Delhi Airport Metro Express Pvt. Ltd., New Delhi V. Pr.CIT-03, New Delhi

ITA 2813/DEL/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7030 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 17-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: DMRC
• Keywords: Depreciation; Assessment record; Revised return; Set aside
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 13; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI L. P. SAHU, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER APPELLANT BY : SH. AJAY VOHRA, SR. ADV. SH. ROHIT JAIN, ADV. MS. DEEPSHREE RAW, ADV. RESPONDENT BY : MS. RACHNA SINGH, CIT (DR). DATE OF HEARING : 02.01.2017 DATE OF PRONOUNCEMENT: 12.01.2017 ORDER PER BEENA A. PILLAI, JM: 1. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 30.03.2016 PASSED BY PRINCI PAL COMMISSIONER OF INCOME TAX, DELHI-3 (HEREINAFTER RE FERRED TO AS PR. CIT) UNDER SECTION 263 OF THE ACT, FOR THE YEAR UNDER CONSIDERATION ON THE FOLLOWING GROUNDS OF APPEAL: I.T.A. NO. 2813/DEL/2016 (ASSESSMENT YEAR 2011-12) DELHI AIRPORT METRO EXPRESS PVT. LTD. RELIANCE CENTER MAHARAJA RANJIT SINGH MARG, NEW DELHI GIR/PAN : AAAFE2646N (APPELLANT) VS. PR. CIT NEW DELHI. (RESPONDENT) ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 2 OF 16 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE IMPUGNED ORDER DATED 30.03.2016 PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME-TAX (PCIT), UNDER SECTION 263 OF THE INCOME-TAX ACT, 19 61 ('THE ACT') IS WITHOUT JURISDICTION, ILLEGAL, BAD I N LAW AND VOID-AB-INITIO. 2. THAT THE LD. PCIT ERRED IN INVOKING REVISIONAR Y PROCEEDINGS UNDER SECTION 263 OF THE ACT MERELY ON THE BASIS OF CBDT CIRCULAR DATED 23,4.2014, WHICH WAS ISSUED MUCH AFTER THE COMPLETION OF ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. 3. THAT THE LD. PCIT ERRED IN INITIATING REVISION ARY PROCEEDINGS UNDER SECTION 263 OF THE ACT MERELY ON THE BASIS OF CBDT CIRCULAR DATED 23.4.2014, WITHOUT APPRECIATING THAT CBDT CIRCULAR IS NOT BINDING ON T HE APPELLANT AND ONLY ON THE BASIS OF SUBSEQUENT CBDT CIRCULAR, THE COMPLETED ASSESSMENT CANNOT BE REOPENED UNDER SECTION 263 OF THE ACT. 4. THAT THE LD. PCIT ERRED IN NOT APPRECIATING TH AT THE CBDT CIRCULAR, WHICH WAS NOT APPLICABLE TO THE FACT S OF THE APPELLANT'S CASE AND WAS ALSO CONTRARY TO TH E LAW LAID DOWN IN VARIOUS DECISIONS, COULD NOT BE TH E BASIS TO SET-ASIDE THE ASSESSMENT CONCLUDED VIDE ORDER DATED 31.12.2013 UNDER SECTION 143(3) OF THE ACT. 5. THAT THE LD. PCIT ERRED IN INVOKING REVISIONAR Y PROCEEDINGS UNDER SECTION 263 OF THE ACT IGNORING T HE LAW LAID DOWN BY THE HON'BLE HIGH COURT WHICH IS BINDING ON LOWER AUTHORITIES IN RESPECT OF ELIGIBIL ITY OF THE ASSESSEE TO CLAIM DEPRECIATION UNDER SECTION 32 (1) OF THE ACT ON EXPENDITURE INCURRED TOWARDS ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 3 OF 16 ACQUIRED/DEVELOPED UNDER THE BUILD-OP ERATE-TRANSFE R SCHEME ('BOT SCHEME'). 6. THAT THE LD. PCIT ERRED IN NOT APPRECIATING TH AT THERE IS NO CONCEPT UNDER THE ACT FOR DEFERMENT OF EXPENDITURE INCURRED TOWARDS ACQUISITION/DEVELOPMEN T UNDER THE BOT SCHEME. 2. THE LD. PR. CIT HAS SET ASIDE THE ASSESSMENT ORDER DATED 31.12.2013 PASSED UNDER SECTION 143 (3) OF TH E ACT BY HOLDING THE SAME TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: - ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE YEA R UNDER CONSIDERATION DECLARING A TOTAL LOSS AT RS. 1,27,65,56,278/- ON 28.09.2011, WHICH WAS SUBSEQUEN TLY REVISED ON 28.03.2013, DECLARING A TOTAL LOSS OF RS . 1,31,11,92,502/-. THE ASSESSMENT WAS COMPLETED UNDE R SECTION 143 (3) OF THE ACT ON 31.12.2013 AT THE REV ISED LOSS OF RS. 1,31,11,92,502/. SUBSEQUENTLY, ON EXAMINATION O F RECORDS BY LD. PR. CIT, IT WAS OBSERVED THAT THE AS SESSMENT ORDER PASSED BY LD. AO IS ERRONEOUS, IN SO FAR AS I T WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND LD. PR CIT ISSUED SHOW CAUSE NOTICE ON 16.03.2015 INITIATING PROCEEDINGS UNDER SECTION 263 OF THE ACT WHICH IS A S UNDER: 3. ON SCRUTINY OF ASSESSMENT RECORD IT IS SEEN THAT THE ASSESSEE COMPANY WAS A CONCESSIONAIRE OF THE AIRPORT METRO EXPRESS PROJECT OF DELHI METRO RAIL ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 4 OF 16 CORPORATION (DMRC) WHICH HAS BEEN DEVELOPED UNDER BUILD OPERATE AND TRANSFER (BOT SCHEME). THE ASSESSEE HAD ACCEPTED THE CONCESSION FOR A PERIOD O F 30 YEARS AND THE CONCESSION PERIOD COMMENCED ON THE AVAILABLE DATE AND SHALL END ON THE TERMINATION DAT E. THE ASSESSEE HAD CLAIMED DEPRECIATION OF RS 112,29,74,447/- DURING THE A.Y 2011-12 ON FIXED ASSETS OF RS 1560,48,17,189/- @ 50 % OF THE ELIGIBL E DEPRECIATION RATES, AS THE ASSETS WERE USED FOR LES S THAN 180 DAYS WHICH WAS ALLOWED IN THE ASSESSMENT. AS THE ASSETS WERE DEVELOPED UNDER BOT SCHEME THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM OF DEPRECIATION AS IT WAS NOT THE OWNER OF THE ASSETS. IN BOT ARRANGEMENT FOR DEVELOPMENT OF AIRPORT METRO PROJECT THE POSSES SION OF LAND WAS HANDED OVER TO THE ASSESSEE BY DMRC( NOTIFIED AUTHORITY FOR THE PURPOSE OF CONSTRUCTION OF THE PROJECT) WITHOUT ANY ACTUAL TRANSFER OF OWNERSHIP A ND THE ASSESSEE HAD ONLY A RIGHT TO DEVELOP AND MAINTA IN THE ASSETS. THE DESIGN & CONSTRUCTION OF BASIC CIVI L STRUCTURE FOR THE PROJECT WAS DONE BY DMRC AND THE SAME WAS MADE AVAILABLE TO THE CONCESSIONAIRE PROGRESSIVELY FOR DESIGN, SUPPLY, INSTALLATION, COMMISSIONING AND OPERATION OF SYSTEM AND RELATED WORK, THE ASSESSEE ENJOYED THE BENEFITS ARISING FRO M THE USE OF ASSET THROUGH COLLECTION OF FARES FOR A SPECIFIED PERIOD WITHOUT HAVING ACTUAL OWNERSHIP OV ER SUCH ASSETS. THEREFORE, THE RIGHTS IN THE LAND REMA INED VESTED WITH THE GOVERNMENT/ITS AGENCY(DMRC). THUS, AS THE ASSESSEE DID NOT HOLD ANY RIGHTS IN THE PROJ ECT EXCEPT RECOVERY OF FARES TO RECOUP THE EXPENDITURE INCURRED, IT CANNOT BE TREATED AS OWNER OF THE PROP ERTY, EITHER WHOLLY OR PARTIALLY FOR PURPOSE OF ALLOWABIL ITY OF DEPRECIATION UNDER SECTION 32(L)(III) OF THE ACT. T HE PROVISIONS OF THE ACT DO NOT ALLOW CLAIM OF DEPRECI ATION ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 5 OF 16 ON THE ASSETS DUE TO NON-FULFILLMENT OF OWNERSHIP CRITERIA IN BOT CASES. 4. AS THE ASSESSEE HAD INCURRED EXPENDITURE ON A PROJECT FOR DEVELOPMENT OF METRO RAILWAYS IT WAS ENTITLED TO RECOVER COST INCURRED TOWARDS DEVELOPME NT OF SUCH FACILITY (COMPRISING OF CONSTRUCTION COST A ND OTHER PRE-OPERATIVE EXPENSES) DURING THE CONSTRUCTI ON PERIOD. FURTHER, EXPENDITURE INCURRED BY THE ASSESS EE ON SUCH BOT PROJECTS HAD BROUGHT AN ENDURING BENEFI T IN THE FORM OF RIGHT TO COLLECT THE FARES DURING TH E PERIOD OF THE AGREEMENT. THE SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD VS CIT 225 ITR 802, ALLOWED SPREADING OVER OF LIABILITY OV ER A NUMBER OF YEARS ON THE GROUND THAT THERE WAS A CONTINUING BENEFIT TO THE COMPANY OVER A PERIOD, THEREFORE, ANALOGOUSLY, EXPENDITURE INCURRED ON AN INFRASTRUCTURE PROJECT FOR DEVELOPMENT OF METRO RAI L UNDER BOT AGREEMENT MAY BE TREATED AS HAVING BEEN MADE/INCURRED FOR THE PURPOSE OF BUSINESS OR PROFESSION OF THE ASSESSEE AND SAME MAY BE ALLOWED TO BE SPREAD DURING THE TENURE OF THE CONCESSIONAIR E AGREEMENT IF THE VALUE OF THE FIXED ASSETS WERE TO BE AMORTIZED EVENLY OVER A PERIOD OF 30 YEARS THE AMOU NT TO BE AMORTIZED WOULD BE RS 52,01,60,572/- ONLY FOR EACH YEAR. THEREFORE, BY ALLOWING DEPRECIATION TO T HE ASSESSEE THE ASSESSEE HAS BEEN ALLOWED EXCESSIVE DEDUCTION OF RS 60,28,13,875/-. TO THE EXTENT THE O RDER PASSED BY THE A.O IS FOUND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. 5. IN VIEW OF THE FACTS MENTIONED IN PARA 3 AND PAR A 4 ABOVE, IT IS EVIDENT THAT THE ASSESSMENT HAS BEEN COMPLETED WITHOUT DUE APPLICATION OF MIND AND REQUISITE INQUIRY, WHICH RENDERS IT ERRONEOUS IN SO FAR ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 6 OF 16 AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. AS MENTIONED ABOVE, THE ASSESSMENT ORDER FOR THE A.Y 2011-12 IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF REVENUE TO THE EXTENT OF ALLOWING THE CLAIM OF DEPRECIATION OF RS 112,29,74,447/- TO THE ASSESSEE AS AGAINST ALLOWING AMORTIZATION OF VALUE OF FIXED ASS ETS EVENLY OVER A PERIOD OF 30 YEARS. THEREFORE, THE PROCEEDINGS UNDER SECTION 263 OF INCOME TAX ACT ARE HEREBY INITIATED. 4. THE LD. PR. CIT WAS OF THE OPINION THAT ASSESSEE W AS NOT ELIGIBLE FOR DEPRECIATION ON THE VALUE OF THE F IXED ASSETS FOR A PERIOD OF 30 YEARS, BEING THE CONCESSION PERI OD GRANTED TO THE ASSESSEE BY DMRC, AS LAID DOWN BY THE HONBL E SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LTD VS. CIT REPORTED IN 225 ITR 802 . HE WAS OF THE OPINION THAT THE RATIO LAID DOWN BY HONBLE SC WAS APPLICABLE TO THE FACTS OF ASSESSEE AS ASSESSEE DOES NOT OWN THE PROJECT WHOLLY OR PARTLY, BEING AN ESSENTIAL CONDITION, FOR CLAIMING THE DEPRECIATION ON THE PLANT AND MACHINERY AND THEREFORE DO NOT FALL WITHIN THE CATEGORY OF INTANGIBLE ASSETS SPECIFIED IN SUB CLAUSE (II) OF S UBSECTION (1) OF SECTION 32 OF THE ACT. 5. AGGRIEVED BY THE ORDER PASSED BY LD. PR. CIT, ASSE SSEE IS IN APPEAL BEFORE US NOW. 6. LD. COUNSEL FOR ASSESSEE SUBMITS THAT LD. PR. CIT HAS WRONGLY APPLIED CIRCULAR ISSUED BY CBDT NO. 9/2014 WHICH IS DATED 23.04.2014, BEING SUBSEQUENT TO THE ASSESSMEN T ORDER ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 7 OF 16 PASSED. HE SUBMITTED THAT SINCE THE CIRCULAR ISSUED PREJUDICES THE INTEREST OF THE ASSESSEE AND MANDATES/INSTRUCTS THE ASSESSING OFFICER TO MAKE AN ASSESSMENT IN A PARTICULAR MANNER, THE INSTRUCTION IS BEYOND THE SCOPE AND AMBIT OF THE POWERS CONFERRED ON THE BOARD UNDER SECTION 119 OF THE ACT LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE CASE OF ASSESSEE WAS WHERE ASSES SMENT WAS COMPLETED AT THE TIME OF ISSUANCE OF SHOW CAUSE NOTICE UNDER SECTION 263, AND UNLESS TWO PRECONDITIONS OF THE ASSESSMENT ORDER BEING PREJUDICIAL AS WELL AS ER RONEOUS TO THE INTEREST OF THE REVENUE ARE SATISFIED, LD. PR. CIT DOES NOT HAVE THE JURISDICTION TO INITIATE PROCEEDINGS UNDER SECTION 263 OF THE ACT. 7. ON MERITS LD. COUNSEL FOR ASSESSEE ARGUED THAT ASSESSEE HAD ENTERED INTO A CONCESSION AGREEMENT WI TH DMRC UNDER THE TERMS OF THE AGREEMENT EXPRESSLY MEN TIONED THEREIN, AND HAD CONSTRUCTED AIRPORT METRO EXPRESS PROJECT UNDER BOT SCHEME (BUILD OPERATE AND TRANSFER). HE F URTHER SUBMITTED THAT 30 YEARS CONCESSION WAS GRANTED TO T HE ASSESSEE UNDER THE AGREEMENT TO THE ASSESSEE. THE A SSESSEE HAD CLAIMED DEPRECIATION OF RS. 1,12,29,74,447/- FO R THE YEAR UNDER CONSIDERATION ON THE FIXED ASSETS OF RS. 1,560,48,17,189/- AT THE RATE OF 50% AS THE ASSETS WERE PUT TO USE FOR LESS THAN 180 DAYS, WHICH HAS BEEN RIGHT LY ALLOWED IN THE ASSESSMENT. LD. COUNSEL FOR ASSESSEE SUBMITT ED THAT ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMEN T HAD RAISED ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 8 OF 16 A SPECIFIC QUERY IN THE QUESTIONNAIRE ISSUED UNDER SECTION 142(1) DATED 18.09.2013, WHEREIN HE HAD CALLED FOR THE DETAILS OF ADDITIONS MADE TO THE SALE OF FIXED ASSE TS ALONGWITH COPIES OF BILLS/EVIDENCE OF TRANSACTIONS MORE THAN RS. 1 LAKH AND THE EXACT DATE OF PUTTING THESE ASSETS TO USE F OR BUSINESS PURPOSE. HE SUBMITTED THAT IN LIEU OF QUESTIONNAIRE ISSUED BY THE LD. AO, ASSESSEE FILED DETAILED REPLY DATED 21. 10.2013 WHEREIN COMPLETE DETAILS INCLUDING DETAILS OF ADDIT ION MADE TO THE FIXED ASSETS WITH INFORMATIONS RELATING TO DA TE OF PURCHASE, MORE THAN 180 DAYS, LESS THAN 180 DAYS WE RE SUBMITTED. 8. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSEE H AD AMORTISED THE COST OF THE ASSETS OVER CONCESSION PE RIOD BASED ON THE PROJECTED REVENUE IN THE BOOKS OF ACCOUNTS, TREATING THE SAME AS IN THE NATURE OF INTANGIBLE ASSETS BEIN G BUSINESS OR COMMERCIAL RIGHTS AND IN THE RETURN OF INCOME AS SESSEE HAD CLAIMED DEPRECIATION WITH RESPECT TO THE COST I N TERMS OF SECTION 32 (1) (II) OF THE ACT. IT HAS BEEN SUBMITT ED THAT AS PER THE TERMS OF THE CONCESSION AGREEMENT, ASSESSEE WAS GRANTED PERMISSION TO SET UP, OWN AND OPERATE THE PROJECT A LONG WITH SUBSTANTIAL COMMERCIAL RIGHTS, INCLUDING BUT NOT LI MITED TO THE RIGHT TO COLLECT FARES FROM THE PROJECT. HE SUB MITTED THAT THE PLANT AND MACHINERY INSTALLED WERE PURCHASED BY THE ASSESSEE DURING THE SUBSISTENCE OF THE CONCESSION P ERIOD AND WAS LEGALLY OWNED BY IT. HE THUS, SUBMITTED THAT SI NCE THE ASSETS WERE USED FOR THE PURPOSES OF ASSESSEES BUS INESS, THE ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 9 OF 16 ASSESSEE HAD RIGHTLY CLAIM DEPRECIATION THEREON UND ER SECTION 32 OF THE ACT. 9. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS COMPLETED AND THE DEPRECIATION CLAIM ED BY THE ASSESSEE WAS DULY VERIFIED BY THE ASSESSING OFF ICER ON THE BASIS OF THE DETAILED DOCUMENTS SUBMITTED BEFORE TH E LD. AO. UNDER SUCH CIRCUMSTANCES THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD TAKEN A PO SSIBLE VIEW IN LAW AND HANDS PROCEEDINGS INITIATED UNDER 2 63 OF THE ACT WAS OUTSIDE THE SCOPE OF REVISIONARY JURISDICTI ON. LD. COUNSEL FOR ASSESSEE RELIED UPON THE FOLLOWING DECI SIONS TO SUBSTANTIATE HIS PREPOSITION: MALABAR INDUSTRIAL CO LTD REPORTED IN 243 ITR 83 (S C) CIT VERSUS MAX INDIA LTD REPORTED IN 295 ITR 282 (S C) CIT VERSUS KELVINATOR OF INDIA LTD REPORTED IN 332 ITR 231 (DEL) 10. HE SUBMITTED THAT THE VIEW TAKEN BY THE ASSESSING OFFICER WAS SUBSTANTIATED BY THE LEGAL PRECEDENTS A ND THUS, THE ORIGINAL ASSESSMENT WAS IN CONFORMITY WITH LAW IT AND THEREFORE CANNOT BE HELD TO BE ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF THE REVENUE. 11. ON THE CONTRARY THE LD. DR SUBMITTED THAT THE ASSE SSEE HAD ENTERED INTO AN AGREEMENT WITH DMRC, UNDER BOT SCHEME FOR PURPOSES OF CONSTRUCTION OF THE PROJECT. SHE SUBMITTED THAT THE SCHEME DOES NOT ACTUALLY TRANSFE R THE ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 10 OF 16 OWNERSHIP AND ASSESSEE HAS ONLY THE RIGHT TO DEVELO P AND MAINTAIN THE ASSET. SHE SUBMITTED THAT THE ASSESSEE ENJOYS THE BENEFITS ARISING FROM THE USE OF ASSET THROUGH COLLECTION OF TOOL FOR A SPECIFIED PERIOD WITHOUT HAVING ACTUAL O WNERSHIP OVER SUCH ASSET AND FOR THE PURPOSES OF ALLOWABILIT Y OF DEPRECIATION UNDER SECTION 32 (1) (II) OF THE ACT, THE ASSESSEE CANNOT BE TREATED AS OWNER OF THE PROPERTY EITHER W HOLLY OR PARTIALLY. 12. LD. DR SUBMITTED THAT HONBLE SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INVESTMENT CORPORATION LT D (SUPRA) HAS ALLOWED SPREADING OVER OF THE LIABILITY OVER TH E CONCESSION PERIOD, WHICH ACCOUNTING METHOD HAS BEEN ADOPTED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS. SHE FURTHER SUBM ITTED THAT UNDER SUCH CIRCUMSTANCES THAT EXPENDITURE INCURRED ON THE INFRASTRUCTURE PROJECT UNDER BOT SCHEME MUST BE SPR EAD OVER DURING THE PERIOD OF CONCESSIONAIRE AGREEMENT. SHE PLACED RELIANCE UPON THE DECISION OF BOMBAY HIGH CO URT IN THE CASE OF NORTH KARNATAKA EXPRESS HIGHWAY LTD IN ITA NO. 499/2012, WHEREIN THE HONBLE BOMBAY HIGH COURT HEL D THAT DEPRECIATION IS NOT ALLOWABLE ON TOLL ROAD CONSTRUC TED UNDER BOT SCHEME SINCE THE TOLL ROAD BELONGED TO THE GOVE RNMENT AND THE COMPANY TAXPAYER WAS NOT THE OWNER OF THE S AID ROAD. 13. LD. DR SUBMITTED THAT THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS HAS FAILED TO EXAMINE ABOVE ISSUES AND HAS PASSED A CRYPTIC ORDER WITHOUT PROPER APPLI CATION OF ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 11 OF 16 MIND. SHE THUS SUBMITTED THAT THE ASSESSMENT ORDER PASSED BY LD. AO IS ERRONEOUS IN SOFAR AS PREJUDICIAL TO T HE INTEREST OF THE REVENUE. SHE PLACED RELIANCE UPON THE FOLLOW ING DECISIONS TO SUBSTANTIATE HER PREPOSITION: MALABAR INDUSTRIAL CO LTD VS. CIT REPORTED IN (2000 ) 243 ITR 83 (SC); NABHA INVESTMENTS PVT. LTD. VS. UOI, REPORTED IN (2 000) 246 ITR 41 (DEL) CIT VS. NAGESH KNITWEARS PVT. LTD REPORTED IN (201 2) 345 ITR 135 (DEL) CIT VS. BHAGWAN DAS REPORTED IN (2005) 272 ITR 367 (ALL) PRATAP FOOTWEAR VS. ACIT REPORTED IN (203) SOTA 638 (JUBBALPORE) (TRIB); 14. LD. DR SUBMITTED THAT ASSESSING OFFICER IS BOTH AN INVESTIGATOR AND ADJUDICATOR, HAS TO DECIDE THE ISS UE BY CONDUCTING PROPER INVESTIGATION AND ENQUIRY. SHE SU BMITTED THAT IN THE PRESENT CASE LD. AO HAS FAILED TO INVES TIGATE THE ISSUE OF DEPRECIATION CLAIMED BY THE ASSESSEE AND H AS COMPLETED THE ASSESSMENT ON THE MINIMUM AMOUNT OF EVIDENCE THAT WAS PLACED BEFORE LD. AO. SHE FURTHER SUBMITTED THAT IT IS TO SAFEGUARD THE INTEREST OF T HE REVENUE UNDER SUCH CIRCUMSTANCES THAT THE LD. PR. CIT HAS I NITIATED THE REVISIONARY PROCEEDINGS UNDER SECTION 263. SHE ARGUED THAT THE PROCEEDINGS INITIATED BY THE LD. PR. CIT I S VERY WELL ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 12 OF 16 WITHIN THE AMBIT OF LAW AS THE ASSESSING OFFICER HA S ACCEPTED THE REVISED RETURNED INCOME WITHOUT GOING INTO DETA IL ANY VERIFYING THE CLAIMS MADE BY ASSESSEE. SHE SUBMITTE D THAT NO INJUSTICE WILL BE CAUSED BY UPHOLDING THE ORDER OF LD. PR. CIT, AS IT IS OPEN FOR ASSESSEE TO MAKE SUBMISSIONS BEFO RE THE ASSESSING OFFICER AFRESH AND IN THE EVENT THE CLAIM OF THE ASSESSEE IS FOUND TO BE CORRECT, WILL BE ALLOWED. S HE SUBMITTED THAT AT THIS JUNCTURE IT WOULD BE INCORRE CT TO HOLD THE ORDER PASSED BY LD. PR. CIT AS UNJUSTIFIED BECA USE THE ASSESSMENT ORDER PASSED BY THE LD. AO IS WITHOUT VE RIFICATION OF VARIOUS ISSUES IN ACCORDANCE WITH LAW. SHE PLACE D HER RELIANCE UPON THE FOLLOWING DECISION TO SUBSTANTIAT E THIS PREPOSITION: RAMPYARI DEVI SAROGI VS. CIT REPORTED IN (1968) 67 ITR 84 (SC) TARA DEVI AGRAWAL VS CIT REPORTED IN (1973) 88 ITR 323 (SC) GEE VEE ENTERPRISES VS. ACIT REPORTED IN (1975) 99 ITR 375 (DEL); DG HOUSING PROJECTS LTD REPORTED IN (2012) 343 ITR 329 (DEL) CIT VERSUS GOETZ INDIA LTD REPORTED IN 361 ITR 505 (DEL) 15. SHE THUS, SUBMITTED THAT IT IS NECESSARY THAT THE ASSESSING OFFICER EXAMINES THE FACTUAL MATRIX IN TH E LIGHT OF THE LEGAL PROVISIONS. ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 13 OF 16 16. WE HAVE PERUSED THE RECORDS PLACED BEFORE US IN TH E LIGHT OF THE SUBMISSIONS ADVANCED BY BOTH THE SIDES AND THE JUDICIAL PROCEEDINGS RELIED UPON BY THEM. 17. GROUND NO. 1 THAT ARISES FOR OUR CONSIDERATION IS ABOUT THE EXERCISE OF THE POWERS BY LD. PR. CIT UNDER SEC TION 263 OF THE ACT. AS NOTED ABOVE, THE SUBMISSIONS BY LD. DR HAS BEEN THAT, LD. ASSESSING OFFICER DID NOT CONSIDER T HE ASPECT OF WHETHER THE DEPRECIATION WAS ALLOWABLE TO THE ASSES SEE UNDER THE GIVEN SET OF CIRCUMSTANCES AND THAT IF ALLOWABL E. THIS ARGUMENT PREDICATES ON THE ASSESSMENT ORDER WHICH APPARENTLY DOES NOT GIVE ANY REASON WHILE ALLOWING THE DEPRECIATION CLAIMED BY ASSESSEE. HOWEVER, THAT BY ITSELF WOULD NOT BE INDICATIVE OF THE FACT THAT LD. AO HAD NOT APPLIED HIS MIND ON THE ISSUE. FROM A PLAIN READING OF SECTION 263(1), IT IS CLEAR THAT POWER OF REVISION CAN BE E XERCISED BY LD. PR CIT ONLY IF ON EXAMINATION OF THE RECORDS HE IS OF THE OPINION THAT ANY ORDER PASSED THEREIN IS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE . THE CONSIDERATION OF THE CIT AS TO WHETHER THE ORDER IS ERRONEOUS INS OFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, MUST BE BASED ON THE MATERIALS AVAILABLE ON RECORD. THERE MUST BE SO ME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT, TAX WHICH WA S LAWFULLY EXILIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPL ICATION OF RELEVANT STATUTE ON AN INCORRECT OR INCOMPLETE INTE RPRETATION A LESSER TAX THAT WAS JUST, HAS BEEN IMPOSED. IN TH E PRESENT FACTS OF THE CASE, LD. AO HAD MADE ENQUIRIES REGARD ING THE ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 14 OF 16 ADDITIONS THAT HAS BEEN MADE TO THE FIXED ASSETS AN D THE ASSESSEE HAD GIVEN DETAILS INCLUDING THE BILLS OF P URCHASE OF THE PLANT AND MACHINERY IN THAT REGARD. ALL THESE A RE PART OF THE RECORD OF THE CASE. ASSESSMENT ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME TAX OFFICER ACTING IN ACCORDANCE WITH LAW MA KES AN ASSESSMENT AND TAKES A PLAUSIBLE VIEW, THE SAME CAN NOT BE BRANDED AS ERRONEOUS BY LD. PR CIT, SIMPLY BECAUSE ACCORDING TO HIM ORDER SHOULD HAVE BEEN WRITTEN MOR E ELABORATELY. IN CASE WHERE THERE IS INADEQUATE ENQU IRY BUT NO LACK OF ENQUIRY, LD. PR CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/ENQUIRY MADE AS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY LD. PR CIT HIMSELF, AND HE IS ABLE TO ESTABLISH AND SHOW THE E RROR OR MISTAKE MADE BY LD. AO MAKING THE ASSESSMENT ORDER UNSUSTAINABLE IN LAW AND SUCH FINDINGS MUST BE CLEA R, UNAMBIGUOUS AND NOT DEBATABLE. 18. IN THE FACTS OF THE PRESENT CASE, LD. PR. CIT HAS NOT BEEN ABLE TO SUCCESSFULLY ESTABLISH THROUGH HIS ENQ UIRY THAT THE ORDER PASSED BY LD. AO IS UNSUSTAINABLE IN LAW. MOREOVER THE VIEW TAKEN BY LD. AO IS A PLAUSIBLE VIEW, WHICH IS SUPPORTED BY VARIOUS JUDICIAL PRECEDENTS. THE ASSES SMENT ORDER PASSED CANNOT BE CALLED TO BE ERRONEOUS THOUG H MAY BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. AS BOTH THE INGREDIENTS DOES NOT STAND FULFILLED OF BEING ERRON EOUS, AS WELL ITA NO. 2813/DEL/2016 (AY 20011-12) PAGE 15 OF 16 AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE ORDER PASSED BY LD. PR. CIT IS HEREBY QUASH AND SET-ASIDE. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JANUARY, 2017. SD/- SD/- (L. P.SAHU) (BEENA A. PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 12.01.2017 @M!T COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI)