SHRI SATYANRAYAN B MUNDHADA, Amaravati V. CIT- I, Nagpur

ITA 153/NAG/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2227 (ITAT-NAGPUR)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 07-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Audit objection
• Section: 143(3); 133A; 263

Judgement Text

1 ITA NO. 153/NAG/2015 THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 153 /NAG/2015. ASSESSMENT YEAR : 2010 - 11. SATYANARAYAN B. MUNDHADA, COMMISSIONER OF INCOME TAX - 1, DHAMANGAON RLY., DIST. AMRAVATI. VS. NAGPUR. PAN AAZPM5152F. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S HANKARLAL M. RATHI. RESPONDENT : SHRI NARENDRA KANE. DATE OF HEARING : 05 - 04 - 2016 DATE OF PRONOUNCEMENT : - 5 TH MAY , 2016. O R D E R PER MUKUL K. SH RAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX - 1, NAGPUR PASSED U/S 263 OF I.T. ACT DATED 11 - 03 - 2015. THE APPELLANT HAS CHALLENGED THE ORDER PASSED U/S 263 AS PER THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE SINCE THE COMMISSIONER OF INCOME TAX HAS NOT PASSED ORDER U/S 263 BY APPLYING HIS MIND INDEPENDENTLY AS PROVIDED U/S 263(1) BUT ORDER PASSES WITH THE PREJUDICE AND BIAS MIND AND HENCE IT IS UNLAWFUL AND DE SERVES TO BE SET ASIDE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, DIRECTION GIVEN BY THE COMMISSIONER TO THE ASSESSING OFFICER REGARDING TO BRINGS TO TAX THE UNACCOUNTED INVESTMENT IN UNRECORDED PURCHASES REQUIRED FOR MAKING UNRECORDED SALES OF RS.39,14,708/ - IS UNWARRANTED. 2 ITA NO. 153/NAG/2015 2. THE OBSERVATION OF THE LEARNED COMMISSIONER WAS THAT A SURVEY U/S 133A WAS CONDUCTED ON 23 - 02 - 2010. DURING THE SURVEY SHORTAGE OF STOCK OF RS.10,86,372/ - WAS FOUND WHICH CONTAINED THE UNRECORDED TURNOVER OF RS.39,14,708/ - . ACCORDING TO THE LEARNED COMMISSIONER THE TOTAL DISCREPANCY AS FOUND AT THE TIME OF SURVEY WAS RS.50,01,080/ - . AS AGAINST THAT, WHILE COMPLETING THE ASSESSMENT U/S 143(3) THE AO HAD ADDED ONLY RS.2,75,800/ - . THEREFORE, ACCORDING TO LEARNED COMMISSIONER, T HE BALANCE AMOUNT OF RS.47,25,280/ - REMAINED UNASSESSED, WHICH HAS CAUSED REVENUE LOSS. AS PER LEARNED COMMISSIONER THE ORDER PASSED BY THE AO WAS PRIMA FACIE AN ERRONEOUS ORDER, HENCE THE PROVISIONS OF SECTION 263 WERE INVOKED. LEARNED COMMISSIONER HAS SE T ASIDE THE ASSESSMENT ORDER AND DIRECTED TO REASSESS THE INCOME AS PER THE FOLLOWING OBSERVATIONS : I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE LD. AR. AS DISCUSSED EARLIER, SOME DOCUMENTS SHOWING UNACCOUNTED SALES WERE FOUND AND IMPOUNDED FROM THE PREMISES OF THE ASSESSEE DURING THE COURSE OF SURVEY CONDUCTED ON 23/2/2010. AS PER THE INFORMATION AVAILABLE IN THESE DOCUMENTS, THE TOTAL AMOUNT OF UNRECORDED SALES CAME TO RS. 39,14,708/ - . ANY SALE COMPRISES OF TWO PARTS NAMELY - THE PURCHASES AND PROFIT THEREON. IN THIS CASE, ALL THE THREE COMPONENTS NAMELY - SALES, PURCHASES AND PROFITS HAVE NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS. THEREFORE, ADDITION ON TWO COUNTS WERE REQUIRED TO BE MADE - (I) ON ACCOUNT OF INVESTMENT IN PURCHASES NEE DED FOR MAKING THE UNRECORDED SALES, AND, (II) PROFIT ON THE UNRECORDED SALES. HOWEVER, THE AO BROUGHT TO TAX ONLY ONE COMPONENT, VIZ. ESTIMATED GROSS PROFIT ON THE UNRECORDED SALES. NOT TO SPEAK OF MAKING ANY ADDITION ON ACCOUNT OF ESTIMATED INVESTMENT ON PURCHASES REQUIRED FOR MAKING UNRECORDED SALES, THE AO DID NOT EVEN MAKE ANY ENQUIRY ON THIS ASPECT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS CLEARLY A CASE OF NON APPLICATION OF MIND ON THE PART OF THE AO. IN THE FOLLOWING DECISIONS, IT HA S BEEN HELD THAT THE ORDER PASSED BY THE AO WITHOUT APPLICATION OF MIND WOULD BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE: 1. CIT VS EMERY STONE MANUFACTURING CO, 213 ITR 843(RAJ.) 2. MOFUSSIL WAREHOUSE & TRADING CO. LTD .VS. CIT 238 ITR 867(MAD) 3. ASHOK LEYLAND LTD. VS CIT 260 ITR 599 (MAD) 4. CIT VS BHAGWANDAS 272 ITR 367(AII) 5. SHERAFFUDIN VS CIT 41 DTR(KER) 263 6. CIT VS ASSAM TEA HOUSE 344 ITR 507 (P&H) 7. CIT VS HIMACHAL PRADESH FINANCIAL CORPN. 186 TAXMAN 1 05(HP). IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS CIT 243 ITR 83(SC), IT WAS HELD 3 ITA NO. 153/NAG/2015 THAT WHERE THE ORDER WAS PASSED WITHOUT APPLICATION OF MIND, IT WOULD BE AN ERRONEOUS ORDER. MOREOVER, THE INVESTMENT REQUIRED FOR MAKING UNRECORDED SALES REMAINED U N ASSESSED IN THE CASE OF THE ASSESSEE. THEREFORE, BY NOT BRING TO TAX THE AMOUNT OF INVESTMENT MADE TOWARDS UNRECORDED PURCHASES WHICH WERE CONVERTED INTO UNRECORDED SALES, PREJUDICE HAS BEEN CAUSED TO THE INTEREST OF REVENUE. AS REGARDS THE LD.AR'S RELIA NCE ON THE DECISION OF CIT VS DESIGN & AUTOMATION ENGINEERS 232 ITR 632 (BOM), THE SAME IS DISTINGUISHABLE ON FACTS SINCE IN THE SAID CASE, THE ORDER WAS PASSED BY THE A.O. AFTER DUE APPLICATION OF MIND AND THE SAME WAS, THEREFORE, HELD TO BE OUTSIDE' THE PURVIEW OF POWERS OF THE SECTION 263 VESTED IN THE CIT. ON THE CONTRARY, IN THE CASE ON HAND, THE AO HAS NOT CONDUCTED ANY ENQUIRY AT ALL WHICH HE WAS BOUND TO DO. IN THE OTHER CASE NAMELY CIT VS GABRIAL (I) LTD. 203 ITR 108(BOM.) RELIED UPON BY THE LD. AR , THE HON'BLE COURT HAS HELD THAT THE ORDER SOUGHT TO BE REVISED U/S 263 MUST BE ERRONEOUS AND ALSO BY VIRTUE OF ITS BEING ERRONEOUS, PREJUDICE SHOULD BE CAUSED TO THE INTEREST OF