Shri Manish Kumar, Indore V. The CIT-I, Indore

ITA 26/IND/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7107 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KESHAVE SAXENA
• Assessee Lawyers: P D NAGAR
• Keywords: Business income; Business expenditure; Salary income; Principle of natural justice
• Section: 143(3); 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JM AND SHRI R.C. SHARMA, AM ITA NO. 26/IND/2011 AY 2006 - 07 MANISH KUMAR, KOLKATA PAN AFWPK 2451 G APPELLANT VS. CIT - 1, INDORE RESPONDENT APPELLANT BY SHR I P.D. NAGAR, CA RESPOND ENT BY SHRI KESHAVE SAXENA, CIT/DR ORDER PER R.C. SHARMA, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT - I , INDORE, DATED 3 1.3.201 1 FOR THE AY 200 6 - 0 7 IN THE MATTER OF ORDER PASSED U/S 263 OF THE I.T. ACT, 1961, ON THE FOLLOWING GROUNDS: 1. T HE ORDER OF THE L D. COMMISSIONER OF I N C OME TAX SETTING ASIDE THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT IS BAD IN LAW AS HE FORMED THE DIFFERENT OPINION TO THE ASSESSING OFFICER, HENCE THE ORDER O F THE LD . CIT BE QUASHED. 2. THAT THE ORDER OF THE L D. COMMISSIONER OF I NCOME TAX PASSED UNDER SECTION 263 IS BAD IN LAW AS WELL AS ON FACTS. HE ERRED IN LAW IN HOLDING 2 THE TRANSACTIONS OF ACQUISITION AND SALE OF INVESTMENTS AS BUSINESS TRANSACTION, IGNOR ING THE JUDICIAL PRONOUNCEMENTS. ON THE OTHER HAND HE WRONGLY REFERRED THE JUDGMENTS OF CERTAIN IRRELEVANT CASES ON FACTS AND IN LAW. 3. THE ORDER OF THE L D . CIT IS BAD ON FACTS AS THE ASSESSEE MOTIVE AND INTENTION WAS NOT TO TRADE IN SHARES BUT TO EARN D IVIDEND AND CAPITAL APPRECIATION ONLY. HE OUGHT TO HAVE CONSIDERED THAT DURING THE YEAR NUMBER OF TRANSACTIONS WERE 27 IN AGGREGATE AND THAT TOO IN SPECIFIED SCRIPTS OF 13 COMPANIES ONLY. SOME OF THE SHARES WERE PURCHASED IN EARLIER YEARS AND SOLD DURING T HE YEAR. HIS TRANSACTIONS WERE DELIVERY BASED ONLY. THE ASSESSEE HAS ALSO DEALT IN INVESTMENTS OF HIS MINORS THERE BY EARNING LONG TERM CAPITAL GAIN ALSO. 4. THAT THE L D. COMMISSIONER OF INCOME TAX OUGHT TO HAVE CONSIDERED THE FACT THAT THERE WAS NOT MUC H VOLUME OR FREQUENCY NOR CONTINUITY OR REGULARITY IN PURCHASE OR SALE TRANSACTIONS OF SHARES OF LISTED COMPANIES WITH RECOGNIZED STOCK EXCHANGES; HENCE CAPITAL GAIN EARNED COULD NOT BE ASSESSED TO TAX UNDER THE HEAD 'INCOME FROM BUSINESS . 5. THAT THE L D. COMMISSIONER OF INCOME TAX OUGHT TO HAVE FURTHER CONSIDERED THAT THE ASSESSEE WAS DERIVING INCOME FROM SALARY AND IS 3 HOLDING THE EQUITY SHARES OF VARIOUS COMPANIES AS 'INVESTMENT' AS EVIDENT FROM BOOKS. INCOME EARNED ON SHARE TRANSACTIONS WAS BEING REGULA RLY AND CONSISTENTLY ASSESSED TO TAX AS SHORT TERM/LONG TER M CAPITAL GAIN IN EARLIER Y EARS . T H E INTENTION A S WELL AS BASED ON PRINCIPALS OF CONSISTENCY, THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT CANNOT BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IN ANY MANNER ORDER, SO PASSED U/S 263 OF THE ACT THEREFORE, DESERVES TO BE QUASHED. 2. THE FACTS, IN BRIEF, ARE THAT THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY, WHEREIN ASSESSMENT WAS FRAMED AT INCOME OF RS. 75,63,825/ - U/S 143(3), AS AGAINST RETURNED INCOME OF RS. 73,20,225/ - . THE LONG TERM AND SHORT TERM CAPITAL GAINS OFFERED BY THE ASSESSEE WAS SCRUTINIZED BY THE ASSESSING OFFICER AND THEREAFTER SAME WAS ACCEPTED. THE ASSESSEE DERIVES INCOME FROM SALARY AND WAS HOLDI NG EQUITY SHARES OF VARIOUS COMPANIES AS INVESTMENT AND THE SAME WERE HELD IN THE BOOKS OF ACCOUNT ALSO AS INVESTMENT SINCE MANY YEARS. IN EARLIER YEAR ALSO, THE INCOME EARNED ON THESE INVESTMENTS WAS ASSESSED AS LONG TERM/SHORT TERM CAPITAL GAINS. HOWEVER , THE SHARES 4 WERE SHOWN IN THE BALANCE SHEET AS INVESTMENT. KEEPING IN TO VIEW, THE FREQUENCY OF TRANSACTION AND THE FACT THAT THE SHARES WERE HELD AS INVESTMENT, THE AO ASSESSED THE CAPITAL GAIN ARISING OUT OF THE SAME AS LONG TERM AND SHORT TERM CAPITAL GAINS. EVEN THE INTEREST EARNED ON BORROWING WAS NOT CLAIMED AS BUSINESS EXPENDITURE NOR IT WAS ALLOWED AS SET OFF AGAINST INTEREST INCOME. THE ORDER SO PASSED BY THE ASSESSING OFFICER WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENU E BY THE LD. CIT U/S 263 BY OBSERVING AS UNDER : - NO DOUBT THE ASSESSEE HAS EARNED ON INVESTMENTS THE LONG TERM CAPITAL GAIN WITH DIVIDEND INCOME, BUT THE ASSESSEE HAS TRADED IN SHARES BY EFFECTING PURCHASES ON THE SAME DATE AND THESE ARE THE TRANSACTIONS WHICH ARE THE MOOT POINT OF TREATMENT UNDER THE RELEVANT HEAD OF INCOME I.E. WHETHER TAXABLE UNDER SHORT TERM CAPITAL GAIN OR BUSINESS INCOME. 3. AFTER D ISCUSSING VARIOUS JUDICIAL PRONOUNCEMENTS, THE LD. CIT REACHED TO THE FOLLOWING CONCLUSIONS : - 5 IN THE LIGHT OF THE SUBMISSIONS FILED BY THE ASSESSEE AND THE MATERIAL AVAILABLE ON RECORD THE ISSUE WAS DISCLOSED WITH THE LEARNED COUNSEL FOR THE ASSESSEE WHO PREFERRED TO RELY ON THE SUBMISSIONS JUSTIFYI NG THE CLAIM FOR OFFER OF PROFIT IN SHARE TRANSACTIONS A S SHORT TERM CAPITAL GAINS. THE DETAILED CHART OF THE PURCHASES AND SALES EFFECTED DURING THE YEAR WAS FURNISHED AND IT WAS SEEN THAT EVEN ON THE SAME DATE THE TRANSACTIONS IN SHARES WERE EFFECTED AND THE PERIOD OF TRANSACTIONS BETWEEN PURCHASE AND SALE VA RIED FROM FIVE DAYS TO MORE THAN TWO MONTHS . THE FACTS WHICH BECOME OBVIOUS FROM THE SUBMISSIONS OF THE ASSESSEE ARE THAT FREQUENT TRANSACTIONS WERE EFFECTED IN SHARES, NUMBERING IN ALL TO 27, AND THE FACT OF BORROWED FUNDS BEING INVESTED IN SHARES WAS ALS O ACCEPTED. ON THE ISSUE OF INTENTION OF THE ASSESSEE, IT WAS THE CASE OF LD. AUTHORIZED REPRESENTATIVE THAT THE INVESTMENTS IN SHARES WERE DISCLOSED IN THE BALANCE SHEET AS INVESTMENT AS NOT AS STOCK IN 6 TRADE AND DIVIDEND INCOME WAS DULY EARNED. THE LD. A UTHORIZED REPRESENTATIVE ALSO PLACED RELIANCE ON THE VARIOUS CASE LAWS ON THE ISSUE OF CAPITAL GAIN VERSUS BUSINESS INCOME AND ALSO CHALLENGED THE VALIDITY OF THE NOTICE U/S 263 OF THE INCOME - TAX ACT, 1961, BASED ON VARIOUS DECISIONS. NO DOUBT THE ASSESSEE HAS EARNED ON INVESTMENTS THE LONG TERM CAPITAL GAIN WITH DIVIDEND INCOME, BUT THE ASSESSEE HAS TRADED IN SHARES BY EFFECTING PURCHASES ON THE SAME DATE AND THESE ARE THE TRANSACTIONS WHICH ARE THE MOOT POINT OF TREATMENT UNDER THE RELEVANT HEAD OF INCOME I.E. WHETHER FROM THE STATEMENT OF SHORT TERM CAPITAL GAIN THAT THE PURPOSE OF SALE WAS TO ENCASH THE APPRECIATION IN THE SHORT TERM PROFIT WAS ALSO EARNED OUT OF THE SALE OF SHARES WHICH WERE PURCHASED DURING THE PREVIOUS YEAR ITSELF. THE ASSESSEE IS MAI NTAINING THE PORTFOLIO OF INVESTMENT BUT AT THE SAME TIME IS ALSO TRADING IN SHARES TO ENCASH THE APPRECIATION IN THEIR VALUE. THEREFORE, IN VIEW OF THESE FACTS SOME OF THE 7 DECISIONS RELIED UPON WHICH RELATE TO INVESTMENT ONLY ARE NOT APPLICABLE IN THE CA SE OF THE ASSESSEE BECAUSE OF THE PECULIAR FACTS OF THIS CASE. ACCORDINGLY, THE RATIO OF THE DECISIONS RELIED UPON I.E. 14 TTJ 282 (BOM) AND 70 ITD 161 DELHI I.T.A.T., IN VIEW OF FACTS OF THE CASE DOES NOT HELP THE CASE OF THE ASSESSEE. IN THE CASE OF SMK SHARES & STOCK BROKING , T HE CASE WAS A BROKING FROM WHICH ARE NOT THE FACTS OF THE CASE OF THE ASSESSEE . ON THE FACTS OF THE CASE, THEREFORE, IS THE RELEVANT DECISION IS OF THE HON'BLE I.T.A.T. AHMEDABAD BENCH REPORTED AT (2006) 99 ITD 219 (AHD) IN THE CAS E OF DCIT CIRCLE 1 VS. DEEPABEN AMITHAI SHAH WHEREIN IT WAS HELD THAT WHET IS RELEVANT IS THE VOLUME, FREQUENCY, CONTINUITY AND REGULARITY OF THE TRANSACTIONS OF PURCHASE AND SALE IN SHARES FROM WHERE IT CAN BE INFERRED THAT THESE TRANSACTIONS MUST HAVE BE EN ENTERED INTO BY THE ASSESSEE WITH THE PROFIT MOTIVE. THE SAID WAS ALSO THE DECISION IN THE CASE OF MIRAJ INVESTMENT, SURAT IN I.T.A.NO. 2194/AHD/2008, 8 AND IN THE CA S E OF SMT. PURNIMA K. SHAH IN I.T.A.NO. 3154/AHD/2002. THEREFORE, LOOKING IN TO THE FREQU ENCY AND VOLUME OF TRANSACTIONS, THE PROFITS ARISING OUT OF IT IN ACCORDANCE WITH THESE DECISIONS WAS TAXABLE NOT UNDER THE HEAD CAPITAL GAIN, BUT UNDER THE HEAD BUSINESS AND THE AO WHILE ACCEPTING SO ERRED IN PASSING THE ORDER WHICH WAS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE PROVISIONS OF SECTION 263 THUS GETS INVOKED. THEREFORE, THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER IS SET - ASIDE TO BE REFRAMED AFRESH. 4. AGAINST THE ABOVE ORDER OF CIT, THE ASSESSEE IS IN F URTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT THE ASSESSEE BASICALLY DERIVES INCOME FROM SALARY AND WAS ALSO HOLDING EQUITY SHARES OF VARIOUS COMPANI ES AS INVESTMENT SINCE MANY YEARS. INCOME EARNED ON THESE SHARES WERE REGULARLY ASSESSED BY DEPARTMENT AS LONG TERM/SHORT TERM CAPITAL GAINS. DIVIDEND EARNED THEREON 9 WAS ALSO ASSESSED AS INCOME FROM OTHER SOURCES. THERE WAS NO CHANGE IN THE INTENTION OF TH E ASSESSEE IN ACQUIRING THESE SHARES EVEN DURING THE YEAR UNDER CONSIDERATION NOR IN THE METHOD OF ACCOUNTING FOR THESE SHARES IN THE BOOKS OF ACCOUNT. IN THE COURSE OF SCRUTINY ASSESSMENT, AFTER APPLYING ITS MIND THE AO ACCEPTED THE LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN OFFERED BY THE ASSESSEE, BECAUSE THE TRANSACTIONS WERE NOT FREQUENT AND THE SHARES WERE HELD AS INVESTMENT IN THE SAME MANNER AS WAS HELD IN EARLIER YEARS. THE AO ALSO FOUND THAT THE INTEREST PAID ON BORROWING WAS ALSO NOT CLAI MED AS BUSINESS EXPENDITURE NOR CLAIMED OR ALLOWED AS SET - OFF AGAINST THE INTEREST INCOME. 6. WE HAVE CAREFULLY GONE THROUGH THE YEAR WISE HISTORY OF TRANSACTIONS ENTERED INTO BY THE ASSESSEE WITH RESPECT TO SALE OF SHARES, WHICH WERE HELD AS INVESTMENT AND FOUND THAT IN THE ASSESSMENT YEARS 2003 - 04, 2004 - 05 AND 2005 - 06, THE TOTAL NUMBER OF TRANSACTIONS OF SALES WERE ONLY 2, 6, 54 RESPECTIVELY. DURING THE YEAR, THE TOTAL NO. OF TRANSACTIONS WERE 37 . O UT OF THE TOTAL SHORT TERM CAPITAL GAINS OF RS. 66,87,198/ - , ABOUT 90 % OF SHARES WERE HELD FOR SIX MONTHS AND ABOVE. SHORT TERM CAPITAL GAINS WITH 10 RESPECT TO THE SHARES HELD FOR ONE MONTH TO THREE MONTHS WORKED OUT TO BE RS. 2,37,744/ - . HOWEVER, ONLY IN RESPECT OF A TRANSACTION ENTERED INTO IN TRA - TRADE , SHORT TE RM CAPITAL GAIN OF RS. 23,475/ - WAS EARNED. BY APPLYING ANY TEST AS DISCUSSED BY THE LD. CIT(A), IT CANNOT BE SAID THAT SUCH TRANSACTIONS WERE IN THE NATURE OF BUSINESS AND TRADE. HON'BLE SUPREME COURT VIDE ITS ORDER DATED 15.11.2010 DISMISSED THE SPECIAL LEAVE PETITION AGAINST JUDGMENT OF BOMBAY HIGH COURT IN THE CASE OF GOPAL PUROHIT, 228 CTR 582, WHEREIN FOLLOWING WAS THE OBSERVATION OF THE HON'BLE HIGH COURT : - (A) IT WAS OPEN TO AN ASSESSEE TO MAINTAIN TWO SEPARATE PORTFOLIOS, ONE RELATING TO INVESTMENT AN D ANOTHER RELATING TO BUSINESS OF DEALING IN SHARES, (B) THAT A FINDING OF FACT HAD BEEN ARRIVED AT BY THE TRIBUNAL AS REGARDS THE TWO DIS TINCT TYPES OF TRANSACTIONS NAMELY, THOSE BY WAY OF INVESTMENT AND THOSE FOR THE PURPOSES OF BUSINESS, 11 (C) THAT THERE SHOULD B E UNIFORMITY IN TREATMENT AND CONSISTENCY WHEN FACTS AND CIRCUMSTANCES ARE IDENTICAL PARTICULARLY IN THE CASE OF THE ASSESSEE AND (D) THAT ENTRIES IN BOOKS OF ACCOUNT ALONE ARE NOT CONCLUSIVE IN DETERMINING THE NATURE OF INCOME THOUGH THEY HAVE A BEARING. 7. FURTHERMORE, ACQUISITION OF SHARES WITH THE HELP OF BORROWED FUND IS NO MORE DECISIVE OF THE TRUE NATURE OF TRANSACTION AND DOMINANT MOTIVE OF THE ASSESSEE HAS TO BE CONSIDERED AS HELD BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF H.HOLCK LOSSON VS CIT, (19 97) 85 ITR 285 (BOM) , 85 ITR 285 , AND RAJKOT BENCH IN THE CASE OF PUSHPA BEN H. KOTICHA, 88 TTJ 384. NOW WE COME TO THE DECISION RELIED ON BY THE LD. SENIOR D.R. IN THE CASE OF FI DELITY NORTH STAR FUND & OTHER, (2007) 288 ITR 641, WHEREIN IT WAS HELD THAT TRANSACTIONS WERE ONLY IN THE NATURE OF INVESTMENT AND PROFIT ARISING THERE FROM CANNOT BE TREATED AS BUSINESS INCOME OF THE ASSESSEE. THUS, THIS PROPOSITION WAS IN FAVOUR OF THE ASSESSEE RATHER THAN REVENUE. 12 8. NOW COMING TO THE POWER OF CIT U/S 263 AS PER OUR CONSIDERED VIEW, WHEN THE AO AFTER APPLYING HIS MIND HAD TAKEN A VIEW, WHICH IS TENABLE IN LAW, SUCH ORDER CANNOT BE BRANDED AS ERRONEOUS ONLY ON THE PLEA THAT IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. THERE IS NO DISPUTE TO THE WELL SETTLED LEGA L PROPOSITION THAT BEFORE EXERCISING POWERS UNDER SECTION 263, THE LD. CIT HAS TO SATISFY TWO CONDITIONS SIMULTANEOUSLY TO THE EFFECT THAT ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND A PREJUDICE HAS BEEN CAUSED TO THE REVENUE BECAUSE OF SUCH ERRONEOU S ORDER. ONLY WHEN BOTH THESE CONDITIONS ARE BEING SATISFIED THE LD. CIT CAN VALIDLY EXERCISE HIS POWERS OF REVISION UNDER SECTION 263. A BARE READING OF PROVISIONS OF S. 263 MAKES IT CLEAR THAT THE PREREQUISITE TO EXERCISE OF JURISDICTION BY THE CIT SUO MOT U UNDER IT, IS THAT THE ORDER OF THE ITO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT IF THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE RECOURSE CANNOT BE HAD TO S. 263(1). THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR 13 COMMITTED BY THE AO. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLI CATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REVENUE I S NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. THE SCHEME OF THE ACT IS TO LEVY AND COLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS T ASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE ITO, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE PHRASE PREJUDICIAL TO THE INTEREST OF THE REVENUE HA S TO BE READ IN CONNECTION WITH AN ERRONEOUS ORDER PASSED BY THE AO. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE 14 VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE R EVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. 9. THE POWER OF SUO MOTU REVISION UNDER SUB - S. (1) OF S.263 IS IN THE NATURE OF SUPERVISORY JURISDICTION AND THE SAME CAN BE EXERCISED ONLY IF BOTH THE CIRCUMSTANCES SPECIFIED THEREIN EXIST VIZ. (I) THE ORDER IS ERRONEOUS; ( II) BY VIRTUE OF THE ORDER BEING ERRONEOUS PREJUDICE HAS BEEN CAUSED TO THE INTEREST OF THE REVENUE. IT HAS, THEREFORE, TO BE CONSIDERED FIRSTLY AS TO WHEN AN ORDER CAN BE SAID TO BE ERRONEOUS. AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN A CCORDANCE WITH LAW. IF AN ITO ACTING IN ACCORDANCE WITH LAW MAKES CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE ACCORDING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. THIS SECTION DOES NOT V ISUALIZE A CASE OF SUBSTITUTION OF JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ITO, WHO PASSED THE ORDER, UNLESS THE DECISION IS HELD TO BE ERRONEOUS. 15 10. IN VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FIND ANY MERIT IN THE ORDER PASSED U/S 263 BY THE CIT. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED I N THE OPEN COURT ON 19 TH AUGUST, 2011. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19 TH AUGUST, 2011. CPU*