Bundy India Ltd., Baroda V. The DCIT, Circle-1(1), Baroda

ITA 1650/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85680 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 23-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 26-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMLENDU VERMA
• Keywords: Business income; Depreciation; Transfer pricing; Double taxation relief; Opportunity of being heard; International transaction; Revised return; Unabsorbed depreciation
• Section: 143(3); 14A; 263; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUN TANT MEMBER BUNDY INDIA LTD 2 GIDC, INDUSTRIAL ESTATE, MAKARPURA, BARODA- 390014 PAN: AAACB3039M (APPELLANT) VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), BARODA (RESPONDENT) ASSESSEE BY: SHRI SANJAY R. SHAH, A.R. REVENUE BY: SHRI VIMLENDU VERMA, CIT-D. R. DATE OF HEARING : 30-01-2015 DATE OF PRONOUNCEMENT : 13-02- 2015 / ORDER PER : MUKUL KR. SHRAWAT, JUDICIAL MEMBER:- THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM THE ORDER OF CIT, BARODA PASSED U/S. 263 OF IT ACT DATED 27-03-2 014. INITIALLY GROUNDS RAISED BY THE APPELLANT WERE LENGTHY HENCE CONCISED . THIS APPEAL IS HEREIN BELOW DECIDED AS PER THE FOLLOWING CONCISE G ROUNDS:- ITA NO. 1650/AHD/2014 ASSESSMENT YEAR 2008-09 I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 2 1. THE ORDER PASSED BY THE LEARNED CIT U/S 263 OF THE ACT IS BAD IN LAW AS THE ORDER OF LEARNED A.O. U/S 143(3) WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. LT IS THEREFORE SUBMITTED THAT ORDER PASSED U/S 263 BE QUASHED. 2. THE ORDER PASSED BY THE LEARNED CIT U/S 263 IS BAD IN LAW AS IT NOWHERE RECORDS ANY FINDINGS THAT ORDER PASSED B Y LEARNED A.O. IS EITHER ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. 3. THE LEARNED CIT ERRED IN LAW IN HOLDING THAT AD DITIONS MADE U/S 92CA(3) SHOULD NOT BE SET OFF AGAINST CURRENT Y EAR'S BUSINESS LOSS AS WAS DONE BY THE LEARNED A.O. THE LEARNED CI T FAILED TO APPRECIATE THAT VIEW TAKEN BY THE LEARNED A.O. WAS ONE OF THE POSSIBLE VIEWS AND HENCE PROVISIONS OF SECTION 263 CANNOT BE INVOKED QUA THIS ISSUE FOLLOWING HON'BLE SUPREME CO URT DECISION IN THE CASE OF MALABAR INDUSTRIAL CO./ LTD. 243 ITR 8 3. 4. THE LEARNED CIT ALSO ERRED IN APPLYING PROVISIO NS OF SECTION 263 OF THE ACT TO THE DISALLOWANCE U/S40(A)(I) WHEN LEARNED A.O. HAD TAKEN A POSSIBLE VIEW UNDER THE PROVISIONS OF THE L AW. 5. THE LEARNED CIT INVOKED PROVISIONS U/S 263 AND PASSED ORDER U/S 263 BASED ON INCORRECT OBSERVATIONS AND WITHOU T APPRECIATING THE CONTENTIONS RAISED BY THE ASSESSEE. 6. THE LEARNED CIT ERRED IN LAW AND ON FACT IN NOT APPRECIATING THE JUDICIAL PRECEDENTS, WHICH HELD THAT NO SURCHAR GE AND CESS SHOULD BE ADDED TO WITHHOLDING TAX RATES PROVIDED U /S 195 IN VIEW OF DTAA BETWEEN INDIA AND RESPECTIVE COUNTRIES. 7. WITHOUT PREJUDICE TO FOREGOING, EVEN ON MERITS OF THE CASE THE APPELLANT HAS WITHHELD APPROPRIATE TAX UNDER SECTIO N 195 OF THE ACT, ON THE MANAGEMENT CHARGES PAID TO TL UK AND ALSO SU O MOTO DISALLOWED THE MANAGEMENT CHARGES OF RS. 1,61,53314 /- UNDER SECTION 40(A)(I) OF THE ACT , ON ACCOUNT OF NON-DED UCTION OF TAXES ON THE SAME AND IN ANY CASE DISALLOWANCE U/S 40(A)(I) IS NOT ATTRACTED IN RESPECT OF SHORT DEDUCTION OF TAX. 2. THIS IS THE CASE OF A PUBLIC LIMITED COMPANY ENG AGED IN THE BUSINESS OF MANUFACTURING OF COPPER COTED STEEL TUBES. A RE TURN OF LOSS WAS FILED, I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 3 HOWEVER, CONSEQUENCE UPON AN ORDER OF THE TPO AN UP WARD ADJUSTMENT IN ARMS LENGTH PRICE OF RS. 10,58,37,071/-WAS MADE. THE AO HAS PASSED AN ORDER U/S. 143(3) R.W.S. 144C(3) OF IT ACT DATED 6 TH JANUARY, 2012 ACCORDING TO WHICH THE INCOME WAS ASSESSED AT RS. 8 ,57,52,857/-. 2.1 THE OBJECTION OF LD. CIT WAS THAT NO ADJUSTMENT OF THE LOSS WAS PERMISSIBLE AGAINST THE ENHANCEMENT OF INCOME MADE VIDE TPO ORDER U/S. 92CA(3) OF IT ACT. A SHOW CAUSE NOTICE WAS ISSUED IN THE FOLLOWING MANNER:- (I) IT IS NOTICED THAT THE ASSESSED INCOME OF RS. 8,57,52,857/- INCLUDED OF ARMS LENGTH PRICE OF RS. 10,58,37,071/ - COMPUTED U/S. 92CA(3). THE TOTAL TAXABLE INCOME COMPUTED IN THE ASSESSMENT ORDER WAS AS PER THE FOLLOWING TABLE: TOTAL LOSS AS PER REVISED RETURN 2,04,77,664 ADD: 1 ON ACCOUNT OF TRANSFER PRICING 10,58,37,071 2 DISALLOWANCE U/S. 14A R.W.S. 8D 24,295 3 10(A)(IA) 3,69,155 10,62,30,521 ASSESSED INCOME RS. 8,57, 52,857/- ADDITION ON ACCOUNT OF TRANSFER PRICING IS ONLY AN ENHANCEMENT OF INCOME AND IT DOES NOT FALL UNDER AN Y HEADING SPECIFIED U/S. 14 OF THE ACT. FURTHER, BUSINESS I NCOME, IS TO BE COMPUTED UNDER THE PROVISIONS OF SECTION 28 TO SECT ION 44DA OF THE I.T. ACT. SINCE ARMS LENGTH PRICE AND COMPUTED U NDER SECTION 92CA(3), IT CANNOT BE CONSIDERED AS A BUSINESS INC OME AND HENCE NO SET-OFF OF BUSINESS LOSS/UNABSORBED DEPRECIATION CAN BE ALLOWED THERE FROM. AS PER SECTION 94C(4), IT IS ONLY AN E NHANCEMENT OF TOTAL INCOME. THE INCORRECT COMPUTATION OF INCOM E RESULTED IN UNDERASSESSMENT OF INCOME TO THE EXTENT OF RS. 2,00 ,84,214/-. (II) IT IS ALSO SEEN FROM APPENDIX E OF FORM 3CEB T HAT THE ASSESSEE HAD PAID MANAGEMENT CHARGES OF RS. 3,64,61 ,642/- TO M/S. TI GROUP AUTOMOTIVE SYSTEMS LTD., U.K. WHERE T HE ASSESSEE WAS REQUIRED TO DEDUCT TDS OF RS. 61,96,656 (@ 15% + SC & EC) ON THE AMOUNT OF MANAGEMENT CHARGES OF RS. 3,64,61, 642/- U/S. 195 