REVENUE. THERE MUST BE MATERIAL BEFORE THE COMMISSIONER TO SATISFY HIM, PRIM A FACIE, THAT THE TWO REQUISITES ARE PRESENT. IN THE PRESENT CASE, BOTH THE CONDITIONS HAVE BEEN CLEARLY SATISFIED. BY NOT MAKING ANY ENQUIRY OR APPLYING HIS MIND TO THE ISSUE OF BRINGING TO TAX THE UNRECORDED INVESTMENT IN PURCHASES REQUIRED FOR MAKING UN ACCOUNTED SALES, THE AO HAS MADE AN ERRONEOUS ORDER. FURTHER FAILURE TO BRING THE AMOUNT OF INVESTMENT REQUIRED FOR MAKING UNRECORDED SALES TO TAX HAS RESULTED INTO PREJUDICE TO THE INTEREST OF REVENUE. THEREFORE, THE ASSESSMENT ORDER U/S 143(3) IS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE SAME IS SET ASIDE TO THE FILE OF THE AO WITH A DIRECTION TO BRING TO TAX THE UNACCOUNTED I NVESTMENT IN UNRECORDED PURCHASES REQUIRED FOR MAKING UNRECORDED SALES OF RS. 39,14,708/ - . DURING THE C OURSE OF HEARING, IT HAS BEEN STATED BY THE LD. AR THAT THE DOCUMENT NO. 32 IMPOUNDED DURING SURVEV CONTAIN THE DETAILS OF UNRECORDED PURCHASES MADE BY THE ASSESSEE IN RESPECT OF WHICH UNRECORDED SALES OF RS. 39,14,708/ - HAVE BEEN MADE. WHILE WORKING OUT THE INVESTMENT NEEDED FOR MAKING UNRECORDED SALES, THE AO MAY ALSO KEEP IN MIND THE INFORMATION AVAIL ABLE IN THE SAID DOCUMENT. THE AO SHOULD REDO THE ASSESSMENT AFTER ALLOWING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 3. FROM THE SIDE OF THE APPELLANT LEARNED A.R. MR. SHANKARLAL M. RATHI APPEARED AND PLEADED THAT THE AO HAD CONSIDERED THE ISSUE OF SHORTAG E OF STOCK AS WELL AS THE UNRECORDED SALES AND THEREAFTER ASSESSED THE ADDITIONAL EXTRA INCOME OF RS.75,800/ - AFTER EXAMINING THE FACTS OF THE CASE AS UNDER : (I) THERE WAS A SURVEY U/S 133A OF THE I.T. ACT, ON 23.02.2010 AT THE BUSINESS PREMISES OF THE ASSESSEE AND THE STOCK WAS PHYSICALLY COUNTED AND THE VALUATION OF THE STOCK AS COUNTED BY THE SURVEY PARTY ON THE DATE OF SURVEY IS RS. 16,14,153/ - . THAT IF NORMAL TRADING ACCOUNT FRAMED FROM 1.4.2009 TO 2010 THEN IT WILL BE AS UNDER : - 4 ITA NO. 153/NAG/2015 PROBABLE TRADING ACCOUNT. 1.4.09 TO 23.02.2010 13616163 SALES 35,90,652 OPENING STOCK 2643890 PROBABLE CLOSING 11920510 PURCHASES STOCK ON THE BASIS OF GP @ 5.5% 748891 GROSS PROFIT @5.5% ------------------ 16260053 16260053 ----------------- ----------------- SO IN THIS CASE PROBABLE CLOSING STOCK SHOULD HAVE BEEN RS.2643890/ - LESS CLOSING STOCK ACTUALLY FOUND AT THE TIME OF SURVEY RS.1614153 DIFFE RENCE RS.1029737 ADD GP @ 5.5% RS. 56635 UNRECORDED SALES RS.1086372/ - SINCE IN THIS . CASE, PURCHASES ARE FULLY ACCOUNTED IN THE BOOKS AND THE INVESTMENT HAVING BEEN PROVED, THERE COULD BE NO SEPARATE ADDITION FOR INVESTMENT. IF THE PURCHASES ARE NOT RECORDED AS A FACT AND STILL STIORTAQE IS FOUND, THERE COULD BE ADDITION OF THE INITIAL INVESTMENT OF THE PURCHASES, ROLLED OVER AND GETTING CIRCULATED IN THE SYSTEM OR OTHERUNSE. IN ALL FAIRNESS, THE PROFIT ELEMENT OF SUCH STOCK FOUND SHORT CAN BE ESTIMATED AND ADDED ON THE PRESUMPTION THAT LEADS TO THE INFERENCE THAT THERE ARE OBVIOUSLY SOLD WITHOUT BEING RECORDED. A SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE INDORE BENCH OF ITAT IN THE CASE OF ITO VS.JEWEL EMPORIUM (1994) (48ITD164). IT WAS HELD THAT NO ADDITION COULD BE MADE U/S.69B. FURTHER ITAT THIRD MEMBER BENCH AHEM DABAD IN THE CASE OF B.K. BROTHERS ENGINEER WORKS VS. DEIT (2003) 781TJ876 (AHD) (TM) HELD THAT 'STOCK FOUND DEFICIT HAVING BEEN. ASSUMED REPRESENTING UNDISCLOSED INCOME ON ACCOUNT OF UNRECORDED SALES IS TO BE, RESTRICTED TO THE AMOUNT OF NET PROFIT WHI CH COULD HAVE BEEN EARNED BY THE ASSESSEE.' ': SO FAR THE SAKE OF CONVENIENCE, UNRECORDED SALES AS ABOVE ARE ASSUMED @ RS.11,00,000/ - ON WHICH GP @5.5% COMES TO RS:60,500/ - . (U) THAT DURING THE COURSE OF SURVEY SOME ROUGH SALE BILL BOOKS WERE FOUND AT SL.NO.21 TO 29 OF THE INVENTORY DTD.23. 02. 20 10 AND TOTAL OF SUCH SALES ARE RS.39, 14, 708/ - . THIS IS THE' TURNOVER WHICH WAS UNRECORDED. IT STANDS TO REASON THAT INCOME RELATABLE TO SUC~ TURNOVER IS REQUIRED TO BE ESTIRI:ATED. IT IS BECAUSE ONLY SUC H PROFIT EMBEDDED THEREIN THAT COULD BE CHARGED, SINCE T~E ENTIRE SALES CAN NOT BE PROFIT. THE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRESIDENT (INDUSTRIES (2002) 258 ITR 654 (GUJ) HELD SO THE CONTEXT OF UNDISCLOSED TURNOVER FOUND FROM EXCISE RECORDS. FURTHER IN THIS CASE IT IS NOT NECESSARY TO ESTIMATE THE CAPITAL EMPLOYED AND / OR IN 5 ITA NO. 153/NAG/2015 CIRCULATION FOR THE PURPOSES OF SUCH UNDISCLOSED TURNOVER OUTSIDE THE BOOKS, FOR THE REASONS AS STATED IN PARA (I) THERE WAS AMOUNT OF RS.11,00,000/ - REPRESENTING THE SAL ES EFFECTED BUT NOT RE CORDED IN THE BOOKS OF ACCOUNT DURING THE WHOLE YEAR WAS A VAILABLE WITH ASSESSEE FORN PURPOSE OF EFFECTING THE PURCHASES OUTSIDE THE BOOKS. HENCE THE PROBABLE INCOME I.E. GP 5.5% COME TO RS.2,15,300/ - HENCE, TOTAL PARA (I) AND (II) COMES AS UNDER : RS.60500 + RS.2153300 = RS. 275800/ - LESS : ADDITIONAL INCOME SHOWN IN RETURN OVER & ABOVE NORMAL INCOME RS.200000/ - ------------------- EXTRA ADDITIONAL INCOME RS,75800/ - --------------------- 4. THE LEARNED A.R. HAS ALSO INFORMED THAT THE VIEW TAKEN BY THE LEARNED COMMISSIONER WAS NOT HIS INDEPENDENT OPINION BUT IT WAS BASED UPON AUDIT OBJECTION. HE HAS DRAWN OUR AT TENTION ON AN AFFIDAVIT WHEREIN IT WAS STATED ON OATH THAT AN INSPECTION OF THE REVENUE RECORD WAS CONDUCTED BY THE ASSESSEE ON 17 TH APRIL, 2015 AND IT WAS FOUND THAT THERE WAS A SHEET DATED 01 - 11 - 2013 WHICH WAS IN RESPECT OF THE AUDIT OBJECTION RECORDED BY THE AUDIT PARTY. THE SAID AUDIT OBJECTION WAS PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2010 - 11 . IN THE SAID AFFIDAVIT IT HAS ALSO BEEN MENTIONED THAT THE ASSESSEE HAD APPLIED FOR GRANT OF CERTIFIED COPY OF THE AUDIT OBJ ECTION WHICH WAS NOT PROVIDED. LEARNED A.R. HAS ALSO DRAWN OUR ATTENTION ON AN APPLICATION DATED 23 RD APRIL, 2015 ASKING FOR A CERTIFIED COPY OF THE AUDIT OBJECTION. ON THE ISSUE OF INVOCATION OF JURISDICTION ON THE BASIS OF AUDIT OBJECTION RELIANCE WAS PLACED IN THE CASE OF ADDITIONAL CIT VS. MUKUR CORPORATION 111 ITR 312 (GUJ.). RELIANCE WAS ALSO PLACED ON THE DECISION OF SIRPUR PAPER MILL 77 ITR 6 (SC). ONE MORE DECISION OF JEEVANLAL LTD. VS. ADDL. CIT 108 ITR 407 (CAL.) HAS ALSO BEEN RELIED UPON. 5. FROM THE SIDE OF THE REVENUE, LEARNED D.R. MR. NARENDRA KANE HAS SUPPORTED THE VIEW TAKEN BY THE LEARNE D COMMISSIONER ON THE GROUND THAT THE ASSESSMENT MADE AT RS.75,800/ - WAS ERRONEOUS WITHOUT CONSIDERING THE MATERIAL GATHERED AT THE TIME OF SURVEY AGAINST THE ASSESSEE. THE AO WAS NOT JUSTIFIED IN IGNORING THE UNRECORDED SALES AND THE DISCREPANCY IN THE ST OCK, HENCE THE 6 ITA NO. 153/NAG/2015 LEARNED COMMISSIONER HAS RIGHTLY SET ASIDE THAT ORDER BY INVOKING THE JURISDICTION U/S 263 OF I.T. ACT. 6. WE HAVE HEARD BOTH TH E SIDES AT SOME LENGTH AND ALSO CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE NOTICED THAT DURING THE COURSE OF THE PROCEEDINGS BEFORE THE LEARNED COMMISSIONER IT WAS POINTED OUT THAT BOTH THE ISSUES I.E. THE SHORTAGE OF STOCK AS WELL AS TH E UNRECORDED SALES WERE DULY CONSIDERED BY THE AO WHILE PASSING THE ORDER U/S 143(3) DATED 28 - 12 - 2012. FROM THE SIDE OF THE APPELLANT WE HAVE BEEN INFORMED THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS A WHOLESALE GRAIN MERCHANT. THE ASSESSEE HAS ALSO EARNE D COMMISSION INCOME AS AN AGENT. ON PERUSAL OF THE ASSESSMENT ORDER IN QUESTION WE HAVE NOTICED THAT THE ASSESSEE HAS PREPARED A RECASTED TRADING ACCOUNT TO DEMONSTRATE THAT THE WORKING OF THE CLOSING STOCK COULD BE RECONCILED IF THE GP RATE AT 5.5% IS T AKEN INTO ACCOUNT. AS PER THE SAID WORKING THE UNRECORDED SALES WERE CALCULATED AT RS.10, 86,372/ - . T HE ASSESSEE HAS ALSO FURNISHED THE WORKING OF THE TOTAL ADDITION WHICH COULD BE RS.2,75,800/ - IF THE GP RATE AT 5.5% WAS TO BE APPLIED, HOWEVER, THE ASSESSE E HAD ALSO DISCLOSED ADDITIONAL INCOME IN THE RETURN OF RS. 2 LAKHS, THEREFORE, THE BALANCE OF RS.75,800/ - WAS STATED TO BE THE INCOME YET TO BE TAXED IN THE HANDS OF THE ASSESSEE. THE AO HAD ACCORDINGLY ACCEPTED THE SA ID CALCULATION OF THE ASSESSEE AND AD DED THE AMOUNT OF RS.75,800/ - IN THE TAXABLE INCOME OF THE ASSESSEE. AS A RESULT THE TOTAL INCOME WAS ASSESSED AT RS.4,45,930/ - . AS FAR AS THIS CONTENTION OF LEARNED AR IS CONCERNED THAT THE AO HAD DULY APPLIED HIS MIND AND THERE WAS NO ESCAPEMENT OF INCOM E, HENCE INVOCATION OF JURISDICTION U/S 263 IS NOT SUSTAINABLE IN THE EYES OF LAW , IT IS TRUE THAT, T HE AO HAD FORMED AN OPINION, HOWEVER, LEARNED CIT WANTED TO SUBSTITUTE AN ANOTHER OPINION WHICH IS NOT PERMISSIBLE U/S 263 AS HELD IN THE CASE OF MALABAR I NDUSTRIAL CO. 243 ITR 83 (SC). 6.1 AS FAR AS THE SECOND LIM B OF ARGUMENT IS CONCERNED, AN AFFIDAVIT IS ON RECORD WHEREIN IT WAS STATED ON OATH THAT AN AUDIT OBJECTION WAS AVAILABLE ON 7 ITA NO. 153/NAG/2015 REVENUE RECORD WHICH WAS THE BASIS FOR INVOCATION OF THE PROCEEDINGS U/S 263 OF THE I.T. ACT. THIS ASSERTION ON OATH HAS NOT BEEN DENIED BY THE REVENUE DEPARTMENT. RATHER THE REVENUE DEPARTMENT HAS NOT PLACED ANY CONTRARY MATERIAL ON RECORD THAT THERE WAS NO AUDIT OBJECTION AT ALL AND THE AFFIDAVIT OF THE ASSESSEE IS FACT UALLY INCORRECT. IN THE ABSENCE OF ANY SUCH DENIAL FROM THE SIDE OF THE REVENUE DEPARTMENT WE HEREBY CONS IDER THAT THE CASE LAWS CITED FROM THE SIDE OF THE APPELLANT CAN BE APPLIED WHEREIN THE HONBLE COURTS HAVE OPINED THAT WHILE ADMINISTERING QUA S I - JUDI CIAL POWERS T H E LEARNED COMMISSIONER MUST BRING ON RECORD AN UNBIASED MIND OPINION . THE LEARNED COMMISSIONER IS REQUIRED TO CONSIDER IMPARTIALLY THE OBJECTIONS AND THEREUPON DECIDE WHETHER AN ORDER IS ERRONEOUS ORDER OF THE AO. THEREFORE, THE HONBLE COU RTS HAVE HELD THAT THE CIT CANNOT BE PERMITTED TO BE INFLUENCED BY A DECISION OF ANOTHER AUTHORITY. THE DECISIONS AS CITED HEREIN ABOVE ARE, THEREFORE, RELEVANT TO SETTLE THIS ISSUE BY PLACING RELIANCE ON THE PRECEDENTS . THIS LIM B OF ARGUMENT IS HEREBY AC CEPTED. 7. WE, THEREFORE, HOLD THAT IN THE LIGHT OF FACTUAL MATRIX AND THE LAW LAID DOWN , THE IMPUGNED ORDER PASSED U/S 263 IS NOT SUSTAINABLE IN THE EYES OF LAW . T HE PROCEEDINGS INITIATED U/S 263 ARE HEREBY QUASHED. GROUNDS ALLOWED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF MAY , 2016. SD/ - SD/ - (SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER NAGPUR, DATED: 5 TH MAY , 2016. 8 ITA NO. 153/NAG/2015 COPY FORWARDED TO : 1. SHRI SATYANARAYAN M. MUNDHADA. PROP: SATYANARAYAN COMPANY, MAIN ROAD, DHAMANGAON RLY. DIST. AMRAVATI. 2. I.T.O., WARD - 3, AMRAVATI. 3. COMMISSIONER OF INCOME - TAX - 1,NAGPUR. 4. D.R., ITAT, NAGPUR. 5. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE.