- (1.) This appeal u/s 260 A of Income Tax Act, 1961 ( for short "the Act") is directed against the order dated 28.7.11 of the Income Tax Appellate Tribunal(ITAT), Jodhpur Bench,Jodhpur in Income Tax Appeal No.825/JU/1997, dismissing the appeal filed by the appellant-assessee against the order of Commissioner of Income Tax(CIT), Jodhpur u/s 263 of the Act for the assessment year 1992-93 holding the assessment order dated 28.2.95 passed by the Assessing Officer (AO)under Section 143(3) of the Act as erroneous and prejudicial to the interest of revenue.
(2.) Briefly the facts giving rise to the appeal are that the assessee during the relevant assessment year was engaged in the business of manufacturing HDPE woven sacks and was also doing the job work of converting HDPE granules into HDPE tape for its sister concern, namely, M/s. Plasto Packs International Private Limited, which is ultimately used as yarn in weaving HDPE fabric. The return of income for the relevant assessment year was filed by the assessee on 31.12.92 disclosing the income at Rs.11,98,404/-. The assessment was completed by AO u/s 143(3) of the Act on 28.2.95 assessing the income at Rs.23,62,540/-.
(3.) However, on perusal of the assessment records, CIT found that the assessee was doing job work for M/s. Plasto Packs International Pvt. Ltd.under an agreement dated 28.12.84. In terms of the agreement, Excise Duty and other taxes, if any, levied at any time were to be reimbursed by the assessee's sister concern M/s. Plasto Packs International Pvt. Ltd.. The assessment in the case of the sister concern for the assessment year 1992-93 was completed vide assessment order dated 28.2.95 wherein it was observed by the AO that M/s. Plasto Packs International Pvt. Ltd. had credited an amount of Rs.8 lacs towards the assessee in Excise Duty account. It was also observed by the AO that the assessee did not raise any debit note on M/s. Plasto Packs International Pvt. Ltd. with regard to the sum of Rs.8 lacs. But, the AO did not deal with the matter while passing the assessment order in the case of the assessee for Assessment Year 1992-93. The CIT also observed that as a matter of fact, the assessee had demanded Rs.8 lacs from its sister concern vide letter dated 21.3.92. The position as aforesaid was also indicated in the order of CIT dated 10.2.97 passed in Appeal No.20/96-97 for Assessment Year 1993-94. In these circumstances, CIT being satisfied that an amount of Rs.8 lacs was taxable in the hands of the assessee for the Assessment Year 1992-93 but the same was not included by the AO due to failure on his part in making enquiries with regard to the job work and agreement dated 28.12.94 and therefore, the assessment order passed by the AO u/s 143(3) is erroneous in so far as it is prejudicial to the interests of the revenue and accordingly, initiated the proceedings for revision of the order by issuing notice to the assessee u/s 263 of the Act.;