- (1.) THE present appeal is filed by the Department against the order dated 25.05.2002 passed by the Income Tax Appellate Tribunal, Lucknow in ITA No. 318/LUC/2003 for the assessment year 2001 -02.
(2.) ON 08.05.2009, a Coordinate Bench has admitted the appeal on the following substantial question of law : "Whether the Income Tax Appellate Tribunal was justified in law in cancelling the order u/s 263 of the Income Tact Act 1961 passed by the Commissioner of Income Tax (Appeals) -1, Kanpur ignoring the fact that the order of the Assessing Officer was erroneous in so far as prejudicial to the interest of revenue and the CIT had correctly passed the order u/s 263 of the Income Tax Act, 1961 by invoking the provisions of Section 263 of the Income Tax Act"
(3.) THE brief facts of the case are that the assessee is a firm of civil contractors consisting of five partners. During the assessment year under consideration, it has constructed 32 flats. On 23.2.2000, a survey was conducted at the business premises of the assessee. A trial balance sheet of the assessee was found indicating the cash in hand of Rs. 14.98 lakhs. But during the survey, no actual cash was found. It was alleged that the cash was taken by the partners, who have spended the same. The A.O. has accepted the explanation of the assessee. However, the CIT has passed an order under Section 263 of the Income Tax Act, stating that the assessment order is erroneous and prejudicial to the interest of the revenue. So, he set aside the assessment order and directed the A.O. to make a fresh assessment order. Being aggrieved, the assessee has filed an appeal before the Tribunal, who has set aside the order passed by the CIT under Section 263 of the Income Tax Act. Not being satisfied, the Department has knocked the doors of this Court. With this background heard Shri Dhananjay Awasthi, the learned counsel for the appellant -Department, who has justified the order passed by the CIT under Section 263 of the Income Tax Act. He submits that no details of "work in progress" were maintained. No inventory of closing stock in the form of semi finished buildings, finished buildings, raw materials etc. were found on record. The books of accounts were incomplete and the entries of vouchers regarding various expenses incurred were not made in the books of accounts. No cash was found of Rs.14.98 lakhs, which was shown in the books of accounts.;