ICICI HOME FINANCE COMPANY LTD, MUMBAI V. CIT 10, MUMBAI

ITA 2912/MUM/2012

• Counselvise Citation: 291219914 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 29-12-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 30-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS DR
• Assessee Lawyers: AARTI VISSANJI
• Section: 263; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL I BE NCH, MUMBAI BEFORE SHRI R.C. SHARMA, AM AND SHRI VIJAY PAL RA O, JM I.T.A. NO.2912/MUM/2012 ( ASSESSMENT YEAR : 2007-08) ICICI HOME FINANCE COMPANY LTD. ICICI BANK TOWERS BANDRA-KURLA COMPLEX, BANDRA (EAST) MUMBAI-400 051. VS. CIT - 10 ROOM NO.574, 5 TH FLOOR, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. PAN/GIR NO. : AAACI 6285 N ( ! APPELLANT ) .. ( '#! RESPONDENT ) !$ APPELLANT BY : MS. AARTI VISSANJI '#!%$ / RESPONDENT BY : SHRI KISHAN VYAS - (DR) &' %( DATE OF HEARING : 29/12/2014 )*+, % ( / DATE OF PRONOUNCEMENT : 21/01/2015 O R D E R PER -./01203405 67 : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE REVISION ORDER DATED 07/03/2012 OF CIT PASSED UNDER SECTION 263 OF THE I NCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS :- (1) BEING AGGRIEVED BY THE ORDER BEARING NO. CIT-10/263 /AY 2007-08 DATED MARCH 07, 2012 ISSUED BY THE COMMISSIONER OF INCOME -TAX - 10, MUMBAI (HEREINAFTER CALLED THE CIT) UNDER SECTION 263 OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) AND COMMUNICATED TO TH E APPELLANT ON MARCH 21, 2012, THE APPELLANT APPEALS AGAINST AND ON THE FOLLOWING AMONGST OTHER GROUNDS WHICH ARE WITHOUT PREJUDICE TO EACH OTHER. (A) RE: SETTING ASIDE OF ORDER UNDER SECTION 263 OF THE ACT 2 ITA NO.2912/M/12 (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT ERRED IN PASSING AN ORDER UNDER SECTION 263 WITHOUT GIVING T HE APPELLANT AN OPPORTUNITY OF A PERSONAL HEARING ON THE GROUND THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT IS ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. (3) THE CIT OUGHT TO HAVE APPRECIATED THAT PROVISIO NS OF SECTION 263 CAN ONLY BE INVOKED IF THE ORDER OF THE ASSESSING O FFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND THE FULFILLMENT OF BOTH THE CONDITIONS IS AN ESSENTIAL PREREQUISITE WHICH IN TH E APPELLANT'S CASE ARE NOT SATISFIED. (4) THE CIT FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAS INTERPRETED THE APPLICABLE PROVISIONS OF THE ACT AN D ALSO EXAMINED / EVALUATED THE ACCOUNTING PRACTICE ADOPTED BY THE APPELLANT TO WARDS ACCOUNTING OF PROVISION OF SUNDRY EXPENSES DISCLOSED DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) AND HENCE THE ORDER ISSUED UNDER SEC TION 143(3) IS IN ACCORDANCE WITH THE PROVISIONS OF THE LAW AND IS NO T ERRONEOUS AS IT DOES NOT DEVIATE FROM THE LAW. THE ORDER OF THE CIT THUS NOT BEING BONAFIDE OUGHT TO BE SET ASIDE. (B) RE: PROVISION FOR SUNDRY EXPENSES FOR RS.5,72,4 7,576 (5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE CIT FAILED TO EVALUATE AND EXAMINE THE FACTS DISCLOSED BY THE APPELLANT AND ALSO FAILED TO ACKNOWLEDGE THE EVIDENCES / SUPPORTI NG IN SUPPORT OF THE SUBMISSIONS FILED BY THE APPELLANT DURING THE PROCE EDINGS UNDER SECTION 263 OF THE ACT BEFORE THE CIT. (6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT FAILED TO APPRECIATE THAT THE ASSESSING OFFICER HAD MADE T HE NECESSARY ENQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AND DID NOT ACCORDINGLY DISALLOW PROVISION FOR SUNDRY EXPENSES AMOUNTING TO RS.5,72,47,576. (7) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT ERRED IN DIRECTING THE ASSESSING OFFICER TO REFRAME THE ASSE SSMENT TO EXAMINE THE PROVISION FOR SUNDRY EXPENSES FOR RS.5,72,47,576 WI THOUT CONSIDERING THE APPELLANT'S SUBMISSION THAT PROVISION TOWARDS BUSIN ESS MEETING EXPENSES AMOUNTING TO RS.31,70,573 WERE REVERSED BY THE APPE LLANT AS A GENERAL PRACTICE BASED ON ACCRUAL / MERCANTILE CONCEPT OF A CCOUNTING REGULARLY FOLLOWED BY THE APPELLANT SINCE INCEPTION AND THE B ALANCE PROVISION FOR SUNDRY EXPENSES AMOUNTING TO RS.5,40,77,000 WAS AGA INST ACTUAL EXPENSES INCURRED DURING THE FINANCIAL YEAR 2006-07 WHERE TH E APPELLANT TRANSFERRED THE NECESSARY PROVISION FOR SUNDRY EXPE NSES AMOUNT TO THE RESPECTIVE VENDOR'S ACCOUNT IN ACCORDANCE WITH THE DOUBLE ENTRY SYSTEM OF ACCOUNTING AS PER INDIAN GAAP. THE CIT FAILED TO RE CORD AN EXPRESS FINDING OF ERROR AND PREJUDICE TO THE INTEREST OF THE REVENUE. (C) GENERAL : (8) THE APPELLANT CRAVES LEAVE AND RESERVES ITS RIGHTS TO VARY, AMEND, ALTER AND/OR ADD TO THE GROUNDS OF APPEAL AND TO PRODUCE SUCH ORAL AND DOCUMENTARY EVIDENCE AND FILE SUCH COMPILATION OF D OCUMENTS AS MAY BE NECESSARY AT THE TIME OF HEARING OF THE APPEAL. 3 ITA NO.2912/M/12 2. ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECT ION 143(3) ON 22/12/2009 WHEREBY THE TOTAL INCOME OF THE ASSESSEE WAS COMPUT ED AT RS.31,01,33,700/-. SUBSEQUENTLY, THE COMMISSIONER ON PERUSAL OF THE AS SESSMENT RECORD FOUND THAT THE ASSESSEE COMPANY HAS DEBITED VARIOUS PROVISIONS FOR EXPENSES WHICH WERE NOT ADDED BACK IN THE COMPUTATION OF INCOME. THE AO ALLOWED T HE EXPENSES WITHOUT PROPER EXAMINATION ON THE ALLOWABILITY OF THE SAME. ACCORD INGLY, THE COMMISSIONER PROPOSED TO REVISE THE ORDER OF THE AO BY INVOKING THE PROVISIO N OF SECTION 263 OF THE INCOME TAX ACT BY ISSUING SHOW CAUSE NOTICE UNDER SECTION 263 DATED 28/02/2011. IN RESPONSE TO SHOW CAUSE NOTICE THE ASSESSEE FILED ITS REPLY VIDE LETTER DATED 15/02/2012 AND SUBMITTED THAT THE EXPENSES INCURRED UNDER THE HEAD PROVISION OF SUNDRY EXPENSES AS POINTED OUT BY THE COMMISSIONER WERE ACTUALLY INCUR RED AND PAID BY THE ASSESSEE DURING THE YEAR. THEREFORE, THE PROVISION REPRESENT ED THE AMOUNT PAYABLE TOWARDS SERVICES RENDERED BY VENDORS/ SERVICE PROVIDERS ET C. BASED ON ACTUAL PAYOUTS MADE IN PREVIOUS MONTHS AT VARIOUS COST CENTRES/BRANCHES/ L OCATION PAN INDIA. THE PROVISION WAS BASED ON ACTUAL EXPENSES INCURRED IN THE PREVIO US MONTH AND WAS REQUIRED TO BE CREATED IN ACCORDANCE WITH THE ACCOUNTING PRACTICE REGULARLY FOLLOWED BY THE COMPANY AS PER GUIDELINES SPECIFIED IN THE ACCOUNTING STAN DARDS-29 IN ICAI. THE ASSESSEE CLARIFIED THAT THE PROVISIONS CREATED WERE NOT TOWA RDS AN UNASCERTAINED LIABILITY POLICY BUT WAS BASED ON RATIONAL GROUND AND ACTUAL EXPENSE S INCURRED DURING THE PREVIOUS MONTH . THE COMMISSIONER HAS OBSERVED THAT THIS ISS UE HAS NOT BEEN EXAMINED BY AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ACC ORDINGLY THE ASSESSMENT ORDER PASSED UNDER SECTION 22/12/2009 IS ERRONEOUS AND PR EJUDICIAL TO THE INTERESTS OF THE REVENUE AND THE SAME WAS SET ASIDE TO THE RECORD OF THE AO FOR FRAMING ASSESSMENT DENOVO. 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE PROVISIONS IN QUESTION WERE MADE FOR ASCERTAINED EXPENSES AND, T HEREFORE, THE AO WHILE FRAMING THE ASSESSMENT ALLOWED IT BY ACCEPTING THE ACCOUNTING P RACTICE ADOPTED BY THE ASSESSEE TOWARDS ACCOUNTING OF THE PROVISION OF SUNDRY EXPEN SES SINCE ITS INCEPTION. SHE HAS 4 ITA NO.2912/M/12 FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNISHED A LL THE DETAILS REGARDING THE PROVISION/S OF EXPENSES RECOGNIZED BY THE ASSESSEE COMPANY AND THE SAME WERE REVERSED WHENEVER THE INVOICE IS RECEIVED REGARDING THE EXPENSES FROM THE VENDOR. THEREFORE, MOST OF THESE EXPENSES WERE PAID DURING THE YEAR ON THE BASIS OF ACTUAL AMOUNT AS PER THE INVOICE. SINCE THE EXPENDITURE IS IN THE NATURE OF REGULAR MONTH-WISE EXPENSES, THEREFORE, THESE ARE RECOGNIZED ON THE BA SIS OF THE ACTUAL EXPENDITURE INCURRED FOR THE PREVIOUS MONTH AND THE PROVISION I S REVERSED WHEN THE INVOICE IS RECEIVED BY THE ASSESSEE. IN SOME INSTANCES DUE TO MISTAKE THE ENTRIES WERE MADE TWICE AND, THEREFORE, TO RECTIFY THE WRONG ENTRY, T HE ASSESSEE CARRIED OUT RECTIFICATION IN BOOKS OF ACCOUNT, THEREFORE, THERE IS NO IMPACT OF SUCH RECTIFICATION ENTRIES MADE BY THE ASSESSEE . SHE HAS REFERRED TO THE DETAILED REPLY D ATED 15/02/2012 FILED BY THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTICE AND S UBMITTED THAT THE ASSESSEE EXPLAINED EACH AND EVERY ITEM OF PROVISION FOR SUND RY EXPENSES TO SHOW THAT THESE ARE BASED ON ACTUAL EXPENSES AND AS PER THE PRACTICE FO LLOWED BY THE ASSESSEE SINCE BEGINNING. THE LD. AR HAS FURTHER CONTENDED THAT TH E ACTUAL EXPENDITURE INCURRED DURING THE YEAR ARE MUCH HIGHER THAN THE PROVISION MADE, T HEREFORE, WHEN THE AO HAS ALLOWED ACTUAL EXPENSES, THE PROVISION BECOMES IMMATERIAL. THE LD. AR HAS FURTHER CONTENDED THAT THE COMMISSIONER HAS PICKED UP SELECTED ENTRIE S MADE FOR RECTIFYING THE MISTAKES WITHOUT CONSIDERING ALL THE RELEVANT ENTRIES AND N EUTRAL EFFECT ON THE CLAIM OF EXPENSES. SHE HAS FURTHER CONTENDED THAT THERE IS NO ERROR IN THE ASSESSMENT ORDER WHEN THE EXPENSES ARE ALLOWED, ARE ACTUAL EXPENDITURE AND NO T PROVISION. 3.1 ON THE OTHER HAND THE LD. DR HAS SUBMITTED THA T THE AO HAS NOT CONDUCTED ANY ENQUIRY AND EXAMINED THIS ISSUE OF PROVISION MADE B Y THE ASSESSEE IN RESPECT OF SUNDRY EXPENSES, THEREFORE, THERE IS A LACK OF APPLICATION OF MIND ON THE PART OF THE AO WHILE PASSING THE ORDER. HE HAS RELIED ON THE ORDER OF KERALA HIGH COURT IN THE CASE OF P.V. SREENIJIN [2014] 47 TAXMANN.COM 61 (KERALA) AND SUBMITTED THAT WHEN THE COMMISSIONER HAS NOT MADE ANY ATTEMPT TO SUBSTITUTE THE OPINION OF THE AO, BUT HAS TAKEN COGNIZANCE WITH LACK OF ENQUIRY WITH CERTAIN TRANSACTION THEN THE JURISDICTION EXERCISED BY THE COMMISSIONER UNDER SECTION 263 IS PROPER AND LEGAL. 5 ITA NO.2912/M/12 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE FIND THAT WHILE COMPUTING ASSESSMENT UNDER SECTI ON 143(3) THE AO HAS NOT DISCUSSED THE ISSUE ABOUT THE PROVISION FOR SUNDRY EXPENSES. THE COMMISSIONER HAS GIVEN VARIOUS INSTANCES FOR PROVISION OF SUNDRY EXP ENSES IN THE SHOW CAUSE NOTICE AND THE IMPUGNED ORDER WHICH ARE AS UNDER :- A) PROVISION FOR SUNDRY EXPENSES (BUSINESS MEETING EXPENSES) RS.31,71,576/- B) PROVISION FOR SUNDRY EXPENSES (PROFESSIONAL FEE S) RS.41,60,000/- C) PROVISION FOR SUNDRY EXPENSES (PRINT MEDIA EXPE NSES) RS.21,41,56,000/- D) PROVISION FOR SUNDRY EXPENSES (TV VISUAL MEDIA EXPENSES) RS.91,00,000/- E) PROVISION FOR SUNDRY EXPENSES (EVENT/SPONSORSHI P EXPENSES) RS.21,70,000/- F) PROVISION FOR SUNDRY EXPENSES (PROFESSIONAL & L EGAL EXPENSES) RS.25,81,000/- G) PROVISION FOR SUNDRY EXPENSES (PROFESSIONAL & LE GAL EXPENSES) RS.68,90,000/- H) PROVISION FOR SUNDRY EXPENSES (PROFESSIONAL & LE GAL EXPENSES) RS.47,20,000/- 4.1 THOUGH THE ASSESSEE HAS GIVEN A DETAILED REPLY TO THE SHOW CAUSE NOTICE, HOWEVER, THE COMMISSIONER HAS NOT GONE INTO THE COR RECTNESS OF THE REPLY FILED BY THE ASSESSEE AND HELD THAT THERE IS A LACK OF ENQUIRY A S WELL AS NON-APPLICATION OF MIND ON THE PART OF THE AO WHILE FRAMING THE ASSESSMENT ORD ER. ACCORDINGLY, THE COMMISSIONER HAS SET ASIDE THE ORDER WITH THE DIRECTION FOR DENO VO ASSESSMENT. FROM THE ASSESSMENT ORDER WE FIND THAT IT DOES NOT EXHIBIT ANY THOUGHT PROCESS ON THE PART OF THE AO ON THE ISSUE OF PROVISION OF SUNDRY EXPENSES AS POINTED OU T BY THE COMMISSIONER. THEREFORE, WE ARE IN AGREEMENT WITH THE VIEW OF THE COMMISSION ER THAT THERE IS A LACK OF ENQUIRY AND NON-APPLICATION OF MIND ON THE PART OF THE AO W HILE PASSING THE ASSESSMENT ORDER. THE HONBLE KERALA HIGH COURT IN THE CASE OF P.V. SREENIJIN [2014] 47 TAXMANN.COM 61 (KERALA) (SUPRA), HELD IN PARA 18 TO 21 AS UNDER :- 18. IN THE PRESENT CASE, ONE OF THE CONTENTIONS RA ISED IS THAT THE ASSESSMENT ORDER HAS BEEN PASSED AFTER 21 MONTHS AND THE SAME WAS FINALISED AFTER DISCUSSION WITH THE COMMISSIONER OF INCOME TAX. TH E PETITIONER RELIES ON EXHIBIT P3 AND P4 TO CONTEND THAT THE SAME WOULD CL EARLY REVEAL THAT CONSULTATION WAS MADE WITH THE COMMISSIONER OF INCO ME TAX BY THE ASSESSING OFFICER PRIOR TO THE FINALISATION OF THE SAME. THIS COURT, HOWEVER, ON EXHIBIT P3 AND P4 ALONE IS NOT TO ASSUME THAT SUCH CONSULTATIO N HAD BEEN MADE. THE QUASI-JUDICIAL AUTHORITIES UNDER THE ENACTMENT WILL HAVE TO ACT WITHIN THE JURISDICTION CONFERRED BY THE STATUTE AND INDEPENDE NTLY AS ALSO NOT UNDER DICTATES OF THE SUPERIOR OFFICERS. BUT FOR EXHIBITS P3 AND P4 THERE IS NOTHING 6 ITA NO.2912/M/12 ON RECORD TO SHOW THAT EXHIBIT P1 HAS BEEN PASSED A FTER CONSULTATION WITH THE COMMISSIONER, WHO HAS PASSED THE IMPUGNED ORDER S, EXHIBIT P7; NOR IS IT PLEADED THAT THERE IS ANY SUCH OFFICE PROCEDURE AVA ILABLE. 19. THE NEXT CONTENTION URGED BY THE LEARNED COUNSE L APPEARING FOR THE PETITIONERS IS THAT A REVISION UNDER SECTION 263 CO ULD BE MADE ONLY IF THERE IS A LEGAL INFIRMITY IN THE ORDER. THE PRESENT ORDERS, A LL HAVING DEALT WITH FACT SITUATIONS, ARE ESSENTIALLY ADDITIONS ATTEMPTED TO BE MADE, WHICH THE COMMISSIONER DOES NOT HAVE THE AUTHORITY UNDER SECT ION 263, IS THE CONTENTION. IT IS TO BE NOTICED THAT THE COMMISSIONER, WHILE PA SSING EXHIBIT P7 ORDERS, WHICH ARE SEPARATELY PRODUCED IN ALL THE WRIT PETIT IONS, HAS SPECIFICALLY NOTICED THAT THE ASSESSING OFFICER HAS FAILED TO TAKE INTO ACCOUNT THE ENTIRE INFORMATION AVAILABLE WITH THE DEPARTMENT. THE CONTENTION OF TH E PETITIONERS THAT WHAT IS NOW SOUGHT TO BE INCLUDED UNDER SECTION 263, HAS AL READY BEEN CONSIDERED, IS NOT EVIDENT FROM THE ASSESSMENT ORDERS. THE ISSUES SPECIFICALLY DEALT WITH IN THE IMPUGUED NOTICES ARE NOT SEEN DISCUSSED BY THE ASSESSING OFFICER, EXCEPT THE EXPENDITURE FOR FOREIGN TRAVEL. THIS IS A CASE WHERE THE ENTIRE MATERIALS ON RECORD WERE NOT CONSIDERED BY THE ASSE SSING OFFICER. THE COMMISSIONER HAD TAKEN INTO ACCOUNT THE INFORMATION AVAILABLE TO THE DEPARTMENT, AS REVEALED FROM THE RECORDS CALLED FOR UNDER SECTION 263, AND FOUND MANY TRANSACTIONS TO HAVE BEEN OMITTED TO BE CONSIDERED BY THE ASSESSING OFFICER. 20. COMMISSIONER HAS FOUND THAT THE ORDER IS ERRONE OUS FOR REASON OF THE ASSESSING OFFICER HAVING NOT APPLIED HIS MIND TO A NUMBER OF FACTUAL ASPECTS AVAILABLE IN THE RECORDS. THESE INTER ALIA RELATE T O THE EXPENDITURE INCURRED BY THE ASSESSEES IN DEVELOPING LANDED PROPERTY, CON STRUCTION OF BUILDINGS, RENOVATION AND ALTERATION OF RESIDENTIAL APARTMENTS AND THOSE INCURRED IN TRAVELLING TO VARIOUS COUNTRIES ABROAD. IT ALSO TAK ES NOTE OF EXPENDITURE ALLOWED FAR IN EXCESS OF THAT PERMISSIBLE: AND EVEN BEYOND THE INCOME DECLARED. THE SAME WOULD, HENCE, DEFINITELY BE AN E RRONEOUS PROCEDURE ADOPTED BY THE ASSESSING OFFICER, WHEREIN THE ENTIRE MATERI ALS AVAILABLE TO THE DEPARTMENT HAD NOT BEEN TAKEN INTO ACCOUNT, RESULTI NG IN PREJUDICE TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER, BY THE IMPUGNED ORDER HAS NOT ATTEMPTED A SUBSTITUTION OF HIS OPINION TO THAT OF THE ASSESSING OFFICER; BUT HAS TAKEN COGNIZANCE OF THE 'LACK OF ENQUIRY' WITH RESPECT TO CERTAIN TRANSACTIONS AS DISTINGUISHED FROM 'INSUFFICIENT EN QUIRY'. THIS REVEALS CLEAR NON-APPLICATION OF MIND BY THE ASSESSING OFFICER; A S HAS BEEN NOTICED BY THE TWO SEPARATE DIVISION BENCHES OF THIS COURT IN APPO LLO TYRES LTD. (SUPRA) AND ENGLISH INDIAN CLAYS LTD. (SUPRA). 21. ON THE STRENGTH OF THE ABOVE FINDINGS, THIS COU RT IS OF THE DEFINITE OPINION THAT NO INTERFERENCE CAN BE MADE AT THE STA GE OF SHOW CAUSE NOTICE. THE PETITIONERS WOULD HAVE THEIR REMEDIES BEFORE THE CO MMISSIONER OF INCOME TAX, WHO SHALL DEFINITELY CONSIDER THE OBJECTIONS PLACED BEFORE HIM AND PASS REASONED ORDERS AS IS MANDATED UNDER SECTION 263. W ITH RESPECT TO THE POWER OF THE COMMISSIONER UNDER SECTION 263 TO ISSU E A SHOW CAUSE NOTICE IN THE NATURE OF THE ORDERS IMPUGNED IN THE WRIT PETIT IONS, THIS COURT IS OF THE OPINION THAT IT WAS PERFECTLY PROPER AND LEGAL AND WITHIN THE POWERS OF THE COMMISSIONER UNDER SECTION 263 OF THE ACT TO HAVE I SSUED SUCH NOTICES. IN THE RESULT, THE WRIT PETITIONS SHALL STAND DISMI SSED; DECLINING INVOCATION 7 ITA NO.2912/M/12 OF THE EXTRA-ORDINARY POWERS UNDER ARTICLE 226. HOW EVER; MAKING IT CLEAR THAT THIS COURT HAS NOT LOOKED AT ANY OF THE ADDITI ONS, OR MATERIALS WHICH ARE THE BASIS OF THE REVISION NOTIFIED BY THE COMMISSIO NER, AS NOTICED IN THE IMPUGNED ORDERS, THE SUSTAINABILITY OF WHICH IS OPE N TO CHALLENGE BY THE PETITIONERS HEREIN, BEFORE THE COMMISSIONER. THE PA RTIES ARE DIRECTED TO SUFFER THEIR RESPECTIVE COSTS. 4.2 ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGA LITY AS FAR AS EXERCISE OF POWER BY THE COMMISSIONER UNDER SECTION 263 IS CONCERNED. H OWEVER, WE DIRECT THE AO TO DECIDE THE ISSUE BY CONSIDERING THE DETAILED REPLY FILED BY THE ASSESSEE TO THE SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT, AND IF T HE EXPLANATION OF THE ASSESSEE IS FOUND TO BE CORRECT THEN NO DISALLOWANCE /ADDITION IS CALLED FOR ON THE ACCOUNT. SINCE THE AO HAS NOT CONDUCTED ANY ENQUIRY, THEREFORE, TH E MATTER REQUIRES PROPER VERIFICATION AND EXAMINATION. ACCORDINGLY, THE APPE AL OF THE ASSESSEE IS DISMISSED WITH CERTAIN OBSERVATIONS. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/01/2015 . %)*+, & 89' :;<=<;=<>* %? SD/- SD/- ( 4@AB0CD0 ) ( -./01203405 ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER &E MUMBAI; 9' DATED 21/01/2015 . ' . ./ JV, SR. PS 8 ITA NO.2912/M/12 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , !' / DR, ITAT, MUMBAI 6. #$ %' / GUARD FILE. & & & & / BY ORDER, & //TRUE COPY// ' ' ' ' / &( &( &( &( ) ) ) ) (DY./ASSTT. REGISTRAR) , !' / ITAT, MUMBAI.