I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 4 OF THE ACT. AS AGAINST THIS, TDS OF RS. 28,53,891/ - WAS ONLY DEDUCTED. THIS RESULTED IN SHORT DEDUCTION OF TDS OF RS. 33,42,765/- U/S. 195 ATTRACTING THE PROVISIONS OF 40(A)(IA) OF THE ACT. IN VIEW OF THIS, THE PROPORTIONATE AMOUNT OF RS. 1,96,69,109/- WAS REQUIRED TO BE DISALLOWED U/S. 40(A)(I) AND ADDED BACK TO THE T OTAL INCOME. THIS BEING NOT DONE RESULTED INTO UNDERASSESSMENT OF RS. 1,96,69,109/-. 2.2. THE VEHEMENT OBJECTION OF THE ASSESSEE WAS THA T THERE IS NO SUCH PROVISION IN THE IT ACT TO COMPUTE THE INCOME AS SU GGESTED VIDE ORDER U/S. 92CA(3) INDEPENDENTLY, WITHOUT CONSIDERING THE OTHE R PROVISIONS OF THE ACT. THE ASSESSE HAS ALSO OBJECTED ABOUT THE PROPO SED REVISION IN THE SAID SHOW CAUSE NOTICE IN RESPECT OF THE SHORT DEDU CTION OF TDS. LD. COMMISSIONER WAS OF THE VIEW THAT THE ORDER OF THE AO WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE HENCE HELD AS UNDER:- 3.1 SET-OFF OF ARMS LENGTH PRICE AGAINST BROUGHT FORWARD LOSSES THE ASSESSING OFFICER HAS ALLOWED THE ADDITIONS MAD E ON ACCOUNT OF ARMS' LENGTH PRICE COMPUTED U/S 92CA(3) TO BE SET O FF AGAINST BROUGHT FORWARD BASES. HE HAS NOT EXAMINED THAT SI NCE DETERMINING OF ARMS' LENGTH PRICE DOES NOT FALL UNDER ANY OF TH E HEADS OF INCOME SPECIFIED U/S 14 AND THEREFORE, THE ALLOWABILITY OF THE SAME AGAINST THE BROUGHT FORWARD LOSSES SHOULD HAVE BEEN EXAMINE D IN DETAIL. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO V ERIFY AND DECIDE AFRESH THIS ISSUE KEEPING IN VIEW HE RELEVAN T PROVISION IN THIS REGARD AND ALSO AFTER GIVING THE ASSESSEE AN OPPORT UNITY OF BEING HEARD. 3.2 SHORT DEDUCTION OF TDS PERUSING THE FORM 3CER SUBMITTED BY THE ASSESSEE, I T HAS BEEN NOTICED THAT THE ASSESSEE HAS PAID MANAGEMENT CHARG ES OF RS. 2,04 ,77,664/- TO M/S TL GROUP AUTOMOTIVE SYSTEMS L TD, UK. ON THIS AMOUNT THE ASSESSEE COMPANY WAS REQUIRED TO DEDUCT TDS @ 15% WITH APPLICABLE SURCHARGE AND EDUCATION CESS I.E. R S.61,96 , 656/-, BUT IT HAD DEDUCTED ONLY RS. 28,53,891/- AS TDS. WITH THIS REGARD, THE ASSESSEE HAD SUBMITTED THAT I T HAD PAID TOTAL RS. 3,64,642/- TO M/S TL GROUP AUTOMOTIVE SY STEMS LTD. UK (TL I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 5 UK) AS MANAGEMENT CHARGES AND OUT OF THIS AMOUNT IT HAD DISALLOWED SUM OF RS. 1,61,53,514/- WHILE COMPUTING BUSINESS INCOME U/S 40(A)(I) OF THE ACT. FURTHER IT HAD ST ATED THAT ON THE BALANCE AMOUNT IT HAD DEDUCTED TAX @ 15% AS PROVIDE D UNDER ARTICLE 13 -ROYALTIES AND FEES FOR TECHNICAL SERVIC ES OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) BETWEEN INDIA A ND UNITED KINGDOM. THE ASSESSEE HAD SUBMITTED THAT AS PER PRO VISIONS OF DTAA, THE SURCHARGE AND EDUCATION CESS SHOULD NOT B E ADDED TO THE TAX. 3.3. THE CONTENTION OF THE ASSESSEE IS A MATTER VER IFICATION. ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO A SCERTAIN THE AMOUNT PAID TO M/S TL GROUP AUTOMOTIVE SYSTEMS LTD UK AND THE DISALLOWANCE MADE BY THE ASSESSEE U/S 40(A)(I). TH E ASSESSING OFFICER IS ALSO DIRECTED TO VERIFY THE TAX DEDUCTED ON SAID AMOUNT PAID AS PER PROVISIONS UNDER DOUBLE TAXATION BETWEE N INDIA AND UNITED KINGDOM. 4. AS PER AFORESAID DISCUSSION, THE ORDER OF TH E ASSESSING OFFICER IS SET ASIDE TO BE FRAMED AFRESH KEEPING IN VIEW TH E RELEVANT PROVISIONS IN THIS REGARD AND ALSO AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. 3. FROM THE SIDE OF THE APPELLANT, LD. AR SHRI SANJ AY R. SHAH, APPEARED AND RAISED OBJECTION THAT THE AO HAS APPLI ED THE CORRECT LAW IN COMPUTING THE INCOME OF THE ASSESSEE. AO HAS ALSO EXAMINED THE TDS PROVISIONS IN THE LIGHT OF THE APPLICABILITY OF SEC TION 40(A)(IA) OF THE ACT. THE ASSESSEE HAS FURNISHED THE COMPLETE PARTY-WISE DETAIL AND THE NATURE OF PAYMENT ON WHICH TDS WAS DEDUCTED. THIS IS NOT THE CASE WHERE THE AO HAS NOT APPLIED HIS MIND. IN RESPECT OF THE PRO POSED DIRECTION OF LD. COMMISSIONER, LD. AR HAS DRAWN OUR ATTENTION ON AN ORDER OF DRP PASSED U/S. 144C(5) OF IT ACT, DATED 09-12-2011 WHEREIN IT WAS DIRECTED AS UNDER:- 19.2 WE DO NOT FIND ANY SUPPORT IN LAW FOR THE AO S VIEW. SECTION 92CA(3) IS ONLY A PROCEDURAL SECTION-LAYS DOWN HOW INCOME ARISING FROM INTERNATIONAL TRANSACTIONS SHOULD BE COMPUTED- IT NEITHER CHANGES THE NATURE OF INCOME NOR CREATES ANY NEW HE AD OF CHARGEABLE INCOME UNDER THE ACT. HENCE WE AGREE WIT H THE I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 6 ASSESSEE AND DIRECT THE AO TO ALLOW THE BENEFIT OF SET OFF/CARRY FORWARD OF LOSSES AS PER THE REGULAR PROVISIONS OF THE ACT. LD. AR HAS THEREFORE PLEADED THAT EVEN IN THE SUBSE QUENT YEAR A HIGHER AUTHORITY OF THE REVENUE DEPARTMENT HAS DISCARDED T HE VIEW AS TAKEN BY THE LD. COMMISSIONER IN THE IMPUGNED ORDER PASSED U /S. 263 OF IT ACT. ABOUT THE SHORT DEDUCTION OF TDS, LD. AR HAS PLEADE D THAT ALL THE RELEVANT FACTS AND INFORMATIONS WERE VERY MUCH BEFORE THE AO WHEREIN IT WAS INFORMED THAT THE ASSESSEE SUO MOTO HAS DEDUCTED TH E TAX ON THE ELIGIBLE AMOUNT BUT ON THE BALANCE AMOUNT DEDUCTED THE TAX @ 15% AS PROVIDED UNDER ARTICLE 13 PERTAINING TO ROYALTIES AND FEES F OR TECHNICAL SERVICES OF DTAA BETWEEN INDIA AND UK. SO LD. AR HAS PLEADED T HAT AS PER THE PROVISION OF DTAA, THE SURCHARGE AND EDUCATIONAL CE SS WAS NOT REQUIRED TO BE ADDED TO THE TAX. HE HAS CONCLUDED THAT THE LD. COMMISSIONER HAS SIMPLY ASKED THE AO TO VERIFY THE CONTENTION OF THE ASSESSEE AND FAILED TO RECORD HIS SATISFACTION ABOUT THE ESCAPEMENT OF TAX IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. ON THE OTHER HAND FROM THE SIDE OF THE REVENUE L D DR, SHRI VIMLENDU VERMA, HAS SUPPORTED THE ORDER OF LD. COMM ISSIONER 5. WE HAVE HEARD BOTH SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. AS FAR AS THE FIRST OBJECTION OF THE LD. CO MMISSIONER ABOUT THE CORRECT METHOD OF THE COMPUTATION OF ASSESSED INCOM E IS CONCERNED, SINCE OTHER AUTHORITY OF THE REVENUE DEPARTMENT I.E. DRP HAS ALREADY HELD THAT THE BENEFIT OF SET OFF/CARRY FORWARD OF LOSSES ARE TO BE COMPUTED AS PER THE REGULAR PROVISIONS OF THE ACT, THEREFORE, WE HEREBY HOLD THAT THERE WAS NO LEGAL SANCTITY ON THE PART OF LD. COMMISSIONER TO D IRECT THE AO TO VERITY AND DECIDE AFRESH THIS ISSUE. I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 7 6. FURTHER, WE HEREBY HOLD THAT THE DECISION OF HON BLE DELHI HIGH COURT PRONOUNCED IN THE CASE OF ITAT VS. DG HOUSING PROJECT LTD 343 ITR 329 (DELHI) IS APPLICABLE WHEREIN IT WAS HELD THAT THE LD. COMMISSIONER AGAIN REMITTING THE MATTER FOR A FRESH DECISION TO THE AO TO CONDUCT FURTHER INQUIRIES WITHOUT A FINDING THAT THE ORDER OF THE A O IS ERRONEOUS IS NOT SUSTAINABLE. THEREFORE, WE ARE OF THE VIEW THAT TH E MANNER IN WHICH THE LD. COMMISSIONER HAS GIVEN DIRECTION TO THE AO ARE NOT IN LINE WITH SEVERAL DECISIONS OF HONBLE COURTS NAMELY, CIT VS. GABREIL INDIA LTD 71 TAXMAN 585, CIT VS. ARVIND JEWELLERS 150 TAXMAN 170 (GUJAR AT). 7. ABOUT THE SECOND ISSUE RAISED BY LD. COMMISSIONE R, WE HEREBY HOLD THAT FIRSTLY THE AO HAS EXAMINED THAT ISSUE ON THOS E RELEVANT FACTS HENCE CANNOT BE SAID TO HAVE COMMITTED AN ERROR AND SECON DLY THE ISSUE CAN BE SAID TO BE CONTROVERSIAL BECAUSE IN THE CASE OF DIC ASIA PACIFIC LT. VS. ACIT INTERNATIONAL TAXATION 22 TAXMANN.COM 310 (KOL KATTA), IT WAS HELD AS UNDER:- HELD A PLAIN READING OF PROVISIONS OF ARTICLES 2, 11 AND 12 OF INDIA SINGAPORE DTAA SHOWS THAT WHILE INTEREST AND ROYALT IES CAN INDEED BE TAXED IN THE SOURCE STATE, THE TAX SO CHARGED ON THE SAME, UNDER ARTICLES 1 AND 12, CANNOT EXCEED 15 PER CENT AND 10 PER CENT RESPECTIVELY. THE EXPRESSION 'TAX IS DEFINED IN AR TICLE', 2(I) TO INCLUDE 'INCOME-LAX' AND IS STATED TO INCLUDE 'SURCHARGE' T HEREON, SO FAR AS INDIA IS CONCERNED ARTICLE 2(2) FURTHER EXTENDS THE SCOPE OF THE 'TAX' BY LAYING DOWN THAT IT SHALL ALSO COVER 'ANY IDENT ICAL OR SUBSTANTIALLY SIMILAR TAXES WHICH ARE IMPOSED BY EITHER CONTRACTI NG STATE AFTER THE DATE OF SIGNATURE OF THE PRESENT AGREEMENT IN ADDIT ION TO, OR IN PLACE OF, THE TAXES REFERRED TO IN PARAGRAPH 1' [PARA 6] THE EDUCATION CESS, AS INTRODUCED IN INDIA INITIALL Y IN YEAR 2004, WAS NOTHING BUT IN THE NATURE OF A ADDITIONAL SURCHARGE . IT WAS DESCRIBED AS SUCH IN THE FINANCE ACT INTRODUCING THE SAID CES S. [PARA 8] I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 8 ARTICLE 2(1) OF THE APPLICABLE TAX TREATY PROVIDES THAT THE TAXES COVERED SHALL INCLUDE TAX AND SURCHARGE THEREON. ON CE ONE COMES TO CONCLUSION THAT EDUCATION IS NOTHING BUT AN ADDI TIONAL SURCHARGE, IT IS ONLY COROLLARY THERETO THAT THE EDUCATION CESS W ILL ALSO BE COVERED BY THE SCOPE OF ARTICLE 2. ACCORDINGLY, PROVISION S OF ARTICLES 11 AND 12 MUST FIND PRECEDENCE OVER THE PROVISIONS OF THE INCOME-TAX ACT AND RESTRICT THE TAXABILITY, WHETHER IN RESPECT OF INCOME-TAX OR SURCHARGE OR ADDITIONAL SURCHARGE WHATEVER NAME C ALLED, AT THE RATES SPECIFIED IN THE RESPECTIVE ARTICLE. IN ANY CASE, EDUCATION CESS WAS INTRODUCED THE FINANCE ACT, 2004, WITH EFF ECT FROM ASSESSMENT YEAR 2005-06 WHICH WAS MUCH AFTER THE S IGNING OF LNDIA- SINGAPORE TAX TREATY ON 24-1-1994. IN VIEW O F THE SPECIFIC PROVISIONS TO THE EFFECT THAT THE SCOPE OF ARTICLE 2 SHALL ALSO COVER 'ANY IDENTICAL OR SUBSTANTIALLY SIMILAR TAXES WHICH ARE IMPOSED BY EITHER CONTRACTING STATE AFTER THE DATE OF SIGNATUR E OF THE PRESENT AGREEMENT IN ADDITION TO, OR IN PLACE OF THE TAXES REFERRED TO IN PARAGRAPH 1, AND IN VIEW OF THE FACT THAT EDUCATION CESS IS ESSENTIALLY OF THE SAME NATURE AS SURCHARGE, BEING AN ADDITIONAL SURCHARGE, THE SCOPE OF ARTICLE 2 ALSO EXTENDS TO T HE EDUCATION CESS. [PARA 9] THEREFORE, THE EDUCATION CESS CANNOT BE LEVIED IN R ESPECT OF TAX LIABILITY OF THE ASSESSEE-COMPANY. [PARA 10] 8. WE HAVE REPRODUCED THE ABOVE PARAGRAPH WITH VIEW TO KNOW WHETHER THIS ISSUE WAS PREJUDICIAL OR NOT AND WHETH ER THE AO HAS TAKEN ONE VIEW WHICH WAS ALSO A PLAUSIBLE VIEW. MOREOVER , WE HAVE NOTED THAT LD. COMMISSIONER HAS NOT DEMONSTRATED ANY BREACH OF LAW OR PROCEDURE BY THE AO TO ALLEGE THAT THE IMPUGNED ORDER OF THE AO WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. RATHER THE DIRECTION OF LD. COMMISSIONER APPEARS TO BE GENERAL IN NATURE ASKING THE AO TO VE RIFY THE FACTS AGAIN AFRESH. IN THE ABSENCE OF ANY INDEPENDENT FINDING AND LEAVING THE AO TO START A FRESH INVESTIGATION IS NOT WITHIN THE POWER S ASSIGNED U/S. 263 OF THE IT ACT. WE THEREFORE HOLD THAT THE ORDER U/S. 263 IS NOT SUSTAINABLE IN THE EYES OF LAW. I.T.A NO. 1650/AHD/2014 A.Y. 2008-09 PAGE NO BUNDY INDIA LTD VS. DCIT 9 9. RESULTANTLY, GROUNDS RAISED HEREBY ARE ALLOWED. APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) (MUKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 13/02/2015 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,