M/s Shri Shakti Credits Limited, Kanpur V. The Commissioner of Income -tax-II, Kanpur

ITA 345/LKW/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0719 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VIVEK MISHRA
• Keywords: Opportunity of being heard; Revenue expenditure
• Section: 142(1); 263; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.345/LKW/2013 ASSESSMENT YEAR:2008 - 2009 C.I.T. - II, KANPUR. VS M/S SHRI SHAKTI CREDITS LIMITED, 11 - MOTI BHAWAN, 52/1, COLLECTORGANJ, KANPUR. PAN:AACCS0092B (RESPONDENT) (APPELLANT) SHRI P. K. KAPOOR, C.A. APPELLANT BY SHRI VIVEK MISHRA, C.I.T., D. R. RESPONDENT BY 22/06/2015 DATE OF HEARING 24 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT - II, KANPUR DATED 30/12/2010 FOR THE ASSESSMENT YEAR 2008 - 2009 PASSED BY HIM U/S 263 OF THE ACT. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE 'CIT' HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSMENT ORDER DATED 30.12.2010 AS PASSED BY THE DY. CIT - 6, KANPUR WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WITHIN THE MEANING OF SECTION 263 AND IN PASSING THE IMPUGNED ORDER DIRECTING THE 'ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH AFTER ALLOWING THE ASSESSEE DUE OPPORTUNITY OF BEING HEARD'. 2. BECAUSE THE ORDER DATED 28.03.2013, WHICH IS SUBJECT MATTER OF PRESENT APPEAL, IS WHOLLY VITIA TED AS THE SAME IS BEYOND THE GROUNDS ON WHICH SHOW CAUSE NOTICE UNDER SECTION 2 263(1) DATED 14.03.2013 HAD BEEN ISSUED AND ACCORDINGLY THE SAME DESERVES TO BE QUASHED. 3. BECAUSE THE ASSESSMENT ORDER DATED 30.12.2010 WAS 'NO ORDER' IN THE EYES OF LAW AND ACCORDINGLY THE SAME COULD NOT HAVE BEEN SUBJECTED TO REVISION UNDER SECTION 263 OF THE ACT. 4. BECAUSE THE DIRECTION FOR FRESH ASSESSMENT AS PER PARA 7 OF THE ORDER DATED 28.03.2013 AS HAS BEEN IMPUGNED IN THE PRESENT APPEAL, IS WHOLLY UNENFORCE ABLE IN LAW AS THE EARLIER ASSESSMENT ORDER DATED 30.12.2010 ITSELF WAS 'NON - EXISTENT' AND CONSEQUENTLY NO FRESH ASSESSMENT CAN BE MADE (EVEN IN PURSUANCE OF THE ORDER DATED 28.3.2013). WITHOUT PREJUDICE TO THE AFORESAID 5. BECAUSE THE 'CIT', AFTER HIMS ELF HAVING FOUND AND ACCEPTED THAT (A) THE ASSESSEE 'SUCCEEDS IN ESTABLISHING THAT ITS CLAIM WAS NOT ACCURATE/CORRECT'; (B) SUCH 'INACCURACY'/'INCORRECTNESS' WAS ON ACCOUNT OF UNDER STATEMENT OF CLAIM FOR DEDUCTION OF SERVI CE TAX; COULD NOT HAVE HELD THAT THE DEDUCTION OF RS.1,73,30,720/ - CLAIMED BY THE APPELLANT AND ALLOWED IN THE ASSESSMENT ORDER DATED 30.12.2010 WAS PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY NO REVISION UNDER SECTION 263 WAS PERMISSIBLE ON TH IS ISSUE. 6. BECAUSE THE 'CIT' HAS ERRED IN HOLDING THAT PAYMENT OF HANDLING CHARGES AS MADE TO (A)M/S MUREN IMPEX (P) LTD. 1,23,21,518 (B)M/S E - COMMODITIES 2,00,00,000 ARE ''CLOUDED WITH DOUBTS AS NO BUSINESS REQUIREMENT FOR SUCH PAYMENT HAS BEEN ESTABLISHED.' 