JOHN GALT INTERNATIONAL, MUMBAI V. PR CIT-22, MUMBAI

ITA 2155/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8021 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 27-06-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHN
• Keywords: Sale consideration of property below Jantri Value; Opportunity of being heard; Audit objection; Bad and doubtful debts; Corroborative evidences; Assessment record; Reason to believe; Borrowed satisfaction
• Section: 143(3); 50C; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER ITA NO . 2155 /MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 1A, MAYA BUILDING, 17 TH ROAD, PLOT NO. 533, KHAR (W), MUMBAI 400 052 PAN NO: AACFJ 7761 M V . PRINCIPAL CO MMISSIONER OF INCOME TAX 22 , PIRAMAL CHAMBERS, PAREL , MUMBAI 400 012 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJEEV KHANDELWAL SHRI NAGIN PAREKH DEPARTMENT BY : SHRI ALOK JOHN DATE OF HEARING : 25.09. 2017 DATE OF PRONOUNCEMENT : 20 . 12 .2017 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD.PCIT 22, MUMBAI DATED 06.03.2017 PASSED U/S. 263 OF THE ACT FOR THE ASSESSMENT YEAR 2013 - 14. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 2 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL (I) THE PRINCIPAL COMMISSIONER OF INCOME - TAX - 22, MUMBAI (HEREINAFTER REFERRED TO AS THE LD.PCIT) ERRED IN FRAMING AN EX - PARTE ORDER DATED 06.03.2017 U/S. 263 OF THE ACT TO SET ASIDE THE ORDER OF THE ASS ISTANT COMMISSIONER OF INCOME - TAX 22(1), MUMBAI, (HEREINAFTER REFERRED TO AS THE ASSESSING OFFICER) BY HOLDING THAT T HE ORDER OF THE ASSESSING OFFICER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AND ERRONEOUS, BOTH AND GIVING DIRECTION TO THE ASSESSING OFFICER TO RE - DO THE ASSESSMENT. (II) THE ASSESSEE CONTEND THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.PCIT OUGHT NOT TO HAVE FRAMED AN EX - PARTE ORDER INASMUCH AS THE APPELLANTS ATTENDED THE HE ARING ON THE APPOINTED DAY AND SUBMITTED A LETTER DATED 06 TH MARCH, 2017. (III) THE APPELLANTS FURTHER, C ONTENDS THAT THE LD.PCIT HAS NOT APPRECIATED THE FACTS OF THE CASE IN ITS ENTIRETY; THE IMPUGNED ORDER U/S. 263 IS BAD IN LAW INASMUCH AS THE ORDER OF THE A SSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. (IV) THE APPELLANTS FURTHER, CONTEND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.PCIT OUGHT NOT TO HAVE REACHED THE AFORESAID CONCLUSIONS INASMU CH AS THE ASSESSING OFFICER AFTER HAVING BEEN SATISFIED ON THE BASIS OF ALL PAPERS AND DOCUMENTS THAT HAVE BEEN FURNISHED TO HIM HAS ACCEPTED THE RETU RN OF INCOME OF THE APPELLANTS. 3. THE LEARNED COUNSEL FOR THE ASSESSEE , AT THE OUTSET SUBMITS THAT THIS ORDER OF THE LD.PCIT WAS PASSED WITHOUT EXAMINING THE ASSESSMENT RECORD. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT LD.PCIT DOES NOT HAVE THE RECORDS WHEN NOTICE U/S. 263 WAS ISSUED. THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITS THAT IN THE ABSENCE OF ASSESSMENT RECORD THE LD.PCIT COULD NOT HAVE EXAMINED THE RECORD SO AS TO FORM AN OPINION THAT 3 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3) OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT WHEN THE NOTICE U/S. 263 OF THE ACT DATED 21.03.2016 WAS ISSUED INITIALLY BY THE LD.PCIT, ASSESSEE APPROACHED THE ASSESSING OFFICER ON 27.07.2016 REQUESTING FOR A PHOTOCOPY OF THE PROCEEDINGS SHEET OF THE ASSESSMENT THAT HAS BEEN COMPLETED U/S. 143(3) OF THE ACT ON 16.10.2015. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT ON THE VERY SAME DAY IT WAS INTIMATED TO THE LD.PCIT THAT ASSESSEE HAS APPROACHED THE ASSESSING OFFICER BY LETTER DATED 27.07.2 016 REQUESTING THE PHOTOCOPY OF THE PROCEEDING SHEET OF THE ASSESSMENT TO ENABLE THE ASSESSEE TO ESTABLISH THAT THE ASSESSING OFFICER HAS CALLED FOR AND VERIFIED ALL THE DETAILS SUBMITTED TO HIM ON ALL THE ISSUES RAISED IN THE SHOW CAUSE NOTICE ISSUED U/S. 263 OF THE ACT AND THE ASSESSING OFFICER HAS APPLIED HIS MIND AND ARRIVED AT A CORRECT C ONCLUSION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT BY LETTER DATED 08.08.2016 ONCE AGAIN IT WAS INTIMATED TO THE LD.PCIT THAT THE PHOTOCOPY OF PROCE EDINGS SHEET OF THE ASSESSMENT IS REQUIRED TO OBTAIN FROM THE ASSESSING OFFICER AND SOUGHT FOR ADJOURNMENT OF THE PROCEEDINGS . THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT ON THE VERY SAME DAY ONCE AGAIN ASSESSEE HAD WRITTEN A LETTER TO THE A SSESSING OFFICER REQUESTING FOR A PHOTOCOPY OF THE PROCEEDINGS SHEET OF 4 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL THE ASSESSMENT WHEN THE MATTER FIXED FOR HEARING O N 22.08.2016 BY THE LD.PCIT, IT WAS ONCE AGAIN SUBMITTED THAT PHOTOCOPY OF THE PROCEEDINGS SHEET OF ASSESSMENT IS NEED TO BE OBTAINED FROM THE ASSESSING OFFICER SO AS TO SUBMIT REPLY BY THE ASSESSEE ESTABLISHING THE FACT THAT THE ASSESSING OFFICER HAS CALLED FOR THE DETAILS , VERIFIED ALL THE DETAILS SUBMITTED ON ALL THE ISSUES AND HAS APPLIED HIS MIND AND ARRIVED AT A CORRECT C ONCLUSION IN COMPLETING THE ASSESSMENT. SIMILAR PLEA WAS MADE ON 08.09.2016 BEFORE THE LD.PCIT. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD.PCIT HOWEVER PASSED ORDER U/S. 263 OF THE ACT ON 06.03.2017 HOLDING THAT ASSESSMENT ORDER DATED 16.10.2015 PASSE D BY THE ASSESSING OFFICER IS WITHOUT CONDUCTING PROPER INVESTIGATION AND WITHOUT PROPER APPLICATION OF MIND AND THEREFORE IS AN ERRONEOUS ORDER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY SET ASIDE THE ASSESSMENT FOR MAKING A FRESH ASSESSMENT. 4. LEARNED COUNSEL FOR THE ASSESSEE REFERRING TO ASSESSMENT ORDER DATED 16.10.2015 SUBMITTED THAT IT IS THE FINDING OF THE ASSESSING OFFICER THAT ASSESSEE MAINTAINED ALL THE BOOKS OF ACCOUNTS ALONG WITH SUPPORTING EVIDENCES, BOOKS OF ACCOUNTS A RE AUDITED AND IN THE COURSE OF HEARING ALL RELEVANT DETAILS ARE CALLED FOR AND VERIFIED PARTICULARLY THE DETAILS OF SALES AND PURCHASES, MAJOR EXPENSES AND ALL ASSETS AND LIABILITIES ARE VERIFIE D, BO OKS OF ACCOUNTS WERE PRODUCED ARE ALSO VERIFIED AT RANDO M AND IT WAS 5 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL ALSO OBSERVED BY THE ASSESSING OFFICER THAT MAINTENANCE OF BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCES ARE IN ACCORDANCE WITH THE RETURN OF INCOME SUBMITTED FOR THE RELEVANT PREVIOUS YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IN T HE COURSE OF ASSESSMENT PROCEEDINGS ASSESSING OFFICER HAS CALLED FOR ALL THE DETAILS, HE HAS EXAMINED THEM AND CONCLUDED THE ASSESSMENT AND THEREFORE THE ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE SAID TO BE AN ERRONEOUS ORDER WHICH IS PREJUDICIAL T O THE INTEREST OF THE REVENUE. 5. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT THE BASIS FOR ISSUE OF NOTICE U/S. 263 OF THE ACT IS ASSESSMENT YEAR 2012 - 13 AND THE LD.PCIT CAME TO THE CONCLUSION THAT THE ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2013 - 14 WHICH IS UNDER AP PEAL IS ERRONEOUS ONLY ON THE B ASIS OF TH E PROCEEDINGS FOR THE ASSESSMENT YEAR 2012 - 13 WHERE THE ASSESSING OFFICER MADE CERTAIN DISALLOWANCE S AND ADDITIONS. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE CURRENT ASSESSMENT YEAR THE LD.PCIT FAILED TO EXAMINE THE RECORD AND COME TO AN INDEPENDENT OPINION/SATISFACTION TO HOLD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE. LEARNED COUNSEL FOR THE ASSESSEE REFERRING TO PAGE NOS. 121 TO 134 OF THE PAPER BOOK SUBMITS THAT THESE ARE LEDGER ACCOU NT OF PURCHASES OF RAW MATERIAL , REFERRING TO THE PAGE NOS.185 TO 203 OF THE PAPER BOOK SUBM ITS THAT THESE 6 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL ARE SAMPLE BILLS AND REFERRING TO PAGE NOS . 72, 76 TO 83 SUBMITS THAT THESE ARE THE PARTY WISE DETAILS IN RESPECT OF THE PURCHASES MADE AND THESE DETAILS WERE FURNISHED TO THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THE SE WERE EXAMINED BY THE ASSESSING OFFICER AND NO DISALLOWANCE WAS MADE TOWARDS PURCHASES. SIMILARLY LEARNED COUNSEL FOR THE AS SESSEE REFERRING TO THE LETTER FURNISHED BEFORE THE ASSESSING OFFICER SUBMITS THAT THE DETAILS IN RESPECT OF SITE EXPENSES , MEMBE RSHIP SUBSCRIPTION , STAFF WELFARE, TRAVELLING AND CONV EYANCE, ENTRAINMENT EXPENSES ETC., WERE FURNISHED IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THEY WERE EXAMINED BY THE ASSESSING OFFICER AND NO DISALLOWANCE WAS MADE. REFERRING T O PAGE NOS. 35 TO 39 O F THE PAPER BOOK SUBMITS THAT THE DETAILS WERE FURNISHED IN RESPECT OF LABOUR CHARGES TO THE ASSESSING OFFICER, REFERRING TO PAGE NOS . 232 TO 238 , 239 TO 241 SUBMITS THAT DETAILS WERE FURNISHED IN RESPECT OF LOAN OBTAINED FROM JOHN GALT ZINGA TECHNOLOGIES BY THE ASSESSEE BEFORE ASSESSING OFFICER AND THIS WAS ALSO EXAMINED BY THE ASSESSING OFFICER AND NO ADDITION/DISALLOWANCE WAS MADE , R EFERRING TO PAGE NO S . 67,72 TO 75, AND 128 TO 148 COUNSEL SUBMITS THAT THESE ARE THE DETAILS FURNISHED IN RESPECT OF BAD DEBTS WRITTEN OFF BY THE ASSESSEE AND THESE DETAILS WERE EXAMINED BY THE ASSESSING OFFICER IN THE COURSE ASSESSMENT PROCEEDINGS AND ON APPLICATION OF MIND BY THE ASSESSING OFFICER ALLOWED THE CLAIMS OF THE 7 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL ASSESSEE. FURTHER REFERRING TO PAGE NOS . 156 TO 163 OF THE PAPER BOOK SUBMITS THAT THESE ARE THE DETAILS IN RESPECT OF THE ADDIT ION S TO FIXED ASSETS FURNISHED BEFORE THE ASSESSING OFFICER WHICH WERE ALSO EXAMINED BY THE ASSESSING OFFICER AND ACCEPTED THE CLAIMS OF THE ASSESSEE. THEREFORE THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITS THAT ALL THE DETAILS IN RESPECT OF THE ISSUES WHICH WERE RAISED BY THE LD.PCIT IN HIS NOTICE HAVE BEEN FURNISHED TO THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS THEY WERE ALL EXAMINED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAS APPLIED HIS MIND AND TAKEN A VIEW AND THEREFORE IT CANNOT BE SAID THAT THERE IS NO APPLICATION OF MIND BY THE ASSESSING OFFICER AND THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF THE REVENUE SIMPLY BECAUSE THE LD.PCIT HAS A DIFFERENT VIEW ON THE ISSUES. 6. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT IN THE ABSENCE OF THE ASSESSMENT RECORD IT IS NOT KNOWN AS TO HOW AN OPINION WAS FORMED BY THE LD. PCIT THAT THE ASSES SMENT ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ORDER SHEET OF THE PROCEEDINGS OF THE ASSESSMENT UNDER APPEAL I.E. 2013 - 14 HAS NEVER BEEN SUPPLIED TO THE ASSESSEE BY THE ASS ESSING OFFICER OR BY THE LD.PCIT AND IT IS AN ADMITTED FACT THAT THE ASSESSING OFFICER COLLECTED SOME OF THE DETAILS 8 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL FURNISHED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS ONCE AGAIN AFTER THE COMPLETION OF ASSESSMENT AND A PARTIAL RECORD WAS RE CONSTRUCTED. REFERRING TO THE LETTER DATED 24.08.2017 WRITTEN BY THE OFFICE OF THE LD.PCIT 22 TO THE LD.CIT(DR) , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THIS LETTER DEMONSTRATES THAT THE RECORD WAS RECONSTRUCTED AND THE ASSESSEE FURNISHED ITS REPLIES ALONG WITH NECESSARY DOCUMENTS BEFORE THE ASSESSING OFFICER TO ESTABLISH THAT THE ASSESSING OFFICER CALLED FOR VARIOUS DETAILS AND COMPLETED THE ASSESSMENT AFTER EXAMINING SUCH DETAILS. LEARNED COUNSEL FOR THE ASSESSEE FURTHER MADE ELABORATE SUBMI SSIONS IN RESPECT OF THE MERITS OF THE ADDITION /DISALLOWANCE PROPOSED BY THE LD.PCIT. 7. LEARNED COUNSEL FOR THE ASSESSEE ALSO BROUGHT TO OUR NOTICE THAT FOR THE ASSESSMENT YEAR 2012 - 13 LD.CIT(A) PASSED ORDER ON 19.08.2016 DELETING THE ADDITIONS/DISALLOWANCE S MADE BY THE ASSESSING OFFICER AND THIS ORDER IS ALSO AVAILABLE TO THE LD.PCIT WHEN LD.PCIT PASSED ORDER U/S.263 OF THE ACT ON 06.03.2017 . LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THE LD.PCIT HAS TAKEN NOTE OF ONLY THE ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2012 - 13 BUT IGNORED THE ORDER PASSED BY THE LD.CIT(A) FOR THE ASSESSMENT YEAR 2012 - 13 DATED 19.08.2016 WHERE THE ADDITIONS/DISALLOWANCES WERE DELETED BY THE LD.CIT(A). 9 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 8. LD.DR VEHEMENTLY SUPPORTED THE ORDER OF THE LD.PCIT IN INVOKING THE PROVISIONS THE SECTION 263 OF THE ACT AND HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. LD.DR FURTHER SUBMITS THAT THE ASS ESSEE FAILED TO BRING TO THE NOTICE OF THE LD.PCIT THAT THE ASSESSING OFFICER WAS APPROACHED FOR THE PROCEEDINGS OF T HE ORDER SHEET OF THE ASSESSMENT AND SUCH ORDER SHEET WAS NEVER FURNISHED BY THE ASSESSING OFFICER. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, P ERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN THE COURSE OF HEARING OF THIS APPEAL, O N A QUERY FROM THE BENCH AS TO WHETHER THE ORIGINAL RECORD OF ASSESSMENT IS AVAILABLE WITH THE DEPARTMENT , IT WAS ADMITTED THAT THE ORIGINAL ASSESSMENT RECORD IS NOT AVA ILABLE AND NOT TRACEABLE. REVENUE COULD NOT SUBMIT BEFORE US WHEN THE LD.PCIT CALLED FOR THE RECORD FROM ASSESSING OFFICER AND WHEN THE ASSESSING OFFICER SENT THE RECORD TO THE LD.PCIT FOR HIS EXAMINATION. FURTHER I T IS AN ADMITTED FACT THAT THE ASSESSIN G OFFICER AFTER COMPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT ON 16.10.2015 COLLECTED SOME OF THE INFORMATION FROM THE ASSESSEE WHICH WAS FURNISHED IN THE COURSE OF ASSESSMENT PROCEEDINGS AND RECONSTRUCTED THE ASSESSMENT RECORD . IT APPEARS THAT THE LD. PCIT BASED ON THIS INFORMATION SUPPLIED BY THE ASSESSING OFFICER AFTER COMPLETION OF ASSESSMENT CAME TO THE CONCLUSION THAT T HE ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3) OF THE ACT ON 10 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 16.10.2015 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE R EVENUE. ON A PERUSAL OF THE ORDER PASSED BY THE LD.PCIT WE FIND THAT THE LD.PCIT CAME TO THE CONCLUSION THAT IN T HE ORDER PASSED FOR THE ASSESSMENT YEAR 2012 - 13 THE ASSESSING OFFICER MADE ADDITION S AND DISALLOWANCE S BY REJECTING BOOKS OF ACCOUNTS AND DURING THE CURRENT ASSESSMENT YEAR THE ASSESSING OFFICER ACCEPTED THE DETAILS FURNISHED WITHOUT REJECTING THE BOOKS OF ACCOUNTS AND WITHOUT MAKING ANY ADDITION/DISALLOWANCE AS WAS MADE IN THE ASSESSMENT YEAR 2012 - 13 AND THEREFORE HE WAS OF THE OPINION THAT T HE ASSESSMENT ORDER PASSED FOR THE ASSESSMENT YEAR 2013 - 14 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. LD.PCIT WHILE CONCLUDING THAT T HE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST O F THE REVENUE OBSERVED AS UNDER: - 5. AS PER LETTER DATED 27.07.2016 A& 08.09.2016 OF THE ASSESSEE HAS STATED THAT THE O HAS CALLED FOR AND VERIFIED ALL THE DETAILS SUBMITTED TO HIM AND HE HAS APPLIED HIS MIND AN ARRIVED AT A CORED T CONCLUSION, THIS CANNOT BE ACCEPTED AS THERE ARE NO SUCH DETAILS OF VERIFICATION/EXAMINATION OF THE NATURE AND GENUINENESS OF THE ABOVE EXPENSES/ CLAIMS MADE BY THE ASSESSEE PLACED ON RECORD, ALSO THE ASSESSEE FAILED TO FILE ANY SUBMISSION ON VARIOUS OPPORTUNITIES GIVEN TO HIM. HENCE, I CONSIDER THAT IN VIEW OF THE ISSUES DISCUSSED IN PARA 2 & 3 ABOVE AND ON THE BASIS OF RECORDS AVAILABLE, THE ASSESSMENT ORDER DATED 16.10.2015 PASSED BY THE ASSESSING OFFICER IS WITHOUT CONDUCTING PROPER INVESTIGATION AND WITHOUT PROPER APP LICATION OF MIND AND THEREFORE, IT IS AN ERRONEOUS ORDER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHIN THE PROVISIONS OF SECTION 263 OF THE I.T. ACT, 1961. 10. AS COULD BE SEEN FROM THE ABOVE , IF THE CONTENTION OF THE ASSESSEE THAT AS PER LETTER DA TED 27.07.2016 AND 08.09.2016 THE ASSESSING OFFICER HAS CALLED FOR AND VERIFIED ALL THE DETAILS SUBMITTED TO HIM AND HAS APPLIED 11 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL HIS MIND AND ARRIVED AT A CORRECT CONCLUSION IN FRAMING THE ASSESSMENT ACC EPTING THE CLAIM OF THE ASSESSEE . THIS CONTENTION OF THE ASSESSEE WAS NEGATED BY THE LD.PCIT STATING THAT IT CANNOT BE ACCEPTED IN THE ABSENCE OF DETAILS OF VERIFICATION / EXAMINATION OF THE NATURE AND GENUINENESS OF THE EXPENSES/ CLAIMS MADE BY THE ASSESSEE IS PLACED ON RECORD. WE FAILED TO UNDERSTAND AS TO ON WHAT BASIS THE LD.PCIT ARRIVED AT THIS CONCLUSION ESPECIALLY IN THE ABSENCE OF THE ORIGINAL RECORD. IT IS AN ADMITTED FACT THAT THE ORIGINAL ASSESSMENT RECORD IS NOT TRACEABLE AND NOT AVAILABLE AND T HEREFORE THE RECORD WAS RECONSTRUCTED WITH THE INFORMATION FURNISHED BY THE ASSESSEE AFTER COMPLETION OF ASSESSMENT. WITHOUT EXAMINATION THE QUARRIES RAISED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THE INFORMATION FURNISHED BY THE ASSES SEE IN RESPECT OF ALL THE ISSUES RAISED BY THE LD.PCIT IN THE ORDER WE FAIL TO UNDERSTAND AS TO HOW THE LD.PCIT APPLIED HIS INDEPENDENT MIND TO ARRIVE AT A SATISFACTION THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON A PLAIN READING OF THE ORDER OF THE LD.PCIT WE FIND THE WHOLE BASIS OF HIS ORDER IN HOLDING THAT THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2013 - 14 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE IS ONLY BA SED ON T HE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2012 - 13 WHERE THE ASSESSING OFFICER MADE CERTAIN ADDITIONS/DISALLOWANCE AFTER REJECTING THE BOOKS OF ACCOUNTS. 