M/s Ramola Constructions Company, Tehri Garhwal V. ITO, Rishikesh

ITA 3132/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4065 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 09-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 24-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SAPRA
• Assessee Lawyers: O P SAPRA AD V SS
• Keywords: Depreciation
• Section: 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) (DELHI BENCH : F NEW DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRES IDENT AND SHRI A.D. JAIN, JUDICIAL MEMBER SHRI A.D. JAIN, JUDICIAL MEMBER SHRI A.D. JAIN, JUDICIAL MEMBER SHRI A.D. JAIN, JUDICIAL MEMBER I.T.A. NO.3132/DEL./2010 I.T.A. NO.3132/DEL./2010 I.T.A. NO.3132/DEL./2010 I.T.A. NO.3132/DEL./2010 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006 (ASSESSMENT YEAR : 2006- -- -07) 07) 07) 07) RAMOLA CONSTRCUTION COMPANY RAMOLA CONSTRCUTION COMPANY RAMOLA CONSTRCUTION COMPANY RAMOLA CONSTRCUTION COMPANY VS. VS. VS. VS. ITO, WAR ITO, WAR ITO, WAR ITO, WARD 2, D 2, D 2, D 2, OLD TEHRI ROAD, OLD TEHRI ROAD, OLD TEHRI ROAD, OLD TEHRI ROAD, RISHIKESH. RISHIKESH. RISHIKESH. RISHIKESH. CHAMBA, DISTT. GARHWAL, CHAMBA, DISTT. GARHWAL, CHAMBA, DISTT. GARHWAL, CHAMBA, DISTT. GARHWAL, (UTTRAKHAND) (UTTRAKHAND) (UTTRAKHAND) (UTTRAKHAND) (PAN/GIR NO. : AAIFR4289C) (PAN/GIR NO. : AAIFR4289C) (PAN/GIR NO. : AAIFR4289C) (PAN/GIR NO. : AAIFR4289C) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : S/SHRI SANDEEP SAPRA & O.P. SAPRA, AD V. ASSESSEE BY : S/SHRI SANDEEP SAPRA & O.P. SAPRA, AD V. ASSESSEE BY : S/SHRI SANDEEP SAPRA & O.P. SAPRA, AD V. ASSESSEE BY : S/SHRI SANDEEP SAPRA & O.P. SAPRA, AD V. REVENUE BY : SHRI SUDESH GARG, CIT(DR) REVENUE BY : SHRI SUDESH GARG, CIT(DR) REVENUE BY : SHRI SUDESH GARG, CIT(DR) REVENUE BY : SHRI SUDESH GARG, CIT(DR) ORDER ORDER ORDER ORDER PER A.D. JAIN, JM THIS IS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2006-07 AGAINST THE ORDER OF THE CIT, DEHRADUN PASSED U/S 263 OF THE I .T. ACT, ON 18.03.2010. 2. THE FACTS ARE THAT THE ASSESSEE PARTNERSHIP FIRM IS A C IVIL CONTRACTOR. IT FILED ITS RETURN OF INCOME DECLARING INCOME OF `411440. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT, VIDE ORDER DATED 30.12.08, AT AN INCOME OF `453050, THEREBY MAKING A N ADDITION OF `41611 TO THE RETURNED INCOME ON ACCOUNT OF UNEXPLA INED EXPENDITURE. 3. DURING REVIEW OF SCRUTINY CASES, THE ADDITIONAL CIT , OBSERVED THAT THE CASE WAS SELECTED FOR SCRUTINY, SINCE THE PROFIT WAS LESS THAN 5% OF THE CONTRACTUAL RECEIPT; THAT HUGE DEBT OF `6114953 EXISTED ON ACCOUNT OF WAGES AND THE AO ON ACCOUNT OF WAGES AND THE AO HA D NOT EXAMINED WHETHER THE CONTRACT WARRANTED HUGE ENGAGE MENT OF LABOUR. THE ADDL.CIT THUS SUBMITTED A PROPOSAL FOR REMEDIAL AC TION U/S 263 OF THE ACT. I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 2 4. THE NOTICE ISSUED TO THE ASSESSEE U/S 263 OF THE ACT WA S ON THE FOLLOWING COUNTS: 1. IT APPEARS THAT HE AO HAS NOT EXAMINED THE ALLOWAB ILITY OR OTHERWISE OF WAGES OF `4009642. 2. DISALLOW ABILITY OF INTEREST ON BORROWED CAPITAL W ITH RESPECT TO THE INTEREST FREE ADVANCE NOT BEEN EXAMINED. 3. SOURCE OF CAPITAL OF `260000 INTRODUCED BY SHRI KAMAL CHAND RAMOLA HAS NOT BEEN EXAMINED. 4. THE AO HAS ALSO NOT EXAMINED THE REASONS FOR DECLARI NG PROFIT AT LESS THAN 5% OF THE CONTRACTUAL RECEIPTS. 5. VIDE REPLY/LETTER DATED 21.12.09, THE ASSESSEE SUBMIT TED BEFORE THE CIT THAT WAGES PAYABLE ON 31.3.06 WERE OF `40096 42; THAT LABOURERS ENGAGED IN THE CONSTRUCTION WORK BELONGED T O NEPAL, JHARKHAND AND BIHAR ETC. AND THE CONSTRUCTIONS WERE B EING CARRIED OUT IN THE REMOTE AREAS OF UTTRAKHAND, WHEREAS THERE WERE NO BANKING FACILITIES; AND THAT, THEREFORE, THE WORKERS DID NOT WITHDRAW THEIR WAGES TILL THE COMPLETION OF THE CONTRACT. 6. BY VIRTUE OF THE IMPUGNED ORDER, THE CIT SET ASIDE THE ASSESSMENT TO THE AO WITH THE DIRECTION THAT THE AO WOU LD FRAME THE ASSESSMENT DE-NOVO AFTER EXAMINING THE GENUINENESS OF THE EXPENDITURE ON ACCOUNT OF WAGES AND PURCHASES OF MATER IAL. 7. AGGRIEVED, THE ASSESSEE IS IN APPEAL. 8. THE LD.COUNSEL FOR THE ASSESSEE, CHALLENGING THE IMPU GNED ORDER, HAS CONTENDED THAT IN THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE CIT HAD NO JURISDICTION TO INVOKE THE PROVISIONS O F SECTION 263 OF THE ACT; THAT THE CIT HAS FACTUALLY ERRED IN STATING THAT THE AO HAD NOT PROPERLY EXAMINED THE GENUINENESS OF THE EXPENDITURE OF WAGES, WHEREAS THE CIT HIMSELF ADMITS THAT THE EXPENSES ON WAGE S HAD BEEN I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 3 EXAMINED; THAT THE CIT DID NOT RAISE ANY QUERY REGAR DING THE PURCHASE OF MATERIAL WORTH `4439047, AS DEBITED TO THE ASSESSEES P&L A/C, EITHER IN THE SHOW-CAUSE NOTICE, OR DURING THE HEARIN G BEFORE HIM; THAT IT IS CLEAR FROM THE ASSESSMENT ORDER THAT THE AO HAD PR OPERLY EXAMINED THE WAGES AND LABOUR EXPENSES DEBITED TO THE P&L A/C, AMOUNTING TO `6114953, OUT OF WHICH, `4009642 WERE PAYABLE AS ON 31.3.06; THAT THE AO HAD ALLOWED THE WAGES AS DEBITED TO THE P&L A/C AFTER PROPER VERIFICATION THEREBY; THAT FURTHER, EV EN ON MERITS, IT IS AVAILABLE FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAD P URCHASED THE BOOKS OF ACCOUNT, AS SUCH CASH BOOK, LABOUR AND MUST ER ROLL REGARDING THE WAGES PAID, ALONG WITH BILLS/VOUCHERS; T HAT FROM THIS, IT IS OBVIOUS THAT THE AO HAD COMPUTED THE INCOME OF THE A SSESSEE BY PROPER APPLICATION OF MIND, THAT NOT ONLY THIS, THE ASSESSEE HAD ITSELF DISCLOSED A LARGE HIGHER PROFIT FOR THE YEAR UNDER CO NSIDERATION, THAT AS COMPARED TO THE IMMEDIATELY PRECEDING YEAR; AND THA T THIS BEING SO, THERE WAS NO JUSTIFICATION FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. 9. THE LD.DR, ON THE OTHER HAND, HAS STRONGLY RELIED ON THE IMPUGNED ORDER. STRESS HAS BEEN LAID ON THE OBSERVATIO N OF THE CIT THAT DESPITE HAVING BEEN ASKED TO DO SO, THE ASSESSEE DID NOT SUBMIT PROOF OF PAYMENT OUTSTANDING WAGES SHOWN AT `4009642. IT HAS ALSO BEEN SUBMITTED THAT THE CITS FACTUAL STATEMENT THAT A PERUSAL OF THE ASSESSEES RECORDS REVEALED THAT THE AO HAD NOT PROPERLY EXAMINED THE GENUINENESS OF THE EXPENDITURE DEBITED ON ACCOUNT OF PURCHASE OF MATERIAL AND WAGES, HAS REMAINED UNCONTROVERTED. 10. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MA TERIAL ON RECORD. A PERUSAL OF THE NOTICE ISSUED TO THE ASSESSEE U/ S 263 OF THE ACT SHOWS THAT THERE WAS NO SPECIFIC MENTION REGARDING THE MATERIAL PURCHASED BY THE ASSESSEE. HOWEVER, THE CIT HAS HELD THE ASSESSMENT I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 4 ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF THE REVENUE SINCE, ACCORDING TO THE CIT, THE AO HAD NOT PROPERLY EXAMINED THE GENUINENESS OF THE EXPENDITURE DEBITED ON ACCOUNT OF, OTHER THAN WAGES, MATERIAL PURCHASED. ON THIS VERY SCORE, THE ORD ER OF THE CIT IS LIABLE TO BE CANCELLED. THE ASSESSMENT ORDER HAS BEEN R EVISED ON A GROUND WHICH IS NON-EXISTENT IN THE NOTICE FOR INVOKI NG THE PROVISIONS OF SECTION 263 OF THE ACT. 11. FURTHER, THE AO, IN THE ASSESSMENT ORDER, HAS MADE, INTER ALIA, THE FOLLOWING OBSERVATIONS: 2. THE ASSESSEE FIRM ENGAGED IN CIVIL CONTRACT WORK WI TH DIFFERENT DEPARTMENTS. THE ASSESSEE HAS FILED AUDIT REPO RT IN FORM NO.3CB & 3CD ALONG WITH RETURN AND HE WAS REQU IRED TO PRODUCE BOOKS OF ACCOUNT, COPY OF BANK ACCOUNTS, VOUC HERS OF EXPENSES WHICH WERE DEBITED IN P&L A/C, SALARY/LABOUR REGISTER, DETAILS OF CHEQUES RECEIVED FROM CONTRACT WORK. COMP UTERIZED BOOKS SUCH AS CASH BOOK AND LEDGER AND MUSTER ROLL REGAR DING WAGES PAID ALONG WITH BILLS/VOUCHERS WERE PRODUCED AND TEST CHECKED. NECESSARY DETAILS/REPLY OBTAINED AND PLACED ON RECORD. ON EXAMINATION OF TRADING ACCOUNT SHOWS THAT THE ASSESSEE HAS PAID `6114953 ON ACCOUNT OF WAGES AND LABOUR. THE C OPY OF MUSTOR ROLL WAS PRODUCED FOR EXAMINATION WHICH SHOWS TH AT THE TOTAL WAGES WAS PAID `2105311 ONLY AND REST OF THE AMO UNT OF `4009642 WAS OUTSTANDING AS ON 31.3.2006. THE MONTHWI SE LIST OF WAGES PAID OBTAINED AND VERIFIED. 12. IT IS THUS EVIDENT THAT BEFORE THE AO, THE ASSESSEE F ILED TAX AUDIT REPORT, THE BOOKS OF ACCOUNT, BANK ACCOUNTS, VOUCHERS OF EXPENSES DEBITED TO THE P&L A/C, SALARY/LABOUR REGISTER, DETAI LS OF CHEQUES RECEIVED FROM CONTRACT WORK, COMPUTERIZED BOOKS AS SUC H CASH BOOK AND LABOUR AND MUSTER ROLL REGARDING WAGES PAID, ALON G WITH BILLS AND VOUCHERS, AS REQUIRED BY THE AO. THESE WERE DULY EXAM INED BY THE AO. PAGE 8 OF THE ASSESSEE PAPER BOOK IS A COPY OF NOTI CE DATED 15.4.10, ISSUED BY THE AO U/S 142(1)/263 OF THE ACT. IT WOULD BE APPROPRIATE TO REPRODUCE HEREIN THE CONTENTS OF THIS NOTICE: I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 5 F.NO.AAIFR-4289/ITO-W.2/RKSH/2010-11 OFFICE OF THE INCOME TAX OFFICER, WARD 2, RISHIKESH, DATED 15/04/10 TO, M/S RAMOLA CONSTRUCTION CO., OLD TEHRI ROAD, CHAMBA (T.G.) SUB:-NOTICE U/S 142(1)/263 PF THE I.T. ACT, 1961 FOR THE A.Y.2006- 07 REGARDING IN ORDER TO FINALIZE THE ASSESSMENT PROCEEDINGS IN YOUR CASE, THE FOLLOWING BOOKS OF ACCOUNT/DOCUMENTS DETAILS AND EXPLA NATIONS ARE NECESSARY. YOU ARE HEREBY REQUIRED TO PRODUCE THE SAM E ON THE DATE AND TIME SPECIFIED IN THE NOTICE U/S 142(1) ENCLOSED H EREWITH:- 1. ON PERUSAL OF P&L A/C FOR THE YEAR UNDER CONSIDERA TION IT IS NOTICED THAT YOU HAVE EXPENSES ON THE FOLLOWING HEADS AS UNDER: (I) MATERIAL PURCHASED - `4439047 (II) LABOUR & WAGES - `6114953 PLEASE PRODUCE ALL BILLS/VOUCHERS REGARDING MATERIAL P URCHASED ALONG WITH BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSID ERATION AND GENUINENESS OF THE PURCHASES. PLEASE PRODUCE EVIDENCE R EGARDING WAGES PAID TO THE LABOURS AND GENUINENESS OF OUTSTANDING WAGES PAYABLE `4009642. DATE FIXED FOR COMPLIANCE ON 07.05.2010. A FORMAL NOTICE U/S 142(1) OF THE I.T. ACT, 1961 IS ENCLOSED. SD/- I.T.O., WARD 2, RISHIKESH 13. THE ABOVE ALSO SHOWS THAT THE AO SPECIFICALLY REQUI RED THE ASSESSEE TO PRODUCE BOOKS OF ACCOUNT, DOCUMENTS, DETAILS A ND EXPLANATIONS WITH REGARD TO THE MATERIAL PURCHASED FO R `4439047 AND LABOUR AND WAGES OF `6114953. THE ASSESSEE WAS ALSO SPECIF ICALLY ASKED TO PRODUCE ALL BILLS/VOUCHERS REGARDING MATERIAL PURCHASED ALONG WITH BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATIO N AND EXPLAINED THE GENUINENESS OF THE PURCHASES. THE ASSESSEE WAS TO PRODU CE EVIDENCE REGARDING WAGES PAID TO THE LABOURERS AND TH E GENUINENESS OF THE OUTSTANDING CHARGES PAYABLE OF `4009642. IT W AS IN RESPONSE, I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 6 THAT THE ASSESSEE PRODUCED ALL THE DETAILS AND DOCUMENTA RY EVIDENCE AS ABOVE, BEFORE THE AO. 14. NOT ONLY THIS, EVEN THE CIT HIMSELF HAS ADMITTED I N THE IMPUGNED ORDER THAT THE EXPENSES PERTAINING TO WAGES HAD BEEN E XAMINED. THE CIT, THOUGH, OBSERVED THAT IN HIS OPINION, THEY HAD N OT BEEN EXAMINED PROPERLY. 15. IN CIT VS. ASHISH RAJPAL, 320 I.T.R. 674(DEL.), IT HAS BEEN HELD THAT WHERE THE AO HAD EXAMINED THE MATTER, THE CONC LUSION OF THE CIT THAT THERE WAS LACK OF PROPER VERIFICATION, WAS UNSUSTA INABLE. THE INVOCATION OF THE PROVISIONS OF SECTION 263 OF THE ACT , IN SUCH CIRCUMSTANCES, WAS HELD TO BE NOT PROPER. 16. IN CIT VS. ARVIND JEWELLERS, 259 I.T.R. 502(GUJ.) , WHERE THE TRIBUNAL HAD HELD THAT THE ASSESSEE HAD PRODUCED RELEVA NT MATERIAL AND OFFERED EXPLANATION IN PURSUANCE OF NOTICES ISSUED U/S 142(1) AND 143(2) OF THE ACT AND AFTER CONSIDERING THE MATERIAL AND EXPLANATIONS, THE AO HAD COME TO A DEFINITE CONCLUSION, SINCE THE M ATERIAL WAS THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE AO AND A PARTICULAR VIEW WAS TAKEN. IT WAS CORRECTLY HELD THA T THE MERE FACT THAT A DIFFERENT VIEW COULD BE TAKEN, SHOULD NOT HAVE FOR MED THE BASIS FOR ACTION U/S 263 OF THE ACT. 17. IN CIT VS. GABRIEL INDIA LTD., 203 I.T.R. 108( BOM.), IT WAS HELD THAT WHERE THE CLAIM HAD BEEN ALLOWED BY THE AO ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, JUST BECAUSE THE AO HAD NOT MADE AN ELABORATE DISCUSSION, THE AOS ORDER COULD NOT BE SAID TO BE ERRONEOUS. 18. IN MALABAR INDUSTRIAL CO. LTD. VS. CIT(SC), IT H AS BEEN HELD AS FOLLOWS: A BARE READING OF SECTION 263 OF THE I.T. ACT, 1961 , MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JURISD ICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER OF TH E ITO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST S OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 7 CONDITIONS, NAMELY, (I) THE ORDER OF THE AO 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 ITO 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 CANN OT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE AO, IT IS ONLY WHEN AN ORDER IS ERRO NEOUS THAT THE SECTION WILL BE ATTRACTED. THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REVEN UE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE AO. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE AO, CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN ITO ADOPTED ONE OF TH E COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE , OR WHERE TWO VIES ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WI TH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE RE VENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW . 19. IN CIT VS. DEVELOPMENT CREDIT BANK LTD., 323 I .T.R. 206, WHERE THE AO, AFTER MAKING AN ENQUIRY AND ELICITING A RESP ONSE FROM THE ASSESSEE, CAME TO CONCLUSION THAT THE ASSESSEE WAS ENTITLED T O DEPRECIATION ON THE VALUE OF SECURITIES HELD ON THE T RADING ACCOUNT, THE CIT WAS HELD NOT ENTITLED TO TREAT THE FINDINGS OF TH E AO TO BE ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVEN UE. 20. THE TRIBUNAL, VIDE ORDER DATED 23.7.10, IN THE CASE OF M/S BARU SINGH RANA IN I.T.A. NO.1895/DEL./10 FOR ASSESSMENT YEA R 2002-03 (COPY PLACED ON RECORD), HAS HELD TO THE EFFECT THAT WHERE THE AO HAD VERIFIED THE CAPITAL BROUGHT IN BY ALL THE FOUR PAR TNERS, OF WHOM, THREE WERE EXISTING ASSESSEES, WHO CONTRIBUTED CAPITAL BY WAY O F TRANSFER OF MONEY FROM OTHER SOURCE IN WHICH THEY WERE PARTNERS, OR BY WAY OF LOANS AND THE FOURTH PARTNER WAS ENGAGED IN MILK BUSIN ESS, WHO CONTRIBUTED ` 1 LAKH FROM THIS BUSINESS AS CAPITAL CONTR IBUTION, AND THE AO HAD VERIFIED THE EXPENSES AND GENUINENESS OF THE OUT STANDING LABOUR CHARGES, THE AOS ORDER COULD NOT BE SAID TO BE EITHER ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. I.T.A. NO.3132/DEL./2010 (A.Y. : 2006-07) 8 21. IN THE PRESENT CASE ALSO, AS DISCUSSED HEREIN ABOVE, N O ERROR OR PREJUDICE TO THE INTERESTS OF THE REVENUE STANDS MADE O UT IN THE ORDER OF THE AO. ACCORDINGLY, IN OUR CONSIDERED OPINION, THE ASSESSEE IS JUSTIFIED IN ITS GRIEVANCE THAT THE CIT ERRED IN INVO KING THE PROVISIONS OF SECTION 263 OF THE ACT. ACCORDINGLY, THIS GRIEVANCE OF THE ASSESSEE IS JUSTIFIED AND IS ACCEPTED AS SUCH. 22. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 09.05.2011. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) VICE PRESIDENT JUDICIAL MEMBER DATED: MAY 09, 2011. *SKB* COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT, DEHRADUN. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. AR/ITAT