M/s. Manisha Agri Biotech P Ltd., Hyderabad V. Commissioner of Income Tax, - IV, Hyderabad

ITA 223/HYD/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7631 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Unexplained cash credit; Bogus Share capital; Business income; Difference of opinion; Change of opinion
• Section: 43B; 143(3); 133A; 148; 263

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 223/HYD/2014 ASSESSMENT YEAR 2009-10 M/S. MANISHA AGRI BIOTECH PVT. LTD., HYDERABAD PAN: AACCM7108C VS. THE COMMISSIONER OF INCOME-TAX-IV, HYDERABAD APPELLANT RESPONDENT APPELLANT BY: SRI P. MURALI MOHAN RAO RESPONDENT BY: SRI P. SOMA SEKHAR REDDY DATE OF HEARING: 16 .0 9 .2014 DATE OF PRONOUNCEMENT: 13 . 1 0 .2014 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX-IV, HYDERABAD D ATED 22.01.2014 FOR A.Y. 2009-10, PASSED U/S. 263 OF INC OME- TAX ACT, 1961. 2. THE ASSESSEE COMPANY M/S. MANISHA AGRI BIO TECH PVT. LTD., IS ENGAGED IN THE BUSINESS OF PROCESSING OF SEEDS AND IT FILED ITS RETURN OF INCOME FOR THE A.Y. 2009 -10 ON 6.1.2010 DECLARING TOTAL INCOME OF RS. 98,59,859. T HE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT W AS COMPLETED U/S 143(3) OF THE ACT ON 30.12.2011 DETERMINING THE TOTAL INCOME AT RS. 1,04,55,360. 3. SUBSEQUENTLY, IT WAS NOTICED THAT THE SAID ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE AND ACCORDINGLY A SHOW CAUSE NOTICE U/S 263 OF THE ACT WAS ISSUED ON 16.12.2013. THE RELEVANT POR TION 2 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== OF THE SHOW CAUSE NOTICE CONTAINING THE REASONS FOR TREATING THE ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE IS RE-PRODUCED HEREIN BELOW : '1. THE AO HAS ACCEPTED YOUR CLAIM OF AGRICULTURAL INCOME OF RS. 3086191, WHICH WAS CLAIMED AS EXEMPT FROM TAXATION. AS PER THE INFORMATION AVAILABLE ON RECORD, YOUR BUSINESS IS 'TRADING OF SEEDS. IT IS, THEREFORE, CLEAR THAT THE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING OF VARIOUS KINDS OF HYBRID SEEDS AND THEREFORE, THE INCOME GENERATED FROM THIS ACTIVITY IS ASSESSABLE AS BUSINESS INCOME RATHER THAN AGRICULTURAL INCOME. 2. FROM THE DETAILS OF PAYMENTS MADE TOWARDS PF CONTRIBUTION, IT IS NOTICED THAT THE EMPLOYEES' SHARE OF CONTRIBUTION AMOUNTING TO RS. 278118 WAS NOT REMITTED TO GOVERNMENT ACCOUNT WITHIN THE DUE DATE AND HENCE THE SAME SHOULD HAVE BEEN DISALLOWED U/S 36(L)(VA). 3. IN YOUR CASE, A SURVEY U/S 133A OF THE ACT WAS CONDUCTED ON 29.8.2011 AND BOOKS OF ACCOUNT / DOCUMENTS WERE IMPOUNDED AS PER THE INFORMATION AVAILABLE IN THE IMPOUNDED MATERIAL, THERE IS A DETAILED ACCOUNT OF CROP WISE AND PRODUCT WISE QUANTITY SOLD THROUGH VARIOUS BRANCHES DURING THE FIN. YEAR 2008-09. AS PER THESE DETAILS, THE COMPANY'S NET DOMESTIC SALES DURING THE FINANCIAL YEAR 2008- 09 IN TERMS OF QUANTITY AMOUNTED TO 43,63,689.90 KGS. VALUED AT RS. 32,15,99,707/-. AS PER THE ROI, YOUR NET DOMESTIC SALES FOR THE YEAR UNDER CONSIDERATION WERE SHOWN AT RS. 30,63,94,292/-. HENCE, THERE IS A DIFFERENCE OF RS. 15205415 BETWEEN THE FIGURE OF SALES, AS REFLECTED IN THE IMPOUNDED MATERIAL AND THE AMOUNT OF SALES ADMITTED BY YOU IN THE RETURN OF INCOME. THIS ISSUE WAS NOT EXAMINED BY THE AO AND THE DIFFERENCE WAS NOT CONSIDERED AS INCOME WHILE COMPLETING THE ASSESSMENT. 3 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== 4. CONSEQUENT TO SURVEY PROCEEDINGS, YOU WERE REQUESTED TO EXPLAIN THE SOURCES OF CASH DEPOSIT OF RS. 950000 MADE IN ICICI BANK ACCOUNT ON 2.3.2009. IN RESPONSE TO THIS, IT WAS EXPLAINED THAT FOR THE FIN. YEAR 2008-09, THE AO COMPLETED THE ASSESSMENT AFTER VERIFYING THE BOOKS OF ACCOUNT. HOWEVER, IT IS FOUND FROM THE RECORD THAT THIS ISSUE WAS NOT EXAMINED AND THERE IS NO INFORMATION AVAILABLE ON RECORD EXPLAINING THE SOURCES FOR THE ABOVE MENTIONED CASH DEPOSIT 5 DURING THE FINANCIAL YEAR UNDER CONSIDERATION THE COMPANY HAS INTRODUCED RS. 32,36,030/- TOWARDS SHARE CAPITAL. CONSEQUENT TO THE SURVEY PROCEEDINGS, YOU WERE REQUESTED TO FURNISH COMPLETE INFORMATION WITH REGARD TO THE DETAILS OF INVESTORS ALONG WITH CONFIRMATION LETTERS. HOWEVER, YOU HAD NOT PRODUCED ANY DETAILS IN RESPECT OF THE BELOW MENTIONED AMOUNTS CLAIMED TO HAVE BEEN RECEIVED FROM THE FOLLOWING INVESTORS DURING THE FINANCIAL YEAR 2008-09. ARV PRASAD - RS. 315600 ASIF RIAZ - RS. 50000 K PURSHOTHAM RAO - RS. 315600 DURING THE ASST. PROCEEDINGS. THE AO DID NOT VERIFY THE SOURCES FOR THE ABOVE MENTIONED INVESTMENT AND ACCEPTED YOUR CLAIM.' 4. THE AR SUBMITTED THAT THE ASSESSEE OBJECTED TO THE REVISIONARY PROCEEDINGS CONTENDING THAT WHEN TW O VIEWS ARE POSSIBLE AND THE A O HAD TAKEN ONE VIEW, WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TRE ATED AS ERRONEOUS AND PREJUDICIAL TO THE INT ERESTS OF THE R EVE NUE , UNLESS THE VIEW TAKEN BY THE IT O IS UN- SUSTAINABLE IN LAW. IN RESPECT OF THE CLAIM OF AGRICULTURAL INCOME OF R S . 30,86,191, THE AR SUBMITTED THAT THE COMPANY'S ACTIVITY INCLUDED AGRICULTURAL A CTIVITY 4 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== AND STATED THE MODUS OPERANDI OF THE BUSINESS ACTIV ITY AS UNDER: (I) OUR COMPANY IS ENGAGED IN THE PLANT BREEDING, RESEARCH, CULTIVATION OF FOUNDATION (MOTHER) SEED AND PRODUCTION OF HIGH YIELDING HYBRID SEEDS OF VARIOUS CROPS AND THEIR MARKETING. (II) THE GERMPLASM IS COLLECTED AND PLANTED IN COMPANY'S RESEARCH FARMS. SUBSEQUENTLY BY USING SOME AGRICULTURAL SCIENTIFIC PROCESS AND BY ON-FARMING ACTIVITY, HIGH YIELD BREED OF FOUNDATION SEEDS OF VARIOUS CROPS ARE PRODUCED (III) WITH THIS HYBRID BREEDS, THE COMPANY CULTIVATES FOUNDATION SEEDS IN THE COMPANIES AGRICULTURAL FARMS ON COMPANY OWN LANDS AND ON LEASED LANDS. (IV) THE HYBRID SEED THUS THEN PRODUCED ARE RETESTED AND DISTRIBUTED TO FARMERS TOR MULTIPLICITY OF PRODUCTION. (V) THE FARMER PRODUCES HYBRID SEEDS WITH THE FOUNDATION SEEDS TAKEN FROM THE ASSESSEE COMPANY, BY SOWING THEIR AGRICULTURAL LANDS AND BY THE PROCESS OF AGRICULTURAL ACTIVITY. (VI) THE HYBRID SEEDS, THUS PRODUCED BY THE FARMERS ARE PRODUCED BY THE ASSESSEE COMPANY AND AFTER SOME PROCESS TO MEET 5 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== THE MARKET CONDITIONS AND PACKED TO SUIT TROUTS OF THE SEEDS AND THEN THEY ARE SOLD IN COMMERCIAL MARKETS'. 5. THE AR FURTHER SUBMITTED THAT THE ASSESSEE DID NOT CLAIM THE ENTIRE INCOME FROM THE ABOVE MENTIONED ACTIVITIES AS AGRICULTURAL INCOME BUT IT HAS ONLY T REATED THAT PORTION OF THE INCOME UP TO THE PRODUCTION AND SALE OF FOUNDATION SEEDS TO FARMERS (FOR MULTIPLYING THE SAME TO HYBRID SEEDS) AS AGRICULTURAL INCOME. THE INCOM E GENERATED FROM THE MARKETING OF HYBRID SEEDS IS STA TED TO HAVE BEEN ADMITTED AS BUSINESS INCOME. IN SUPPORT O F ITS CONTENTION, THE ASSESSEE ALSO RELIED UPON ON THE IT AT DECISION IN VIBHA AGROTECH LIMITED FOR ASST. YEAR R EPORTED IN 314 ITR (AT) 231 AND AY 2002-03, 2004-05 & 2005- 06 IN ITA NOS. 469/HYD/2008, 470/HYD/2008, 480/HYD/2008, 76/HYD/2008, 234/HYD/2009 DATED 19.6.2010. 6. HOWEVER, THE CIT U/S. 263 HELD THAT THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE AND IN THE INSTAN T CASE THE CLAIMS MADE BY THE ASSESSEE WERE ACCEPTED BY TH E AO WITHOUT MAKING ANY ENQUIRY AND WITHOUT BRINGING ON RECORD ANY SUPPORTING MATERIAL TO EXPLAIN THE VIEW TAKEN BY THE AO IN THE ASSESSMENT ORDER. THE CIT, THEREF ORE, HELD THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE C IT HELD THAT THE ASSESSEE IS NOT CARRYING ON ANY AGRICULTUR AL ACTIVITIES AND R & D ACTIVITY UNDERTAKEN BY THE ASS ESSEE IS COLLECTION OF GERMPLASM FROM SEVERAL SOURCES WHI CH IS NOT PRODUCED OR MANUFACTURED OR CULTIVATED BY THE ASSESSEE BUT COLLECTED FROM OUTSIDE SOURCES. 6 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== 7. THE CIT FURTHER OBSERVED AT PARA 3.8 THAT GROSS AGRICULTURAL INCOME OF RS. 47,34,213 WAS CLAIMED IN THE RETURN AND AFTER CLAIMING DEDUCTION FOR CULTIVA TION EXPENSES OF RS. 16,48,022, NET AGRICULTURAL INCOME OF RS. 30,86,191 WAS RETURNED. THE CIT STATED THAT DURING THE ASST. PROCEEDINGS, DETAILS OF CULTIVATIO N EXPENSES WAS CALLED FOR, IN RESPONSE TO WHICH, THE ASSESSEE FURNISHED COPY OF THE LEDGER EXTRACT OF TH E SAID EXPENDITURE. IT IS SEEN FROM THIS LEDGER EXTRA CT THAT MOST OF THE EXPENSES WERE BOOKED ON ACCOUNT OF TOUR ADVANCE TO STAFF AND SMALL PART OF THE EXPENDITURE OF ABOUT RS. 2.5 LAKHS WAS SHOWN TO HAVE BEEN INCURRED IN CASH. FURTHER', THE SAID CULTIVATI ON EXPENDITURE WAS GROUPED A L ONG WITH R&D EXPENDITURE AND CLAIMED UNDER THE SAME HEAD IN THE P&L ACCOUNT. THE CIT HELD THAT ON PERUSAL OF THE LEDGER EXTRACT OF CULTIVATION EXPENDITURE IT IS SEEN THAT IT WAS INCU RRED IN CONNECTION WITH TOUR OF COMPANY STAFF TO NANDYAL AND NO AMOUNT IS RELATABLE TO AGRICULTURAL ACTIVITY AND NOTHING WAS INCURRED TOWARDS BASIC AGRICULTURAL OPERATIONS. THE CIT(A) OBSERVED THAT IT IS THE DUTY OF ASSESSEE TO ESTABLISH THE AGRICULTURAL OPERATIONS W ITH SUFFICIENT EVIDENCE AND ASSESSEE SHOULD MAINTAIN PROPER RECORD OF EXPENDITURE AND BOOKS OF ACCOUNTS FOR SUCH SO CALLED AGRICULTURAL OPERATIONS. 8. THE CIT ALSO RELIED ON THE DECISION OF PIONEER OVERSEAS CORPORATION VS. DCIT (INTERNATIONAL TAXATI ON) (35 SOT 0467). THE CIT ALSO STATED THAT THE JURISD ICTIONAL TRIBUNAL'S DECISION IN THE CASE OF VIBHA AGROTECH L TD., AS RELIED ON BY THE ASSESSEE, IS DIFFERENT FROM THE C ASE OF THE 7 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== ASSESSEE SINCE IN THAT CASE THE TRIBUNAL FOUND IT A S A FACT THAT THE ASSESSEE CARRIED OUT AGRICULTURE. 9. WITH RESPECT TO THE SECOND ISSUE BEING DISALLOWANCE OF EMPLOYEE'S SHARE OF CONTRIBUTION TO PF AMOUNTING TO RS. 2,73,118, THE CIT PERUSED THE CHART FURNISHED B Y THE ASSESSEE SHOWING THE AMOUNT UNDER CONSIDERATION BEI NG DEPOSITED TO THE CREDIT OF THE EMPLOYEE ACCOUNT ON VARIOUS DATES BEFORE THE DATE OF FILING THE RETURN OF INCOM E U/S. 139(1) OF THE ACT. THE ASSESSEE HAS ALSO SUBMITTED THAT SECTION 43B WAS AMENDED WITH EFFECT FROM 1.4.2004 PROVIDING FOR ALLOWANCE OF SUCH PAYMENT IF THE PAYM ENT IS ACTUALLY MADE ON OR BEFORE THE DUE DATE OF FILING T HE RETURN OF INCOME IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH INCOME WAS INCURRED. 10. THE CIT(A) FROM THE AUDIT REPORT FILED U/S 44AB ALONG WITH RETURN OF INCOME , OBSERVED THAT IN THE RELEVANT COLUMN I.E.. CO L . 21(B), WHERE THE AUDITOR IS REQUIRED TO PROVIDE DETAILS OF ANY SUM REFERRED TO IN SECTION 43B LIABILITY OF WHICH WAS INCURRED BY THE ASSESSEE IN THE PREVIOUS YEAR BUT THE SUMS W ERE PAID ON OR BEFORE THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE PREVIOUS YEAR, THE AUDITOR MENTIONED THE DETAILS AS NIL. THE CIT OBSERVED THAT THE SUBMISSION MADE BY THE ASSESSEE IS CONTRARY TO THE REMARK MADE IN THE TAX AUDIT REPORT. ACCORDINGLY, H E WAS OF THE VIEW THAT THIS ISSUE IS REQUIRED TO BE EXAMINED AFRESH IN THE LIGHT OF THE REMARKS MADE IN TAX AUDIT CERTIFICATE AND THE INFORMATION FILED DUR ING REVISION PROCEEDINGS. 8 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== 11. THE NEXT ISSUE RELATES TO UNACCOUNTED SALE OF RS. 1,52,05,415. IN THE REVISIONARY PROCEEDINGS, THE ASSESSEE EXPLAINED THAT THE AMOUNT OF UNACCOUNTED SALES MENTIONED IN THE SHOW CAUSE NOTICE IS NOTHING BUT THE SUM OF EXPORT SALES AND CULTIVATION INCOME WHICH WAS DISCLOSED IN THE P&L ACCOUNT. ACCORDINGLY , IT WAS CONTENDED THAT THERE WERE NO UNACCOUNTED SAL ES AS POINTED OUT IN THE SHOW CAUSE NOTICE. THE CIT OBSERVED THAT I N THIS CASE, A SURVEY U/S 133A WAS CARRIED OUT ON 29.8.2011. DURING THE SURVEY PROCEEDINGS, INCRIMINATING MATERIAL WAS IMPOUNDED. SUBSEQUENT TO THE SURVEY, ASSESSMENT FOR THIS YEAR WAS COMPLETED ON 30.12.2011. IN THE IMPOUNDED MATERIAL MARKED AS 'ANNEXURE MABPL/2', INFORMATION REGARDING DOMESTIC SALES MADE IN THE FINANCIAL YEAR 2008-09 IS AVAILABLE. THE CIT POINTED OUT THAT AS P ER THE SAID INFORM A TION. THE DE TAILS OF GROUP - WISE, PRODUCT - WISE QUANTITY SOLD BY THE ASSESSEE THROUGH VARIOUS BRANCHES DURING THE FINANCIAL YEAR 2008-09 AMOUNTED TO R S . 32 , 15 , 99 , 707 C ORRESPONDING TO 43 , 63 , 680 KG AND THIS AMOUNT WAS MENTIONED AS DOMESTIC SALES IN T HE IMPOUNDED MATERIAL. 12. THE CIT NOTED THAT EXAMINATION OF THE RECORD SHOWED THAT THE A O HAS NOT CONFRONTED THIS INFORMATION WITH THE ASSESSEE DURING THE ASST. PROCEEDINGS AND NO ENQUIRY WITH REGARD TO THE DISCREPANCY IN THE AMOUN T OF DOMESTIC SALES FIGURES AS A VAILABLE I N THE IMPOUNDED MATERIAL VIS-A-VIS THE AMOUNT SHOWN IN THE R ETURN WAS MADE. THE CIT CONCLUDED THAT THIS IS A CASE WHERE T HE INFORMATION AVAILABLE IN THE IMPOUNDED MATERIAL WAS NOT TAKEN INTO ACCOUNT AND NO ENQUIRY WAS MADE WITH 9 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== REGARD TO THE DISCREPANCY FOUND AND, THEREFORE, THE VIEW TAKEN BY THE A O IN ACCEPTING THE SALES FIGURES DISCLOSED IN THE P&L ACCOUNT CANNOT BE HELD TO BE SUSTAINABLE IN LAW AND THE MATERIAL IMPOUNDED IN TH E SURVEY PROCEEDINGS CONTAINING DISCREPANCY IN SALES W AS NOT CONFRONTED WITH THE ASSESSEE SO AS TO FIND OUT THE CORRECT TURNOVER. THE CIT HELD THAT THE ORDER HAS BECOME BOTH ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF THE R EVENUE 13. THE NEXT ISSUE IS IN RESPECT OF ADDITION OF UNEXPLAINED CASH DEPOSIT OF RS. 9,50,000 CLAIMED TO HAVE BEEN RECEIVED FROM 3 INVESTORS. THE AR OF THE ASSE SSEE SUBMITTED THAT A CHART SHOWING PARTY-WISE BREAK-UP OF CAPITAL INTRODUCED INTO THE COMPANY DURING THE YEAR HAS BEEN PRODUCED BEFORE THE AO WHICH IS AS UNDER. ACCORDING TO THE AR, ALONG WITH THE CHART CONFIRMAT ION LETTERS FROM THE 3 INVESTORS WERE ALSO FILED. SL. NO. NAME OF THE SHAREHOLDER NO. OF SHARES AMOUNT (RS.) 1. M. SABIR 97837 978370 2. P.V. RAMA RAO 94681 946810 3. S. VENU GOPAL 56809 568090 4. G. VINOD KUMAR RAO 34716 347160 5. A.V.R. PRASAD 31560 315600 6. ASIF RIAZ 5000 50000 7. K. PURUSHOTHAMRAO 3000 30000 TOTAL 32,36,030 14. THE CIT HELD THAT IN RESPECT OF THE REMAINING THREE INVESTORS NO INFORMATION WAS FURNISHED. THE CIT OBS ERVED THAT IT IS ALSO CLEAR FROM THE ORDER-SHEET NOTINGS DATED 29.12.2011 AND 16.12.2011 WHEREIN THE A O NOTED THAT THE AR FILED ONLY SOME O F THE CONFIRMATION LETTERS AND NO DETAILS OF THESE INVESTORS WERE FURNISHED EVEN 10 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== SUBSEQUENTLY ALSO. THE CIT POINTED OUT THAT THE AO COMPLETED THE ASSESSMENT ON 30/12/2011 WITHOUT MAKING ANY A DDITION TOWARDS UNEXPLAINED CASH CREDIT EVEN THOUGH NEITHER INFORMATION LETTERS, NOR ANY OTHER DETA I LS SHOWING THAT THESE THREE PERSONS HAD REALLY INVESTE D CAPITAL IN THE COMPANY WERE FILED BY THE ASSESSEE. THE CIT CONCLUDED THAT HAVING ISSUED A SHOW CAUSE NOTIC E PROPOSING TO TREAT THE UNEXPLAINED SHARE CAPITAL AS CASH CREDIT, T HE AMOUNT CLAIMED TO HAVE BEEN INVESTED BY THE SAID THREE PERSONS SHOULD HAVE BEEN ASSESSED AS UNEXPLAINED CASH CREDIT WHEN THE ASSESSEE FAILED TO PROVE THE INVESTMENT BY FURNISHING NECESSARY EVIDENCE AND HENCE, ON THIS COUNT ALSO, THE ASSESSMENT ORDER HAS BECOME BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF THE REVENUE . 15. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 16. THE LEARNED COUNSEL FOR THE ASSESSEE SRI P. MURALI MOHAN RAO STATED THAT THE AO HAD UNDERTAKEN THE SUR VEY PROCEEDINGS IN WHICH A DETAILED QUESTIONNAIRE WAS ANSWERED BY THE ASSESSEE AND BROUGHT OUR NOTICE PAG ES 103 AND 104 OF THE PAPER BOOK. AT PAGE 110 OF THE PAPER BOOK THE ITO, WARD-16(2), HYDERABAD HAD WRITTEN A L ETTER DATED 15.11.2011 WHICH IS AS FOLLOWS: 'FOR COMPLETING THE SCRUTINY ASSESSMENTS, YOU ARE REQUIRED TO COMPLY TO THE FOLLOWING QUESTIONNAIRE: 1. THERE IS AN INCREASE OF SHARE CAPITAL FOR RS. 32.36 LAKHS. PLEASE EXPLAIN THE SOURCE AND DETAILS OF INVESTORS. 2. PLEASE FILE NAMES AND ADDRESSES OF SUNDRY CREDITORS FOR PURCHASES, EXPENSES, DEALER DEPOSITS. 11 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== 3. PLEASE FURNISH DETAILS OF PURCHASES OF 12.52 CRORES, CLOSING STOCK OF RS. 3.8 CRORES WITH NATURE OF SEED, QUANTITY, RATE, ETC. 4. PLEASE FILE DETAILS OF TDS MADE ON ADVERTISEMENT, COLD STORAGE, INTEREST, AUDIT FEES, CONSULTANCY CHARGES, ETC. 5. PLEASE FILE DETAILS OF PAYMENT OF EMPLOYEE'S CONTRIBUTION TO PF & ESI. 6. PLEASE FILE LEDGER EXTRACTS OF ALL EXPENSES. 7. COPY OF BANK ACCOUNT. 17. IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT THE CIT ERRED IN PASSING THE ORDER U/S. 263 OF THE ACT BY FORMING MERE CHANGE OF OPINION AND WITHOUT CONSIDER ING THE FACT THAT THE ORIGINAL ASSESSMENT HAS BEEN COMP LETED U/S. 143(3) OF THE ACT AFTER CAREFUL VERIFICATION O F ALL THE INFORMATION FURNISHED. IT WAS ALSO CONTENDED THAT THE NOTICE U/S. 148 DATED 28.3.2013 WAS ISSUED AND PROCEEDINGS U/S. 148 ARE PENDING FOR THE A.Y. 2009- 10 ON THE SAME ISSUE. THEREFORE, SIMULTANEOUS PROCEEDING S U/S. 263 IS NOT CORRECT AND VOID AB INITIO . THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISIONS IN THE CASE OF MALABAR INDUSTRIAL COMPANY LTD. VS. CIT (24 3 ITR 83) (SC), SPECTRA SHARES & SCRIPS (P) LTD. VS. CIT (36 TAXMANN.COM 348) (AP), SRINIVASA HATCHERIES (P) LTD . VS. DCIT (81 ITD 36) (HYD), INVENTAA CHEMICALS LTD. VS. ACIT (42 SOT 249) (HYD), NEW CYBERABAD CITY PROJECTS (P) LTD. VS. ITO (33 TAXMANN.COM 280) (HYD). 18. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED THAT AL L THE FIVE ISSUES VIZ., (1) AGRICULTURAL INCOME, (2) PF CONTRIBUTION, (3) ADDITION ON ACCOUNT OF UNACCOUNTE D SALES, (4) UNEXPLAINED CASH DEPOSITS AND (5) ADDITI ON OF 12 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== SHARE CAPITAL INTRODUCED, HAVE BEEN EXAMINED AND EXPLAINED AND THOROUGHLY ENQUIRED BY THE AO, AS THE ASSESSEE HAD REPLIED TO AO'S REQUEST TO FURNISH INFORMATION TO THE QUERIES IN HIS LETTER AT PAGE 11 0 OF THE PAPER BOOK. HENCE, IT WAS ARGUED THAT IT IS MERE CH ANGE OF OPINION ON THE PART OF THE CIT TO INVOKE JURISDI CTION U/S. 263 OF THE ACT. 19. THE DR, ON THE OTHER HAND, COUNTERED THE LEARNED COUNSEL FOR THE ASSESSEE BY ARGUING THAT MERE FILIN G OF DETAILS BY THE ASSESSEE WILL NOT MAKE THE ORDER U/S . 263 INVALID BUT ONE HAS TO SEE WHETHER THE ASSESSING OF FICER HAS MADE AN ERROR IN PASSING HIS ORDER. 20. WE HAVE HEARD BOTH THE PARTIES. IT IS SETTLED LAW THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE DETAILED REASONS AND ONCE IT IS CL EAR THAT THERE WAS APPLICATION OF MIND BY AN ENQUIRY, THE RESPONDENT, MERELY BECAUSE HE ENTERTAINS A DIFFEREN T OPINION IN THE MATTER, CANNOT INVOKE HIS POWERS UND ER SECTION 263 OF THE ACT. IT IS, THEREFORE, NOT CORRE CT TO SAY THAT THERE WAS NO PROPER ENQUIRY BY THE ASSESSING O FFICER. IN THE INSTANT CASE, THE ASSESSING OFFICER HAD NOT ONLY TAKEN A POSSIBLE VIEW BUT IN THE CIRCUMSTANCES THE ONLY VIEW POSSIBLE AND, THEREFORE, HIS ORDER COULD NOT H AVE BEEN TERMED AS ERRONEOUS OR PREJUDICIAL TO THE REVE NUE WARRANTING EXERCISE OF REVISIONAL JURISDICTION UNDE R SECTION 263 OF THE ACT BY THE RESPONDENT. THE RESPO NDENT HAD NO DIFFERENT OR NEW MATERIAL TO TAKE DIFFERENT VIEW FROM THE ONE TAKEN BY THE ASSESSING OFFICER AND THE REASONS GIVEN BY HIM TO REOPEN THE ASSESSMENT AND SUSTAIN THE REVISION ARE TOTALLY UNACCEPTABLE. THE 13 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== RESPONDENT IS NOT VESTED WITH ANY POWER UNDER SECTI ON 263 TO INITIATE PROCEEDINGS FOR REVISION IN EVERY C ASE AND START RE-EXAMINATION AND FRESH ENQUIRIES IN MATTERS WHICH HAVE ALREADY BEEN CONCLUDED UNDER THE LAW. 21. IF ASSESSING OFFICER TAKES A POSSIBLE VIEW, THEN TH E ASSESSMENT ORDER CANNOT BE SAID TO BE ERRONEOUS AND THE COMMISSIONER IS NOT ENTITLED TO EXERCISE JURISDICTI ON UNDER SEC. 263 OF THE ACT, AS HELD BY THE DECISIONS IN THE CASES OF MALABAR INDUSTRIAL CO. LTD. V. CIT [2000] 243 ITR 83/109 TAXMAN 66 (SC) ; CIT V. MAX INDIA. LTD. [200 7] 295 ITR 282/[2008] 166 TAXMAN 188 (SC). 22. IF THE ASSESSING OFFICER HAS ISSUED SHOW CAUSE NOTICES WITH RESPECT TO AN ISSUE AND THE ASSESSEE H AS REPLIED THERETO FULLY, COMMISSIONER IS NOT ENTITLED TO INTERFERE AS EVERY DECISION OR VIEW THAT THE ASSESS ING OFFICER TAKES IS NOT TO BE REFLECTED IN THE ASSESSM ENT ORDER AND AN ITEM FINDS MENTION ONLY IF HE DOES NOT AGREE WITH THE ASSESSEE'S CONTENTION. HENCE, THE ASSESSME NT ORDER CANNOT BE SAID TO BE ERRONEOUS AND WE RELY ON THE DECISIONS IN THE CASES OF CIT V. VIKAS POLYMERS [20 10] 194 TAXMAN 57 (DELHI); CIT V. SUNBEAM AUTO LTD. 11 ITR 1 7 2 10 189 TAXMAN 436 DELHI; AND CIT V. GABRIEL INDIA LTD. [1993] 203 ITR 108/71 TAXMAN 585 (BORN.). 23. WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN ; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC. 263 MERELY BECAUSE HE HAS A DIFFERENT OP INION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN 14 ITA NO. 223/HYD/2014 M/S. MANISHA AGRI BIOTECH PVT. LTD. =========================== ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CAN NOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BE EN WRITTEN MORE ELABORATELY. WE ARE, THEREFORE, OF THE OPINION THAT THE ASSESSEE'S APPEAL IS TO BE ALLOWED. 24. IN THE RESULT, ASSESSEE'S APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 13 TH OCTOBER, 2014 SD/ - (B. RAMAKOTAIAH) ACCOUNTANT MEMBER SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD, DATED THE 13 TH OCTOBER, 2014 TPRAO COPY TO: 1. M/S. MANISHA AGRI BIOTECH PVT. LTD., C/O. M/S. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD-82. 2. THE COMMISSIONER OF INCOME - TAX - IV, HYDERABAD. 3 . THE ADDL. CIT, RANGE - 16, HYDERABAD. 4 . THE DEPUTY CIT, CIRCLE 16(2), HYDERABAD. 5 . THE DR, A - BENCH, ITAT, HYDERABAD.