12 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 11. IT IS ALSO EVIDENT FROM THE LETTER ISSUED BY THE OFFICE OF THE LD.PCIT DATED 24.08.2017 THAT THE RECORDS WERE RECONSTRUCTED. IT WAS FURTHER MENTIONED IN THE SAID LETTER THAT A VOLUMINOUS PAPER BOOK WAS FILED BY ASSESSEE CHALLENGING THE ORDER U/S. 263 OF THE ACT AND THIS WAS RECEIVED AFTER PASSING THE ORDER BY THE LD.PCIT AND THEREFORE TH E DETAILS OF THE SAME COULD NOT BE INCORPORATED IN THE ORDER U/S. 263 OF THE ACT. IF THIS IS THE POSITION WE ARE UNABLE TO UNDERSTAND AS TO HOW THE LD.PCIT STATED IN THE ORDER THAT THERE ARE NO DET A I L S OF VERIFICATION/EXAMINATION OF THE NATURE OF GENUINENESS OF THE EX PENSES / CLAIMS MADE BY THE ASSESSEE WERE PLACED ON RECORD. 12. IN THE CASE OF CIT V. GABRIEL INDIA LTD [203 ITR 108] THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT ON A READING OF SECTION 263 OF THE ACT, IT IS CLEAR THAT THE POWER OF SUO MOTU REVISION CAN BE EXERCISED BY THE COMMISSIONER ONLY AFTER AN EXAMINATION OF THE RECORDS OF ANY PROCEEDINGS IN THIS ACT AND IF HE CONSIDERS THAT ANY ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE. IT WAS HELD THAT IT IS NOT AN ARBIT RARY AND UNCHARTERED POWER BUT CAN BE EXERCISED ONLY ON FULFILLMENT OF THE REQUIREMENTS LAID DOWN IN SECTION 263 OF THE ACT. HON'BLE HIGH COURT HELD THAT THE CONSIDERATION OF THE COMMISSIONER AS TO WHETHER THE ORD ER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE MUST BE BASED 13 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL ON MATERIAL ON THE RECORD OF THE PROCEEDINGS CALLED FOR BY HIM IF THERE ARE NO MATERIAL ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT COMMISSIONER ACTING IN A REASONABLE MANNER COULD HAVE COME TO SUCH A CONCLUSION THE VERY INITIATION OF PROCEEDINGS BY HIM WILL BE ILLEGAL WITHOUT JURISDICTION. 13. IN THE CASE ON HAND IT IS AN ADMITTED FACT THAT THE ORIGINAL RECORD IS NOT TRACEABLE. RECORD WAS RECONSTRUCTED PARTIA LLY BASED ON WHICH CONCLUSION WAS ARRIVED AT , THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THERE WAS NO COMPLETE RECORD BEFORE THE LD.PCIT FOR EXAMINATION AND TO ARRIVE THE SATISFACTION OF THE ASSESSMENT ORDER BEI NG ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD.PCIT RESTED HIS DECISION ONLY ON THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2012 - 13 WHERE HE NOTICED THAT THE ASSESSING OFFICER HAD REJECTED THE BOOKS AND MADE SOME DISALLOWANCE. HOWEVER, DURING THE CURRENT ASSESSMENT YEAR SINCE THE ASSESSING OFFICER DID NOT MAKE ANY SUCH DISALLOWANCE THE LD.PCIT IS OF THE VIEW THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2013 - 14 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 14 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 14. IN THE CASE OF VINAY PRATAP THACKER V. CIT (SUPRA), IT HAS BEEN HELD THAT REVISION U/S. 263 IS NOT POSSIBLE ON A BORROWED SATISFACTION. WHILE HOLDING SO IT WAS OBSERVED AS UNDER: 22. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES AND HAVE ALSO PERUSED THE MATERIAL PLACED BEFORE US, INCLUDING THE CASE LAWS CITED BY EITHER SIDE. ON GOING THROUGH THE SUBMISSIONS OF THE ASSESSEE, SCN AND AUDIT OBJECTION, WE FIND THAT THE ISSUE HAD BEEN DEALT WITH BY THE AO IN REGULAR ASSESSMENT PROCEEDINGS AND THEREAFTER AN AUDIT OBJECTION WAS RAISED, WHICH WAS USED BY THE AO TO CONVINCE THE CIT TO INVOKE HIS JURISDICTION UNDER SECTION 263. WHEN WE READ THE SECTION, WHICH READS, AS, (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THIS CLEARLY SHOWS, THAT THE CIT MUST HIMSELF COME TO A CONCLUSION, AFTER APPLYING HIS OWN MIND, BECAUSE, THE WORDS USED IN THE SECTION ARE,.. AND IF HE CONSIDERS .., HERE, APPLICATION OF HIS OWN MIND BECOMES IMPORTANT. IT IS IMPORTANT TO EXAMINE THE SIMILARITY OF THE EXPRESSION USED UNDER SECTION 147(1) AND 263(1). UNDER SECTION 147(1), THE EXPRESSION USED IS HAS REASON TO BELIEVE AND UNDER SECTION 263(1), THE EXPRESSION USED IS IF HE CONSIDERS. TH OUGH THE EXPRESSIONS USED ARE NOT VERBATIM PARI MATERIA, BUT THE MEANING WHICH IS TO BE DRAWN IN BOTH THE EXPRESSIONS ARE PARI MATERIA, I.E., AN INDEPENDENT, UNPOLLUTED AND UNADOPTED APPLICATION OF MIND BY THE OFFICER, INVOKING THE PROVISION. 23. WE HAVE SEEN FROM THE IMPUGNED ORDER OF THE CIT, DATED 11.02.2011, THE CIT ADMITS, A PROPOSAL WAS RECEIVED ON 10.06.2010 FROM THE AO UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, POINTING OUT SOME DISCREPANCIES/SHORT COMINGS IN THE ASSESSMENT ORDER. THIS CLEARL Y SHOWS THAT IN SO FAR AS THE CIT WAS CONCERNED, HE DID NOT APPLY HIS OWN MIND, WHICH THE HONBLE SUPREME COURT OF INDIA HAS SAID IN ICICI BANK (SUPRA) THAT THERE SHOULD BE AN INDEPENDENT APPLICATION OF MIND. 15 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 24. ON PERUSAL OF THE SCN AND THE IMPUGNED ORD ER, WE FIND THAT THERE IS A DEPARTURE FROM THE REASONS TAKEN TO INVOKE THE PROVISIONS UNDER SECTION 263, THIS ALSO FINDS FAVOUR WITH THE ARGUMENTS ADVANCED BY THE AR AND GET COVERED BY THE DECISIONS CITED BY HIM. 25. WE ALSO HAVE TO ACCEPT THE ARGUMENTS O F THE AR WITH RESPECT OF APPLICABILITY OF SECTION 50C ON LEASE HOLD PROPERTIES, BECAUSE, THIS IS AN UNDISPUTED FACT THAT THE IMPUGNED PROPERTY WAS A LEASED PROPERTY, EVEN THOUGH, IT IS A LONG LEASE, BUT THE TITLE OF THE SAME SHALL ALWAYS REMAIN WITH THE AC TUAL OWNER, IN THE PRESENT CASE, BMA. THOUGH THE ISSUE IS SQUARELY COVERED BY THE CITED DECISIONS, BUT GOING BY THE SUBMISSIONS OF THE DR THAT IT IS A CASE OF DEEMED OWNERSHIP, ITSELF CREATES A DOUBT THAT WHETHER THERE HAS TO BE AN APPLICATION OF SECTION 5 0C OR NOT. THIS DOUBT, IN OUR CONSIDERED OPINION IS FATAL TO INVOCATION OF PROVISIONS OF SECTION 263, BECAUSE PROVISION OF SECTION 263 CANNOT BE INVOKED WHERE THE ISSUE BECOMES DEBATABLE, BECAUSE IF THE ISSUE IS DEBATABLE IT GOES OUT OF THE SCOPE OF ADMINI STRATION PROVISIONS BUT WOULD FALL IN THE REALM OF JUDICIAL PROVISIONS, WHICH IS NOT THE PURPOSE AND CONTEXT OF SECTION 263, WHICH, IN OUR OPINION IS TO DEAL ONLY ON TWO REALMS SIMULTANEOUSLY, I.E. WHETHER THE ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 26. IN THE INSTANT CASE, THE CIT, BY INVOKING THE JURISDICTION UNDER SECTION 263 STEPPED ON THE CORRECTNESS AND QUESTIONED THE APPLICABILITY OF SECTION 50C ON LEASED PROPERTY IN THE SCN, HE, THEREFORE TRANS GRESSED INTO THE JUDICIAL TERRITORY, WHICH HE CANNOT. 27 WE ARE AWARE OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF GABRIAL INDIA LTD., REPORTED IN 203 ITR 108, WHEREIN, THE HONBLE BOMBAY HIGH COURT HELD, CIT CANNOT REVISE ORDER MERELY BE CAUSE HE DISAGREES WITH THE CONCLUSION ARRIVED AT BY THE ITO. WE ARE ALSO AWARE OF THE CASE OF CIT VS SUNBEAM AUTO LTD., REPORTED IN 227 CTR 133, WHEREIN THE HONBLE DELHI HIGH COURT DREW A DISTINCTION BETWEEN LACK OF INQUIRY AND INADEQUATE ENQUIRY AN D HELD THAT IN THE CASE OF INADEQUATE ENQUIRY, PROVISIONS UNDER SECTION 263 CANNOT BE INVOKED. IN OUR OPINION, IN THE INSTANT CASE, THIS IS NEITHER THE CASE OF INADEQUATE ENQUIRY NOR LACK OF ENQUIRY AT THE REGULAR ASSESSMENT STAGE. 28. TAKING INTO CONSIDE RATION THE ENTIRE GAMUT OF FACTS AND JUDICIAL DECISIONS, PLACED BEFORE US, WE ARE OF THE CONSIDERED OPINION THAT THE CIT COULD NOT HAVE INVOKED THE JURISDICTION UNDER SECTION 263 WITHOUT HIS OWN INDEPENDENT APPLICATION OF MIND; ON OTHERWISE DEBATABLE ISSUE S AND BY MERELY DISAGREEING ON THE VIEW TAKEN BY THE AO. 29. IN THE RESULT, WE SET ASIDE THE ORDER OF THE CIT DATED 11.02.2011, PASSED UNDER SECTION 263 AND ANNUL THE INITIATION OF 16 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL REVISION PROCEEDINGS AND AS A CONSEQUENCE, WE RESTORE THE ORDER PASSED BY THE AO, UNDER SECTION 143(3) DATED 15.12.2008. 15. SIMILARLY PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SPAN OVERSEAS LTD V. CIT IN ITA.NO.1223/PN/2013 DATED 21.12.2015, IT HAS BEEN HELD AS UNDER: - 7. A PERUSAL OF THE IMPUGNED ORDER SHOWS, THAT THE COMMISSI ONER OF INCOME TAX IN THE INSTANT CASE HAS MERELY REPRODUCED THE DEFICIENCIES POINTED OUT BY THE DY. COMMISSIONER OF INCOME TAX IN THE ASSESSMENT ORDER. THE COMMISSIONER OF INCOME TAX HAS NOT GIVEN THE REASONS AS TO HOW THE FINDINGS OF THE ASSESSING OFFICE R ARE ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE CONTENTION OF THE ASSESSEE IS THAT ALL THE RELEVANT DOCUMENTS WERE PLACED ON RECORD BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER HAS PASSED THE O RDER AFTER CONSIDERING THE SAME. THE DUTY OF THE ASSESSEE IS BRING ALL THE RELEVANT DOCUMENTS BEFORE THE ASSESSING OFFICER. THE MANNER IN WHICH THE ORDER IS TO BE PASSED IS THE PREROGATIVE OF THE ASSESSING OFFICER. 8. THE ORDER OF THE ASSESSING OFFICER MA Y BE BRIEF AND CRYPTIC BUT THAT BY ITSELF IS NOT SUFFICIENT REASON TO HOLD THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS FOR THE COMMISSIONER TO POINT OUT AS TO WHAT ERROR WAS COMMITTED BY THE ASSESSING OFFICER IN TAKING A PARTICULAR VIEW. IN THE CASE IN HAND, THE COMMISSIONER OF INCOME TAX HAS FAILED TO POINT OUT ERROR IN THE ASSESSMENT ORDER. FOR INVOKING REVISIONARY POWERS, THE COMMISSIONER OF INCOME TAX HAS TO EXERCISE HIS OWN DISCRETION AND JUDGMENT. HERE THE COMMISSIONER OF INCOME TAX HAS INVOKED THE PROVISIONS OF SECTION 263 AT THE MERE SUGGESTION OF THE DY. COMMISSIONER OF INCOME TAX, WITHOUT EXERCISING HIS OWN DISCRETION AND JUDGMENT. 9. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VINAY PRATAP THACKER VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX PASSED U/S. 263 ON THE GROUND THAT THE COMMISSIONER OF INCOME TAX HAD NOT USED HIS OWN DISCRETION AND JUDGMENT IN ASSUMI NG THE REVISIONAL JURISDICTION.. 10. IN VIEW OF THE FACT THAT THE COMMISSIONER OF INCOME TAX HAS INVOKED THE PROVISIONS OF SECTION 263 WITHOUT APPLYING HIS OWN INDEPENDENT JUDGMENT AND MERELY AT THE BEHEST OF PROPOSAL FORWARDED BY THE DY. COMMISSIONER OF INCOME TAX IS AGAINST THE SPIRIT OF ACT. THUS, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. 17 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL 16. ON A PERUSAL OF THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT ON 16.10.2015 FOR THE ASSESSMENT YEAR 2013 - 14 WE FIND THAT ASSESSING OFFICER OBSERVED AS UNDER: 3. THE ASSESSEE IS A PARTNERSH IP FIRM AND MAINLY DOES THE JOB OF MANUFACTURING, INSTALLATION AND COMMISSION OF AIRCRAFT BARRIER SYSTEM FOR THE MINISTRY OF DEFENCE. THE ASSESSEE WRITES BOOKS OF ACCOUNTS ON MERCANTILE SYSTEM OF ACCOUNTING AND MAINTAINS ALL RELEVANT BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCE. BOOKS OF ACCOUNTS ARE AUDITED AS PER THE INCOME TAX ACT, 1961. DURING THE COURSE OF HEARING ALL RELEVANT DETAILS ARE CAL LED FOR AND VERIFIED. THE PARTICULAR DETAILS OF SALES AND PURCHASES, MAJOR EXPENSES AND ALL ASSETS AND LIABILITI ES ARE VERIFIED PRODUCED BOOKS OF ACCOUNTS ARE ALSO VERIFIED AT RANDOM. MAINTENANCE OF BOOKS OF ACCOUNTS AND SUPPORTING EVIDENCES ARE IN ACCORDANCE WITH THE RETURN OF INCOME SUBMITTED FOR THE RELEVANT PREVIOUS YEAR . 17. AS COULD BE SEEN FROM THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE IS MAIN TAIN ING BOOKS OF ACCOUNTS AND ALL THE RELEVANT BOOKS OF ACCOUNTS WITH SUPPORTING EVIDENCES . BOOKS OF ACCOUNTS WERE AUDITED AND IN THE COURSE OF ASSESSMENT PROCEEDINGS ALSO RELEVANT DETAILS ARE CALLED FOR AND VERIFIED PARTICULARLY DETAILS OF SALES AND PURCHASES, LEDGER EXPENSES AND ALL THE ASSETS AND LIABILITY W ERE VERI FIED WITH REFERENCE TO BOOKS OF ACCOUNTS AND THE BOOKS OF ACCOUNTS AND EVIDENCES ARE IN ACCORDANCE WITH THE RETURN OF INCOME. THEREFORE THE OBSERVATION OF THE LD.PCIT THAT THERE ARE NO DETAILS OF THE VERIFICATION /EXAMINATION OF THE NATURE AND GENUINENESS OF THE EXPENSES / CLAIMS WERE NOT PLACED ON RECORD BY THE ASSESSEE APPEA RS TO BE MISPLACED . THE VOLUMINOUS DETAILS WERE FURNISHED BEFORE US BY THE 18 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL ASSESSEE ALSO PROVES THAT THESE DETAILS WERE FURNISHED BEFORE THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS WHICH WERE ALSO EXAMINED BY THE ASSESSING OFFICER AND COMPLETED THE ASSESSMENT. 18. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. FINE JEWELLERY (INDIA) LTD. [372 ITR 303] FOLLOWING ITS EARLIER DECISION IN IDEA CELLULAR LTD V. DCIT [301 ITR 407] HAS TAKEN A VIEW THAT: IF A QUERY IS RAISED DU RING THE ASSESSMENT PROCEEDINGS AND RESPONDED TO BY THE ASSESSEE, THE MERE FACT THAT IT IS NOT DEALT WITH IN THE ASSESSMENT ORDER WOULD NOT LEAD TO A CONCLUSION THAT NO MIND HAD BEEN APPLIED TO IT. 19. THE HON'BLE DELHI HIGH COURT IN THE CASE OF PCIT V. DELH I AIRPORT METRO EXPRESS PVT. LTD. (SUPRA) HAS CATEGORICALLY HELD THAT FOR THE PURPOSE OF EXERCISING JURISDICTION U/S. 263 OF THE ACT AND REACHING A CONCLUSION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE THE LD.PCIT HAS TO UND ERTAKE SOME MINIMAL ENQUIRY IF THE LD.PCIT IS OF THE VIEW THAT ASSESSING OFFICER HAD NOT UNDERTAKEN ANY ENQUIRY IT BECOMES INCUMBENT ON THE LD.PCIT TO CONDUCT SUCH ENQUIRY. IN THE CASE ON HAND WE FIND THAT THE LD.PCIT HAS MERELY RELIED ON THE ORDER OF THE ASSESSING OFFICER FOR THE PRECEDING ASSESSMENT YEAR AND ALSO OBSERVING THAT THERE WERE NO ENQUIRIES MADE BY THE ASSESSING OFFICER FOR THE CURRENT ASSESSMENT YEAR , CAME TO THE CONCLUSION THE ASSESSMENT ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE INSTANT 19 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL CASE THE LD.PCIT IGNORED OR RATHER NOT EXAMINED AT ALL IN THE ABSENCE OF ORIGINAL RECORD , THE ENQUIRIES CONDUCTED BY THE ASSESS ING OFFICER DURING THE ASSESSMENT PROCEEDINGS AND HAS MERELY OBSERVED THAT THE ASSESSMENT ORDER WAS PASSED WITHOUT MAKING PROPER ENQUIRIES. IT IS A MATTER OF RECORD THAT LD.PCIT HAS HIMSELF NOT UNDERTAKEN ANY ENQUIRY TO REACH A CONCLUSION THAT THE ORDER I S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 20. IN THE CASE OF CIT V. DLF LIMITED [350 ITR 555] THE HON'BLE DELHI HIGH COURT HELD THAT UNDER THE PROVISIONS OF SECTION 263 OF THE ACT, IT IS NOT THAT MERE PREJUDICE TO THE REVENUE OR MERE ERRONEOUS VIEW WHICH CAN BE REVISED BUT THERE SHOULD BE ADDED ELEMENT OF UNSUSTAINABILITY IN THE ORDER OF THE ASSESSING OFFICER WHICH CLOTHES THE COMMISSIONER OF INCOME TAX WITH JURISDICTION TO ISSUE NOTICE AND PROCEED TO PASS APPROPRIATE ORDER U/S. 263 OF THE ACT. 21. WE FURTHER FIND THAT EXCEPT STATING THAT THE ASSESSEE HAS NOT FURNISHED ANY DE TAILS BEFORE THE ASSESSING OFFICER , THE ASSESSING OFFICER WITHOUT CONDUCTING PROPER INVESTIGATION AND WITHOUT PROPER APPLICATION OF MIND ACCEPTED THE CLAIMS OF THE ASSESSEE AND THEREFORE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE , T HE LD.PCIT COULD NOT DEMONSTRATE OR GIVE PROPER REASON S AS TO HOW THE ASSESSMENT 20 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 22. IN VIEW OF THE ABOVE DISCUSSION WE ARE OF THE VIEW THAT THE LD.PCIT HAS FAI LED TO SHOW THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS AN ESTABLISHED PROPOSITION OF LAW THAT BOTH THE CONDITIONS I.E. ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE ARE REQUIRED TO BE SATISFIED FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. IN THE INSTANT CASE WE ARE OF THE VIEW THAT THE LD.PCIT HAS FAILED TO SHOW THAT BOTH THE CONDITIONS EXIST. IN THE CIRCUMSTANCES WE FIND MERIT I N THE CONTENTIONS OF THE ASSESSEE THAT THE REVISION ORDER PASSED BY THE LD.PCIT FOR THE YEAR UNDER CONSIDERATION IS BEYOND THE SCOPE OF SECTION 263 AND HENCE NOT VALID . IN THE CIRCUMSTANCES WE SET - ASIDE THE ORDER OF THE LD.PCIT AND ALLOW THE GROUNDS OF TH E ASSESSEE. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRON OUNCED IN THE OPEN COURT ON THE 20 TH DECEMBER , 2017. SD/ - SD/ - ( RAJESH KUMAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 20 / 12 / 2017 VSSGB , SPS 21 ITA NO.2155/MUM/2017 (A.Y: 2013 - 14) JOHN GALT INTERNATIONAL COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM