Conventional Fastners, Haridwar V. CIT, Dehradun

ITA 2556/DEL/2013

• Counselvise Citation: 255620114 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POONAM KHAIRA SIDHU
• Assessee Lawyers: SUDHANSHU SHARMA
• Keywords: Business income; Right to appeal
• Section: 143(3); 142(1); 80HHC; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. T.S.KAPOOR, ACCOUNTANT MEMBER I.T.A .NO.2556 /DEL/201 3 (ASSESSMENT YEAR - 2 009 - 10 ) CONVENTIONAL FASTNERS, C/O - SH. RANVEER SHARMA, ADVOCATE, 1 ST FLOOR, SHRI GANESH COMPLEX, RANIPUR MORE, HARIDWAR - 249401. P AN - AAFFC8403N (APPELLANT) VS CIT, INCOME TAX OFFICE (AAYKAR BHAWAN), SUBHASH ROAD, DEHRADUN (UK). (RESPONDENT) APPELLANT BY SH. SUDHANSHU SHARMA, CA RESPONDENT BY SMT. POONAM KHAIRA SIDHU, CIT DR ORDER PER DIVA SINGH, JM B Y THE PRESENT APPEAL PERTAINING TO 2009 - 10 ASSESSMENT YEAR THE ASSESSEE ASSAILS THE CORRECTNESS OF THE ORDER DATED 23.03.2011 PASSED BY THE CIT, DEHRADUN U/S 263 ON THE FOLLOWING GROUNDS: - 1. ON FACTS AND UNDER CIRCUMSTANCES, COMMISSIONER OF INCOME TAX, DEHR ADUN HAS WRONGFULLY DISALLOWED DEDUCTION U/S 80 - IC WHICH WAS CLEARLY AVAILABLE TO INTEREST INCOME ARISING OUT OF FIRST DEGREE NEXUS WITH THE MANUFACTURING ACTIVITY OF THE ASSESSEE. 2. ON FACTS AND ON MATTER OF LAW, COMMISSIONER OF INCOME TA, DEHRADUN IS NOT JUSTIFIED CANCELLING THE ORIGINAL ASSESSMENT ORDER PASSED ON 16/11/2010 & INSTRUCTING FRAMING AFRESH AFTER TAKING INTO CONSIDERATION ASPECTS DISCUSSED. 2. THE RELEVANT FACTS OF T HE CASE ARE THAT THE ASSESSEE IN THE YEAR UNDER CONSIDERATION IS STATED TO BE DERIVING INCOME FROM THE MANUFACTURING AND SALE OF ELECTRONIC POWER METERS. BY WAY OF ELECTRONICALLY FILING ITS RETURN ON 26.09.2009 THE ASSESSEE HAD RETURNED A NIL INCOME . THE CASE WAS SELECTED FOR SCRUTINY BY CASS AND AFTER ISSUANCE OF NOTICE U/S 143(2) AND 142(1) DEDUCTION U/S 80 - IC WAS ALLOWED TO THE NET PROFIT OF RS.54,31,995/ - BY THE ASSESSMENT ORDER DATED 16.11.2010 PASSED U/S 143(3) OF THE I.T. ACT. THE COMMISSIONER IN THE EXERCISE OF HIS REVISIONARY 2 I.T.A .NO. - 2556 /DEL/2013 POWERS NOTING THAT THE NET PROFIT INCLUDES INTEREST O F RS.22,29,129/ - ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE REQUIRING HIM TO EXPLAIN AS TO HOW THE SAID INTEREST INCOME WAS ALLOWABLE AS A DEDUCTION U/S 80 IC OF THE ACT. IN RESPONSE TO THE SAME, THE ASSESSEE SUBMITTED THAT THE INTEREST INCOME IS OUT OF FDR PLEDGED AS A SECURITY TO OBTAIN BANK GUARANTEE AS SUCH IT IS ELIGIBLE FOR DEDUCTION U/S 80 IC. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS : - CIT VS PARAMOUNT PREMISES (P.) LTD. [1991] 190 ITR 259 (BOM.) CIT VS ARVIND CONSTRUCTIONS CO. LTD. [2009] 317 ITR 276 (DEL.) CIT VS JAPEE DSC VENTURES LTD. [2011] 335 ITR 132 (DEL.) CIT VS NECTAR LIFE SCIENCES LTD. [2011] 203 TAXMANN 0318 (DEL.) CIT VS ELTEK SGS (P.) LTD [ 2008] 300 ITR 6 (DEL) CIT VS JAGDISHPRASD M JOSHI [2009] 318 ITR 420 (BOM.) 2.1. NOT CONVINCED WITH THE EXPLANATION AND CONSIDERING THE DECISION RELIED UPON BY THE ASSESSEE AS DISTINGUISHABLE ON FACTS THE CIT(A) CANCELLED THE ASSESSMENT ORDER DATED 16.11. 2010 HOLDING THE SAME TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE U/S 263 AND DIRECTED THE AO TO FRAME THE ASSESSMENT AFRESH. IN SUPPORT OF HIS VIEW RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS CIT VS RAJA BAHADUR KAMAKHYA NARAYAN SINGH [1948] 16 ITR 325 (PC) MRS. BACHA F.GUZDAR VS. CIT [1955] 27 ITR 1 (SC) CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO. LTD. VS CIT [1978] 113 ITR 84 (SC) CIT VS STERLING FOODS [1999] 237 ITR 0579 (SC) LIBERTY INDIAN VS CIT [2009] 317 ITR 1218 (SC) 3. AGGRIEVED BY THIS THE ASSESSEE IS IN THE APPEAL BEFORE THE TRIBUNAL. 4. LD. AR RELYING UPON THE DECISIONS CITED BEFORE THE CIT , DEHRADUN CONTENDED THAT IN THE FACTS OF THE ASSESSEE S CASE THE EARNING OF INTEREST IS DIRECTLY LINKED TO THE BUSINESS INCOME A ND IS OF THE FIRST DEGREE AS THE ASSESSEE WHO IS IN THE BUSINESS OF MANUFACTURE AND SUPPLY OF ELECTRIC METERS FOR SUPPLY AND INSTALLATION BY UTTARANCHAL POWER CORPORATION LTD. WAS REQUIRED TO FURNISH GUARANTEES IN FAVOUR OF THE POWER CORPORATION IN THE FO RM OF BANK DEPOSIT CUM PERFORMANCE GUARANTEE WHICH WOULD REMAIN PLEDGED IN FAOVUR OF THE POWER CORPORATION DURING THE ENTIRE PERIOD FOR WHICH THE GUARANTEE IS APPLICABLE AND IT IS THESE FDRS WHICH HAVE BEEN PLEDGED AS A SECURITY WHICH HAVE EARNED THE BANK INTEREST. IN THIS BACKGROUND RELYING UPON THE 3 I.T.A .NO. - 2556 /DEL/2013 DECISIONS OF THE DELHI HIGH COURT IN THE CASE OF CIT VS ARVIND CONSTRUCTIONS CO. LTD. [2009] 317 ITR 275 (DEL.) & C IT VS JAPEE DSC VENTURES LTD. [2011] 335 ITR 132 AGAIN OF THE DELHI HIGH COURT WHEREIN CONSID ERING THE FACT THAT THE INTEREST FLOWS FROM BANK DEPOSITS IN IDENTICAL CONDITION WH EREIN THE AO REJECTED THE ASSESSEE S CLAIM APPLYING THE DECISION OF THE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & FERT. LTD. VS CIT [1997] 227 ITR 172 SOUGHT T O TAX THE SAME. THEIR LORDSHIPS OF THE DELHI HIGH COURT FOLLOWING THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS BOKARO STEEL LTD. ON FACTS HELD THAT THE ISSUE COULD NOT BE DECIDED CONSIDERING TUTICORIN ALKALI CHEMICALS & FERT. LTD. AND THE ISSUE I NSTEAD SHOULD BE DECIDED CONSIDERING THE DECISION OF THE APEX COURT IN CIT VS KARNAL COOP. SUGAR MILLS LTD. [2000] 243 ITR 2. IT WAS HIS SUBMISSION THAT IN THE FACTS OF THE PRESENT CASE ALSO THESE DECISIONS FOLLOWING CIT VS JAYPEE DSC VENTURES LTD. SHOULD HAVE BEEN FOLLOWED. RELIANCE WAS ALSO PLACED UPON ANOTHER DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS NECTAR LIFE SCIENCES LTD. [2011] 203 TAXMAN 0318 (DEL.) WHEREIN THEIR LORDSHIPS CONSIDERING THE DEDUCTION U/S 80HHC IN THE CONTEXT OF INTEREST OF FDRS KEPT WITH THE BANK AS A SECURITY FOR OPENING LETTER OF CREDIT ALLOWED THE CLAIM OF THE ASSESSEE. THE LD. AR WAS REQUIRED TO ADDRESS HOW THE DECISIONS RELIED UPON IN DIFFERENT CONTEXT WOULD HELP THE ASSESSEE S CASE IN THE FACE OF THE SPEAKING JUDGEMENT S OF THE APEX COURT CONSISTENTLY ON THE ISSUE WHICH HAVE BEEN REFERRED TO BY THE CIT, DEHRADUN IN THE ORDER. HOWEVER THE LD. AR MERELY RELIED UPON THE DECISIONS CITED WHICH HAD ALSO BEEN RELIED UPON BEFORE THE CIT , DEHRADUN . 5. LD. CI T DR PLACING RELIANCE UPON THE IMPUGNED ORDER SUBMITTED THAT THE CIT HAS NOT REFERRED TO THE DECISION OF THE APEX COURT IN THE CASE OF TUTICORIN ALKALI CHEMICALS & FERT. LTD. VS CIT [1997] 227 ITR 172 (SC) OR BOKARO STEEL LTD. ACCORDINGLY REFERENCE TO THO SE DECISIONS IN THE FACTS WAS QUESTIONED. IT WAS ALSO SUBMITTED THAT AS POINTED OUT BY THE BENCH THE COMMISSIONER, DEHRADUN HAS RELIED UPON PANDIAN CHEMICALS LTD. VS CIT [2003] 262 ITR 278, CAMBAY ELECTRIC SUPPLY INDSTL.CO. LTD. VS CIT [1978] 113 ITR 8 4 AND LIBERTY INDIAN VS CIT AMONGST OTHERS AND IN THE FACE OF THE LANGUAGE OF THE SECTION IT IS VERY CLEAR THAT THE LEGISLATURE HAS 4 I.T.A .NO. - 2556 /DEL/2013 CONSCIOUSLY USED THE WORD DERIVE FROM AND NOT ATTRIBUTABLE TO THE MEANING OF WHICH STANDS ADDRESSED BY THE APEX COU RT IN THE CASE OF CAMBAY ELECTRIC SUPPLY INDSTL. CO. LTD. VS CIT RELIED UPON. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE WE PROCEED TO ADDRESS THE SPECIFIC ARGUMENTS OF THE PARTIES BEFORE THE BENCH, IT IS A PPROPRIATE TO FIRST REPRODUCED FROM THE RECORD HOW THE ASSESSMENT HAS BEEN CONCLUDED. FOR THE SAID PURPOSE, THE BODY OF THE ASSESSMENT ORDER IS REPRODUCED HEREUNDER: - ASSESSMENT ORDER DATED 16.11.2010 ASSESSEE FIRM FILED ITS RETURN ELECTRONICALLY ON 26.0 9.2009 DECLARING TOTAL INCOME OF RS. NIL. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AND NOTICE U/S 143(2) OF THE INCOME TAX ACT 1961 WAS ISSUED ON 20.08.2010 WHICH WAS DULY SERVED UPON THE ASSESSEE. NOTICE U/S 142(1) ALONG WITH QUESTIONNAIRE WAS IS SUED ON 13.09.2010. IN RESPONSE TO THESE NOTICES SHRI SUDHANSHU SHARMA, CA ATTENDED AND FILED REPLIED FROM TIME TO TIME. THE CASE WAS DISCUSSED WITH HIM. 2. THE ASSESSEE DERIVES IT S INCOME FROM THE MANUFACTURING AND SALE OF ELECTRONICS POWER METERS, INSTA LLATION AND EQUIPMENTS. THE BOOKS OF ACCOUNTS WERE PRODUCED WHICH WERE VERIFIED ON TEST CHECK BASIS. THE ASSESSEE EARNED A NET PROFIT OF RS.54,31,995/ - AND CLAIMED DEDUCTION OF ENTIRE AMOUNT U/S 80 IC OF THE I.T.ACT, 1961. THIS WAS THE FIFTH YEAR OF CLA IM OF THIS DEDUCTION BY THE ASSESSEE. 3. AFTER VERIFICATION OF THE FACTS, THE CLAIM OF THE ASSESSEE IS FOUND TO BE GENUINE AND INCOME IS ASSESSED AT NIL. 6.1 . CONSIDERING THE ABOVE ALONGWITH THE ORDER UNDER CHALLENGE AND THE ARGUMENTS OF THE RESPECTIVE PART IES BEFORE THE BENCH WHICH HAVE BEEN REFERRED TO IN THE EARLIER PART OF THIS ORDER, WE ARE OF THE VIEW ON FACTS THAT THE CONCLUSION ARRIVED AT BY THE CIT, DEHRADUN CANNOT BE FAULTED WITH. IT IS EVIDENT FROM THE RECORD THAT THE CLAIM ALLOWED BY THE AO WAS NOT ALLOWABLE IN LAW. THE ISSUE ON FACTS IS WELL SETTLED BY A PLETHORA OF DECISIONS RIGHT FROM THE DECISION OF THE APEX COURT IN THE CAMBAY ELECTRIC SUPPLY INDSTL. CO. LTD. VS CIT RENDERED ON 11.04.1978 WHEREIN THEIR LORDSHIPS HAVE BROUGHT OUT IN DETAIL THE DIFFERENCES IN THE MEANING OF ATTRIBUTABLE TO AND DERIVED FROM . THE EXPRESSION FURTHER CAME UP FOR CONSIDERATION IN THE CASE OF CIT VS STERLING FOODS [1999] 237 ITR 579 RENDERED ON 15.04.1999 AND FOLLOW ED IN YET ANOTHER DECISION BY THE APEX COURT IN PANDIAN CHEMICALS LTD. VS CIT [2003] 262 ITR 278 RENDERED ON 24.04.2003. THE LATEST DECISION OF THE APEX COURT IN THE CASE OF LIBERTY INDIA VS CIT AGAIN RE - AFFIRMS THE SAME VIEW. AS 5 I.T.A .NO. - 2556 /DEL/2013 OPPOSED TO THE SETTLED LEGAL POSITION RELIED UPON BY THE LD. COMMISS IONER, DEHRADUN IT IS SEEN FROM A PERUSAL OF THE IMPUGNED ORDER THE DECISIONS RELIED UPON BY THE ASSESSEE HAVE BEEN H E LD TO BE DISTINGUISHABLE ON FACTS. ADDRESSING THE DECISIONS RELIED UPON BEFORE US WE HOLD CONCURRING WITH THE FINDINGS OF THE CIT, DEHRAD UN THAT THEY DO NOT COME TO RES CUE OF THE ASSESSEE IN THE ADMITTED FACTS . NO EFFORT HAS BEEN MADE BY THE LD. AR TO SHOW HOW THE DECISIONS ARE WRONGLY RELIED. T HE DECISIONS OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS JAPEE DSC VENTURES LTD. (CI TED SUPRA) STRONGLY RELIED UPON BY THE LD. AR IT IS SEEN IS OF NO HELP AS IN THE FACTS OF THAT CASE THE ISSUE FOR CONSIDERATION BEFORE THE HON BLE HIGH COURT WAS ENTIRELY DIFFERENT. T HE ISSUE UNDER CONSIDERATION BEFORE THE HON BLE HIGH COURT WAS WHETHER T HE INTEREST EARNED ON THE BANK GUARANTEE WHICH WAS A PRE - REQUISITE FOR THE PROJECT WOULD BE IN THE NATURE OF CAPITAL AND REQUIRED TO BE ADJUSTED TO REDUCE AND SET OFF THE PROJECT COST OR WAS IT A REVENUE INCOME TAXABLE UNDER THE HEAD OF INCOME FRO M OTHER SOURCES . IT IS FOR THIS PURPOSE THAT THE DECISIONS OF THE APEX COURT IN THE CASE OF BOKARO STEEL LTD, TUTICORIN ALKALI CHEMICALS & FERT. LTD. VS CIT (CITED SUPRA) AND CIT VS KARNAL COOP. SUGAR MILLS LTD. (CITED SUPRA) CAME UP FOR CONSIDERATION . THE DECISION THAT IT REDUCED THE PROJECT EXPENSES AND THE AMOUNT WAS NOT TAXABLE AS INCOME FROM OTHER SOURCES DOES NOT HELP THE ASSESSEE S CASE IN ANY MANNER AND RELIANCE THEREON IS MISPLACED. RELIANCE HAS ALSO BEEN PLACED ON THE DECISION OF THE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS NECTAR LIFE SCIENCES LTD. (CITED SUPRA). THE SAID DECISION OPERATES ON THE PECULIAR FACTS OF THE CASE AND THE ISSUE UNDER CONSIDERATION WAS ALLOWABILITY OF NETTING OF EXPENSES WHERE THE AO HAD HIMSELF HELD THAT FDRS WER E BUSINESS INCOME OF THE ASSESSEE. THE LD. AR HAS ALSO RELIED UPON ANOTHER DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ARVIND CONSTRUCTIONS LTD.. A PERUSAL OF THE SAME SHOWS THAT ALTHOUGH THE DECISION WAS RENDERED ON 04.12.2007 HO WEVER THE SETTLED LEGAL POSITION BY WAY OF THE JUDGEMENT S OF THE APEX COURT IN CAMBAY ELECTRIC SUPPLY INDSTL. CO. LTD., STERLING FOODS AND PANDIAN CHEMICALS LTD. WERE NOT REFERRED BY THE REVENUE. IN THE FACTS OF THE PRESENT PROCEEDINGS THE DECISIONS HAVE BEEN CONSIDERED AND CONFRONTED AND CANNOT BE IGNORED. IN THE AFORESAID PECULIAR FACTS 6 I.T.A .NO. - 2556 /DEL/2013 AND CIRCUMSTANCES W E ARE OF THE VIEW THAT THE APPEAL OF THE ASSESSEE DESERVES TO BE DISMISSED. AS THE COMMISSIONER HAS NOT ONLY DEMONSTRATED THE ERROR IN HIS ORDER BUT ALSO THE FACT THAT IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE LAW IS WELL SETTLED THAT THE COMMISSIONER IN THE EXERCISE OF HIS REVISIONARY POWER CANNOT SET ASIDE AN ASSESSMENT ORDER ONLY ON THE GROUND THAT THERE IS AN ERROR UNLESS HE MAKES OU T A CASE THAT THE ERROR IS SUCH THAT THE ORDER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE RATIONALE FOR HAVING SUCH POWERS VESTED IN THE COMMISSIONER IS BASED ON THE FACT THAT THE REVENUE DOES NOT HAVE ANY RIGHT TO APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. IT IS W ELL - SETTLED LEGAL POSITION THAT THE ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND AN ADJUDICATOR. IF THE ASSESSING OFFICER IN THE DISCHARGE OF HIS DUTIES AND FUNCTIONS AS AN A DJUDICATOR DECIDES A QUESTION OR ASPECT AND MAKES A WRONG ASSESSMENT WHICH IS UNSUSTAINABLE IN LAW , I T CAN BE CORRECTED BY THE COMMISSIONER IN EXER CIS E OF HIS R EVISIONARY POWERS. IT IS A WELL ACCEPTED LEGAL POSITION THA T A S AN INVESTIGATOR IT IS INCUMBENT UPON THE ASSESSING OFFICER TO INVESTIGATE THE FACTS REQUIRE D TO BE EXAMINED AND VERIF Y THE SAME IN ORDER TO COMPUTE THE TAXABLE INCOME. IF THE ASSESSING OFFICER FAILS TO CONDUCT THE SA ID INVESTIGATIONS, HE COMMITS AN ERROR AND THE WORD ERRONEOUS INCLUDES FAILURE TO MAKE THE E NQUIRY. IN SUCH CASES THE ORDER BECOMES ERRONEOUS BECAUSE E NQUIRY OR VERIFICATION HAS NOT BEEN MADE AND NO T BECAUSE A WRONG ORDER HAS BEEN PASSED ON MERIT S . THE REASON IS OBVIOUS THE POSITION A ND FUNCTION OF THE ASSESSING OFFICER IS VERY DIFFERENT FROM THAT OF A CIVIL COURT. THE STATEMENTS MADE IN A PLEADING PRO VED BY THE MINIMUM AMOUNT OF THE EVIDENCE MAY BE ACCEPTED BY A CIVIL COURT IN THE ABSENCE OF ANY REBUTTAL. THE CIVIL COURT IS NEUTRA L. IT SIMPLY GIVES DECISION ON THE BASIS OF THE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. HOWEVER THE ASSESSING OFFICER IS NOT ONLY AN A DJUDICATOR BUT IS ALSO AN I NVESTIGATOR. HE IS NOT EXP E C TED TO REMAIN PASSIVE IN THE FACE OF A RETURN WHICH APPAREN TLY APPEARS TO BE IN ORDER BUT CALL S FOR FURTHER INQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS ST ATED IN THE RETURN WHEN CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. THE MEANING TO BE GIVEN TO THE WORD ERRONEOUS IN SECTI ON 263 EMERGES OUT OF THIS CONTEXT AS IT IS INCUMBENT O N THE ASSESSING OFFICER T O FURTHER INVESTIGATE THE FACTS 7 I.T.A .NO. - 2556 /DEL/2013 STATED IN THE RETURN WHEN CIRCUMSTANCES WOULD MAKE SUCH AN INQUIRY PRUDENT THAT THE WORD ERRONEOUS IN SECTION 263 INCLUDES FAILURE TO MAKE SU CH AN INQUIRY. NO DOUBT IT IS EQUALLY CLEAR THAT A COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND RO V ING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED. HOWEVER IT IS EQUALLY WELL SETTLED THAT THE ORDER CANNOT BE T ERM ED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. THE SECTION DOES NOT VISUALIZE A CASE OF SUBSTITUTING THE JUDGEMENT OF THE COMMISSIONER FOR THAT AND THE ASSESSING OFFICER WHO PASS ES THE ORDER UNLESS THE DECISION IS HELD TO BE ERRONEOUS. THE JURISDICTIONAL PRE - CONDITION STIPULATE THAT THE COMMISSIONER OF INCOME TAX MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. IT IS WELL SETTLED THAT THE ORDER U/S 263 CAN BE TERMED ERRONEOUS ONLY IF THE COMMISSIONER HOL DS AND DECIDES THAT IT IS CONTRARY TO LAW. IN THE FACTS OF THE PRESENT CASE THE COMMISSIONER IN THE EXERCISE HIS POWERS U/S 263 HAS COME TO THE CONCLUSION THAT THE ASSESSMENT ORDER DT. 16.11.2010 IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENU E BASED ON THE LEGAL POSITION AS SET OUT IN HIS ORDER WHICH HAS NOT BEEN DISTINGUISHED ON FACTS BY THE LD. AR. FINDING OURSELVES IN CONCURRENCE WITH THE VIEW TAKEN THE GROUNDS RAISED ARE DISMISSED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH OF JANUARY 2015 . SD/ - SD/ - ( T.S.KAPOOR ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 / 01 /201 5 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI