Sh. Pushpender Kumar Goyal, Hisar V. CIT, Hisar

ITA 3003/DEL/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7378 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 17-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 15-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK WADEKAR
• Keywords: Gross profit estimation; Gift; Revision of order; Opportunity of being heard; Audit objection; Principle of natural justice; Cost of acquisition; Difference of opinion; Tax effect
• Section: 143(3); 147; 263

Judgement Text

ITA NO. 3003 / DEL/ 201 4 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTANT MEMBER I.T.A. N O. 3003 /DEL/201 4 A.Y . 200 9 - 10 SH. PUSHPENDR KUMAR GOYAL, C/O SH. SACHIN JAIN, ADVOCATE, 696/8, GANGA BAGH, HANSI - 125033, DISTT. HISSAR (PAN: AAYPG1179J) VS . COMMISSIONER OF INCOME TAX, INCOME TAX OFFICE, HISSAR (HARYANA) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. NAVIN GUPTA, ADVOCATE DEPARTMENT BY : SH. VIVEK WADEKAR, CIT(DR) DATE OF HEARING : 15 - 10 - 2014 DATE OF ORDER : 29 - 10 - 2014 ORDER PER H.S. SIDHU : J M TH IS APPEAL BY THE ASSES S EE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX , HISSAR DATED 21.3.2014 P ERTAINING TO ASSESSMENT YEAR 2009 - 10. 2. THE GROUNDS RAISED READ AS UNDER: - I . THAT THE ORDER OF THE LD. CIT IS AGAINST LAW AND FACTS. 2. THAT THE LD. CIT ERRED IN INVOKING SECTION 263 OF THE I.T. ACT TO THE LD. AO, ALTHOUGH ALL THE ISSUES WERE DULY CONSIDERED ITA NO. 3003 / DEL/ 201 4 2 BY THE LD. AO U/S. 143(3) AND DIRECTING HIM TO MAKE FRESH ASSESSMENT, ALTHOUGH NEITHER THE ORDER OF THE AO WAS ERRONEOUS NOR PREJU DICIAL TO THE INTEREST OF REVENUE. 3. THAT THE LD. CIT ERRED IN GIVING DIRECTIONS U/S. 263 OF THE ACT TO THE LD. AO, ALTHOUGH ALL THE ISSUE WERE DULY CONSIDERED BY THE LD. AO DURING ASSESSMENT PROCEEDINGS AND AFTER EXAMINING ALL THE DOCUMENTS / SUBMISSIONS, ONE OF THE POSSIBLE VIEW WAS TAKEN: - (A) LD. CIT ERRED IN HOLDING THAT THE ASSESEE HAS USED INTEREST BEARING FUNDS IN THE ACQUISITION OF HOUSE PROPERTY AT MODEL TOWN AND THUS AO FAILED TO DISALLOW THE DEDUCTION ON ACCOUNT OF INTEREST PAID. (B) LD. CIT ERRED IN HOLDING THAT THE AO HAS FAILED TO CONSIDER THE ISSUE OF INTEREST PAID TO WIFE AT A LOWER RATE THAN THE RATE PAID ON THE LOANS RAISED BY THE ASSESSEE. (C) LD. CIT ERRED IN HOLDING THAT THE AO HAS FAILED TO CALCULATE THE LONG TERM CAPITAL GAINS ARISES ON THE S ALE OF PROPERTY CORRECTLY. (D) LD. CIT ERRED IN SETTING ASIDE THE ENTIRE ASSESSMENT TO THE LD. AO, INSTEAD OF SETTING ASIDE ONLY ON LIMITED ISSUE DISCUSSED IN THE ORDER. 4. THAT THE LD. CIT ERRED IN NOT APPLYING HIS MIND TO THE MATTER RATHER TOOK UP THE ISSUES ALREADY RAISED BY THE AUDIT PARTY AS AUDIT OBJECTION. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR ALTER ANY OF THE GROUNDS OF APPEAL. 3 . BRIEFLY STATED FACTS ARE THAT THE RETURN OF INCOME WAS FILED ON 29.9.2009 DECLARING AN INCOME OF RS. 3,65,230/ - WHIC H WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 AT THE SAME INCOME. LATER ON, THE CASE WAS SELECTED ITA NO. 3003 / DEL/ 201 4 3 UNDER THE COMPUTER ASSISTED SCRUTINY SCHEME (CASS). ASSESSMENT WAS COMPLETED ON 21.12.2011 U/S. 143(3) OF THE I.T. ACT, 1961 AT AN INCOME OF RS. 7,5 2,720/ - VIDE ORDER DATED 21.12.2011. 4 . THE LD. CIT VIDE IMPUGNED ORDER DATED 2 1 . 3 .201 4 HELD THAT THE ASSESSMENT ORDER IN QUESTION IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE THEREFORE, HE HAS SET ASIDE THE ASSESSMENT U/S. 263(1) OF THE I. T. ACT, 1961 AND HAS DIRECTED THE AO TO MAKE A FRESH ASSESSMENT ORDER. LD. CIT HAS ADUDICATED THE CASE BY OBSERVING AS UNDER: - 2.4 DURING THE YEAR, THE ASSESSEE HAS PAID INTEREST OF RS.7,12,224/ - . ON THE ONE HAND, THE ASSESSEE IS PAYING INTEREST ON THE BORROWED FUNDS AND AT THE SAME TIME INVESTING IT IN NON BUSINESS INVESTMENT, PROPERTIES AND INTEREST FREE ADVANCES. AS PER DECISIO N IN THE CASE OF ABHISHEK INDUSTRIES VS. CIT (286 ITR 1) P&H, THE INTEREST EXPENSES ARE NOT ALLOWABLE U/S 36(1 )(III) IF THE ASSESSEE HAS DIVERTED FUNDS TOWARDS NON BUSINESS ACTIVITY SINCE, THERE ARE NON - BUSINESS ADVANCES INVESTMENT AS WELL AS INVESTMENTS WHICH ARE COVERED U/S 14A, IT APPEARED THAT AO FAILED TO DISALLOW THE DEDUCTION ON ACCOUNT OF INTEREST PAID. 2.5 THE AO, IN VIEW OF THE ABOVE STATED FACTS AND CIRCUMSTANCES, OUGHT TO HAVE MADE PROPER INQUIRIES .AND MADE APPROPRIATE DISALLOWANCES WHICH HE HAS NOT DONE. FAILURE ON THE PART OF THE A.O., RENDERS THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 2.6 IN RESPONSE TO THE NOTICE U/S 263(1) DATED 31.01.2014, THE ASSESSEE FILED REPLY ON 24.02.2014 RE - ITERATING THAT FLAT N O.23/4 AND HOUSE AT BHIWANI WAS INHERITED BY HIM THROUGH WILL OF HIS FATHER. IT WAS ALSO STATED THAT OFFICE BEARING NO.1012 HAS BEEN PURCHASED FOR BUSINESS PURPOSES. IT HAS ALSO BEEN CONTENDED THAT ITA NO. 3003 / DEL/ 201 4 4 PROPORTIONATE DISALLOWANCE OF DEDUCTION CLAIMED ON ACCOUNT OF INTEREST ON INVESTMENT IN FLAT NO.23/3 AND PLOT AT KUNDLI HAVE ALREADY BEEN CONSIDERED BY THE A.O. AT THE TIME OF FINALIZATION OF ASSESSMENT PROCEEDINGS. AS REGARDS, INVESTMENT MADE IN HOUSE PROPERTY AT MODEL TOWN, DELHI AMOUNTING TO RS.45,63,0001 - , IS STATED THAT IT WAS ALSO CONSIDERED BY THE A.O. AND FOUND THAT NO INTEREST BEARING FUND IS INVESTED FOR ACQUISITION OF THIS PROPERTY. 2.7 THE REPLY FILED BY THE ASSESSEE HAS BEEN CONSIDERED. ASSESSEE'S REPLY REGARDING ACQUISITION OF PROPERTIES THROUGH WI LL AND THE INVESTMENT IN FLAT NO.23/3 AND PLOT AT KUNDLI BEING CONSIDERED BY THE A.A., HOLDS GOOD. HOWEVER, WITH REGARD TO INVESTMENT IN ACQUISITION OF HOUSE PROPERTY AT MODEL TOWN, DELHI AT RS.45,63,000/ - CLAIMED TO BE OUT OF OWN CAPITAL, THE A.O. HAS NO T EXAMINED THE ISSUE AND NO MATERIAL HAS BEEN PLACED ON RECORD TO PROVE THAT THE INVESTMENT HAS BEEN MADE OUT OF OWN CAPITAL. DURING PROCEEDINGS U/S 263, ALSO, NO DETAILS HAVE BEEN PLACED ON RECORD EXCEPT THE CONTENTION THAT AO CONSIDERED 'THIS FACT & FOUN D THAT NO INTEREST BEARING FUND IS INVESTED FOR ACQUISITION OF THIS PROPERTY'. 2.8 THE DETAILS PLACED ON RECORD HAVE BEEN GONE THROUGH. IT IS REVEALED THEREFROM THAT THE ASSESSEE HAD HIS OWN CAPITAL BALANCE OF RS.49,25,583/ - AND FURTHER CONTENDED THAT HE WAS ALSO ENJOYING INTEREST FREE ADVANCES OF RS.25,74,7401 - . HOWEVER, IT IS SEEN THAT THE COST OF ASSETS INCLUDING ACQUIRED THROUGH WILL, OTHER INVESTMENTS AND STOCK - IN - TRADE OF SHARES AMOUNT TO RS.70.04 LAKH APPROXIMATELY AND THERE REMAINS HARDLY ANY AMOU NT WITH THE ASSESSEE OUT OF HIS CAPITAL & OUT OF INTEREST FREE LOANS WHICH CAN BE SAID TO HAVE BEEN INVESTED IN THE ACQUISITION OF HOUSE PROPERTY VALUED AT RS.45,63,000/ - . ITA NO. 3003 / DEL/ 201 4 5 2.9 THUS, AO'S FAILURE TO EXAMINE THE ISSUE REGARDING DISALLOWANCE OF DEDUCTION CL AIMED ON ACCOUNT OF INTEREST EXPENSES RELEVANT TO THE INVESTMENTS OTHER THAN BUSINESS INVESTMENTS HAS RESULTED IN FRAMING AN ASSESSMENT WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 2.10 THE ABOVE DISCUSSION INDICATES THAT ASSESSEE HAS US ED INTEREST BEARING FUNDS IN THE ACQUISITION OF HOUSE PROPERTY AT MODEL TOWN & THE ASSESSMENT FRAMED BY THE AO IS ERRONEOUS TO THIS EXTENT. IT IS CERTAINLY PREJUDICIAL TO THE INTEREST OF REVENUE. 3.1 THE ASSESSEE HAS ADVANCED AN AMOUNT OF RS.13,59,0001 - T O HIS WIFE, SMT. SANTOSH GOYAL AND CHARGED INTEREST @ 6% AS AGAINST PAYING INTEREST @ 10%. THE ASSESSEE WAS REQUESTED TO STATE AS TO WHY INTEREST ABO~%~ULD NOT B~OWED AND ADDED BACK TO HIS INCOME, AS THE AO. HAS FAILED TO CO~SSUE AND ASSESSMENT FRAMED BY H IM IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST AND REVENUE. IN RESPONSE TO THE NOTICE U/S 263(1) DATED 31.01.2014, THE ASSESSEE, STATED AS UNDER: - . 2.5) THAT NO ADVANCE TO SMT. SANTOSH GOYAL HAS BEEN MADE FREE OF INTEREST AS ASSESSEE CHARGED INTE REST @6% FROM SMT. SANTOSH GOYAL DULY CREDITED IN INTEREST ACCOUNT AND OFFERED FOR TAX, KINDLY REFER TO AUDITED PROFIT & LOSS ACCOUNT WHICH IS ON RECORD, THEREFORE, IT COULD NOT BE SAID THAT INTEREST BEARING FUNDS ARE TRANSFERRED IN INTEREST FREE ADVANCE ALTERNATIVELY ASSESSED THE SAME AMOUNT ON INTEREST @ 6% ON WHICH ITA NO. 3003 / DEL/ 201 4 6 HE IS PAYING INTEREST @ 10% PA., THEREFORE, IT IS SUBMITTED THAT SINCE THE ASSESSEE HAD VARIOUS INTEREST UNSECURED LOANS AGGREGATING TO RS. 25,74,740/ - , AND AS SUCH THERE IS NO LOSS TO REVENU E AND IT COULD NOT BE SAID THAT ASSESSEE DIVERTED INTEREST BEARING FUNDS TO INTEREST FREE ADVANCES. 3.2 THE REPLY FILED BY THE ASSESSEE HAS BEEN CONSIDERED AND IS NOT TENABLE. NO DOUBT, THE ASSESSEE HAS CHARGED INTEREST BUT IT IS LOWER THAN THE RATE PAID ON THE LOAN RAISED BY THE ASSESSEE. AS INDICATED IN PARA 2.5 ABOVE, THE CAPITAL AND INTEREST FREE FUNDS AVAILABLE WITH THE ASSESSEE HAVE BEEN EXHAUSTED AGAINST THE INVESTMENT IN THE ASSETS MENTIONED, THEREIN. THEREFORE, THE FUNDS USED FOR ADVANCING THIS LO AN IS CERTAINLY INTEREST BEARING. THE CORRESPONDING INTEREST PAID IS NOT AN ALLOWABLE AS DEDUCTION. THE AO HAS NOT CONSIDERED THE ISSUE AND HIS FAILURE IN THIS REGARD HAS RESULTED IN PASSING AN ASSESSMENT ORDER WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF REVENUE. 4.1 DURING THE YEAR, THE ASSESSEE HAS SOLD PLOT NO.16 IN A SOCIETY KNOWN AS UJJWAL, APARTMENTS, VIKAS PURI, NEW DELHI. THE ASSESSEE HAS SOLD THIS PLOT FOR RS.14.00 LACS. THE ASSESSEE HAS SHOWN A LOSS OF RS.1 ,59,643/ - IN THIS DEAL. THI S PROPERTY WAS ITA NO. 3003 / DEL/ 201 4 7 ACQUIRED IN 1990 - 91 AND SOLD DURING THE ASSESSMENT YEAR 2009 - 10. THE ASSESSEE HAS STATED THAT THOUGH THE AGREEMENT WAS MADE FOR SALE FOR RS.14.00 LACS BUT THE ASSESSEE HAD TO PAY RS.1,50,000/ - TO THE PURCHASER FOR REPAIRS. THE FULL DETAIL OF RECEIPT OF RS.14.00 LACS BY THE ASSESSEE FROM PURCHASER IS GIVEN IN THE DEED OF AGREEMENT TO SELL DATED 26.08.2008 AS BELOW: - SR.NO. AMOUNT CHEQUE NO. DATED 1. RS. 9,00,000/ - 397541 23.8.2008 2. RS. 3,50,000/ - 485603 25.8.2008 3. RS. 1,50,0000/ - CASH RS. 14,00,000/ - 4.2 AS PER THE PROVISIONS OF SECTION 48, FULL VALUE OF CONSIDERATION RECEIVED (RS.14.00 LAKH) IS TO BE TAKEN INTO ACCOUNT. MOREOVER, THERE IS NO EVIDENCE REGARDING DATE & COST OF ACQUISITION. THE AO, THEREFORE, OUGHT TO HAVE NOT ACCEPTED THE CLAIM OF ASSESSEE THAT SALES CONSIDERATION WAS RS.12.5 LAKH AND FURTHER DEDUCTION OUT OF SALE CONSIDERATION (RS.14.00 LAKH) SHOULD HAVE BEEN ALLOWED BASED ON EVIDENCES. 4.3 ACCORDINGLY, NOTICE DATED 31.01.2014 WAS ISSUED ULS 263(1), ASKING SHOW CAUSE AS TO WHY THE ASSESSME NT ORDER SHOULD NOT BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND SUITABLE MODIFIED. IN RESPONSE, THE ASSESSEE VIDE REPLY FILED ON 24.02.2014 STATED AS UNDER: - ITA NO. 3003 / DEL/ 201 4 8 4.1) THIS IS UNDISPUTED FACT THAT ASSESSEE SOLD A FLAT NO. 16 FOR A CONSIDERATION OF RS. 14 LACS VIDE REGD. SALE DEED DATED 27 - 08 - 2008 BUT ON THE OTHER HAND FOR REPAIR AND WHITE WASHING RS.1.5 LACS WERE PAID BY ASSESSEE TO THE PURCHASERS IN PERSUANCE TO AGREEMENT DATED 12 - 08 - 2008 ON ACCOUNT OF WORK OF REPAIR AND WHITE WASH ETC. DONE BY THEM OF THEIR OWN CHOICE, PHOTO COPY OF AGREEMENT WAS FURNISHED DURING ASSESSMENT PROCEEDINGS AND IS ON RECORD, ORIGINAL WAS PRODUCED AND SAME WAS VERIFIED BY LEARNED ASSESSING OFFICER AND AS SUCH ONLY RS. 12.5 LACS COME INTO TH E HANDS OF ASSESSEE AND SAME WERE OFFERED FOR TAX. IT IS SPECIFICALLY DENIED THAT ASSESSEE HAD PAID RS. 3.5 LACS (RS. 2 LACS + RS. 1.5 LACS) TO THE PURCHASERS FOR REPAIR ETC. AS EXPLAINED HEREIN ABOVE ASSESSEE PAID ONLY RS. 1.5 LACS OUT OF SALE CONSIDERATI ON OF RS. 14 LACS TO THE PURCHASERS AND BALANCE RS. 12.5 LACS WERE CONSIDERED TO WORK OUT LONG TERM CAPITAL GAINS, .COMPUTATION OF INCOME FORTIFIES THIS CONTENTION OF THE ASSESSEE AND SAME IS ON RECORD. SINCE THE ENQUIRY WAS ALREADY MADE AND A DISCUSSION O N THE ISSUE AFTER ENQUIRY HAS BEEN TAKEN THE MATTER MAY NOT BE TAKEN FOR ACTION UNDER S. 263 OF THE ACT. 4.2) IT IS SPECIFICALLY INCORRECT THAT ASSESSEE CLAIMED DEDUCTION OF RS. 3.5 LACS OUT OF SALE CONSIDERATION RATHER HE IS CLAIMING ONLY RS. 1.5 LACS, I F THIS CLAIM OF ASSESSEE TO REDUCE THE SALE CONSIDERATION IS NOT ACCEPTED BY YOUR GOODSELF THAN TELESCOPIC ADJUSTMENT IN SHAPE OF COST OF IMPROVEMENT OF THE FLAT MAY KINDLY BE ALLOWED TO THE ASSESSEE, WHICH DOES NOT EFFECTS THE L TCG WORKED OUT AND ITA NO. 3003 / DEL/ 201 4 9 ASSESSE D. FOR COST OF ACQUISITION COPIES OF SEVERAL LAST YEAR'S BALANCE SHEETS WERE PRODUCED, WHICH AFTER DUE VERIFICATION WERE RETURNED TO THE ASSESSEE AND COPIES OF ALLOTMENT LETTER & AGREEMENT WERE ALSO PRODUCED, PHOTO COPIES WHEREOF ARE ON RECORD, HOWEVER, PH OTO COPIES OF AUDITED BALANCE SHEET FOR YEAR ENDED ON 31 - 03 - 2005, 31 - 03 - 2006, 31 - 03 - 2007 AND 31 - 03 - 2008 ARE ANNEXED TO SUBSTANTIATE THE COST OF ACQUISITION AND AS SUCH LEARNED ASSESSING OFFICER RIGHTLY ACCEPTED THE CLAIM MADE BY ASSESSEE AND RIGHTLY ALLOWE D DEDUCTION OUT OF SALE CONSIDERATION TO THE ASSESSEE FOR WORKING OF LONG TERM CAPITAL GAINS ON FLAT SOLD AFTER PROPER ENQUIRY AND THIS IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE. .' 4.4.1 THE REPLY FILED BY THE ASSESSEE HAS BEEN CONSIDERED, CA REFULLY. THE COST OF ACQUISITION IS ADOPTED AS PER FIGURE SHOWN IN OLD BALANCE - SHEETS. REGARDING DATE OF ACQUISITION, AUTHORIZED REPRESENTATIVE POINTED OUT TO THE COPY OF AGREEMENT OF LICENCE DATED 11.10.1991 WHICH SAYS THAT SOCIETY ENTERED INTO A LOAN AGR EEMENT DATED 25.01.1988 WITH THE DELHI CO - OPERATIVE HOUSING FINANCE SOCIETY LTD FOR SECURINO LOAN FOR ERECTING MULTI STOREY BLOCKS OF FLATS. THIS DOCUMENT SHOWS THAT THE FLAT WAS NOT ALLOTTED BEFORE 11.10.1991. IN FACT, AS PER LETTER DATED 20.12.1991 OF T HE SOCIETY (ANNEXURE - A TO THIS ORDER), STATES THAT THE ASSESSEE IS ENTITLED TO TAKE OVER THE PHYSICAL POSSESSION. THEREFORE, THE INDEXATION CAN ONLY BE ALLOWED FROM 20.12.1991 INSTEAD OF 25.01.1988, AS CLAIMED BY THE ASSESSEE. ITA NO. 3003 / DEL/ 201 4 10 4.4.2 THE ASSESSEE HAS HIMSE LF ADMITTED THAT THE FLAT WAS SOLD FOR A CONSIDERATION OF RS. 14.00 LACS. AS PER THE SALE DEED, THERE IS NO LIABILITY OF THE ASSESSEE TOWARDS 'REPAIR'. IT IS NOT BELIEVABLE THAT AFTER SETTLING THE SALE CONSIDERATION THE WHITE WASHING EXPENSES WOULD BE BORN E BY THE OWNER OUT OF SALE CONSIDERATION DETERMINED. MOREOVER, NO PURCHASER WOULD BEAR BURDEN OF STAMP DUTY ON AN ADDITIONAL AMOUNT OF RS.1.5 LAKH. THE COPY OF AGREEMENT DATED 12.08.2008 FILED BY THE ASSESSEE IN THIS REGARD APPEARS TO BE A SELF - SERVING EV IDENCE AS THERE IS NO MENTION OF THIS DOCUMENT IN THE DEED FOR AGREEMENT TO SALE EXECUTED ON 26.08.2008 (ON WHICH STAMP DUTY HAS BEEN PAID). THERE IS NO MENTION OF SUCH LIABILITY ON BEHALF OF THE ASSESSEE (SELLER) IN SAID DEED DATED 26.08.2008. IN FACT, IF (AS FURNISHED PER THE AGREEMENT DATED 12.08.2008), THE AMOUNT OF RS. 1.5 LAKH WAS PAID BY THE SETTER (ASSESSEE), IT WOULD HAVE FIND MENTION, EXPLICITLY OR IMPLICITLY, IN THE AGREEMENT TO SALE EXECUTED ON 26.08.2008. THEREFORE, GENUINENESS OF THIS PAYMENT IS DOUBTFUL. IN ANY CASE, THIS CANNOT BE TREATED AS EXPENSES INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH THE 'TRANSFER'. THE AO HAS FAILED TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE IN RIGHT LEGAL PERSPECTIVE. THEREFORE, THE AO HAS FAILED TO CALCULATE THE LTCG CORRECTLY AND THIS FAILURE HAS RESULTED IN PASSING AN ORDER WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE TO THIS EXTENT. 5.1 IN VIEW OF DISCUSSION IN ABOVE PARAS, I AM OF THE OPINION THAT THERE IS NON - APPLICAT ION OF MIND ON PART OF THE A.O. ALSO, THE AO FAILED TO APPLY CORRECT PROVISIONS OF THE LAW. THEREFORE, ASSESSMENT ORDER IS HELD AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IN RESPECT OF AFORESAID ISSUES. HAD THE ITA NO. 3003 / DEL/ 201 4 11 CONSEQUENT ADDITIONS BEEN MADE, THERE WOULD HAVE BEEN SUBSTANTIAL TAX EFFECT AND THUS THE CAUSE OF THE REVENUE HAS SUFFERED. FURTHER, THE IMPUGNED ORDER OF THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS IT IS IN CLEAR VIOLATION OF THE LEGAL PROVISIONS CONTAINED IN THE INCOME TAX ACT, 1961. THUS, THE VALIDITY I SANCTITY OF THE LEGAL PROVISIONS OF THE ACT, HAS BEEN ERODED AND IT MAY SERVE AS A BAD PRECEDENT. 5.2 THE ASSESSMENT ORDER IS, THEREFORE, SET ASIDE U/S 263(1) OF THE INCOME T AX ACT, 1961 TO THE ABOVE STATED EXTENT. THE ABOVE ISSUES ARE RESTORED (BACK) TO THE FILE OF AO FOR MAKING FRESH ASSESSMENT. THE AO (ASSESSING OFFICER) IS DIRECTED TO MAKE FRESH ASSESSMENT AFTER MAKING NECESSARY AND PROPER INQUIRIES I INVESTIGATION, IN THE LIGHT OF DISCUSSIONS MADE IN THE PRECEEDING PARAS (BUT NOT NECESSARILY LIMITING TO THE SAME) AND MAKE A JUDICIOUS AND LOGICAL ORDER AS PER LAW, AFTER PROVIDING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5 . AGAINST THE ORDER DATED 21 . 3 .201 4 OF THE LD. CIT, ASSESSSEE IS IN APPEAL BEFORE US. 6 . LD. COUNSEL OF THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING PAGES 1 TO 120 HAVING THE RECORDS WITH THE LOWER AUTHORITIES. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS , ESPECIALLY THE PAPER BOOK FILED BY THE LD. COUN S EL OF THE ASSESSEE AND ORDERS OF THE REVENUE AUTHORITIES. 8. IT HAS BEEN ARGUED BY THE LD. A.R. SHRI NAVIN GUPTA, ADVOCATE, THAT THE IMPUGNED ORDER PASSED U/S. 263 OF THE ACT IS ILLEGAL, UNWARRANTED AND IS BAD IN LAW AND IS AL SO AGAINST THE PRINCIPLES OF NATURAL JUSTICE. A FURTHER ARGUMENT ITA NO. 3003 / DEL/ 201 4 12 WAS ADVANCED BY THE LD. A.R. THAT THE LD. CIT DID NOT EVEN CONSIDER THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE. THEREFORE, RATHER THE IMPUGNED ORDER BECOMES ARBITRARY BEING LOPSIDED. IT IS CLAIMED THAT THE LD. AO HAS EXAMINED ALL THE POINTS WHICH WERE RAISED IN THE NOTICE U/S. 263 WHILE FRAMING THE IMPUGNED ASSESSMENT ORDER, BUT WITHOUT LOOKING INTO THEM, THE LD. CIT HAS MADE A ROUTINE ORDER WITHOUT EVEN REFERRING TO THE INVESTIGATION DONE BY THE LD. AO. FINALLY, IT HAS BEEN ARGUED THAT THE ORDER OF THE LD. AO BEING NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF REVENUE AND, IS REVISABLE U/S. 263 OF THE ACT. 9. ON THE OTHER HAND, THE LD. D.R. SHRI VIVEK W ADEKAR, CIT(DR), HAS PLACED HEAVY RELIANCE ON THE ORDER OF THE LD. CIT AND HAS STRONGLY CONTENDED THAT THE ORDER IS NOT ONLY ERRONEOUS BECAUSE PROPER INVESTIGATION WAS NOT DONE BY THE LD. AO, BUT IS ALSO, TO THE EXTENT, PREJUDICIAL TO THE INTEREST OF THE REVENUE AND, THEREFORE, HE H AS JUSTIFIED THE ACTION OF CIT TAKEN U/S. 263 OF THE ACT. 10. HAVING CAREFULLY EXAMINED THE ENTIRE EVIDENCES AVAILABLE ON THE RECORD IN THE LIGHT OF THE ORAL SUBMISSIONS OF THE PARTIES, WITH REFERENCE TO THE PROVISIONS OF LAW AND AFTER GIVING ANXIOUS THOU GHT, IN THE LIGHT OF THE PLAIN WORDS USED IN SECTION 263 OF THE ACT . WE DRAW SUPPORT FROM THE DECISION OF THE HON BLE SUPREME COURT RENDERED IN THE CASE OF MALABAR INDUSTRIES CO. LTD. VS. CIT (2000) 243 ITR 83 (SC) AND OTHER RELEVANT CASES, WE ARE OF THE CONSIDERED OPINION THAT THIS IS NOT A FIT CASE FOR REVISING THE ASSESSMENT ORDER. THE REASONS FOR OUR ABOVE CONCLUSION ARE THAT THE TWIN CONDITIONS, VIZ., THE ASSESSMENT ORDER SHOULD BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE D O NOT CO - EXIST IN THIS CASE. THE ASSESSEE HAD FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AND HAD DISCLOSED THE SAME DURING THE RELEVANT YEAR, ALONGWITH ENTIRE REQUISITE DETAILS. DURING THE ASSESSMENT PROCEEDINGS, THE LD. AO EXAMINED ALL THE R ELEVANT EVIDENCES ITA NO. 3003 / DEL/ 201 4 13 PRODUCED BEFORE HIM, EITHER ALONGWITH THE RETURN OR DURING THE ASSESSMENT PROCEEDINGS, AND HAS ACCEPTED THE GIFT AS GENUINE. THE AO CALLED FOR THE ENTIRE DETAILS. 11 . THE REVISIONAL POWER CONFERRED ON THE COMMISSIONER UNDER THIS SECTION IS OF WIDE AMPLITUDE. IT ENABLES THE COMMISSIONER TO CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THE ACT. THE REVISIONAL POWER UNDER SECTION 263 CANNOT BE EXERCISED IN RESPECT OF A MATTER WHICH FALLS WITHIN THE POWER TO ASSESS ESCAPED INCOME UNDER SECTION 147 OF THE ACT. THE REVISIONAL POWER IS A QUASI - JUDICIAL ONE HEDGED WITH LIMITATION AND HAS TO BE EXERCISED SUBJECT TO THE SAME AND WITHIN ITS SCOPE AND AMBIT. SO FAR AS CALLING FOR THE RECORDS AND EXAMINING THEM IS CONCERNED, UNDOUBTEDLY, IT IS AN ADMINISTRATIVE ACT BUT ON EXAMINATION TO CONSIDER OR IN OTHER WORDS, TO FORM AN OPINION THAT PARTICULAR ORDER IS ERRONEOUS IS SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IS A QUASI - JUDICIAL ACT BECAUSE ON THIS CONSIDERATION OR OPINION THE WHOLE MACHINERY OF RE - EXAMINATION AND RECONSIDERATION OF AN ORDER OF ASSESSMENT, WHICH HAS ALREADY BEEN CONCLUDED AND CONTROVERSY WHICH HAS BEEN SET AT REST, IS AGAIN SET IN MOTION. IT IS AN IMPORTANT DECISION AND THE SAME CANNOT BE BASED UPON THE WHIMS AND THE FANCIES OR THE CAPRICE OF THE REVISING AUTHORITY. THERE MUST BE MATERIAL(S) AVAILABLE FROM THE RECORDS CALLED FOR BY THE COMMISSIONER. THE COMMISSIONER MUST GIVE REASONS FOR PASSING AN ORDER. HE IS BOUND BY THE DECISIONS OF THE HON BL E SUPREME COURT AND JURISDICTIONAL HIGH COURT. THE COMMISSIONER MUST COME TO A FIRM CONCLUSION ON THE POINT THAT ERROR IN THE ORDER HAS RESULTED IN PREJUDICE TO THE INTERESTS OF THE REVENUE. HE HAS TO APPLY HIS MIND FOR COMING TO A FIRM CONCLUSION WHICH SHOULD BE BASED ON PROPER MATERIAL AND HE MUST MENTION THAT MATERIAL IN HIS ORDER. THE COMMISSIONER MAY UNDER THIS SECTION PASS SUCH AN ORDER AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT OR CANCELING T HE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT, ITA NO. 3003 / DEL/ 201 4 14 OR ANY OTHER ORDER TO THE DETRIMENT OF THE ASSESSEE. BUT A MISTAKE OR OMISSION IN THE ASSESSMENT ORDER WOULD NOT JUSTIFY THE SETTING ASIDE OF THE WHOLE ORDER. 1 2 . FROM THE PLAIN READING OF THE ABOVE PROVISI ON IT IS MANIFESTLY CLEAR THAT AN ORDER CAN BE REVISED IF AND ONLY IF THE TWIN CONDITIONS, VIZ., ONE THAT THE ORDER IS ERRONEOUS AND TWO THAT TO THAT EXTENT IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE CO - EXIST. OR IN OTHER WORDS, AN ORDER CAN BE RE VISED IF IT IS BOTH ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. AN ORDER, WHICH IS ONLY ERRONEOUS BUT NOT PREJUDICIAL, CANNOT BE REVISED. LIKEWISE AN ORDER, WHICH IS ONLY PREJUDICIAL TO THE INTEREST OF THE REVENUE BUT NOT ERRONEOUS, CANNOT BE REVISED. TO PUT IT IN, STILL SIMPLER WORDS, IT IS MANDATORY FOR THE COMMISSIONER TO REVISE AN ORDER THAT BOTH THE ABOVE CONDITIONS MUST CO - EXIST . AN ORDER WHICH IS NOT ERRONEOUS CANNOT BE REVISED EVEN IF IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, AND THE VICE - VERSA. 1 3 . THE SUBJECT OF REVISION U/S 263 HAS BEEN VASTLY EXAMINED AND ANALYSED BY VARIOUS COURTS INCLUDING THAT OF HON BLE APEX COURT. THE REVISIONAL POWER CONFERRED ON THE COMMISSIONER VIDE S. 263 IS OF VIDE AMPLITUDE. IT ENABLES THE COMMISSIONER TO CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDING UNDER THE ACT. IT EMPOWERS THE COMMISSIONER TO MAKE OR CAUSE TO BE MADE SUCH AN ENQUIRY AS HE DEEMS NECESSARY IN ORDER TO FIND OUT IF ANY ORDER PASSED BY ASSESSING OFFICER IS ER RONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ONLY LIMITATION ON HIS POWERS IS THAT HE MUST HAVE SOME MATERIAL(S) WHICH WOULD ENABLE HIM TO FORM A PRIMA - FACIE OPINION THAT THE ORDER PASSED BY THE OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ONCE HE COMES TO THE ABOVE CONCLUSIONS ON THE BASIS OF THE MATERIAL THAT THE ORDER OF THE A.O. IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTERESTS IF THE REVENUE, THE COMMISSIONER IS EMPOWERED TO PASS AN ORDER AS THE CIRCUMSTANCES OF THE CASE MAY WARRANT. HE MAY PASS AN ORDER ENHANCING THE ASSESSMENT OR HE MAY ITA NO. 3003 / DEL/ 201 4 15 MODIFY THE ASSESSMENT. HE IS ALSO EMPOWERED TO CANCEL THE ASSESSMENT AND DIRECT TO FRAME A FRESH ASSESSMENT. HE IS EMPOWERED TO TAKE RECOURSE TO ANY OF THE THREE COURSES INDICATED IN S. 263. SO, IT IS CLEAR THAT THE COMMISSIONER DOES NOT HAVE UNFETTERED AND UNCHEQURED DISCRETION TO REVISE AN ORDER. THE COMMISSIONER IS REQUIRED TO EXERCISE REVISIONAL POWER WITHIN THE BOUNDS OF THE LAW AND HAS TO SATISFY THE NEED OF FAIRNESS IN ADMINISTRATIVE ACTION AND FAIR - PLAY WITH DUE RESPECT TO THE PRINCIPLE OF AUDI ALTERAM PARTEM AS ENVISAGED IN THE CONSTITUTION OF INDIA AS WELL IN SECTION 263. AN ORDER CAN BE TREATED AS ERRONEOUS IF IT WAS PASSED IN UTT ER IGNORANCE OR IN VIOLATION OF ANY LAW; OR PASSED WITHOUT TAKING INTO CONSIDERATION ALL THE RELEVANT FACTS OR BY TAKING INTO CONSIDERATION IRRELEVANT FACTS. THE PREJUDICE THAT IS CONTEMPLATED UNDER S. 263 IS THE PREJUDICE TO THE INCOME TAX ADMINISTRATIO N AS A WHOLE. THE REVISION HAS TO BE DONE FOR THE PURPOSE OF SETTING RIGHT DISTORTIONS AND PREJUDICES CAUSED TO THE REVENUE IN THE ABOVE CONTEXT. THE FUNDAMENTAL PRINCIPLES WHICH EMERGE FROM THE SEVERAL CASES REGARDING THE POWERS OF THE COMMISSIONER UNDER SECTION 263 MAY BE SUMMARIZED BELOW: - (I) THE COMMISSIONER MUST RECORD SATISFACTION THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. BOTH THE CONDITIONS MUST BE FUL - FILLED. (II) SECTION 263 CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER AND IT IS ONLY WHEN AN ORDER IS ERRONEOUS, THAT THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SUFF ICE FOR THE REQUIREMENT OF ORDER BEING ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION OF MIND, SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. ITA NO. 3003 / DEL/ 201 4 16 (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PERMISSIBLE UNDER LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER, UNLESS T HE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE UNDER LAW. (VI) IF WHILE MAKING THE ASSESSMENT, THE ASSESSING OFFICER EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME, THE COMMISSIONER, WHILE EXERCISING HIS POWER UNDER SECTION 263, IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME IN PLACE OF THE INCOME ESTIMATED BY THE ASSESSING OFFICER. (VII) THE ASSESSING OFFICER EXERCISE QUASI - JUDICIAL POWER VESTED IN HIM AND IF HE EXERCISE SUCH POWER IN ACCORDANCE WITH LAW AND ARRIVES AT A CONCLUSION, SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. (VIII) THE COMMISSIONER , BEFORE EXERCISING HIS JURISDICT ION UNDER SECTION 263, MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE ASSESSING OFFICER HAS MADE ENQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND THE ASSESSEE HAS GIVEN DETAILED EXPLANATION BY A LETTE R IN WRITING AND THE ASSESSING OFFICER ALLOWED THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE DECISION OF THE ASSESSING OFFICER ITA NO. 3003 / DEL/ 201 4 17 CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DOES NOT MAKE AN ELABORATE DISCUSSION IN T HAT REGARD. 1 4 . NOW REVERTING BACK TO THE FACTS OF THE CASE IN HAND, IT IS FOUND THAT THE AO HAS MADE PROPER ENQUIRIES DURING THE ASSESSMENT PROCEEDINGS AND AFTER EXAMINING THE PROOFS SO FILED BY THE ASSESSEE BEFORE HIM, HAS MADE DISALLOWANCE ON BEING SATI SFIED WITH THE EXPLANATION OF THE ASSESSEE. THE FINDING OF THE HON BLE SUPREME COURT GIVEN IN THE CELEBRATED DECISION OF MALABAR INDUSTRIES CO. LTD. (SUPRA) ARE RELEVANT FOR READY REFERENCE AND SO THESE ARE BEING EXTRACTED HEREIN BELOW : A BARE READING O F SECTION 263 OF THE INCOME - TAX ACT, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER OF THE INCOME - TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING 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 OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE - 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. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE PREJUDICIAL TO THE INTEREST OF THE REVENUE IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UNDERSTOOD IN ITS OR DINARY MEANING IT IS OF WIDE IMPORT AND IS NOT CONFINED TO LOSS OF TAX. THE SCHEME OF THE ACT IS TO LEVY AND COLLECT TAX IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE INCOME - TAX OFFICER, THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL ITA NO. 3003 / DEL/ 201 4 18 CERTAINLY BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 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 PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCOME - TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT H AS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME - TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME - TAX OFFICER IS UNSUSTAINABLE IN LAW. 15. THE ABOVE RATIO OF HON BLE SUPREME COURT S DECISION SUPPORTS OUR FINDING GIVEN IN THIS CASE. THE HON BLE KOLKATA BENCH HAS FURTHER CLARIFIED AND DEFINED AS TO WHAT DOES THE EXPRESSIONS LACK OF ENQUIRY BY AO MEANS WHILE DECIDING THE CASE OF SIGMA SEARCH LIGHTS LTD. VS. ITO, 82 ITTJ 956 (ITAT KOLKATA). THE HON BLE BENCH HAS OBSERVED AS UNDER : - REVISION ERRONEOUS AND PREJUDICIAL ORDER LACK OF ENQUIRY BY AO AN ORDER MAY BE BRIEF OR CRYPTIC BUT IF HAS BEEN PASSED AFTER CONDUCTING PROPER ENQUIRIES INTO THE FACTS STATED IN THE RETURN, SUCH AN ORDER CANNOT BE HELD ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THAT REASON ALONE CIT SETTING ASIDE ASSESSMENT UNDER S. 263 AND ORDER ING DO NOVO ASSESSMENT ON GROUNDS OF LOW GP RATE AND HIGHER EXPENSES TOWARDS COMMISSION NO FINDING BY CIT THAT EXPENSES WERE BOGUS AND SIMILAR EXPENSES TO SAME PARTIES ALLOWED IN EARLIER AS WELL AS SUBSEQUENT ASSESSMENT YEARS RECORD SHOWING THAT AO MAD E DETAILED ENQUIRY BEFORE COMPLETING THE ASSESSMENT CONDITION PRECEDENT FOR INVOKING REVISIONAL JURISDICTION NOT PRESENT REVISIONAL ORDER QUASHED. 16. WE ALSO FIND THAT T HE AGRA BENCH OF ITAT HAS TAKEN A SIMILAR VIEW THAT IF THE ASSESSMENT ORDER IS NOT WRITTEN MORE ELABORATELY, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER. THIS VIEW WAS TAKEN IN THE CASE ITA NO. 3003 / DEL/ 201 4 19 OF GOYAL IRON AND STEEL WORKS INDIA VS. ACIT REPORTED IN 120 TAXMAN PAGE 208. AGAIN HON BLE AGRA BENCH HAS TAKEN SIMILAR VIEW WHILE D ECIDING THE CASE OF URMILA GUPTA VS. ACIT IN ITA NO. 04/AGRA/2005 VIDE ORDER DATED 23.2.2006. THE HON BLE NAGPUR BENCH OF ITAT HAS ALSO TAKEN A VIEW WHICH SUPPORTS OUR ABOVE FINDING IN THE CASE OF SHRI P.K. BHATIA, CORBA VS. CIT (2006) 5 ITJ 235 (COPY ON R ECORD). THE HON BLE BENCH HAS HELD AS UNDER : - REVISION U/S. 263 OF THE INCOME - TAX ACT, 1961 THE REVISION ORDER WAS BASED ON THE ASPECTS BEING CONSIDERED BY THE AO LEARNED CIT HAS NOT BEEN ABLE TO FIND ANY ERROR LEADING TO ORDER BECOME PREJUDICIAL T O THE INTEREST OF THE REVENUE TRIBUNAL HELD IF THE ASSESSEE HAD FURNISHED THE REQUISITE INFORMATION AND THE AO HAD COMPLETED THE ASSESSMENT THEREAFTER CONSIDERING ALL THE FACTS, THEN THE CIT WAS NOT EMPOWERED TO EXERCISE POWERS OF REVISION U/S. 263 R EVENUE HAS NOT BEEN ABLE TO BRING OUT ANY MATERIAL ESTABLISH THAT THE LD. CIT WAS POINTING OUT MISTAKES OR ERRORS IN THE ORDER OF THE AO. THE AO HAD EXERCISE THE QUASI - JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSIONS AND SUC H A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE CIT WAS NOT FULLY SATISFIED WITH THE CONCLUSION REVISION WAS NOT JUSTIFIED, APPEAL OF ASSESSEE IS ALLOWED. ITA NO. 3003 / DEL/ 201 4 20 17. THE ABOVE DECISION WAS RENDERED AFTER FOLLOWING THE DECISION OF JURISDICTIO NAL HIGH COURT (MP HIGH COURT) 171 ITR 141 (CIT VS. RATLAM COAL ASH CO.). THERE ARE HOST OF OTHER DECISIONS IN THIS DIRECTION, WHICH SUPPORT OUR ABOVE FINDINGS. WE FIND THAT HON BLE M.P. HIGH COURT HAS TAKEN THE DECISION ON SIMILAR LINES WHILE DECIDING T HE CASE OF ITO, GWALIOR VS. SMT. URMILA GUPTA, WHICH HAS CONFIRMED THE VIEW TAKEN BY THE TRIBUNAL IN ITA NO. 04/AGR./2005 (AGRA BENCH) REFERRED TO ABOVE. 18. WE FURTHER FIND THAT T HE HON BLE THIRD MEMBER, BEING THE HON BLE PRESIDENT HAS DECIDED SAME AND S IMILAR ISSUE IN THE CASE OF M/S. PAL & PAL ELECTROMECHANICAL LTD. VS. CIT GWALIOR IN ITA NO. 52/AGR./2007 FOR A.Y. 2000 - 01 ORDER DATED 18.11.2008, WHERE THERE WAS DIFFERENCE OF OPINION BETWEEN THE HON BLE MEMBERS CONSTITUTING THE DIVISION BENCH WITH REGARD TO A REVISION WHETHER IT WAS VALID OR NOT. THE HON BLE THIRD MEMBER HELD THAT THE REVISION WAS NOT VALID BECAUSE IT WAS OBLIGATORY ON THE PART OF THE CIT TO SHOW FOR THE PURPOSE OF SECTION 263 THAT THE ASSESSMENT WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICI AL TO THE INTEREST OF THE REVENUE. THE FACTS OF THE ABOVE CASE ARE MORE OR LESS ON THE SAME AND SIMILAR LINES AS ARE THE FACTS OF THE GIVEN CASE. THUS, WE ALSO DRAW SUPPORT FROM THE THIRD MEMBER DECISION (SUPRA). 19 . IN VIEW OF THE FOREGOING OBSERVATIONS, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE SO AS TO ATTRACT THE PROCEEDINGS U/S. 263 ITA NO. 3003 / DEL/ 201 4 21 OF THE I.T. ACT, 1961. AC CORDINGLY, WE CANCEL THE REVISIONAL ORDER PASSED U/S. 263 AND RESTORE THE ASSESSMENT ORDER IN QUESTION. 2 0 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED . ORDER PRONOUNCED IN THE O PEN C OURT ON 29 / 10 /20 1 4 . SD/ - SD/ - [ J.S. REDDY ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 29 / 10 /201 4 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3 . CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES