Bridge & Building Construction Co. (P) Ltd., Kolkata V. CIT (CEN-1), KOLKATA, Kolkata

ITA 241/KOL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4954 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 12-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANANDA SRIVASTAVA
• Assessee Lawyers: MANISH TIWARI
• Keywords: Opportunity of being heard; Accommodation entries; Revenue expenditure; Capital expenditure
• Section: 143(3); 133(6); 263; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 241 / KOL / 2015 ASSESSMENT YEAR :2011-12 BRIDGE & BUILDING CONSTRUCTION COMPANY PVT LTD., 90B, S.P.MUKHERJEE ROAD, KOLKATA-700 026 [ PAN NO. AADCB 0689 E ] V/S . CIT (CENTRAL-1), AAYAKAR BHAWAN POORVA 110, SHANTIPALLY, KOLKATA-700 107 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI MANISH TIWARI, AR /BY RESPONDENT SHRI SACHIDANANDA SRIVASTAVA, CIT-DR /DATE OF HEARING 17-02-2016 /DATE OF PRONOUNCEMENT 19-04-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (CENTRAL-I), KOLKATA M. NO.CIT(C-I)/263/ M/S BRIDGE & BUILDING CONS.(P) LTD 14-15/KOL/3399-607 DATED 15.01.2015. A SSESSMENT WAS FRAMED BY DCIT,CC-XX, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28.0 3.2014 FOR ASSESSMENT YEAR 2011-12. GROUNDS RAISED BY ASSESSEE IS REPRODUCED B ELOW:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT (CENTRAL)-1, KOLKATA HAS ERRED IN INITIATING PROCEEDING U/S. 263 OF INCOME TAX ACT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT (CENTRAL)-1, KOLKATA HAS ERRED IN HOLDING THAT ASSESSMENT ORDER U/S 143(3) OF INCOME TAX ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 2 ACT, 1961 DATED 28.03.2014 IS ERRONEOUS & PREJUDICI AL TO THE INTEREST OF REVENUE. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT (CENTRAL)-1, KOLKATA HAS ERRED IN SETTING ASIDE ORDER U/S 143(3) DATED 28.03.2014 BY RELYING ON THE DECISION OF RAMPYARI DEVI SARAOGI VS CIT, 67 ITR 84(SC) 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT (CENTRAL)-1, KOLKATA HAS ERRED IN PASSING ORDER U/S 263 DATED 15 .01.2015 BY RELYING UPON IRRELEVANT & EXTRANEOUS CIRCUMSTANCES 5. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT (CENTRAL)-1, KOLKATA HAS ERRED IN NOT APPRECIATING THE FACTS PRO PERLY THAT THE AO CONDUCTED DETAILED ENQUIRY BY ISSUING NOTICES U/S 133(6) AND ONLY AFTER GETTING PROPER RESPONSE TO SUCH NOTICES THE AO FRAMED ASSESSMENT U /S 143(3). 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT (CENTRAL)-1, KOLKATA HAS ERRED IN PASSING ORDER U/S 263 MECHANIC ALLY WITHOUT PROPER APPLICATION OF MIND. 2. ISSUE RAISED IN ALL THE GROUNDS OF APPEAL BY AS SESSEE IS THAT LD. CIT U/S 263 OF THE ACT ERRED IN HOLDING THE ASSESSMENT ORDE R PASSED BY ASSESSING OFFICER AS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF REVENUE. THE FACT IN BRIEF ARE THAT ASSESSEE IN THE INSTANT APPEAL, IS A PRIVATE LIMITED COMPANY ENGAGED IN CONTRACTUAL BUSINESS. IN THIS CA SE, SOME INFORMATION WAS RECEIVED FROM ACIT, RANGE-8, NEW DELHI REGARDIN G THE PRESENT ASSESSEE THAT HE HAD PROVIDED ACCOMMODATION ENTRIES TO M/S S KYLINE ENGINEERING CONTRACTS (INDIA) PVT. LTD. ACCORDINGLY THE LD. ACI T, NEW DELHI REQUESTED TO ISSUE NOTICE U/S. 131(1)(D) OF THE ACT TO DCIT, CC- XX, KOLKATA TO VERIFY THE GENUINENESS OF ASSESSEES BUSINESS BY MAKING FIELD ENQUIRIES. HOWEVER, LD. CIT FOUND THAT NO SUCH INQUIRY HAS BEEN CONDUCTED. BESIDES THE ABOVE IN THE INSTANT CASE, ASSESSEE WAS PAID A SUM OF 16,86,87,593/- FOR UNDERTAKING EARTH WORK FOR DEVELOPMENT OF AGRICULTURAL LAND BY M/S SKYLINE ENGINEERING CONTRACTS (INDIA) PVT. LTD. ACCORDINGLY, LD. CIT OP INED THAT ORDER PASSED BY AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, HENCE, LD. CIT ISSUED NOTICE U/S 263 OF THE ACT ON THE FOLLOWING P OINTS:- ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 3 A) THAT AO FAILED TO MAKE NECESSARY INQUIRIES AS R EQUIRED BY LD. ACIT, NEW DELHI U/S. 131(1)(D) OF THE ACT FOR VERIFYING T HE GENUINENESS OF THE ASSESSEE, B) THAT ASSESSEE HAS MADE PAYMENT TO THREE PARTIES (1) UPASANA DISTRIBUTORS, (2) ANUKUL FISCAL SERVICES PVT. LTD. AND (3) ADVENTURE INDIA TOWARDS THE SALES PROMOTION EXPENSES, HOWEVER, AO H AS NOT DONE ANY INQUIRY, C) THAT ASSESSEE HAS INCURRED AN EXPENSE OF 30,16,903/- TOWARDS REPAIR AND MAINTENANCE OF ITS RENTED OFFICE. THE AS SESSEE DID NOT SHOW ANY FIXED ASSET IN THE NAME OF ITS OFFICE BUILDING. LD. CIT FOUND THAT AO HAS NOT EXAMINED AS TO WHY ASSESSEE HAD INVESTED SU CH A HUGE AMOUNT OF 30 LAKH ON RENTED BUILDING WHEREAS RENT CHARGE SHO WED IN ITS PROFIT AND LOSS ACCOUNT, IS MERELY OF 7,200/- PER ANNUM, D) THAT THERE WAS INFORMATION GATHERED FROM SOURCE OF AIR THAT ASSESSEE HAS SOLD THE PROPERTY AMOUNTING TO 3 CRORES BUT SAME FACT HAS NOT BEEN VERIFIED BY AO FROM THE OFFICE OF SUB REGISTRAR, JAITARAN, RAJASTHAN. ACCORDINGLY, LD. CIT OPINED THAT ORDER OF AO IS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THUS THE CIT ISSUED NOTICE U/S 263 OF THE ACT. IN RESPONSE THERETO, THE ASSESSEE HAS SUBMITTED AS UND ER:- 1) THAT ASSESSEE ATTENDED THE HEARING SEVERAL TIMES AT THE TIME OF ASSESSMENT BEFORE ASSESSING OFFICER ON AND FROM NOV . 2013 TO MAR. 2014. ALL RELEVANT DETAILS REGARDING PURCHASE, REPA IR AND MAINTENANCE AND OTHER ASSETS AND SALE PROMOTION AND COPY OF FORM 20B FOR SHOWING CAPITAL WAS FURNISHED AT THE TIME O F FRAMING ASSESSMENT. THE EXPENSES INCURRED ON PURCHASE OF MA TERIALS WERE DULY CROSS VERIFIED BY SERVICE OF NOTICE ISSUED U/S 133(6) OF THE ACT BY AO. THEREFORE, ASSESSMENT WAS COMPLETED AFTER DE TAILED INQUIRY AND EXAMINATION OF ALL RELEVANT MATERIALS. ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 4 2) THE REASON EXPRESSED IN THE SHOW CAUSE NOTICE TH AT THE ASSESSEE MIGHT HAVE INDULGED IN GIVING ACCOMMODATION ENTRIES CANNOT BE A VALID GROUND FOR INITIATION OF PROCEEDINGS UNDER SE CTION 263 BECAUSE OF SUSPICION AND SURMISES. 3) REGARDING SALE OF PROPERTY ASSESSEE HAS GIVEN AN AFFIDAVIT THAT NO SUCH PROPERTY WAS SOLD DURING THE RELEVANT YEAR. HOWEVER, LD. CIT DISREGARDED THE CLAIM OF ASSESSEE BY OBSERVING AS UNDER:- I) HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. V. CIT (2000) 243 ITR 83 (SC) THE LD. CIT CAN PASS ORDER U NDER SECTION 263 OF THE ACT EVEN IF THERE IS A DEBATABLE ISSUE. THE HONBLE APEX COURT HAS FURTHER HELD THAT WHERE AO H AS ACCEPTED ENTRY IN THE STATEMENT OF ACCOUNT FILED BY THE ASSE SSEE AND IN THE ABSENCE OF ANY SUPPORTING MATERIAL AND WITHOUT MAKI NG ANY ENQUIRY, THE COMMISSIONER UNDER SECTION 263 OF THE ACT CAN EXERCISE JURISDICTION. II) THE CLAIM OF ASSESSEE IS THAT THE BOOKS OF ACCO UNT OF ASSESSEE WERE PRODUCED BEFORE AO AT THE TIME OF ASSESSMENT I S NOT CORRECT. AS PER THE EXAMINATION OF ASSESSMENT RECOR DS, THE ASSESSEE HAS PRODUCED ITS BOOKS OF ACCOUNT ON 28.03 .2014 AND AO PASSED ASSESSMENT ORDER ON THE SAME DATE. THEREF ORE, IT IS CLEAR AND BEYOND DOUBT THAT AO HAS NOT EXAMINED OR CARRIED OUT NECESSARY INQUIRIES OR INVESTIGATION AS REQUIRED. III) THAT THERE WAS NO INQUIRY U/S. 131(1)(D) OF TH E ACT AS REQUIRED BY ACIT, NEW DELHI REGARDING THE GENUINENESS OF ASSESS EES BUSINESS ACTIVITIES. BUT FROM THE RECORD, IT REVEAL ED THAT NO SUCH INQUIRY WAS CONDUCTED BY AO. IN THIS CASE, LD. CIT RELIED IN THE CASE OF RAMPYARI DEVI SAROOGI V. CIT 67 ITR 84 (SC); IV) SINCE THE BOOKS OF ACCOUNT OF ASSESSEE WERE PRO DUCED BEFORE AO ON 28.03.2014 AND AO PASSED ORDER ON SAME DATE, HENCE, IT IS CLEAR THAT SALES PROMOTION EXPENSE SHOWN BY ASSE SSEE HAS NOT BEEN VERIFIED BY AO. ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 5 V) THAT AO HAS RELIED ON THE AFFIDAVIT SUBMITTED BY ASSESSEE REGARDING THE SALE OF PROPERTY FOR AN AMOUNT OF 3 CRORE. HOWEVER, AO SHOULD HAVE TAKEN THE REGISTERED DOCUME NTS OF THE SOLD PROPERTY IN QUESTION FROM SUB-REGISTRAR OF RAJ ASTHAN. SO IT IS VERY MUCH APPARENT THAT THE AO FAILED TO COLLECT TH E REQUIRED INFORMATION AND NECESSARY INQUIRY HAS NOT BEEN DONE BY THE AO. IN THIS CONNECTION, LD. CIT U/S. 263 OF THE ACT REL IED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES V. ACIT 99 ITR 375 (DEL); VI) THAT AO WHO HAS DONE THE ASSESSMENT, HAS ALSO A DMITTED THAT THE NECESSARY INQUIRIES WERE NOT MADE IN RELATION T O THE ASSESSMENT DUE TO NON-COOPERATION ON THE PART OF TH E ASSESSEE. IN VIEW OF ABOVE, LD. CIT PASSED ORDER U/S. 263 OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE U S. SHRI MANISH TIWARI, LD AUTHORIZED REPRESENTATIVE AP PEARING ON BEHALF OF ASSESSEE AND SHRI SACHIDANANDA SRIVASTAVA, LD. DEPA RTMENTAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. THE LD. AR SUBMITTED BEFORE US THAT THE ASSESSMENT WAS FRAMED BY THE AO AFTER DUE VERIFICATION AND DETAILED ENQUIRY AND REL IED ON THE ORDER OF AO. ON THE CONTRARY THE LD. DR STRONGLY RELIED ON THE ORDE R OF THE LD. CIT. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORDS. FROM THE AFORESAID DISCUSSION WE FIND THAT THE LD. CIT TREATED THE ORDER OF THE AO ERRONEOUS IN SO FAR AS IT IS PREJUD ICIAL TO THE INTEREST OF REVENUE. IT IS BECAUSE THAT THE AO HAS NOT VERIFIED THE EXPENSES IN DETAILS. BESIDES THERE WERE SOME INFORMATION FROM NEW DELHI INCOME TAX OFFICE FOR CHECKING THE GENUINENESS OF THE ASSESSEE ACTIVITIES AS HE MIGHT HAVE ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 6 INDULGED IN PROVIDING ACCOMMODATING ENTRIES. AND THIS FACT WAS NOT VERIFIED BY THE CONCERN INCOME TAX OFFICER. THERE WAS SOME S ALE OF THE PROPERTIES WHICH WERE NOT DISCLOSED IN THE INCOME TAX RETURN. THEREFORE THE LD. CIT HELD THE ORDER ERRONEOUS IN SO FAR PREJUDICIAL TO THE IN TEREST OF REVENUE. NOW TO ARRIVE AT THE CORRECT CONCLUSION OF THE CASE, WE DE EM IT NECESSARY TO REPRODUCE THE RELEVANT PROVISIONS OF SECTION 263 OF THE ACT. (1) THE [ PRINCIPAL COMMISSIONER OR] COMMISSIONER M AY 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 ERRONE OUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE, MY , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUS ING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THER EON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DI RECTING A FRESH ASSESSMENT. THE SUM AND SUBSTANCE OF THE ABOVE REPRODUCED SECTI ON 263(1) CAN BE SUMMARIZED IN THE FOLLOWING POINTS:-: 1) THE COMMISSIONER MAY CALL TO EXAMINE THE RECORD OF ANY PROCEEDING UNDER THE ACT; 2) IF HE CONSIDERS THAT THE ORDER PASSED BY THE AO IS (I) ERRONEOUS; AND (II) IS PREJUDICIAL TO THE INTEREST OF REVENUE; 3) HE HAS TO GIVE AN OPPORTUNITY OF HEARING IN THIS RESPECT TO THE ASSESSEE; AND 4) HE HAS TO MAKE OR CAUSE TO MAKE SUCH ENQUIRY AS HE DEEMS NECESSARY; 5) HE MAY PASS SUCH ORDER THEREON AS THE CIRCUMSTAN CES OF THE CASE JUSTIFY INCLUDING, (I) AN ORDER ENHANCING OR, (II) MODIFYING THE ASSESSMENT OR (III) CANCELLING THE ASSESSMENT AND DIRECTING A FRE SH ASSESSMENT. 4.1 NOW IN THE LIGHT OF THE ABOVE WORDS, WE HAVE TO EXAMINE AS TO WHETHER THE ORDER OF THE LD. CIT IS A VALID ORDER IN THE LI GHT OF THE ABOVE STATED POINTS/ ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 7 PROVISIONS OF SECTION 263 OF THE ACT. IN THE PRESEN T CASE IN HAND, WE FIND THAT THE LEARNED CIT HAS TREATED THE ORDER OF THE AO ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON ACCOUNT OF FOUR REAS ONS. THE FIRST REASON WAS THAT THE AO COULD NOT VERIFY THE GENUINENESS OF THE ASSESSEE IN ACCORDANCE WITH THE QUERY RAISED FROM THE OFFICE OF INCOME TAX - DELHI. THE QUERY WAS RAISED THAT THE ASSESSEE MIGHT BE ENGAGED IN PROVID ING ACCOMMODATION ENTRIES TO M/S SKYLINE ENGINEERING CONTRACTS INDIA PRIVATE LIMITED. SO IT WAS REQUIRED BY DELHI INCOME TAX OFFICE TO VERIFY GENUI NENESS OF ASSESSEES BUSINESS BY MAKING FIELD ENQUIRIES BUT IT WAS NOT M ADE BY THE AO. IN OUR VIEW THIS CANNOT BE THE REASON TO MAKE AN OPINION THAT T HE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE. THIS IS BECAUSE SECTION 263 REQUIRES THE COMMISSIONER OF INCOME TAX TO CONSIDER THE ORDER ERRONEOUS AFTER EXAMINING THE RECORDS OF THE PROCEE DINGS. HERE IN THIS CASE NO RECORD OF THE ASSESSEE HAS BEEN CALLED AND EXAMI NED FOR HOLDING THE ORDER ERRONEOUS, THEREFORE WE DISAGREE WITH THE VIEW OF T HE LD. CIT. 4.2 THE 2 ND AND 3 RD REASON WAS THAT THE ASSESSEE HAS CLAIMED SALES PROMOTION EXPENSES AND REPAIR & MAINTENANCE EXPENSE S WITHOUT PROPER ENQUIRY AND EXAMINATION OF THE RECORDS. HOWEVER FRO M THE ORDER OF THE AO WE FIND THAT THE ASSESSEE HAS PRODUCED BOOKS OF ACCOUN TS AND OTHER DETAILS WHICH WERE TEST CHECKED BY THE AO AND THEREAFTER TH E ASSESSMENT ORDER WAS FRAMED. THE CIT ALSO ALLEGED THAT THE BOOKS OF ACCO UNTS WERE PRODUCED ON THE DAY I.E. 28 TH MARCH 2014 AND SAME DAY THE ORDER OF ASSESSMENT WA S PASSED. WE AGAIN DISAGREE WITH THE VIEW OF CIT THAT THE AO HAD SHORT TIME FOR THE VERIFICATION OF THE BOOKS. IN THIS CONNECTION W E OPINED THAT IT WAS THE DUTY OF THE AO TO CARRY OUT THE ASSESSMENT OF THE ASSESS EE IN THE MANNER AS HE DEEMS FIT IN THE INTEREST OF THE REVENUE. ACCORDING LY THE AO HAS DONE HIS JOB BY FRAMING THE ASSESSMENT ON THE ASSESSEE. HOWEVER THE CIT MAKES HIS OPINION THAT THE ORDER PASSED BY THE AO WAS MADE IN HASTE BUT FAILED TO BRING ANYTHING ON RECORD FROM THE PROCEEDINGS FOR HOLDING THE ORDER OF THE AO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. IN THIS CONNECTION WE RELY ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 8 ON THE ORDER OF HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS. M/S ASHOK HANDLOOM F ACTORY PVT. LTD. IN ITA NO. 19 OF 2016 DATED 01.02.2016 WHEREIN THE HONBLE HIGH COURT HA S HELD THAT IT IS SETTLED LAW THAT THE COMMISSIONER O F INCOME TAX CAN EXERCISE HIS JURISDICTION U/S 263 OF THE ACT ONLY IN CASES WHERE NO ENQUIRY IS MADE BY THE ASSESSING OFFICER. IN THE INSTANT CASE, IT IS ADMIT TED BY THE INCOME TAX DEPARTMENT THAT THE ASSESSING OFFICER HAD MADE SOME ENQUIRIES THOUGH ACCORDING TO THEM IT WAS NOT A PROPER ENQUIRY. IN V IEW OF THE ABOVE WE FIND NO REASON TO HOLD THE ORDER OF THE AO ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF THE REVENUE. 4.3 THE 4 TH REASON WAS THAT AS PER THE INFORMATION COLLECTED F ROM THE SOURCE OF AIR, THE ASSESSEE HAS SOLD THE PROPERTY AMOUNTIN G TO RS. 3 CRORES BUT THE ASSESSEE DID NOT MAKE ANY DISCLOSURE IN THE BOOKS O F ACCOUNTS. SO THE CIT TREATED THE ORDER OF THE AO ERRONEOUS AND THE PREJU DICIAL TO THE INTEREST OF THE REVENUE. HOWEVER FROM THE PROVISIONS OF SECTION 263 WE FIND THAT THE CIT WAS SUPPOSED TO MAKE SUCH ENQUIRIES AS HE DEEMS NEC ESSARY BEFORE ARRIVING TO THE CONCLUSION THAT THE ORDER PASSED BY THE AO I S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE CIT HAS FAILED TO M AKE OR CAUSE TO MAKE SUCH ENQUIRY AS HE DEEMS NECESSARY. THE TERM DEEMS NECES SARY IS OPEN ENDED. THERE COULD BE CASES THAT THE COMMISSIONER CAN TAKE A STAND THAT THERE WAS NO NECESSITY TO MAKE SUCH ENQUIRY. IF THAT IS THE C ASE IT SHOULD BE SPECIFICALLY RECORDED THAT THE FACTS EMANATING FROM THE RECORDS REQUIRES NO FURTHER ENQUIRY TO BE MADE OR CAUSE TO BE MADE. HOWEVER FROM THE PR OVISION OF THE SECTION 263 OF THE ACT WE FIND THAT THE CIT IS BOUND TO MAK E NECESSARY ENQUIRY BEFORE ARRIVING AT THE CONCLUSION THAT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE INSTANT CASE THE CIT SHOULD HAVE ENQUIRED FROM THE OFFICE OF SUB REGISTRAR JITARAN, RAJASTHAN TO ASCERTAIN WH ETHER THERE WAS ANY TRANSACTION OF SALE OF THE PROPERTY. IN OUR VIEW TH E CIT HELD THE ORDER OF AO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E WITHOUT MAKING NECESSARY ENQUIRY. ACCORDINGLY WE ARE INCLINED TO REVERSE THE ORDER OF THE CIT PASSED ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 9 UNDER SECTION 263 OF THE ACT. WE ARE ALSO FINDINGS SUPPORT FROM ONE OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F COMMISSIONER OF INCOME-TAX VS GABRIEL INDIA LTD. (1993) 203 ITR 10 8 (BOM) WHEREIN IT WAS HELD THAT WE MAY NOW EXAMINE THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE POWERS OF THE COMMISSIONER SET OUT ABOVE. THE INCOME-TAX O FFICER IN THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPEN DITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN DETAILED EXPLANATI ON IN THAT REGARD BY A LETTER IN WRITING. ALL THESE ARE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEIN G SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. SUCH DECISION OF THE I NCOME-TAX OFFICER CANNOT BE HELD TO BE 'ERRONEOUS' SIMPLY BECAUSE IN HIS ORD ER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. MOREOVER, IN T HE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEED INGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWA NCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT AN EXPENDITURE OF CAPITAL NATURE. H E SIMPLY ASKED THE INCOME-TAX OFFICER TO RE-EXAMINE THE MATTER. THAT, IN OUR OPINION, IS NOT PERMISSIBLE. FURTHER INQUIRY AND/OR FRESH DETERMINA TION CAN BE DIRECTED BY THE COMMISSIONER ONLY AFTER COMING TO THE CONCLUSION TH AT THE EARLIER FINDING OF THE INCOME-TAX OFFICER WAS ERRONEOUS AND PREJUDICIA L TO THE INTERESTS OF THE REVENUE. WITHOUT DOING SO, HE DOES NOT GET THE POWE R TO SET ASIDE THE ASSESSMENT. IN THE INSTANT CASE, THE COMMISSIONER D ID SO AND IT IS FOR THAT REASON THAT THE TRIBUNAL DID NOT APPROVE HIS ACTION AND SET ASIDE HIS ORDER. WE DO NOT FIND ANY INFIRMITY IN THE ABOVE CONCLUSIO N OF THE TRIBUNAL. 16. IN THE LIGHT OF THE FOREGOING DISCUSSION, WE AN SWER THE QUESTION REFERRED TO US IN THE AFFIRMATIVE, THAT IS, IN FAVOUR OF THE AS SESSEE AND AGAINST THE REVENUE. IN VIEW OF THE ABOVE AND FROM THE FACTS OF THE CASE THAT THE ORDER PASSED U/S 263 OF THE ACT BY THE LD. CIT CANNOT BE HELD TO BE SUSTAINABLE IN LAW AND THE SAME IS ACCORDINGLY SET ASIDE. 5. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 19/ 04/2016 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 19 / 04 /201 6 ITA NO.241/KOL/2015 A.Y.2011-12 BRIDGE & BLDG. CONST. CO.PVT.LTD. V. CIT (C-1 ) KOL. PAGE 10 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BRIDGE & BUILDING CONSTRUCTION CO. PVT. LTD., 90B, S.P.MUKHERJEE KOLKATA-700026 2. /RESPONDENT-CIT (CENTRAL-I), AAYKAR BHAWAN, POORVA, 110, SHANTI PALLY, KOL-107 3. ) *+ , , - / CONCERNED CIT KOLKATA 4. , , -- / CIT (A) KOLKATA 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,