ITAT quashed order u/s 263 (of Income Tax Act, 1961) as it was not a case of ‘no enquiry’ by AO

1. Assessment order was passed u/s 143(3) (of Income Tax Act, 1961) in M/s R K Overseas/s case and returned income of Rs 78.76 lakhs was accepted.

2. The case was selected for scrutiny for examining claim of deduction u/s 10B (of Income Tax Act, 1961) and also to examine the genuineness of commission expenses.

3. CIT held that AO had not examined the issue properly.

4. CIT set aside the order of the AO.

On appeal, the ITAT held as under:

5. It is apparent that the commission payable in respect of exports made and it is an ascertained liability and not contingent liability.

6. It is not case of no enquiry with regard to all issues raised by CIT in revision proceeding.

7. It may be case of improper or less inquiries by Assessing Officer.

8. Revision power of CIT under provision of section 263 (of Income Tax Act, 1961) shall not be invoked in such situation because improper inquiry or less inquiry is subjective outlook of Assessing Officer.

9. In view of the above legal and factual discussions, the CIT was not justified in invoking provisions of section 263 (of Income Tax Act, 1961) to set aside the order of the Assessing Officer.

Case Reference - M/s. R.K. Overseas vs ACIT.

IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI

BEFORE SHRI SHAILENDRA KUMAR YADAV, JM

AND SHRI RAJESH KUMAR, AM

ITA No. 324/Mum/2014

(Assessment Year: 2008-09)