Indian Sulphacid Industries Limited, New Delhi V. Pr.CIT, Karnal

ITA 261/CHANDI/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 2213 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 26-05-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revision of order; Opportunity of being heard; Cost of acquisition; Wrong claim; Difference of opinion; Corroborative evidences; Assessment record; Change of opinion; TDS; Set aside; Capital Gains; Bogus
• Section: 263; 43; 2(A); 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A,CHANDIGARH BEFORE MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER & SHRI R.L. NEGI, JUDICIAL MEMBER ./ ITA NO.261/CHD/2020 / ASSESSMENT YEAR : 2015-16 INDIAN SULPHACID INDUSTRIES LIMITED, 110, DARYAGANJ, GROUD FLOOR, NEAR GURUDWARA, NEW DELHI-110002 THE PR. CIT, KARNAL ./PAN NO: AAACI3718E / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING ! /ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA ' ! / REVENUE BY : SMT. C.CHANDRAKANTA, CIT # $ % /DATE OF HEARING : 24.12.2020 &'() % / DATE OF PRONOUNCEMENT : 22.02.2021 / ORDER PERANNAPURNA GUPTA, AM: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER DATED 12.3.2020 PASSED BY THE LD. PRINCIPAL COMMISS IONER OF INCOME TAX, KARNAL (IN SHORT THE PCIT) IN EXERCISE OF HIS REVISIONARY POWERS U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. BRIEFLY STATED, THE LD. PCIT ON EXAMINING THE AS SESSMENT RECORDS FOR THE IMPUGNED YEAR FOUND THAT THOUGH THE ASSESSE ES CASE HAD BEEN SELECTED FOR LIMITED SCRUTINY FOR EXAMINING AMONG O THER THINGS, ITS CLAIM ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 2 OF LONG TERM CAPITAL GAINS AND HUGE BUSINESS LOSSES , THERE WERE SEVERAL ERRORS AND DISCREPANCIES WHICH SHOWED THAT THE ASSESSING OFFICER HAD ACCEPTED THE CLAIM OF THE ASSESSEE WITH OUT MAKING ANY PROPER ENQUIRIES AND WITHOUT APPLICATION OF MIND AT ALL. ACCORDINGLY, THE LD. PCIT ASSUMED POWERS U/S 263 FOR REVISING TH E ORDER OF THE ASSESSING OFFICER AND ISSUED NOTICE TO THE ASSESSEE SPECIFICALLY POINTING THE ERRORS NOTED BY HIM VIS-A-VIS THE ABOV E CLAIMS OF THE ASSESSEE OF LONG TERM CAPITAL GAINS AND BROUGHT FOR WARD BUSINESS LOSSES.THE NOTICE IS REPRODUCED AT PAGES 2 TO 5 OF THE ORDER OF THE PCIT. IN RESPONSE TO THE SAME, THE ASSESSEE CONTENDED THA T THE ASSESSING OFFICER HAD EXAMINED THE ISSUES DURING TH E ASSESSMENT PROCEEDINGS AND THE ASSESSEE HAD FILED THE DETAILS AND EVIDENCES WITH REGARD TO THE SAME AND THAT THE ASSESSING OFFICER H AVING BEEN SATISFIED WITH THE SAME, HAD THEREFORE ACCEPTED THE CLAIM OF THE ASSESSEE. THE ASSESSEE FURTHER REPLIED TO EACH AND EVERY SPECIFIC DISCREPANCY/ERROR POINTED OUT BY THE LD. PCIT AND CONTENDED,THEREFORE, THAT THERE WAS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER. THE LD. PCIT REJECTED THE CONTEN TION OF THE ASSESSEE AND HELD THAT THE ASSESSING OFFICER HAD AC CEPTED THE ASSESSEEES CLAIM WITHOUT MAKING ANY VERIFICATION W ITH RESPECT TO THE VARIOUS EXPENSES CLAIMED AGAINST THE CAPITAL GAINS AND AGAINST ITS BUSINESS INCOME AND SINCE THE SAME NEEDED VERIFICAT ION, THE ORDER ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 3 PASSED BY THE ASSESSING OFFICER WAS, THEREFORE, ERR ONEOUS. ACCORDINGLY HE SET ASIDE THE ORDER PASSED BY THE AO WITH THE DIRECTION TO MAKE ASSESSMENT AFRESH AFTER CONSIDERI NG THE ISSUES RAISED . 3. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE FIRS TLY CHALLENGED THE FINDINGS OF THE LD. PCIT OF LACK OF ENQUIRY BY THE ASSESSING OFFICER, FOR HOLDING THE ASSESSMENT ORDER ERRONEOUS . LD.COUNSEL FOR THE ASSESSEE REITERATED THE CONTENTION MADE BEFORE THE LD. PCIT THAT DUE ENQUIRES WERE MADE DURING THE ASSESSMENT PROCEE DINGS AND THAT ALL THE DETAILS AND EVIDENCES WERE FILED BY THE ASS ESSEE TO THE SATISFACTION OF THE ASSESSING OFFICER. IN THIS REG ARD, OUR ATTENTION WAS DRAWN TO THE SUBMISSIONS DATED 17.8.2017 FILED BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDING S, PLACED BEFORE US AT PAPER BOOK PAGES 38 TO 40 ALONGWITH ALL EVIDE NCES FILED WHICH WERE PLACED AT PAGES 41 TO 266. 5. THE LD. COUNSEL FOR THE ASSESSEE THEREAFTER DREW OUR ATTENTION TO THE SPECIFIC ANOMALY AND DISCREPANCY NOTED BY TH E LD. PCIT WHICH WERE CONFRONTED TO THE ASSESSEE VIDE SHOW CAUSE NO TICE ISSUED U/S 263 DATED 4.2.2020 AS UNDER:- ACCORDINGLY, A SHOW CAUSE NOTICE U/S 263 OF THE AC T WAS ISSUED TO THE ASSESSEE ON 04-2.2020 AS FOLLOWS:- ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 4 '2. A PERUSAL OF THE ASSESSMENT RECORD REVEALS THAT THE ASSESSEE HAD SHOWN CAPITAL GAIN OF RS.2,22,47,840/- IN ITS COMPUTATION OF INCOME. IN THE COMPUTATION STATEMENT OF CAPITAL GAIN, THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF 'OTHER EXPENSES' OF RS.27 80,000/-, IN RESPECT OF SALE OF PROPERTY LOCATED AT SHAHDARA, DELHI. IN SUPPORT OF THE GIVEN 'OTHER EXPENSES', THE ASSESSEE SUBMITTED TO THE AO, THE CO PY OF COMMISSION EXPENSES AND BROKERAGE EXPENSES AS PER T HE FOLLOWING DETAILS :- 1. RAJEEV INSULATION PRODUCTS : RS. 8,80,000/- 2. MAYANK GUPTA : RS. 5,90,000/- 3. TDS ON CONTRACTOR ; RS. 13,90,000/-' : RS.28.60.000/- ALONGWITH THIS, THE ASSESSEE HAD SUBMITTED 3 BILLS OF THE ABOVE PARTIES. FROM PERUSAL OF THE BILLS, THE FOLLOWING DISCREPANC IES ARE NOTED :- I) THE BILL FROM MAYANK GUPTA, BUILDERS & CONTRACTORS, 9- TAGARE PARK, DELHI, IS FOR RS.13.90 LACS ON ACCOUNT OF REPAIR OF BUILDING, RAISING: PARTITION WALLS, PLAST ERING, REPAIR OF BATHROOM/KITCHEN ETC. IT IS NOT UNDERSTOOD AS TO HOW BILL OF REPAIR, BRICK WORK, REPAIR OF BATHROOM, KITCHEN ETC . WAS ACCEPTED AT ITS FACE VALUE AS THE PROPERTY SOLD HAP PENS TO BE THE 'VACANT OPEN LAND'. THE ASSESSEE IN 'FIXED ASSETS' SCHEDULE HAS ALSO SHOWN THE GIVEN PROPERTY AS 'LAND'. THE A. O., HOWEVER, BLINDLY ALLOWED THE DEDUCTION OF THE GIVEN EXPENDITURE OF RS.13.90 LACS FROM THE CAPITAL GAIN WITHOUT ANY APPLICATION OF MIND, AND WITHOUT CONDUCTING ANY ENQ UIRIES. II) FURTHER, THERE ARE 2 BILLS OF COMMISSION, ONE FROM RAJEEV INSULATION PRODUCTS OF RS.8 LACS AND ANOTHER OF RS. 5.90 LACS. THE LATTER ONE IS AN UNSIGNED BILL. THE NAME OF THE SO-CALLED COMMISSION AGENT HAS BEEN SMUDGED AT THE TOP OF THE BILL. DESPITE THE EFFORT TO SMUDGE THE NAME, IF IS EVIDEN T THAT THE SAID BILL HAS ALSO BEEN PROCURED FROM THE SAME 'MAYANK G UPTA', FROM WHOM THE BILL OF REPAIR EXPENSES MENTIONED ABO VE WAS PROCURED. THE A.O. DID NOT CARE TO CONDUCT ANY ENQU IRY ABOUT THE GENUINENESS OF THE ASSESSEE'S CLAIM OF THE GIVE N EXPENSES. ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 5 THE A.O. JUST DIDN'T TRY TO FIND OUT AS TO HOW MAYA NK GUPTA HAD ISSUED BILL FOR COMMISSION EXPENSES, AS W ELL AS FOR REPAIR OF BUILDING, AND THAT TOO FOR A VACANT LAND. THE SMUDGING OF THE NAME AT THE TOP OF THE BILL SEEMS I NTENTIONAL WITH THE CLEAR PURPOSE TO AVOID DETECTION OF BOGUS CLAIM. FURTHER, THE BILL IS ALSO UNSIGNED WHICH ESCALATES THE SUSPICION REGARDING THE GIVEN EXPENSES. IN SPITE OF SUCH GLAR ING DISCREPANCIES, THE A.O. HAD PASSIVELY ACCEPTED THE VERSION OF THE ASSESSEE DESPITE THE FACT THAT ONE OF THE REASO NS FOR SELECTION OF CASE FOR SCRUTINY WAS 'VERIFICATION OF CAPITAL III) SIMILARLY, NO ENQUIRIES WERE CONDUCTED BY THE A.O. TO ASCERTAIN THE GENUINENESS OF THE THIRD BILL, I.E. B ILL OF COMMISSION OF RS.8 LACS FROM RAJEEV INSULATION PROD UCTS. IT WAS INCUMBENT UPON THE A.O. TO ASCERTAIN THE IDENTI TY OF THE PARTY CONCERNED, AND THE GENUINENESS OF THE TRANSAC TION. THE SERVICES RENDERED BY RAJEEV INSULATION PRODUCTS SO AS TO MAKE IT ELIGIBLE FOR RECEIPT OF COMMISSION IN CONNECTION WITH THE GIVEN PROPERTY TRANSACTION ALSO NEEDED TO BE LOOKED INTO BY THE A.O. ALSO, THE A.O. DID NOT RAISE ANY QUERY FOR PAY ING COMMISSION TO TWO DIFFERENT PARTIES FOR THE SAME PR OPERTY. 3. A FURTHER PERUSAL OF ASSESSMENT RECORDS HAS REVE ALED THAT THE CAPITAL GAIN EARNED BY THE ASSESSEE ON ACCOUNT OF S ALE OF LAND HAS BEEN ADJUSTED 'AGAINST BUSINESS LOSS. THIS WAS ALSO ONE OF REASONS FOR SELECTION OF CASE FOR SCRUTINY. 3.1 FROM THE P&L ACCOUNT OF THE ASSESSEE, IT IS SEE N THAT THE ASSESSEE HAD RETURNED REVENUE FROM CERTAIN SERVICE CHARGES A T RS. 18,47,557/-, AND ALSO SOME OTHER INCOME OF RS.29,66,854/-. AGAIN ST A TOTAL REVENUE EARNED OF RS.48,14,391/-, THE ASSESSEE HAD CLAIMED LOSS OF RS.2,23,94,470/-. THE SHEER VOLUME OF EXPENSES CLAI MED AT RS.3.28 CR. AGAINST A REVENUE GENERATION OF RS.48.14 LACS SHOUL D HAVE PROMPTED THE AO TO MAKE ENQUIRIES ABOUT THE REASONABLENESS O R GENUINENESS OF THE EXPENSES CLAIMED. AS FAR AS THE EXPENSES ARE CO NCERNED, SOME GLARING FACTS ARE NOTICED WHICH HAVE BEEN IGNORED B Y THE A.O.:- A) THERE ARE EXPENSES OF REPAIR & MAINTENANCE OF RS.10,35,079/- FOR WHICH CERTAIN BILLS HAVE BEEN SU BMITTED. OUT ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 6 OF THESE, THERE ARE 2 BILLS OF MRU, BUILDERS & CONT RACTORS OF RS.54,000/- AND RS.L,59,000/- DATED 04.02.2013 AND 20.04.2013 RESPECTIVELY. THESE BILLS CLEARLY PERTAI N TO PRECEDING YEAR. THE A.O. DID NOT BOTHER TO CHECK TH E JUSTIFICATION FOR CLAIMING THE SAID EXPENSES OF PRE CEDING YEAR. B) THERE IS ANOTHER BILL RELATED TO REPAIR & MAINTE NANCE HEAD, SHOWN AS 'REPAIR TO SHAHBAD BUILDING' AND DEBITED A S ADVANCE TO SAGAR STEEL TRADERS AT RS.67,930/-. IT I S NOTED THAT THE FACTORY AT SHAHBAD IS LYING CLOSED. THEREFORE, THE REASON BEHIND UNDERTAKING REPAIR OF A CLOSED FACTORY NEEDE D TO BE ENQUIRED. EVEN FOR ARGUMENTS' SAKE, IT IS ACCEPTED THAT REPAIR WAS UNDERTAKEN, IF IS NOT UNDERSTANDABLE AS TO HOW ONLY ONE BILL OF STEEL COULD COMPLETE THE REPAIR PROCESS. C) SURVEY EXPENSES HAVE BEEN CLAIMED AT RS.60,000/- . NO QUERY WAS RAISED BY THE A.O. TO EXAMINE THE NATURE AND BU SINESS RELEVANCE OF THE SAID EXPENSES. ONLY INTERNAL VOUCH ERS OF THE COMPANY ARE AVAILABLE ON RECORD, IT IS NOT AT ALL C LEAR AS TO HOW THE SAID EXPENSES ARE INCIDENTAL TO THE BUSINESS AN D HOW THE A.O. SATISFIED HIMSELF REGARDING THE GENUINENESS OF THE CLAIM. D) HEAVY PROFESSIONAL & LEGAL CHARGES HAVE BEEN DEB ITED IN THE P&L ACCOUNT TO THE TUNE OF RS.56,02,852/-. IF I S NOTED THAT THE SAID EXPENSES ARE DISPROPORTIONATELY HIGHER THA N THE PRECEDING YEAR. IF IS NOTED THAT ONLY GENERAL SUBMI SSIONS WERE MADE IN THIS REGARD BY THE ASSESSEE. THE A.O. DID N OT CARE TO ASK THE ASSESSEE TO CO-RELATE THE EXPENSES TO THE E XACT LEGAL AND PROFESSIONAL SERVICES PROCURED CASE-WISE, AND TO AS CERTAIN THE GENUINENESS OF THE SAME. E) AS PER P&L ACCOUNT, THERE IS A PAYMENT OF RS.50, 000/- FOR THE PURCHASE OF SOME 'BOOK'. THE SAID EXPENSES HAVE BEEN BOOKED UNDER THE 'MISCELLANEOUS EXPENSES'. THE A.O. HAS NOT CARED TO GO THROUGH THE DETAILS OF MISC. EXPENSES A ND TO ASCERTAIN WHETHER THE EXPENSES CLAIMED WERE GENUINE AND INCIDENTAL TO THE BUSINESS OF THE ASSESSEE. F) FURTHER, THERE ARE HUGE TRAVELLING EXPENSES 'STA FF', AND FOREIGN TRAVELLING EXPENSES OF DIRECTORS CLAIMED BY THE ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 7 ASSESSEE. GIVEN THE FACT THAT THERE WAS HARDLY ANY WORTHWHILE BUSINESS TRANSACTED BY THE ASSESSEE COMPANY, THE BU SINESS RELEVANCE AND THE GENUINENESS OF THE GIVEN EXPENSES HAS NOT BEEN PROBED INTO BY THE A.O. G) SALARY HAS BEEN PAID TO ONE 'HERITAGE SECURITY & INTELLIGENCE SERVICES'. IT HAS NOT BEEN EXAMINED BY THE A.O. WHETHER THE EXPENSES WERE GENUINE AND INCIDENTAL TO THE BUSINESS OF THE ASSESSEE. 6. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE HADSPECIFICALLY REPLIED TO EACH AND EVERY QUERY BEF ORE THE LD. PCIT. HE DREW OUR ATTENTION TO PAGE NOS. 11 TO 15 OF THE ORDER, WHICH IS REPRODUCED AS UNDER;- III. WITHOUT PREJUDICE TO THE OBJECTIONS RAISED BY THE ASSESSEE IN PARA II ABOVE, THE ASSESSEE HEREIN BELOW STATED THE FACTS A ND JUSTIFICATION OF EXPENSES CLAIMED BY THE ASSESSEE AS BELOW:- J. COMMISSION /BROKERAGE AND OTHER EXPENSES : RS. 2 7,80,000/- DURING FY 2014-15, THE ASSESSE COMPANY HAS SOLD LAND SITUATED AT GALI NO. 8, 458- 466,FRIENDS COLONY INDUSTRIAL AREA, SHAHDARA DELHI FOR RS. 2,32,00,000/-(COPY SUBMITTED BEFORE LEARNED AO). THE ASSESSEE CLAIMED FOLLOWING DEDUCTIONS FROM SUCH SALES CONSIDERATION:- I . COST OF ACQUISITION ; : RS. 6,14,400/- II. COMMISSION /BROKERAGE AND OTHER EXPENSES : RS. 27,80,0001- THE ASSESSE, VIDE ITS REPLY DATED 17.08.2017 SUBMIT TED DETAILS AND BILLS OF SUCH EXPENSES. THE DETAILS OF EXPENSES ARE AS BELOW:- SN NAME OF PARTY AMOUNT (RS.) REMARKS JUSTIFICATION 1. RAJEEV INSULATION PRODUCTS 8,00,000 COMMISSION EXPENSES. BILL ATTACHED AS PER PAGE NO.......TO..... COMMISSION FOR SALE OF PROPERTY. DEBITED TO PROFIT AND LOSS ACCOUNT. ADDED DOCK AND REDUCED FROM CAPITAL GAINS. ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 8 2. MAYANK GUPTA 5,90,000 COMMISSION EXPENSES. BILL ATTACHED AS PER PAGE NO....TO , COMMISSION FOR SALE OF PROPERTY. DEBITED TO PROFIT AND LOSS ACCOUNT. ADDED BACK AND REDUCED FROM CAPITAL GAINS. 3. MAYANK GUPTA 13,90,000 REPAIR AND MISC WORK BILL. BILL ATTACHED AS PER PAGE NO....TO ASSESSE ACQUIRED THE PEACE IF LAND ON 1939. INITIALLY, THE VACANT LAND WAS GIVEN ON LEASE TO A TENANT WHO FROM HIS OWN COST CARRIED OUT THE CONSTRUCTION AND CONSTRUCTED BUILDI NG AND BOUNDARY WALL ETC. AND WHEN HE VACATED THE PREMISES, ASSESSEE INCURRED SOME REPAIR COST AS REQUIRED BY THE BUYER. SINCE THE EXPEN SES WERE INCURRED IN CONNECTION AND IN ORDER TO COMPLETE SALE OF PROPERTY. IT WAS CLAIMED AND ALLOWABLE AS EXPENDITURE. IN THE SHOW CAUSE NOTICE, THERE APPEARS SOME TYPING ERROR IN MENTIONING RS, 8,00,000/- AS RS.8,80,000/- AND ACCO RDINGLY TOTAL WRONGLY MENTIONED AS 28,60,000/- WHERE AS CORRECT A MOUNT IS RS, 27,80,000/- 2. REPAIR AND MAINTENANCE EXPENSES AMOUNTING TO RS1 0,33,079/-. : !N THE SHOW CAUSE NOTICE, THERE APPEARS SOME TYPING ER ROR IN MENTIONING RS.10,35,079/-INSTEAD OF CORRECT FIGURE RS.10,33,07 9/-. DETAILS OF REPAIR AND MAINTENANCE EXPENSES WERE SUBMITTED BEFO RE LEARNED AO (REFER PAGE NO.....TO.....) . DETAILS RE PRODUCED H EREIN BELOW:- FINANCIAL GROUPING TALLY G ROUPING DEBIT REPAIR & MAINTENANCE MISC REPAIRS (DEL) 7,500 REPAIR & MAINTENANCE REPAIRS TO OTHER BUILDING (SBD 67,930 REPAIR & MAINTENANCE OFFICE UPKEEP 22,504 REPAIR & MAINTENANCE REPAIR & MAINTENANCE - COMPUTER 14,055 REPAIR & MAINTENANCE REPAIRS & MAINTENANCE (DELHI) 921,090 TOTAL 10,33,079 ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 9 COPIES OF LEDGER ACCOUNT ENCLOSED PAGE NO. .....TO...... (SUBMITTED VIDE SUBMISSION DATED 17.08.2017 BEFORE ID. AO) THE TWO BILLS OF MPN BUILDERS & CONTRACTORS OF RS. 54,000/- AND 1,59,000/- DATED 04.02.2013 AND 20.04.2013 RESPECTI VELY WERE THOUGH DEBITED TO PROFIT AND LOSS ACCOUNT BUT SINCE THE WORK DONE WAS IN DISPUTE AND THUS ASSESSEE NEVER RECORDED SUCH INVOI CE EARLIER. INTACT, IN CURRENT YEAR ALSO, ON PERUSAL OF MERE LEDGER ACCOUN T YOUR GOODSELF WILL OBSERVE THAT ASSESSEE COMPANY HAS ONCE DEBITED RS.5 4,000/- AND RS.1,59,000/- AND ON SAME DATE HAS REVERSED 2,08,18 0/- FROM THE EXPENSES. THUS ONLY ACCEPTED CLAIM OF MPN BUILDERS TO THE TUNE OF RS.4820/-. FROM THE ABOVE IT IS EVIDENT THAT IN TOTAL REPAIR & MAINTENANCE EX PENSES ASSESSEE AMOUNTING TO RS. 10,33,079/- THE ASSESSEE HAS CLAIMED ONLY RS. 4820/- WHICH PERTAINS TO PRIOR PERIOD BILLS OF MPN BUILDERS WHICH GOT SETTLED IN CURRENT YEAR. THE SAME WAS WELL EXPL AINED TO LEARNED AO AS WELL AND ONLY AFTER BEING SATISFIED, LEARNED AO ACCEPTED THE ASSESSEE'S CLAIM. HENCE CHANGE OF OPINION IS UNDESI RABLE UNDER AMBIT OF SECTION 263. REPAIR TO 'SAHABAD BUILDING RS. 67.930/- : THERE ARE GUARDS WHO STAYS AND LOOK AFTER SAHABAD LAND OF THE ASSESSEE. THE BUILDING IS VERY OLD AND REQUIRES SOME MAINTENANCE. THE ASSESSEE COM PANY HAS PUT FENCING AROUND THE MAIN ENTRANCE TO AVOID UNAUTHORI ZED ENTRY. COPY OF BILL AND VOUCHER IS ENCLOSED. 3.SURVEY EXPENSES RS 60,000 /-.-SURVEY EXPENSES PAID TO A CONSULTANT @10,000/- FOR CONDUCTING MARKET SURVEY FOR THE ASS ESSEE. AS MATTER OF FACT THE ASSESSEE DURING THE PREVIOUS YEAR 2014-15, CARRIED OUT THE BUSINESS ACTIVITY OF EARNING COMMISSION. A SHORT NO TE IN RESPECTS TO BUSINESS ACTIVITY OF EARNING COMMISSION IS APPENDED HEREIN BELOW:- A. THE BUSINESS ACTIVITY OF EARNING COMMISSION WAS STARTED WITH INITIAL MARKET SURVEY IN 1995-96 AND COMMERCIAL ACT IVITY OF COMMISSION EARNING WAS STARTED IN THE BEGINNING OF 1997-98 THE ITEMS ARE:- ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 10 I. IMPORT OF SPECIALIZED POLYMERS RESINS - USED BY' IN DIAN RAILWAY, AUTOMOTIVE INDUSTRY'- LIKE MARUIIUDYOG, COOLING TOWERS MANUFACTURERS AND CHEMICAL EQUIPMENT S MADE OF FIBERS GLASS REINFORCEMENT MANUFACTURES AND II. IMPORT OF HARD PVC FOAM. BALSA WOOD FOR INDIAN RAILWAYS, AEROSPACE WIND ENERGY SECTOR AND SHIP BUILDINGS. B. ABOVE ITEMS ARE SPECIALIZED PRODUCTS AND NOT EAS ILY AVAILABLE IN INDIAN MARKETS-EVEN THOUGH SOME ARE AVAILABLE BU T ARE OF INFERIOR QUALITY AND NOT ACCEPTABLE TO THE MANUFACT URES OF EQUIPMENT'S IN GOVERNMENT SECTOR I ORGANIZED SECTOR . SOME OF THE IMPORT CUSTOMERS ARE INDIAN RAILWAYS COACH BUILDING FACTORY RCF -KAPURTHALA, NATIONAL AEROSPACE, NSTL VISHAKHAP ATNAM, HINDUSTAN AERONAUTICS LTD. ETC. AND IN CORPORATE SE CTOR IIKESUZLON, STERLING GROUP ENERCON INDIA, PAHARPUR COOLING TOWER ETC. . C . THESE CUSTOMERS FLOAT GLOBAL TENDER ENQUIRY FOR THE SPECIALIZED ITEMS REQUIRED AND WE ON BEHALF OF OUR PRINCIPAL COMPANY IN SWITZERLAND I USA AND CHINA SUBMIT THE P RICE AND TECHNICAL BID. ALL WORK CONNECTED TO THE TECHNICAL APPROVAL, PRICE NEGOTIATION AND FILL THE FINALIZATION OF THE ORDER IS LOOKED AFTER BY OUR TEAM OF SALES, MARKETING AND TECHNICAL PERSON W HO HAVE BEEN TRAINED IN USA FACTORY OF OUR FOREIGN PRINCIPALS. D. AFTER THE ORDER FINALIZATION, ALL WORK CONNECTED TO THE OPENING OF LETTER OF CREDIT, AND THEREAFTER THE WORK CONNEC TED TO THE RECEIPT OF GOODS IN INDIA, INSPECTION, CUSTOMS CLEA RANCE AND HANDLING FORWARDING ETC. TILL RECEIPTS OF GOODS TO CUSTOMERS IS UNDER THE SUPERVISION OF OUR OFFICERS. THE JOB REQU IRES EXTENSIVE TRAVELLING AND CLOSE COORDINATION AT ALL LEVELS IN GOVERNMENT AND CORPORATE SECTORS. THE ASSESSEE HIRED A CONSULTANT ON CONTRACT BASIS 10,000/- PER MONTH AND HAS PAID THE SAID AMOUNT TO HER SINCE THE EXPEN SES IS RELATED TO BUSINESS OF THE ASSESSEE THE SAME SHOULD BE ALLOWED . 4. PROFESSIONAL AND LEGAL EXPENSES RS. 56,02,852/- :THE ASSESSE IS UNDERGOING VARIOUS LITIGATIONS UNDER DIFFERENT LAWS . THE ASSESSE ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 11 COMPANY HAS ON GOING NUMBER OF COURT CASES AND CONT ESTING DEMAND AND PENALTIES FOR WHICH PROCEEDINGS HAVE BEEN INITI ATED UNDER DIFFERENT LAWS . THE ASSESSE COMPANY HAS ONGOING LITIGATIONS AS UNDER: N. BEFORE SALES TAX AUTHORITIES-CONTESTING DEMANDS. O. WRIT PETITION BEFORE HIGH COURTS AGAIN ST ATTACHMENT PROCEEDINGS, P. BEFORE B1FR Q. BEFORE AAIFR R. BEFORE CENTRAL EXCISE DEPARTMENTS CONTESTING DE MANDS, S. SETTLEMENT PROCEEDINGS WITH UTTAR HARYANA BIJLI VITRAN NIGAM. T. SETTLEMENT PROCEEDINGS WITH HSIDC. U.SETTLEMENT PROCEEDINGS BEFORE LABOUR COUR/LABOUR LAWS FOR SETTLEMENT OF GRATUITY, V. SETTLEMENT PROCEEDINGS BEFORE LABOUR COURT / LA BOUR LAWS FOR PAYMENTS OF PROVIDENT FUNDS, W. BEFORE CIVIL COURTS TORRENT RECOVER/SUITS, X. BEFORE CIVIL COURTS AND HIGH COURTS FOR VACANT P OSSESSION OF LANDS. Y. ROUTINE AUDIT WORKS Z. ROUTINE ROC AND OTHER STATUTORY COMPLIANCES. COPIES OF LEDGER ACCOUNT WITH NARRATION OF LEGAL AN D PROFESSIONAL EXPENSES ALONG-WITH COPIES OF INVOICES IS ATTACHED AT PAGE NO.....TO......., THE SAME WERE SUBMITTED BEFORE LEARNED AO AS WELL A ND LEARNED AO ON TEST BASIS HAS VERIFIED AND SATISFIED HIMSELF ON TH E CLAIM OF THE ASSESSEE. 5 . PURCHASE OF BOOK 50,000/-: AS PER PROFIT AND LOSS ACCOUNT BOOKS AND PERIODICALS EXPENSES BOOKED AT RS. 1300/- ONLY. THE RE APPEARS SOME TYPING ERROR. WE WOULD BE GLAD TO SUBMIT ME DETAILS AFTER HEARING FROM YOUR GOODSELF. 6. SALARY PAID TO ' HERITAGE SECURITY & INTELLIGENCE S ERVICES': WE NOT ABLE TO TRACK ANY PARTY BY SUCH NAME. PLEASE PROVID E FURTHER DETAILS IF THIS PERTAINS TO ASSESSEE COMPANY. WE WOULD BE GLAD TO SUBMIT THE DETAILS AFTER HEARING FROM YOUR GOODSELF. 7. TRAVELLING EXPENSES OF STAFF AND FOREIGN TRAVELLING EXPENSES DIRECTORS: THE ASSESSEE HAS INCURRED TRAVELLING EXPENSES AMO UNTING TO RS. 19,61,571/-. IN COMPARISON TO RS. 23,22,948/- I N PREVIOUS YEAR. ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 12 THE ASSESSEE IS LINE OF BUSINESS REQUIRES EXTENSIVE TRAVELLING. THE PRINCIPAL OF ASSESSEE IS A SWISS BASED COMPANY. ASS ESSEE IS WORKING UNDER TRADE NAME ''COMPOSITE POLYMERS & SPE CIALTIES COMPANY, A UNIT OF INDIAN SULPHACID INDUSTRIES LIMI TED. THE ASSESSEE TRAVELS FREQUENTLY TO ATTEND WORKSHOPS, LA UNCHES OF THE PRODUCTS. THE ASSESSE HAS SUBMITTED COMPLETE DETAIL S OF TRAVELLING EXPENSES ALONGWITH BILLS AND VOUCHERS. I NTACT FOR FOREIGN TRAVELLING COPY OF INVITATION / EMAIL TRAIL S WERE ALSO ASKED BY LEARNED AO AND PRODUCED BY THE ASSESSEE. ( COPIES ATTACHED.......................) FROM THE ABOVE IT CAN BE SLATED THAT ASSESSEE HAS I NCURRED TRAVEL CONVEYANCES EXPENSES AND THUS CORRECTLY ALLOWED BY LEARNED AO. UNDER THE ABOVE CIRCUMSTANCES, YOUR GOOD SELF WILL APPRECIATE THAT LEARNED AO HAS CARRIED OUT COMPLETE ENQUIRY, INCLUD ING INDEPENDENT INQUIRY AND AFTER BEING SATISFIED WITH THE DETAILS SUBMITTED BEFORE HIM FROM TIME TO TIME HAS ALLOWED THE CLAIM OF COST OF IMPROVEMENT FROM LONG TERM CAPITAL GAINS. ACCORDINGLY, IT IS REQUEST ED THAT THE PROCEEDINGS U/S 263( I) MAY KINDLY BE DROPPED. 7. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT DESPITE THE SPECIFIC ISSUE WISE RESPONSE FILED BY THE ASSESSEE, THE LD. PCIT WITHOUT DEALING WITH THE SAME HELD THE ORDER ERR ONEOUS FOR LACK OF ENQUIRY AND FURTHER FOR THE REASON THAT THE SUBMIS SIONS/EXPLANATIONS AND DOCUMENTS FILED BY THE ASSESSEE NEEDED FURTHER VERIFICATION. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT POWERS U/S 263 OF THE ACT CANNOT BE EXERCISED FOR MERE PURPOSE OF FURTHER ENQUIRES AND THERE HAS TO BE SPECIFIC FINDINGS IN THE ORDER OF T HE ASSESSING OFFICER FOR EXERCISING THE REVISIONARY POWERS U/S 263. HE, THEREFORE, PLEADED THAT THE ORDERS PASSED U/S 263 BE QUASHED SINCE IT WAS NOT IN ACCORDANCE WITH LAW. ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 13 8. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE LD. PCIT CONTENDING THAT IN VIEW OF THE GLARING DISCREPANCIES POINTED OUT BY THE LD. PCIT IN THE EVIDENCE SUBMITT ED BY THE LD. COUNSEL FOR THE ASSESSEE VIS-A-VIS ITS CLAIM OF EXP ENSES AGAINST CAPITAL GAINS INCOME AND AGAINST BUSINESS INCOME, T HE FACT OF ASSESSING OFFICER ACCEPTING THE SAME SHOWED CLEAR N ON APPLICATION OF MIND BY THE ASSESSING OFFICER AND NO PROPER ENQU IRIES BEING CONDUCTED AND, THEREFORE, THE ORDER OF THE ASSESSIN G OFFICER HAD BEEN RIGHTLY HELD TO BE ERRONEOUS BY THE LD. PCIT. 9. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y GONE THROUGH THE ORDER OF THE PCIT AND ALSO DOCUMENTS SUBMITTED BEFORE US. THE BASIS FOR HOLDING THE ASSESSMENT ORDER ERRONEOUS B Y THE LD. PCIT, WE FIND IS THAT THE DETAILS ,EVIDENCES AND EXPLANAT ION FILED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM OF CAPITAL GAINS A ND BUSINESS LOSS RETURNED WERE ACCEPTED AS SUCH BY THE AO WITHOUT CO NDUCTING ANY INQUIRY AND OR VERIFICATION. THE ENTIRE THRUST OF T HE LD.PR.CIT IS ON THIS ASPECT OF NON-VERIFICATION OF THE EVIDENCES, D ETAILS AND EXPLANATIONS FILED BY THE ASSESSEE AS IS EVIDENT FR OM THE FINDINGS OF THE LD.PR.CIT AT PARA 4-10 OF HER ORDER AS UNDER: 4. THE SUBMISSIONS MADE BY THE ASSESSEE HAVE BEEN CAREFULLY PERUSED AND DULY CONSIDERED. THE SAME ARE DISCUSSED HEREWITH ALONG WITH THE FACTS OF THE CASE ON MERITS :- ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 14 THE ASSESSEE HAS CHALLENGED THE INVOKING OF THE PROVISIONS OF SECTION 263 ON THE GROUNDS THAT THE A SSESSING OFFICER HAD MADE PROPER AND ADEQUATE ENQUIRIES AND EXAMINATION AS REQUIRED IN THE FACTS OF THE CASE AN D THEREAFTER ALLOWED THE CLAIMS OF THE ASSESSEE. THE ASSESSMENT ORDER IS STATED TO BE NOT ERRONEOUS ON THIS GROUND. IT IS FU RTHER STATED MAT MERELY A DIFFERENT VIEW FROM THAT OF THE ASSESS ING OFFICER BY ITSELF COULD NOT HAVE BEEN A GROUND FOR EXERCISING JURISDICTION U/S 263. IF WAS ALSO SUBMITTED THAT AN ORDER CAN BE INTERFERED WITH UNDER THE REVISIONARY PROVISIONS NOT ONLY WHEN THE ORDER IS HELD ERRONEOUS BUT IT ALSO HAS TO BE PREJUDICIAL TO THE INTEREST OF REVENUE. SEVERAL CASE LAWS HAVE BEEN RELIED UPON. IN THE PRESENT CASE, THE ASSESSING OFFICER COMPLET ED THE ASSESSMENT WITHOUT ANY APPLICATION OF MIND AND WITH OUT CONDUCTING ANY WORTHWHILE ENQUIRIES AS IS EVIDENT F ROM THE REASONS SPENT OUT IN THE SHOW CAUSE LETTER FOR INIT IATING THE REVISIONARY PROCEEDINGS U/S 263 OF THE ACT. THE AO BLINDLY ACCEPTED ASSESSEE'S CLAIMS WITHOUT ANY INDEPENDENT VERIFICATION AS WILL BE EVIDENT FROM THE ENSUING DISCUSSIONS. TH ERE WERE NO SUBSEQUENT EVENTS THAT WERE NOT AVAILABLE TO THE AO AT THE TIME OF MAKING THE ASSESSMENT. IT HAS BEEN HELD BY MANY COURTS THAT WHERE THERE IS LACK OF PROPER ENQUIRY OR APPLICATION OF MIND THE INVOKI NG OF PROVISIONS OF SECTION 263 IS RIGHTFUL AND JUSTIFIED (SHIV AUTOMOBILES VS ITO [2010]133 TTJ 505: 43 DTR 345 (I TAT AGRA) WHERE THE CLAIMS OF DEDUCTIONS WERE ALLOWED W ITHOUT ANY APPLICATION OF MIND, THE ORDER OF REVISION WAS HELD TO BE JUSTIFIED. (CIT VS ALLOY STEEL (2013) 359 ITR 355 : 217 TAXMAN 262 (KAR). THE COURTS HAVE HELD THAT AN ORDER BY TH E ASSESSING OFFICER WITHOUT APPLICATION OF MIND IS DEFINITELY P REJUDICIAL TO INTEREST OF REVENUE (MALABAR INDUSTRIAL CO.LTD. VS. CIT(2000) 243 ITR 53(SC), BHARAT OVERSEAS BANK LTD. VS CIT (2 013) 152 TTJ 546 : 82 DTR 373 (ITAT CHENNAI), ALSO, INADEQUA TE INQUIRY BY THE ASSESSING OFFICER WHICH LED HIM TO B ELIEVE INCORRECT FACTS WAS PREJUDICIAL TO THE REVENUE (CIT VS MAITHAN INTERNATIONAL (2015) 375 ITR 123 : 277 CTR 65 :231 TAXMAN 381 : 117 DTR 401 (CAL). CONSIDERING THE SUBMISSION S OF THE ASSESSEE, THE FACTS OF THE CASE AND THE JUDICIAL PR ONOUNCEMENTS ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 15 AS DISCUSSED ABOVE, THE CLAIM OF THE ASSESSEE THAT RECOURSE TO SECTION 263 OF THE ACT, IN THE PRESENT CASE, IS NOT SUSTAINABLE. 5. THE ASSESSEE HAS SUBMITTED DETAILS OF THE DEDUCT IONS CLAIMED ON ACCOUNT OF COMMISSION/BROKERAGE AND REPA IRS ETC. AMOUNTING TO RS.27,80,000/- IN THE CALCULATION OF C APITAL GAINS. THE JUSTIFICATION OF THE EXPENSES WAS NOT EXAMINED BY THE AO. THESE ARE REQUIRED TO BE EXAMINED TO VERIFY THEIR A LLOWABILITY. 6. WITH RESPECT TO THE REPAIR AND MAINTENANCE EXPEN SES AMOUNTING TO RS.10,33,079/-, THE ASSESSEE HAS CLAIM ED THAT ONLY A SUM OF RS.4820/- HAS BEEN EVENTUALLY CLAIMED. THI S ASPECT WAS NOT VERIFIED BY THE AO AND REQUIRES VERIFICATION. S IMILARLY, THE REPAIR TO SHAHABAD BUILDING REQUIRES VERIFICATION. 7. THE ASSESSEE HAS EXPLAINED THE BUSINESS REQUIREM ENT OF THE EXPENDITURE OF RS.60,000/- ON ACCOUNT OF SURVEY EXPENSES. THE NAME, ADDRESS OF THE RECIPIENT AS WELL AS NATUR E OF SERVICE RENDERED HAVE NOT BEEN SPELT OUT. THE AO HAD FAILED TO VERIFY THIS ASPECT WHICH REQUIRED VERIFICATION. 8. THE ALLOWABILITY OF THE PROFESSIONAL AND LEGAL E XPENSES AMOUNTING TO RS.56,02,852/- AND TRAVELLING EXPENSES OF STAFF AND FOREIGN TRAVELLING EXPENSES AMOUNTING TO RS.19,61,5 71/- HAS TO BE VERIFIED AS THERE WAS NO APPLICATION F MIND TO T HE SAME BY THE AO. 9. THE PURCHASE OF BOOK AND SALARY PAID TO HERITAGE SECURITY AND INTELLIGENCE SERVICES HAVE TO BE VERIFIED WITH RESPECT TO THE CLAIM OF THE ASSESSEE. 10. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE AO H AS PASSED THE ORDER DATED 06.12.2017 IN AN EXTREMELY CARELESS , CASUAL AND PERFUNCTORY MANNER WITHOUT CARING TO GO THOUGH THE DETAILS OF THE CASE AND CONDUCTING ANY WORTHWHILE ENQUIRIES ON CRITICAL ISSUES. THE AO FAILED TO EXERCISE DUE DILIGENCE IN RESPECT OF EACH AND EVERY ISSUE INVOLVED IN THE ASSESSEES CAS E, AND HAS PASSED A SUMMARY ASSESSMENT ORDER AFTER SIMPLY OBTA INING A FEW DOCUMENTS FROM THE ASSESSEE AND PLACING THEM ON RECORD. THE ORDER PASSED BY THE A.O. IS, THEREFORE, HELD TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF R EVENUE. THE SAME IS ACCORDINGLY SET-ASIDE WITH THE DIRECTIONS TO THE A.O. TO MAKE THE ASSESSMENT AFRESH AFTER INTERALIA CONSIDERING A LL THE FACTS/ISSUES DISCUSSED ABOVE. THE A.O. IS ALSO DIRE CTED TO ALLOW ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 16 REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE BEFORE PASSING THE ASSESSMENT ORDER IN THIS CASE. 10. AS IS EVIDENT FROM A BARE PERUSAL OF PARA 5-9 A BOVE THE LD.PR.CIT HAS DEALT WITH EACH ISSUE FLAGGED IN HER SHOW CAUSE NOTICE, AND ADMITTED TO THE FACT OF DETAILS ,EVIDEN CES AND EXPLANATIONS VIS A VIS THE SAME BEING FILED BY THE ASSESSEE, BUT HAS HELD THAT THEY NEED FURTHER VERIFICATION. SURPRISIN GLY THOUGH NO REASON HAS BEEN GIVEN FOR THE NEED FOR FURTHER VERI FICATION. 11. UNDOUBTEDLY THE PURPOSE OF ASSESSMENT IS TO VER IFY THE CLAIM OF THE ASSESSEE TO THE INCOME RETURNED FOR TAXATION. B UT THE EXTENT AND MANNER OF VERIFICATION IS DEPENDENT ON THE SUBJECTI VE SATISFACTION OF THE ASSESSING OFFICER. ALL CLAIMS ARE PRIMARILY SUB STANTIATED BY SUPPORTING EVIDENCES/DOCUMENTS. IT IS NOT THAT EVER Y EVIDENCE SO FILED NEEDS TO BE NECESSARILY VERIFIED. THIS NEITHE R APPEALS TO LOGIC NOR IS IT FEASIBLE LOGISTICALLY CONSIDERING VOLUMIN OUS TRANSACTIONS CARRIED OUT BY ASSESSEES IN THE COURSE OF THEIR BUS INESS. THE AO CAN BE SATISFIED ABOUT THE VERACITY AND GENUINENESS OF THE TRANSACTION BASIS THE SUPPORTING DOCUMENTARY EVIDENCES AND EXPL ANATIONS FILED WITH RESPECT TO THE SAME. BUT AT THE SAME TIME IF T HE EVIDENCES AND DOCUMENTS RAISE SUSPICION THEN A CASE FOR FURTHER V ERIFICATION IS COMPULSORILY MADE OUT AND THE ABSENCE OF THE SAME S URELY MAKES THE ORDER ERRONEOUS SO AS TO CAUSE PREJUDICE TO THE REV ENUE. BUT IN THE PRESENT CASE, SADLY THE LD.PR.CIT HAS FAILED TO MAK E OUT A CASE FOR ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 17 FURTHER VERIFICATION OF THE DETAILS AND EXPLANATION S FILED BY THE ASSESSEE. UNDISPUTEDLY THE AO HAD EXAMINED THE CLAI M OF CAPITAL GAINS AND BUSINESS LOSSES RETURNED BY THE ASSESSEE, DURING ASSESSMENT PROCEEDINGS. EVEN WITH REGARD TO THE ISSUES FLAGGED BY THE LD.PR.CIT, THE AO HAD EXAMINED THE SAME WITH THE EV IDENCES ,DETAILS AND EXPLANATIONS FILED BY THE ASSESSEE. THERE IS NO DISPUTE WITH REGARD TO THE AFORESAID. EVEN BEFORE THE LD.PR.CIT THE ASSESSEE HAD REFERRED TO THE SAID EVIDENCES AND EXPLAINED THE QU ERIES RAISED BY THE LD.PR.CIT. WITHOUT POINTING OUT FALLACY IN THE SAME SO AS TO RAISE DOUBT REGARDING THE VERACITY OF THE CLAIM ,THUS CAL LING FOR FURTHER VERIFICATION, WE CANNOT AGREE WITH THE FINDINGS OF THE LD.PR.CIT THAT THE ISSUES REQUIRED FURTHER VERIFICATION AND THE AB SENCE OF THE SAME RESULTED IN THE ASSESSMENT ORDER SO PASSED BEING ER RONEOUS. 12. IT IS TO BE NOTED THAT IT IS ONLY THE ABSENCE OF ENQUIRY WHICH SHOULD HAVE BEEN MADE (EMPHASIS PROVIDED BY US) WHICH MAKES THE ORDER ERRONEOUS AS PER EXPLANATION 2(A) TO SECTION 263 WHICH READS AS UNDER: S.263. (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT , AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN B Y THE ASSESSING] OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE, MA Y, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 18 DIRECTING A FRESH ASSESSMENT. EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSES OF THIS SUB- SECTION,- EXPLANATION-1 .. .. EXPLANATION-2 FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED 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 PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; 13. THE ORDER OF THE LD.PR.CIT, IN THE IMPUGNED CAS E, FALLS GRIEVOUSLY SHORT OF THIS REQUIREMENT OF POINTING O UT THE ABSENCE OF ENQUIRY WHICH SHOULD HAVE BEEN MADE IN THE PRESENT CASE. AND THEREFORE, WE HOLD, THAT THERE IS NO FINDING BY THE LD.PR.CIT OF THE ASSESSMENT ORDER BEING ERRONEOUS. THE JURISDICTION ASSUMED BY THE LD.PR.CIT, THEREFORE U/S 263 OF THE ACT FOR REVISIN G THE ASSESSMENT ORDER THEREFORE, IS, WE HOLD, NOT AS PER LAW AND T HE ORDER SO PASSED BY THE LD.PR.CIT IS ACCORDINGLY SET ASIDE. 14. THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 22.02.2021. SD/- SD/- (R.L. NEGI) ( ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 22.02.2021 ITA NO. 261-CHD-2020 - INDIAN SUPHACID INDUSTRIES LIMITED , NEW DELHI 19 .. /RATI '+ ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , %2 , 34516 / DR, ITAT, CHANDIGARH 6. 157$ / GUARD FILE '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR