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III. Direct Tax Caselaws:
1. The Commissioner of Income Tax, Patiala Vs. M/s Roadmaster Industries of India Ltd., ITC No. 90 of 1999, Date of Decision: 18.03.2013, Punjab & Haryana High Court at Chandigarh
The order of the CIT passed u/s 263 in respect of the items which do not form the subject matter of the show cause notice issued u/s 263 is liable to be quashed.
Held:
Section 263 of the Act empowers the Commissioner of Income Tax to call for and examine the record of any proceeding, if he finds that any order passed therein by the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue. But such order can be passed after giving an opportunity of being heard to the assessee. The show cause notice was issued in respect of matters under Sections 32 AB and 80 HHC of the Act and not in respect of other matters, therefore the show cause notice to be quashed only in respect of matters which were not subject matter of the show cause notice.
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2. The Commissioner of Income Tax-III, Ludhiana Vs. M/s Shree Krishna Enterprises, I.T.A. No. 287 of 2012 (O&M), Date of Decision: 21.02.2013, Punjab & Haryana High Court at Chandigarh
Disallowance of expenses can not be made by Assessing Officer without verifying books of accounts.
The assessee has discharged its onus by producing the books of account and documentary evidences to substantiate the expenses. Once the Assessing Officer himself has failed to verify the entries, there is no reason to disallow the distribution expenses.
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