Muni Rai, V. ACIT,

ITA 29/PAT/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1026 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ARCHANA PRASAD JR S C
• Assessee Lawyers: S C SANNIGRAHI
• Keywords: Unexplained cash credit; Unexplained investment; Business income; Depreciation; Source of fund; Cost of acquisition
• Section: 68; 145; 6; 263; 144; 2

Judgement Text

, PATNA IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA . . , , BEFORE SHRI A.D. JAIN (JM) AND SHRI SANJAY ARORA (AM) ./ I.T.A. NO S . 29 & 30/PAT/2012 ( / ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 ) MUNI RAI, 68, CHANAKYAPURI, RA J A BAZAR, PATNA - 14 / VS. ACIT , CIRCLE - 5, PATNA ./ ./ PAN/GIR NO. ( / APPELLANT ) : ( / RESPON DENT ) / APPELLANT BY : SHRI S. C. SANNIGRAHI, FCA / RESPONDENT BY : SMT. ARCHANA PRASAD, J R.S.C. / DATE OF HEARING : 23 .0 4 . 2015 / DATE OF PRONOUNCEMENT : 28 .05.2015 / O R D E R PER SANJAY ARORA, AM: THIS IS A SET OF TWO APPEALS ARISING OUT OF SEPARATE ORDERS U/S.263 OF INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) BY THE COMMISSIONER OF INCOME TAX - II, PATNA (CIT FOR SHORT) , I.E., OF EVEN DATE , 26.12.2011, FOR TWO CONSECUTIVE Y EARS, BEING ASSESSMENT YEAR S (A.Y.) 2008 - 09 AND 2009 - 10. THE APPEALS RAISING A COMMON ISSUE , PER THE SOLE EFFECTIVE GROUND NO S . 1 AND 2 IN BOTH THE APPEALS, AS UNDER, THE SAME W ERE TAKEN UP TOGETHER FOR HEARING , AND ARE ACCORDINGLY BEING DISPOSED OF PER A COMMON , CONSOLIDATED ORDER: 1. FOR THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER U/S.263 IS BAD IN LAW & FACTS. 2. FOR THAT, ON THE FACTS AND CIRCUMSTA N CES OF THE CASE, THE LEARNED COMMISSIONER FAILED TO APPRECIATE THAT THE BOOKS OF ACCOUNT S ARE REJECTED 2 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT BY THE LEARNED ASSESSING OFFICER U/S. 145 CONSIDERING THE SAME IS UNRELIABLE AND ESTIMATE THE PROFIT @ 7% (*) . THEREFORE, THE ACTION TAKEN U/S. 263 FOR DECIDING THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IS TOTALLY ARB ITRARY AND BASED ON SURMISES & CONJECTURE ONLY. HENCE, THE ORDER IS LIABLE TO BE CANCELLED. [(*) 8% , FOR A.Y. 2009 - 10] 2. THE ONLY ISSUE ; THE ASSESSEE NOT PRESSING ITS GD. 3 FOR A.Y. 2008 - 09 DURING HEARING, IS TOWARD THE NON - MAINTAINAB ILITY OF THE ASSUMPTION OF JURISDICTION U/S.263 IN - AS - MUCH AS THE ASSESSING OFFICER (A.O.) HAD, WHILE FRAMING THE IMPUGNED ASSESSMENT /S , CORRECTLY NOT MADE ANY ADDITION WITH REGARD TO UNEXPLAINED SUNDRY CREDITORS/UNSECURED LOANS, AS HE HAD, REJECTING THE A SSESSEES BOOKS OF ACCOUNT, ESTIMATED ITS ASSESSEES INCOME INVOKING SECTION 145(3) OF THE ACT. HOW COULD HE , THEN, FALL BACK ON THE SAME ACCOUNTS TO MAKE AN ADDITION U/S.68 OF THE ACT , THE LD. AR, THE ASSESSEES COUNSEL, WOULD ASSEVERATE . EXPLAINING THE A SSESSEES CASE, IT