Shri Gurvinder Singh Suri, New Delhi V. Pr CIT, New Delhi

ITA 2644/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1549 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 10-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUSHMA SINGH
• Assessee Lawyers: RAKESH GUPTA
• Keywords: Difference of opinion; Valuation report; Procedural lapse; Change of opinion; TDS; Set aside; Capital Gains
• Section: 142(1); 80IC; 264; 80IC; 13; 263; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES F, NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 2644/DEL/2016 : ASSTT. YEAR : 2011-12 GURVI NDER SINGH SURI, C/O M/S RRA TAXINDIA, D-28, SOUTH EXTENSION, PART-I, NEW DELHI-110049 VS PR. COMMISSIONER OF INCOME TAX (CENTRAL)-1, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAAPS8291D ASSESSEE BY : SH. RAKESH GUPTA, ADV. REVENUE BY : SMT. SUSHMA SINGH, CIT DR DATE OF HEARING: 02 . 03 .2020 DATE OF PRONOUNCEMENT: 13 .05 .2020 ORDER PER DR. B.R.R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. PR. CIT (CENTRAL)-1, NEW DELHI DAT ED 01.03.2016. 2. THE MOOT GROUND RAISED BY THE ASSESSEE PERTAINS TO ASSUMING JURISDICTION U/S 263 OF THE INCOME TAX ACT, 1961 WI TH REGARD TO CLAIM OF RS.12,00,000/- ALLOWED BY THE ASSESSING OFFICER U/S 57 OF THE ACT. 3. THE PERTINENT FACTS OF THE CASE ARE THAT THE ASS ESSEE EARNED INCOME BY WAY OF SALARY & BONUS, INCOME FROM HOUSE PROPERTY, SHARE OF BUSINESS PROFIT, CAPITAL GAINS FROM TRANSFER OF PRO PERTY AND INCOME FROM OTHER SOURCES. THE INTEREST EARNED BY THE ASSESSEE WAS RS.44,02,030/-. THE ASSESSEE HAS OFFERED TO TAX AN AMOUNT OF RS.32, 02,030/- UNDER THE HEAD INCOME FROM OTHER SOURCES AFTER CLAIMING DED UCTION ON ACCOUNT OF ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 2 PAYMENT OF INTEREST OF RS.12,00,000/-. THE LD. PCIT DURING THE REVISIONARY PROCEEDINGS U/S 263 HELD THAT THE ASSES SING OFFICER HAS NOT LOOKED INTO/ENQUIRED THE CLAIM OF EXPENSES U/S 57 D URING THE ASSESSMENT PROCEEDINGS. THE LD. PCIT HELD THAT FOR ALLOWING TH E DEDUCTION U/S 57, NEXUS BETWEEN THE INCOME EARNED AND THE EXPENDITURE INCURRED TO EARN THIS INCOME IS A MANDATORY REQUIREMENT AND THIS REQ UIREMENT HAS NOT BEEN ESTABLISHED DURING THE ASSESSMENT PROCEEDINGS. DISREGARDING THE EXPLANATION OFFERED BY THE ASSESSEE VIDE LETTER DAT ED 10.11.2015, THE LD. PCIT HAS SET ASIDE THE ORDER OF THE ASSESSING OFFIC ER HOLDING THAT THE AO ALLOWED THE DEDUCTION WITHOUT ANY ENQUIRY AND EXAMI NATION OF THIS ISSUE. 4. THE LD. AR ARGUED ON THE STRENGTH OF THE SUBMISS IONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO THE DETAILS O F EARNING OF INTEREST AND PAYMENT ON ACCOUNT OF INTEREST. 5. THE LD. DR ARGUED, DRAWING THE ATTENTION TO THE E XPLANATION II OF THE SECTION 263 OF IT ACT INTRODUCED BY THE FINANCE ACT, 2015 W.E.F. 01.06.2015. SHE ALSO RELIED ON THE JUDGMENTS IN THE CASE OF DENIEL MERCHANTS PVT. LTD. VS ITO (SC) AND ALSO RELIED ON THE WRITTEN SUBMISSION OF THE LD. CIT DR, SMT. SULEKHA VERMA. THE SUBMISSIO NS IN WRITING ARE AS UNDER: IN THIS REGARD, IT IS HUMBLY SUBMITTED THAT EXPLAN ATION 2 HAS BEEN INSERTED IN SECTION 263 OF I.T. ACT BY FINANCE ACT 2015 W.E.F. 01.06.2015 WHICH IS REPRODUCED BELOW: EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFI CER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES O R VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOU T INQUIRING 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 ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 3 (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WI TH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, REND ERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE C ASE OF THE ASSESSEE OR ANY OTHER PERSON. IN THE ABOVE CASE, IT IS HUMBLY SUBMITTED THAT THE FOLLOWING DECISION MAY KINDLY BE CONSIDERED WITH REGARD TO VA LIDITY OF PROCEEDINGS U/S 263 OF I.T. ACT: 1. HONBLE SUPREME COURT IN THE CASE OF DENIEL MERC HANTS PVT. LTD. VS. ITO (APPEAL NO. 2396/2017) DATED 29.11.201 7. THE RELEVANT JUDGEMENT OF HONBLE CALCUTTA HIGH COU RT IN THIS CASE IS ALSO ENCLOSED. IN THIS GROUP OF CASES, HONBLE S UPREME COURT HAS DISMISSED SLPS IN CASES WHERE AO DID NOT MAKE ANY P ROPER INQUIRY WHILE MAKING THE ASSESSMENT AND ACCEPTING THE EXPLA NATION OF THE ASSESSEE(S) INSOFAR AS RECEIPT OF SHARE APPLICATION MONEY IS CONCERNED. ON THAT BASIS THE COMMISSIONER OF INCOME TAX HAD, AFTER SETTING ASIDE THE ORDER OF THE ASSESSING OFFI CER, SIMPLY DIRECTED THE ASSESSING OFFICER TO CARRY THOROUGH AN D DETAILED INQUIRY. 2. MALABAR INDUSTRIAL CO. LTD. VS CIT [20001 109 T AXMAN 66 (SC)/[2000] 243 ITR 83 (SC)/[2000] 159 CTR 1 (SC) WHERE HONBLE SUPREME COURT HELD THAT WHERE ASSESSI NG OFFICER HAD ACCEPTED ENTRY IN STATEMENT OF ACCOUNT FILED BY ASSESSEE, IN ABSENCE OF ANY SUPPORTING MATERIAL WITHOUT MAKING A NY ENQUIRY, EXERCISE OF JURISDICTION BY COMMISSIONER UNDER SECT ION 263(1) WAS JUSTIFIED. 3. RAJMANDIR ESTATES (P.) LTD. VS PCIT [70 TAXMANN .COM 124 (CALCUTTA)/[2016] 240 TAXMAN 306 (CALCUTTA/[2016] 3 86 ITR 162 (CALCUTTA)/[2016] 287 CTR 512] WHERE HONBLE CALCUTTA HIGH COURT HELD THAT WHERE A SSESSEE WITH A SMALL AMOUNT OF AUTHORISED SHARE CAPITAL, RAISED A HUGE SUM ON ACCOUNT OF PREMIUM AND CHOSE NOT TO GO IN FOR INCRE ASE OF AUTHORISED SHARE CAPITAL MERELY TO AVOID PAYMENT OF STATUTORY FEES AND ASSESSING OFFICER PASSED ASSESSMENT ORDER WITHO UT CARRYING OUT REQUISITE ENQUIRY INTO INCREASE OF SHARE CAPITA L INCLUDING PREMIUM RECEIVED BY ASSESSEE, COMMISSIONER WAS JUST IFIED IN TREATING ASSESSMENT ORDER AS ERRONEOUS AND PREJUDIC IAL TO INTEREST OF REVENUE 4. RAJMANDIR ESTATES (P.) LTD. VS PCIT [2017] 77 T AXMANN.COM 285 (SC)/[2017] 245 TAXMAN 127 (SC) HONBLE SUPREME COURT HAS DISMISSED SLP AGAINST HIG H COURT'S RULING THAT WHERE ASSESSEE WITH A SMALL AMOUNT OF A UTHORISED SHARE ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 4 CAPITAL, RAISED HUGE SUM ON ACCOUNT OF PREMIUM, EXE RCISE OF REVISIONARY POWERS BY COMMISSIONER OPINING THAT THI S COULD BE A CASE OF MONEY LAUNDERING WAS JUSTIFIED. 5. SHREE MANIUNATHESWARE PACKING PRODUCTS & CAMPHO R WORKS VS CIT [1998] 96 TAXMAN 1 (SC)/[1998] 231 ITR 53 (S C)/[1997] 143 CTR 406 (SC) HONBLE SUPREME COURT HELD THAT WORD 'RECORD' USED IN SECTION 263(1) WOULD MEAN RECORDS AS IT STANDS AT TIME OF E XAMINATION BY COMMISSIONER BUT NOT AS IT STANDS AT TIME OF ORDER PASSED BY ASSESSING OFFICER. MATERIAL WHICH HAD ALREADY COME ON RECORD THOUGH SUBSEQUENTLY TO MAKING OF ASSESSMENT COULD B E TAKEN INTO CONSIDERATION BY COMMISSIONER. COMMISSIONER WAS JUS TIFIED IN INVOKING SECTION 263 ON BASIS OF VALUATION REPORT S UBMITTED BY DVO SUBSEQUENT TO ASSESSMENT ORDER. 6. ORDER OF HONBLE SUPREME COURT OF INDIA IN THE C ASE OF CIT V. AMITABH BACHCHAN 384 ITR 200 DATED MAY 11, 2 016 SECTION 263 DOES NOT REQUIRE ANY SPECIFIC SHOW CAUS E NOTICE DETAILING SPECIFIC GROUNDS ON WHICH REVISION OF ASS ESSMENT ORDER IS TENTATIVELY BEING PROPOSED AFFECTING INITIATION OF EXERCISE IN ABSENCE THEREOF OR TO REQUIRE COMMISSIONER TO CONFINE HIMSE LF TO TERMS OF NOTICE AND FORECLOSING CONSIDERATION OF ANY OTHER I SSUE OR QUESTION OF FACT; COMMISSIONER IS FREE TO EXERCISE HIS JURIS DICTION ON CONSIDERATION OF ALL RELEVANT FACTS, PROVIDED AN OP PORTUNITY OF HEARING IS AFFORDED TO ASSESSEE TO CONTEST FACTS ON BASIS OF WHICH HE HAD EXERCISED REVISIONAL JURISDICTION. 7. ORDER OF HONBLE ITAT F-BENCH IN THE CASE OF PTC IMPEX (INDIA) PVT. LTD. VS CIT. ITA NO. 2860/DEL/2010 DAT ED 03.04.2018 HONBLE ITAT DELHI F- BENCH HAS HELD AS UNDER: 21. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENT ION AND ALSO GONE THROUGH THE ORDER OF THE LD. CIT U/S 263 AND T HE ORDER OF THE ASSESSING OFFICER PASSED U/S 143 (3) OF THE ACT WHI CH WAS SUBJECT TO REVISION BY THE CIT. WE HAVE ALSO PERUSED THE VARIO US CASE LAWS CITED BEFORE US BY THE PARTIES. ACCORDING TO SECTIO N 263 OF THE ACT, COMMISSIONER OF INCOME TAX CAN RESORT TO CORRECTIVE MEASURES BY REVISING THE ASSESSMENT ORDER PASSED BY THE ASSESSI NG OFFICER, IF AFTER EXAMINING RECORDS SUCH ASSESSMENT ORDER PASSE D BY THE ASSESSING OFFICER, HE (THE COMMISSIONER OF INCOME-T AX) FOUND THAT SUCH AN ORDER PASSED BY THE ASSESSING OFFICER IS ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN MALABAR INDUSTRIAL CO LTD VERSUS CIT 243 ITR 83 (SC) HON'BLE SUPREME COURT HE LD THE COMMISSIONER HAS SATISFIED OF TWIN CONDITIONS NAMEL Y (I) THAT THE ORDER IS ERRONEOUS, (II) THAT IT IS PREJUDICIAL TO THE INTEREST OF ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 5 REVENUE. AS HELD IN SEVERAL JUDICIAL PRECEDENTS THA T COMMISSIONER DOES NOT HAVE POWER TO REVISE THE ORDER OF THE LD. ASSESSING OFFICER WHERE THERE ARE TWO VIEWS POSSIBLE AND THE LD. ASSE SSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS. FURTHER, WHERE THE LD. ASSESSING OFFICER HAS MADE SOME ENQUIRY AND HAS REA CHED AT A CONCLUSION. THEREFORE, ON DEBATABLE ISSUES AND WHER E THERE IS ABSENCE OF LACK OF INQUIRY' THE POWERS OF THE CIT C ANNOT BE EXERCISED UNDER SECTION 263 OF THE ACT. THERE EXIST S A DIFFERENCE BETWEEN LACK OF INQUIRY' AND INADEQUATE INQUIRY'. IN THE PRESENT CASE ON ALL THE FOUR ISSUES RAISED BY THE LD. CIT, IN THE PAPER BOOK SUBMITTED BY THE ASSESSEE OR IN THE ARGUMENTS RAISE D BY THE LD. AUTHORIZED REPRESENTATIVE WE DID NOT FIND THAT LD. AO HAS MADE ANY ENQUIRY ON ALL ITA NO. 2860/DEL/2010 A Y 2005-06 PT C IMPEX (INDIA) PVT. LTD VS. COMMISSIONER OF INCOME TAX THE 4 ISSUES. THEREFORE, ACCORDING TO US THERE IS NO INQUIRY MADE BY THE LD. ASSESSING OFFICER ON THE ISSUES RAISED BY CIT IN PR OCEEDINGS UNDER SECTION 263 OF THE ACT. THE ARGUMENTS OF LD. AUTHOR IZED REPRESENTATIVE ON THE ISSUE WITH RESPECT TO CASH DE POSITED IN THE BANK ACCOUNT, LOAN REPAID, BANK INTEREST ON FIXED D EPOSIT RECEIPT AND ABSENCE OF NARRATION IN THE BANK STATEMENTS WER E MORE ON THE ASPECT THAT NO SUCH ADDITION CAN BE MADE IN THE HAN DS OF THE ASSESSEE. HOWEVER, NOTHING IS LEAD BEFORE US THAT M AKES US TO ASCERTAIN THAT LD. AO DURING THE COURSE OF ASSESSME NT PROCEEDINGS HAVE INQUIRED ABOUT ALL THOSE THINGS AT ALL. MERELY BECAUSE THERE ARE DISALLOWANCES UNDER SECTION 10 B OF THE ACT AND ADDITION ON ACCOUNT OF UNDISCLOSED SALES WHICH IS PRECISELY MAD E ON THE BASIS OF THE INFORMATION AVAILABLE WITH THE LD. ASSESSING OF FICER IN TAX AUDIT REPORT ONLY, IT CANNOT BE SAID THAT ON THESE 4 ISSU ES THE LD. AO HAS MADE ANY ENQUIRY. THE LD. ASSESSING OFFICER NOTES I N THE ASSESSMENT ORDER THAT DESPITE REQUEST THE ASSESSEE HAS NOT PRODUCED THE COMPLETE BOOKS OF ACCOUNTS ALONG WITH THE BILLS AND VOUCHERS BEFORE HIM. THE LD. AUTHORIZED REPRESENTAT IVE VEHEMENTLY REFERRED TO PAGE NO. 19 OF THE ORDER OF THE LD. CIT (APPEALS) DATED 15/3/2010 WHEREIN IT IS STATED THAT BOOKS OF ACCOUN TS AND VOUCHERS WERE PRODUCED BEFORE THE ASSESSING OFFICER ON 26/12 /2007 AND 29/12/2007 (SATURDAY) BUT NOT TAKEN ON RECORD BY TH E AO. THE ASSESSMENT IN THE PRESENT CASE WAS FRAMED UNDER SEC TION 143 (3) OF THE ACT ON 31/12/2007. THIS ITSELF SHOWS THAT AS SESSING OFFICER HAS NOT LOOKED AT THE BOOKS OF ACCOUNTS WHICH ARE A LLEGEDLY PRODUCED BEFORE AO AS PER VERSION OF THE ASSESSEE O N 26/12/2007. THIS TOO IS THE SUBMISSION OF THE ASSESSEE BEFORE C IT (A) WHICH HAS NOT BEEN ADJUDICATED BY CIT (A). EVEN OTHERWISE, ME RE PRODUCTION OF BOOKS OF ACCOUNTS DOES NOT MAKE THE ISSUES BEFOR E US FALL IN TO THE CATEGORY OF INADEQUATE INQUIRY'. IF WE AGREE TO SUCH AN ARGUMENT THEN, IN ALL CASES WHERE THE BOOKS OF ACCO UNTS WERE PRODUCED BEFORE THE ID AO, THEN THE CASE WOULD FALL OUTSIDE THE PURVIEW ITA NO. 2860/DEL/2010 A Y 2005- 06 PTC IMPE X (INDIA) PVT. LTD VS. THE COMMISSIONER OF INCOME TAX OF SECT ION 263 OF THE ACT. FURTHER NO RECORDS OF COMMUNICATION BY THE AO TO ASSESSEE ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 6 AND REPLY BY ASSESSEE TO ID AO WAS SHOWN TO US TO S HOW ON THESE FOUR ISSUES THAT THE ASSESSING OFFICER HAD APPLIED HIS MIND ON ANY OF THEM. ACCORDING TO US CASE BEFORE US IS OF JACK OF INQUIRY' AND NOT ABSENCE OF ANY INQUIRY. ALL JUDICIAL PRECEDENTS RELIED UP ON BEFORE US RELATED TO ABSENCE OF ADEQUATE INQUIRY BUT NONE OF THEM DEALT WITH THE ISSUES OF COMPLETE LACK OF INQU IRY AS IN CASE BEFORE US. HENCE, WE DO NOT HAVE ANY HESITATION IN UPHOLDING ACTION OF ID CIT IN INVOKING HIS JURISDICTION U/S 263 OF T HE ACT. HENCE, ORDER PASSED U/S 263 OF THE ACT BY THE ID CIT IS UP HELD AND APPEAL OF THE ASSESSEE IS DISMISSED. 8. ORDER OF HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. INFOSYS TECHNOLOGIES LTD. 341 ITR 293 DATED 04.01.2012 SECTION 263 IS A SECTION WHICH ENABLES THE COMMISS IONER TO HAVE A LOOK AT THE ORDERS OR PROCEEDINGS OF THE LOWER AUTH ORITIES AND TO EFFECT A CORRECTION, IF SO NEEDED, PARTICULARLY IF THE ORDER OR PROCEEDING IS ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF THE REVENUE. THIS PROVISION OCCURS IN A TAXING STATUTE, THE OBJECT OF WHICH IS TO RAISE REVENUE FOR THE STATE, AND SECTIO N 263 IS AN ENABLING PROVISION CONFERRING JURISDICTION ON THE C OMMISSIONER TO REVISE THE ORDER OF THE AUTHORITIES BELOW IN CERTAI N CIRCUMSTANCES PARTICULARLY WHEN IT IS ERRONEOUS AND PREJUDICIAL. ONE CAN AT ONCE REALIZE THAT THE PROVISION IS INTENDED TO PLUG LEAK AGE TO THE REVENUE BY AN ERRONEOUS ORDER PASSED BY THE LOWER AUTHORITI ES, WHETHER BY MISTAKE OR IN IGNORANCE OR EVEN BY DESIGN. IT MAKES LITTLE DIFFERENCE AS TO FOR WHAT REASONS THE ORDER IS PASSED BY THE L OWER AUTHORITY, SO LONG AS IT BECOMES ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ULTIMATELY, THE OBJECT IS TO ENSURE TH AT LEAKAGE OF THE REVENUE IS PLUGGED AND SOME TAX DUE TO THE STATE NO T REACHING THE COFFERS OF THE STATE IS PREVENTED BY EXERCISE OF RE VISIONAL JURISDICTION OF THE COMMISSIONER. [PARA 18] 9. ORDER OF HONBLE DELHI ITAT IN THE CASE OF CIT VS. APOLLO TYRES LTD., 65 ITD 263 (COPY ENCLOSED) A PLAIN READING OF SECTION 263 CLEARLY INDICATES T HAT THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORDS O F ANY PROCEEDINGS UNDER THE ACT. FOR THIS PURPOSE, HE IS NOT REQUIRED TO SHOW AS TO WHAT REASONS PROMPTED HIM TO CALL FOR AN D EXAMINE THE RECORD. THE PROVISIONS ALSO DO NOT PRESCRIBE ANY LI MITATION THAT THE COMMISSIONER SHOULD SUO MOTU CALL FOR AND EXAMINE T HE RECORD AND HE CANNOT TAKE INTO CONSIDERATION OR RELY UPON ANY REPORT OR INFORMATION WHICH MAY BE SUPPLIED TO HIM BY THE OTH ER OFFICERS OF THE DEPARTMENT OR ON THE BASIS OF ANY INFORMATION W HICH HE MAY OBTAIN FROM ANY OTHER SOURCE. THE AUTHORITY OF THE COMMISSIONER TO CALL FOR AND EXAMINE THE RECORD ON THE BASIS OF ANY INFORMATION FROM ANY SOURCE OR SUO MOTU IS PURELY AN ADMINISTRA TIVE MATTER. IF AFTER CALLING FOR AND EXAMINING THE RECORDS, THE CO MMISSIONER ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 7 CONSIDERS THAT THE ORDER OF THE ASSESSING OFFICER I S ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF TH E REVENUE, THEN SUBSEQUENT PROCEEDING ACQUIRES QUASI-JUDICIAL CHARA CTER. ON COMPARISON OF SECTIONS 263 AND 264 IT WOULD BE SEEN THAT IN SECTION 264 THE COMMISSIONER MAY, EITHER OF HIS OWN MOTION OR ON AN APPLICATION BY THE ASSESSEE, CALL FOR THE RECORD S OF ANY PROCEEDING UNDER THE ACT. HOWEVER, IN SECTION 263 T HE EXPRESSION ON HIS OWN MOTION IS ABSENT. IN THE ABSENCE OF SU CH AN EXPRESSION AND ALSO IN VIEW OF THE FACT THAT THERE IS NO RESTR ICTION OR LIMITATION ON THE POWER OF THE COMMISSIONER TO CALL FOR AND EX AMINE THE RECORD OF ANY PROCEEDING PURSUANT TO THE REPORT GIV EN BY THE ASSESSING OFFICER OR BY OTHER DEPARTMENTAL OFFICER, THE COMMISSIONER COULD VALIDLY CALL FOR AND EXAMINE THE RECORD OF THE ASSESSEE IN THE INSTANT CASE FOR THE RELEVANT YEAR PURSUANT TO A LETTER OF THE ASSESSING OFFICER CONTAINING A PROPOS AL UNDER SECTION 263. THEREFORE, THERE WAS NO MERIT IN THE CONTENTIO N OF THE ASSESSEE IN THIS REGARD. 10. ORDER OF HONBLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES VS ADDL. CIT, 99 ITR 375 WHERE IT IS HELD THAT THE COMMISSIONER CAN REGARD T HE ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES O F THE CASE, ITO SHOULD HAVE MADE FURTHER INQUIRIES BEFORE ACCEPTING THE STATEMENTS MADE BY THE ASSESSEE IN HIS RETURN AND IT WAS OBSER VED THAT REASON IS OBVIOUS. THE POSITION AND FUNCTIONS OF THE ITO A RE VERY DIFFERENT FROM THAT OF CIVIL COURT. 11. ORDER OF HONBLE DELHI BENCH IN THE CASE OF PER FETTI VAN MELLE INDIA PVT. LTD., ITA NO. 3046/DEL/2016 FOR A.Y. 200 9-10 ORDER DATED 11.01.2019. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RECORDS. IT IS PERTINENT TO NOTE THAT THE ASSESSEE IS ENGAGED I N MANUFACTURING OF A VARIETY OF CONFECTIONARY PRODUCTIONS WHICH INC LUDES BIG BABOOL, ALPENLIBE, CENTRE FRESH, CENTER FRUIT, CENTER SHOK, CHATER PATER, CHLOR-MINT, CHOCO-TELLA, COFITOS, HAPPYDENT WHITE, PROTEX HAPPYDENT, MARBELS, MENTOS ETC. FROM THESE PRODUCTS IT CAN BE SEEN THAT ALL PRODUCTS ARE NOT THAT OF PHARMA, CHLO R- MINT, AYURVED BASED PRODUCTS. THERE ARE CONFECTIONARY PRODUCTS AS WELL. THE PR. CIT AFTER PERUSAL OF THE QUARTERLY STATEMENT FURNIS HED BY THE ASSESSEE COMPANY WITH THE COMMISSIONER, CENTRAL EXC ISE, MEERUT FOR F.Y. 2008-09, NOTICED THAT THE ASSESSEE COMPANY HAD ALSO MANUFACTURED OTHER PRODUCTS SUCH AS CHEWING GUM, TOFFEE AND BUBBLE GUM IN ADDITION TO MANUFACTURING OF PHARMA PRODUCTS FOR WHICH THE ASSESSEE COMPANY IS NOT ENTITLED FOR DEDU CTION U/S 80IC OF THE ACT AS THESE ARTICLE OR THINGS ARE NOT SPECI FIED IN THE FOURTEENTH SCHEDULE. BUT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MA DE BEFORE ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 8 ALLOWING ANY RELIEF U/S 80IC OF THE ACT TO THE ASSE SSEE COMPANY. THE DECISION OF THE HONBLE SUPREME COURT IN MALABA R INDUSTRIAL COMPANY LTD. VS. CIT (243 ITR 83) (SC) HELD THAT TH E COMMISSIONER HAS TO SATISFY HIMSELF OF BOTH THE CON DITIONS, FIRSTLY ORDER BEING ERRONEOUS AND 8 ITA NO. 3046/DEL/2016 S ECONDLY ORDER BEING PREJUDICIAL TO THE INTEREST OF REVENUE. BOTH THESE TESTS HAVE BEEN SEEN BY THE PRINCIPAL COMMISSIONER OF INCOME T AX IN THE PRESENT CASE AND APTLY APPLIED IN THE PRESENT CASE. IT IS ALSO HELD BY THE HONBLE APEX COURT THAT THE PROVISIONS CANNO T BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COM MITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRO NEOUS THAT THE SECTION WILL BE ATTRACTED. THUS, THE PR. CIT HAS LO OKED INTO THE ASPECT OF THE ASSESSMENT ORDER IN THE PRESENT CASE TO THE EXTENT OF ERRONEOUS AND THUS, SECTION 263 OF THE ACT IS ATTRA CTED IN THE PRESENT CASE. SECTION 263 OF THE ACT IS NOT INVOKED SIMPLY FOR CORRECTING MISTAKE OR ERROR COMMITTED BY THE ASSESS ING OFFICER IN THE PRESENT CASE. IT CAN BE OBSERVED THAT THE PR. C IT HAS CONSIDERED ALL THE CONTENTIONS OF THE ASSESSEE AND THEREAFTER RIGHTLY COME TO THE CONCLUSION THAT THE ASSESSING OFFICER F AILED TO CONSIDER THE FACT THAT WHETHER THE ASSESSEE IS ENTITLED FOR CLAIM UNDER SECTION 80IC OR NOT IN RESPECT OF THE PRODUCTS WHIC H DO NOT COME UNDER THE AMBIT OF FOURTEENTH SCHEDULE. IT CAN BE S EEN THAT THE PR. CIT HAS PROPERLY INVOKED THE PROVISIONS OF SECTION 263 AND THERE IS NO PROCEDURAL LAPSE ON THE PART OF THE PR. CIT. IN FACT, THE ASSESSING OFFICER DID NOT MADE ANY INQUIRY AND THER E IS NO MENTION OF THE SAME IN THE ASSESSMENT ORDER ITSELF WHICH PR OVES THAT THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFIC ATION WHICH SHOULD HAVE BEEN DONE BY THE ASSESSING OFFICER BEFO RE ALLOWING THE CLAIM U/S 80IC OF THE ACT. THUS, IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THERE IS LOSS OF REVENUE. THE PR. C IT AFTER ISSUING THE SHOW CAUSE NOTICE U/S 263 OF THE ACT GIVEN AMPL E OPPORTUNITY TO THE ASSESSEE FOR EXPLANATION AND DEALT WITH THE REPLY/DETAILS FILED BY THE ASSESSEE IN PROPER MANNER. THUS, PROPER OPPO RTUNITY WAS GIVEN BY THE PR. CIT TO THE ASSESSEE DURING THE PRO CEEDINGS U/S 263 OF THE ACT. THE PRESENT CASE IS COVERED BY THE DECISION OF THE HONBLE APEX COURT IN CASE OF DENIEL MERCHANTS PRIV ATE LIMITED & ANR. VS. INCOME TAX OFFICER (APPEAL NO. 2396/2017 O RDER DATED 29.11.2017). THE HONBLE SUPREME COURT HELD AS UNDE R: IN ALL THESE CASES, WE FIND THAT THE COMMISSIONER OF INCOM E TAX HAD PASSED 9 ITA NO. 3046/DEL/2016 AN ORDER UNDER SECTI ON 263 OF THE INCOME TAX ACT, 1961 WITH THE OBSERVATIONS THAT THE ASSESSING OFFICER DID NOT MAKE ANY PROPER INQUIRY WHILE MAKIN G THE ASSESSMENT AND ACCEPTING THE EXPLANATION OF THE ASS ESSEE(S) INSOFAR AS RECEIPT OF SHARE APPLICATION MONEY IS CO NCERNED. ON THAT BASIS THE COMMISSIONER OF INCOME TAX HAD, AFTER SET TING ASIDE THE ORDER OF THE ASSESSING OFFICER, SIMPLY DIRECTED THE ASSESSING OFFICER TO CARRY THOROUGH AND DETAILED INQUIRY. IT IS THIS ORDER WHICH IS UPHELD BY THE HIGH COURT. WE SEE NO REASON TO INTER FERE WITH THE ORDER OF THE HIGH COURT. THE SPECIAL LEAVE PETITION S ARE DISMISSED. ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 9 THUS, IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT PROPERLY ADJUDICATED THE ISSUE OF CLAIM U/S 80IC BEFORE ALLO WING THE SAME TO THE ASSESSEE COMPANY, THEREFORE, THE PR. CIT HAS RI GHTLY INVOKED SECTION 263 OF THE ACT AND PASSED THE ORDER. THEREF ORE, THE ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 PASSE D BY THE PRINCIPAL COMMISSIONER OF INCOME TAX IS JUST AND PR OPER. THERE IS NO NEED TO INTERFERE WITH THE SAME. THE APPEAL OF T HE ASSESSEE IS DISMISSED. 12. ORDER OF HONBLE DELHI BENCH IN THE CASE OF RAM ESH KUMAR., ITA NO. 1982/DEL/2018 FOR A.Y. 2014-15 ORDER DATED 25.01.2019. 16. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIE S AND GONE THROUGH THE FACTS ON RECORD. ALL THE ARGUMENTS, FAC TS, DECISIONS, CASE LAWS CITED BY THE LD. AR AND THE LD. DR HAVE B EEN PERUSED AND DULY CONSIDERED FOR ADJUDICATION. TO THE NOTICE ISSUED BY THE ASSESSING OFFICER PERTAINING TO THE LONG TERM CAPIT AL GAINS THE ASSESSEE HAS REPLIED THAT HE HAD PURCHASED THE SHAR ES ON 16/03/2012 AND SOLD IN JULY 2013 AND RECEIVED SALE PROCEEDINGS OF RS. 11,29,599/-. IT WAS REPLIED THAT THE ORIGINAL S HARES PURCHASED WERE OF M/S PANCHSHUL MARKETING LTD. WHICH STANDS M ERGED WITH M/S KAILASH AUTOMOBILE AND THE SHARES OF KAILASH AU TOMOBILES WERE ALLOTTED IN THE RATIO OF 1:1. BEYOND THIS INFORMATI ON THERE WERE NO ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER. THE R ELIANCE OF THE LD. AR ON THE CASE OF GABRIEL INDIA LTD. IS OF NO H ELP TO THE ASSESSEE AS IT ENUNCIATED TWO PRINCIPLES NAMELY I.) THE ORDER IS ERRONEOUS II) BY THE VIRTUE OF THE ORDER BEING ERRO NEOUS PREJUDICE IS CAUSED TO THE INTEREST OF THE REVENUE. IN THE INSTA NT CASE THERE HAS BEEN AN INFORMATION WITH THE DEPARTMENT WHICH HAS B EEN PASSED ON TO THE ASSESSING OFFICER FOR VERIFICATION AND FA ILURE OF THE ASSESSING OFFICER TO VERIFY THE TRANSACTIONS IN THE LIGHT OF THE INFORMATION AVAILABLE MAKES THE ORDER ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ASS ESSING OFFICER HAS MENTIONED ABOUT INPUTS FROM INVESTIGATION WING IN A SSESSMENT ORDER BUT HAS NOT EXAMINED ABSOLUTELY ANYTHING REGA RDING THE GENUINITY OF THE TRANSACTIONS. THE LD. PCIT HAD ENO UGH MATERIAL IN HIS CUSTODY TO PRIMA FACIE TO SHOW THAT THE TAX WHI CH WAS LAWFULLY 14 EXIGIBLE HAS NOT BEEN IMPOSED. SIMILARLY IN THE CASE OF SUNBEAM AUTO THE COURTS HAVE HELD THAT IN THE CASE OF LACK OF ENQUIRY COURSE OF ACTION UNDER SECTION 263 IS VALID. IN THIS CASE ON THE FACTS OF THE RECORD IT CAN BE OBSERVED THAT THE ASSESSING OFFICE R HAS NOT APPLIED HIS MIND REGARDING THE ALLOWABILITY OF THE EXEMPTIO N OF THE LONG TERM CAPITAL GAIN. THIS IS NOT THE CASE OF INADEQUA TE ENQUIRY BUT IS A CLEAR CASE OF LACK OF ENQUIRY WHICH MAKES IT DIFF ERENT FROM THE CASE OF NIRAV MODI (SUPRA). OBTAINING OF THE INFORM ATION ABOUT THE TRANSACTION CANNOT BE TAKEN AS AKIN TO ENQUIRING AB OUT THE INFORMATION. THIS IS A CLEAR CASE OF NO ENQUIRY FOR WHICH THE LD. PCIT HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 263. WE ALSO FIND THAT THE LD. PCIT HAS CLEARLY BROUGHT ABOUT THE ERR OR IN THE ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 10 ASSESSMENT ORDER AND HAS ALSO DIRECTED THE ASSESSIN G OFFICER TO TAKE REMEDIAL ACTION TO TAKE ACTION AS PER THE LAW AFTER PROVIDING DUE OPPORTUNITY TO THE ASSESSEE. THUS, IT CAN BE SA ID THAT THE LD. PCIT HAS NOT EXCEEDED HIS JURISDICTION NOR DIRECTED THE ASSESSING OFFICER TO PASS THE ASSESSMENT ORDER IN ANY PARTICU LAR WAY THUS NOT INTERFERING IN THE JUDICIAL FUNCTION OF THE ASSESSI NG OFFICER. 17. ONGOING THROUGH THE FACTS, IT CAN BE OBSERVED T HAT THE ASSESSING OFFICER HAS NOT CONDUCTED ANY ENQUIRY AND THIS IS A CLEAR CASE OF LACK OF ENQUIRY NOT A CASE INADEQUATE ENQUI RY. FURTHER NON APPLICATION OF MIND BY THE ASSESSING OFFICER CAN BE EASILY GAUZED FROM THE FACT THAT THE INFORMATION AVAILABLE WITH T HE ASSESSING OFFICER HAS NOT BEEN UTILISED DURING THE ASSESSMENT PROCEEDINGS WHICH MAKES THE CASE FIT FOR APPLYING THE PROVISION S OF EXPLANATION 2 (A) OF SECTION 263. THUS BASED ON THE FACTS ON RE CORD THE CONTENTION OF THE ASSESEE CANNOT BE HELD TO BE VALI D IN WHICH ARE DETAILED AS UNDER (A) THE ORDER PASSED BY THE ASSESSING OFFICER IS N EITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE R EVENUE: THE ORDER PASSED HAS BEEN FOUND TO BE ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF THE REVENUE AS PER THE CASE LAW CITED A ND ON FACTS OF THE CASE. (B) THE ASSESSEE IS NOT COVERED IN ANY OF THE COND ITIONS MENTIONED IN 15 EXPLANATION 2 OF SECTION 263(1) : T HE ASSESSEE HAS FOUND TO BE SQUARELY COVERED BY THE PROVISIONS OF SECTION 263 91) EXPLANATION 2 AS NO ENQUIRIES OR VERIFICATION H AS BEEN CONDUCTED WHICH SHOULD HAVE BEEN MADE BY THE ASSESS ING OFFICER. (C) MERELY BECAUSE THE CIT MAY NOT AGREE TO THE OR DER OF THE ASSESSING OFFICER JUST DUE TO CHANGE OF OPINION, TH E SAID ORDERS CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVENUE : THIS IS NOT A CASE OF THE PRINCIPAL CI T NOT AGREEING TO THE ORDER OF THE ASSESSING OFFICER AND NOR A CASE O F CHANGE OF OPINION. IN FACT THE ASSESSING OFFICER HAS NOR FORM ED ANY OPINION IN ALLOWING THE LONG TERM CAPITAL GAINS AND PRACTICALL Y HAS NOT EXAMINED THE ISSUE AT ALL. (D) THERE IS A DISTINCTION BETWEEN LACK OF INQUIR Y AND INADEQUATE INQUIRY'. IF THERE WAS ANY INQUIRY, EVE N IF IT WAS INADEQUATE, IT DOES R OT GIVE RIGHT TO THE COMMISSI ONER TO PASS ORDERS UNDER SECTION 263 MERELY BECAUSE OF A DIFFER ENT OPINION FROM THE ASSESSMENT ORDER QUESTIONNAIRE IT CAN BE U NEQUIVOCALLY HELD THAT THIS IS A CLEAR CASE OF LACK OF ENQUIRY. (E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS W ITH A VIEW TO STARTING FISHING AND ROVING ENQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED. THERE ARE NO FISHING OR RUIN ENQ UIRIES CONDUCTED ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 11 BY THE LD. PRINCIPAL CIT NOR DIRECTED THE ASSESSING OFFICER TO CONDUCT SUCH ENQUIRIES. (F) THE ASSESSEE HAS ALREADY FURNISHED ALL THE DOC UMENTARY EVIDENCES WHICH PROVES THAT TRANSACTIONS RELATED TO SALE AND PURCHASE OF SHARES ARE GENUINE THERE IS ABSOLUTE DI FFERENCE BETWEEN ENQUIRY CALLING OF INFORMATION, INVESTIGATI ON AND EXAMINATION. FROM THE ACTION OF THE ASSESSING OFFIC ER IT CAN BE SAID THAT NO ENQUIRY HAS BEEN CONDUCTED IN THIS CASE. (G) MERELY BECAUSE THE STOCK PRICE MOVED SHARPLY, THE ASSESSEE IS NOT TO BE 16 BLAMED FOR BOGUS TRANSACTIONS WHERE HE HAS PURCHASED AND SOLD THE STOCKS THROUGH REGISTERED BR OKERS AND CONFIRMED BY VALID CONTRACT NOTES AS PER LAW. THE O RDER U/S 263 HAS NOT BEEN BASED ON THE STOCK PRICE BUT IT WAS BASED ON THE INFORMATION AND EXTENSIVE INVESTIGATION AND THE CON CLUSION DRAWN THEREOF BY THE REVENUE EXTENSIVE INVESTIGATION BY T HE DEPARTMENT. (H) THE TRANSACTIONS CANNOT BE BRUSHED ASIDE ON SU SPICION AND SURMISES WHERE THE TRANSACTIONS OF THE SHARES ARE G ENUINE THE LD. PRINCIPAL CIT HAS INVOKED THE PROVISIONS OF SECTION 263 BASED ON THE VALID TANGIBLE INFORMATION WHICH HAS BEEN EXTEN SIVELY INVESTIGATED BY THE DEPARTMENT AS THE ASSESSING OFF ICER HAS FAILED TO DISCHARGE HIS STATUTORY DUTIES IN ACCORDANCE WIT H THE INCOME TAX ACT WHICH LED TO THE ORDER BEING ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE. 18. HENCE KEEPING IN VIEW THE ENTIRE FACTS OF THE C ASE, THE JUDGMENT OF THE APEX COURT IN THE CASE OF MALABAR I NDUSTRIAL CO. LTD. 243 ITR 83 WHEREIN THE ACTION UNDER SECTION 26 3 IS UPHELD WHEN THE ASSESSING OFFICER HAS ACCEPTED THE STATEME NT OF ACCOUNT FILED BY THE ASSESSEE WITHOUT MAKING ANY ENQUIRY, T HE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF DANIEL MERCHAN TS PVT. LTD. WHICH HELD THAT IN THE CASE WHERE ASSESSING OFFICER DID NOT MAKE ANY PROPER ENQUIRY, THE LD. PCIT IS CORRECT IN DIRE CTING THE ASSESSING OFFICER TO CARRY THOROUGH AND DETAILED EN QUIRY. 19. ONGOING THROUGH THE QUESTIONNAIRE, ASSESSMENT O RDER, WE HAVE NO HESITATION TO SAY THAT THE ASSESSING OFFICE R HAS NOT APPLIED HIS MIND TO THE ISSUE OF SHARE TRANSACTIONS FOR WHI CH THE DETAILED INFORMATION IS AVAILABLE REGARDING THE SUSPICIOUS N ATURE OF THE TRANSACTIONS. ACCORDINGLY, TO US, BASED ON THE FACT S AND CIRCUMSTANCES, THE CASE BEFORE US IS A CASE OF ABSO LUTE LACK OF ENQUIRY BUT NOT A CASE OF INADEQUATE ENQUIRY BY HIM . HENCE, ORDER PASSED U/S 263 OF THE ACT BY THE ID CIT IS UPHELD A ND APPEAL OF THE ASSESSEE IS DISMISSED. 6. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 12 7. WE FIND THAT THE JUDGMENTS QUOTED BY THE REVENUE MOSTLY PERTAIN TO THE CASES WHERE THE AO DID NOT MAKE ANY PROPER E NQUIRY IN SO FAR AS THE RECEIPT OF SHARE APPLICATION MONEY IS CONCERNED . THEY WERE THE CASES WHERE THE ORDERS WERE PATENTLY ERRONEOUS ARE PREJUD ICIAL TO THE INTEREST OF REVENUE. THE JUDGMENTS IN THE CASE OF AMITABH BA CHCHAN (SUPRA), INFOSYS TECHNOLOGIES LTD. (SUPRA) ARE DIFFERENTIATE D AND FOUND TO BE NOT APPLICABLE TO THE INSTANT CASE. 8. WE FIND THAT THE ASSESSEE HAS SHOWN THE COMPUTAT ION OF ASSESSABLE INCOME AS UNDER: INCOME FROM OTHER SOURCES: INTEREST RECEIVED FROM BONDS 9,780.00 INTEREST RECEIVED ON LOAN 4,402,030.00 LESS: INTEREST PAID ON LOAN 1,200,000.00 3,202,030.00 MEETING FEES RECEIVED 4,500.00 INTEREST RECEIVED ON S.B. 11,949.00 INTEREST RECEIVED N P.P.F. 240,246.00 LESS: EXEMPT U/S 10(11) 240,246.00 DIVIDEND RECEIVED ON SHARES 18.00 LESS: EXEMPT U/S 10(34) 18.00 3,220,259.00 9. DURING THE ASSESSMENT PROCEEDINGS, THE AO HAS REQ UISITIONED THE DETAILS OF LOANS & ADVANCES RECEIVED AND ALSO THE L OANS & ADVANCES GIVEN VIDE NOTICE U/S 142(1) OF THE ACT DATED 25.04.2013. THE COMPLETE DETAILS HAVE BEEN PROVIDED BY THE ASSESSEE TO THE ASSESSING OFFICER VIDE REPLY DATED 12.06.2013. AS PER THE DETAILS FURNISHED BEFO RE THE AO, THE ASSESSEE HAS RECEIVED INTEREST FROM BHL FOREX & FIN LEASE LTD. OF RS.44,02,030/- AND THE ASSESSEE PAID INTEREST OF RS .12,00,000/- TO MULTIPLEX FINCAP LTD. THE COMPLETE DETAILS OF THE L OANS GIVEN AND RECEIVED HAVE BEEN ENQUIRED BY THE ASSESSING OFFICER. THE AM OUNT OF THE LOAN GIVEN TO BHL FOREX & FINLEASE LTD. WAS RS.2,41,00,0 00/- DURING THE YEAR AND THE OPENING BALANCE STANDS AT RS.1,14,87,686/-. DURING THE YEAR THE ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 13 PAYMENT OF RS.8,77,891/- WAS MADE LEAVING A CLOSING BALANCE OF RS.3,91,11,825/-. THE TOTAL INTEREST RECEIVED WAS R S.44,02,030/-. THUS, WE FIND THAT THIS LOAN HAS BEEN AN ONGOING FINANCIA L TRANSACTION WITH THE ASSESSEE FOR A MINIMUM PERIOD OF THREE YEARS. THE C ONFIRMATION HAS ALSO BEEN OBTAINED THE ASSESSING OFFICER ALONG WITH DETA ILS OF THE CHEQUES ISSUED ON ACCOUNT OF INTEREST PAYMENT. THE DETAILS OF TDS HAVE ALSO BEEN FILED BEFORE THE AO. THE ASSESSEE HAS ALSO RECEIVED SALARY & BONUS FROM BHL FOREX & FINLEASE LTD. WHICH HAS BEEN DULY OFFER ED TO TAX. REGARDING THE PAYMENT OF INTEREST, THE DETAILS OF OPENING BAL ANCE, CLOSING BALANCE OF THE LOANS RECEIVED HAVE ALSO BEEN FILED AND EXAM INED BY THE ASSESSING OFFICER. THE OPENING BALANCE WITH MULTIPLEX FINCAP LTD. WAS RS.1,50,00,000/-. THE INTEREST RECEIVED DURING THE YEAR IS RS.12,00,000/- AND THE CLOSING BALANCE OF RS.1,62,000/- HAS BEEN R EFLECTED IN THE DETAILS FILED BY THE ASSESSEE AS EXAMINED BY THE ASSESING O FFICER. THUS, WE FIND THAT THIS IS ALSO AN ONGOING TRANSACTION BETWEEN TH E ASSESSEE AND LOANEE. THUS, WE FIND THAT BOTH THE PARTIES ARE HAVING REGU LAR TRANSACTIONS WITH THE ASSESSEE OVER A PERIOD OF TIME. HENCE, THE CLAU SE (A) OF THE EXPLANATION II TO SECTION 263 FINDS NO APPLICATION TO THE FACTS OF THE CASE. FURTHER, THE LD. PCIT HAS NOT BROUGHT ANYTHING ON R ECORD AS TO HOW THE ACTION OF THE ASSESSING OFFICER CULMINATED IN TREAT ING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE FIND THAT THE ORDER OF THE ASSESSING OFFICER IS NEITHER ERRONEOUS AS IT DID NOT VIOLATE ANY PROVISIONS OF EXPLANATION II TO SECTION 263 NOR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS NO LOSS OF REVENU E COULD BE BROUGHT TO LIGHT BY THE LD. PCIT IN THE REVISIONARY PROCEEDING S. HENCE, WE HOLD THAT THE OPINION OF THE LD. PCIT THAT THE ORDER HAS BEEN PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATIONS WITH SHOULD HAVE BEEN MADE HAS NO TANGIBLE JUSTIFICATION ON THE FACTS OF THE INSTANT CASE. ITA NO. 2644/DEL/2016 GURVINDER SINGH SURI 14 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/05/2020. SD/- SD/- (BHAVNESH SAINI) (DR. B .R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 13/05/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR