Shri Ankit Vinosbhai Parekh, Navsari V. The Pr. CIT, Valsad

ITA 1246/AHD/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2323 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRASENJIT SINGH
• Assessee Lawyers: RASESH SHAH
• Keywords: Prejudicial to interest; Revenue expenditure; Reassessment proceedings; Capital expenditure; Set aside
• Section: 143(3); 147; 263

Judgement Text

SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 1 OF 19 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT . . , . . , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER S . N O . . ./ I. T.A NO. / AY: APPELLANT V. /RE SPONDEN T 1 1276 /AH D/2017 200 8 - 09 SMT. PRAGNABEN VINODBHAI PAREKH, HOUSE NO. 1864/A/3, SHANTI NIKTETAN APARTMENT. NEAR CENTRAL BANK, NAVSARI - 396445 PAN: ACCPP 1525F V. PR. CIT , VALSAD 2 1246 /AH D/2017 200 8 - 09 SHRI ANKIT VINODBHAI PAREKH HOUSE NO.30, SHANTI NIKTETAN APARTMENT. NEAR CENTRAL BANK, NAVSARI - 396445 PAN: APMPP 2453D V. PR. CIT, VALSAD 3 1247/AH D/2017 2007 - 08 SHRI VINODBHAI RANCHHODBHAI PAREKH HOUSE NO.305/B, SHANTI NIKTETAN APARTMENT. NEAR CENTRAL BANK, NAVSARI - 396445 PAN: ACCPP 1542Q V. PR. CIT, VALSAD 4 1248 /AH D/2017 2008 - 09 SHRI VINODBHAI RANCHHODBHAI PAREKH HOUSE NO.305/B,SHANTI NIKTETAN APARTMENT. NEAR CENTRAL BANK, NAVSARI - 396445 PAN: ACCPP 1542Q V. PR. CIT, VALSAD SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 2 OF 19 /ASSESSEE BY SHRI RASESH SHAH, CA /REVENUE BY SHRI PRASENJIT SINGH, CIT(D.R.) / DATE OF HEARING: 25.05.2018 /PRONOUNCEMENT ON 30.05.2018 /O R D E R PER BENCH: 1. THESE FOUR APPEALS ARE FILED BY THE THREE ASSESSEE`S ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LEARNED PRINCIPAL COMMISSIONER OF INCOME-TAX- VALSAD, ( IN SHORT PR. CIT) IN WHICH THREE ORDERS ARE DTD. 27.03.2017 FOR THE ASSESSMENT YEAR 2008-09 AND ONE ORDER IS DTD. 22.03.2017 FOR THE ASSESSMENT YEAR 2007-08 IN THE CASE OF SHRI VINODBHAI R. PAREKH, ALL ORDERS ARE PASSED UNDER SECTION 263 OF THE ACT (HEREINAFTER REFERRED TO AS OF THE ACT). 2. BOTH PARTIES HAVE AGREED THAT FACTS IN ALL APPEAL ARE IDENTICAL AS IN THE CASE OF MRS. PRGANABEN VINODBHAI PAREKH, HENCE, FACTS IN I.T.A. NO.1276/AHD/2017 FOR THE ASSESSMENT YEAR 2008-09 ARE BEING DISCUSSED AS LEAD CASE, AND THE RATIO OF WHICH WOULD ALSO APPLY TO OTHER TWO CASES AND THREE APPEALS. 3. THE GROUND NOS.1 TO 9 OF THE APPEAL STATES THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX (PR.CIT) HAS ERRED IN PASSING EX-PARTE SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 3 OF 19 ORDER UNDER SECTION 263 OF THE ACT PREMATURELY NOT GRANTING ADJOURNMENT AND CANCELLING THE ASSESSMENT BY HOLDING IT AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS THE ASSESSING OFFICER(AO) HAD NOT MADE ADDITION OF CASH DEPOSITS OF RS.10,93,460/- IN IDBI BANK AND RS.12,99,800/- IN AXIS BANK AND NOT MADE ANY ENQUIRY REGARDING ACQUISITION OF SHARES OF RS.50,63,754/- WITHOUT APPRECIATING THE FACTS THAT THE ASSESSING OFFICER(AO) HAD PASSED ASSESSMENT ORDER AFTER OBTAINING CLARIFICATION OF CASH DEPOSITS IN BANK ACCOUNT AND OTHER DETAILS, THEREFORE, THE ASSESSMENT COULD NOT BE TERMED AS ERRONEOUS. 4. SUCCINCTLY, FACTS AS CULLED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 11.08.2008 DECLARING TOTAL INCOME OF RS.60,534/-. THE CASE WAS REOPENED U/S.147 AND ASSESSMENT WAS MADE UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT ON 29.03.2016 ACCEPTING THE RETURNED INCOME OF RS. 60,534. THE AO AND RANGE HEAD OF NAVSARI HAVE PROPOSED THAT THE ASSESSMENT ORDER IN THIS CASE IS ERRONEOUS. THEREFORE, PR.CIT ISSUED A NOTICE UNDER SECTION 263 ON 10.03.2017 FIXING HEARING FOR 14.03.2017. HOWEVER, NO ONE ATTENDED ON 14.03.2017 AND PLEA WAS TAKEN BY THE ASSESSEE VIDE LETTER DATED 14.03.2017 SUBMITTED THAT ASSESSMENT IS NOT GETTING TIME BARRED SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 4 OF 19 BY 31.03.2017, HENCE, HEARING BE ADJOURNED. IN RESPONSE TO WHICH, A LETTER WAS ISSUED ON 15.03.2017 FIXING HEARING FOR 21.03.2017 BUT ONE ATTENDED, HENCE, PR.CIT HAS PASSED THE ORDER BASED ON SHOW CAUSE ISSUED. THE PR.CIT OBSERVED THAT THE CASH DEPOSITS OF RS.10,93,460/- WITH IDBI AND RS.12,99,800/- WITH AXIS BANK , WHICH THE AO ADDED IN THE CASE OF ANKIT VINOD JOINT HOLDER OF BANK ACCOUNT WITH AXIS BANK. BUT, NO ADDITION WAS MADE IN THE HANDS OF ANKIT VINOD PAREKH ALSO. THEREFORE, THIS AMOUNT OF RS.12,99,800/- WAS REMAINED AS UNEXPLAINED AND SHOULD HAVE BEEN BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE OR IN THE HANDS OF SHRI ANKIT PAREKH. THEREFORE, THE AO MADE GRIEVOUS ERROR BY NOT MAKING ADDITION ONLY ON THE BASIS OF ASSESSEE VERSION. CONSEQUENTLY, THIS AMOUNT ESCAPED ASSESSMENT. FURTHER, THE AO FAILED TO MAKE ANY ENQUIRY ABOUT DEPOSIT OF RS.10,93,460/- WITH BANK ACCOUNT IDBI INSTEAD OF ACCEPTING THE SELF-MADE LIST OF SALE PURCHASE SUBMITTED BY THE ASSESSEE. THE PR.CIT OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE WHATSOEVER REGARDING TRADE IN GOLD AND SILVER ORNAMENTS. THE ASSESSEE HAS NOT FOUND REGISTERED ANYWHERE UNDER SHOP ESTABLISHMENT ACT. SIMILARLY, THE AO MADE NO ENQUIRY WHATSOEVER ABOUT THE SOURCE OF SHARES WORTH RS.50,63,754/- DISPUTE THE FACT THAT HE HAD CIB SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 5 OF 19 INFORMATION TO THIS EFFECT. THEREFORE, IN ABSENCE OF COMPLETE ABSENCE OF INQUIRY WHATSOEVER ON THESE TWO ISSUES, THE PR.CIT HAS HELD THAT THE AO GRIEVOUSLY ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, THEREFORE, THE SAME WAS THEREFORE, SET-ASIDE TO BE MADE AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. THEREFORE, THE AO WAS DIRECTED TO CARRY OUT THROUGH INQUIRY OF SOURCE OF CASH DEPOSITS AND OF OLD THEORY OF TRADING OF GOLD AND SILVER IS SUBMITTED THEN THE AO SHOULD MAKE PROPER INQUIRY AND THIRD PARTY VERIFICATION AND THE AO SHOULD INQUIRE REGARDING INVESTMENT IN SHARES. THE PR.CIT ALSO SUPPORTED HIS VIEW BY PLACING RELIANCE ON THE DECISION OF GEE VEE CORPORATION V. ADDL. CIT [1975] 99 ITR 375 (DELHI), MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83 (SC) : [2003] 183 CTR 228 (SC) : [2003] 131 TAXMAN 535 (SC) AND OTHER AS DISCUSSED IN HIS ORDER PASSED UNDER SECTION 263 OF THE ACT. 5. BEING AGGRIEVED, THE ASSESSEE FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS REOPENED ON THE GROUND THAT CASH DEPOSITS OF RS.10,93,460/- WITH IDBI BANK, RS.12,99,800/- WITH AXIS BANK AND RS.50,63,754/- INVESTED ON DIFFERENT DATES FOR ACQUIRING SHARES. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE AO HAS SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 6 OF 19 CONDUCTED INQUIRIES AND FOUND THAT CASH DEPOSITS WITH IDBI BANK ARE ON ACCOUNT OF SALE PROCEEDS AND SAID BANK ACCOUNT HAS BEEN SHOWN IN THE BALANCE SHEET WITH REGARDING CASH DEPOSIT OF RS.12,99,800/- WITH AXIS BANK THE AO HAS MADE ADDITION OF RS.6,41,280/- ESTIMATING 8% PROFIT ON INCLUDING AND BANK DEPOSITS THE AMOUNT OF RS.80,16,000/- IN THE CASE OF ANKIT V. PAREKH, SON OF THE ASSESSEE, BEING JOINT ACCOUNT HOLDER OF AXIS BANK WITH THE ASSESSEE WHEREIN, THE CASH DEPOSITS OF RS.12,99,800/- HAS BEEN CONSIDERED. WITH REGARD SHARES OF RS.50,63,754/- O SUCH SHARES ARE HELD BY THE ASSESSEE, THEREFORE, THE OBSERVATION MADE BY THE PR.CIT IN THE SHOW CAUSE UNDER SECTION 263 THAT NO ADDITION IS MADE IN RESPECT OF CASH DEPOSITS OF RS.12,99,800/- IS INCORRECT. THE ASSESSEE HAD SHOWN BANK ACCOUNT WITH IDBI IN HIS BALANCE SHEET FILED WITH THE RETURN OF INCOME AND SAME REPRESENTED SALES MADE BY THE ASSESSEE, AND IS THEREFORE, ACCOUNTED. REGARDING SOURCE OF ACQUISITION OF SHARES OF RS.50,63,754/- NO SUCH SHARES ARE HELD BY THE ASSESSEE. FURTHER, NO DETAILS WERE MENTIONED IN SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT. THERE IS NO ALLEGATION OF THE REVENUE, THE ASSESSEE HAS HOLDING SHARES OF PARTICULAR COMPANY. THE PR.CIT HAS ISSUED NOTICE UNDER SECTION 263 ON 10.03.2017 AND SOUGHT INFORMATION BY 14.03.2017, WHICH WAS SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 7 OF 19 NOT POSSIBLE WITHIN SHORT TIME AND THE ASSESSEE WAS NOT EXPECTED TO MAINTAIN BOOKS OF ACCOUNTS BEYOND SIX YEARS UNDER RULE 6F(5) BY WHICH THE LIMIT WAS EXPIRED ON 31.03.2016. THEREFORE, BY PLACING RELIANCE IN THE CASE OF CIT V. MINALBEN S. PARIKH 215 ITR 81 (GUJ) AND CIT V. GABRIEL INDIA LTD. 203 ITR 108(BOM) AND MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83 (SC) : [2003] 183 CTR 228 (SC) : [2003] 131 TAXMAN 535 (SC) SUBMITTED THAT IT IS SETTLED POSITION THE BOTH THE CONDITIONS THAT ORDER SHOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE TO BE SATISFIED BEFORE INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. THE PR.CIT ERRED IN EXERCISING POWER U/S.263 OF THE ACT WHEN THE ISSUE RAISED THEREIN ALREADY ENQUIRED INTO BY THE AO DURING ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER IS PASSED AFTER DUE APPLICATION OF MIND, THEREFORE, IMPUGNED NOTICE ALLEGING THAT PROPER AND ADEQUATE ENQUIRY WAS NOT MADE IS ARBITRARY AND BASED ON CONJECTURE AND SURMISES. THE PR.CIT HAS NOT GIVEN ANY FINDING AS TO HOW THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PR.CIT HAS NOT MADE ANY ENQUIRY AND SIMPLY DIRECTED THE AO TO MAKE FURTHER VERIFICATION AND EXAMINATION. THE LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE ORDER OF HON`BLE DELHI HIGH COURT IN THE CASE OF PR. CIT V. SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 8 OF 19 AIRPORT METRO EXPRESS PVT. LTD. [I.T.A. NO. 705/2017 WHICH LAID DOWN THAT FOR THE PURPOSE OF EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT, THE CONCLUSION THAT ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE HAD TO BE PRECEDED BY SOME MINIMAL INQUIRY. IN FACT, IF THE LD. PR.CIT IS OF THE VIEW THAT THE AO DID NOT UNDERTAKE ANY ENQUIRY, IT BECOMES INCUMBENT UPON THE LEARNED PR.CIT TO CONDUCT SUCH ENQUIRY. FURTHER, RELYING ON THE DECISION IN THE CASE OF PR.CIT V. MODICARE LIMITED [I.T.A. NO. 759/2017] OF HONBLE DELHI HIGH COURT WHEREIN FOLLOWING ITS OWN DECISION IN THE CASE OF ITO V. DG HOUSING PROJECTS LIMITED 343 ITR 32(DEL), DIT JYOTI FOUNDATION [357 ITR 388 ] AND PR. CIT V. AIRPORT METRO EXPRESS PVT. LTD. [I.T.A. NO. 705/2017] HELD THAT THE EXERCISE OF JURISDICTION CANNOT BE OUTSOURCED BY THE COMMISSIONER OF INCOME TAX(CIT) TO THE AO AND THEREFORE, THE CIT CANNOT DIRECT THE AO TO PROVIDE DETAILS OF THE FACTORS ON THE BASIS OF WHICH PROCEEDINGS UNDER SECTION 263 OF THE ACT COULD HAVE BEEN INITIATED. THE LD.AUTHORISED REPRESENTATIVE(AR) FURTHER PLACED RELIANCE IN THE CASE OF CIT V. SUNBEAM AUTO LTD.[2010] 332 ITR 167 (DELHI) /189 TAXMAN 436 (DEL) WHEREIN IT WAS HELD THAT IF THERE WAS ANY INQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF, GIVE OCCASION TO THE COMMISSIONER TO PASS ORDER U/S. 263 OF THE ACT , SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 9 OF 19 MERELY BECAUSE THE COMMISSIONER HAS A DIFFERENT OPINION IN THE MATTER AND THAT ONLY IN CASES WHERE THERE IS NO ENQUIRY, THE POWERS U/S.263 OF THE ACT CAN BE EXERCISED. THE PR.CIT CANNOT PASS AN ORDER THAT FURTHER / THROUGH ENQUIRY SHOULD HAVE BEEN MADE BY THE AO. IT WAS CONTENDED THAT PR.CIT TOOK THE BASIS OF CIB/AIR INFORMATION FOR PASSING ORDER UNDER SECTION 263 OF THE ACT, BUT DID NOT GIVE FINDING ABOUT PREJUDICIAL NATURE OF ORDER OF THE AO. IT HAS BEEN HELD BY THE HON`BLE DELHI HIGH COURT IN THE CASE OF PR. CIT V. MERA BABA REALTY ASSOCIATES PVT. LTD. [2017] 99 CCH 235 (DEL) THAT PR.CIT MUST BE SATISFIED, AFTER APPLICATION OF MIND, THE ORDER OF THE AO WAS ERRONEOUS WITH REFERENCE TO MATERIAL MADE AVAILABLE TO HIM. NO SUCH APPLICATION OF MIND BY PR. CIT WAS EVIDENT FROM IMPUGNED ORDER WHICH IS UNDER CONSIDERATION BEFORE TRIBUNAL. 6. PER CONTRA, THE LD. CIT (DR) VEHEMENTLY RELIED UPON THE ORDER OF PR.CIT AND SUBMITTED THAT PR.CIT HAS RIGHTLY EXERCISED JURISDICTION UNDER SECTION 263 OF THE ACT BY DIRECTING THE AO TO MAKE FURTHER ENQUIRY. THE LD.CIT (DR) SUBMITTED THAT THE CASE WAS REOPENED BASED ON AIR INFORMATION, BUT THE AO HAS NOT MADE ENQUIRY AND SIMPLY ACCEPTED THE EXPLANATION OF THE ASSESSEE. THEREFORE, THE ORDER PASSED BY THE AO WAS ERRONEOUS AND SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 10 OF 19 PREJUDICIAL TO THE INTEREST OF THE REVENUE. HENCE, THE PR.CIT HAS RIGHTLY EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE GONE THROUGH ALL THE JUDGEMENTS CITED BY THE PARTIES BEFORE US. WE NOTE