A.Kannan, CHENNAI V. ITO, Pondicherry

ITA 1170/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96338 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M N MAURYA
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Principle of natural justice; Peak credit
• Section: 143(3); 68; 69; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # , $ & BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.1170/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) MR. A.KANNAN, PROP. M/S. VADAMALAIYAN FINANCE 36, VALLALAR SALAI, KAMRAJ NAGAR, PONDICHERRY-605 011. VS THE INCOME TAX OFFICER, WARD-1(1), PUDUCHERRY. PAN:AAKPK1389E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. M.N.MAURYA, CIT /DATE OF HEARING : 8 TH SEPTEMBER, 2015 /DATE OF PRONOUNCEMENT : 6 TH NOVEMBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX, PUDUCHERRY DATE D 26.03.2014 PASSED UNDER SECTION 263 OF THE ACT FOR THE ASSESSMENT YEAR 2009-10. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS I N THE APPEAL, THE CRUX OF THE ISSUE IS THAT COMMISSIONER OF INCOME TAX ERRED IN ASSUMING JURISDICTION UNDER SECTION 26 3 OF THE ACT AND CONSEQUENTLY ERRED IN PASSING REVISION ORDE R IN SETTING ASIDE THE ORIGINAL ASSESSMENT FRAMED BY THE 2 ITA NO.1170/MDS/2014 ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT O N 29.12.2011. THE COMMISSIONER OF INCOME TAX FAILED T O APPRECIATE THAT SOURCE FOR CASH DEPOSITS WERE PROPE RLY EXPLAINED WITH MATERIAL EVIDENCE AND OUGHT TO HAVE APPRECIATED THAT ASSUMPTION OF FACTS BASED ON SURMI SE WOULD NULLIFY HIS ACTION IN SETTING ASIDE THE ASSESSMENT FRAMED ON PROPER EXAMINATION OF FACTS. 3. BRIEF FACTS ARE THAT ASSESSEE, AN INDIVIDUAL, EN GAGING IN THE MONEY LENDING BUSINESS FILED HIS RETURN OF INC OME ON 31.07.2009 ADMITTING INCOME OF ` 63,830/-. ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 29.12. 2011 DETERMINING THE INCOME AT ` 62,96,560/- BY MAKING ADDITIONS UNDER SECTION 68 / 69 OF THE ACT AND ALSO DISALLOWA NCE TOWARDS DEPRECIATION AND INTEREST TO LOAN CREDITORS . SUBSEQUENTLY NOTICE UNDER SECTION 263 WAS ISSUED BY THE COMMISSIONER OF INCOME TAX STATING THAT ON VERIFICA TION FROM RECORDS, IT IS SEEN THAT ASSESSING OFFICER HAS TAKE N PEAK CREDIT OF CASH DEPOSITS WITHOUT GIVING ANY REASONS OR OBTAINING NECESSARY EVIDENCES FROM THE ASSESSEE. T HE PEAK CREDIT HAS BEEN TAKEN ON THE BASIS OF ORAL SUBMISS IONS WITHOUT ANY CLEAR PROOF OR SUBSTANTIAL MATERIAL TO SUPPORT. 3 ITA NO.1170/MDS/2014 THE BENEFIT OF PEAK CREDIT CAN BE GIVEN ONLY WHEN T HE RECYCLING OF FUNDS IS PROVED BY THE ASSESSEE I.E. W ITHDRAWALS WERE NOT UTILIZED FOR OTHER EXPENSES OR INVESTMENTS AND WERE AVAILABLE FOR SUBSEQUENT DEPOSITS IN BANK ACCOUNTS. THE ASSESSEE HAS TO GIVE PROOF OF THE FACT THAT EARLIER WITHDRAWALS HAVE BEEN RE-DEPOSITED IN THE BANK ACCOUNT AND HE H AS TO EXPLAIN AS TO WHY WITHDRAWAL WAS UTILIZED IN THE IN TERVENING PERIOD. THEREFORE, COMMISSIONER OF INCOME TAX BY ST ATING THAT ASSESSING OFFICER HAS NOT MADE ANY ENQUIRIES B UT HAS ACCEPTED ORAL SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE TO CONSIDER THE PEAK CREDIT HELD THAT THE ACTION OF THE ASSESSING OFFICER IN PA SSING THE ORDER UNDER SECTION 143(3) DATED 29.12.2011 IS ERRO NEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 4. IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSES SEE STATED THAT PETITIONER HAD NOT INCLUDED THE SAVINGS BANK ACCOUNT IN THE BALANCE SHEET PREPARED , AS THE BALA NCE SHEET RELATES TO HIS BUSINESS ASSETS AND LIABILITIES ONLY . THE PETITIONER HAD INADVERTENTLY MISSED OUT TO REPORT THE TRANSACTIONS RELATING TO CASH DEPOSITS IN EXCESS OF ` 10,00,000/- IN THE FINANCIAL YEAR. THE PETITIONER IS A FINANCIER 4 ITA NO.1170/MDS/2014 OF REPUTE IN PONDICHERRY TOWN AND MANY OF THE BUSI NESS MEN HAVE HAD TRANSACTIONS WITH HIM DURING THE PAST THRE E DECADES CONSIDERING HIS LONGSTANDING REPUTATIONS AND GOODWI LL, A LOT OF PEOPLE PARK THEIR MONEY WITH HIM FOR SAFE CUSTODY A ND DRAW IT BACK IN TIMES OF NEED AND PEOPLE REPOSED SO MUCH CONFIDENCE ON THE PETITIONER THAT NO DOCUMENTARY RE CORDS HAVE BEEN CREATED FOR THESE TRANSACTIONS. THE PETIT IONER HAD NOT ONLY KEPT UP HIS WORDS BUT ALSO PROVED IN ACTIO N BY PROMPT PAYMENT OF DEMAND. THE ASSESSEE HAD PLEADE D THAT HE IS NOT IN POSSESSION OF ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM AND MOREOVER HIS BUSINESS ETHI CS IN ADDITION TO THE UNWRITTEN UNDERSTANDING BETWEEN THE PETITIONER AND THE PARTIES WITH WHOM THE PETITIONER HAD TRANSACTED BARRED HIM FROM FURNISHING ANY FURTHER D ETAILS REGARDING CASH TRANSACTIONS. THEREFORE, IT WAS CONT ENDED THAT NEITHER ANY INCOME HAD FACTUALLY ACCRUED TO THE PET ITIONER FROM THE TRANSACTIONS NOR ANY ASSET / INVESTMENT HA D BEEN CREATED/TAKEN PLACE IN RESPECT OF THE ABOVE TRANSA CTIONS. IT WAS CONTENDED THAT FOR WANT OF CORROBORATIVE EVIDEN CE IN SUPPORT OF HIS CLAIM, THE ASSESSEE HAD PLEADED TO G IVE BENEFIT OF TAXING HIM ON THE PEAK CREDIT AND NOT TH E TOTAL SUM 5 ITA NO.1170/MDS/2014 OF THE CASH TRANSACTIONS. THEREFORE IT WAS SUBMITT ED THAT ASSESSING OFFICER TAXED ON PEAK CREDIT OF ` 50,76,005/- AND PEAK CREDIT WORKING HAS BEEN DONE SCIENTIFICALLY. I T WAS FURTHER CONTENDED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF ASSESSMENT ORDER CANNOT BE TREATED A S PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 5. THE COMMISSIONER OF INCOME TAX PASSED ORDER UNDE R SECTION 263 OF THE ACT HOLDING THAT ASSESSMENT ORDE R PASSED UNDER SECTION 143(3) DATED 29.12.2011 IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND DI RECTED TO DO THE ASSESSMENT DE NOVO HOLDING THAT ASSESSING OFFIC ER HAS COMPLETED THE ASSESSMENT PROCEEDINGS WITHOUT PROPER ENQUIRY AND INVESTIGATION ON VARIOUS ASPECTS OBSERV ING AS UNDER:- 5. IN HIS PETITION, THE ASSESSEE HAS STATED THAT SUBSEQUENT TO SURVEY IN HIS PREMISES ON 08.09.2011 THE DOCUMENTS WERE IMPOUNDED THAT HE HAD MAINTAINED PERFECT RECORDS FOR HIS BUSINESS TRANSACTION GIVING ELABORATE DETAILS FOR EACH AND EVERY TRANSACTION AN D THAT NO OTHER INVESTMENTS OR LOANS HAVE COME TO LIGHT DU RING- THE SURVEY. ON THE OTHER HAND, THE ASSESSEE STATES THAT HE IS A FINANCER OF REPUTE IN PONDICHERRY TOWN; THA T MANY OF THE TOP BUSINESS MEN HAVE HAD TRANSACTIONS WITH HIM DURING THE PAST THREE DECADES THAT CONSIDERING HIS LONGSTANDING REPUTATION AND GOODWILL, A LOT OF PEOP LE PARK THEIR MONEY WITH HIM FOR SAFE CUSTODY AND DRAW IT B ACK IN TIMES OF NEED ;THAT NO DOCUMENTARY RECORDS HAVE BEE N CREATED FOR SUCH TRANSACTIONS ; THAT HE HAD NOT ONL Y KEPT UP HIS WORDS BUT ALSO PROVED IN ACTION BY PROMPT 6 ITA NO.1170/MDS/2014 PAYMENT ON DEMAND ; THAT HE IS NOT IN POSSESSION OF ANY DOCUMENTARY EVIDENCE IN SUPPORT OF HIS CLAIM AND HI S BUSINESS ETHICS IN ADDITION TO THE UNWRITTEN UNDERS TANDING BETWEEN HIM AND THE PARTIES WITH WHOM HE HAD TRANSACTED BARRED HIM FROM FURNISHING ANY FURTHER D ETAILS REGARDING THE CASH TRANSACTIONS ; THAT NEITHER ANY INCOME HAD FACTUALLY ACCRUED TO HIM FROM THE SAID TRANSACT IONS NOR ANY ASSET /INVESTMENT HAD BEEN CREATED /TAKEN P LACE IN RESPECT OF SUCH TRANSACTIONS; THAT FOR WANT OF CORROBORATIVE EVIDENCE IN SUPPORT OF HIS CLAIM HE H AD PLEADED TO GIVE THE BENEFIT OF TAXING HIM ON THE PE AK CREDIT. 6. THE ASSESSEE HAS MADE CONTRADICTORY CLAIMS IN HIS WRITTEN SUBMISSION REFERRED TO ABOVE. HIS ADMIS SION TO THE FACTS AND THE CIRCUMSTANCES OF THE CASE ITSE LF JUSTIFIES THE OBSERVATIONS MADE IN THE SHOW CAUSE NOTICE THAT THE 'THAT THE A.O HAS NOT MADE ANY ENQU IRIES BUT HAS ACCEPTED THE ORAL STATEMENTS MADE BY THE AUTHORISED REPRESENTATIVES OF THE ASSESSEE WHICH AR E NOT SUPPORTED BY ANY EVIDENCES.' WHEN THE ASSESSEE HAS BEEN CARRYING ON A BUSINESS COMPLYING WITH VARI OUS LEGAL REQUIREMENTS, IT BECOMES HIS STATUTORY OBLIGA TION TO FURNISH ALL THE DETAILS CALLED FOR AS PER THE PROVI SIONS OF THE INCOME TAX ACT, 1961 DURING ANY PROCEEDINGS AND HE CANNOT BE SELECTIVE IN FURNISHING THE DETAILS AND INFORMATION. THE ASSESSEE'S VERSIONS THAT HE IS ACC EPTING THE PARKING OF FUNDS BY LOT PERSONS WITH HIM AND OU T OF WHICH NO BENEFIT IS DERIVED BY HIM AND THAT UNWRITT EN UNDERSTANDING BETWEEN HIM AND THE PARTIES WITH WHOM HE HAD TRANSACTED BARRED HIM FROM FURNISHING ANY FU RTHER DETAILS REGARDING THE CASH TRANSACTIONS CLEARLY GO TO SHOW THAT THE ASSESSING OFFICER HAS COMPLETED THE PROCEEDINGS WITHOUT PROPER ENQUIRY AND INVESTIGATIO N ON VARIOUS ASPECTS. IT IS ALSO FOUND THAT THE JUDICIAL CASE LAWS CITED BY HIM ARE NOT RELEVANT AND CANNOT BE AP PLIED TAKING INTO ACCOUNT THE FACTS AND THE CIRCUMSTANCES THE PRESENT CASE. 6. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSI ONS MADE BEFORE THE COMMISSIONER OF INCOME TAX, PUDUCHE RRY STATING THAT ASSESSING OFFICER HAS APPLIED PEAK CRE DIT ON 7 ITA NO.1170/MDS/2014 EXAMINING THE DETAILS AND THEREFORE THE ORDER PASSE D BY THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDIC IAL TO THE INTERESTS OF THE REVENUE. HE FURTHER CONTENDS THAT IF TWO VIEWS ARE POSSIBLE AND ONE OF THE VIEWS IS ADOPTED BY THE ASSESSING OFFICER, THE ORDER CANNOT SAID TO BE ERRO NEOUS OR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE CO UNSEL PLACES RELIANCE ON THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. PVP VENTURES LTD. (90 DTR 340) AND THE DECISION OF SUPREME COURT IN THE CASE OF CIT VS. MA X INDIA LTD. (295 ITR 282) IN SUPPORT OF HIS CONTENTIONS. 7. DEPARTMENTAL REPRESENTATIVE SUPPORTS THE ORDER O F THE COMMISSIONER OF INCOME TAX IN DIRECTING THE ASSESSI NG OFFICER TO REDO THE ASSESSMENT DENOVO. DEPARTMENTA L REPRESENTATIVE SUBMITS THAT ASSESSING OFFICER COMPL ETED THE ASSESSMENT WITHOUT EXAMINING THE DETAILS OF PEAK C REDIT AND SIMPLY ACCEPTED THE REQUEST OF THE ASSESSEE TO ADOP T PEAK CREDIT AS SUBMITTED BY THE ASSESSEE. THEREFORE, THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) BY THE ASSESSING OFFICER IS CERTAINLY ERRONEOUS AND PREJUD ICIAL TO THE INTERESTS OF THE REVENUE. 8 ITA NO.1170/MDS/2014 8. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISIONS RELIED ON. IN THE COURSE OF ASSES SMENT PROCEEDINGS UNDER SECTION 143(3), THE ASSESSING OF FICER CALLED FOR DETAILS IN RESPECT OF THE CASH DEPOSITS MADE INTO SAVINGS BANK ACCOUNT IN LAKSHMI VILAS BANK, PONDICH ERRY WHERE SUM OF ` 1,11,60,000/- WAS DEPOSITED BY THE ASSESSEE IN THE SAID BANK ON VARIOUS DATES AND THES E DEPOSITS WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS . THE DEPOSITS WERE ALL MADE OUTSIDE THE BOOKS OF ACCOUNT S. THE ASSESSING OFFICER CALLED FOR DETAILS AND EXPLANATIO N REGARDING THESE DEPOSITS. HOWEVER, THE ASSESSEE COULD NOT EX PLAIN THE TRANSACTION BUT REQUESTED FOR TAKING PEAK CREDIT OF CASH DEPOSITS AS INCOME. THE ASSESSING OFFICER SIMPLY AC CEPTED THE REQUEST OF THE ASSESSEE AND ADOPTED PEAK CREDIT ON THESE DEPOSITS AT ` 50,76,005/- AS INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE ACT AND ACCORDINGLY ASSESSM ENT WAS COMPLETED. ON A READING OF THE ASSESSMENT ORDER, WE FIND THAT THE ASSESSEE HAS NOT PRODUCED ANY DETAILS IN R ESPECT OF THESE DEPOSITS IN SPITE OF THE ASSESSING OFFICER CA LLING FOR DETAILS AND EXPLANATION, BUT A REQUEST WAS MADE TO ADOPT PEAK CREDIT. THE ASSESSING OFFICER WITHOUT EXAMININ G THE 9 ITA NO.1170/MDS/2014 NATURE OF DEPOSITS SIMPLY ACCEPTED THE REQUEST AND ADOPTED PEAK CREDIT. 9. THE COMMISSIONER OF INCOME TAX PASSED ORDER UNDE R SECTION 263 OF THE ACT HOLDING THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRIES BUT HAS ACCEPTED THE ORAL SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE O F THE ASSESSEE WHICH ARE NOT SUPPORTED BY ANY EVIDENCE. T HE COMMISSIONER OF INCOME TAX (APPEALS) WAS OF THE VIE W THAT ASSESSEES VERSION THAT HE IS ACCEPTING PARKING OF FUNDS BY LOT OF PERSONS WITH HIM AND OUT OF WHICH NO BENEFIT IS DERIVED BY HIM AND THE UNWRITTEN UNDERSTANDING BETWEEN THE ASSESSEE AND THE PARTIES WITH WHOM HE HAD TRANSAC TED BARRED THE ASSESSEE FROM FURNISHING ANY FURTHER DET AILS REGARDING THE CASH DETAILS CLEARLY GO TO SHOW THAT ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT PROCEEDINGS WI THOUT PROPER ENQUIRY AND INVESTIGATION ON VARIOUS ASPECTS . WE AGREE WITH THE ABOVE VIEW OF THE COMMISSIONER OF IN COME TAX SINCE NO ENQUIRIES WERE MADE BY THE ASSESSING O FFICER. THE ASSESSEE HAS NOT FURNISHED ANY DETAILS IN RESP ECT OF CASH DEPOSITS AND IN SUCH CIRCUMSTANCES IT CANNOT B E HELD THAT ASSESSING OFFICER HAS TAKEN ONE OF THE PERMISS IBLE VIEWS 10 ITA NO.1170/MDS/2014 ESPECIALLY WHEN NO ENQUIRIES WERE MADE BY THE ASSES SING OFFICER IN RESPECT OF THESE DEPOSITS. THE CASE LAWS RELIED ON BY THE COUNSEL FOR THE ASSESSEE ARE DISTINGUISHABLE ON FACTS AND HAVE NO RELEVANCE TO THE FACTS OF THE CASE ON H AND. 10. IN THE CASE OF M/S. MALABAR INDUSTRIAL CO.LTD. VS. CIT (243 ITR 83), THE HONBLE SUPREME COURT HELD THAT AN INCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLIC ATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERR ONEOUS. SIMILARLY, ORDERS PASSED WITHOUT APPLYING THE PRINC IPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND ARE ALSO ERRONEOUS. IN THE INSTANT CASE, THE ASSESSING OFF ICER HAD NEVER APPLIED HIS MIND TO THE ISSUE OF WHETHER PEAK CREDIT OF THE CASH DEPOSITS CAN BE CONSIDERED FOR ADDITION OR NOT ESPECIALLY WHEN THE ASSESSEE HAS NOT FURNISHED ANY DETAILS IN RESPECT OF NATURE OF THESE DEPOSITS. FURTHER, THE ASSESSEE HAS NOT PROVED THAT THERE ARE RECYCLING OF FUNDS AN D THEREFORE PEAK CREDIT SHOULD BE CONSIDERED. THE ASSESSEE HAS ALSO NOT PROVED THAT WITHDRAWALS WERE NOT UTILIZED FOR OTHER EXPENSES OR INVESTMENTS AND WERE AVAILABLE FOR MAKING SUBSEQ UENT DEPOSITS IN THE SAID BANK ACCOUNT . THERE WAS NO EV IDENCE FURNISHED BY THE ASSESSEE TO SHOW THAT EARLIER WITH DRAWALS 11 ITA NO.1170/MDS/2014 HAVE BEEN RE-DEPOSITED IN THE BANK ACCOUNT AND NO EXPLANATION WAS GIVEN AS TO HOW THE WITHDRAWALS WER E UTILIZED IN THE INTERVENING PERIOD. NONE OF THE DET AILS HAVE BEEN EXAMINED BY THE ASSESSING OFFICER WHILE COMPLE TING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE AS SESSING OFFICER HAS PASSED THE ASSESSMENT ORDER SIMPLY ACC EPTING THE REQUEST OF THE ASSESSEE THAT PEAK CREDIT SHOULD BE TAKEN AS INCOME AND WITHOUT EXAMINING THE CORRECT POSITIO N OF LAW. THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICE R WITHOUT APPLICATION OF MIND IS CERTAINLY AN ERRONEOUS ORDER AND IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 11. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF MANNULAL MATADEEN VS. CIT (277 ITR 346) HELD THAT T HE INCOME TAX OFFICER HAD NOT MADE NECESSARY ENQUIRIES BEFORE ALLOWING THE DEDUCTION OF INTEREST TO MANNULAL MATA DEEN ON THE CREDIT BALANCE AND THEREFORE, THE ORDER PASSED WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. 12. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS.SESHASAYEE PAPER AND BOARDS LTD. (242 ITR 490) W HILE EXAMINING THE POWERS OF COMMISSIONER OF INCOME TAX 12 ITA NO.1170/MDS/2014 UNDER SECTION 263 OBSERVED AS UNDER:- THAT THE COMMISSIONER FOUND THAT THE INCOME-TAX OFFICER WAS NOT CORRECT IN GRANTING RELIEF WITH RE SPECT TO SOME OF THE ITEMS CONSIDERED IN THE ORIGINAL ASSESS MENT PROCEEDINGS AND FROM THE INSTANCES OR SPECIMENS OF SOME OF THE CASES EXAMINED BY HIM, HE CAME TO THE CONCLUSION THAT THE INCOME-TAX OFFICER HAD NOT COM PLETED THE ASSESSMENT BY FOLLOWING THE PROCEDURE EXPECTED OF HIM. IT WAS NOT NECESSARY FOR THE COMMISSIONER TO EXAMINE EACH ITEM IN DETAIL AND RECORD A CLEAR FIN DING THAT THE ORDER PASSED BY THE INCOME-TAX OFFICER WAS ERRONEOUS. THE HONBLE HIGH COURT FURTHER OBSERVED AS UNDER:- THE DECISION OF THIS COURT IN THE CASE OF K.A.RAMASWAMY CHETTIAR VS. CIT [(1996) 220 ITR 657 ], MAKES IT CLEAR THAT THE INCOME-TAX OFFICER IS EXPE CTED TO MAKE AN ENQUIRY BEFORE TAXING THE PARTICULAR ITEM O F INCOME OR BEFORE GRANTING DEDUCTION OF A PARTICULAR ITEM OF EXPENDITURE AND IF HE DOES NOT MAKE SUCH AN ENQ UIRY AS EXPECTED, THAT WOULD BE A GROUND FOR THE COMMISSIONER OF INCOME TAX TO INTERFERE UNDER SECTI ON 263 OF THE ACT. 13. IN THE INSTANT CASE, THE ASSESSING OFFICER NEIT HER EXAMINED ANY DETAILS WITH REGARD TO THE REQUEST OF THE ASSESSEE TO ADOPT PEAK CREDIT NOR MADE ANY ENQUIRY BEFORE ALLOWING SUCH CLAIM OF THE ASSESSEE WHILE COMPLETI NG THE ASSESSMENT. THEREFORE, IN VIEW OF THE ABOVE DISCUSS ION, WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE ASSES SING OFFICER UNDER SECTION 143(3) ALLOWING THE CLAIM OF THE ASSESSEE IN CONSIDERING PEAK CREDIT ON THE CASH DE POSITS IS WITHOUT APPLICATION OF MIND AND WITHOUT EXAMINING THE 13 ITA NO.1170/MDS/2014 CORRECT POSITION OF LAW AND THEREFORE IS CERTAINL Y AN ORDER PASSED ERRONEOUSLY AND PREJUDICIAL TO THE INTEREST S OF THE REVENUE. THEREFORE, THE COMMISSIONER OF INCOME TAX HAD RIGHTLY INVOKED THE PROVISIONS UNDER SECTION 263 O F THE ACT DIRECTING THE ASSESSING OFFICER TO REDO THE ASSESSM ENT UNDER SECTION 143(3) OF THE ACT AFRESH. ACCORDINGLY, WE UPHOLD THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX AN D REJECT THE GROUNDS OF APPEAL RAISED BY THE ASSESS EE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH NOVEMBER, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 6 TH NOVEMBER, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2.RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .