M/s Sri Sai Contractors, Kovvur V. The ITO, Ward-1, Tanuku, Tanuku

ITA 109/VIZ/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0255 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 09-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B G REDDY
• Keywords: Rejection of books of accounts
• Section: 143(3); 142(1); 263; 63

Judgement Text

ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.109/VIZAG/2012 ( / ASSESSMENT YEAR : 2008-09 ) SRI SAI CONTRACTORS KOVVUR VS. ITO WARD-1 TANUKU [ PAN: AAZFS 1987P ] (, , , , / APPELLANT) (-. -. -. -., ,, , / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, ADVOCATE -., / / RESPONDENT BY : SHRI B.G. REDDY, CIT(DR) / 3 / DATE OF HEARING : 21.09.2015 / 3 / DATE OF PRONOUNCEMENT : 30. 0 9.2015 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT, RAJAHMUNDRY DATED 29.02.2012 U/S 263 OF THE IN COME-TAX ACT, 1961 (HEREINAFTER CALLED ACT) FOR THE ASSESSMENT YEAR 2008-09. ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 2 2. THE BRIEF FACTS OF THE CASE, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM, WHICH IS ENGAGED IN THE BUSINESS OF CIVIL WOR K CONTRACTS, FILED RETURN OF INCOME, FOR THE ASSESSMENT YEAR 2008-09 D ECLARING TOTAL INCOME OF RS. 1,65,150/-. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) ON 06-07-2009. THE CASE WAS SELECTED FOR SCR UTINY, A NOTICE U/S 143(2) AND 142(1) ALONG WITH A LETTER ISSUED ON 01- 09-2009. IN RESPONSE TO CALL NOTICE, THE ASSESSEE AUTHORIZED REPRESENTAT IVE SRI. J.N.V. RANGA RAO, ADVOCATE AND I.T.P. PRESENT FROM TIME TO TIME AND FURNISHED THE INFORMATION CALLED FOR AND ALSO PRODUCED BOOKS OF A CCOUNTS, BILLS AND VOUCHERS ETC. THE ASSESSING OFFICER, AFTER EXAMININ G THE BOOKS OF ACCOUNTS AND OTHER INFORMATION, COMPLETED THE ASSES SMENT U/S 143(3) AFTER MAKING ADDITIONS OF RS. 66,825/- BEING DIFFER ENCE IN PARTNERS CAPITAL ACCOUNT AND ALSO ROUND SOME DISALLOWANCE OF RS. 1,00,000/- TOWARDS UNVERIFIABLE EXPENDITURES. 3. THE CIT, RAJAHMUNDRY HAS ISSUED A SHOW-CAUSE NOT ICE U/S 263 OF THE ACT DATED 19.09.2011 PROPOSING TO REVISE THE AS SESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) DATED 30 .10.2009. THE CIT, PROPOSED TO REVISE THE ASSESSMENT ORDER, FOR THE FO LLOWING REASONS. (A) THE A.O. HAS PASSED THE ASSESSMENT ORDER WITHOU T CONDUCTING PROPER ENQUIRY WITH REGARD TO ALLOWABILITY OF EXPEN DITURE UNDER THE HEAD WAGES AND CENTERING CHARGES, AS THESE EXPENDITURES ARE SUPPORTED BY ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 3 SELF-MADE VOUCHERS AS INDICATED BY THE ASSESSING OF FICER IN HIS ORDER AND ENDORSED BY THE TAX AUDITORS IN ANNEXURE TO FORM. N O.3CB. (B) THE ADDITIONS TO CAPITAL ACCOUNTS OF THE PARTNE RS ARE NOT EXAMINED WITH REGARD TO THEIR SOURCE OF INCOME. (C) THE A.O., HAS NOT VERIFIED THE CORRECTNESS OF P ROFIT DECLARED BY THE ASSESSEE, AS THERE WAS DIFFERENCE IN CAPITAL ACCOUN TS OF THE PARTNERS AND ALSO ASSESSEE CLAIMS HUGE EXPENDITURE WITHOUT SUPPO RTING BILLS AND VOUCHERS. (D) THE A.O., HAS NOT VERIFIED THE DEDUCTION TOWARD S PARTNERS REMUNERATION VIS-A VIS THE SERVICES RENDERED BY THE M. ( E) THE A.O. INCORRECTLY ALLOWED THE CLAIM OF TDS STANDING IN THE NAME OF THE PARTNERS TO THE FIRM. THEREFORE, THE CIT WAS OF THE VIEW THAT THE ASSESSM ENT ORDER PASSED U/S 143(3) DATED 30.10.2009 IS ERRONEOUS ON THE AFO REMENTIONED COUNTS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE IN TERMS OF THE PROVISIONS OF SECTION 263 OF THE ACT. THE CIT, FUR THER OBSERVED THAT THE ASSESSEE HAS CLAIMED HUGE EXPENDITURE UNDER THE HEA D WAGES AND CENTERING CHARGES AND THESE EXPENSES ARE SUPPORTED BY SELF-MADE VOUCHERS. THE CIT WAS OF THE OPINION THAT THE A.O., HAS NOT CONDUCTED PROPER ENQUIRY BEFORE COMPLETION OF ASSESSMENT WITH REGARD TO THE ABOVE EXPENDITURES, INSTEAD MADE ROUND SOME DISALLO WANCES OF ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 4 RS. 1,00,000/-, WHICH IS A CLEAR CASE OF LACK OF E NQUIRY AND NON- APPLICATION OF MIND. THE CIT FURTHER OBSERVED THAT THERE IS DIFFERENCE IN PARTNERS CAPITAL ACCOUNTS, WHICH ARE CLEARLY SHOWS THAT THE BOOKS OF ACCOUNTS ARE NOT PROPER. THE A.O., WITHOUT REJECTIN G THE BOOKS OF ACCOUNTS JUST COMPLETED THE ASSESSMENT, WHICH IS AG AIN A CASE OF NON- APPLICATION OF MIND. ACCORDING TO THE CIT, THE A.O . ALLOWED THE REMUNERATION TO PARTNERS WITHOUT CONSIDERING THE S ERVICES RENDERED BY THEM. THE CIT WAS OF THE OPINION THAT THE PROFIT DE CLARED BY THE ASSESSEE IS VERY LOW, THEREBY, THE A.O. SHOULD HAVE REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED THE NET PROFIT. HENCE, A SHOW CAUSE NOTICE IS ISSUED TO THE ASSESSEE, TO EXPLAIN WHY THE ASSESSME NT ORDER PASSED BY THE A.O. SHALL NOT BE SET ASIDE. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE FILED A DETAILED WRITTEN SUBMISSION DA TED 4-11-2011, EXPLAINED WHY THE ORDER PASSED BY THE A.O. IS NOT E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT AFTER CONSIDERING THE RELEVANT SUBMISSIONS MADE BY THE ASSESSEE, SET ASID E THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO REDO TH E ASSESSMENT AFTER GIVING REASONABLE OPPORTUNITY OF HEARING. AGGRIEVED BY THE CITS ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 5 4. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SU BMITTED THAT THE ASSESSMENT ORDER IS NOT ERRONEOUS AND ALSO NOT PREJ UDICIAL TO THE INTEREST OF THE REVENUE. THE A.R. FURTHER SUBMITS T HAT DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAS FURNISHED ALL THE D ETAILS SOUGHT BY THE A.O. AND AFTER CAREFULLY EXAMINED THE DETAILS FILED , THE A.O. PASSED THE ASSESSMENT ORDER WHICH IS EVIDENT FROM THE ASSESSME NT ORDER. THE A.R. SUBMITTED THAT, THE CIT IS NOT CORRECT IN STATING T HAT THE A.O. DID NOT VERIFIED THE BILLS AND VOUCHERS, AND WITHOUT CONDUC TING PROPER ENQUIRY THE ASSESSMENT IS COMPLETED. THE A.R. FURTHER SUBMI TTED THAT AS FOR AS SELF-MADE VOUCHERS IS CONCERNED, THE A.O. HAS CALLE D FOR BOOKS OF ACCOUNTS AND VOUCHERS WHICH WERE VERIFIED BY THE A. O. AS INDICATED IN HIS ASSESSMENT ORDER. THE A.R. FURTHER SUBMITTED TH AT THE ASSESSEE EXECUTES WORKS CONTRACTS WHICH IS MORE LABOUR ORIEN TED JOB HENCE, THE ASSESSEE INCURRED HUGE LABOUR CHARGES. HE FURTHER, ARGUED THAT THOUGH SOME OF THE EXPENDITURE ARE SUPPORTED BY SELF-MADE VOUCHERS, THESE FACT WAS BROUGHT TO THE NOTICE OF A.O. AND THE A.O. , AFTER VERIFIED THE VOUCHERS, CAME TO THE CONCLUSION THAT THE ROUND SOM E DISALLOWANCE OF RS. 1,00,000/- WOULD SUFFICE TO MEET THE ENDS OF JU STICE. THEREFORE, IT IS NOT A CASE OF LACK OF ENQUIRY OR NON-APPLICATION OF MIND BY THE A.O. ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 6 5. THE AUTHORISED REPRESENTATIVE, FURTHER SUBMITTED THAT AS FOR AS CAPITAL ACCOUNTS OF THE PARTNERS IS CONCERNED, CONFIRMATIO N LETTERS HAVE BEEN FILED IN RESPECT OF ALL THE CREDITS IN THE CAPITAL ACCOUNT AND AFTER EXAMINATION THE A.O., NOTICED THAT THERE WAS A DIFF ERENCE IN BROUGHT FORWARD CAPITAL ACCOUNT OF TWO PARTNERS FOR AN AMO UNT OF RS. 66,825/- WHICH WAS BROUGHT TO TAX AS EXCESS OF ASSETS OVER L IABILITIES, WHICH IS EVIDENT FROM THE ASSESSMENT ORDER. THEREFORE, THE C IT IS NOT CORRECT IN ASSUMING JURISDICTION TO REVISE THE ISSUE WHICH WAS ALREADY VERIFIED AND CONSIDERED BY THE A.O. IN HIS ASSESSMENT ORDER. THE LEARNED AUTHORIZED REPRESENTATIVE, FURTHER SUBMITTED THAT THE ANOTHER GROUND ON WHICH THE ASSESSMENT IS PROPOSED TO REVISED IS THAT THE PROFI T DECLARED BY THE ASSESSEE IS LOW AND THE BOOKS OF ACCOUNTS ARE NOT P ROPER, THEREFORE, THE CIT DIRECTED THE A.O. TO EXPLORE THE POSSIBILITY OF REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATE THE NET PROFIT. THE A.R. ARGU ED THAT THE PROFIT DECLARED BY THE ASSESSEE IS 6.42% ON THE GROSS TURN OVER WHICH IS IN LINE WITH THE NATURE OF BUSINESS CARRIED ON BY THE ASSES SEE. HE FURTHER, SUBMITTED THAT THE ASSESSEE EXECUTES GOVT. WORKS AN D ARE HIGHLY COMPETITIVE AS SUCH THE PROFIT MARGIN IS VERY LOW. IN SPITE OF THESE DIFFICULTIES, THE NET PROFIT DECLARED BY THE ASSESS EE IS QUITE REASONABLE. WITH REGARD TO REJECTION OF BOOK OF ACCOUNT, IT IS S UBMITTED THAT CARRY FORWARD OF OPENING BALANCES OF PREVIOUS YEAR DOES N OT HAVE ANY BEARING ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 7 ON THE BOOK RESULTS OF THE CURRENT YEAR AND THEREFO RE, THE SAME CANNOT BE A VALID GROUND FOR REJECTION OF BOOKS OF ACCOUNT S. HE FURTHER, SUBMITTED THAT REJECTION OF BOOKS OF ACCOUNTS AND A SSESSMENT ON THE BASIS OF BOOKS RESULTS ARE TWO OPTIONS AVAILABLE TO THE A.O., WHEN IT COMES TO MERE DEFECTS IN MAINTENANCE OF VOUCHERS AN D HIS ACTION OF HAVING CHOSEN ONE OF THE TWO COURSES AVAILABLE TO H IM, CANNOT BE TERMED AS ERRONEOUS. 6. THE AR FURTHER, SUBMITTED THAT THE A.O., VERIFIE D THE PARTNERSHIP DEED AND THE PARTNERSHIP DEED PROVIDES FOR REMUNERATION TO ALL WORKING PARTNERS, ACCORDINGLY, ALLOWED THE DEDUCTION TOWARD S REMUNERATION. RECONSTITUTION OF PARTNERSHIP DOES NOT HAVE ANY BEA RING ON THE TOTAL INCOME OF THE FIRM AND AS SUCH THERE IS NO PREJUDIC E CAUSED TO THE REVENUE IN THIS REGARD. HE FURTHER ARGUED THAT IT I S QUITE COMMON IN CIVIL CONTRACTORS THAT THE WORK IS OBTAINED IN THE NAME O F PARTNERS AND EXECUTED BY A FIRM OF PARTNERS. FURTHER, THERE IS C LEAR STIPULATION IN THE PARTNERSHIP DEED THAT THE CONTRACT WORKS ARE TREATE D AS PROPERTY OF THE FIRM. THE VERY FACT THAT THE ENTIRE CONTRACT RECEIP TS HAVE BEEN OFFERED IN THE HANDS OF FIRM WHICH WAS VERIFIED BY THE A.O., A ND ALLOWED THE CLAIM OF CREDIT OF TDS STANDING IN THE NAME OF THE PARTNE RS TO THE FIRM ACCOUNT, WHICH IS CLEARLY SHOWS THAT THE A.O. HAS C ONSIDERED THE ISSUE BEFORE PASSING THE ASSESSMENT ORDER. ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 8 7. THE AR FURTHER, SUBMITTED THAT THE ASSESSING OFF ICER HAS EXAMINED THE RELEVANT ASPECTS IN THE COURSE OF ASSESSMENT PROCEE DINGS. AN ELEMENT OF JUDGMENT AND DISCRETION ARE INVOLVED IN THIS MATTER AND THE ASSESSING OFFICER BEING QUASI-JUDICIAL AUTHORITY SHALL HAVE T HE AUTHORITY TO EXERCISE THE RIGHT DISCRETION ON THE BASIS OF AVAILABLE INFO RMATION COME TO HIS KNOWLEDGE DURING THE COURSE OF ASSESSMENT, MOST OF WHICH MAY NOT FIND PLACE IN THE ASSESSMENT ORDER. THEREFORE, THE ASSES SMENT ORDER PASSED BY THE A.O. IS NOT ERRONEOUS AND ALSO NOT PREJUDICI AL TO THE INTEREST OF THE REVENUE TO BE UPHELD AND THE CIT ORDER SHOULD B E QUASHED. HE RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF DIRECTOR OF INCOME TAX VS. JYOTI FOUNDATION, (2013) 357 ITR 388 (DEL). 8. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATI VE STRONGLY SUPPORTED THE ORDER OF THE CIT. HE FURTHER, ARGUED THAT IF YOU GO THROUGH THE PROFIT & LOSS ACCOUNT FILED BY THE ASSE SSEE, WAGES AND CENTERING CHARGES CONSTITUTED THE MAJOR EXPENDITURE S AND THESE ARE SUPPORTED BY SELF-MADE VOUCHERS HAVE NOT BEEN PROPE RLY VERIFIED BY THE A.O., THE D.R., FURTHER SUBMITTED THAT THE ASSESSME NT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE, AS THE ASSESSING OFFICER PASSED THE ORDER WITHOUT CONDUCTI NG PROPER ENQUIRY IN RELATION TO DEDUCTIBILITY OF EXPENDITURES SUPPORTED BY SELF-MADE VOUCHERS AND ALLOWABILITY OF REMUNERATION TO PARTNE RS. THE ASSESSING ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 9 OFFICER FAILED TO VERIFY THE CREDITS IN PARTNERS C APITAL ACCOUNTS AND ALSO ALLOWED CREDIT FOR TDS STANDING IN THE NAME OF INDI VIDUAL PARTNERS TO FIRM ACCOUNT, THEREFORE, IT IS CLEAR CASE OF NON-AP PLICATION OF MIND AND LACK OF ENQUIRY. THEREFORE, THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. TH EREFORE, THE CIT RIGHTLY ASSUMED THE JURISDICTION BY INVOKING PROVISIONS OF SECTION 263 AND HIS ORDER SHOULD BE UPHELD. THE DR, PLACED RELIANCE ON THE JUDGMENT OF HONBLE HIGH COURT OF ANDHRA PRADESH, IN THE CASE O F CIT VS VARANASI KANTHA RAO, I.T.T.A. NO. 36 OF 2004, DATED MARCH, 3 1 2015 AND ALSO CIT VS. MAITHAN INTERNATIONAL (2015) 375 ITR 123 (CAL-H C). 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. WE ALSO CONSIDERED THE CASE LA WS CITED BY EITHER OF THE PARTIES. THE CIT ASSUMED THE REVISION POWERS ON THE REASONS THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY BEFORE PA SSING ASSESSMENT ORDER, THEREBY HIS ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CIT FURTHER, OBSERVED THAT THE ASSESSEE HAS CLAIMED HUGE EXPENDITURE UNDER THE HEAD WAGES AND C ENTERING CHARGES AND THESE EXPENSES ARE SUPPORTED BY SELF-MADE VOUCH ERS. THE CIT WAS OF THE OPINION THAT THE A.O., HAS NOT CONDUCTED PRO PER ENQUIRY BEFORE COMPLETION OF ASSESSMENT WITH REGARD TO THE ABOVE E XPENDITURES, INSTEAD MADE ROUND SOME DISALLOWANCES OF RS. 1,00,0 00/-, WHICH IS A ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 10 CLEAR CASE OF LACK OF ENQUIRY AND NON-APPLICATION OF MIND. THE CIT FURTHER OBSERVED THAT THERE IS DIFFERENCE IN PARTNE RS CAPITAL ACCOUNTS, WHICH ARE CLEARLY SHOWS THAT THE BOOKS OF ACCOUNTS ARE NOT PROPER. THE A.O., WITHOUT REJECTING THE BOOKS OF ACCOUNTS JUST COMPLETED THE ASSESSMENT, WHICH IS AGAIN A CASE OF NON- APPLICATI ON OF MIND. ACCORDING TO THE CIT, THE A.O., ALLOWED THE REMUNER ATION TO PARTNERS WITHOUT CONSIDERING THE SERVICES RENDERED BY THEM. THE CIT WAS OF THE OPINION THAT THE PROFIT DECLARED BY THE ASSESSEE IS VERY LOW, THEREBY, THE A.O., SHOULD HAVE REJECTED THE BOOKS OF ACCOUNTS AN D ESTIMATED THE NET PROFIT. THE CIT HAS GIVEN ELABORATE DISCUSSION ON T HE ISSUES IN HIS ORDER AND JUSTIFIED THE REVISION OF ASSESSMENT ORDER UNDE R SECTION 263. WHILE DOING SO, HE HAS RELIED UPON VARIOUS CASE LAWS AS I NDICATED IN HIS ORDER. 10. TO INVOKE THE PROVISIONS OF SECTION 263 OF THE ACT, THE TWIN CONDITIONS MUST BE SATISFIED I.E. THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND FURTHER IT MUST BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNLESS BOTH CONDITIONS ARE SATISFIED, THE CIT CANNOT ASSUME JURISDICTION TO PASS ORDER U/S 263 OF THE ACT. IT IS NOT NECESSARY THAT EVERY ORDER WHICH IS PREJUDICIAL TO THE INTEREST OF REVENUE IS ALSO ERRONEOUS. UNLESS THE A.OS ORDER IS NOT ERRONEOUS, NO ACTION CAN BE TAKEN BY THE CIT U/S 263 OF THE ACT, THIS IS BECAUS E THE TWIN CONDITIONS I.E. (1) THE ORDER IS ERRONEOUS AND (2) THE SAME IS ALSO PREJUDICIAL TO THE ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 11 INTEREST OF THE REVENUE ARE NOT CO-EXISTS. IN THE PRESENT CASE, THE A.O. HAS CONDUCTED ENQUIRY BEFORE ALLOWING DEDUCTION TOW ARDS WAGES AND CENTERING EXPENSES AND ALSO EXAMINED THE POINTS ON WHICH THE CIT WANTS FURTHER VERIFICATION. THE ASSESSING OFFICER A FTER CAREFULLY EXAMINED THE BOOKS OF ACCOUNTS AND RELEVANT VOUCHERS FURNISH ED BY THE ASSESSEE PASSED THE ASSESSMENT ORDER AS INDICATED IN HIS ORD ER, WHICH IS CLEARLY EVIDENT FROM THE ASSESSMENT ORDER. THE CONTENTION OF THE CIT WAS THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY AND ALSO NOT APPLIED HIS MIND BEFORE ALLOWING THE DEDUCTION. BUT, WE DO NOT AGRE E WITH THE CIT FOR THE REASON THAT THERE IS A DISTINCTION BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. IF THERE IS AN INADEQUATE ENQU IRY THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE CIT TO ASSUME JURISDICT ION U/S 263 OF THE ACT, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MA TTER. THE CIT CAN DO THIS ONLY, WHEN THERE IS A LACK OF ENQUIRY BY TH E ASSESSING OFFICER. IN THE PRESENT CASE, THE ASSESSMENT ORDER IS DETAILED ONE AND ALSO, THE A.O. HAS PASSED A REMARKS IN THE ASSESSMENT ORDER O N TWO ISSUES, ON WHICH THE CIT ASSUMED JURISDICTION, I.E. DISALLOWAN CE OF ROUND SOME EXPENDITURE OF RS. 1,00,000/- UNDER THE HEAD WAGES AND CENTERING CHARGES AND ALSO PARTNERS CAPITAL ACCOUNTS, WHERE THE ADDITION WAS RS. 66,825/-.THE A.O. HAD CALLED FOR EXPLANATION AND TH E ASSESSEE HAS FURNISHED ITS EXPLANATION. BUT, THE CIT WAS OF THE OPINION THAT THE ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 12 ASSESSING OFFICER COULD HAVE DO WELL TO EXPLORE THE POSSIBILITY OF REJECTING THE BOOKS OF ACCOUNTS AND ESTIMATE THE PROFIT. ACCO RDING TO CIT, THE ASSESSING OFFICER HAS CONDUCTED ENQUIRY BUT, IN ADE QUATE, THEREFORE HE WANTED FURTHER ENQUIRY ON THE ISSUE ON WHICH HE ASS UMED JURISDICTION. THIS FACT HAD NOT BEEN DISPUTED BY THE REVENUE. THE COMMISSIONER CANNOT INITIATE REVISION PROCEEDINGS, WITH A VIEW T O CONDUCT FISHING AND REVOLVING ENQUIRY IN THE MATTERS WHICH ARE ALREADY EXAMINED BY THE A.O. THE DEPARTMENT CANNOT DO FRESH ASSESSMENT IN THE GU ISE OF REVISION ON THE MATTERS WHICH ARE EXAMINED AND CONCLUDED BY THE A.O. THE A.O. BEING A QUASI JUDICIAL AUTHORITY, SHALL HAVE THE AU THORITY TO EXERCISE RIGHT JUDGEMENT AND DISCRETION ON THE BASIS OF INFORMATIO N AVAILABLE BEFORE HIM. IN THE PRESENT CASE ON HAND, THE ASSESSING OF FICER AFTER CONSIDERING VOUCHERS, MADE AN ROUND SOME ADDITION O F RS.1,00,000/- WHICH IS ONE OF THE POSSIBLE VIEW AVAILABLE FOR HIM , WHICH THE CIT SHALL NOT TERM IT AS LACK OF ENQUIRY OR NON APPLICATION O F MIND. THUS, IT CANNOT BE SAID THAT IT IS A CASE OF LACK OF ENQUIRY OR NON APPLICATION OF MIND. 11. NOW, IT IS RELEVANT TO CONSIDER THE CASE LAWS R ELIED ON BY THE PARTIES. THE ASSESSEE RELIED ON THE HONBLE DELHI H IGH COURT DECISION IN THE CASE OF DIRECTOR OF INCOME TAX VS. JYOTI FOUNDA TION, (2013) 357 ITR 388 (DELHI), WHEREIN, THE HONBLE COURT OBSERVED AS UNDER. ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 13 IT WAS HELD THAT REVISIONARY POWER U/S 263 IS CONF ERRED ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORI TY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BUT ORDERS WHICH ARE P ASSED WITHOUT INQUIRY/INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE REVISIONARY AUT HORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UN DERTAKEN. IN THE CASE OF INCOME TAX OFFICER VS. DG HOUSING PROJE CTS LIMITED, (2012) 343 ITR 329 (DELHI) IT WAS HELD THAT IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME T O THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERR ONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECES SARY, BEFORE THE ORDER U/S 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE AO WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT S USTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT C ANNOT REMAND THE MATTER TO THE AG TO DECIDE WHETHER THE F INDINGS RECORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INA DEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERR ONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUC TED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR M ISTAKE MADE BY THE AG, MAKING THE ORDER UNSUSTAINABLE IN LAW. I N SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DR AWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTH ER ENQUIRY OR INVESTIGATION BUT THE AO HAD ERRONEOUSLY NOT UNDERT AKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAM BIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FO R A FRESH DECISION TO THE AG TO CONDUCT FURTHER ENQUIRIES WIT HOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFI ED FOR EXERCISE OF JURISDICTION U/S 263. IN SUCH MATTERS, TO REMAND THE ISSUE TO THE AG WOULD IMPLY / THE CIT HAS NOT EXAMI NED AND DECIDED WHETHER OR NOT THE ORDER IS ERRONEOUS BUT H AS DIRECTED THE AG TO DECIDE THE ASPECT/QUESTION. AN ORDER OF R EMIT CANNOT BE PASSED BY THE CIT TO ASK THE AG TO DECIDE WHETHE R THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. THEREFORE JURISDICTIONAL PRECONDITION ST IPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. THE MATERIAL WHICH THE CIT CAN RELY INCLUDES NOT ONLY THE RECORD AS IT STANDS AT T HE TIME WHEN THE ORDER IN QUESTION WAS PASSED BY THE AG BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY T HE CIT. (PARA 4) IN THE PRESENT CASE, INQUIRIES WERE CERTAINLY CONDU CTED BY THE AO. IT IS NOT A CASE OF NO INQUIRY. THE ORDER U/S 263 ITSELF RECORDS THAT THE DIRECTOR FELT THAT THE INQUIRIES W ERE NOT ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 14 SUFFICIENT AND FURTHER INQUIRIES OR DETAILS SHOULD HAVE BEEN CALLED. HOWEVER, IN SUCH CASES, AS OBSERVED IN THE CASE OF DG HOUSING PROJECTS LIMITED, THE INQUIRY SHOULD HAVE B EEN CONDUCTED BY THE COMMISSIONER OR DIRECTOR HIMSELF TO RECORD T HE FINDING THAT THE ASSESSMENT ORDER WAS ERRONEOUS. HE SHOULD NOT H AVE SET ASIDE THE ORDER AND DIRECTED THE AO TO CONDUCT THE SAID INQUIRY. REVENUE'S APPEAL DISMISSED. 12. THE ASSESSEE RELIED ON CO-ORDINATE BENCH DECISI ON IN THE CASE OF SMT. SUSHEELA DEVI BOTHRA JAIN VS. ITO, WARD -1, RA JAHMUNDRY, ITA. NO. 279/VIZ/2014, WHEREIN THE HONBLE TRIBUNAL AFTER CO NSIDERING THE DELHI HIGH COURT DECISION IN THE CASE OF DIRECTOR OF INCO ME TAX VS. JYOTI FOUNDATION (SUPRA), CIT, SUNBEAM AUTO LTD (2011) 33 2 ITR 167 (DEL) AND HONBLE ANDHRA PRADESH HIGH COURT DECISION IN T HE CASE OF SPECTRA SHARES AND SCRIPS PVT LTD VS. CIT, (2013) 354 ITR 3 5(AP), QUASHED THE ORDER PASSED BY CIT. 13. A SIMILAR ISSUE CAME BEFORE THE CO-ORDINATE BEN CH IN THE CASE OF AGRI GOLD CONSTRUCTIONS PVT LTD VS. THE COMMISSIONER OF INCOME-TAX, VIJAYAWADA, ITA. NO. 452/VIZ/2012, WHEREIN THE HON BLE TRIBUNAL HELD THAT THE CIT CANNOT SEEK TO SUBSTITUTE HIS OPINION ON THE PERCENTAGE OF PROFIT THAT HAS TO BE APPLIED IN THE PLACE OF OPINI ON OF ASSESSING OFFICER UNDER THE GRAB OF REVISIONARY POWERS, SPECIFICALLY WHEN THE AO HAS DISCUSSED THE ISSUES IN DETAIL AND PASSED AN ORDER AFTER DUE APPLICATION OF MIND. 14. IN THE CASE OF SPECTRA SHARES AND SCRIPS PVT. L TD., (2013) 354 ITR 35, THE HONBLE A.P. HIGH COURT HAS CULLED OUT PRIN CIPLES LAID DOWN BY THE HONBLE SUPREME COURT AND ALSO VARIOUS HIGH COU RTS ON THE ISSUE OF EXERCISE OF JURISDICTION BY THE CIT U/S 263 OF THE ACT. IT READS AS FOLLOWS: ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 15 '(A) THE COMMISSIONER HAS TO BE SATISFIED OF TWIN C ONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE INCOME-TAX OFFICER IS ERR ONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IT IS PREJUDICIAL TO THE REVENUERECOURSE CANNOT BE HAD TO SECT/ON 263(1) OF THE ACT. (B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURS ES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIO NER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTA INABLE IN LAW. (C) TO INVOKE THE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SECTION 263, THE COMMISSIONER MUST GIVE REASO NS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME-TAX OFFICER IS ERR ONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL N OT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICA TION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCL USION THAT THE ORDER OF THE INCOME- TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDIC IAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME-TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPE CT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSES SING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSME NT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION. (E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WI TH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALR EADY CONCLUDED , THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIG ATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW VERSIONS WHICH THEY PRESE NT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS D ISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. (F) WHETHER THERE WAS APPLICATION OF MIND BEFORE AL LOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN IN QUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMI SSIONER TO PASS ORDERS UNDER SECTION 263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME-TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTE N MORE ELABORATELY, THERE MUST BE SOME PRIMA FADE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 16 WHAT WAS JUST, HAS BEEN IMPOSED. (G) THE POWER OF THE COMMISSIONER UNDER SECTION 263 (1) IS NOT LIMITED ONLY TO THE MATER/AL WHICH WAS AVAILABLE BEFORE THE AO AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXA MINE ANY OTHER RECORD WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORD ER OF ASSESSMENT.' -. 15. WE ALSO, CONSIDERED THE JUDGMENT OF HONBLE HIGH COURT OF ANDHRA PRADESH, IN THE CASE OF CIT VS VARANASI KANTHA RAO, I.T.T.A. NO. 36 OF 2004, DATED MARCH, 31 2015, WHEREIN THE COURT HELD AS UNDER: ON A READING OF THE PROVISION OF SECTION 263 IT IS CLEAR THAT THE ONLY PRE-CONDITION FOR REVISING THE ORDER OF ASSESSING O FFICER IS THAT THE ORDER OF THE ASSESSING OFFICER SHOULD BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CO MMISSIONER POINTS OUT THE ERRORS IN THE ORDER OF THE ASSESSING OFFICER AND A PERUSAL OF THE ERRORS WOULD CLEARLY DISCLOSE, THE P REJUDICIAL INTEREST OF THE REVENUE. THE VESTING OF SUCH POWER IN THE HA NDS OF THE COMMISSIONER UNDER SECTION 263 IS TO SEE THAT THE A SSESSING OFFICER DOES NOT COMMIT ANY ERROR AFFECTING THE INTERESTS O F THE REVENUE. [PARA 11] IN THE INSTANT CASE, A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER WOULD SHOW THAT THE RETURN OF INCOME FILED BY THE A SSESSEE WAS ACCEPTED AND THE TAX WAS FINALIZED. FROM THE ORDER OF THE ASSESSING OFFICER, ONE CANNOT DEDUCE WHETHER THE ERRORS POINT ED OUT BY THE COMMISSIONER WERE CONSIDERED BY THE ASSESSING OFFIC ER OR NOT. THE COMMISSIONER NOT ONLY POINTED OUT THE ERRORS, BUT A LSO HAD SHOWN THE EFFECT OF THE SAME ON THE REVENUE. IT IS NOT KN OWN HOW THE TRIBUNAL HAS COME TO THE CONCLUSION THAT THE ERRORS HAVE NO EFFECT ON THE REVENUE. THE, TRIBUNAL OUGHT NOT TO H AVE TAKEN INTO CONSIDERATION THE EXPLANATION SUBMITTED BY THE ASSE SSEE BEFORE THE COMMISSIONER FOR COMING TO THE CONCLUSION THAT THE ERRORS POINTED OUT BY THE COMMISSIONER HAVE NO EFFECT ON THE REVEN UE. ULTIMATELY, IT IS FOR THE ASSESSING OFFICER, AT THE TIME OF DE NOVO ENQUIRY, TO CONSIDER WHETHER, THE EXPLANATION OFFER ED BY THE ASSESSEE TO THE POINTS RAISED BY THE COMMISSIONER IS PROPER OR NOT. WHEN ONCE THE COMMISSIONER HAS GOT POWER TO POINT OUT THE ERR ORS WHICH HAD THE EFFECT ON THE REVENUE, THE TRIBUNAL CANNOT SIT AS AN APPELLATE AUTHORITY ON THE ORDER OF THE COMMISSIONER PASSED U NDER SECTION 263 OF THE ACT. IF THE POWER EXISTS IN THE COMMISSI ONER AND IS EXERCISED BY HIM AFTER SATISFYING HIMSELF ON THE FA CTS OF THE CASE, IT IS NOT FOR THE TRIBUNAL TO RE-APPRECIATE THE SAI D SATISFACTION OF THE COMMISSIONER. ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 17 IT IS ONLY WHEN THE COMMISSIONER DOES NOT EXERCISE THE POWER PROPERLY BY SATISFYING THE TWIN TEST CONTEMPLATED UNDER SECT ION 263, THE ORDER OF THE COMMISSIONER CAN BE HELD TO BE PERVERSE. A PRIMA FACIE PERUSAL OF THE ORDER OF THE COMMISSIONER SHOWED THAT HE WAS SATISFIED THAT THERE WERE ERRORS WHICH HAD EFFECT ON THE INTERESTS OF TH E REVENUE AND IT NEEDED A FURTHER ROBE BY THE ASSESSING OFFICER. [PARA 16] IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS O PINED THAT THE ORDER PASSED BY THE COMMISSIONER IS PROPER AND AS P ER POWERS CONFERRED ON HIM UNDER SECTION 263. ACCORDINGLY, TH E ORDER OF THE TRIBUNAL IS SET ASIDE. [PARA 17] 16. THE HONBLE CALCUTTA HIGH COURT, IN THE CASE OF CIT VS. MAITHAN INTERNATIONAL (2015) 375 ITR 123 (CAL-HC), WHEREIN THE COURT HELD AS UNDER . THE AO WAS REQUIRED TO MAKE PROPER INVESTIGATION T O DETERMINE WHETHER THE MONEY WAS REALLY LENT BY THE THIRD PARTY OR IT HAS COME OUT OF THE RESOURCES OF THE ASSESSEE HIMSELF. THE SOURCE OF TH E - APPARENT SOURCE IS A RELEVANT ENQUIRY. THAT THE ASSESSING OF FICER HAS FAILED TO APPLY HIS MIND TO ALL ASPECTS OF THE CASE, IS, THER EFORE, SELF-EVIDENT. SUCH NON-APPLICATION MIND CONSTITUTED PASSING OF AN ERRO NEOUS ORDER WHICH IS ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. 17. WE HAVE EXAMINED THE JUDGMENT OF HONBLE ANDHRA PRADESH HIGH COURT (SUPRA), AND HONBLE CALCUTTA HIGH COURT IN T HE CASE OF CIT VS. MAITHAN INTERNATIONAL (2015) 375 ITR 123 (CAL-HC), CITED BY THE DEPARTMENTAL REPRESENTATIVE, IN THE LIGHT OF THE FA CTS OF THIS CASE AND COME TO A CONCLUSION THAT THE FACTS OF THE CASES RE FERRED BY THE REVENUE ARE DIFFERENT FROM THE FACTS OF THE PRESENT CASE. THE CASE BEFORE THE HONBLE ANDHRA PRADESH HIGH COURT WAS TH AT THE ASSESSING OFFICER HAS ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE AND FINALIZED THE TAX. SIMILARLY, THE CASE BEFORE THE H ONBLE CALCUTTA HIGH COURT WAS THAT THE AO, AFTER EXAMINATION OF BANK PA SS BOOK, PROFIT & LOSS ACCOUNT AND BALANCE SHEET TREATED THE LOAN AS GENUINE BUT, THE CIT AFTER MAKING ENQUIRY FOUND THAT THE LOANS WERE NOT GENUINE AND ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 18 CREDITORS WERE NOT HAVING SUFFICIENT MEANS TO GIVE THE LOAN. IN THE PRESENT CASE ON HAND, THE AO, HAS MADE ALL POSSIBLE ENQUIRY AND PASSED A REMARKS IN THE ASSESSMENT ORDER ON THE ISS UES ON WHICH THE CIT ASSUMED JURISDICTION. 18. IN THIS VIEW OF THE ABOVE AND ALSO CONSIDERING THE RATIOS OF THE JUDGMENTS REFERRED BY THE COUNSELS, WE ARE OF THE O PINION THAT THE A.O. EXAMINED THE ISSUES ON WHICH THE CIT ASSUMED JURISD ICTION. THE CIT ASSUMES JURISDICTION AND REVISED THE ASSESSMENT ORD ER U/S 263 OF THE ACT WITHOUT POINTING OUT ANY MISTAKES IN THE A.OS ORDER WITH A DIFFERENT OPINION, WHICH ITSELF IS NOT A GROUND FOR ASSUMING JURISDICTION U/S 263 OF THE ACT. THEREFORE, WE QUASH THE CITS ORDER U/S 2 63 AND RESTORE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. 19. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPT15. SD/- SD/- ( (( ( . .. . ) ) ) ) ( (( ( . . . . ) ) ) ) ( (( ( V. DURGA RAO ) )) ) ( (( ( G. MANJUNATHA) / // / JUDICIAL MEMBER / // / ACCOUNTANT MEMBER /VISAKHAPATNAM: 6 / DATED : 30.9.2015 VG/SPS ITA NO.109/VIZAG/2012 SRI SAI CONTRACTORS, KOVVUR 19 / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT M/S. SRI SAI CONTRACTORS, D.NO.15-3-2, FLAT NO.4, KAKATIYA PLAZA, KOVVUR, W.G. DIST. 2. -., / THE RESPONDENT ITO WARD-1, TANUKU 3. ; / THE CIT, VISAKHAPATNAM 4. ; () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // AB ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM