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TMI Blog2022 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee did not furnish adequate details of other expenses of Rs.32.04 Crores are not correct. The observation that there was fall in the Net Profit rate and therefore, the income should have been estimated @8%, is also without any basis. As seen that the assessee s books were subjected to Tax Audit and no defects could be pointed out by Ld. AO in the books of accounts maintained by the assessee. Hence, there is no justification for rejection of books of accounts. Assessee s income could not be estimated u/s 44AD since the turnover is beyond threshold limit of Sec. 44AD. The assessee s books were audited and there could be various reasons for fall in the net profit rate. However, even otherwise, this aspect was beyond the scope o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcised by Ld. Principal Commissioner of Income Tax, Madurai-2 (Pr. CIT) vide order dated 28.05.2018 against the assessment order framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 28.12.2017. The grounds raised by the assessee read as under: 1. The order of the learned PCIT is opposed to law on the facts and in the circumstances of the case. 2. The learned PCIT ought to have seen that the assessing officer completed the assessment after conducting due verification as deemed fit by her and the learned PCIT cannot term it as inadequate without explaining how it was inadequate. 3. The learned PCIT ought to have seen that there is difference between lack of enquiry and inadequate enquiry as explained by the Honourable D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified the revisional proceedings on the ground that the issues flagged in the revisional order were never subject matter of verification and examination by Ld. AO. The Ld. CIT-DR also filed written submissions in support of the revision which have duly been taken note of by us. In the written submissions, Ld. CIT-DR has relied in Explanation-2 to Sec.263 and cited various judicial precedents in support of the revision. The case was put for clarification also. 3. Having heard rival submissions and after going through the impugned order, our adjudication would be as given in succeeding paragraphs. Assessment Proceedings 4.1 We find that the assessee being resident firm is stated to be engaged as civil contractor and sale of rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revisional Proceedings 5. Subsequently, Ld. Pr. CIT, upon perusal of case records, held an opinion that the order was erroneous and prejudicial to the interest of the revenue and accordingly, show-caused the assessee on 16.05.2018. The same stem from the observation of Ld. Pr. CIT that the assessee did not furnish adequate details of other expenses of Rs.32.04 Crores. Since the supporting vouchers were not filed during assessment proceedings, the books should have been rejected and the income was to be determined @8% as per Sec.44AD. The assessee reflected Net profit Rate of 1.24% which was lesser than net profit rate of 2.71% as reflected in AY 2014-15 despite turnover remaining the same. Further, the assessee claimed Rs.25 Lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... head. The assessee did not explain the steep reduction in the net profit rate during the year. Regarding payment to collaborate, the assessee failed to provide any evidences for genuineness of the expenses incurred. Therefore, the assessment order was set aside and Ld. AO was directed to re-do the assessment in accordance with law. 9. Pursuant to the same, an assessment has been framed by Ld. AO on 15.12.2019 determining the income @8% of turnover of Rs.74.57 Crores. Aggrieved as aforesaid, the assessee is in further appeal before us assailing the revisional jurisdiction as exercised by Ld. Pr. CIT u/s 263. Our findings and Adjudication 10. Upon careful consideration of material fact, it could be noted that the case of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny were duly examined and verified by Ld. AO and certain addition was made after perusal of all the evidences. Therefore, it would not be correct to say that the assessment was framed without due verification or examination. No error could be found in the assessment order which would justify revision of the order. In such a case, Explanation-2 to Sec.263 would have no application. 11. The observations of Ld. Pr. CIT that the assessee did not furnish adequate details of other expenses of Rs.32.04 Crores are not correct. The observation that there was fall in the Net Profit rate and therefore, the income should have been estimated @8%, is also without any basis. It could be seen that the assessee s books were subjected to Tax Audit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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