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TMI Blog2022 (1) TMI 940X X X X Extracts X X X X X X X X Extracts X X X X ..... wheelers and spare parts etc. The assessee filed its return declaring total income at Rs. 32,37,270/-. The assessment was finalized at the same income. Invoking the powers u/s.263, the ld. Pr. CIT held the assessment order to be erroneous and prejudicial to the interest of the Revenue on the five counts, namely, (i) Disallowance of Professional Fees at Rs. 73,000/- u/s.40(a)(ia) for non-deduction of tax at source u/s.194J; (ii) Disallowance of Transport Expenses of Rs. 37,19,441/- u/s.40(a)(ia) on account of failure to deduct TDS u/s.194C; (iii) Mismatch of Sales Turnover at Rs. 1,72,62,558/-; (iv) Improper verification of Sundry Creditors; and (v) Interest on refund u/s.244A at Rs. 24,969/- not offered for taxation. 3. During t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice that deduction of tax at source was warranted u/s.194J @10%, which the assessee failed to do and hence disallowance u/s.40(a)(ia) of the Act was called for. In response, the assessee submitted that the total professional fees debited to Aurangabad Branch was albeit Rs. 73,000/-, but no individual payment or aggregate of amounts paid to a single party exceeded a sum of Rs. 30,000/-, which was a condition precedent for deduction of tax at source. The assessee tendered break-up of Rs. 73,000/- which has been incorporated at para 3.1.2 of the impugned order. Not convinced, the ld. Pr. CIT held the assessment order to be erroneous and prejudicial to the interest of the Revenue on the ground that the AO did not examine this aspect. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransport Expenses of Rs. 37,19,441/- u/s.40(a)(ia) for failure on the part of the assessee to deduct tax at source u/s.194C of the Act. The assessee submitted before the ld. Pr.CIT that the case was covered under sub-section (6) of section 194C which states that no deduction shall be made from any sum credited or paid to a contractor during the course of business of plying, hiring or leasing goods carriages where such contractor owns ten or less carriages on any time during the previous year and furnishes a declaration to the effect along with Permanent Account Number to the persons paying such sum. The assessee furnished necessary details with the amount paid to each party along with their PAN Numbers, which have been tabulated in para 4.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial in this regard. Page 33 of the paper book is a copy of Annexure 1 Part B of the Tax Audit report in which the amount of turnover has been shown at Rs. 40,47,36,750/-. As against that, the amount of turnover as per the Trading Account, appearing at page 8 of the paper book, has been declared at Rs. 38,74,74,192/-. It is this latter amount of turnover which has been actually considered for the purposes of computation of total income. Even though there is a mistake in mentioning the figure of turnover in Tax Audit report but that mistake does not affect the total income inasmuch as the amount of profit shown in the Profit and loss account has been considered for the purposes of computation of total income. In fact, the same audit report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge chunk of total sundry creditors got exhausted in the balances of more than Rs. 1.00 lakh, for which proper verifications were done. Some small balances here and there below Rs. 1.00 lakh even though not examined by the AO, did not render the assessment order erroneous and prejudicial to the interest of the Revenue unless the ld. Pr.CIT demonstrates something amiss in them, which is actually not the case. (v) Interest on refund u/s.244A at Rs. 24,969/- not offered for taxation : 9.1. The ld. Pr.CIT observed in the show cause notice that interest on refund amounting to Rs. 24,969/- received by the assessee u/s.244A of the Act was not offered for taxation, which the AO did not examine. In response, the assessee submitted that the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se issues in the assessment order. 11. Ordinarily, an AO is supposed to discuss only the important issues of assessment in his order. Unless an issue is of grave importance or has serious implications or prima facie warrants examination, the AO needs to incorporate discussion in the assessment order only on such issues, with which he does not agree with the treatment given by the assessee. For instance, if an assessee has claimed a deduction or exemption, with which the AO does not concur, he needs to discuss the same in the body of the assessment order and incorporate his reasons before making such an addition or disallowance. Other items of usual or repetitive nature from year to year, with which the AO agrees with the assessee, need not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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