WAS SUBMITTED BY THE LD. AUTHORIZED REPRESENTATIVE (AR), THAT THE ASSESSEE IS A CONTRACTOR, WHO CARRIED HIS ASSESSMENT FOR A.Y. 2008 - 09 IN APPEAL. NO ISSUE WITH REGARD TO THE CREDITS IMPUGNED U/S. 68, OR ANY OTHER, SAVE THAT OF ESTIMATIO N OF INCOME, WAS TAKEN UP IN APPEAL BY THE ASSESSEE CONTESTING ITS ASSESSMENT FOR THAT YEAR BEFORE THE FIRST APPELLATE AUTHORITY, A ND WHO VIDE HIS ORDER DATED 21.1 1.2011 (COPY ON RECORD), HOWEVER, REDUCED THE ESTIMATION OF INCOME TO 5%, I.E., FROM 7% BY TH E A.O. THE PROFIT FOR THE FOLLOWING YEAR (A.Y. 2009 - 10) WAS SIMILARLY ASSESSED AT 8%, REJECTING THE ASSESSEES BOOKS AND DISTURBING THE DISCLOSED PROFIT ( AT 5.89% OF SALES). THE TRIBUNAL IN THE CASE OF AJAY KUMAR SINGH (IN ITA NOS. 546 & 559/PAT/2007 & CO NO. 74/PAT/2007 DATED 16.05.2008/COPY ON RECORD), RELYING ON THE DECISIONS IN THE CASE OF INDORE MALWA UNITED MILLS VS. STATE OF M. P. [1966] 60 ITR 41 (SC) AND CIT VS. AGGARWAL ENGINEERING CO. [2008] 302 ITR 246 (P & H), DELETED THE ADDITION UNDER SAME CI RCUMSTANCES. THIS REPRESENTS AND SETS UP THE ASSESSEES CASE. THE REVENUE, ON THE OTHER HAND, CLAIMS THAT THERE IS NOTHING IN LAW THAT WOULD OBVIATE THE APPLICATION OF SECTION 68 IN A CASE WHERE SECTION 145(3) IS INVOKED AND ASSESSMENT COMPLETED BY ESTIMAT ING THE INCOME OF THE ASSESSEES (PARTICULAR) BUSINESS AFTER REJECTING HIS BOOKS OF ACCOUNT FOR THAT SOURCE OF INCOME. 3 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. 3.1 THE PARTIES BEFORE US PROCEEDED ON THE BASIS THAT THE ISSUE IS R ES INTEGRA . HOWEVER, EVEN AS OBSERVED BY THE BENCH DURING HEARING, THE ISSUE STANDS SETTLED BY THE DECISION BY THE APEX COURT IN CIT VS. DEVI PRASAD VISHWANATH PRASAD [1969] 72 ITR 194 (SC) AND CIT VS. MANICK SONS [1979] 74 ITR 1(SC), WITH THE HELD PORTI ON OF THE SAID DECISIONS BEING REFERRED TO AND READ OUT DURING THE HEARING. THE APEX COURT IN DEVI PRASAD VISHWANATH PRASAD (SUPRA), UPON THIS ISSUE BEING RAISED IN APPEAL, CLARIFIED THAT THERE IS NOTHING IN LAW SO AS TO PREVENT TAXING BOTH, THE CASH CREDI T, THE NATURE AND SOURCE OF WHICH IS NOT SATISFACTORILY EXPLAINED, AND THE BUSINESS INCOME ESTIMATED U/S.13 OF THE INDIAN INCOME TAX ACT, 1922 (CORRESPONDING TO SECTION 145 R/W SECTION 144 OF THE INCOME TAX ACT, 1961), UPON REJECTING THE BOOKS OF ACCOUNT O F THE ASSESSEE AS UNRELIABLE. FURTHER, WHERE THERE IS AN UNEXPLAINED CREDIT, IT IS OPEN TO THE INCOME TAX OFFICER TO HOLD THAT IT IS THE INCOME OF THE ASSESSEE, AND NO FURTHER BURDEN LIES ON HIM TO SAY THAT THE INCOME IS FROM ANY PARTICULAR SOURCE. IT IS F OR THE ASSESSEE TO PROVE THAT, EVEN IF THE CASH CREDIT REPRESENTS HIS INCOME, IT IS INCOME FROM A SOURCE WHICH HAS ALREADY BEEN TAXED. THE ASSESSEES CASE IS, THUS, LEGALLY WITHOUT MERIT. THE ARGUMENT AS ADVANCED IS NOT FACTUALLY TENABLE AS WELL. WE MAY CL ARIFY THIS BY WAY OF AN EXAMPLE. THE ASSESSEES BOOKS OF ACCOUNT DISCLOSE AN INCOME OF RS.10 (SAY) ON A TURNOVER OF RS.100 (SAY), I.E., DISCLOSE A PROFIT RATE OF 10%. THE A.O. ESTIMATES THE SAME AT 15% (SAY). THE ASSESSEES BOOKS, THUS, EXHIBIT A TOTAL EXP ENDITURE OF RS.90/ - , I.E., EITHER AGAINST THE GOODS CONSUMED OR SERVICES AVAILED QUA THE REPORTED TURNOVER. TO THE EXTENT UNPAID, A LIABILITY IN ITS RESPECT , BEING UNDISCHARGED AS AT THE YEAR - END, WOULD FIND REFLECTION IN THE ASSESSEES BOOKS AS SUNDRY CRE DITORS . THAT IS, WOULD ARISE QUA THE EXPENDITURE CLAIMED (RS.90/ - ), WHICH STANDS EXCLUDED IN COMPUTING THE INCOME OF RS.10/ - . T HE LIABILITY (RS.90/ - ) AND PROFIT (RS.10/ - ) COMPONENTS ARE THUS MUTUALLY EXCLUSIVE AND DISTINCT. TO SAY, THEREFORE, THAT NO UNPRO VED LIABILITY COULD BE CONSIDERED AS INCOME UNDER THE CIRCUMSTANCE OF THE BOOK RESULTS BEING IGNORED AND INCOME, CONSEQUENTLY, ESTIMATED, IS MISCONCEIVED. WHEN IT IS SAID THAT THE BOOKS OF ACCOUNT ARE REJECTED, IT ONLY IMPLIES 4 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT THEIR BEING FOUND AS NOT RELI ABLE FOR THE PURPOSE OF DETERMINATION OF INCOME OF THE RELEVANT BUSINESS/PROFESSION. THAT DOES NOT AND COULD NOT POSSIBLY MEAN THAT THE BOOKS ARE TO BE DISCARDED FOR THE PURPOSE S OF THE ACT. WHY, THE TURNOVER ADOPTED ITSELF MAY BE AS REFLECTED IN THE SAID BOOKS. IN A GIVEN CASE, THE ASSESSEE MAY WELL SEEK TO EXPLAIN AN INVESTMENT (OR OTHER VALUABLES) FOUND IN HIS POSSESSION ON THE BASIS OF THE DRAWINGS REFLECTED IN HIS BOOKS, WHICH MAY HAVE OTHERWISE BEEN FOUND AS NOT YIELDING CORRECT INCOME AND, ACCORDINGL Y, REJECTED. HOWEVER, THE WITHDRAWALS (SAY) AND, THUS, THE CAPITAL REFLECTED IN SUCH ACCOUNTS CAN SURELY FORM A BASIS OF THE EXPLANATION AS TO THE SOURCE OF SUCH INVESTMENT. TRUE, THE A.O. HAVING NOT ACCEPTED THE BOOK RESULTS, THE ASSESSEES CLAIM FOR EXPE NDITURE AT RS.90/ - , COMING BACK TO OUR EXAMPLE, STANDS IN EFFECT ACCEPTED AT A MODIFIED FIGURE OF RS.85/ - , I.E., BY ESTIMATING THE PROFIT AT RS.15/ - . THERE IS, THUS, WITHOUT DOUBT AN EXCLUSION OF LIABILITY, AS REFLECTED IN THE ASSESSEES ACCOUNTS, TO THE E XTENT OF THE DIFFERENCE OF RS.5/ - . THAT IS, IT IS POSSIBLE TO BE ARGUED THAT THE LIABILITY AS REFLECTED IN ACCOUNTS, WHERE IN RESPECT OF EXPENDITURE INCURRED FOR THE YEAR, TO THE EXTENT OF RS.5/ - , COULD NOT BE IMPUGNED AS INVALID IN - AS - MUCH AS THE SAME F OLLOWS THE NON ACCEPTANCE OF THE CORRESPONDING EXPENDITURE TO THAT EXTENT. THE MATTER, WE MAY THOUGH CLARIFY , IS PURELY FACTUAL. IN A GIVEN CASE, THE INCOME UNDISCLOSED OR DEPRESSED MAY NOT BE BY WAY OF INFLATION OF EXPENSES BUT BY WAY OF SUPPRESSION OF IN COME, WHICH CAN FURTHER ASSUME EITHER THE FORM OF SUPPRESSION IN THE SALE RATE OR OF THE SUPPLIES BEING NOT BOOKED IN WHOLE. THIS ALSO EXPLAINS OUR REFERENCE TO MANICK SONS (SUPRA), WHEREIN THE HONBE APEX COURT CLARIFIED THAT AN ADDITION ON ACCOUNT OF AN INTANGIBLE, AS WHERE THE INCOME IS ESTIMATED AT A SUM HIGHER THAN THAT REFLECTED IN THE ASSESSEES ACCOUNTS, COULD WELL FORM THE BASIS OF ITS ADJUSTMENT OR TELESCOPING AGAINST A TANGIBLE ADDITION, VIZ. QUA UNPROVED CREDITS/ INVESTMENT. WHY, BY CIRCUMSTANTI AL OR OTHER CORROBORATING EVIDENCES, CASE COULD BE MADE OUT FOR TELESCOPING OF UNEXPLAINED CREDITS WITH UNEXPLAINED INVESTMENTS/ASSETS IN A GIVEN CASE? THE PRINCIPLE OF TELESCOPING HAS BEEN FURTHER ELUCIDATED BY THE APEX COURT IN ANANTHARAM VEERASINGHAIAH & CO. VS. CIT [1980] 123 ITR 457 (SC), RESTING ON THE PREMISE THAT THE INCOME THAT HAS SUFFERED TAX IS, AFTER ALL, ONLY REAL INCOME. ITS MANIFESTATION IN DIFFERENT FORMS, THEREFORE, HAS TO BE GIVEN DUE REGARD AND, CIRCUMSTANCES 5 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT ADMITTING, ALLOWED CREDIT FO R. THE ONUS TO ESTABLISH THE EXISTENCE OF SUCH CIRCUMSTANCES THOUGH WOULD ALWAYS BE ON THE ASSESSEE. IT IS, THUS, WHOLLY INCORRECT IN LAW TO SAY THAT THERE COULD BE NO INVOCATION OF SECTION 68 WHERE THE INCOME IS DETERMINED U/S. 145(3) R/W SECTION 144. THE MATTER STANDS ALSO DISCUSSED AT SOME LENGTH BY THE TRIBUNAL IN THE CASE OF SAI CONSTRUCTION VS. ITO [2009] 31 DTR 33 (CTK) , AGAIN, WITH REFERENCE TO THE TWO DECISIONS BY THE APEX COURT CITED SUPRA. NO GROUND FOR ASSAILING SECTION 263 ON THIS SCORE, THUS, OBTAINS. THE ARGUMENT OF THE A.O. S VIEW BEING A POSSIBLE VIEW ALSO WOULD NOT SURVIVE IN VIEW OF THE SETTLED LAW. THE DECISIONS CITED BEFORE THE TRIBUNAL, AND WHICH MOVED IT , WOULD BE ALSO IN VIEW THEREOF BE OF NO AVAIL. IN FACT, THE DECISION BY THE APEX COURT IN INDORE MALWA UNITED MILLS (SUPRA) IS ON ANOTHER ISSUE; THE HONBLE COURT THEREIN O NLY EXHORTING FOR CONSIDERATION OF ALL THE RELEVANT MATERIALS BY THE ASSESSING AUTHORITY , WHILE THE DECISION IN AGGARWAL ENGINEERING CO. (SUPRA) IS RENDERED WITHOUT CONSIDERING A ND DE HORS THE BINDING JUDICIAL PRECEDENTS BY THE APEX COURT CITED SUPRA . 3. 2 COMING TO THE FACTS OF THE CASE, THE ASSESSMENT ORDER/S HAS BEEN CONSIDERED AS ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE , BY THE LD . CIT ON THE GROUND OF ABSENCE OF PROPER ENQUIRY ON THE FOLLOWING ASPECTS OF THE ASSESSMENT : A.Y. 2008 - 09 A) NON - VERIFICATION OF S UNDRY CREDITORS: RS.1,19,29,237/ - B) NON - VERIFICATION OF UNSECURED LOAN/S: RS.2,27,000/ - NO VERIFICATION HAD BEEN UND ERTAKEN BY THE A.O. DESPITE THE FACT THAT THE BALANCE O F ONE CREDITOR, M/S. KRISHNA HARDWARE, KATIHAR (OUTSTANDING AT RS.50.46 LACS AS AT 31.03.2008), CONTINUES TO REMAIN UNPAID, SAVE TO THE EXTENT OF RS.10 LACS, EVEN UP TO 26.07.2010, I.E., 2 YEARS AFTER THE END OF THE RELEVANT FINANCIAL YEAR. THE A.O. HAD TAKEN THE CONFIRMATIONS FROM THE CREDITORS AT FACE VALUE, WITHOUT ENQUIRING INTO THE REASONS AS TO WHY THE BALANCES CONTINUE TO OBTAIN EVEN MUCH AFTER THE END OF THE RELEVANT YEAR, I.E., CONSIDERING THA T A NORMAL TRANSACTION W OULD GET CONCLUDED MUCH EARLIER, WITHIN A PERIOD 6 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT OF FEW DAYS OR AT BEST A COUPLE OF MONTH S AFTER THE TRANSACTION. SIMILARLY, SMT. RAMBA RAI, WIFE OF LT. SHRI HARENDRA RAI, I S STATED OF HAVING GIVEN A LOAN (UNSECURED) OF RS.2,27,000/ - TO THE ASSESSEE , WHICH OUTSTANDS AS ON 31.03.2008. THE SAME, HOWEVER, DOES NOT FIND REFLECTION IN THE ASSESSEES BALANCE SHEET AS AT THAT DATE, WHILE THOSE THAT D O (FROM FIVE PARTIES) ARE VERY OLD , SO THAT THE A.O. HAD FAILED TO, AND WHICH HE WAS DUTY BO UND TO, CARR Y VERIFICATION AS TO THE GENUINENESS OF THOSE LIABILITIES. A FAILURE TO MAKE PROPER ENQUIRY, CALLED FOR UNDER THE CIRCUMSTANCES, RENDERS A N ORDER PER SE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, RELYING ON THE DECISIONS IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT [ 2000 ] 243 ITR 83 (SC); CIT VS. DEEPAK KUMAR GARG [ 2008 ] 299 ITR 435 (MP); AND JAI MICA SUPPLY CO. LTD. VS. A SST. CIT [2003] 86 IT D 93 (KOLKATA) (TM) , HE SET ASIDE THE IMPUGNED ASSESSMENT TO THAT EXTENT , DIRECTIN G FOR EXAMINATION OF THE MATTER AND ADJUDICATION IN ACCORDANCE WITH THE LAW IN LIGHT OF HIS OBSERVATIONS. A.Y. 2009 - 10 3. 3 THE ASPECTS OF ASSESSMENT FOUND DEFICIENT FOR LACK OF INQUIRY BY THE LD. CIT ARE: A) N ON INCLUSION OF THE INCOME ARISING BY WAY OF MISCELLANEOUS SALES ( RS.70,000/ - ) AND ROYALTY ( RS.2,45,249/ - ) . B) NON - VERIFICATION OF U NSECURED LOAN/S : RS.2,27,000/ - O UR OBSERVATION S SHALL APPLY EQUALLY TO THE ISSUES ARISING, ALBEIT UNADDRESSED , FOR THIS YEAR AS WELL. IN THIS REGARD, THE ASPECTS STATED AT PARA 3.2 (A) ABOVE WOULD REQUIRE SOME CLARIFICATION. THE REJECTION OF THE ASSESSEES ACCOUNTS DOES NOT IMPLY DISCARDING ALL AND EVERY INFORMATION THEREIN OR CONTENTS THEREOF. WE HAVE ALREADY CLARIFIED , ON THE B ASIS OF THE DECISIONS BY THE APEX COURT , THAT ESTIMATION OF PROFIT UPON REJECTION OF THE BOOK RESULTS WOULD NOT PRECLUDE ADDITION IN RESPECT OF UNEXPLAINED CREDIT/S APPEARING IN THOSE ACCOUNTS, THOUGH THERE COULD BE REASONS FOR TELESCOPING THE TWO ADDITION S. SIMILARLY, THE HONBLE HIGH COURT IN SHYAM BIHARI VS. CIT [2012] 345 ITR 283 (PAT) HAS CLARIFIED FOR ALLOWANCE OF DEPRECIATION SEPARATELY. TRUE, THE SAME IS A STATUTORY ALLOWANCE, SUBJECT TO BEING ALLOWED EVEN WHERE NO CHARGE IN ITS RESPECT STAND S BOOKE D IN ACCOUNTS. HOWEVER, THE COST OF ACQUISITION OR IMPROVEMENT OF THE RELEVANT ASSETS AND , IN TURN , THE WDV OF THE 7 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT RELEVANT BLOCK OF ASSETS, WOULD ONLY BE IN TERMS OF THE BOOKS OF ACCOUNT. WHY, PROFIT, B E IT TRADING OR NET , IS ESTIMATED NORMALLY ON THE BAS IS OF SALES AS REFLECTED THEREIN. WE CAN MULTIPLY EXAMPLES; THE WHOLE PREMISE BEING OF THE ASSESSMENT OF INCOME BEING ON A REASONABLE AND OBJECTIVE BASIS, TAK I N G INTO ACCOUNT ALL THE RELEVANT INFORMATION. THE ROYALTY INCOME AND MISCELLANEOUS SALES HAVE NOT HING TO DO WITH THE CONTRACT RECEIPT, INCOME FROM WHICH ACTIVITY IS ESTIMATED IN THE MAIN , NOR ANY RELATIONSHIP THEREWITH STANDS SHOWN . THE TWO REPRESENT SOURCES OF INCOME SEPARATE AND DISTINCT FROM THE CONSTRUCTION BUSINESS AND, ACCORDINGLY, THERE IS NO G AINSAYING THAT THE SAME WOULD ALSO STANDS TO BE ASSESSED. NO ENQUIRY IN THE MATTER HAVING BEEN MADE, THE ASSESSMENT ORDER RESULTANTLY SUFFERS FROM LACK OF ENQUIRY AND DUE APPLICATION OF MIND. THE LD. CIT , ACCORDINGLY, RELYING ON THE DECISIONS IN THE CASE O F M ABAR INDUSTRIAL CO. LTD. ( SUPRA) ; DEEPAK KUMAR GARG ( SUPRA ); AND JAI MICA SUPPLY CO. LTD. ( SUPRA ), SET ASIDE THE IMPUGNED ASSESSMENT TO THAT EXTENT , DIRECTING FOR EXAMINATION OF THE MATTERS AND ADJUDICATION IN ACCORDANCE WITH THE LAW IN LIGHT OF HIS OBS ERVATIONS. IT IS TRITE LAW THAT LACK OF ENQUIRY , WHERE AND TO THE EXTENT DUE UNDER THE CIRCUMSTANCES , I S A MANIFESTATION OF ABSENCE OF APPLICATION OF MIND , AND RENDERS THE RESULTING ORDER ERRONEOUS TO THE EXTENT IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE . CASE LAW IN THE MATTER IS LEGION, WITH THE LD. CIT ALSO RELYING ON CELEBRATED DECISION BY THE APEX COURT . FURTHER, OUR OBSERVATION S WITH REGARD TO THE SECOND ASPECT (AT PARA (B) ABOVE), WHICH IS THE SAME AS FOR THE EARLIER YEAR , WOULD OBTAIN FOR THI S YEAR AS WELL, AND SO WOULD , THEREFORE, OUR DECISION, SO THAT IN EFFECT THE DECISION OF THE LD. CIT STANDS UPHELD FOR BOTH THE ASPECTS OF ASSESSMENT FOR BOTH THE YEARS. WE DECIDE ACCORDINGLY. 3.4 WE, ACCORDINGLY, UPHOLD THE INVOCATION OF SECTION 263 IN THE INSTANT CASE. THE MATTER SHALL, ACCORDINGLY, GO BACK TO THE FILE OF THE A.O. TO ALLOW THE ASSESSEE AN OPPORTUNITY TO ESTABLISH ITS CASE FOR TELESCOPING, AND WHICH SHALL BE DECIDED BY HIM PER A SPEAKING ORDER. THE DIRECTIONS BY THE LD. CIT WOULD STAND M ODIFIED TO THIS EXTENT, I.E., WHERE AND TO THE EXTENT THE SAME ARE INCONSISTENT THEREWITH. WE DECIDE ACCORDINGLY. 8 ITA NO S . 29 & 30/PAT/2012 (A.YS. 20 08 - 09 & 20 09 - 10) MUNI RAI VS. ACIT 4. IN THE RESULT, THE ASSESSEES APPEALS ARE DIS MISSED . ORDER PRONOUNCED BY LISTING THE RESULT ON THE NOTICE BOARD OF THE BENCH UNDER RULE 34(4) OF THE APPELLATE TRIBUNAL RULES, 1963. SD/ - SD/ - ( A. D. JAIN ) (S ANJAY ARORA) / J UDICIAL ME MBER / A CCOUNTANT MEMBER DATED : 28 . 0 5 .201 5 . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - PATNA 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , ITAT, PATNA