R.S.DIAMONDS PVT. LTD., MUMBAI V. PR. CIT- .5, MUMBAI

ITA 3418/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7155 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 21-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Transfer pricing; Principle of natural justice; Assessment record; Set aside
• Section: 263; 143(3); 142(1); 80IA; 143(2)

Judgement Text

INTHEINCOMETAX APPELLATETRIBUNAL MUMBAI BENCHDMUMBAI BEFORE SHRI C.N.PRASAD(JUDICIAL MEMBER)AND SHRI S. RIFAURRAHMAN(ACCOUNTANT MEMBER) ITANO.3418/MUM/2019 ASSESSMENT YEAR:2015-16 R.S. DIAMONDSPRIVATE LIMITED, 1402, A WING, NAMAN MIDTOWN, DR. AMBEDKAR NAGAR, SENAPATIBAPAT MARG, ELPHINSTON WEST, MUMBAI-400013. VS. PRINCIPLECOMMISSIONEROF INCOME TAX, ROOMNO. 501, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020. PAN NO. AADCR 2142J APPELLANT RESPONDENT ASSESSEEBY : MR. MADHURAGRAWAL, AR REVENUEBY : MR. AJAYKUMAR& MR. BHARAT ANDHALE, DRS DATE OF HEARING : 07/06/2021 DATE OF PRONOUNCEMENT : 03/09/2021 ORDER PER S. RIFAURRAHMAN,A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2015-16. THE APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE PR. COMMISSIONER OF INCOME TAX-5, MUMBAI (IN SHORT PR. CIT) U/S 263 OF THE INCOMETAXACT1961, (THEACT). 2. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR (AY) 2015-16 ON 30.09.2015 DECLARING LOSS OF R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 2 RS.2,78,97,977/-. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND STATUTORY NOTICES U/S 143(2) AND 142(1) WERE SERVED ON THE ASSESSEE. THE ASSESSMENT WASCOMPLETEDU/S143(3)OFTHEACTON27.12.2017.THEASSESSEEISENGAGEDIN THE BUSINESS OF TRADING INCLUDING IMPORT AND EXPORT OF ROUGH AND POLISHED DIAMONDSGEMSANDJEWELLERY. 3. LD. PR. CIT-5, MUMBAI DURING VERIFICATION OF THE ASSESSMENT RECORDS, HE OBSERVEDTHATTHECASEWASSELECTEDFORCOMPLETESCRUTINYTHROUGHCASS.ONEOF THE REASONS FOR SELECTION WAS THE LARGER SPECIFIC DOMESTIC TRANSACTION. HE OBSERVED THAT THE ASSESSING OFFICER DID NOT REFER T.P. AUTHORITY FOR DETERMINATION OF ARMS LENGTH PRICE (ALP) OF DOMESTIC TRANSACTIONS AND ASSESSMENTWASCOMPLETEDWITHOUTTHESAME.FURTHER,HEOBSERVEDTHATTHEAO HASNOTVERIFIEDSTOCKDETAILSOFSALESANDPURCHASESOFDIAMOND.THELD.PR.CIT OBSERVEDTHATINHISORDERTHATNOTICE U/S263WASISSUEDON05.03.2019ANDIN RESPONSE TO THE ABOVE NOTICE THE ASSESSEE ATTENDED AND FILED REPLY VIDE LETTER DATED 11.03.2019 WITH THE ENCLOSURES. HE OBSERVED THAT WITH REGARD TO STOCK DETAILS OF SALES AND PURCHASES OF DIAMOND IT IS STATED THAT DETAILS OF PURCHASES SUBMITTED INCLUDES PURCHASE OF DIAMONDS AS WELL AS JEWELLERY THUS TOTAL QUANTITY 2006.82 CARATS AS REFERRED IN THE CAPTIONED NOTICE IS WRONGLY CONSTRUED AS TOTAL QUANTITY OF PURCHASE OF DIAMONDS ONLY AND COMPARED WITH THE ACTUAL QUANTITY REPORTED IN THE FINANCIAL/TAX AUDIT REPORT RELATED TO PURCHASE OF DIAMOND. SIMILARLY, ON SALE SIDE, SALE OF DIAMOND HAS NOT BEEN SUPPRESSED. THE DIAMOND STUDDED IN JEWELLERY SOLD. HENCE, TOTAL SALE INCLUDES SALEOF DIAMONDSALSO. 4. FURTHER, CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. PR. CIT CONCLUDED THAT THERE WAS A PRIMA FACIE NO VERIFICATION RELATING TO THE EXCESS R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 3 PURCHASES ON DIAMOND SALES SUPPRESSION OF SALE AS SHOWN BY THE ASSESSEE. HE OBSERVED THAT THIS NEEDS VERIFICATION. FURTHER HE OBSERVED THAT ASSESSING OFFICER PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WITHOUT PROPER VERIFICATION OF THE ISSUE AND WITHOUT REFERRING CASE TO THE T.P. AUTHORITY FOR DETERMINATION OF ALP. ACCORDINGLY, THE ASSESSMENT ORDER PASSED BY THE ASSESSINGOFFICERWASCANCELLED/SETASIDEANDASSESSINGOFFICERWASDIRECTEDTO VERIFY THE STOCK REGISTER AND REFER THE MATTER TO T.P. AUTHORITIES THAT DETERMINATIONOFALP. 5. AGGRIEVEDWITHTHEABOVEORDERTHEASSESSEEISINAPPEALBEFOREUSRAISING FOLLOWINGGROUNDSOFAPPEAL : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE PR. CIT HAS ERRED IN CANCELLING/SETTINGASIDETHEASSESSMENTORDERPASSEDBYTHEASSESSINGOFFICER(AO)U/S. 143(3)OFTHEINCOME-TAXACT,1961('THEACT')BYINVOKINGTHEPROVISIONSOFSECTION263 OF THE ACT. 2. ONTHEFACTSANDINTHECIRCUMSTANCESOFTHECASEANDINLAWTHEPR.CITERREDINHOLDING THAT THE ASSESSMENT ORDER IS ERRONEOUS AS THE AO HAS NOT VERIFIED THE STOCK DETAILS DURING THECOURSE OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 263 OF THE ACT. 3. ONTHEFACTSANDINTHECIRCUMSTANCESOFTHECASEANDINLAWTHEPR.CITERREDINHOLDING THAT THE ASSESSMENT ORDER IS ERRONEOUS AS THE AO HAS NOT REFER THE CASE TO TRANSFER PRICING AUTHORITY FOR DETERMINATION OF ARM'S LENGTH PRICE OF THE ALLEGED SPECIFIED DOMESTIC TRANSACTION, WITHOUT APPRECIATING THAT CLAUSE (I) OF SECTION 92BA OF THE ACT HASBEEN OMITTEDBYTHE FINANCEACT, 2017. 6. BEFORE US, THE LD. AR SUBMITTED THAT DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSEE HAS FILED ALL THE INFORMATION ASKED BY THE ASSESSING OFFICER VIDE NOTICE U/S 142(1) OF THE ACT. HE BROUGHT TO OUR NOTICE PAGE 16-17 OF THE PAPER BOOK (P/B) IN WHICH THE ASSESSEE HAS FILED DETAILS OF BUSINESS ACTIVITY, THE DETAILS OF PURCHASES AND SALES. FURTHER, HE SUBMITTED THAT THE ASSESSMENT WASCOMPLETEDAFTERCOMPLETE VERIFICATIONOF THE DETAILS SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSINGOFFICER. R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 4 7. HE BROUGHT TO OUR NOTICE, THE FINDINGS OF THE PR. CIT IN HIS ORDER AND SUBMITTEDTHAT LD.CITHASRAISEDTHEISSUEOFNON-VERIFICATION BYTHEAOBUTHE DIDNOTGIVEANYFINDINGS.FURTHER,HESUBMITTEDTHATTHEASSESSEEHASSUBMITTED COMPLETE DETAILS OF PURCHASES AND SALES BEFORE THE ASSESSING OFFICER AND RELEVANT DETAILS ARE FILED ON PAGE 61 OF THE P/B. FURTHER, HE BROUGHT TO OUR NOTICE PAGE 77OF THE P/B WHERE THE ASSESSEE HASEXPLAINEDTHE JEWELLERY SALES WHICH INCLUDES DIAMONDS. HE ALSO BROUGHT TO OUR NOTICE PAGE 134 OF THE P/B WHICH IS TAX AUDIT REPORT SUBMITTED BY THE AUDITOR OF THE COMPANY. IT CLEARLY INDICATES THE BOOKS WERE AUDITED BY THE INDEPENDENT AUDITOR FURTHER HE BROUGHT TO OUR NOTICE PAGE 144 OF THE P/B IN WHICH THE TAX AUDIT REPORT HAS GIVEN QUANTITY DETAILS RELATING TO CUT AND POLISHED DIAMONDS AND SEPARATE DETAILS OF JEWELLERY, WHICH IS EXACTLY SAME DETAILS WHICH WAS SUBMITTED BEFORE THE PR. CIT ON 11.03.2019. THE RELEVANT LETTER IS PLACED AT PAGE 6 OF THE P/B. FURTHER, HE BROUGHT TO OUR NOTICE AT PAGE 7 OF THE P/B, THE RECONCILIATION OF QUANTITYPURCHASEANDSALEAREFILEDBEFOREPR.CIT.THEREFORE,HESUBMITTEDTHAT THE ASSESSING OFFICER HAS VERIFIED ALL THESE DETAILS AND THE QUERY RAISED BY THE PR. CIT IS CLEARLY EXPLAINED BEFORE HIM. EVEN THOUGH, THE PR. CIT HAS CANCELLED THEORDERWITHOUTGIVINGANYFINDING.FORTHISPROPOSITION,HERELIEDONTHECASE OF COMMISSIONER OF INCOME-TAX, MUMBAI V. AMITABH BACHCHAN [2016] 69 TAXMANN.COM170(SC).THE ORDERPASSED U/S263BE SETASIDE. 8. ON THE OTHER HAND, THE LD. DR RELIED ON THE FINDINGS OF PR. CIT AND SUBMITTED THAT THE MAIN REASONS FOR CANCELLING THE ASSESSMENT ORDER IS FOR NOT REFERENCE TO THE TPO. IN THISREGARD, HE RELIEDON THE RANBAXYLABORATORIES LTD. VS. THECOMMISSIONEROFINCOMETAX (ITANO.504OF 2008)DATED18.11.2011. R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 5 IN RESPONSE, THE LD. AR OF SUBMITTED THAT NON-REFERENCE TO THE TPO WAS NEVER RAISED THE ISSUE BY THE PR. CIT IN NOTICE ISSUED U/S 263 OF THE ACT. THEREFORE, THE PR. CIT HAS NOT ISSUED ANY NOTICE ON THIS PARTICULAR ISSUE BEFORE HAND. 9. CONSIDEREDTHE RIVAL SUBMISSIONSANDMATERIAL ON RECORD.WE NOTICE THAT THE LD. PR. CIT HAS ISSUED NOTICE U/S 263 OF THE ACT BY RAISING NON-VERIFICATION OF THE PURCHASES AND SALES AND HE OBSERVED THAT THERE IS DIFFERENCE IN STOCK DETAILSOFPURCHASESANDSALESOFDIAMONDSBASEDONTHEDETAILSUBMITTEDBYTHE ASSESSEE WHICH ALSO INCLUDES JEWELLERY. BASED ON THE INFORMATION FILED BEFORE US, WE NOTICE THAT THIS PARTICULAR ISSUE WAS SUBMITTED BEFORE THE ASSESSING OFFICER AND QUANTITY DETAILS WERE ALSO AUDITED BY AN INDEPENDENT AUDITOR. THE ASSESSING OFFICER DEEMED TO HAVE VERIFIED THE INFORMATION WHICH WAS SUBMITTED BEFORE HIM AND THE SAME INFORMATION WAS ALSO SUBMITTED BEFORE PR. CIT.WENOTICEDFROMTHE263ORDERTHATPR.CITHASNOTVERIFIEDTHEINFORMATION SUBMITTED BEFORE HIM AND ALSO NOT GIVEN ANY FINDINGS. THE HONBLE SUPREME COURTIN THE CASEOF AMITABHBACHCHAN (SUPRA)HASHELDASBELOW: THEPOWEROFAPPEALANDREVISIONISCONTAINEDINCHAPTERXXOFTHEACTWHICHINCLUDESSECTION263 THAT CONFERS SUO MOTU POWER OF REVISION IN THE COMMISSIONER. THE DIFFERENT SHADES OF POWER CONFERRED ON DIFFERENT AUTHORITIES UNDER THE ACT HAS TO BE EXERCISED WITHIN THE AREAS SPECIFICALLY DELINEATED BY THE ACT AND THE EXERCISE OF POWER UNDER ONE PROVISION CANNOT TRENCH UPON THE POWERSAVAILABLE UNDER ANOTHER PROVISIONOF THEACT. IN THIS REGARD, ITMUST BE SPECIFICALLY NOTICED THATAGAINSTANORDEROFASSESSMENT,SOFARASTHEREVENUEISCONCERNED,THEPOWERCONFERREDUNDER THEACTISTO REOPENTHECONCLUDEDASSESSMENT UNDER SECTION147 AND/OR TOREVISETHEASSESSMENT ORDER UNDER SECTION263. THE SCOPE OFTHE POWER/JURISDICTION UNDER THEDIFFERENT PROVISIONS OFTHE ACT WOULD NATURALLY BE DIFFERENT. THE POWER AND JURISDICTION OF THE REVENUE TO DEAL WITH A CONCLUDED ASSESSMENT, THEREFORE, MUST BE UNDERSTOOD IN THE CONTEXT OF THE PROVISIONS OF THE RELEVANTSECTIONS.WHILEDOINGSO,ITMUSTALSOBEBORNEINMINDTHATTHELEGISLATUREHADNOTVESTED INTHEREVENUEANYSPECIFICPOWERTOQUESTIONANORDEROFASSESSMENTBYMEANSOFANAPPEAL.[PARA 9] REVERTING TO THE SPECIFIC PROVISIONS OF SECTION 263 WHAT HAS TO BE SEEN IS THAT A SATISFACTION THAT AN ORDER PASSED BY THE AUTHORITY UNDER THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 6 REVENUE IS THE BASIC PRE-CONDITION FOR EXERCISE OF JURISDICTION UNDER SECTION 263. BOTH ARE TWIN CONDITIONS THAT HAVE TO BE CONJOINTLY PRESENT. ONCE SUCH SATISFACTION IS REACHED, JURISDICTION TO EXERCISE THE POWER WOULD BE AVAILABLE SUBJECT TO OBSERVANCE OF THE PRINCIPLES OF NATURAL JUSTICE WHICHISIMPLICITINTHEREQUIREMENTCASTBYTHESECTIONTOGIVETHEASSESSEEANOPPORTUNITYOFBEING HEARD. ITISIN THE CONTEXT OFTHEABOVE POSITIONTHAT THIS COURT HASREPEATEDLYHELDTHAT UNLIKETHE POWER OF REOPENING AN ASSESSMENT UNDER SECTION 147, THE POWER OF REVISION UNDER SECTION 263 IS NOT CONTINGENT ON THE GIVING OF A NOTICE TO SHOW CAUSE. IN FACT, SECTION 263 HAS BEEN UNDERSTOOD NOTTOREQUIREANYSPECIFICSHOW-CAUSENOTICETOBESERVEDONTHEASSESSEE.RATHER,WHATISREQUIRED UNDER THE SAID PROVISION IS AN OPPORTUNITY OF HEARING TO THE ASSESSEE. THE TWO REQUIREMENTS ARE DIFFERENT; THE FIRST WOULD COMPREHEND A PRIOR NOTICE DETAILING THE SPECIFIC GROUNDS ON WHICH REVISIONOFTHEASSESSMENTORDERISTENTATIVELYBEINGPROPOSED.SUCHANOTICEISNOTREQUIRED.WHAT ISCONTEMPLATEDBYSECTION263,ISANOPPORTUNITYOFHEARINGTOBEAFFORDEDTOTHEASSESSEE.FAILURE TO GIVE SUCH AN OPPORTUNITYWOULD RENDER THE REVISIONAL ORDER LEGALLY FRAGILE NOT ON THE GROUND OF LACK OFJURISDICTIONBUTON THE GROUNDOF VIOLATIONOF PRINCIPLES OFNATURALJUSTICE. [PARA10] ITMAYBETHATINAGIVENCASEANDINMOSTCASESITISSODONETHATANOTICEPROPOSINGTHEREVISIONAL EXERCISE IS GIVEN TO THE ASSESSEE INDICATING THEREIN BROADLY OR EVEN SPECIFICALLY THE GROUNDS ON WHICH THE EXERCISE IS FELT NECESSARY. BUT THERE IS NOTHING IN THE SECTION TO RAISE THE SAID NOTICE TO THESTATUSOFAMANDATORYSHOW-CAUSENOTICEAFFECTINGTHEINITIATIONOFTHEEXERCISEINTHEABSENCE THEREOFORTOREQUIRETHECOMMISSIONERTOCONFINEHIMSELFTOTHETERMSOFTHENOTICEANDFORECLOSING CONSIDERATION OF ANY OTHER ISSUE OR QUESTION OF FACT. THIS IS NOT THE PURPORT OF SECTION 263. OF COURSE, THERE CAN BE NO DISPUTE THAT WHILE THE COMMISSIONER IS FREE TO EXERCISE HIS JURISDICTION ON CONSIDERATION OF ALL RELEVANT FACTS, A FULL OPPORTUNITY TO CONTROVERT THE SAME AND TO EXPLAIN THE CIRCUMSTANCES SURROUNDING SUCH FACTS, AS MAY BE CONSIDERED RELEVANT BY THE ASSESSEE, MUST BE AFFORDEDTOHIMBYTHECOMMISSIONER PRIOR TOTHEFINALIZATIONOFTHEDECISION. [PARA11] INTHEINSTANTCASE,THEREISNODISPUTETHATINTHEORDERPASSEDBYTHECOMMISSIONERUNDERSECTION 263 FINDINGS HAVE BEEN RECORDED ON ISSUES THAT ARE NOT SPECIFICALLY MENTIONED IN THE SHOW-CAUSE NOTICE THOUGH THERE ARE THREE ISSUES MENTIONED IN THE SHOW-CAUSE NOTICE WHICH HAD SPECIFICALLY BEEN DEALT WITHINTHEORDER PASSEDUNDERSECTION263. [PARA12] INSOFARASFINDINGSCONTAINEDINTHEORDEROFTHECOMMISSIONERBEYONDTHEISSUESMENTIONEDINTHE SHOWCAUSE NOTICE IS CONCERNED, THE TRIBUNAL TAKING NOTE OF THE AFORESAID ADMITTED POSITION HELD THATTHEORDERUNDERSECTION263WASVIOLATIVEOFPRINCIPLESOFNATURALJUSTICEASFARASTHEREASONS, WHICH FORMED THE BASIS FOR THE REVISION BUT WERE NOT PART OF THE SHOW-CAUSE NOTICE ISSUED UNDER SECTION263WERE CONCERNED. [PARA12] THE ABOVE GROUND WHICH HAD LED THE TRIBUNAL TO INTERFERE WITH THE ORDER OF THE COMMISSIONER SEEMS TO BE CONTRARY TO THE SETTLED POSITION IN LAW, AS INDICATED ABOVE AND THE TWO DECISIONS OF THIS COURT IN GITA DEVI AGGARWAL V. CIT [1970] 76 ITR 496 AND CIT V. ELECTRO HOUSE [1971] 82 ITR 824.THETRIBUNALINITSORDERHADNOTRECORDEDANYFINDINGTHATINCOURSEOFTHESUOMOTUREVISIONAL PROCEEDINGS, HEARING OF WHICH WAS SPREAD OVER MANY DAYS AND ATTENDED TO BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, OPPORTUNITY OF HEARING WAS NOT AFFORDED TO THE ASSESSEE AND THAT THE ASSESSEE WAS DENIED AN OPPORTUNITY TO CONTEST THE FACTS ON THE BASIS OF WHICH THE COMMISSIONER HAD COME TO HIS CONCLUSIONS AS RECORDED IN THE ORDER PASSED UNDER SECTION 263. DESPITETHEABSENCEOFANYSUCHFINDINGINTHEORDEROFTHETRIBUNAL,BEFOREHOLDINGTHESAMETOBE LEGALLY UNSUSTAINABLE, THE COURT WILL HAVE TO BE SATISFIED THAT IN THE COURSE OF THE REVISIONAL R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 7 PROCEEDING THE ASSESSEE, ACTUALLY AND REALLY, DID NOT HAVE THE OPPORTUNITY TO CONTEST THE FACTS ON THE BASIS OF WHICH THE COMMISSIONER HAD CONCLUDED THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE ABOVE IS THE QUESTION TO WHICH THE COURT,THEREFORE,WILL HAVE TOTURNTO. [PARA13] ON CONSIDERATION OF THE ORDER OF THE ASSESSING OFFICER AS WELL AS THE ORDER OF THECOMMISSIONER IT APPEARS THAT THE COMMISSIONER, IN THE COURSE OF THE REVISIONAL PROCEEDINGS, HAD SCRUTINIZED THE RECORD OF THE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND NOTED THE VARIOUS DATES ON WHICH OPPORTUNITIESTOPRODUCETHEBOOKSOFACCOUNTANDOTHERRELEVANTDOCUMENTSWEREAFFORDEDTOTHE ASSESSEE WHICH REQUIREMENT WAS NOT COMPLIED WITH BY THE ASSESSEE. IN THESE CIRCUMSTANCES, THE REVISIONAL AUTHORITYTOOKTHEVIEWTHATTHEASSESSINGOFFICER,AFTER BEINGCOMPELLEDTOADJOURNTHE MATTER FROM TIME TO TIME, HAD TO HURRIEDLY COMPLETE THE ASSESSMENT PROCEEDINGS TO AVOID THE SAME FROM BECOMING TIME BARRED. IN THE COURSE OF THE REVISIONAL EXERCISE, RELEVANT FACTS, DOCUMENTS, AND BOOKS OF ACCOUNT WHICH WERE OVERLOOKED IN THE ASSESSMENT PROCEEDINGS WERE CONSIDERED. ON SUCH RE-SCRUTINY IT WAS REVEALED THAT THE ORIGINAL ASSESSMENT ORDER ON SEVERAL HEADS WAS ERRONEOUS AND HAD THE POTENTIAL OF CAUSING LOSS OF REVENUE TO THE STATE. IT IS ON THE AFORESAID BASIS THAT THE NECESSARY SATISFACTION THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIALTOTHEINTERESTSOFTHEREVENUEWASRECORDEDBYTHECOMMISSIONER.ATEACHSTAGEOFTHE REVISIONAL PROCEEDING THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD APPEARED AND HAD FULL OPPORTUNITYTOCONTESTTHEBASISONWHICHTHEREVISIONAL AUTHORITYWASPROCEEDING/HADPROCEEDED IN THE MATTER. IF THE REVISIONAL AUTHORITY HAD COME TOITS CONCLUSIONSIN THE MATTER ON THE BASIS OF THE RECORD OF THE ASSESSMENT PROCEEDINGS WHICH WAS OPEN FOR SCRUTINY BY THE ASSESSEE AND AVAILABLE TO HIS AUTHORIZED REPRESENTATIVE AT ALL TIMES, IT IS DIFFICULT TO SEE AS TO HOW THE REQUIREMENTOFGIVINGOFAREASONABLEOPPORTUNITYOFBEINGHEARDASCONTEMPLATEDBYSECTION263 HADBEENBREACHEDINTHEPRESENTCASE.THEORDER OFTHETRIBUNALINSOFARASTHEFIRSTISSUE,I.E.,THE REVISIONAL ORDER GOING BEYOND THE SHOW-CAUSE NOTICE IS CONCERNED, THEREFORE, CANNOT HAVE ACCEPTANCE. THEHIGHCOURTHAVINGFAILEDTOFULLY DEAL WITHTHEMATTER INITSCRYPTICORDER, THESAID ORDER ISNOTTENABLEANDISLIABLETOBEINTERFEREDWITH. [PARA14] RESPECTFULLY FOLLOWING THE SAME, WE REJECT THE CONTENTION OF THE LD. PR. CIT THAT THE AO HAS NOT VERIFIEDTHE STOCK DETAILS.THE ASSESSEE SUPPLIED ALL THE INFORMATIONBEFOREHIM.THELD.PR.CITHASNOJURISDICTIONU/S263TOVERIFYTHE SAME. WITHREGARDTOOTHERISSUEOFNON-REFERENCETOTPOFORDETERMINATIONTHE ALP. IT IS BROUGHT TO OUR NOTICE THAT PR. CIT HAS NOT ISSUED ANY NOTICE BEFORE INVOKINGTHISNEWISSUE.FURTHER,WEOBSERVETHATPR.CITHASNOTCLEARLYBROUGHT ON RECORD HOW THE CASE OF ASSESSEE IS FALLING UNDER T.P. ADJUSTMENT. WE NOTICE THATPROVISIONSOFSECTION92BAISAPPLICABLEONLYTOTHECASESOFASSESSEES,WHO R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 8 CLAIM DEDUCTION U/S 40A SUB-SECITON (2)(B), TRANSACTION FALLING U/S 80IA SUB- SECTION (10)ANDTRANSACTIONSFALLINGU/S115AB. ONVERIFICATIONOFTHERETURNOFINCOMEFILEDBYTHEASSESSEEWENOTICETHAT THEASSESSEEHASNOTCLAIMEDANYBENEFITINANYOFTHEABOVESECTIONS.THEREFORE, INOURCONSIDEREDVIEW,WITHOUTISSUINGANYNOTICETOASSESSEEONTHISISSUEAND WITHOUT GIVING A CHANCE OF BEING HEARD TO THE ASSESSEE. THE PR. CIT CANNOT INVOKE TRANSFER PRICING PROVISIONS AND WITHOUT GIVING REASONS, HOW THE TP PROVISION IS ATTRACTED. THEREFORE, WITH THE ABOVE OBSERVATIONS, WE ARE INCLINED TO SET ASIDE THE ORDER PASSED U/S 263. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT,THE APPEALFILEDBYTHE ASSESSEEISALLOWED. ORDER PRONOUNCEDINTHEOPENCOURTON 03/09/2021. SD/- SD/- (C.N.PRASAD) ( S. RIFAURRAHMAN ) JUDICIALMEMBER ACCOUNTANTMEMBER MUMBAI; DATED:03/09/2021 RAHUL SHARMA,SR. P.S. COPYOFTHEORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT R.S. DIAMONDSPVT.LTD. ITA NO. 3418/M/2019 9 5. DR, ITAT,MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSISTANTREGISTRAR) ITAT,MUMBAI