M/s. Globus Housing, Bhopal V. The C.I.T., Bhopal

ITA 259/IND/2010

• Counselvise Citation: 25922714 RSA 2010
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 05-04-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 04-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: P K JAIN
• Keywords: Additional evidence; Fair market value; Valuation report
• Section: 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ITA NO.259/IND/2010 A.Y.2006-07 GLOBUS HOUSING BHOPAL PAN AAFFG-6810K APPELLANT VS COMMISSIONER OF INCOME TAX BHOPAL RESPONDENT APPELLANT BY : SHRI P.K. JAIN RESPONDENT BY : SHRI KESHAV SAXENA O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT DATED 31.3.2010 ON THE GROUND THAT THE LEARNED CIT WAS NOT JUSTIFIED IN PASSING A REVISIONAL ORDER U/S 263 OF THE ACT BY HOLDING THAT THE ORDER PASSED BY THE ASSESSI NG OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE. 2 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESS EE FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE IN THE FORM OF POSSESSION LETTER FROM ALL 22 OCCUPANTS IN THE ASSE SSEE HOUSING SOCIETY. THESE DOCUMENTS COULD NOT BE PRODU CED BEFORE THE LOWER AUTHORITIES. IT WAS PRAYED THAT T HE ADDITIONAL EVIDENCE FILED BEFORE US MAY BE ADMITTED WHICH GOES TO THE ROOT OF THE MATTER IN COMING TO A CORRECT CONCLUSIO N. THE LEARNED CIT DR CONTENDED THAT IT IS TOO LATE TO ADM IT THE ADDITIONAL EVIDENCE WHICH WAS NOT FILED BEFORE THE LOWER AUTHORITIES. HOWEVER, WE ADMIT THE ADDITIONAL EVIDE NCE FOR OUR CONSIDERATION. 3. THE LD. COUNSEL FOR THE ASSESSEE FILED WRITTEN S UBMISSIONS RUNNING INTO 27 PAGES CONTAINING CERTAIN FACTS AND THE CASES RELIED UPON BY THE ASSESSEE. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE FIRM CAME INTO EXISTENCE BY A DEED OF PARTNERSHIP DATED 16 TH FEBRUARY, 2004 FOR THE BUSINESS OF BUILDERS, DEVELOPERS AND COLONIZER AND TO DEAL IN REAL ESTATE AND ALLIED ACTIVITIES. IT WAS SUBMITTED THAT THE ASSESSEE CONSTRUCTED 22 UNITS AND CLAIMED DEDUCTION U/S 3 80IB(10) OF THE ACT. IT WAS CLAIMED THAT THE ASSESS EE PURCHASED 1.18 ACRES OF LAND OUT OF 2.71 ACRES WHIC H WAS APPROVED BY TOWN & COUNTRY PLANNING DEPARTMENT LO CAL AUTHORITY VIDE LETTER NO. 3802 DATED 11.11.2003. I T WAS CLAIMED THAT M/S. RAMA CONSTRUCTION OBTAINED BUILDING PERMI SSION FROM MUNICIPAL CORPORATION ON 3.1.2004 FOR THE ENTIRE LA ND OF 2.71 ACRES. HOWEVER, THE ASSESSEE CLAIMED TO HAVE DEVEL OPED 1.18 ACRES OF LAND IN THE NAME OF GLOBUS CITY AND COMPLE TED THE DEVELOPMENT BY CONSTRUCTING ALL THE RESIDENTIAL UNI TS BY FEBRUARY/MARCH, 2006. IT WAS SUBMITTED THAT THE MU NICIPAL CORPORATION WAS DULY INFORMED ABOUT THE COMPLETION OF THE PROJECT BUT THEY DID NOT ISSUE THE COMPLETION CERTI FICATE FOR WHICH OUR ATTENTION WAS INVITED TO LETTER DATED 1.3 .2006. ON QUESTIONING FROM THE BENCH REGARDING NON-AVAILABILI TY OF COMPLETION CERTIFICATE, IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE THAT NO COMPLETION CERTIFICATE IS REQU IRED. IT WAS SUBMITTED THAT AUDIT REPORT IN FORM NO. 10CCB DATED 4.9.2006 WAS FURNISHED ALONG WITH THE RETURN FOR THE ASSESSM ENT YEAR 2006-07. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. 4 AS PER THE ASSESSEE, THE NECESSARY DOCUMENTS WERE F URNISHED. IT WAS EMPHATICALLY CLAIMED THAT ALL THE DOCUMENTS/ DETAILS WERE FILED BEFORE THE ASSESSING OFFICER, THEREFORE, THE ORDER CANNOT BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE. IT WAS ALSO SUBMITTED THAT THE NECESSARY COMPLIANCE WAS AL SO MADE TO THE NOTICE ISSUED U/S 263 OF THE ACT AND THE LEA RNED CIT COMPLETELY IGNORED THE CLAIM OF THE ASSESSEE WITHOU T APPRECIATING THE FACTS. IT WAS FURTHER SUBMITTED TH AT THE REVISIONARY POWERS U/S 263 EXERCISED BY THE LEARNED CIT ARE WITHOUT ANY BASIS. A PLEA WAS ALSO RAISED THAT THE LEARNED CIT RAISED STRANGE QUESTIONS LIKE THE LAND IN QUESTION WAS NOT REGISTERED BY THE PURCHASER AND THE SAME HAS NOT BE EN INQUIRED INTO BY THE ASSESSING OFFICER AND THE ASSE SSING OFFICER DID NOT ASK FOR THE EVIDENCE OF COST OF EACH DUPLEX HOUSES, AREA OF SUCH HOUSES, VALUATION REPORT, WHICH ARE RE QUIRED FOR ALLOWING DEDUCTION U/S 80IB(1) OF THE ACT AND THE N UMBER OF HOUSES CONSTRUCTED/SOLD ALONG WITH THE SALE CONSIDE RATION AND MODE OF TRANSACTION, ETC. WERE ALSO NOT CONSIDERED IN THE ASSESSMENT ORDER. THE LD. COUNSEL FOR THE ASSESSEE ALSO 5 RELIED UPON VARIOUS CASES WHICH ARE MENTIONED IN HI S WRITTEN SUBMISSIONS, BEING THE MATTER OF RECORD, THE SAME A RE NOT REPEATED HERE. 4. ON THE OTHER HAND, THE LEARNED CIT DR STRONGLY DEFE NDED THE IMPUGNED ORDER BY CONTENDING THAT THE LEARNED A SSESSING OFFICER HAS NOT CONSIDERED THE ISSUE IN THE REQUIRE D MANNER AND IT IS SURELY ERRONEOUS AND PREJUDICIAL TO THE I NTEREST OF REVENUE. OUR ATTENTION WAS INVITED TO THE MANNER I N WHICH THE ASSESSMENT ORDER WAS FRAMED. RELIANCE WAS PLACED UP ON THE DECISION IN 299 ITR 435 (MP), 243 ITR 83 (SC), 151 ITR 48 (KARN.) BY FURTHER SUBMITTING THAT THE DECISION 249 ITR 306 (SC) RELIED ON BY THE ASSESSEE RATHER SUPPORTS THE CASE OF THE REVENUE. IT WAS EMPHATICALLY SUBMITTED THAT THE AS SESSMENT ORDER WAS FRAMED WITHOUT APPLICATION OF MIND AND EV EN THE APPLICABILITY OF SECTION 80IB(1) OF THE ACT HAS NOT BEEN MENTIONED IN THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BRIEF FACTS ARE THAT THE ASSES SEE FIRM IS 6 ENGAGED IN THE BUSINESS OF BUILDERS, COLONIZERS, DE VELOPERS IN REAL ESTATE BUSINESS, ALLIED ACTIVITIES AND CAME IN TO EXISTENCE ON 16.2.2004 BY A DEED OF PARTNERSHIP. THE ASSESSE E CLAIMED THAT IT DEVELOPED ABOUT 1.18 ACRES OF LAND TAKEN FR OM M/S RAMA CONSTRUCTIONS OUT OF 2.71 ACRES OF LAND OWNED BY TH EM BY EXECUTING AN AGREEMENT TO SELL ON 19.6.2004 FOR A CONSIDERATION OF RS.80 LACS. THE ASSESSEE CLAIMED T HAT THE POSSESSION OF THE LAND WAS DELIVERED TO THE ASSESSE E FIRM ON 19.6.2004 ITSELF AND THUS THE ASSESSEE BECAME THE O WNER OF THE LAND BY VIRTUE OF SECTION 2(47)(V) OF THE ACT, NOT-WITH- STANDING THE FACT THAT THE NAME OF THE ASSESSEE FIR M WAS NOT RECORDED IN THE REVENUE RECORD. HOWEVER, WE FIND TH AT THESE FACTS ARE NOT EVEN MENTIONED IN THE ASSESSMENT ORDE R. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUN DER THE ASSESSMENT ORDER DATED 11 TH MARCH, 2008 :- ;G IZDJ.K DSL CASS DS RGR FU/KKZJ.K O'KZ 2006 & 07 DS FY, P;FUR FD;K X;K GSA FU/KKZFJRH ,D QEZ GSA FU/KKZFJRH DH VK; DK L=KSR HKOU FUEKZ.K ,OA FODKL DS ISKS LS VK; GSA FU /KKZFJRH }KJK VIUH VK;DJ FOOJ.KH FNUKAD 31 VDVWCJ] 2006 DKS FUJAD VK; NKKZRS GQ, VKWFMV FJIKSVZ DS LKFK BL DK;KZY; ESA NKF[KY DH GSA 7 2 - VK;DJ VF/KFU;E 1961 DH /KKJK 143 2 DS RGR LWPUK FNUKAD 25-07-2007 DKS TKJH FD;K X;KA FQJ DJ FU/KKZJ.K VF/KDKJH DS CNYKO GKSUS DS DKJ.K IQU% /KKJK 143 2 DS UKSFVL ,OA IZUKOYH 142 1 FNUKAD 28-08-2007 DKS TKJH FD;K X;K A MDR LWPUK DS VUQIKYU ESA DJNKRK DS IZKF/KD`R IZFRFUF/K JH IH-DS- TSU] LH-,- LE;≤ IJ MIFLFKR GQ, ,OA VIUK FYF[KR TCKO ,OA LI' VHDJ.K ,OA IZI= IZLRQR FD, X, TKS FD VFHKYS[K IJ MIYC/K GS A 3 - LAFO{KK DS NKSJKU YKHK&GKFU [KKRK] FCY OKMPLZ ] JFTLVJ BR;KFN IZLRQR FD, X,] FTLDK IJH{K.K VSLV PSD DS VK/ KKJ IJ FD;K X;KA DJNKRK DH VK; DK L=KSR HKOU FUEKZ.K ,OA FODKL DS ISKS LS VK; GSA DJNKRK LS IZDJ.K IJ PPKZ DH XBZ A 4 - IZLRQR IZI=KSA ,OA LI'VHDJ.K ESA MIYC/K RF;KSA DKS /;KU ESA J[KRS GQ, DJNKRK }KJK FOOJ.KH ESA NKKZBZ XBZ NWV DKS VK; DJ VF/KFU;E ] 1961 DH /KKJK 80 VKBZ-CH-DS RGR EKU; DJRS GQ, BLDH VK; DKS FUJAD EKU; FD;K TKRK GSA FOOJ.KH ESA NKKZBZ VK; FOOJ.KH ESA NKKZBZ VK; FOOJ.KH ESA NKKZBZ VK; FOOJ.KH ESA NKKZBZ VK; % : % :% : % :- -- - 43,29,627 @& @&@& @& ?KVKBZ,% /KKJK ?KVKBZ,% /KKJK ?KVKBZ,% /KKJK ?KVKBZ,% /KKJK 80 VKBZ VKBZ VKBZ VKBZ- -- -CH CHCH CH- -- -DS RGR NWV DH JKFK % : DS RGR NWV DH JKFK % : DS RGR NWV DH JKFK % : DS RGR NWV DH JKFK % :- -- - 43,29,627 @& @&@& @& FU/KKZFJR DH XBZ VK; % : FU/KKZFJR DH XBZ VK; % : FU/KKZFJR DH XBZ VK; % : FU/KKZFJR DH XBZ VK; % :- -- - FUJAD FUJAD FUJAD FUJAD IW.KKZAD ESA DQY VK; % : IW.KKZAD ESA DQY VK; % : IW.KKZAD ESA DQY VK; % : IW.KKZAD ESA DQY VK; % :- -- - FUJAD FUJAD FUJAD FUJAD MIJKSDRKUQLKJ FU/KKZJ.K FD;K X;K A IWOZ IZNRR DJKSA DK EQTJK FN;K TK,A RNKUQLKJ UKSFVL ,OA PKYKU TKJH FD, TK,A GLRK@& ** 6. IF THE AFORESAID ASSESSMENT ORDER IS ANALYSED, W E FIND THAT THE ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICE R LACKS CLARITY WHICH CLEARLY GIVES JURISDICTION FOR INVOKI NG REVISIONAL JURISDICTION U/S 263 OF THE ACT BY THE LEARNED CIT. EVEN THE 8 REASON FOR GRANTING DEDUCTION U/S 80IB(10) OF THE A CT HAS NOT BEEN MENTIONED. THE MANNER IN WHICH THE ASSESSMENT WAS FRAMED ITSELF GIVES JURISDICTION FOR INVOKING THE P ROVISIONS OF SECTION 263 OF THE ACT. IT IS NOT A REASONED ORDER . EVEN OTHERWISE, BEFORE US, FOR THE FIRST TIME, THE LD. C OUNSEL FOR THE ASSESSEE FILED APPLICATION FOR ADMISSION OF ADDITIO NAL EVIDENCE IN THE FORM OF COMPLETION OF RESIDENTIAL UNIT MEANI NG THEREBY IT IS NOT KNOWN WHETHER THESE UNITS WERE CONSTRUCTED/C OMPLETED WITHIN THE STIPULATED PERIOD AS THE SAME IS NOT OOZ ING OUT FROM THE ASSESSMENT ORDER BECAUSE THE REQUIREMENT OF SEC TION 80IB(10) SPEAKS ABOUT COMPLETION CERTIFICATE. EVEN BEFORE THE TRIBUNAL, NO COMPLETION CERTIFICATE WAS FILED BY TH E ASSESSEE AND IN TURN A PLEA WAS RAISED THAT NO COMPLETION CE RTIFICATE IS REQUIRED. THEREFORE, WE ARE REPRODUCING HEREUNDER T HE PROVISIONS OF SECTION 80IB(10) OF THE ACT :- 80-IB. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INC LUDES ANY PROFITS AND GAINS DERIVED FROM ANY BUSINESS REF ERRED TO IN SUB- SECTIONS (3) TO 81 [(11), (11A) AND (11B) 81A ] (SUCH BUSINESS BEING HEREINAFTER REFERRED TO AS THE ELIGIBLE BUSINESS), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSES SEE, A DEDUCTION FROM SUCH PROFITS AND GAINS OF AN AMOUNT EQUAL TO S UCH PERCENTAGE AND FOR SUCH NUMBER OF ASSESSMENT YEARS AS SPECIFIED IN THIS SECTION. 9 XXX XXX XXX [(10) THE AMOUNT OF DEDUCTION IN THE CASE OF AN UND ERTAKING DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED B EFORE THE 31ST DAY OF MARCH, 6A [ 2008 ] BY A LOCAL AUTHORITY SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN THE PREVIOUS YEAR RELEVANT TO AN Y ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, ( A ) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVEL OPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 AND COMPLETES SUCH CONSTRUCTION, ( I ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN APPROV ED BY THE LOCAL AUTHORITY BEFORE THE 1ST DAY OF APRIL, 2004, ON OR BEFORE THE 31ST DAY OF MARCH, 2008; ( II ) IN A CASE WHERE A HOUSING PROJECT HAS BEEN, OR, I S APPROVED BY THE LOCAL AUTHORITY ON OR AFTER THE 1ST DAY OF APRIL, 2 004, WITHIN FOUR YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE HOU SING PROJECT IS APPROVED BY THE LOCAL AUTHORITY. EXPLANATION. FOR THE PURPOSES OF THIS CLAUSE, ( I ) IN A CASE WHERE THE APPROVAL IN RESPECT OF THE HO USING PROJECT IS OBTAINED MORE THAN ONCE, SUCH HOUSING PROJECT SHALL BE DEEMED TO HAVE BEEN APPROVED ON THE DATE ON WHICH THE BUILDING PLA N OF SUCH HOUSING PROJECT IS FIRST APPROVED BY THE LOCAL AUTHORITY; ( II ) THE DATE OF COMPLETION OF CONSTRUCTION OF THE HOU SING PROJECT SHALL BE TAKEN TO BE THE DATE ON WHICH THE COMPLETION CER TIFICATE IN RESPECT OF SUCH HOUSING PROJECT IS ISSUED BY THE LOCAL AUTH ORITY; ( B ) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHIC H HAS A MINIMUM AREA OF ONE ACRE: PROVIDED THAT NOTHING CONTAINED IN CLAUSE ( A ) OR CLAUSE ( B ) SHALL APPLY TO A HOUSING PROJECT CARRIED OUT IN ACCORDANCE WITH A SCHEME FRAMED BY THE CENTRAL GOVERNMENT OR A STATE GOVERNMENT FOR RECONSTRUCTION OR REDEVELOPMENT OF EXISTING BUILDINGS IN AREAS DEC LARED TO BE SLUM AREAS UNDER ANY LAW FOR THE TIME BEING IN FORCE AND SUCH SCHEME IS NOTIFIED BY THE BOARD IN THIS BEHALF; ( C ) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITY OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETRES FROM THE MU NICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND AND FIVE HUNDRED SQUA RE FEET AT ANY OTHER PLACE; 6B [ AND ] ( D ) THE BUILT-UP AREA OF THE SHOPS AND OTHER COMMERCI AL ESTABLISHMENTS INCLUDED IN THE HOUSING PROJECT DOES NOT EXCEED FIV E PER CENT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR T WO THOUSAND SQUARE FEET, WHICHEVER IS LESS.] 10 THE FOLLOWING CLAUSES (E) AND (F) SHALL BE INSERT ED AFTER CLAUSE (D) OF SUB-SECTION (10) OF SECTION 80-IB BY THE FINANCE (N O. 2) ACT, 2009, W.E.F. 1-4-2010 : ( E ) NOT MORE THAN ONE RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO ANY PERSON NOT BEING AN INDIVIDUAL; AND ( F ) IN A CASE WHERE A RESIDENTIAL UNIT IN THE HOUSING PROJECT IS ALLOTTED TO A PERSON BEING AN INDIVIDUAL, NO OTHER RESIDENTIAL UN IT IN SUCH HOUSING PROJECT IS ALLOTTED TO ANY OF THE FOLLOWING PERSONS , NAMELY: ( I ) THE INDIVIDUAL OR THE SPOUSE OR THE MINOR CHILDRE N OF SUCH INDIVIDUAL, ( II ) THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDU AL IS THE KARTA, ( III )ANY PERSON REPRESENTING SUCH INDIVIDUAL, THE SPOUS E OR THE MINOR CHILDREN OF SUCH INDIVIDUAL OR THE HINDU UNDIVIDED FAMILY IN WHICH SUCH INDIVIDUAL IS THE KARTA. 6C [ EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED T HAT NOTHING CONTAINED IN THIS SUB-SECTION SHALL APPLY T O ANY UNDERTAKING WHICH EXECUTES THE HOUSING PROJECT AS A WORKS CONTR ACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNME NT). ] IF THE AFORESAID PROVISION OF THE ACT IS ANALYSED, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSMENT ORDER IS LAC KING CLARIFY AND WE ARE REFRAINING OURSELVES FROM COMMENTING UPO N THE ALLOWABILITY OF DEDUCTION UNDER THE AFORESAID PROVI SION BECAUSE THE ISSUE BEFORE US IS WHETHER THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AND CONSEQUENT INVOCATION OF REVISIONAL JURISDICTION U/ S 263 BY THE LEARNED CIT. BEFORE US, THE THRUST OF ARGUMENT ON B EHALF OF THE ASSESSEE IS ON ALLOWABILITY OF DEDUCTION UNDER SECT ION 80IB(10) OF THE ACT. 11 7. BEFORE ANY CONCLUSION, THE WORD PREJUDICE MUST BE JUDICIOUSLY EXAMINED. WHAT CONSTITUTES PREJUDICE T O THE REVENUE HAS BEEN THE SUBJECT MATTER OF A JUDICIAL DEBATE. ONE VIEW WAS THAT PREJUDICIAL TO THE INTEREST OF REVENU E DOES NOT NECESSARILY MEAN LOSS OF REVENUE. THE EXPRESSION IS NOT TO BE CONSTRUED IN A PETTY FOGGING MANNER BUT MUST BE GIVEN A DIGNIFIED CONSTRUCTION. THE INTEREST OF REVENUE AR E NOT TO BE EQUATED TO RUPEES AND PAISE MERELY. THERE MUST BE A GRIEVOUS ERROR IN THE ORDER PASSED BY THE ITO WHICH MIGHT SE T A BAD TREND OR PATTERN FOR SIMILAR ASSESSMENT WHICH, ON A BROAD RECKONING, THE COMMISSIONER MIGHT THINK TO BE PREJU DICIAL TO THE REVENUE ADMINISTRATION. THE PRE-REQUISITE TO EXERC ISE THE JURISDICTION U/S 263 IS THAT THE ORDER OF THE ASSES SING OFFICER MUST BE ERRONEOUS INSOFAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF T WIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER, SOUGHT TO BE REVISED, IS ERRONEOUS AND (II) IT IS P REJUDICIAL TO THE INTEREST OF REVENUE. IF ONE OF THEM IS ABSENT, IF THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS BUT NOT PREJUDICIAL TO THE INTEREST 12 OF REVENUE, RECOURSE CANNOT BE HAD TO SECTION 263(1 ). THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKE D TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED B Y THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRO NEOUS THEN THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMP TION OF FACT OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE RE QUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL T HE ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL J USTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PREJUDICIA L TO THE INTEREST OF REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. W E ARE AWARE THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE O F ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED PREJUDICIAL TO THE INTEREST OF REVENUE. FOR EXAMPLE, IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND I T HAS RESULTED IN LOSS OF THE REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE OF THE VIEW S WITH WHICH COMMISSIONER DOES NOT AGREE, IT CANNOT BE TRE ATED AS ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVE NUE, UNLESS 13 THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAI NABLE IN LAW. THE LAND-MARK DECISION FROM THE HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL COMPANY LIMITED VS. CIT (2000) 243 ITR 83 IS THE GUIDING FACTOR. IF DUE TO AN ERRONEO US ORDER OF THE INCOME TAX OFFICER, THE REVENUE IS LOSING TAX LAWFU LLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO TH E INTEREST OF REVENUE. IF AT LEAST ONE ITEM IS FOUND TO BE PREJUD ICIAL TO THE REVENUE, THE INITIATION OF PROCEEDINGS U/S 263 CANN OT BE QUESTIONED. THIS VIEW IS SUPPORTED BY THE DECISION FROM HONBLE MADRAS HIGH COURT IN INDIAN TEXTILES VS. CI T; 157 ITR 112 (MAD.). THE EXPRESSION PREJUDICIAL TO THE INT EREST OF REVENUE MUST BE REGARDED AS INVOLVING THE CONSTRUC TION OF FACTS OR ORDERS WHICH ARE SUBVERSIVE OF THE ADMINIS TRATION OF REVENUE. THERE MUST BE SOME GRIEVOUS ERROR IN THE O RDER PASSED BY THE ITO. THE HONBLE KARNATAKA HIGH COUR T WENT TO THE EXTENT THAT THE ASSESSMENT FRAMED IN UNDUE HAST E OR WITHOUT INQUIRY IS PREJUDICIAL TO THE INTEREST OF R EVENUE (THALIBAI F. JAIN V. ITO 101 ITR 1). THE HONBLE RAJASTHAN HIGH COURT IN CIT V. EMERY STONE MFG. COMPANY; 213 ITR 843 HEL D THAT 14 ALLOWING UNPROVED DEDUCTION IS PREJUDICIAL TO THE I NTEREST OF REVENUE. THE HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF HH MAHARAJA RAJA PAWAR, DEWAS V.CIT; 138 ITR 518 HA S DISCUSSED THE FULFILLMENT OF REQUISITE TWIN CONDITI ONS BEFORE INVOKING THE REVISIONAL JURISDICTION BY THE LEARNED CIT. SO FAR AS THE CASES RELIED UPON BY THE ASSESSEE ARE CONCERNED , WE HAVE GONE THROUGH THE SAME AND FIND EITHER THEY ARE ON D IFFERENT FACTS OR ON DIFFERENT ISSUES, THEREFORE, DOES NOT H ELP THE ASSESSEE. THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN CIT V. DEEPAK KUMAR GARG; 299 ITR 435 FURTHER SU PPORTS THE CASE OF THE REVENUE. THE RATIO LAID DOWN BY THE HON BLE APEX COURT IN CIT V. LUCAS TVS LIMITED; 249 ITR 306 FOR INTERPRETATION OF LAW FURTHER SUPPORTS THE CASE OF THE REVENUE. 8. IF THE AFORESAID DISCUSSION AND THE JUDICIAL PRONOUNCEMENTS CONTAINED THEREIN ARE KEPT IN JUXTAP OSITION WITH THE ASSESSMENT ORDER, CERTAINLY WE ARE OF THE VIEW THAT THAT THE ASSESSMENT ORDER IS ERRONEOUS INSOFAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS PERTINENT TO MEN TION HERE THAT THE CONCLUSION PORTION OF THE IMPUGNED ORDER 15 AFTER CAREFUL EXAMINATION OF THE FACTS PLACED ON R ECORD AND WRITTEN SUBMISSION FILED BY ASSESSEE, I AM OF THE O PINION THAT THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE ABO VE FACTS DESPITE THERE BEING SUFFICIENT MATERIAL ON RECORD. THEREFORE, THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER IS E RROENOSU IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF R EVENUE AND IS THEREFORE HEREBY CANCELLED U/S 263 OF THE I.T. ACT. THE ASSESSING OFFICER IS DIRECTED TO REFRAME THE ASSESS MENT ORDER AFTER EXAMINING THE ABOVESAID ISSUE AND AFTER AFFOR DING SUFFICIENT OPPORTUNITIES TO THE ASSESSEE OF BEING H EARD. 9. IN THE REVISIONAL ORDER THE LEARNED CIT HAS MER ELY DIRECTED THE ASSESSING OFFICER TO EXAMINE THE FACT S/CLAIM AFTER AFFORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. THEREFORE, IT CAN BE INFERRED THAT THE IMPUGNED ORDER IS SILENT O N THE ALLOWABILITY OR DISALLOWABILITY AND THE LEARNED CIT HAS NOT FINALLY DECIDED ANYTHING. THEREFORE, THE INTEREST OF THE A SSESSEE IS NOT JEOPARDIZED IN ANY MANNER BECAUSE THE ASSESSEE EVEN OTHERWISE IS SUPPOSED TO PAY DUE TAXES, IF PAYABLE. IN THE ASSESSMENT ORDER, THE LEARNED ASSESSING OFFICER HAS NOT DISCUSSED THE ISSUES IN THE REQUIRED MANNER AND EVE N HAS NOT MENTIONED WHETHER THE ASSESSEE IS ENTITLED FOR DEDU CTION U/S 16 80IB(10) AND ESPECIALLY THE CONDITIONS ATTACHED WIT H THIS SECTION. THERE IS NO FINDING IN THE ASSESSMENT ORD ER WHETHER THE ASSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN U/S 80IB(1) OF THE ACT BEFORE ALLOWING THE DEDUCTION. IT IS AL SO AN ADMITTED FACT THAT THE ASSESSEE TILL DATE HAS NOT FURNISHED THE COMPLETION CERTIFICATE WHICH IS A PRE-REQUISITE OF SECTION 80I B(10) OF THE ACT . WE, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT AND CONFIRM THE SAME. FINALLY, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 7 TH APRIL, 2011. (R.C.SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7 TH APRIL, 2011 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, GU ARD FILE DN/- 17