010 to 31.03.2011. 7. Details of movable / immovable assets owned by you during the period 01.04.2010 to 31.3.2011. 8. Furnish copy of jamabandi/fard in respect of land holdings and also furnish copy of form J. Original these documents be produced for verification. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ared a true account and filed my income tax returns in response to the notice under section 148 of the Income Tax Act 1961 and which was filed on 21.10.2013 vide your office No.4135. Since my case was opened on the basis of the deposits in the my saving account No. 11321388010 (Copy of bank statement along with accretion statement has already been with my previous reply) 3. That I am maintaining only one saving account in the State Bank Of India, Zira and the copy of my Bank Account No.l 1321388010 along with accretion statement explaining each and every entry of deposit and withdrawals have been explained as already been submitted with my previous and these are the reasons recorded by your good self that cash deposits in the saving account is more than your income and on the basis which your good self has issued me notice u/s 148 for filling my Income Tax returns for the Asstt Year 2010-11 relevant to the previous year 2009-10 (Saving account No. 11321388010). 4. Since I am maintain only one saving account No. 11321388010 and hence accretion statement of same account No.l1321388010 along with copy of Bank Statement have been prepared has alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er consideration and my immovable property i.e. agricultural are ancestral one. 8. That lam an agriculturist as stated in para one of this reply and holding seven acres of agricultural land in my name (The copy Jamabandi and Gardauwri both has already been submitted with previous reply) which the main source income or amount which left by the farmers out of direct purchase of tractors from Company direct in the name of farmers. 9. That I am a farmer and this direct purchase if for farmers direct from company and to prove my contention I have photo copy of the DD issued from my bank saving account and Bills issued directly by the company M/s Mahindra and Mahindra in the name of farmers (Photo copies of DD along with purchase Bill of tractors issued by the company in the name each farmers which as already been submitted with my previous reply.) 10. That I have already explained that all the amount received from the farmers was first deposited in my account as most of the farmers did not have any bank account and from this account the DD was purchased as this the pre condition of the company that amount will be accepted either a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that nearly 34 tractors were sold under the scheme in which you earned commission. at the rate of ₹ 30,000/- per tractor totaling to ₹ 10,20,000/-. However, there are withdrawals amounting to ₹ 12,39,268/-. Therefore, income has been under-assessed at ₹ 10,93,668/- {₹ 12,39,268- ₹ 1,45,600} by not taking into account tire whole of taxable income. 3. The AO failed to make proper inquiries into commission earned and failed to assess income correctly. In view of the above facts, the assessment framed by the Assessing Officer on 02.07.2014 u/s 143(3) for the assessment year 2010-11 is erroneous and prejudicial to the interest of revenue. You are hereby called upon to explain as to why the assessment framed on 02.07.2014 in your case for the assessment year 2010-11, may not be revised u/s 263 of the Income Tax Act, 1961. You may file your objections, if any before 17.03.2017. 4. The case well be taken up for hearing on 17.03.2017 at 11.45 AM before the undersigned. 2.5 The said notice was replied by the assessee vide its reply dated 27.03.2017, however, the Ld. Pr. CIT did not get impre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he directions to the Assessing Officer to make decide the matter afresh after giving adequate opportunity of being heard to the assessee and examining all relevant evidence. A copy of submissions filed on behalf of the assessee in these proceedings may be transmitted to the Assessing Officer. 3. The assessee, by way of this appeal challenged the impugned order on the following grounds of appeal. 1. That the learned Principal commissioner of Income, Bhatinda Range, Bhatinda was not right in applying the provisions of the section 263 of the Income Tax Act, 1961 on the same issue on which the Assessing officer, Ward-3(2), Ferozepur has recorded the reasons for the issued notice under section 148 of the I.T. Act, 1961 on the point of commission of ₹ 30,000/- per tractors which was received by assessee and which has been left to be assessed in the hands of the assessee, which is not correct as this the assumptions and hence the orders passed by the kindly be quashed. 2. That the assesee has worked as catalytic agent between the company and the farmers and the assessee being farmers and know the policy of the new com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order does not reflects the said transactions as highlighted by the Pr. CIT in its notice dated 14.03.2017, however, it is a fact that the Assessing Officer vide its notices dated 31.01.2012 and 28.12.2012, specifically enquired about financial transaction of ₹ 1,16,37,157/- carried out by the assessee in State Bank of India during the financial year 2009-10. The notice dated 28.12.2012 was specifically replied by the assessee by narrating the facts qua financial transactions of ₹ 1,16,37,157 in State Bank of India. The assessee has also filed Bank Statement and copies of demand drafts and retail invoices cum dispatch advices for consideration of the Assessing Officer. Subsequently vide notice dated 05.07.2013, the Assessing Officer also sought verification of the AIR/CIB information regarding the aforesaid transaction which was also replied by the assessee vide its reply dated 06.08.2013 detailing the facts qua the aforesaid transaction. Thereafter notice u/s 148 dated 16.08.2013 was issued on the basis of reasons recorded u/s 147 of the Act on dated 16.08.2013, in response to which the assessee also filed its return of income. Thereafter, notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income- tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between 'lack of inquiry' and 'inadequat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be erroneous simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure but an expenditure of capital nature. He simply asked the Income-tax Officer to reexamine the matter. That, in our opinion, is not permissible. Further inquiry and/or fresh determination can be directed by the Commissioner only after coming to the conclusion that the earlier finding of the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue. Without doing so, he does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and revision. 4.8 Coming to the instant case, we again perused the documents available on record and realized that though submission of Ld. D R is correct to the effect that the Assessing Officer in the assessment order did not make any discussion in regard to the query made by him and the explanation submitted by the assessee thereto, however from the statutory notices and questionnaire issued by the Assessing Officer and replies thereto by assessee and documents available on record, it is undoubtedly clear that the Assessing Officer thoroughly examined and verified the material facts and documents and all the issues raised in the questionnaire including cash deposit of Rs.l,16,37,157/- in saving bank account No.11321388010 with State Bank of India, Zira, relevant for passing the assessment order u/s 143(3)/147 of the Act and therefore it cannot be said that the Assessing Officer has not made any enquiry and thus such decision of the Income-tax Officer cannot be held to be erroneous simply because in his order he did not make an elaborate discussion in that regard. 4.9 However the Ld. Pr. CIT issued the notice dated 14.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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