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TMI Blog2019 (12) TMI 1191X X X X Extracts X X X X X X X X Extracts X X X X ..... in the transaction as per the books and as computed by the assessee having regard to arm s length price. The method used for determining the arm s length price which also goes to show that there is nothing on the record to suggest that assessee had made any excessive payments to the related parties which has caused loss to the Revenue. Payment of bank guarantee commission and renewal fees - HELD THAT:- With regard to payment of bank guarantee commission and renewal fees is concern, in this regard, we have seen from the record that specific query was raised by the AO and the assessee had submitted ledger account vide letter dated 25.11.2016 and also duly replied to the query vide letter dated 26.12.2016. All those facts goes to show that the AO has applied his mind and after considering the same and has passed the assessment order u/s.143(2) of the Act and hence it cannot be said that this is a case of no enquiry. It is well settled that both the conditions vis- -vis before of AO should be erroneous and assessment was prejudicial to the interest of Revenue and both those conditions should be cumulatively specified by the ld.Pr.CIT. In the present case the matter belongs to A.Y. 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness as a government contractor for construction works during the year and consideration. The assessee company filed its Return of Income on 17.11.2014 for the A.Y. 2014-15 by declaring total income of ₹ 7,45,67,950/-. The Scrutiny assessment was finalized u/s.143(3) on 28.12.2016 by determining the total income at ₹ 7,46,90,940/- by way of making addition of ₹ 1,22,994/- on account of disallowance of various expenses. 4. Subsequently, ld.Pr.CIT on scrutiny record had observed that there were various payments made by the assessee company to the persons covered u/s.40A(2)(b) of the Act in the form of director remuneration, rent expenses and purchase payments. However, no proper verification has been made by the AO in respect of these payments. 5. Ground No.1: The Authorised Representative (AR) reiterated the same arguments as raised before the ld.Pr.CIT. It was submitted that ld.PCIT has erred in passing the order u/s.263 of the Act by invoking Explanation-2 although, the assessment order passed u/s.143(3) of the I.T.Act was neither erroneous nor prejudicial to the interest of Revenue. It was also submitted that ld.Pr.CIT has erred in setting aside in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de any excessive payment to related. It was further submitted that in fact in this case, the provision of domestic transfer pricing were applicable for the year under consideration. In this regard, The assessee had also duly furnished the report from expert in Form 3CEB as required by law wherein all the details of payment made to related party were mentioned viz. Name of person with whom specific domestic transaction has been entered into, Description of transaction along with quantitative details if any, Total amount paid or payable in the transaction as per books and as computed by assessee having regard to arm's length price, Method used for determining the arm's length price. Further, the AO was satisfied with the report and hence, the assessment order cannot be termed as erroneous on this issue. Also, the assessment order cannot be considered as prejudicial to the interest of Revenue, because the assessee had filed all the documents and books of accounts and there was nothing on record to suggest that assessee had made any excessive payment to related parties and hence there is no loss to the Revenue. 7. Further, with regard to issue of making payment of bank guarantee commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India Ltd. - 295 ITR 0282 (SC) and by the Gujarat High Court in the case of CIT vs. Arvind Jewellers - 259 ITR 0502. It was submitted that in view of the above submission it is clear that the order passed by Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue and requested to drop proceedings initiated u/s. 263. 9. On the other hand, the ld.Departmental Representative(DR) relied upon the orders of the ld.Pr.CIT. 10. We have heard the Counsels of both the parties and we also perused the material placed on record and orders passed by the Revenue Authority as well as the judgments cited by the party. As per the facts of the present case, the assessee company is engaged in the business of government contractor for construction works during the year under consideration. The original assessment was completed u/s.143(3) by the AO thereby assessing the total income at ₹ 7,46,90,944/- as against return income of ₹ 7,45,67,950/-. In the course of assessment proceedings, assessee also furnished copy of Tax Audit Report, P&L Account, Balance Sheet and Capital Account along with copy of income, return of income and computation of income. Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Act dated 03.11.2016 which is at page 24 to 26 and in this respect the reply was also filed by the assessee before the AO which is at page no.20 to 23 and had filed all the replies along with documents and participated into the enquiry proceedings being carried out by the AO. We, further noticed that since the assessee has filed the audited reports containing all the details regarding related parties u/s.40A(2)(b) along with name, PAN, Relations, nature of transactions and payments made. Even otherwise, the assessee has also duly furnished the report from expert in Form 3CEB as required by Law, wherein all the details of payment made related to party were mentioned i.e. name of persons with whom specifically domestic transactions as entered into, description of transaction along with quantitative details if any. Total amounts paid or payable in the transaction as per the books and as computed by the assessee having regard to arm's length price. The method used for determining the arm's length price which also goes to show that there is nothing on the record to suggest that assessee had made any excessive payments to the related parties which has caused loss to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pursuance of the notices issued under s. 142(1) as well as s. 143(2)- ITO has come to a definite conclusion after considering those material and explanation-Mere fact that a different view could be taken cannot be a basis for an action under s. 263-Tribunal was justified in setting aside the order passed by the CIT under s. 263 and in the case of CIT Vs. Nirav Modi 390 ITR 0292 (Bom. HC) wherein it has been held that Commissioner in his order of revision, did not indicate any doubt in respect of genuineness of evidence produced by assessee - Moreover, satisfaction of Assessing Officer on basis of documents produced was not shown to be erroneous -Whether on facts, it was a case where a view had been taken by Assessing Officer after making proper enquiry and, thus, Tribunal was justified in setting aside impugned revisional order - Held, yes" in the case of CIT Vs. DG Housing Projects Limited 343 ITR 329 (Del. HC) wherein it has been held that the Commissioner cannot remit the matter for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order of Assessing Officer is erroneous -Such finding that the order is erroneous is a condition prec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Anil Kumar, learned C.I.T. (D.R.) at this stage relies upon section 263 Explanation 2 inserted in the Act by the Finance Act 2015 w.e.f. 01.06.2015 envisaging exercise of revision jurisdiction even when an assessment is framed without any enquires and verification which should have been, in the opinion of revisional authority, deemed to be erroneous in so far as prejudicial to the interest of the revenue. He cites a co-ordinate bench decision of Crompton Greaves Limited vs. CIT - ITA No.1994/Mum/2013 and 2836/Mum/2014 decided on 01.02.2016 holding the above explanation to section 263 of the Act as retrospective in nature. The assessee at this stage informs us that another coordinate bench in ITA nos.870 & 1234/Ahd/2014 decided on 20.05.2016 in the case of Jayanth Murthy vs. DCIT holds the above stated former decision as per incuriam and section 263 Explanation 2 to be only having prospective operation. The Revenue's argument on inadequate enquiry aspect is accordingly rejected. We rely on hon'ble jurisdictional high court's decision in CIT vs. Amit Corporation (2013) 213 Taxman 19 (Gujarat) holding that section 263 is not to be invoked for making further enquiries in case the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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