THAT SECTION 263 OF THE ACT ENABLES SUPERVISORY JURISDICTION TO THE CIT OVER THE AO. THE CIT IS EMPOWERED TO ACT U/S. 263 OF THE ACT WHEN HE CONSIDERS THAT AO'S ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS A SETTLED POSITION OF LAW THAT THE AFORESAID TWIN CONDITIONS I.E. AO'S ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IS SINE QUA NON FOR ASSUMPTION OF REVISIONARY JURISDICTION BY CIT. WHEN WE SAY THAT LACK OF INQUIRY MAKES AN AO'S ORDER ERRONEOUS, ONE HAS TO KEEP IN MIND THE DIFFERENCE BETWEEN LACK OF INQUIRY AND INADEQUATE INQUIRY. LACK OF INQUIRY MAKES THE AO'S ORDER ERRONEOUS, BUT INADEQUATE INQUIRY DOES NOT MAKE THE ORDER OF AO ERRONEOUS. IF THE AO'S VIEW IS A PLAUSIBLE VIEW ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THEN PR.CIT CANNOT EXERCISE THE 263 JURISDICTION TO IMPOSE HIS OWN VIEW WHICH MAY BE A VIEW POSSIBLE TO BE TAKEN IN THE VERY SAME FACTS OF THE CASE. THE HON`BLE SUPREME COURT IN CIT V. MAX INDIA LTD. [2007] 295 ITR 282 (SC) REITERATED THAT THE PHRASE SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 11 OF 19 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' AS USED IN SECTION 263(1) OF THE ACT MUST BE READ IN CONJUNCTION WITH THE EXPRESSION 'ERRONEOUS' AND UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS FOUND TO BE UNSUSTAINABLE IN LAW, THE POWERS UNDER SECTION 263 OF THE ACT CANNOT BE INVOKED. 8. THE PR.CIT IN THIS CASE EVEN THOUGH STATED THAT THE AO FAILED TO EXAMINE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE SOURCE OF CASH DEPOSITS IN BANK ACCOUNT WITH IDBI AND AXIS BANK AND INVESTMENT IN SHARES BUT DID NOT POINT OUT WHAT TYPE OF INQUIRY OR VERIFICATION SHOULD HAVE BEEN CARRIED OUT IN THIS REGARD BY THE AO. HOWEVER, WE FIND THAT THE AO DID MAKE ENQUIRY REGARDING CASH DEPOSITS OF RS.12,99,800/- AND SAME WERE CONSIDERED AS UNEXPLAINED IN THE CASE OF SHRI ANKIT V. PAREKH, SON OF THE ASSESSEE OF WHOM THIS JOINT ACCOUNT BELONGED AND MADE ADDITION @ 8% OF CASH DEPOSITS IN HIS HAND . THEREFORE, THE VERSION OF THE PR.CIT THAT NO ADDITION HAS BEEN MADE ON THIS ACCOUNT IS BASED ON WRONG FOUNDATION. SIMILARLY, WE FIND THAT THE ASSESSEE HAS DISCLOSED BANK ACCOUNT WITH IDBI IN HER BALANCE SHEET FILED ALONG WITH RETURN OF INCOME, AND SAME ARE CLAIMED AS CASH SALES, WHICH HAVE BEEN ACCEPTED BY THE AO AFTER MAKING ENQUIRY, THEREFORE, SAME CANNOT BE TREATED AS UNDISCLOSED. SIMILARLY, WITH REGARD TO INVESTMENT IN SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 12 OF 19 SHARES, WE FIND THAT PR.CIT HAS NOT POINTED OUT THAT WHICH SHARES ARE HELD BY THE ASSESSEE. WE ALSO NOTICE THAT IN CONSEQUENT TO PROCEEDING UNDER SECTION 263, AN ASSESSMENT ORDER WAS PASSED WHEREIN THE AO HAS NOT MADE ANY ADDITION ON ACCOUNT OF INVESTMENT IN SHARES BUT MADE SOME OTHER DEPOSITS WHICH ARE STILL NOT CLEAR. THUS, WE FIND THAT THE AO HAS MADE ENQUIRY AND TAKEN A PLAUSIBLE VIEW AFTER APPLICATION OF MIND. THEREFORE, THE ORDER PASSED BY THE AO, IN OUR OPINION, SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT PREJUDICIAL TO THE INTEREST OF THE REVENUE, IF THE PR.CIT WOULD HAVE SPECIFICALLY POINTED OUT THAT WHICH OF INQUIRIES OR VERIFICATION SHOULD HAVE BEEN CARRIED OUT BY THE AO IN THIS REGARD AND THE AO FAILED TO CARRY OUT THOSE INQUIRIES AND VERIFICATION AS DESIRED BY THE PR. COMMISSIONER OF INCOME-TAX. SINCE THE PR.CIT HAS NOT SUGGESTED THE BASIS OF INQUIRY OR VERIFICATION TO BE CARRIED OUT BY THE AO, THE ORDER PASSED BY THE AO CANNOT BE DEEMED TO BE ERRONEOUS IN SO AS FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 9. SIMILAR VIEW HAS BEEN IN THE CASE OF CIT V. SUNBEAM AUTO LTD. [2011] 332 ITR 167 (DELHI) [2010] 189 TAXMAN 436 (DELHI) WHEREIN THE HON`BLE HIGH COURT HELD THAT INADEQUACY OF ENQUIRY WILL NOT GIVE JURISDICTION TO COMMISSIONER UNDER SECTION 263. IN THIS SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 13 OF 19 CASE THE HON`BLE HIGH COURT HAS HELD AS UNDER: (HEAD NOTE) : SECTION 263 OF THE INCOME-TAX ACT, 1961 - REVISION - OF ORDER PREJUDICIAL TO INTEREST OF REVENUE - ASSESSMENT YEAR 2001-02 - WHETHER IF WHILE MAKING ASSESSMENT, ASSESSING OFFICER HAS MADE AN INADEQUATE ENQUIRY, THAT WOULD NOT, BY ITSELF, GIVE OCCASION TO COMMISSIONER TO PASS ORDER UNDER SECTION 263, MERELY BECAUSE HE HAS DIFFERENT OPINION IN MATTER, IT IS ONLY IN CASES OF 'LACK OF INQUIRY' THAT SUCH A COURSE OF ACTION WOULD BE OPEN - HELD, YES - ASSESSEE-COMPANY WAS ENGAGED IN BUSINESS OF MANUFACTURING AND SUPPLYING AUTO PARTS - IN ASSESSMENT FOR RELEVANT ASSESSMENT YEAR, IT HAD BEEN ALLOWED DEDUCTION OF EXPENDITURE INCURRED ON TOOLS AND DYES AS REVENUE EXPENDITURE - COMMISSIONER, HOWEVER, SET ASIDE ASSESSMENT ORDER IN EXERCISE OF HIS POWERS UNDER SECTION 263 ON GROUND THAT ASSESSING OFFICER HAD ALLOWED AFORESAID EXPENDITURE WITHOUT MAKING PROPER ENQUIRY - HE, ACCORDINGLY, REMITTED MATTER BACK TO ASSESSING OFFICER TO RE-EXAMINE ISSUE - WHETHER WHEN FACTS CLEARLY SHOWED THAT ASSESSING OFFICER HAD UNDERTAKEN EXERCISE OF EXAMINING AS TO WHETHER EXPENDITURE INCURRED BY ASSESSEE IN REPLACEMENT OF DYES AND TOOLS WAS TO BE TREATED AS REVENUE EXPENDITURE OR NOT AND ON BEING SATISFIED WITH ASSESSEE'S SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 14 OF 19 EXPLANATION, HE ACCEPTED SAME, IT COULD BE SAID TO BE A CASE OF LACK OF INQUIRY - HELD, NO - WHETHER FURTHER, ON FACTS AND LAW, VIEW TAKEN BY ASSESSING OFFICER WAS ONE OF POSSIBLE VIEWS AND, THEREFORE, ASSESSMENT ORDER PASSED BY ASSESSING OFFICER COULD NOT BE HELD TO BE PREJUDICIAL TO INTEREST OF REVENUE - HELD, YES - WHETHER, THEREFORE, TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE ORDER OF COMMISSIONER - HELD, YES. 10. IN THE CASE OF CIT V. VODAFONE ESSAR SOUTH LTD. [2013] 1 ITR- OL526(DELHI): [2012] 212 TAXMAN 184(DELHI) IN WHICH THE HON`BLE HIGH COURT RELIED ON ITS EARLIER JUDGEMENT IN THE CASE OF CIT V. SUNBEAM AUTO LTD. [2011] 332 ITR 167 (DELHI) [2010] 189 TAXMAN 436 (DELHI) IN WHICH IT HELD THAT IF THERE IS SOME ENQUIRY BY THE ASSESSING OFFICER IN THE ORIGINAL PROCEEDINGS, EVEN IF INADEQUATE, THAT CANNOT CLOTHE THE COMMISSIONER WITH JURISDICTION UNDER SECTION 263 MERELY BECAUSE HE CAN FORM ANOTHER OPINION. AT THE MOST THE CASE OF THE ASSESSEE CAN BE REGARDED TO BE LACK OF INQUIRY IN ACCORDANCE WITH COMMISSIONER OF INCOME-TAX IF HE HAS DIFFERENT OPINION HOW TO PROCEED WITH ASSESSMENT OF THE CASE. 11. IN THE LIGHT OF THE AFORESAID JUDICIAL PRECEDENTS IN THE PRESENT CASE WHAT HAS TO BE SEEN IS WHETHER THE AO HAS MADE ENQUIRIES ABOUT CASH DEPOSITS IN BANK ACCOUNT AND INVESTMENT IN SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 15 OF 19 SHARES. IF THE ANSWER IS AFFIRMATIVE THEN SECOND QUESTION ARISES WHETHER THE ACCEPTANCE OF THE CLAIM BY THE AO WAS A PLAUSIBLE VIEW OR ON THE FACTS OF THE FINDING ON THE FACTS THAT THE SAID FINDING OF THE AO CAN BE TERMED AS SUSTAINABLE IN LAW. WE FIND THAT THE AO HAS CONSIDERED CASH DEPOSITS OF RS.12,99,800/- AS UNEXPLAINED AND CONSIDERED THE SAME IN THE CASE OF SHRI ANKIT V. PAREKH AND MADE ADDITION ON THIS ACCOUNT BY ESTIMATING PROFIT @ 8%. IT MAY ALSO BE NOTED THAT ASSESSMENT WAS REOPENED FOR VERIFICATION OF THESE VERY DEPOSITS, THEREFORE, IT WAS INCUMBENT ON THE AO TO MAKE SUCH ENQUIRY IN RESPECT OF THESE ISSUES. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE FIND THAT THE AO HAS MADE DUE ENQUIRIES. SINCE WE FIND THAT THE AO HAD MADE ENQUIRIES REGARDING CASH DEPOSITS IN BANK ACCOUNT AND TAKEN A VIEW AND CONSIDERED FOR ADDITION AND ACCEPTED THE VERSION OF THE ASSESSEE THAT BANK ACCOUNT WITH IDBI WAS DISCLOSED AND NOT MADE ANY ADDITION ON THIS TREATING IT AS DISCLOSED AND ON SHARES AS NO INVESTMENT IN SHARES WAS FOUND TO HAVE BEEN MADE BY THE ASSESSEE. THUS, THE VIEW TAKEN BY THE AO WAS PLAUSIBLE VIEW, WHICH CANNOT BE DISTURBED BY THE LD. COMMISSIONER OF INCOME-TAX. IN THE CASE OF CIT V. GREEN WORLD CORPORATION [2009] 314 ITR 81/181 TAXMAN 111 (SC), THE HON'BLE SUPREME COURT OBSERVED THAT 'AN ORDER OF ASSESSMENT SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 16 OF 19 PASSED BY THE ASSESSING OFFICER SHOULD NOT BE INTERFERED WITH ONLY, BECAUSE ANOTHER VIEW IS POSSIBLE. 12. IN THE CASE OF CIT V. GABRIEL INDIA LTD. [1993] 203 ITR 108/71 TAXMAN 585 (BOM.). THE HON'BLE HIGH COURT HELD THAT 'THE INCOME TAX OFFICER IN THE CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE WERE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THIS DECISION OF THE INCOME TAX OFFICER COULD NOT BE HELD TO THE 'ERRONEOUS' SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. MOREOVER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDINGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT AN EXPENDITURE OF CAPITAL NATURE. HE SIMPLY ASKED THE INCOME TAX OFFICER TO RE-EXAMINE THE MATTER. THAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263'. SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 17 OF 19 13. THE LEARNED COUNSEL FOR THE ASSESSEE RELYING ON THE DECISION IN THE CASE OF PR. CIT V. MODICARE LIMITED [I.T.A. NO. 759/2017] OF DELHI HIGH COURT WHEREIN FOLLOWING ITS OWN DECISION IN THE CASE OF ITO V. DG HOUSING PROJECTS LIMITED 343 ITR 32(DEL), DIT JYOTI FOUNDATION [357 ITR 388 ] AND PR. CIT V. AIRPORT METRO EXPRESS PVT. LTD. [I.T.A. NO. 705/2017] HELD THAT THE EXERCISE OF JURISDICTION CANNOT BE OUTSOURCED BY THE CIT TO THE AO AND THEREFORE, , THE CIT CANNOT DIRECT THE AO TO PROVIDE DETAILS OF THE FACTORS ON THE BASIS OF WHICH PROCEEDINGS UNDER SECTION 263 OF THE ACT COULD HAVE BEEN INITIATED. 14. FURTHER THE HON`BLE DELHI HIGH COURT IN THE CASE OF PR. CIT V. AIRPORT METRO EXPRESS PVT. LTD. [I.T.A. NO. 705/2017 WHICH LAID DOWN FOR THE PURPOSE OF EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT , THE CONCLUSION THAT ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE HAD TO BE PRECEDED BY SOME MINIMAL INQUIRY. IN FACT, IF THE LD. PCIT IS OF THE VIEW TO THE AO DID NOT UNDERTAKE ANY ENQUIRY, IT BECOMES INCUMBENT OF THE LD. PR. CIT TO CONDUCT SUCH ENQUIRY. HOWEVER, WE FIND THAT NO ENQUIRY WAS UNDERTAKEN BY THE PR. CIT IN THE INSTANT CASE. 15. IN THE LIGHT OF ABOVE FACTS AND LEGAL POSITION, WE ARE OF THE CONSIDERED VIEW THAT THE AO HAD MADE DETAILED ENQUIRIES AND AFTER SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 18 OF 19 APPLYING HIS MIND ACCEPTED THE EXPLANATION OF THE ASSESSEE REGARDING BANK DEPOSIT AND CONSIDERED THE SAME ALONG WITH INVESTMENT WHICH IS ALSO PLAUSIBLE VIEW. THEREFORE, WE FIND THAT TWIN CONDITIONS WERE NOT SATISFIED FOR INVOKING THE JURISDICTION UNDER SECTION 263 OF THE ACT. THEREFORE, IN ABSENCE OF THE SAME, THE LD. CIT WAS NOT CORRECT IN EXERCISING THE JURISDICTION UNDER SECTION 263 OF THE ACT AND CANCELLING THE ASSESSMENT AND ACCORDINGLY, WE QUASH THE IMPUGNED ORDER PASSED UNDER SECTION 263 OF THE ACT. 16. ACCORDINGLY, THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 IS ALLOWED. I.T.A. NO. 1246/AHD/2017 AY2008-09 IN SHRI ANKIT V. PAREKH AND I.T.A. NO. 1247 & 1248/AHD/2017 IN CASE OF SHRI VINOD PAREKH A.Y. 07-08 AND A.Y. 08-09. 17. SINCE WE HAVE HELD IN THE CASE OF SMT. PRGANABEN VINODBHAI PAREKH FOR THE ASSESSMENT YEAR 2008-09, IN I.T. ACT, NO.1276/AHD/2017 THE FACTS IN OTHER APPEALS IN THE CASE OF ANKIT V. PAREKH FOR THE ASSESSMENT YEAR 2008-09 AND SHRI VINOD PAREKH FOR THE ASSESSMENT YEAR 2007-08 AND ASSESSMENT YEAR 2008-09 ARE SAME . THEREFORE, FINDINGS AS GIVEN IN THE CASE OF SMT.PRGANABEN V. PAREKH WOULD APPLY MUTATIS MUTANDIS TO THESE CASES / APPEALS. HENCE, FOLLOWING THE REASONING AND FINDINGS AS GIVEN IN THE CASE OF SMT. PRGANABEN- ANKIT- VINODBHAI PAREKH V. PR. CIT- VALSAD I.T.A. NO.1276 & 1246, AND 1247-1248/AHD/2015/A.Y.:08-09, AND 08-09, AND 07-08 & 08-09 PAGE 19 OF 19 SMT.PRGANABEN PAREKH, THE APPEAL IN THE CASE OF SHRI ANKIT V. PAREKH I.T.A. NO. 1246/AHD/2017 A.Y. 2008-09 AND SHRI VINODBHAI PAREKH FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09 I.T.A. NOS. 1247 & 1248/AHD/2017 ARE ALLOWED AND ORDER PASSED UNDER SECTION 263 OF THE ACT IN THESE APPEALS / CASES IS CANCELLED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED IN RESPECT OF ALL ABOVE THREE ASSESSEES. 19. THE ORDER PRONOUNCED IN OPEN COURT ON 30.05.2018. SD/- SD/- ( . . ) /(C.M. GARG) ( . . ) /(O.P.MEENA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER / SURAT: / DATED : 30 TH MAY, 2018/OPM COPY SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT