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TMI Blog2023 (1) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... d 12/12/2019 was also with respect to cash deposits. In the end the assessment proceedings resulted into a show cause notice dated 20/12/2019 with respect to the two issues on which the addition has been made by the learned assessing officer. The appeal pending before the CIT A is only with respect to the additions made by the learned assessing officer - none of the issue involved in the 263 proceedings are considered and decided by the learned CIT A. Therefore, it is evident that the learned assessing officer did not inquire about the loss on assets disposal claimed by the assessee as well as any of the expenditure debited in the profit and loss account. AO has not applied his mind to the claim of the assessee of capital loss or various expenditure. In the case of Mukand global finance limited, the issue was different whether assessee can claim set-off of short-term capital loss against business income or not. The issue before us is whether the assessee can be allowed the capital loss debited in the profit and loss account or not as revenue expenditure and that makes the assessment order unsustainable in law. Therefore, the decisions relied upon by the assessee are not applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law, the learned CIT erred in holding that the order dated 23-12.2019 passed under section 143(3) of the act by the Assessing Officer is erroneous and prejudicial to the interest of Revenue 4. On the facts and in the circumstances of the case and law, the learned CIT erred in setting aside the order passed under Section 143(3) of the I.T. Act, on 26.12.2019 although the return of income was selected for a complete scrutiny and all the issues were elaborately verified and discussed during the course of assessment proceedings." 03. Facts shows that assessee is a consumer co-operative society and is engaged in the business of running petrol/diesel pumps situated as APMC truck terminal, sector 19, Vashi, Mumbai. 04. It filed its return of income on 27/10/2017 declaring a total income of ₹ 1,873,940/- . Case was selected for a complete scrutiny. Based on this the assessment order was passed under section 143 (3) of the act determining total income of the assessee at ₹ 2,699,689/-. The only two additions made by the learned assessing officer is with respect to unexplained money under section 69A of ₹ 14,500/- and disallowance on account of deduction claimed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure, it was held that the learned assessing officer while completing the assessment has not verified the purchases and other expenses claimed by the assessee as deduction. Therefore, the assessment order passed without making enquiry and verification, which should have been made by him, makes the order passed by the learned assessing officer is erroneous insofar as it is prejudicial to the interest of revenue. Therefore, the assessment order passed was set aside to the file of the learned assessing officer with a direction to make a fresh assessment. The learned PCIT directed the assessing officer to disallow the capital loss of ₹ 254,954/- and make other enquiry or verification with regard to purchases and other expenses claimed by the assessee as deduction. Accordingly, the revisionary order was passed under section 263 of the act on 11/3/2022. 08. Assessee is aggrieved with the above revisionary order. The learned authorized representative referred to notice issued under section 142 (1) calling for various details and referred to the details submitted by the assessee. It was further submitted that on the additions made by the learned assessing officer, the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment order erroneous and prejudicial when in past and in subsequent assessment years during the course of scrutiny assessment under section 143 (3) of the act, no such disallowances ever made. Further, the learned principal Commissioner of income tax has not pointed out as to what verification that should have been done but not done except making a general observation. 09. The learned departmental representative vehemently supported the order of the learned principal Commissioner of income tax. It was submitted that there is no evidence available that the learned assessing officer has asked about the capital loss claimed by the assessee or verified any of the expenditure stated by the learned PCIT. He submitted that all the inquiries made by the learned assessing officer revolve around addition under section 69A as well as deduction under section 80 P of the act. He submitted that none of the notices or submission of the details shows that the learned assessing officer has raised any enquiry with respect to the deduction of capital loss claimed by the assessee or any of the expenses incurred by assessee. Therefore, the order passed by the learned assessing officer is erroneous so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed. However, that cannot be criteria to prove that the learned assessing officer has enquired about the incurring of such expenditure for the assessment year. When the learned assessing officer has not asked any query during the assessment proceedings with respect to capital loss debited to the profit and loss account as well as the expenditure incurred by the assessee, there is no question that learned assessing officer has taken any view, which is unsustainable. In fact, the learned assessing officer has not applied his mind to the claim of the assessee of capital loss or various expenditure. In the case of Mukand global finance limited, the issue was different whether assessee can claim set-off of short-term capital loss against business income or not. The issue before us is whether the assessee can be allowed the capital loss debited in the profit and loss account or not as revenue expenditure and that makes the assessment order unsustainable in law. Therefore, the decisions relied upon by the assessee are not applicable to the facts of present case. The case of the learned principal Commissioner of income tax clearly shows that the assessing officer has passed the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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