COMMISSIONER OF INCOME TAX Vs. ASSAM TEA HOUSE

JUDGEMENT

(1.) This appeal has been preferred under Section 260A of Income Tax Act, 1961 (hereinafter referred to as "the Act") proposing following substantial question of law arising out of the order dated 1-8-2009 of the Income Tax Appellate Tribunal, Chandigarh Bench B Chandigarh (hereinafter referred to as "the Tribunal") passed in ITA No. 327/Chd/2009 in respect of assessment year 2004-05:

(2.) After the assessing officer made assessment, the CIT exercising the powers under Section 263 of the Act called for the record for examination and set aside the order with the observations (i) that the books of accounts were not produced as per order sheet of the assessing officer; (ii) The order recorded that assessing officer had seen the books of accounts but the order did not reflect any checking or verification of books of accounts; (iii) The correctness or genuineness of the closing stocks, details of purchases and verification of transportation was not carried out; (iv) The Assessee had paid commission to its partners but did not deduct tax at source under Section 194H of the Act; (v) The rate of interest at which loan was advanced to family members was not examined with reference to Section 40A(2)(b).

(3.) On appeal of the Assessee, the Tribunal set aside the order passed under Section 263 of the Act holding that after criticism of the order of the assessing officer, the CIT did not reach any firm conclusion about evasion of tax which was condition precedent for exercise of power as per law laid down by Honble Supreme Court in Malabar Industrial Co. Ltd. v. CIT, 2000 243 ITR 83 and a judgment of this Court in CIT v. Kanda Rice Mills, 1989 178 ITR 446.