3 7. BECAUSE THE PAYMENTS MADE BY THE APPELLANT WERE NOT ONLY COVERED BY ENFORCEABLE AGREEMENTS ENTERED INTO WITH THE PAYEES, BUT IN PURSUANCE OF THE SAID AGREEMENT VALUABLE SERVICES HAD ALSO BEEN RENDERED BY THEM WHICH ENTITLED THE APPELLANT TO EARN 'HANDLING CHARGES', AND OBSERVATION MADE BY THE 'CIT' ARE WHOLLY ERRONEOUS AS BEING INCONSISTENT WITH THE MATERIAL AND INFORMATION AVAILABLE ON RECORD, AS LISTED IN PARA 6 OF THE EXPLANATION DATED 22.03.2013 (SUBMITTED DURING THE COURSE OF REVISIONARY PROCEEDINGS. 8. BECAUSE MERELY ON ACCOUNT OF 'DOUBT' LURKING IN THE MIND OF 'CIT, THE ADMISSIBILITY OF SUCH PAYMENT COULD NOT HAVE BEEN DISPUTED AND THE ASSESSMENT ORDER DATED 30.12.2010 COULD NOT HAVE BEEN TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS COUNT. 9. BECAUSE EVEN IF THE SERVICES RENDERED BY THE PAYEES / AS LISTED BY THE APPELLANT IN PARA 6 OF ITS EXPLANATION DATED 22 ND MARCH, 2013, ARE HELD TO BE 'IN EXCESS' OF THE TERMS OF THE AGREEMENT IT COULD NOT HAVE BEEN TREATED AS DISQUALIFICA TION, AFFECTING THE ADMISSIBILITY THEREOF. 10. BECAUSE IN ANY CASE, THE 'CIT' HAVING NOT DISPUTED THAT ( A ) THERE EXISTED AGREEMENTS BETWEEN THE APPELLANT AND THE PAYEES; ( B ) GENUINENESS OF SUCH AGREEMENTS WAS NOT IN QUESTION; ( C ) IN PURSUANCE OF SUCH AGREEMENTS ONLY, THE PAYMENTS IN QUESTION HAD BEEN MADE TO THE PERSONS CONCERNED; ( D ) NONE OF THE PAYEES ARE IN ANY WAY RELATED TO THE DIRECTORS OF THE APPELLANT COMPANY; THE VIEW TAKEN BY THE ASSESSING OFFICER IN FAVOUR OF ADMISSIBILITY OF THE PAYMENTS, COULD NOT HAVE BEEN SUBSTITUTED BY THE VIEW OF 'CIT' AND ACCORDINGLY REVISION OF THE ASSESSMENT ORDER DATED 30.12.2010 ON THIS GROUND TOO WAS NOT MAINTAINABLE. 4 11. BECAUSE THE PAYMENT OF RS.75,00,000/ - AS MADE TO M/S K . J. ASSOCIATES HAD BEEN ALLOWED IN THE ASSESSMENT BY TAKING A PROBABLE VIEW BY THE ASSESSING OFFICER AND THE 'CIT' WAS NOT JUSTIFIED EITHER ON FACTS OR IN LAW TO HOLD AGAINST THE ADMISSIBILITY OF SUCH PAYMENT IN THE PROCEEDINGS UNDER SECTION 263. 12. BECAUSE THE ORDER DATED 28.03.2013 IS BASED ON ERRONEOUS GROUNDS AND CONSIDERATIONS AND THE SAME IS NOT SUSTAINABLE EITHER ON FACTS OR IN LAW. 3. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE NOTICE ISSUED BY LEARNED CIT U/S 263(1) IS AVAILABLE ON PAGES 3 TO 4 OF THE PAPER BOOK. HE POINTED OUT TH AT THE FIRST OBJECTION OF LEARNED CIT IS ABOUT DEBITING OF A SUM OF RS.1,73,20,720/ - IN THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF SERVICE TAX PAID AND THE REASON FOR THE OBJECTION IS THAT AS PER CIT, THE ASSESSEE HAS SHOWN RECEIPT OF HANDLING CHARGES OF RS.12,37,47,784/ - WHICH HAS BEEN CREDITED AFTER EXCLUDING THE ELEMENT OF SERVICE TAX AND THEREFORE, AS PER LEARNED CIT, SERVICE TAX CANNOT BE DEBITED TO PROFIT & LOSS ACCOUNT. HE ALSO SUBMITTED THAT THE SECOND OBJECTION OF LEARNED CIT IS THAT THE ASSESSEE HAS DEBITED A SUM OF RS.4,09,21,518/ - ON ACCOUNT OF COMMISSION PAID ON HANDLING CONTRACT TO THREE PERSONS AND THIS IS THE OBJECTION OF LEARNED CIT THAT NO DOCUMENTARY EVIDENCE IS PLACED ON RECORD TO ESTABLISH THAT THE SERVICES WERE ACTUALLY RENDERED BY TH ESE THREE PARTIES TO WHOM COMMISSION PAYMENT WAS MADE. 4. THEREAFTER LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE QUERY LETTER ISSUED BY ASSESSING OFFICER ON 16/12/2010 IS AVAILABLE ON PAGES 26 & 27 OF THE PAPER BOOK AND AS PER CLAUSE 1, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE COPY OF ACCOUNT OF SERVICE TAX PAID AMOUNTING TO RS.1,73,20,720/ - AND TO FILE COPY OF CHALLANS SO THAT PAYMENT MAY BE VERIFIED. HE ALSO SUBMITTED THAT QUERY WAS MADE REGARDING PAYMENT OF 5 COMMISSION BY THE ASSESSEE OF RS. 3,89,89,250/ - AND RS.19,32,266/ - TOTALING RS.409.22 LAC. HE ALSO POINTED OUT THAT THE REPLY SUBMITTED BY THE ASSESSEE BEFORE CIT ON 22/03/2013 IS AVAILABLE ON PAGES 5 TO 21 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT THE REPLY SUBMITTED BY THE ASSESSEE BEF ORE THE ASSESSING OFFICER IS AVAILABLE ON PAGES 28 TO 31 OF THE PAPER BOOK. HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: ( I ) CIT VS. GOYAL PRIVATE FAMILY SPECIFIC TRUST [1998] 171 ITR 698 (ALL) ( II ) CIT VS. ARVIND JEWELLERS [2003] 259 ITR 502 (GUJ) ( III ) ALLAHABAD TRIBUNAL DECISION IN THE CASE OF GREENLAND MOTORS VS. CIT IN I.T.A. NO.465/ALLD/2012 DATED 03/05/2013 (COPY AVAILABLE ON PAGES 165 TO 187 OF THE PAPER BOOK ( IV ) CIT VS. VIKAS PLOYMERS [2012] 341 ITR 537 (DEL) ( V ) CIT VS. SUNBEAM AUTO LTD. [2011] 33 2 ITR 167 (DEL) ( VI ) CIT VS. RATLAM COAL ASH COMPANY [ 1988] 171 ITR 141 (MP) 5. AS AGAINST THIS , LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THIS IS BY NOW SETTLED POSITION OF LAW THAT IF THERE IS LACK OF ENQUIRY BY THE ASSESSING OFFICER OR IF THERE IS LACK OF APPLICATION OF MIND BY THE ASSESSING OFFICER, THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND IN THOSE SITUATION S , THE LEARNED CIT CAN EXERCIS E HIS POWERS U/S 263 OF THE ACT. NOW WE FIND THAT REGARDING FIRST ASPECT I.E. REGARDING SERVICE TAX ISSUE, A VERY GENERAL QUERY WAS RAISED BY THE ASSESSING OFFICER IN HIS QUESTIONNAIRE DATED 16/12/2010 AND THE ASSESSEE WAS ASKED TO FILE COPY OF SERVICE TA X ACCOUNT AND COPY OF CHALLANS IN ORDER TO ENABLE THE ASSESSING OFFICER TO VERIFY AS TO WHETHER THE PAYMENT WAS MADE OR NOT BUT THERE IS NO QUERY AS TO WHETHER THE SERVICE TAX PAYMENT IS ALLOWABLE EXPENDITURE OR NOT BECAUSE THE RECEIPT WERE ACCOUNTED FOR B Y THE ASSESSEE AFTER REDUCING 6 SERVICE TAX THERE FROM AS HAS BEEN STATED BY LEARNED CIT IN HIS NOTICE AND LEARNED A.R. OF THE ASSESSEE COULD NOT POINT OUT ANY DEFECT IN THE REPLY AVAILABLE ON PAGES 28 TO 31 OF THE PAPER BOOK ALSO . THERE IS NO REPLY REGARDI NG SERVICE TAX ASPECT AND THEREFORE, IN OUR CONSIDERED OPINION, THERE IS COMPLETE LACK OF ENQUIRY ON SERVICE TAX ASPECT BY THE ASSESSING OFFICER. 6.1 REGARDING THE COMMISSION PAYMENT ASPECT, THE ASSESSING OFFICER HAS VERY MUCH RAISED A QUERY REGARDING SER VICES RENDERED BY COMMISSION AGENTS WITH DOCUMENTARY EVIDENCE. BUT IN THE REPLY OF THE ASSESSEE, AVAILABLE ON PAGES 28 TO 31 OF THE PAPER BOOK, THE ASSESSEE HAS FURNISHED COPY OF AGREEMENT AND COPY OF COMMISSION BILLS ALONG WITH THE DETAILS OF PROVISIONS OF COMMISSION ON HANDLING CHARGES, TDS, DATE OF PAYMENT OF TDS ETC. BUT THERE IS NO EVIDENCE FURNISHED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER REGARDING SERVICES RENDERED BY THE COMMISSION AGENTS. HENCE, IN OUR CONSIDERED OPINION, THERE IS LACK OF AP PLICATION OF MIND BY THE ASSESSING OFFICER EVEN AFTER MAKING QUERY AND THEREFORE, IN THE FACTS OF THE PRESENT CASE, THE EXERCISE OF THE REVISIONARY POWER BY LEARNED CIT U/S 263 APPEARS TO BE PROPER. 7. NOW WE EXAMINE THE APPLICABILITY OF VARIOUS JUDGMEN TS CITED BY LEARNED A.R. OF THE ASSESSEE. 7.1 THE FIRST JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF GOYAL PRIVATE FAMILY SPECIFIC TRUST (SUPRA) . IN THIS CASE , IT IS NOTED BY HON'B LE ALLAHABAD HIGH COURT THAT THERE IS NO FINDING BY CIT AND THERE IS NO EVIDENCE THAT THE ORDER OF THE ASSESSMENT WAS ERRONEOUS BUT IN THE PRESENT CASE, THE FACTS ARE DIFFERENT. IN THE PRESENT CASE, A CLEAR FINDING IS GIVEN BY LEARNED CIT THAT THE ORDER O F THE ASSESSING OFFICER IS ERRONEOUS 7 AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE FIRST REASON IS THAT THE ASSESSEE HAS SHOWN RECEIPT FROM 17 PARTIES AGAINST THE HANDLING CHARGES AFTER EXCLUDING THE ELEMENT OF SERVICE TAX AND ASSESSEE ALSO DEBITED THE AMOUNT OF SERVICE TAX IN THE PROFIT & LOSS ACCOUNT AND THERE IS NO QUERY BY THE ASSESSING OFFICER ON THIS ASPECT. WE HAVE ALSO SEEN THAT IN THE QUERY LETTER ISSUED BY THE ASSESSING OFFICER, THERE IS NO QUERY ON THIS ASPECT AND THEREFORE, THERE IS LACK OF ENQUIRY. REGARDING THE SECOND ASPECT REGARDING THE SERVICES RENDERED AGAINST PAYMENT OF COMMISSION, A CLEAR FINDING IS GIVEN BY LEARNED CIT THAT THE ASSESSEE HAS BEEN COMPLETELY UNABLE TO PRODUCE ANY DOCUMENTARY EVIDENCE ABOUT ANY SERVICES RENDERED BY THE SE PARTIES TO WHOM COMMISSION WAS PAID. WE HAVE ALSO SEEN THAT ALTHOUGH QUERY WAS RAISED BY THE ASSESSING OFFICER ASKING THE ASSESSEE TO FURNISH EVIDENCE BUT IN THE REPLY SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER, APART FROM FURNISHING COPY O F AGREEMENT, NO EVIDENCE HAS BEEN FURNISHED ABOUT RENDERING OF SERVICE AND THEREFORE, THERE IS COMPLETE NON APPLICATION OF MIND. THEREFORE, THIS JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IS NOT APPLICABLE IN THE PRESENT CASE. 7.2 THE SECOND JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE GUJ A RAT HIGH COURT RENDERED IN THE CASE OF ARVIND JEWELLERS (SUPRA). THIS JUDGMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THAT CASE, IT WAS FOUND THAT THE ASSESSING OFFICER MADE THE ASSESSMENT AFTER CONSIDERING THE RELEVANT MATERIAL AND THE EXPLANATION OFFERED BY THE ASSESSEE IN PUR SUANCE TO THE NOTICE U/S 142(1) AS WELL AS 143(2) OF THE ACT. IN THE PRESENT CASE , THERE WAS NO QUERY MADE BY THE ASSESSING OFFICER REGARDING SERVICE TAX ISSUE AND THERE IS COMPLETE NON APPL ICATION OF MIND ON THE SECOND ASPECT AND THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN THE PRESENT CASE. 8 7.3 THE THIRD JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS A TRIBUNAL DECISION IN THE CASE OF GREENLAND MOTORS (SUPRA). THIS TRIBUNAL DECISION IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE BECAUSE IN THAT CAS E, ALL THE ADDITIONS MADE BY LEARNED CIT IN ORDER PASSED BY HIM U/S 263 WERE DELETED BY THE TRIBUNAL AND THEREAFTER , IT WAS HELD BY TRIBUNAL THAT SINCE ALL THE ADDITION WERE DELETED ON MERIT, THE ORDER PASSED BY CIT U/S 263 IS SET ASIDE AND QUASHED. HENCE , THERE IS NO FINDING IN THIS TRIBUNAL ORDER REGARDING VALIDITY OF ORDER PASSED BY CIT U/S 263 WITHOUT CONSIDERING THE ISSUE ON MERIT AND IN THE PRESENT CASE, THE ISSUE ON MERIT IS ADMITTEDLY NOT PROPERLY EXAMINED BY THE ASSESSING OFFICER BECAUSE NO QUERY WAS MADE BY HIM ON THE FIRST ASPECT AND THERE IS NO APPLICATION OF MIND BY HIM ON THE SECOND ASPECT AND THE ASSESSEE COULD NOT BRING SUFFICIENT MATERIAL ON RECORD BEFORE CIT OR BEFORE US TO ESTABLISH THAT THE DEDUCTION WAS RIGHTLY ALLOWED BY THE ASSESSING OFFICER AND THEREFORE, THIS TRIBUNAL DECISION IS NOT RENDERING ANY HELP TO THE ASSESSEE. 7.4 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF VIKAS PLOYMERS (SUPRA). IN THIS CASE, IT WAS HELD THAT CIT MUST GIVE REASONS AND ASSESSEE MUST BE GIVEN OPPORTUNITY TO BE HEARD. THERE IS NO QUARREL ON THESE TWO ASPECTS BUT IN THE PRESENT CASE, THIS IS NOT THE OBJECTION OF LEARNED A.R. OF THE ASSESSEE THAT NO REASON HAS BEEN GIVEN BY CIT IN HIS ORDER OR THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY THE CIT. THE NEXT BASIS OF DECISION IN THIS CASE IS THAT THERE IS NO MATERIAL TO SHOW THAT THE ORDER OF ASSESSING OFFICER IS PREJUDICIAL TO THE INTEREST OF REVENUE BUT IN THE PRESENT CASE, CIT HAS BROUGHT MATERIAL ON RECORD TO SHOW THAT WHEN THE RECEIPTS WERE ACCOUNTED FOR AFTER REDUCING SERVICE TAX THEN THE PAYMENT OF SERVICE TAX CANNOT BE DEBITED TO PROFIT & LOSS ACCOUNT BUT THE ASSESSEE HAS DONE SO AND IT WAS ALLOWED BY THE ASSESSING OFFICER AND 9 THEREFORE, IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. ON THE SECOND ASPECT ALSO, THIS IS FINDING OF CIT THAT THE ASSESSEE HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO ESTABLISH RENDERING OF SERVICE BY COMMISSION AGENT AND THEREFORE, ALLOWING DEDUCTIO N FOR COMMISSION PAYMENT IS ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. BECAUSE OF THESE FACTS, THIS JUDGMENT IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE. 7.5 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE DELHI H IGH COURT RENDERED IN THE CASE OF SUNBEAM AUTO LTD. (SUPRA). IN THIS CASE, IT WAS HELD BY HON'BLE HIGH COURT THAT THE OPINION OF THE ASSESSING OFFICER IN TREATING THE EXPENDITURE AS REVENUE EXPENDITURE IS PLAUSIBLE VIEW AND NO MATERIAL IS BEFORE THE CIT T O VARY THAT OPINION AND THEREFORE, ORDER OF ASSESSING OFFICER IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE. HENCE, IT IS SEEN THAT IN THAT CASE, THE ISSUE IN DISPUTE WAS AS TO WHETHER THE EXPENDITURE ALLOWED BY THE ASSESSING OFFICER IS REVENUE OR CAPITAL . WHETHER ANY EXPENDITURE IS CAPITAL OR REVENUE IS VERY DEBATABLE ISSUE AND THE RE IS CLEAR FINDING OF HON'BLE HIGH COURT THAT THE OPINION OF THE ASSESSING OFFICER TREATING THE EXPENDITURE AS REVENUE IS PLAUSIBLE VIEW AND THEREFORE, IT WAS HELD THAT THE OR DER PASSED BY LEARNED CIT U/S 263 IS NOT VALID. IN THE PRESENT CASE, THE DISPUTE IS NOT REGARDING CAPITAL OR REVENUE EXPENDITURE. IN THE PRESENT CASE, THE DEDUCTION WAS ALLOWED WITHOUT MAKING ENQUIRY ON ONE ISSUE AND WITHOUT APPLICATION OF MIND ON THE SE COND ISSUE AND THEREFORE, THIS JUDGMENT IS NOT RELEVANT IN THE PRESENT CASE. 7.6 THE NEXT JUDGMENT CITED BY LEARNED A.R. OF THE ASSESSEE IS THE JUDGMENT OF HON'BLE M.P. HIGH COURT RENDERED IN THE CASE OF RATLAM COAL ASH COMPANY (SUPRA). IN THAT CASE , THE ORDER OF REVISION WAS PASSED BY LEARNED CIT ON THE BASIS THAT THE INCOME TAX OFFICER HAD NOT MADE PROPER 10 ENQUIRY. THIS IS BY NOW SETTLED POSITION OF LAW THAT INADEQUATE ENQUIRY IS NOT SUFFICIENT FOR INVOKING SECTION 263 AND ONLY ON LACK OF ENQUIRY OR LACK OF APPLICATION OF MIND, SECTION 263 CAN BE INVOKED. IN THE PRESENT CASE, WE HAVE SEEN THAT THERE IS COMPLETE LACK OF ENQUIRY ON FIRST ISSUE AND THERE IS COMPLETE LACK OF APPLICATION OF MIND ON SECOND ISSUE AND THEREFORE, THIS JUDGMENT OF HON'BLE M.P . HIGH COURT IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE. 8. AS PER ABOVE DISCUSSION, WE HAVE SEEN THAT NONE OF THE JUDGMENT S CITED BY LEARNED A.R. OF THE ASSESSEE IS RENDERING ANY HELP TO THE ASSESSEE AND WE HAVE ALSO SEEN THAT NO ENQUIRY WAS MADE BY THE ASSESSING OFFICER ON ONE ISSUE AND THERE WAS NO APPLICATION OF MIND ON THE SECOND ISSUE AND THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LEARNED CIT U/S 263. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24 /07/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR