M/s Savera Soap Mills, Sunam V. ITO, Sunam

ITA 202/CHANDI/2011

• Counselvise Citation: 20221514 RSA 2011
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 16-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 24-02-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Revision of order; Depreciation; Principle of natural justice; Bad and doubtful debts
• Section: 263; 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE MS.SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 202/CHD/2011 ASSESSMENT YEAR: 2006-07 M/S SAVERA SOAP MILLS, V ITO, PATIALA ROAD, SUNAM. SUNAM. PAN: AAKFS16081 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT : SMT. JYOTI KUMARI DATE OF HEARING : 16.07.2012 DATE OF PRONOUNCEMENT : 31.07.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 24.01.2011 PASSED BY THE LD . CIT U/S 263 OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE A CT'). 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX, PAT IALA HAS ERRED IN ASSUMING THE JURISDICTION U/S 263 OF THE I.T.ACT AND HOLDING THAT THE ORDER AS PASSED BY THE .ASSESSING OFFICER U/S 143 (3) VIDE ORDER, DATED 27.10.2008 IS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE. 2. THAT THE CIT HAS FAILED TO APPRECIATE THE FACT THAT THE EARLIER ASSESSMENT HAS BEEN COMPLETED AFTER DUE APP LICATION OF MIND BY THE CONCERNED ASSESSING OFFICER AND, TH EREFORE, THE ASSUMPTION OF JURISDICTION U/S 263 WAS NOT WARRAN TED. 3. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, TH E CIT HAS ALSO ERRED IN GIVING FINDING IN PARA-4 OF THE ORDER TH AT THE DEPRECIATION WAS REQUIRED TO BE DEBITED TO THE PROF IT AND LOSS ACCOUNT AND HE HAS ALSO FAILED TO APPRECIATE THAT A LL THE CONDITIONS OF WRITING OFF OF BAD DEBTS HAD ADEQUATELY BEEN COM PLIED WITH AND THE 2 AMOUNT HAVE BEEN ADVANCED TO M/S HARI DEV & BROTHER S AND M/S SHAH SOAP MILLS IN THE ORDINARY COURSE OF BUSINESS. 4. THE CIT HAS ALSO ERRED IN SETTING ASIDE THE CASE TO THE ASSESSING OFFICER WHICH PROVES THAT HE WAS NOT IN CONFIRMED OPINION O N ALL THE ISSUES RAISED BY HIM IN THE SHOW CAUSE NOTICE, U/S 263 AND ON THIS ISSUE ALONE, THE SETTING ASIDE OF ASSESSMENT BY THE CIT DESERVES TO BE QUASHED. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS-FINALLY HEARD OR DISPOSED OFF. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, LD. 'AR' GAVE BRIEF HISTORY OF THE CASE. HE REFERRED TO PAG E 35 OF THE PAPER BOOK WHICH IS A QUESTIONNAIRE DATED 13.05.200 8 ISSUED BY THE AO. LD. 'AR' REFERRED TO PAGE 53-54 O F THE PAPER BOOK WHICH IS THE SHOW CAUSE NOTICE U/S 263 ISSUED BY THE CIT ON 28.1.2010 FOR THE ASSESSMENT YEAR 200 6-07. PAGE 56-60 CONTAIN REPLY TO NOTICE U/S 263 OF THE A CT ISSUED BY THE CIT. LD. 'AR' SPECIFICALLY REFERRED TO QUES TION NO.5 WHICH READS AS , PLEASE FURNISH THE DETAILS OF CAPITAL INTRODUCED DURING THE YEAR ALONGWITH SOURCE OF DEPO SIT THEREOF, WITH DOCUMENTARY EVIDENCE. HE ALSO REFERRED TO QUESTION NO.7 OF THE QUESTIONNAIRE, WHICH READS AS, PLEASE FURNISH THE DETAILS OF EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT WITH DOCUMENTARY EVIDENCE. LD. 'AR' FURTHER REFERRED TO PAGE 37-38 OF THE PAPER BOOK, WHICH IS UNDATED REPLY SUBMITTED TO THE AO IN RESPONSE TO QUESTIONNA IRE DATED 13.05.2008. 3(I). IN RESPONSE TO QUESTION NO.5 RAISED BY THE AO , A SINGLE LINE REPLY FILED BY THE ASSESSEE READS AS, PROOF IN THE ACCOUNTS OF CAPITAL INTRODUCED IN THE PARTNERS ACC OUNT, ALONGWITH CONFIRMATION ENCLOSED. IN REPLY TO QUESTION NO.7 3 OF THE SAID QUESTIONNAIRE, ISSUED BY THE AO, THE AS SESSEES REPLY READS AS, COPIES OF THE EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT ARE ENCLOSED. LD. 'AR' FURTHER REFERRED TO PAGE NO. 41 & 42. THESE PAPERS REPRESENT EXPLANATION FI LED BY THE ASSESSEE IN RESPECT OF BAD DEBTS. THE ASSESSEE SUBMITTED THAT CERTAIN GOODS WERE SUPPLIED TO M/S N ARANG GENERAL STORES, HANUMAN GARH BEFORE 31.3.1996. HOW EVER, DURING THE YEAR UNDER CONSIDERATION, THE SAME WERE WRITTEN OFF, AS IRRECOVERABLE U/S 36(1)(VII) READ WITH SECT ION 36(2) OF THE ACT. LD. 'AR' PLACED RELIANCE ON THE DECISION O F THE HON'BLE SUPREME COURT REPORTED IN T.R.F. LTD. V CIT (2010) 323 ITR 397 (S.C). 4. LD. 'DR' SUPPORTED THE ORDER PASSED BY THE CIT A ND PLACED RELIANCE ON THE DECISION, IN THE CASE OF ART HI NURSING HOME V ITO 119 TTJ 415. 5. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE JUDICIAL PRECEDENTS CITED BY TH E PARTIES. A BARE PERUSAL OF THE QUESTIONNAIRE, ISSUED BY THE AO, AND THE REPLY FILED BY THE ASSESSEE REVEALS THAT APPELL ANT HAS FILED EXPLANATION IN RESPECT OF ISSUE OF BAD DEBT R AISED BY THE CIT IN HIS IMPUGNED NOTICE U/S 263 OF THE ACT. 5(I) IN THIS CONTEXT, IT IS PERTINENT TO REPRODUCE THE ASSESSMENT ORDER DATED 27.10.2008, FOR THE ASSESSME NT YEAR 2006-07, PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT : RETURN IN THIS CASE WAS FILED ON 24.10.2006 DECLARI NG AN INCOME OF RS. 1,69,360/-, WHICH WAS PROCESSED UNDER SECTION 1 43(1). THE CASE WAS SELECTED FOR SCRUTINY AS PER CBDT GUIDELINES. NOTICE U/S 4 143(2) WAS ISSUED ON 25.10.2007. SUBSEQUENTL Y, DETAILED QUESTIONNAIRE ALONG WITH NOTICE U/S 142(1) WAS ISSU ED, IN RESPONSE TO WHICH SHRI YOGESH AGGARWAL, ADVOCATE, ATTENDED A SSESSMENT PROCEEDINGS FROM TIME TO TIME AND THE CASE WAS DISC USSED WITH INFORMATION/DOCUMENTS AS CALLED FOR WERE FILED, WHI CH WERE EXAMINED AND PLACED ON RECORD. BOOKS OF ACCOUNTS AL ONG WITH VOUCHERS WERE EXAMINED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE FREIGHT AND FORWARDING EXPENSES WERE NOT PROPERLY V OUCHED. THEREFORE AN ADDITION OF RS.25,000/- IS BEING MADE. 5(II) A BARE PERUSAL OF THE ABOVE ASSESSMENT ORDER PASSED BY THE AO REVEALS THAT IT IS IDEALLY LACONIC AND CR YPTIC ASSESSMENT ORDER. THERE ARE NO FINDINGS BY THE AO, IN THE IMPUGNED ASSESSMENT ORDER ON ANY ISSUE. THEREFORE, DISCERNIBILITY OF THE APPLICATION OF MIND BY THE AO , IS INCOMPREHENSIBLE. IT IS NOT HUMANLY FEASIBLE TO PER CEIVE IN MENTAL STATE OF AFFAIRS OF THE AO, AT THE TIME OF P ASSING ASSESSMENT ORDER, UNLESS HIS MIND IS CLEARLY DEMONS TRATED BY WAY OF WELL -REASONED AND SPEAKING ASSESSMENT OR DER. THEREFORE, THERE CANNOT BE ASSUMPTION THAT THE AO H AS CONSIDERED THE ISSUES RAISED BY THE CIT, IN HIS IMP UGNED ORDER U/S 263 OF THE ACT. THE AO HAS FAILED TO SPE CIFY EVEN THE ISSUES DISCUSSED WITH THE AUTHORIZED REPRESENTA TIVE OF THE ASSESSEE WHO PLEADED THE CASE BEFORE HIM. LD. 'AR' HAS PLACED RELIANCE, ON THE DECISION OF THE HON'BLE SUP REME COURT IN THE CASE OF T.R.F. V CIT (SUPRA). 6. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS, FACTS OF THE CASE AND THE DECISION RELIED UPON BY LD. 'AR '. THE HON'BLE SUPREME COURT HELD THAT IT IS NOT NECESSARY FOR THE ASSESSEE TO ESTABLISH THAT BAD DEBT HAS BECOME IRRE COVERABLE 5 AFTER AMENDMENT TO SECTION 36(1)(VII) OF THE ACT. I T IS ENOUGH IF THE BAD DEBT IS WRITTEN OFF, AS IRRECOVERABLE, I N THE ACCOUNTS OF THE ASSESSEE. THE FINDINGS OF THE HON' BLE SUPREME COURT IN THE CASE RELIED UPON BY LD. 'AR' I S PATENTLY ON MERIT, OF THE ISSUE, WHEREAS THE SUBJECT MATTER OF THE PRESENT APPEAL IS APPLICABILITY OF THE PROVISIONS O F SECTION 263 OF THE ACT VIZ, THE REVISIONARY JURISDICTION OF CIT. THEREFORE, THE DECISION WHICH IS RENDERED IN THE CO NTEXT OF BAD DEBT RELATING TO THE MERIT OF THE CASE, HAS NOT HING TO DO WITH THE JURISDICTION OF THE CIT UNDER SECTION 263 OF THE ACT. 6(I) A PERUSAL OF THE ASSESSMENT ORDER CLEARLY REVE ALS THAT AO PASSED THE ASSESSMENT ORDER IN A PERFUNCTORY AND MECHANICAL MANNER, WITHOUT ANY APPLICATION OF MIND, TO ISSUES RAISED BY THE CIT, IN THE IMPUGNED ORDER U/S 263 OF THE ACT. A BARE PERUSAL OF THE IMPUGNED QUESTIONNA IRE ISSUED BY THE AO AND THE REPLY FILED BY THE ASSESSE E THERETO, REVEALS THAT BOTH ARE SINGLE LINE QUESTION AND SING LE LINE REPLY THERETO. NO DIRECT AND SPECIFIC QUESTION HAS BEEN RAISED BY THE AO IN RESPECT OF THE ISSUES RAISED BY THE CIT IN THE IMPUGNED ORDER PASSED U/S 263 OF THE ACT. T HEREFORE, QUESTION OF SUBMISSION OF REPLY BY THE ASSESSEE DOE S NOT ARISE. SIMILARLY, ON PERUSAL AND CONSIDERATION OF THE FACT- SITUATION OF THE CASE AND RELEVANT RECORDS, WE ARE OF THE CONSIDERED OPINION THAT THE AO HAS FAILED TO CONCEI VE THE SPECIFIC ISSUES WHICH WERE THE SUBJECT MATTER OF TH E IMPUGNED ORDER PASSED U/S 263 OF THE ACT BY CIT. T HE AO WAS NOT AWARE OF SUCH ISSUES. NEEDLESS TO SAY THAT THERE IS 6 NO PRESUMPTION ABOUT CONSIDERATION OF ANY ISSUE, IN THE ABSENCE OF CONCEPTION OF SUCH ISSUES BY THE AO. IT IS A CASE, WHERE THE AO HAS FAILED TO CONCEIVE THE ISSUE RAISED BY THE CIT UNDER THE IMPUGNED ORDER PASSED U/S 263 OF THE ACT. THE ISSUES RAISED BY THE CIT HAS NEVER BEEN T HE CONCERN OF THE AO. LD. CIT HAS RAISED THREE ISSUES IN THE ORDER U/S 263, DATED 24.01.2011, VIZ DEPRECIATION N OT DEBITED TO PROFIT & LOSS ACCOUNT, BAD DEBTS AND INT EREST FREE ADVANCES. 7. THE LD. CIT FOUND THAT ASSESSEE HAD NOT DEBITED THE DEPRECIATION IN THE PROFIT & LOSS ACCOUNT, BUT HAD CLAIMED THE SAME DIRECTLY IN THE COMPUTATION OF INCOME ANNE XED TO THE RETURN. THIS FACT IS EVIDENT FROM THE COMPUTAT ION SHEET, ANNEXED TO THE RETURN OF INCOME. COUNSEL OF THE AS SESSEE, BEFORE THE CIT, IN THE COURSE OF REVISIONARY PROCEE DINGS U/S 263 OF THE ACT SUBMITTED THAT THERE IS NO NEED TO C HARGE THE DEPRECIATION TO THE PROFIT & LOSS ACCOUNT. THIS CO NTENTION OF THE ASSESSEE, WAS NOT FOUND TO BE ACCEPTABLE BY THE CIT. LD. CIT RECORDED THE FINDING THAT OVERALL PROFIT WI LL NOT BE AFFECTED IF DEPRECIATION IS LATER DEBITED TO THE PR OFIT & LOSS ACCOUNT BUT THE CAPITAL ACCRETION WHICH IN THIS CAS E WAS MADE BEFORE DEBITING TO PROFIT & LOSS ACCOUNT, RESU LTED IN ENHANCED CAPITAL DISTRIBUTED TO THE PARTNER. IN TH E PRESENT CASE, PROFIT OF RS.8,59,925/- WAS DIVIDED BETWEEN T WO PARTNERS AND THIS WAS THE AMOUNT WHICH WENT TO INCR EASE THE PROFIT OF PARTNERS AS PER COPIES OF ACCOUNTS OF THE PARTNERS. THIS ISSUE HAS NOT BEEN CONSIDERED BY THE AO 7 WHILE FRAMING THE ASSESSMENT. IN VIEW OF THIS, THE CIT HELD THAT THE ISSUE FALLS UNDER THE STATUTORY CONDITIONS CONTEMPLATED U/S 263 OF THE ACT. HAVING REGARD TO THE FACT- SITUATION OF THE CASE, WE UPHOLD THE FINDINGS OF TH E CIT, ON THIS ISSUE, AS AO WAS NOT AWARE OF THIS ISSUE. IN V IEW OF THIS, QUESTION OF APPLICATION OF MIND DOES NOT ARIS E. 8. THE CIT, FURTHER, OBSERVED THAT A SUM OF RS.2,95 ,847/- WAS DEBITED TO THE PROFIT & LOSS ACCOUNT UNDER THE HEAD BAD DEBTS IN THE NAME OF M/S NARANG GENERAL STORE S. AS THE AO, HAS NOT MADE ANY INVESTIGATION FOR THE JUST IFICATION OF THE SAID CLAIM, CIT TREATED THIS ISSUE COVERED U/S 263 OF THE ACT. HOWEVER, THE ASSESSEE HAS FILED RELEVANT SUBMISSION ON THE ISSUE IN QUESTION. THEREFORE, THI S ISSUE CANNOT BE SAID TO HAVE BEEN NOT CONSIDERED BY THE A O. IN VIEW OF THIS, TO THIS EXTENT THE ORDER OF CIT IS NO T SUSTAINABLE. 9. NEXT ISSUE, WHICH IS COVERED U/S 263 OF THE ACT, PERTAINS TO INTEREST FREE ADVANCE TO SHRI GAURAV GO YAL, M/S HARI DEV & BROTHERS AND M/S SHAHA SOAP MILLS, SUNAM . THE CIT FOUND THAT ON THE ONE HAND, THE ASSESSEE HA D PAID INTEREST TO THE BANK AND P.F.C. AND HAD RAISED INTE REST BEARING LOANS AND ON THE OTHER HAND, ASSESSEE HAD G IVEN INTEREST FREE ADVANCES. THE CIT RECORDED FINDING T HAT AO HAD NOT MADE ANY INVESTIGATION AT THE TIME OF ASSES SMENT PROCEEDINGS IN THE MATTER REGARDING ALLOWABILITY OF THE CLAIM MADE BY THE ASSESSEE. ACCORDINGLY, LD. CIT, BY PLAC ING RELIANCE ON THE DECISION OF M/S MALABAR INDUSTRIAL CO. V CIT 243 ITR 83 (S.C) AND IN THE CASE OF TARA DEVI AGGAR WAL V 8 CIT (1973) 88 ITR 323 (S.C) SET ASIDE THE ORDER OF ASSESSMENT PASSED BY THE AO ON 27.10.1988 U/S 143(3 ). THE CIT HAS ALSO LISTED 7 CASES IN PARA 4 OF HIS AS SESSMENT ORDER U/S 263 OF THE ACT TO SUPPORT THIS VIEW. 10. THE AO, IS AN ADJUDICATOR AS WELL AS AN INVESTI GATOR, WHILE EXERCISING QUASI-JUDICIAL POWER, FOR THE PURP OSE OF FRAMING ASSESSMENT UNDER THE SCHEME OF INCOME-TAX A CT. IT IS HIS STATUTORY DUTY AND RIGHT TO ASCERTAIN THE TR UTH OF THE FACTS, AS STATED IN THE RETURN OF INCOME BY THE ASS ESSEE AND TO MAKE NECESSARY ENQUIRY, AS WARRANTED ON THE FACT S AND CIRCUMSTANCES OF THE CASE. PASSING OF A CRYPTIC AN D DUMB ORDER BY AO DOES NOT AND CANNOT MEAN THAT HE HAS EX ERCISED QUASI-JUDICIAL POWER, AS AN INVESTIGATOR AND ADJUDI CATOR. IN THE PRESENT CASE, AO HAS FAILED TO MAKE ENQUIRY ON THE ISSUE RAISED ABOVE BY THE CIT. THIS VIEW IS STRENGTHENED BY A NUMBER OF DECISIONS, PARTICULARLY BY DECISION OF HO N'BLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES V ADDL. CIT (DELHI) (1975) 99 ITR 375 (DEL). THE REL EVANT PART OF THE RATIO OF THE DECISION IS REPRODUCED HEREUNDE R : IT IS NOT NECESSARY FOR THE COMMISSIONER TO MAKE FURTHER INQUIRIES BEFORE CANCELING THE ASSESSMENT ORDER OF THE INCOME-TAX O FFICER. THE COMMISSIONER CAN REGARD THE ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE INCOME- TAX OFFICER SHOULD HAVE MADE FURTHER INQUIRIES BEFO RE ACCEPTING THE STATEMENTS MADE BY THE ASSESSEE IN HIS RETURN. THE REASON IS OBVIOU S. THE POSITION AND FUNCTION OF THE INCOME-TAX OFFICER IS VERY DIFFERENT FROM THAT OF A CIVIL COURT. THE STATEMENTS MADE IN A PLEADING PROVED BY THE MINIMUM A EVID ENCE MAY BE ADOPTED BY A CIVIL COURT IN THE ABSENCE OF ANY REBUTTAL, COURT I S NEUTRAL. IT SIMPLY GIVES DECISION ON THE BASIS OF THE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. THE INCOME-TAX OFFICER IS NOT ONLY AN BUT ALSO AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER INQUIRY. IT IS HIS DUTY TO THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. IT IS BE CAUSE IT IS INCUMBENT ON THE INCOME-TAX OFFICER TO FURTHER INVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES WOULD MAKE SUCH AN INQUIRY PRUDENT TH AT THE WORD 'ERRONEOUS' IN SECTION 263 INCLUDES THE FAILURE TO MAKE SUCH AN EN QUIRY. THE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN INQUIRY HAS NOT BEEN MADE AND NOT BECAUSE THERE IS WRONG WITH THE ORDER IF ALL THE FACTS STATED THEREI N ARE ASSUMED TO BE CORRECT.: 9 11. THE CIT PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF M/S MALABAR INDUSTRIAL CO. V CIT 243 ITR 83 (S.C). THE HON'BLE SUPREME COURT, I N THIS CASE CLEARLY HELD THAT CIT HAS JURISDICTION U/S 263 OF THE ACT, IF TWIN CONDITIONS ARE SATISFIED, NAMELY; (I) THE ORDER OF THE AO, SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 12. THE HON'BLE APEX COURT FURTHER HELD THAT AN INC ORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW, WILL SATISFY THE REQUIREMENT OF THE ORDER, BEING ERRONEO US. IN THE SAME CATEGORY, FALLS ORDERS PASSED, WITHOUT APP LYING THE PRINCIPLE OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PRE-JUDICIAL TO THE INTEREST OF THE REV ENUE IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD IN ITS ORDINARY MEANING, IT IS OF VITAL IMPORT AND IS NOT CONFINED TO LOSS OF TAX. IF, DUE TO AN ERRO NEOUS ORDER OF THE ITO, REVENUE IS LOOSING TAX, LAWFULLY PAYABL E BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INT EREST OF REVENUE. IN THE PRESENT CASE, AO HAS FAILED TO MAK E ANY ENQUIRY AS PROMPTED BY THE FACTS OF THE CASE IN RES PECT OF THE ISSUES RAISED BY THE CIT IN THE ORDER PASSED U/ S 263 OF THE ACT. THE AO, AS INDICATED EARLIER, HAS NOT PER CEIVED THE ISSUE RAISED BY THE CIT U/S 263 OF THE ACT, THE QUE STION OF APPLICATION OF MIND, MAKING OF ENQUIRY AS INVESTIGA TOR AND PASSING THE SPEAKING ORDER, DOES NOT ARISE. 13. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS , FACTS OF THE CASE AND THE QUESTIONNAIRE ISSUED BY THE AO, ON THE ISSUE IN QUESTION AND REPLY THERETO, FILED BY THE A SSESSEE 10 ALONGWITH THE ASSESSMENT ORDER, IN THE LIGHT OF THE FACTUAL MATRIX OF THE CASE AND THE JUDICIAL PRECEDENTS CITE D BY BOTH THE PARTIES. THE AO, HAS MADE AN ADHOC ADDITION OF RS.20,000/-, WHILE FRAMING ASSESSMENT, IN RESPECT O F FORWARDING EXPENSES NOT PROPERLY VOUCHED. THE AO, IN A SINGLE SENTENCE OF ONE - AND A HALF PARA ASSESSMENT ORDER, CONSISTING OF ONLY TEN LINES, MENTIONED MECHANICALL Y AND CRYPTICALLY THAT DETAILED INFORMATION OF THE DOCUME NTS, AS CALLED FOR, WERE FILED WHICH WERE EXPLAINED AND PLA CED ON RECORD. THE VERACITY OF SUCH ASSERTION OF THE AO, CAN BE EASILY SEEN IN THE LIGHT OF THE IMPUGNED QUESTIONNA IRE AND REPLY THERETO, FILED BY THE ASSESSEE, AS DISCUSSED EARLIER. THEREFORE, HAVING REGARD TO THE ENTIRETY OF THE FAC TS AND CIRCUMSTANCES OF THE CASE, AND ABOVE DISCUSSED ISSU E CLEARLY SPEAKS ABOUT THE NON-APPLICABILITY OF MIND, AND NON - INVESTIGATION INTO THE ISSUE RAISED BY THE CIT. AC CORDINGLY, IN VIEW OF NON-CONSIDERATION OF SUCH ISSUE AS DISC USSED ABOVE, THE ORDER PASSED BY THE CIT U/S 263 OF THE A CT, ON THIS ISSUE IS UPHELD. 14. THE APPEAL OF THE ASSESSEE IS DISPOSED OF, AS D ISCUSSED ABOVE. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY,2012. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: ..JULY,2012. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH