ANUJ JAYENDRA SHAH, MUMBAI V. PR CIT 35, MUMBAI

ITA 2546/MUM/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1764 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: YESHWANT V CHAVAN
• Keywords: Gift; Revision of order; Income from undisclosed sources; Opportunity of being heard; Retrospective amendment
• Section: 43B; 143(3); 142(1); 68; 56; 263; 63

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 2546 /MUM/2015 ( / ASSESSMENT YEAR : 2010-11) ANUJ JAYENDRA SHAH, 52, VALLABH APARTMENT, 87, BHULABHAI DESAI ROAD, MUMBAI 400 026. / V. PRINCIPAL COMMISSIONER OF INCOME TAX 35, C-12, 3 RD FLOOR, PRATYAKSHA KAR BHAVAN, BANDRA-KURLA COMPLEX, BANDRA EAST, MUMBAI 400 051. ./ PAN : AAGPS7560M ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY MS. AARTI VISSANJI REVENUE BY : SHRI YESHWANT V. CHAVAN / DATE OF HEARING : 17-12-2015 / DATE OF PRONOUNCEMENT : 30-12-2015 !' / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL, FILED BY THE ASSESSEE, BEING ITA NO. 2 546/MUM/2015, IS DIRECTED AGAINST THE ORDERS DATED 25-03-2015 PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX - 35, MUMBAI (HEREINAFTE R CALLED THE PR. CIT), FOR THE ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE TRIBUNAL READ AS UNDER:- ITA 2546/M/15 2 (I) THE LEARNED PRINCIPLE COMMISSIONER OF INCOME T AX 35, MUMBAI HAS ERRED IN SETTING ASIDE ASSESSMENT ORDER FOR MAK ING IT DE NOVO FOR REDECIDING THE ISSUE RELATED TO THE CLAIM OF RECEIP T OF GIFT OF RS. 148,00,000/- EVEN THOUGH THE RECEIPT OF SUCH GIFT W AS FULLY VERIFIED BY THE LEARNED ASSESSING OFFICER. (II) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY , OMIT, SUBSTITUTE OR AMEND THE ABOVE GROUND OF APPEAL, AT ANY TIME BEFOR E OR AT, THE TIME OF HEARING, OF THE APPEAL, SO AS TO ENABLE TO LEARNED COMMISSIONER (APPEALS) TO DECIDE THE APPEALS ACCORDING TO LAW. . ' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE ES CASE WAS SELECTED FOR SCRUTINY UNDER CASS. AS PER THE AIR INFORMATION, TH E ASSESSEE HAS PURCHASED UNITS OF DEUTSCHE MUTUAL FUNDS FOR RS. 1, 45,00,000/- ON 15-05- 2009 AND FOR RS. 12,00,000/- ON 20-05-2009. THE AS SESSEE ALSO PURCHASED IMMOVABLE PROPERTY OF RS. 5,27,00,000/- ON 30-12-20 09. TO EXAMINE THE SOURCES OF INVESTMENT IN MUTUAL FUND AND IMMOVABLE PROPERTY AS REPORTED IN ITS UNDER AIR , NOTICE U/S 143(2) READ WITH SECTION 142(1) OF INCOME TAX ACT,1961(HEREINAFTER CALLED THE ACT) WAS ISSUED B Y THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO). DURING THE C OURSE OF THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT READ WITH SECTION 143(2) OF THE ACT, THE ASSESSEE SUBMITTED THAT IT HAS INVESTED RS. 1.45 CR ORES ON 15-5-2009 AND RS. 12 LACS ON 20-05-2009 IN DEUTSCHE BANK MUTUAL FUND, OUT OF GIFT OF RS. 1,48,00,000/- RECEIVED FROM HIS MATERNAL UNCLE SHRI KUMAR CHIMANLAL MEHTA VIDE CHEQUE NO. 221429 DATED 8-5-2009 AND SUBMITTED AFFIDAVIT DATED 30-12- 2010 EXECUTED BY HIS UNCLE MR. KUMAR CHIMANLAL MEHT A .SIMILARLY , THE ASSESSEE EXPLAINED THE SOURCES OF INVESTMENT IN THE FLAT NO 1101, 11 TH FLOOR, RAHEJA EXCELOR, 63, TARDEO ROAD, MUMBAI-400034. TH E AO ACCEPTED THE RETURNED INCOME AND MADE NO ADDITION TO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT ORDER U/S 143(3) DATED 08-03-2013 PASSED BY THE AO AND ACCORDINGLY TOTAL INCOME WAS COMPUTED AT RS. 36,73, 810/- VIDE ASSESSMENT ORDER U/S 143(3) OF THE ACT DATED 8-3-2013 WHICH WA S ALSO THE RETURNED INCOME FILED WITH THE REVENUE BY THE ASSESSEE. ITA 2546/M/15 3 4.THE PR. CIT ISSUED THE NOTICE DATED 14.01.2015 W. R.T. REVISION OF INCOME U/S 263 OF THE ACT FOR THE ASSESSMENT YEAR 2010-11. THE REAFTER, THE ASSESSEE WAS SHOW CAUSED BY THE PR. CIT VIDE THREE SHOW CAUSE N OTICES U/S 263 OF THE ACT DATED 12-02-2015, 26-02-2015 AND 17-03-2015 WITH RE SPECT TO THE RECEIPT OF THE GIFT OF RS. 1,48,00,000/- FROM ASSESSEES MATER NAL UNCLE SHRI KUMAR CHIMANLAL MEHTA BY THE ASSESSEE DURING THE PREVIOUS YEAR ON 08 TH MAY 2009. THE PR. CIT OBSERVED THAT THE CLAIM OF THE ASSESSE E DURING THE ASSESSMENT PROCEEDINGS WAS THAT THE DONOR IS A NRE AND GIFTED THE AMOUNT OUT OF HIS FOREIGN INCOME TO THE ASSESSEE, WHEREAS, IN THE OPI NION OF PR.CIT, IT WAS INCORRECT BECAUSE FUNDS HAVE BEEN CREDITED INTO THE BANK ACCOUNT OF MR. KUMAR CHIMANLAL MEHTA ON 07-05-2009 WITH THE ENTRY OPERA HOUSE TRADE FINANCE MUMBAI AND THE PROCEEDS THEREOF WERE UTILI ZED FOR GIVING GIFT OF RS.1,48,00,000/- TO THE ASSESSEE. THE PR. CIT HELD THAT THE ISSUE REGARDING THE GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESS EE HAS NOT BEEN PROPERLY ENQUIRED/EXAMINED BY THE A.O., THE A.O. WAS REQUIRE D TO VERIFY THE CAPACITY AND CREDITWORTHINESS OF THE DONOR , MR KUMAR CHIMA NLAL MEHTA AND EXAMINE THE GENUINENESS OF TRANSACTION BUT THE A.O. HAS NOT EXAMINED THE GIFT WITH REGARD TO THE IDENTITY, CREDITWORTHINESS AND GENUIN ENESS OF THE GIFT, THEREFORE, THE ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BEFORE THE PR. CIT , THE ASSESSEE SUBMITTED THAT HE HAD RECEIVED A GIFT OF RS. 1.48 CRORES FROM HIS MATERNAL UNCLE SHRI KUMAR CHIM ANLAL MEHTA, A NON- RESIDENT LIVING IN UAE , THE AMOUNTS WERE CREDITED INTO THE NRE ACCOUNT OF SHRI KUMAR CHIMANLAL MEHTA AND THE SAME WERE USED F OR GIVING THE GIFT TO THE ASSESSEE. THE ASSESSEE ALSO FILED AFFIDAVIT OF SHRI KUMAR CHIMANLAL MEHTA, COPIES OF NRE ACCOUNT OF THE UNCLE MR KUMAR CHIMANLAL MEHTA AND A CREDITWORTHINESS CERTIFICATE ISSUED BY CA OF SHRI K UMAR CHIMANLAL MEHTA. HOWEVER, THE PR. CIT HELD THAT THE A.O. IS DUTY BOU ND TO ENQUIRE ABOUT ALL THE ASPECTS OF THE GIFTS I.E. IDENTITY AND CAPACITY OF THE DONOR AND THE GENUINENESS OF THE GIFTS DURING THE ASSESSMENT PROC EEDINGS WHICH THE A.O. ITA 2546/M/15 4 HAS NOT VERIFIED DURING THE ASSESSMENT PROCEEDINGS AND HAS MERELY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE. AS PER 2 ND PROVISO TO SECTION 56(2)(VII) OF THE ACT, THE VALUE OF ANY SUM OF MONEY/IMMOVABLE PROPER TY/MOVABLE PROPERTY RECEIVED WITHOUT CONSIDERATION OR FOR INADEQUATE CO NSIDERATION IS CHARGEABLE TO INCOME TAX IN THE ASSESSMENT OF THE RECIPIENT UN DER THE HEAD INCOME FROM OTHER SOURCES IN CASE WHERE AN INDIVIDUAL OR A HUF RECEIVES, IN ANY PREVIOUS YEAR, FROM ANY PERSON OR PERSONS IF IT IS OTHERWISE NOT PROVED. IN THIS CASE, THE A.O. FAILED TO VERIFY THE CAPACITY OF THE DONOR WHETHER HE WAS CAPABLE OF DONATING SUCH HUGE AMOUNT OR NOT AND ALSO FAILED TO EXAMINE THE GENUINENESS OF TRANSACTION OF THIS GIFT. THE PR. C IT ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER DATED 08-03-2013 FOR EXAMINATION OF THE GIFT OF RS. 1.48 CRORES AND DIRECTED THE A.O. VIDE ORDERS U/S 263 OF THE ACT DATED 25-03-2015 TO EXAMINE ALL THE ASPECTS OF THE GIFT AS CLAIMED B Y THE ASSESEE AND REFRAME THE ASSESSMENT AFTER GIVING SUFFICIENT OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 5. AGGRIEVED BY THE ORDERS DATED 25-03-2015 PASSED BY THE PR. CIT U/S 263 OF THE ACT, THE ASSESSEE IS IN FURTHER APPEAL BEFORE T HE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND ASSESSMENT HAS BEEN FRA MED U/S 143(3) OF THE ACT VIDE ORDERS DATED 8.3.2013. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS RECEIVED A GIFT OF RS.1,48,00 ,000/- FROM HIS MATERNAL UNCLE SHRI KUMAR CHIMIANLAL MEHTA WHICH FALL UNDER DEFINITION OF RELATIVE UNDER SECTION 56(2)(VII) OF THE ACT AND THE AMOUNT IS EXEMPT FROM TAX UNDER THE ACT. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE PR. CIT HAS NOT ARRIVED AT ANY CONCLUSION RATHER HE IS DIRECTING TH E A.O. TO ENQUIRE AND FIND OUT THE CREDITWORTHINESS, CAPACITY AND GENUINENESS ABOUT THE DONOR AND HAS WRONGLY CONCLUDED THAT THE ASSESSMENT ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THREE S HOW CAUSE NOTICES HAVE BEEN ITA 2546/M/15 5 ISSUED BY THE LD. PR. CIT DATED 12.02.2015, 26.02.2 015 AND 17.3.2015 WHICH ARE BASED UPON THE AUDIT QUERY WHICH IS NOT PERMISS IBLE IN LAW. THE LD. COUNSEL SUBMITTED THAT THE DONOR IS ASSESSEES MATE RNAL UNCLE WHO IS SETTLED IN UAE AND OWNS HIS OWN COMPANY THERE AND HAVE SUFF ICIENT CREDITWORTHINESS TO GIVE GIFT TO HIS NEPHEW I.E. THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT A CERTIFICATE FROM THE CA IN UAE OF THE MATERNAL UNCL E MR. KUMAR CHIMANLAL MEHTA WAS ALSO PRODUCED TO ESTABLISH THAT MR. KUMAR CHIMANLAL MEHTA HAS SUFFICIENT CREDITWORTHINESS TO GIVE GIFT OF RS.1,48 ,00,000/- TO THE ASSESSEE. SHE SUBMITTED THAT IN RESPONSE TO THE AUDIT QUERY, THE ASSESSEE ALSO PRODUCED BEFORE THE AO , THE DOCUMENTS LIKE ORIGIN AL PASSPORT, CERTIFIED TRUE COPY OF PASSPORT OF SHRI KUMAR CHIMANLAL MEHTA, ORI GINAL COPY OF AFFIDAVIT AND SOURCE OF GIFT AMOUNT RECEIVED INTO NRE ACCOUNT OF SHRI KUMAR C. MEHTA. THE LD. COUNSEL SUBMITTED THAT WITH REFERENCE TO TH E AUDIT QUERY, THE ASSESSEE ALSO PRODUCED THE PHOTOCOPY OF ING VYSYA B ANK NRE ACCOUNT BANK STATEMENT OF DONOR SHRI KUMAR CHIMANLAL MEHTA, PHOT OCOPY OF BANK ADVISE OF THE REMITTING BANK MASHREQ BANK OF DUBAI AND PHO TOCOPY OF CHARTERED ACCOUNTANT CERTIFICATE OF DONOR SHRI KUMAR CHIMANLA L MEHTA BEFORE THE A.O. TO PROVE THAT SHRI KUMAR CHIMANLAL MEHTA IS THE MAT ERNAL UNCLE OF THE ASSESSEE AND TO ESTABLISH THE IDENTITY AND CREDITWO RTHINESS OF THE DONOR AND GENUINENESS OF THE GIFT TRANSACTION. THE LD. COUNSE L OF THE ASSESSEE SUBMITTED THAT AN AMOUNT OF US$ 299953.00 WAS RECEIVED VIDE I NWARD REMITTANCE (PURCHASE) WHICH IS PLACED AT PAPER BOOK PAGE 7 & 8 OF THE ASSESSEES PAPER BOOK WHICH SHOWED THAT REMITTANCE HAS BEEN RECEIVED FROM UAE TO THE CREDIT OF THE NRE BANK ACCOUNT OF UNCLE MR. KUMAR CHIMANLA L MEHTA OF THE ASSESSEE WITH ING VYSYA BANK WHICH WAS FURTHER USED FOR GIVING GIFT TO THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT THE REMIT TANCE WAS RECEIVED BY ING VYSYA BANK LTD., TFU MUMBAI FROM MASHREQ BANK OF D UBAI FROM THE ACCOUNT OF ASSESSEES MATERNAL UNCLE SHRI KUMAR CHI MANLAL MEHTA FOR FURTHER CREDIT TO THE ACCOUNT WITH ING VYSYA BANK, OPERA HOUSE BRANCH, MUMBAI AND HENCE THE CONTENTION OF THE PR. CIT THAT THE GIFTS ARE RECEIVED NOT ITA 2546/M/15 6 FROM NRE ACCOUNT IS NOT CORRECT RATHER IT WAS RECEI VED FROM ING VYSYA BANK LTD., TFU MUMBAI FOR FURTHER CREDIT TO THE NRE ACC OUNT OF SHRI KUMAR CHIMANLAL MEHTA WHICH WAS FURTHER USED FOR GIVING G IFT TO THE ASSESSEE. THE LD. COUNSEL SUBMITTED THAT THE AUDIT QUERY RAISED B Y THE AUDIT TEAM REGARDING THIS GIFT OF RS. 1.48 CRORES WAS THE BASIS , UPON W HICH THE QUERY WAS RAISED BY THE AO WHICH WAS DULY REPLIED BY THE ASSESSEE VIDE THREE LETTERS DATED 17-10- 2013, 13-01-2014 AND 19-03-2014 FILED BEFORE THE AO WHICH ARE ALSO PLACED AT PAPER BOOK PAGE NO. 20 TO 41, WHEREBY ALL THE DE TAILS WERE DULY SUBMITTED PROVING RELATION BETWEEN THE ASSESSEE AND THE DONOR , WHICH ARE PAN CARD OF THE DONOR, PASSPORT OF THE DONOR, PAN CARD OF THE A SSESSEES MOTHER (AS DONOR IS THE BROTHER OF ASSESSEES MOTHER), PASSPORT OF T HE ASSESSEES MOTHER, PAN CARD OF THE ASSESSEE, PASSPORT OF THE ASSESSEE. SH E SUBMITTED THAT THE COPY OF ING VYSYA BANK NRE ACCOUNT ALONG WITH COPY OF AD VISE OF MASHREQ BANK OF DUBAI AND CA CERTIFICATE OF SHRI KUMAR CHIMANLAL MEHTA AND NOTORISED AFFIDAVIT OF THE DONOR WERE ALSO SUBMITTED BEFORE T HE AO TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS OF THE GIFT TRANSACTION OF RS.1,48,00,000/- . THE LD. COUNSEL O F THE ASSESSEE SUBMITTED THAT THE FIRST NOTICE ISSUED BY PR. CIT WHICH IS AL MOST AFTER ONE YEAR THE AUDIT QUERY WAS RAISED BY THE A.O. THE REPLY SUBMITTED BE FORE THE AO IN CONNECTION WITH THE QUERY OF THE AUDIT TEAM WAS ALSO DULY SUBM ITTED BEFORE THE PR. CIT, HENCE, THE PR.CIT CANNOT MAKE ROVING ENQUIRY OF THE DETAILS AFTER ISSUE OF NOTICE U/S 263 OF THE ACT. THE PR. CIT HIMSELF IS N OT CLEAR WHETHER THE GIFT IS TO BE CHARGED TO TAX U/S 56 OR 68 OF THE ACT AND WH ETHER THE ORDER PASSED BY THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTERE ST OF REVENUE. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION O F THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. GABRIEL INDIA LTD. [199 3] 203 ITR 108(BOM.) TO CONTEND THAT NO ROVING ENQUIRY CAN BE MADE BY THE R EVENUE. THE LD. COUNSEL ALSO RELIED ON THE DECISION OF HONBLE DELHI HIGH C OURT IN THE CASE OF DIRECTOR OF INCOME TAX V. JYOTI FOUNDATION [2013] 357 ITR 38 8 (DEL) AND IN THE CASE OF GLOBUS INFOCOM LTD. V. CIT [2014] 369 ITR 14 (DELHI ) TO CONTEND THAT THE PR. ITA 2546/M/15 7 CIT HAS NOT REACHED ANY CONCLUSION AFTER GOING THRO UGH THE DOCUMENTS ON RECORD AND HE CANNOT INVOKE THE PROVISIONS OF SECTI ON 263 OF THE ACT.THE LD. COUNSEL SUBMITTED THAT SECTION 263 OF THE ACT CANNO T BE INVOKED BASED ON THE AUDIT QUERY AND SHE RELIED UPON THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V. SOHANA WO OLEN MILLS (2008) 296ITR 238(PUN. & HAR. HC).ON BEING ASKED BY THE BENCH ABO UT THE IMPLICATION OF EXPLANATION 2 TO SECTION 263 OF THE ACT BEING NOW I NCORPORATED IN THE STATUTE, THE LD. COUNSEL SUBMITTED THAT IT CANNOT BE SAID TH AT THE ASSESSMENT ORDER IS PASSED WITHOUT MAKING ANY ENQUIRY WHICH IS CLEAR FR OM THE ASSESSMENT ORDER. THE LD. COUNSEL SUBMITTED THAT THE PR. CIT CANNOT S UPERIMPOSE ON THE AO AND THE PR. CIT SHOULD HAVE LOOKED INTO THE RECORD AS DEFINED U/S 263 OF THE ACT TO COME TO CONCLUSION WHETHER THE ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE 7. THE LD. D.R., ON THE OTHER HAND, STRONGLY SUPPOR TED THE ORDERS OF PR. CIT AND CONTENDED THAT THE A.O. HAS NOT MADE PROPER ENQUIRY AND VERIFICATION REGARDING THE GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS MATERNAL UNCLE, MR KUMAR CHIMANLAL MEHTA A ND THE AO HAS MERELY ACCEPTED THE DOCUMENTS FILED BY THE ASSESSEE BEFORE FINALIZING THE ASSESSMENT ORDERS DATED 08-03-2013 PASSED U/S 143(3) OF THE AC T AND HENCE THE PR. CIT HAS RIGHTLY INVOKED PROVISIONS OF SECTION 263 OF TH E ACT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE CASE LAWS RELIED UPON. WE H AVE OBSERVED THAT THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CAS S AND ASSESSMENT HAS BEEN FRAMED U/S 143(3) OF THE ACT VIDE ASSESSMENT O RDERS DATED 8.3.2013. AS PER AIR INFORMATION, THE ASSESSEE HAD, INTER ALIA, MADE INVESTMENT IN MUTUAL FUNDS TO THE TUNE OF RS. 1.57 CRORES IN MAY 2009 WH ICH IS STATED TO BE MADE OUT OF GIFT OF RS. 1.48 CRORES RECEIVED BY THE ASSE SSEE FROM HIS MATERNAL UNCLE SHRI KUMAR CHIMANLAL MEHTA VIDE CHEQUE NO. 221429 D ATED 8 TH MAY, 2009. ITA 2546/M/15 8 WE HAVE OBSERVED THAT THE ASSESSEE HAS FILED AN AFF IDAVIT DATED 30-12-2010 DURING COURSE OF ASSESSMENT PROCEEDINGS EXECUTED BY HIS MATERNAL UNCLE SHRI KUMAR CHIMANLAL MEHTA, THE DONOR WHEREBY HE STATED THAT HE HAS MADE THE GIFT TO HIS NEPHEW I.E. THE ASSESSEE OF RS. 1.48 CR ORES ON 08-05-2009 , OUT OF NATURAL LOVE AND AFFECTION. AS PER FACTS EMERGING FROM RECORDS, THE A.O. HAS ACCEPTED THE GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE ON 08-05-2009 FROM HIS MATERNAL UNCLE , MR. KUMAR CHIMANLAL MEHTA WITHOUT MAKING ANY FURTHER ENQUIRY OR VERIFICATION REGARDING THE IDENT ITY AND CREDITWORTHINESS OF THE DONOR & THE GENUINENESS OF THE GIFT WHICH IS TH E MANDATE OF SECTION 68 OF THE ACT AND HAS MERELY ACCEPTED THE SUBMISSIONS MAD E BY THE ASSESSEE WITH RESPECT TO GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS MATERNAL UNCLE MR. KUMAR CHIMANLAL MEHTA. THE AUDIT QUERY WAS RAISED BY THE AUDIT TEAM THAT T HE A.O. HAS ACCEPTED THIS GIFT OF RS.1.48 CRORES WITHOUT MAKING ANY VERIFICAT ION/INVESTIGATION BEFORE PASSING THE ASSESSMENT ORDER DATED 08-03-2013 U/S 1 43(3) OF THE ACT . THE AO BASED ON AUDIT QUERY RAISED POST CONCLUSION OF T HE ASSESSMENT, IN TURN ASKED THE ASSESSEE TO EXPLAIN THE GIFTS OF RS.1,48, 00,000/- RECEIVED BY THE ASSESSEE FROM HIS MATERNAL UNCLE ON 08-05-2009 , T HE ASSESSEE GAVE THE REPLY BEFORE THE A.O. WITH RESPECT TO THE AUDIT QUE RY VIDE HIS THREE LETTERS DATED 17-10-2013, 13-01-2014 AND 19-03-2014 WHEREBY THE ASSESSEE SUBMITTED ALL THE DETAILS WITH REGARD TO THE GIFT S UCH AS PAN CARD OF THE DONOR, PASSPORT OF THE DONOR, PAN CARD OF THE ASSESSEES M OTHER, PASSPORT OF THE ASSESSEES MOTHER (THE DONOR IS STATED TO BE BROTHE R OF ASSESSEES MOTHER), PAN CARD OF THE ASSESSEE, PASSPORT OF THE ASSESSEE AND PHOTOCOPY OF THE NOTARIZED GIFT DECLARATION/AFFIDAVIT, COPY OF THE I NG VYSYA BANK NRE ACCOUNT BANK STATEMENT , BANK ADVICE FOR INWARD REMITTANCE TRANSACTION DATED 07-05- 2009 ISSUED BY ING VYSYA BANK FOR INWARD REMITTANCE OF US $ 299953 ALONG WITH COPY OF MASHREQ BANK OF DUBAI AND THE CA CERTI FICATE OF SHRI KUMAR C. ITA 2546/M/15 9 MEHTA. THESE REPLIES ARE PLACED IN PAPER BOOK FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. THE PR. CIT HAS INVOKED THE PROVISIONS OF SECTION 2 63 OF THE ACT AND ISSUED FOUR NOTICES DATED 14.01.2015, 12.02.2015, 26.02.20 15 AND 17.03.2015. THE ASSESSEE DULY SUBMITTED THE DETAILS IN RESPONSE TO PROCEEDINGS U/S 263 OF THE ACT INITIATED BY THE PR. CIT , WITH RESPECT TO THE GIFT , WHICH ARE PLACED IN PAPER BOOK FILED BEFORE THE TRIBUNAL , TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND THE GENUINENESS O F THE GIFT TRANSACTION TO ESTABLISH THAT THE GIFT IS GENUINE SUCH AS BANK STA TEMENT OF THE DONOR, AFFIDAVIT OF THE DONOR, CA CERTIFICATE OF HIS MATER NAL UNCLE MR KUMAR CHIMANLAL MEHTA, THE DONOR TO ESTABLISH HIS CREDITW ORTHINESS, PASSPORT OF THE DONOR, PAN OF THE DONOR, PAN AND PASSPORT OF MOTHER OF THE ASSESSEE ( THE DONOR IS STATED TO BE BROTHER OF ASSESSEES MOTHER) . THE PR. CIT PASSED AN ORDER U/S 263 OF THE ACT DATED 25-03-2015 DIRECTING THE A.O. TO VERIFY ALL THE ASPECTS OF THE GIFT OF RS.1,48,00,000/- RECEIVED ON 08-05-2009 BY THE ASSESSEE FROM HIS MATERNAL UNCLE, MR. KUMAR CHIMANL AL MEHTA AS THE SAME WERE NOT VERIFIED BY THE AO WHILE PASSING ASSESSMEN T ORDERS U/S 143(3) OF THE ACT . 9. WE HAVE OBSERVED THAT W.E.F. IST JUNE, 2015 BY F INANCE BILL 2015, EXPLANATION 2 TO SECTION 263 WAS INSERTED TO DECLAR E THE LAW WHICH READS AS UNDER:- [ EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE D EEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, (A) THE ORDER IS PASSED WITHOUT MAKING INQUI RIES OR VERIFICATION WHICH SHOULD ITA 2546/M/15 10 HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQ UIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH AN Y DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE , RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OT HER PERSON. ] WE WOULD LIKE TO REFER AT THIS STAGE TO THE MEANING OF EXPLANATION AS INSERTED IN THE ACT WHEREBY THE HONBLE SUPREME COURT IN THE CASE OF SUNDARAM PILLAI V. PATTABIRAM REPORTED IN (1985) 1 SCC 591, WHEREBY FAZAL ALI , J CULLED OUT FROM EARLIER CASES THE FOLLOWING AS OBJECTS OF AN E XPLANATION TO A STATUTORY PROVISION (REFERENCE PAGE 214-215,PRINCIPLES OF STA TUTORY INTERPRETATION BY JUSTICE G.P.SINGH ,13 TH ED.):- (A) TO EXPLAIN THE MEANING AND INTENDMENT OF THE ACT IT SELF , (B) WHERE THERE IS ANY OBSCURITY OR VAGUENESS IN THE MA IN ENACTMENT TO CLARIFY THE SAME SO AS TO MAKE IT CONSISTENT WITH T HE DOMINANT OBJECT WHICH IT SEEMS TO SUBSERVE, (C) TO PROVIDE AN ADDITIONAL SUPPORT TO DOMINANT OBJECT OF THE ACT IN ORDER TO MAKE IT MEANINGFUL AND PURPOSEFUL, (D) AN EXPLANATION CANNOT IN ANY WAY INTERFERE WITH OR CHANGE THE ENACTMENT OR ANY PART THEREOF BUT WHERE SOME GAP IS LEFT WHICH IS RELEVANT FOR THE PURPOSE OF THE EXPLANATION, IN ORD ER TO SUPPRESS THE MISCHIEF AND ADVANCE THE OBJECT OF THE ACT IF IT CA N HELP OR ASSIST THE COURT IN INTERPRETING THE TRUE PURPORT AND INTENDME NT OF THE ENACTMENT, AND (E) IT CANNOT, HOWEVER , TAKE AWAY A STATUTORY RIGHT WI TH WHICH ANY PERSON UNDER A STATUTE HAS BEEN CLOTHED OR SET AT N AUGHT THE WORKING OF AN ACT BY BECOMING AN HINDRANCE IN THE INTERPRET ATION OF THE SAME. ITA 2546/M/15 11 IT IS PROFITABLE AT THIS STAGE TO REFER TO THE MEMO RANDUM TO FINANCE BILL 2015 AND NOTES TO CLAUSES TO FINANCE BILL, 2015 WHICH AR E AS UNDER: MEMORANDUM TO FINANCE BILL 2015 REVISION OF ORDER THAT IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE THE EXISTING PROVISIONS CONTAINED IN SUB-SECTION (1 ) OF SECTION 263 OF THE INCOME- TAX ACT PROVIDES THAT IF THE PRINCIPAL COMMISSIONER OR COMMISSIONER CONSIDERS THAT ANY ORDER PASSED BY THE ASSESSING OFFICER IS ERRONE OUS 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 AN ENQUIRY PASS AN ORD ER MODIFYING THE ASSESSMENT MADE BY THE ASSESSING OFFICER OR CANCELLING THE ASS ESSMENT AND DIRECTING FRESH ASSESSMENT. THE INTERPRETATION OF EXPRESSION 'ERRONEOUS IN SO F AR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS BEEN A CONTENTIOUS ON E. IN ORDER TO PROVIDE CLARITY ON THE ISSUE IT IS PROPOSED TO PROVIDE THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, (A) THE ORDER IS P ASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHIC H, SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQ UIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH AN Y DECISION, PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISDICTIONAL HIGH C OURT OR SUPREME COURT IN ITA 2546/M/15 12 THE CASE OF THE ASSESSEE OR ANY OTHER PERSON. THIS AMENDMENT WILL TAKE EFFECT FROM 1 ST DAY OF JUNE, 2015. NOTES ON CLAUSES FINANCE BILL 2015 CLAUSE 65 OF THE BILL SEEKS TO AMEND SECTION 263 OF THE INCOME-TAX ACT RELATING TO REVISION OF ORDERS PREJUDICIAL TO REVENUE. THE EXISTING PROVISIONS CONTAINED IN SUB-SECTION (1 ) OF SECTION 263 PROVIDE THAT IF THE PRINCIPAL COMMISSIONER OR COMMISSIONER CONSIDERS TH AT ANY ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS P REJUDICIAL TO THE INTEREST OF REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE AN ENQUIRY, AS HE DEEMS NECESSAR Y, PASS AN ORDER MODIFYING THE ASSESSMENT MADE BY THE ASSESSING OFFICER OR CANCELL ING THE ASSESSMENT AND DIRECTING FRESH ASSESSMENT. IT IS PROPOSED TO AMEND SUB-SECTION (1) OF THE AFOR ESAID SECTION TO INSERT AN EXPLANATION SO AS TO PROVIDE THAT AN ORDER PASSE D BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUD ICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VER IFICATION WHICH, SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQ UIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH AN Y DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE , RENDERED BY THE JURISDICTIONAL HIGH COURT OR ITA 2546/M/15 13 SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OT HER PERSON. THIS AMENDMENT WILL TAKE EFFECT FROM 1ST JUNE, 2015 . 10. NOW, AS CAN BE SEEN ABOVE , THE AMENDMENT TO SE CTION 263 OF THE ACT BY INSERTION OF EXPLANATION 2 TO SECTION 263 IS DECLAR ATORY IN NATURE AND IS INSERTED TO PROVIDE CLARITY ON THE ISSUE AS TO WHICH ORDERS PAS SED BY THE AO SHALL CONSTITUTE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E WHEREBY IT IS PROVIDED , INTER- ALIA, THAT IF THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VER IFICATION BY THE AO WHICH, SHOULD HAVE BEEN MADE OR THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; THE ORDER SHALL BE DEEMED TO BE ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED V. CIT (2000)109 TAXMAN 66 (SC) HELD THAT IF THE AO HAS ACCEPTED THE ENTRY IN THE STATEMENT OF ACCOUNT FILED BY THE TAXPAYER WITHOUT MAKING ENQUIRY , THE SAID ORDER OF THE AO SHALL BE DEEMED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS NOW ESTABLISHED PRINCIPLE THAT WITH RESPECT TO CASH CREDIT APPEARING IN THE BOOKS OF TH E ASSESSEE , THE ASSESSEE HAS TO ESTABLISH THREE INGREDIENTS I.E. IDENTITY AND CREDI TWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION AS APPEARING IN THE BOOKS OF ACCOUNT AS PER MANDATE OF SECTION 68 OF THE ACT WHICH IS A PRIMARY ONUS CASTE BY LAW ON THE ASSESSEE. 11. IN THIS INSTANT APPEAL , DURING THE COURSE OF T HE ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS SUBMITTED AN AFFIDAVIT DATED 30-12-201 0 OF THE DONOR TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND TO PROVE THE GENUINENESS OF THE GIFT AND THE A.O. MERELY ACCEPTED THE SAME WITHOUT MAKIN G ANY FURTHER ENQUIRY OR VERIFICATION. IN OUR CONSIDERED OPINION, THE FACTS OF THE CASE OF THE ASSESSEE IS SIMILAR TO THE FACTS IN THE CASE OF MALABAR INDUSTR IAL CO. LIMITED(SUPRA) WHEREBY NO ENQUIRY/VERIFICATION IS MADE BY THE AO WHILE SUBMIS SIONS OF THE ASSESSEE WERE SIMPLY ACCEPTED. MOREOVER, NOW EXPLANATION 2 TO SEC TION 263 OF THE ACT IS INSERTED ITA 2546/M/15 14 IN THE STATUTE WHICH IS DECLARATORY IN NATURE TO PR OVIDE CLARITY ON THE ISSUE WHEREBY IF THE A.O. FAILED TO MAKE ANY ENQUIRY OR NECESSARY VERIFICATION WHICH SHOULD HAVE BEEN MADE, THE ORDER BECOMES ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF REVENUE. A PROVISO ADDED FROM 01-04-1988 TO SECTION 43B OF T HE ACT FROM 01-04-1984 CAME UP FOR CONSIDERATION IN ALLIED MOTORS PRIVATE LIMIT ED V. CIT (1997) 91 TAXMAN 205(SC) BEFORE HONBLE SUPREME COURT AND IT WAS GIV EN RETROSPECTIVE EFFECT FROM THE INCEPTION OF THE SECTION ON THE REASONING THAT THE PROVISO WAS ADDED TO REMEDY UNINTENDED CONSEQUENCES AND SUPPLY AN OBVIOUS OMISS ION SO THAT THE SECTION MAY BE GIVEN A REASONABLE INTERPRETATION AND THAT IN FA CT THE AMENDMENT TO INSERT THE PROVISO WOULD NOT SERVE ITS OBJECT UNLESS IT IS CON STRUED AS RETROSPECTIVE . IN CIT V. PODAR CEMENT PVT. LIMITED (1997) 92 TAXMAN 541(SC) , THE HONBLE SUPREME COURT HELD THAT AMENDMENT INTRODUCED BY THE FINANCE ACT,1 987 IN SO FAR THE RELATED TO SECTION 27(III) ,(IIIA) AND (IIIB) WHICH REDEFINED THE EXPRESSION OWNER OF HOUSE PROPERTY, IN RESPECT OF WHICH THERE WAS A SHARP DI VERGENCE OF OPINION AMONGST THE HIGH COURTS, WAS CLARIFICATORY AND DECLARATORY IN N ATURE AND CONSEQUENTLY RETROSPECTIVE. SIMILARLY , IN BRIJ MOHAN DAS LAXMAN DAS V. CIT (1997) 90 TAXMAN 41(SC), EXPLANATION 2 ADDED TO SECTION 40 OF THE AC T WAS HELD TO BE DECLARATORY IN NATURE AND , THEREFORE , RETROSPECTIVE.(REFERENCE P AGE 569-570,PRINCIPLES OF STATUTORY INTERPRETATION BY JUSTICE G.P.SINGH ,13 TH ED.). REGARDING THE CONTENTION OF THE ASSESSEE THAT THE P R. CIT IS NOT CLEAR ABOUT THE SECTION 68 OR SECTION 56 OF THE ACT TO BE INVOKED , WHEREBY THE INCOME IS TO BE BROUGHT TO TAX FROM OTHER SOURCES AND IN CASE THE A SSESSE HAS RECEIVED ANY SUM FROM THE CLOSE RELATIVES, SECTION 56 OF THE ACT GRA NTS EXEMPTION FOR BRINGING INTO TAX SUCH INCOME UNDER THE HEAD INCOME FROM OTHER SOURCE S. BUT, HOWEVER, SECTION 68 OF THE ACT CONTEMPLATES THAT WITH RESPECT TO ANY CR EDIT IN THE BOOKS, IT IS AN OBLIGATION CAST UPON THE ASSESSEE TO EXPLAIN THE CR EDIT AS APPEARING IN THE BOOKS OF THE ASSESSEE TO THE SATISFACTION OF THE A.O. BY EST ABLISHING THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTION. THIS INITIAL ITA 2546/M/15 15 AND PRIMARY BURDEN IS CAST UPON THE ASSESSEE U/S 68 OF THE ACT TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE DONOR AND TO S UBSTANTIATE THAT THE TRANSACTION IS GENUINE. THUS, BOTH THE SECTIONS VIZ. SECTION 56 AND 68 OF THE ACT OPERATE IN DIFFERENT FIELD WHEREAS SECTION 56 OF THE ACT DEALS WITH COMPUTATION OF THE INCOME OF THE TAX PAYER UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH PROVIDES RELIEF IN CASE OF RECEIPTS FROM CLOSE RELATIVES AS DEFINED U/ S 56 OF THE ACT WHILE SECTION 68 OF THE ACT IS PLACED UNDER CHAPTER VI OF THE ACT WHICH DEALS WITH AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD OF LOSS AND SE CTION 68 OF THE ACT CAST PRIMARY ONUS ON THE ASSESSEE TO EXPLAIN NATURE AND SOURCE O F CASH CREDIT AS APPEARING IN THE BOOKS OF THE ASSESSEE TO THE SATISFACTION OF TH E AO AND FAILURE TO EXPLAIN THE CASH CREDIT TO THE SATISFACTION OF THE AO SHALL LEA D TO COMPUTATION OF INCOME FROM UNDISCLOSED SOURCES UNDER THE HEAD INCOME FROM OTH ER SOURCES. THUS, IN OUR CONSIDERED VIEW BASED ON THE FACTS AS EMANATING FRO M THE RECORDS, THE A.O. HAS NOT MADE ANY ENQUIRY OR VERIFICATION BEFORE ACCEPTING T HE GIFT OF RS. 1.48 CRORES RECEIVED BY THE ASSESSEE FROM HIS MATERNAL UNCLE, M R CHIMANLAL MEHTA AND HAS MERELY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE WIT H RESPECT TO RECEIPT OF SAID GIFT AND THE PR. CIT HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT DIRECTING THE A.O. TO MAKE PROPER ENQUIRY AND REFRAME THE AS SESSMENT. THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE IN THIS CAS E AS IN THE INSTANT APPEAL, THE AO HAS NOT MADE ANY INQUIRIES OR VERIFICATION WHIC H SHOULD HAVE BEEN MADE TO SATISFY THE INGREDIENTS OF SECTION 68 OF THE ACT AN D HAS MERELY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE WITH RESPECT TO THE GIF T OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS MATERNAL UNCLE . THE ASSESSEE HAS MAINLY RELIED UPON THE FOLLOWING CASE LAWS WHICH ARE DISCUSSED BELOW AND A RE CLEARLY DISTINGUISHABLE: A) CIT V. SOHANA WOOLEN MILLS (2008) 296 ITR 238 (P&H) IT WAS HELD BY THE HONBLE PUNJAB AND HARYANA HIGH COURT THAT MERE AUD IT OBJECTION AND IF A DIFFERENT VIEW IS POSSIBLE ARE NOT ENOUGH TO SAY TH AT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. THE HONBLE HIGH COURT HELD THAT NO RIGID RULE CAN BE LAID DOWN ABOU T THE SITUATION ITA 2546/M/15 16 WHEN THE JURISDICTION CAN BE EXERCISED AND IT IS TO BE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. IN THE INSTANT CASE UNDER APPEAL BEFORE US, THE AO HAS NOT CARRIED OUT ANY ENQUIRY OR VERIF ICATION WITH RESPECT TO THE SUBMISSIONS MADE BY THE ASSESSEE WITH RESPECT T O GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS UNCLE MR. KUMAR CHIMANLAL MEHTA AND THE AO MERELY ACCEPTED THE SUBM ISSIONS OF THE ASSESSEE AND HENCE THERE IS NO QUESTION OF HAVING A DIFFERENT VIEW BY AUDIT TEAM THAN THAT OF THE AO . B) GLOBUS INFOCOM LIMITED V. CIT (2014) 369 ITR 14(DEL HI.) IN THIS CASE THE AO HAS SPECIFICALLY GONE INTO AND EXAMINED THE APPO RTIONMENT OF COMMON EXPENSES , WHO WAS FULLY SATISFIED WITH THE APPORTI ONMENT MADE WHILE THE CIT , INSTEAD OF COMMENTING UPON OR GIVING A FINAL FINDING WHETHER OR NOT THE APPORTIONMENT WAS ACCEPTABLE , OBSERVED THAT IT WAS POSSIBLE THAT THERE WAS AN ATTEMPT TO INFLATE EXPENSES ON TRADING ACTIVITY AND AN ATTEMPT MIGHT HAVE BEEN MADE TO REDUCE THE ACTUAL E XPENSES OF THE EXEMPT UNIT. THE USE OF THE WORD POSSIBLE WOULD I NDICATE THAT THERE WAS NO FINDING OR ADJUDICATION BY THE CIT AND HIS OBSER VATION WAS BASED ON MERE SUSPICION AND UNCERTAIN AND YET A DIRECTION WA S ISSUED TO THE AO TO CARRY OUT FRESH INQUIRIES TO DO THE EXERCISE ONCE A GAIN AND DECIPHER WHETHER THE ACTUAL EXPENSES RELATABLE TO THE MANUFA CTURING AND TRADING ACTIVITIES WERE CORRECTLY SEPARATED. THUS, THE CIT WAS UNSURE WHETHER OR NOT THE BIFURCATION WERE RIGHT OR WRONG AND HENCE I T WAS HELD THAT IT COULD NOT BE SAID THAT THE ORDERS OF THE AO WAS ERRONEOUS . WHILE IN THE INSTANT CASE , THERE IS NO ENQUIRY OR VERIFICATION CONDUCT ED BY THE AO WITH RESPECT TO SUBMISSIONS MADE BY THE ASSESSEE WITH RESPECT TO GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS UNCLE MR. KUMAR CHIMANLAL MEHTA AND THE AO MERELY ACCEPTED THE SUBM ISSIONS OF THE ASSESSEE. ITA 2546/M/15 17 C) DIT V. JYOTI FOUNDATION (2013) 357 ITR 388(DELHI)- IT WAS HELD BY HONBLE DELHI HIGH COURT THAT ORDERS WHICH ARE PASSED WITHO UT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF THE REVENUE, BUT THE ORDERS WHICH ARE PASSED AFTER INQU IRY/INVESTIGATION ARE TREATED ON QUESTION /ISSUE ARE NOT PER-SE OR NORMAL LY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECA USE THE REVISIONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INV ESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN. IN CASE WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY , THE CI T MUST RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. WHILE IN THE INSTANT CASE, THE AO HAS MERELY ACCEPTED THE SUBMISSIONS MADE BY THE ASSESSEE WITH RESPECT TO GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS UNCLE MR. KUMAR CHIMANLAL MEHTA AND NO ENQUIRY OR VERIFIC ATION WAS CONDUCTED BY THE AO. D) CIT V. GABRIEL INDIA LIMITED (1993) 203 ITR 108(BOM .)- IT WAS HELD BY HONBLE BOMBAY HIGH COURT THAT THE POWER OF SUO MOT U REVISION U/S 263 OF THE ACT IS IN THE NATURE OF SUPERVISORY JURISDIC TION AND CAN BE EXERCISED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXISTS I.E. THE ORDER IS ERRONEOUS AND BEING ERRONEOUS , PREJUDICE IS CAUSED TO THE IN TEREST OF THE REVENUE. IF AN AO ACTING IN ACCORDANCE WITH LAW MAKES CERTAIN A SSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE CIT SIMPLY BE CAUSE , ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABOR ATELY. THE SECTION 263 OF THE ACT DOES NOT VISUALIZE A CASE OF SUBSTITUTIO N OF JUDGMENT OF CIT FOR THAT OF THE AO OR ALLOWING THE CIT TO MAKE FISHING OR ROVING ENQUIRIES IN THE MATTERS WHICH ARE CONCLUDED. WHILE IN THE INSTA NT CASE UNDER APPEAL, THE AO HAS MERELY ACCEPTED THE SUBMISSIONS MADE BY THE ASSESSEE WITH RESPECT TO GIFT OF RS.1,48,00,000/- RECEIVED BY THE ASSESSEE FROM HIS UNCLE MR. KUMAR CHIMANLAL MEHTA WITHOUT ANY ENQUIRY AND V ERIFICATION AND THERE IS NO QUESTION OF SUBSTITUTION OF THE OPINION OF THE CIT WITH THAT OF ITA 2546/M/15 18 THE AO OR THE CIT MAKING ANY FISHING OR ROVING ENQU IRY BY PASSING ORDERS U/S 263 OF THE ACT DATED 25-03-2015, HENCE THIS CAS E IS CLEARLY DISTINGUISHABLE. BASED ON OUR ABOVE DISCUSSIONS AND REASONING , WE U PHOLD THE ORDERS DATED 25-03-2015 OF THE PR. CIT INVOKING SECTION 2 63 OF THE ACT BY DIRECTING AO TO RE-DECIDE THE ISSUE WITH RESPECT TO CLAIM OF THE RECEIPT OF GIFT OF RS.1,48,00,000/- BY THE ASSESSEE . WE ORD ER ACCORDINGLY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DECEMBER, 2015. !' # $% &! ' 30-12-2015 ( ) SD/- SD/- (JOGINDER SINGH) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 8 MUMBAI ; &! DATED 30-12-2015 [ .9../ R.K. R.K. R.K. R.K. , EX. SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. : ( ) / THE CIT(A)- CONCERNED, MUMBAI 4. : / CIT- CONCERNED, MUMBAI 5. =>( 99?@ , ?@ , $ 8 / DR, ITAT, MUMBAI H BENCH 6. (BC D / GUARD FILE. ' / BY ORDER, = 9 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 8 / ITAT, MUMBAI