Vam Resorts & Hotels Pvt. Ltd., Meerut V. CIT, Meerut

ITA 2982/DEL/2013

• Counselvise Citation: 298220114 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 07-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Assessee Lawyers: O P SAPRA; CHANDER MEHRA
• Keywords: Depreciation; Principle of natural justice; Difference of opinion; Reason to believe; Change of opinion; Revenue expenditure
• Section: 143(3); 142(1); 80HHC; 263; 63; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2982/DEL./2013 (ASSESSMENT YEAR : 2008-09) VAM RESORTS & HOTELS PVT. LTD., VS. ACIT, CIRCLE 2 , C/O MEHRA & CO., MEERUT. CHARTERED ACCOUNTANTS, 7, RAJESHWARI PALACE, NEAR COMMISSIONER RESIDENCE, CIVIL LINES, MEERUT 250 001. (PAN : AABCV5979M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI O.P. SAPRA, ADVOCATE AND SHRI CH ANDER MEHRA, CA REVENUE BY : SHRI R.S. MEENA, CIT DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER U/S 263 OF THE INCOME-TAX ACT, 1961 OF THE COMMISSIONER OF INCOME-TAX, MEERUT DATED 25.03.2013 FOR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS A COMPANY. THE RETURN OF INCOME WAS FILED ON 27.09.2008 DECLARING INCOME AT RS.14,71,900/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. THE CASE WAS SELE CTED FOR SCRUTINY THROUGH CASS. NOTICES U/S 143(2) AND 143(1) OF THE WERE ISSUED. THE 2 ITA NO.2982/DEL/2013 ASSESSMENT U/S 143(3) OF THE ACT WAS FINALIZED ON 1 8.11.2010. IN THIS ASSESSMENT, AN ADDITION OF RS.1,20,000/- WAS MADE B Y HOLDING AS UNDER :- AFTER DISCUSSION AND TAKING INTO CONSIDERATION T HE INFORMATION FILED BY THE LD. AR OF THE ASSESSEE, TH E ASSESSMENT IS COMPLETED HERE UNDER AS :- THE ASSESSEE HAS SHOWN DEVELOPMENT EXPENSES OF RS.7,16,62,142/- IN THE PROFIT AND LOSS ACCOUNT. T HESE APPEAR TO BE EXCESSIVE THEREFORE, RS.1,20,000/- OUT OF THI S IS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. 3. THE ASSESSEE HAS FILED AN APPEAL AGAINST THIS OR DER OF ASSESSING OFFICER AND THE CIT (A), MEERUT HAS DELETED THIS AD DITION OF RS.1,20,000/- VIDE ITS ORDER DATED 05.06.2013 BY HOLDING AS UNDER :- 3. IN THE ASSESSMENT ORDER, THE AO HAS RECORDED TH AT THE DEVELOPMENT EXPENSES OF RS.7,16,62,142/- HAS BEEN D EBITED TO THE P&L ACCOUNT. THESE APPEAR TO BE EXCESSIVE THER EFORE RS.1,20,000/- IS DISALLOWED AND ADDED TO THE TOTAL INCOME. IN THE SUBMISSIONS FILED DURING THE APPEAL PROCEEDINGS , IT HAS BEEN STATED THAT THE AO HAD NOT MENTIONED ANY ERROR WHILE EXAMINING THE BOOKS OF ACCOUNT AND OTHER DETAILS. THE AO IS ALSO NOT SPECIFIED WHY THE EXPENSES ARE TREATED AS EXCESSIVE. 4. THE FACTS OF THE CASE HAVE BEEN CONSIDERED. NOT ONLY IS THE ADDITION WITHOUT ANY BASIS, THE AO HAS NOT E VEN CONCLUDED THAT THE EXPENSES ARE EXCESSIVE BUT MEREL Y STATED THAT THERE APPEAR TO BE EXCESSIVE. SUCH ADDITION MADE IN A CAVALIER AND CASUAL MANNER CANNOT BE SUSTAINED. 4. THE CIT, MEERUT HAS HELD THAT ASSESSMENT DONE BY ASSESSING OFFICER WAS WITHOUT PROPER ENQUIRY WHICH SHE HAS EN UMERATED IN HER ORDER DATED 25.03.2013. AS PER CIT, THE ASSESSEE H AS PAID DEVELOPMENT 3 ITA NO.2982/DEL/2013 EXPENSES OF RS.7,16,62,142/- BUT HE ASSESSING OFFIC ER HAS NOT OBTAINED THE DETAILS. HE HAS FAILED TO ENQUIRE INTO SUCH MA NY EXPENSES. AS PER CIT, THE ASSESSING OFFICER HAS ALSO NOT EXAMINED WH ETHER ANY TDS WAS MADE ON THESE LAND DEVELOPMENT EXPENSES AMOUNTING T O RS.7,16,62,142/- AND AS PER SECTION 40(A)(IA) OF THE ACT, EXPENSES W ITHOUT TDS WERE TO BE DISALLOWED. IT WAS ALSO NOTED THAT RECEIPTS WERE O F RS.7,86,08,182/- BUT N.P. IS SHOWN JUST AT RS.15,98,210/- WHICH IS ONLY 2% OF THE TOTAL RECEIPTS AND ALSO INCLUDE AGRICULTURAL INCOME OF RS.1,29,600 /-. THUS, IN FACT, N.P. WAS BELOW 2%. ASSESSING OFFICER HAS ACCEPTED THE S AME WITHOUT VERIFICATION. THE CIT ALSO OBSERVED THAT SUNDRY DE BTORS SHOWN IN THE BOOKS OF ACCOUNT OF RS.3,69,88,112/- WERE NOT EXAMI NED AND WHETHER THESE WERE INCLUDED IN GROSS RECEIPTS AS ASSESSEE W AS FOLLOWING MERCANTILE SYSTEM. ON THESE BASIS, SHE HAS INITIAT ED THE PROCEEDINGS U/S 263 OF THE ACT BY HOLDING THE ORDER OF THE ASSESSIN G OFFICER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. SHE HA S ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MA LABAR INDUSTRIES CO. LTD. VS. CIT REPORTED IN 243 ITR 83 (SC) FOR THE PR OPOSITION THAT AN INCORRECT ASSUMPTION OF FACTS OR INCORRECT APPLICAT ION OF LAW WILL SUFFICE THE REQUIREMENT OF THE ORDER BEING ERRONEOUS AND IF THE ORDER IS PASSED WITHOUT APPLICATION OF MIND, SUCH ORDER WILL FALL U NDER THE CATEGORY OF ERRONEOUS ORDER. SHE HAS ALSO PLACED RELIANCE ON T HE DECISION OF CIT VS. 4 ITA NO.2982/DEL/2013 V.N.M.A. RATHINASABAPATHY NADAR REPORTED IN 215 ITR 309 (MAD.) FOR THE PROPOSITION THAT IF AN ORDER IS PASSED IN IGNOR ANCE WITHOUT TAKING INTO CONSIDERATION OF THE RELEVANT FACTS OR IS AFFECTED BY THE PRESENCE OF ANY IRRELEVANT FACT INTO CONSIDERATION, THE SAME IS ERR ONEOUS. SHE HAS ALSO RELIED ON THE DECISION OF SWARUP VEGETABLE PRODUCTS INDUSTRIES LTD. VS. CIT REPORTED IN 187 ITR 412 (ALL.) WHEREIN ACTION O F THE CIT U/S 263 OF THE ACT FOR SETTING ASIDE THE ASSESSMENT ORDER FOR HOLDING IT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WHEN IT WAS DONE WITHOUT PROPER ENQUIRY WAS UPHELD BY THE COURT. THE CIT ALSO RELI ED ON THE DECISION OF HON'BLE ORISSA HIGH COURT IN THE CASE OF UMASHANKAR RICE MILL VS. CIT REPORTED IN 187 ITR 638 (ORI) WHEREIN THE REVISIONA L ORDER OF THE COMMISSIONER WHICH WAS PASSED BY THE COMMISSIONER W HO FELT THAT THERE SHOULD BE A FURTHER ENQUIRY WAS HELD TO BE JUSTIFIE D. RELIANCE WAS ALSO PLACED ON THE DECISIONS OF JAGDISH KUMAR GULATI VS. CIT 269 ITR 71 (ALL.), GEE VEE ENTERPRISES VS. ADDL.CIT 99 ITR 3 75 (DEL.) AND SARAOGI VS. CIT 67 ITR 84 (SC) AND TARA DEVI AGGARWAL VS. CIT 88 ITR 323 (SC) AND ALSO ON VARIOUS DECISIONS MENTIONED IN PAR A 5.5 OF THE ORDER OF THE CIT. THE CIT HAS PARTLY REVISED AND PARTLY SE T ASIDE THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT. 5. NOW, THE ASSESSEE IS IN APPEAL BEFORE US BY TAKI NG THE FOLLOWING GROUNDS OF APPEAL :- 5 ITA NO.2982/DEL/2013 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY GIVING HER FINDINGS WITHOUT GOING THROUGH MERITS AN D FACTS OF THE CASE FOR THE ORDER OF THE LD. ACIT, CIRCLE- 2, MEERUT, PASSED U/S 143(3) AS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED I N LAW BY APPLYING VARIOUS CASE LAWS CITED IN HER ORDER U/S 2 63 OF THE IT ACT,1961 WHICH ARE NOT APPLICABLE IN THE CASE OF TH E ASSESSEE COMPANY ALSO WITHOUT PROVIDING NOTICE OF DEMAND, ENHANCEMENT OF INCOME IS AGAINST THE PRINCIPLES OF LAW. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY NOT GIVING PROPER OPPORTUNITY TO THE ASSESSEE AND P ASSED THE ORDER U/S 263 HURRIEDLY AND WITHOUT TAKING IN CONSI DERATION THE SUBMISSIONS SO MADE MAKES THE ORDER U/S 263 IT ACT, 1961 AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY CLUBBING THE WORK CONTRACTS EXECUTED BY THE ASSESSE E COMPANY IN DIFFERENT YEARS TO A SINGLE YEAR (01-04-2007 TO 31-03-2008.) AND IGNORING THE FACTS FOR SUBSTITUTION LETTER FOR THE WORK ORDER DATED 01-04-2007 IN LIEU OF WORK ORDER DATED 02-05- 2007. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY CLUBBING THE DEBTORS OF RS.3,69,96,112/- WHICH HAVE ALREADY BEEN TAKEN IN THE RUNNING BILLS FOR RS.7,86,08,182/ - . 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY TAKING HYPOTHETICAL FIGURES FOR WORKING OUT PROFITS FROM WORK ORDERS, WHICH EVEN WERE NOT STARTED OR CANCELLED DU RING THE YEAR UNDER CONSIDERATION) AND INFLATED 'THE INCOME OF THE ASSESSEE COMPANY GIVING A NET PROFIT OF 80% FROM RU NNING BILLS FOR RS.7,86,08,182/-. 6 ITA NO.2982/DEL/2013 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY TAKING THE TAX PAYMENTS FOR RS.18,17,238/- AS RECEI PTS OF THE ASSESSEE AND IGNORING THE PAYMENTS MADE BY THE ASSE SSEE COMPANY TO THE ACCOUNT OF CENTRAL GOVERNMENT. 8. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY TAKING THE INCOME FROM AGRICULTURE AS INCOME FROM O THER SOURCES. 9. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX, MEERUT ERRED IN LAW BY DIRECTING THE ASSESSING OFFICER TO VERIFY THE FACTS OF NOT DEDUCTING TDS ON WORK PAYMENTS FOR RS.7,16,62,142/- WHICH HE HAD ALREADY VERIFIED DURING THE ASSESSMENT PROCE EDINGS AND ADDED RS.1,20,000/- TO THE INCOME AS EXCESSIVE PAYM ENTS. 10. THE ASSESSEE RESERVES ALL RIGHTS TO ADO/MODIFY ANY OF THE GROUNDS OF APPEAL FOR THE SAKE OF JUSTICE. 6. THE ASSESSEE HAS ALSO TAKEN ADDITION GROUND WHIC H HAS BEEN ALLOWED AND HEARD TOGETHER WITH THE MAIN GROUND WHI CH READ AS UNDER:- THAT THE PROVISIONS OF SECTION 263 OF THE I. T. AC T IN TERMS HAD NO APPLICATION TO THE FACTS OF APPELLANT'S CASE BECAUSE THE LD. ASSESSING OFFICER HAD PASSED THE ASSESSMENT ORD ER DATED 18.11.2010 U/S 143(3) OF THE I. T. ACT AFTER PROPE R APPLICATION OF HIS MIND'. 7. WHILE PLEADING ON BEHALF OF THE ASSESSEE LD. AR SUBMITTED THAT ASSESSEE HAS EXECUTED LABOUR CONTRACTS WITH M/S. ER A INFRASTRUCTURE INDIA PVT. LTD. FOR DEVELOPMENT OF AGRICULTURAL LAND AT M EERUT. THE RETURN WAS FILED ON 27.09.2008 AND ORDER U/S 143(3) WAS MADE O N 18.11.2010 U/S 143(3) OF THE ACT. THE ASSESSING OFFICER MADE AN A DDITION OF 7 ITA NO.2982/DEL/2013 RS.1,20,000/- WHICH HAS BEEN DELETED BY THE CIT (A) . LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS REPORTED THAT THE RE PRESENTATIVE OF THE ASSESSEE HAS ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FURNISHED THE REPLIES TO VARIOUS QUERIES RAISED. THE BOOKS OF AC COUNTS WERE PRODUCED AND THE SAME WERE EXAMINED ON TEST BASIS. THE CASE WAS DISCUSSED AND AFTER DISCUSSION AND TAKING INTO CONSIDERATION OF T HE INFORMATION FILED BY THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE, THE ASSESSMENT WAS COMPLETED AND AN ADDITION OF RS.1,20,000/- WAS MADE BY HOLDING THAT THE DEVELOPMENT EXPENSES SHOWN OF RS.7,16,62,142/- IN T HE PROFIT & LOSS ACCOUNT APPEARS TO BE EXCESSIVE. LD. AR ALSO DRAW OUR ATTENTION TO THE COPY OF NOTICE ISSUED U/S 142(1) OF THE ACT WITH TH E QUESTIONNAIRE DATED 13.05.2010 WHICH ARE PLACED AT PAGES 5 TO 7 OF THE PAPER BOOK FOR WHICH THE ASSESSEE HAS REPLIED ON 07.07.2010. THE REPLY IS PLACED AT PAGE 8 OF THE PAPER BOOK. THE LD. AR ALSO DRAWS OUR ATTENTIO N TO THE ASSESSEES LETTER DATED 05.10.2010 FILED BEFORE THE ASSESSING OFFICER ALONG WITH THE ANNEXURES MENTIONED THEREIN WHICH IS PLACED AT PAGE S 9 10 OF THE PAPER BOOK. THE ASSESSEE ALSO DRAWS OUR ATTENTION TOWARD S SUBMISSION MADE ON 21.10.2010 FILED BEFORE THE ASSESSING OFFICER PLACE D AT PAGE 11 OF THE PAPER BOOK. LD. AR ALSO DRAWS OUR ATTENTION TO THE DOCUMENTS FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THE DETAILS OF DOCUMENTS INCLUDE COPY OF COMPUTATION OF 8 ITA NO.2982/DEL/2013 INCOME FILED ALONG WITH RETURN OF INCOME ALONG WITH DETAILS OF TDS AT PAGES 19 20 OF THE PAPER BOOK, COPY OF BALANCE SH EET, TRADING AND P&L ACCOUNT ALONG WITH DETAILS OF SCHEDULES MENTIONED T HEREIN AT PAGES 23 TO 28 OF THE PAPER BOOK, THE DETAILS OF SUNDRY DEBTORS WHEREIN ONLY ONE DEBTOR, M/S. ERO INFRASTRUCTURE WAS SHOWN AS DEBTOR AND THESE DETAILS ARE PLACED AT PAGES 29 TO 31 OF THE PAPER BOOK, COPY OF THE LETTER DATED 02.05.2007 TO M/S. ERA INFRASTRUCTURE ALONG WITH AB STRACT SHEET SHOWING THE WORK DONE AND OTHER DETAILS BEFORE THE ASSESSIN G OFFICER PLACED AT PAGES 32 TO 52 OF THE PAPER BOOK. COPIES OF THE WO RK ORDERS ISSUED BY M/S. ERA GROUP TO THE ASSESSEE WERE ALSO FILED BEFO RE THE ASSESSING OFFICER WHICH ARE PLACED AT PAGES 53 TO 62 OF THE P APER BOOK. LD. AR SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ALL THE R ELEVANT DOCUMENTS/EVIDENCES BEFORE THE ASSESSING OFFICER AS ASSESSING OFFICER HAS MADE NECESSARY ENQUIRIES ON ALL THE ISSUES RAIS ED BY CIT AND HAS APPLIED HIS MIND PRIOR TO FINALIZATION OF THE ASSES SMENT. THEREFORE, THE CIT HAS NO JURISDICTION TO INVOKE THE SECTION 263 O F THE ACT. HE HAS PLACED RELIANCE ON THE FOLLOWING CASE LAWS :- (I) HARI IRON TRADING CO. VS. CIT 263 ITR 437 (P &H) (II) CIT VS. ARVIND JEWELLERS 259 ITR 502 (GUJ.) (III) CIT VS. GABRIEL INDIA LTD. 203 ITR 108 (BO M.) (IV) MALABA INDUSTRIAL CO. LTD. VS. CIT 243 ITR 83 (SC) (V) CIT VS. DEVELOPMENT CREDIT BANK LTD. 323 ITR 206 (BOM) 9 ITA NO.2982/DEL/2013 (VI) CIT VS. DESIGN AND AUTOMATION ENGINEERS P. LTD . 323 ITR 632 (BOM.) (VII) CIT VS. ASHISH RAJPAL 320 ITR 674 (DEL.) (VIII) CIT VS. RATLAM COAL ASH CO. 171 ITR 141 (IX) J.P. SHRIVASTAVA VS. CIT 111 ITR 326 (X) ITO VS. DG HOUSING PROJECT LTD. 343 ITR 329 (DEL.) (XI) CIT VS. INTERNATIONAL TRAVELS HOUSE LTD. 344 ITR 554 (DEL.) LD. AR ALSO DRAWS OUR ATTENTION TO THE VARIOUS RELE VANT PARAS OF THE ABOVE JUDGMENTS. IT WAS ALSO SUBMITTED THAT THE CASE LAW S RELIED UPON BY THE CIT HAS NO RELEVANCE IN ASSESSEES CASE AS THOSE WE RE DECIDED ON PARTICULAR FACTS PREVAILING IN THOSE CASES. 8. LD. DR, ON THE OTHER HAND, RELIED ON THE ORDER O F THE CIT AND ALSO SUBMITTED THAT THE ASSESSEE HAS SUBMITTED THE DETAI LS REGARDING THE CONTRACTS, HOWEVER, THE DETAILS REGARDING THE CANCE LLED CONTRACTS WERE NOT SUBMITTED. IN VIEW OF THIS, THE CIT WAS JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. 9. LD. AR ALSO SUBMITTED THAT THE CASE LAWS RELIED UPON BY THE REVENUE WERE AT VARIANCE TO THE FACTS OF THE ASSESS EES CASE. 10. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. IN THIS CASE, THE ASSESSEE WAS CONTRACTOR AND EXECUTED CONTRACT WITH M/S. ERA INFRASTRUCTURE INDIA PVT. LTD. AT MEERUT. THE CASE WAS SELECTED FOR SCRUTINY. NOTICES U/S 143(2) AND 142 (1) WERE ISSU ED ALONG WITH THE 10 ITA NO.2982/DEL/2013 QUESTIONNAIRE WHICH IS EVIDENT FROM THE PAPERS FILE D IN THE PAPER BOOK. THE ASSESSING OFFICER HAS CONSIDERED AND MADE A DIS ALLOWANCE FROM THE DEVELOPMENT EXPENSES OF RS.7,16,62,142/-. THUS, IT IS CLEAR THAT THE ASSESSING OFFICER HAS CONSIDERED THE DEVELOPMENT EX PENSES AND FOUND EXCESSIVE AND ACCORDINGLY, DISALLOWED RS.1,20,000/- OUT OF THIS. AS PER ASSESSING OFFICERS RECORDING, THE BOOKS OF ACCOUNT S WERE PRODUCED WHICH HAVE BEEN EXAMINED. THE ASSESSING OFFICER HA S ALSO REPORTED THAT THE LD. AR OF THE ASSESSEE ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FURNISHED THE REPLIES TO THE VARIOUS QUERIES RAISED BY HIM. THIS FACT SHOWS THAT ASSESSING OFFICER HAS APPLIED HIS MIND A ND GONE THROUGH THE BOOKS OF ACCOUNTS, CONSIDERED THE REPLIES OF THE AS SESSEE AND ALSO TAKEN COGNIZANCE OF THE DEVELOPMENT EXPENSES AND FOUND TH EM EXCESSIVE AND AFTER APPLYING HIS OWN MIND, HE DISALLOWED RS.1,20, 000/- TREATING THE SAME AS EXCESSIVE. THUS, IT IS VERY CLEAR THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND, MADE INVESTIGATIONS AND REACHED A T A CONCLUSION. THEREFORE, ON THIS ISSUE, THE ACTION OF THE CIT FOR INVOKING THE PROVISIONS OF SECTION 263 IS COMPLETELY UNJUSTIFIED. FURTHER ASSESSING OFFICER HAS INQUIRED ABOUT THE TDS DEDUCTIBLE AND ASSESSEE SUBM ITTED REPLY TO ASSESSING OFFICER WHICH IS EVIDENT FORM PARA 9 OF T HE REPLY DATED 07.07.2010. ASSESSING OFFICER HAS ALSO INQUIRED AB OUT CONTRACTS EXECUTED BY ASSESSEE. ASSESSEE HAS SUBMITTED DETAILS OF CON TRACTS AND HAS ALSO 11 ITA NO.2982/DEL/2013 SUBMITTED COPY OF BILLS AND THE PAYMENT SCHEDULE BE FORE THE ASSESSING OFFICER WHICH IS EVIDENT FORM PARA 2 OF THE REPLY D ATED 05.10.2010. ASSESSING OFFICER HAS ALSO CONSIDERED AND INQUIRED ABOUT SUNDRY CREDITORS AND AGRICULTURAL INCOME. THEREFORE, WE ARE OF THE VIEW THAT ASSESSING OFFICER HAS CONSIDERED ALL THE ISSUES ON WHICH CIT HAS INVOKED THE JURISDICTION/S 263 OF THE ACT. THE CIT HAS INVOKED THE PROVISIONS ON SUSPICION AND PRESUMPTION. WE ALSO GOT SUPPORT FRO M THE FOLLOWING CASE LAWS FOR HOLDING SO :- (I) IN THE CASE OF CIT VS. RAM NARAIN GOEL 224 IT R 180, THE HON'BLE P&H HIGH COURT HAS HELD THAT SUSPICION, HOW EVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE OR PROOF. (II) THE HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS. FAQIR CHAMAN LAL 262 ITR 295 HAS HELD THAT IT IS A WELL SETTLED PROPOSITION THAT THE PRESUMPTION HOWSOEVER STRONG C ANNOT SUBSTITUTE EVIDENCE. (III) IN THE CASE OF CIT VS. EMERALD COMMERCIAL LTD . & ANR. 250 ITR 539, THE HON'BLE CALCUTTA HIGH COURT FOLLOW ING ITS OWN JUDGMENT REPORTED IN 244 ITR 422 HAS HELD THAT TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE FINDINGS OF THE INCOME-TAX OFFICER AND THE COMMISSIONER OF INCOME-T AX 12 ITA NO.2982/DEL/2013 (APPEALS) WERE BASED ON PRESUMPTION AND NOT WARRANT ED BY THE FACTS OF THE CASE. WE WOULD ALSO LIKE TO NOTE THAT THE OBSERVATION OF THE CIT THAT THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS FAILED TO INQUIRE INTO THE CORRECTNESS OF GROSS RECEIPTS, CLA IM OF EXPENSES, THE TOTAL CONTRACT WORK TO BE EXECUTED AS PER THE WORK ORDERS AND THE DISCREPANCIES THEREIN, TOTAL RECEIPTS OF THE ASSESSEE AS PER FORM 26AS VIS--VIS THE RECEIPTS RETURNED IN THE PROFIT & LOSS ACCOUNT AND DID NOT RAISE A FINGER ON THE UNVERIFIABLE NATURE OF ACCOUNTS MAINTAINED B Y THE ASSESSEE WAS UNJUSTIFIED. WE ALSO HOLD THAT THIS OBSERVATION IS FACTUALLY INCORRECT. THE ASSESSEE FILED DETAILED CHART GIVING DETAILS OF WOR K CONTRACTS, TDS AMOUNT, WORK CONTRACT TAX AMOUNT, BILL NUMBER WITH DATES ETC. WHICH IS PLACED AT PAGE 63 OF THE PAPER BOOK. IN PARA 2 OF THE ASSESSEES REPLY PLACED AT PAGE 9 OF THE PAPER BOOK, IT HAS BEEN CLE ARLY MENTIONED THAT THE TOTAL WORK CONTRACTS WERE THREE IN THE CURRENT YEAR AND ONE IN PREVIOUS YEAR. THE COPY OF CONTRACTS WAS ENCLOSED. THE ASS ESSEE HAS ALSO ENCLOSED COPY OF BILLS AND PAYMENT SCHEDULE OF THE COMPANY. THESE FACTS CLEARLY SHOW THAT OBSERVATION OF THE CIT IN THIS RE GARD WAS COMPLETELY AGAINST THE FACTUAL POSITION AND, THEREFORE, THESE OBSERVATIONS WERE FACTUALLY INCORRECT. THE VARIOUS CASE LAWS RELIED UPON BY THE ASSESSEE ALSO FORTIFY THE VIEW TAKEN BY US IN THIS REGARD :- 13 ITA NO.2982/DEL/2013 1. 263 ITR 437, HARI IRON TRADING CO. VS. CIT (PUN JAB & HARYANA HIGH COURT) IN WHICH IT WAS HELD AS UNDER : 'HELD, THAT, WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3), THE FACT THAT THE ASSESSEE HAD NOT INCLUDED THE SURRENDERED AMOUNT HAD BEEN NOTICED BY THE ASSESSING OFFICER AND WAS RAISED BY HIM IN THE VARIOUS NOTICES ISSUED TO THE ASSESSEE. THE ASSESSE E HAD NO CONTROL OVER THE WAY THE ASSESSMENT ORDER WA S DRAFTED. THE ASSESSEE HAD EXPLAINED AND PRODUCED NECESSARY EVIDENCE THAT THERE WAS NO DISCREPANCY EITHER IN CASH OR IN THE STOCK'. 2. 259 ITR 502, CIT VS. ARVIND JEWELLERS (GUJARAT H .C.), IN WHICH IT WAS HELD AS UNDER: 'HELD, THAT THE FINDING OF FACT BY THE TRIBUNAL WAS THAT THE ASSESSEE HAD PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANATION IN PURSUANCE OF THE NOTICES ISS UED UNDER SECTION 142(1) AS WELL AS SECTION 143(2) OF T HE ACT AND AFTER CONSIDERING THE MATERIAL AND EXPLANATIONS, THE INCOME-TAX OFFICER HAD COME TO A DEFINITE CONCLUSION. SINCE THE MATERIAL WAS THERE O N RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE INCOME-TAX OFFICER AND A PARTICULAR VIEW WAS TAKEN, THE MERE FACT THAT DIFFERENT VIEW CAN BE TAKEN SHOU LD NOT BE THE BASIS FOR AN ACTION UNDER SECTION 263. T HE ORDER OF REVISION WAS NOT JUSTIFIED'. 3. 203 ITR 108 CIT VS. GABRIEL INDIA LTD., (BOMBAY H.C.). AT PAGE 110, IT WAS HELD AS UNDER:- 'HELD THAT THE INCOME-TAX OFFICER IN THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT REGARD BY A LE TTER IN WRITING. ALL THESE WERE PART OF THE RECORD OF THE C ASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THIS DECISION OF THE INCOME-TAX OFFICER C OULD NOT BE HELD TO BE 'ERRONEOUS' SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION -IN T HAT 14 ITA NO.2982/DEL/2013 REGARD. MOREOVER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDINGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWANCE OF THE CLAIM OF TH E ASSESSEE WAS ERRONEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT AN EXPENDITURE OF CAPIT AL NATURE. HE SIMPLY ASKED THE INCOME-TAX OFFICER TO R E- EXAMINE THE MATTER. THAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER P ASSED BY THE COMMISSIONER OF INCOME-TAX UNDER SECTION 263.' 4. 243 ITR 83, MALABAR INDUSTRIAL CO. LTD. VS. CIT, (SUPREME COURT) :- 'A BARE READING OF SECTION 263 OF THE INCOME-TAX AC T, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUE MO TU UNDER IT, IS THAT THE ORDER OF THE INCOME-TAX OFFIC ER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED O F TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSES SING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE INCOME-TAX OFF ICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVEN UE - RECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT . THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. 'THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED AS PREJUDI CIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE 15 ITA NO.2982/DEL/2013 INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH TH E COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED A S AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. ' 5. 323 ITR 206, CIT VS. DEVELOPMENT CREDIT BANK LTD . (BOMBAY H.C.), IN WHICH IT WAS HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT THERE WAS NO BAS IS OR JUSTIFICATION FOR THE COMMISSIONER TO INVOKE THE PROVISIONS OF SECTION 263. THE ASSESSING OFFICER AF TER MAKING AN ENQUIRY AND ELICITING A RESPONSE FROM THE ASSESSEE CAME TO THE CONCLUSION THAT THE ASSESSEE W AS ENTITLED TO DEPRECIATION ON THE VALUE OF SECURITIES HELD ON THE TRADING ACCOUNT. THE COMMISSIONER COULD NOT HAVE TREATED THIS FINDINGS TO BE ERRONEOUS OR TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE OBSERVATION OF THE COMMISSIONER THAT THE ASSESSING OFFICER HAD ARRIVED AT A FINDING WITHOUT CONDUCTING AN ENQUIRY WAS ERRONEOUS, SINCE AN ENQUIRY WAS SPECIFICALLY HELD WITH REFERENCE TO WHICH A DISCLOS URE OF DETAILS WAS CALLED FOR BY THE ASSESSING OFFICER AND FURNISHED BY THE ASSESSEE. THE TRIBUNAL WAS JUSTIFI ED IN HOLDING THAT RECOURSE TO THE POWERS UNDER SECTION 2 63 WAS NOT WARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE'. 6. 323 ITR 632, CIT VS. DESIGN AND AUTOMATION ENGINEERS (BOMBAY) P. LTD. (BOMBAY H.C.), OF WHICH HEAD NOTES ARE REPRODUCED BELOW: HELD, DISMISSING THE APPEAL, THAT IT COULD NOT BE SAID THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND WHILE GRANTING DEDUCTION UNDER SECTION 80HHC OF THE ACT AS REGARDS THE NET PROFIT EARNED BY THE ASSESSE E PERTAINING TO ITS EXPORT BUSINESS. THE TRIBUNAL WA S RIGHT IN HOLDING THAT THE VIEW TAKEN BY THE ASSESSI NG OFFICER WAS A POSSIBLE VIEW AND THAT THE CONDITION PRECEDENT FOR INVOKING JURISDICTION UNDER SECTION 2 63 BY THE COMMISSIONER DID NOT EXIST. THE TRIBUNAL WA S 16 ITA NO.2982/DEL/2013 JUSTIFIED IN UPSETTING THE ORDER PASSED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT. ' 7. 320 ITR 674, CIT VS. ASHISH RAJPAL (DELHI H.C.). AT PAGES 687-688, THE HON'BLE DELHI H.C. HAS HELD AS U NDER: 'THE FACT THAT A QUERY WAS RAISED DURING THE COURSE OF SCRUTINY WHICH WAS SATISFACTORILY ANSWERED BY THE ASSESSEE BUT DID NOT GET REFLECTED IN THE ASSESSMEN T ORDER, WOULD NOT BY ITSELF LEAD TO A CONCLUSION THA T THERE WAS NO ENQUIRY WITH RESPECT OF TRANSACTIONS CARRIED OUT BY THE ASSESSEE. THE FACT THAT THERE WA S AN ENQUIRY CAN ALSO BE DEMONSTRATED WITH THE HELP OF T HE MATERIAL AVAILABLE ON RECORD WITH THE ASSESSING OFFICER. THE MATERIAL, TO WHICH A REFERENCE HAS BEE N MADE IN THE IMPUGNED JUDGMENT, WOULD SHOW THAT THERE WAS NO 'UNDUE HASTE' IN EXAMINING THE MATERIA L PRIOR TO THE PASSING OF THE ASSESSMENT ORDER DATED MARCH 24, 2005. AT LEAST FOUR LETTERS DATED APRIL 2 7, 2004, FEBRUARY 22, 2005, FEBRUARY 28, 2005 AND MARCH 18, 2005 WERE ADDRESSED BY THE ASSESSEE TO TH E ASSESSING OFFICER GIVING DETAILS, DOCUMENTS AND INFORMATION PERTAINING TO VARIOUS QUERIES RAISED BY THE ASSESSING OFFICER. THESE HAVE BEEN EXAMINED BY THE TRIBUNAL. WE HAVE NO REASON TO BELIEVE THAT EXAMINATION WAS LESS THAN EXACTING. THEREFORE, THE CONCLUSION OF THE COMMISSIONER THAT THERE WAS 'LACK OF PROPER' VERIFICATION IS UNSUSTAINABLE'. 8. 171 ITR 141, CIT VS. RATLARN COAL ASH CO. (M.P. HIGH COURT), IN WHICH IT WAS HELD AS UNDER: AN ORDER OF ASSESSMENT WAS REVISED BY THE COMMISSIONER OF INCOME-TAX UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961,ON THE GROUND THAT THE INCOME- TAX OFFICER HAD NOT MADE PROPER ENQUIRIES. THE ORDE R OF REVISION WAS SET ASIDE AND THE INCOME-LAX OFFICE R'S ORDER WAS RESTORED BY THE TRIBUNAL BECAUSE IT FOUND THAT THE ASSESSEE HAD FURNISHED THE REQUISITE INFORMATION AND THE INCOME-TAX OFFICER HAD COMPLETE D THE ASSESSMENT AFTER CONSIDERING ALL THE FACTS. ON A REFERENCE: 17 ITA NO.2982/DEL/2013 HELD, THAT, ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN REVERSIN G THE ORDER OF THE COMMISSIONER OF INCOME-TAX MADE UNDER SECTION 263 AND RESTORING THAT OF THE INCOME-TAX OFFICER.' 9. 111 ITR 326, J.P. SRIVASTAVA & SONS VS. CIT, (JURISDICTIONAL ALLHD. H.C).: 'WE ARE OF OPINION THAT THE APPROACH OF THE COMMISSIONER IS ERRONEOUS. THE FAILURE OF THE INCOM E- TAX OFFICER TO DEAL WITH THE CLAIM OF THE ASSESSEE IN THE ASSESSMENT ORDER MAY BE AN ERROR, BUT AN ERRONEOUS ORDER BY ITSELF IS NOT ENOUGH TO GIVE JURISDICTION TO THE COMMISSIONER TO REVISE IT UNDER SECTION 338. IT MUS T FURTHER BE SHOWN THAT THE ORDER WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS NOT EACH AND EVERY ORDER PASSED BY THE INCOME-TAX OFFICER WHICH CAN BE REVIS ED UNDER SECTION 33B. SECTION 33B CONTEMPLATES A NOTICE TO THE ASSESSEE. IN RESPONSE TO THE NOTICE THE ASSESSEE MAY SHOW TO THE COMMISSIONER THAT THE ORDER SOUGHT TO BE REVISED IS NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THA T EVENT, THE COMMISSIONER WOULD HAVE NO JURISDICTION TO TAKE ANY FURTHER ACTION. HE WOULD BE COMPETENT TO TAKE ACTION ONLY IF HE REJECTS THE PLEA OF THE ASSESSEE. IT THUS BECOMES NECESSARY FOR THE COMMISSIONER TO EXAMINE THE MERITS OF THE OBJECTION RAISED BY THE ASSESSEE. HE CANNOT DELEGATE THAT POWER TO THE INCOME-TAX OFFICE R BY SETTING ASIDE THE ASSESSMENT ORDER AND DIRECTING HIM TO MAKE A FRESH ASSESSMENT AFTER TAKING INTO CONSIDERATION THE OBJECTION OF THE ASSESSEE.' 10. 343 ITR 329, CIT VS. D.G. HOUSING PROJECTS LTD. (DELHI H.C.), IN WHICH IT WAS HELD AS UNDER: A DISTINCTION MUST BE DRAWN IN THE CASES WHERE THE ASSESSING OFFICER DOES NOT CONDUCT AN ENQUIRY; AS L ACK OF ENQUIRY BY ITSELF RENDERS THE ORDER ERRONEOUS AN D PREJUDICIAL TO THE INTERESTS OF REVENUE AND CASES W HERE 18 ITA NO.2982/DEL/2013 THE ASSESSING OFFICER CONDUCTS AN ENQUIRY BUT THE FINDING RECORDED IS ERRONEOUS AND WHICH IS ALSO PREJUDICIAL TO THE INTERESTS OF REVENUE. IN THE LAT TER CASES, THE COMMISSIONER HAS TO EXAMINE THE ORDER OR THE DECISION TAKEN BY THE ASSESSING OFFICER ON THE MERITS AND THEN FORM AN OPINION ON THE MERITS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THE SECOND SET OF CASES, THE COMMISSIONER CANNOT DIRECT THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRY TO VERIFY AND FIND OUT WHETHER THE ORDER PASSED IS ERRONEOUS OR NOT'. 11. 344 ITR 554, CIT VS. INTERNATIONAL TRAVEL HOUSE LTD. (DELHI H.C.), IN WHICH AT PAGE 555, IT WAS HELD AS UNDER: 'HELD, DISMISSING THE APPEAL, THAT AS WAS EVIDENT F ROM THE ORDER OF THE TRIBUNAL, NO ADDITION TO THE INCOM E OF THE ASSESSEE COULD BE MADE MERELY BECAUSE OF THE DIFFERENCE IN THE ACCOUNTING TREATMENT OF THE COMMISSION IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS BOTH ACCOUNTING SYSTEMS WERE ACCEPTABLE. THE ASSESSING OFFICER HAD DULY APPLIED THIS MIND AND WA S SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSES SEE AND DID NOT MAKE ANY ADDITION IN THAT, REGARD. THE ASSESSING OFFICER HAD NOT INCORPORATED THE FACTS IN DETAIL IN THE ORDER BUT THAT WOULD NOT MEAN THAT TH ERE HAD BEEN NO APPLICATION OF MIND. THE TRIBUNAL NOTED THE FACT THAT THE DETAILS OF TAX DEDUCTED AT SOURCE DURING THE FINANCIAL YEAR HAD BEEN SHOWN AND THE INCOME TH AT WAS SHOWN AS COMMISSION INCOME WAS REFLECTED IN DETAIL IN THE SHOW CAUSE AND IN THE BOOKS OF ACCOUN T. THE ASSESSING OFFICER HAD ALREADY EXAMINED THIS ASPECT BUT THE COMMISSIONER HAD DIRECTED A RE-INQUI RY FOR MERELY A CHANGE OF OPINION WHICH WAS IMPERMISSIBLE UNDER SECTION 263 OF THE ACT. HE WAS REQUIRED TO ARRIVE AT A DEFINITE CONCLUSION BUT HE HAD NOT DONE SO. THERE WAS NO REASON TO INTERFERE WITH THE ORDER OF THE TRIBUNAL'. 12. 343 ITR 342, CIT VS. HERO AUTO LTD. (DELHI H.C. ), IN WHICH IT WAS HELD AS UNDER: 19 ITA NO.2982/DEL/2013 'HELD, DISMISSING THE APPEAL, (I) THAT THERE WAS NO DISCUSSION IN THE ORDER OF THE COMMISSIONER AS TO H OW AND IN WHAT MANNER THE ENQUIRY WAS LACKING AND WHAT WAS THE FAULT AND DEFAULT COMMITTED BY THE ASSESSIN G OFFICER. THE ASSESSING OFFICER HAD EXAMINED THIS ASPECT IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND ACCEPTED THE STAND OF THE ASSESSEE. THERE WAS NO FINDING OF THE COMMISSIONER THAT THE ORDER PASSED B Y THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE QUESTION OF WARRA NTY CLAIM WAS REOPENED IN THE ASSESSMENT YEAR 1999-2000 AFTER AN ORDER UNDER SECTION 263 OF THE ACT. THIS ORDER PASSED WAS STRUCK DOWN BY THE TRIBUNAL AND THAT DECISION HAD BEEN UPHELD BY THE HIGH COURT. (II) THAT THE CLAIM FOR DEDUCTION UNDER SECTION 35DDA WAS MADE BY THE ASSESSEE FOR THE FIRST TIME I N ASSESSMENT YEAR 2002-03. ONE-FIFTH OF THE AMOUNT PAYABLE UNDER THE VOLUNTARY RETIREMENT WAS ALLOWED AS A DEDUCTION. IN THIS YEAR, THE ASSESSING OFFICER H AD FOLLOWED THE EARLIER ASSESSMENT ORDERS. THE COMMISSIONER OBSERVED THAT NOTE 2 IN THE AUDIT REPO RT DID CREATE DOUBT AS TO WHETHER EXPENDITURE TO ESS W AS ACTUALLY INCURRED OR NOT. THE ASSESSEE HAD CLARIFIE D THAT THE NOTE WAS WRITTEN BY THE AUDITOR AS A PRECAUTION ARY MEASURE FOR REPORTING THAT THE AMOUNT HAD BEEN CLAIMED UNDER SECTION 35DDA. THE COMMISSIONER IN THE ORDER DID NOT APPRECIATE AND DEAL WITH THIS ASP ECT. HE HAD WRONGLY INTERPRETED AND OBSERVED THAT THE CLAIM ITSELF WAS MADE AS A PRECAUTIONARY MEASURE. THE TRIBUNAL, WAS, THEREFORE, RIGHT IN SETTING ASIDE TH IS PART OF THE ORDER.' 13. 341 ITR 81 (SC), CIT VS. GREEN WORLD CORPORATIO N WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT ORDER CANNOT BE INTERFERED ONLY BECAUSE ANOTHER VIEW IS POSSIBLE. 14. 332 ITR 167 (DELHI), WHEREIN IT HAS BEEN HELD T HAT IF THERE IS AN ENQUIRY, EVEN INADEQUATE, THAT WOULD NO T BY ITSELF GIVE OCCASION TO THE CIT TO PASS ORDER UNDER SECTIO N 263 MERELY BECAUSE HE HAS DIFFERENT OPINION IN THE MATT ER. 20 ITA NO.2982/DEL/2013 15. 341 ITR 537 (DELHI), CIT VS. VIKAS POLYMERS WHE REIN IT HAS BEEN HELD THAT IF QUERY IS RAISED DURING THE SCRUTINY BY THE AO, WHICH WAS ANSWERED TO THE SATISFACTION OF T HE AO, BUT NEITHER THE QUERY NOR THE ANSWER WAS REFLECTED IN T HE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE AO CALLED FOR INTE RFERENCE AND REVISION. 16. 335 ITR 83, CIT VS. ANIL KUMAR SHARMA (DELHI), WHEREIN IT HAS BEEN HELD THAT TRIBUNAL HAS ARRIVED AT A CONCLUSIVE FINDING THAT THOUGH THE ASSESSMENT ORDER DOES NOT PATENTLY INDICATE THAT ISSUE OF THE TAXABILITY OF T HE COMPENSATION HAS BEEN CONSIDERED BY THE AO, THE REC ORD SHOWS THAT THE AO HAD APPLIED HIS MIND. CONSIDERING ALL THESE FACTS, WE SET ASIDE THE ORDER OF THE CIT AND ALLOW THE ASSESSEES APPEAL. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE STAND S ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF NOVEMBER, 2014. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 14 TH DAY OF NOVEMBER, 2014 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) 5.CIT(ITAT), NEW DELHI. AR/ITAT