DEBASHU SERVICES PRIVATE LIMITED, Nagpur V. CIT-I, Nagpur

ITA 37/NAG/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1659 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: S C THAKAR; C J THAKAR
• Keywords: Assessment record
• Section: 143(3); 142(1); 263

Judgement Text

1 ITA NO. 37/NAG/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 37 /NAG/2014 ASSESSMENT YEAR : 2009 10. DEBASHU SERVICES PRIVATE LIMITED, COMMISSIONER OF INCOME TAX I PLOT NO. 18, SAPTAK PLAZA, V/S. NAGPUR. SHIVAJI NAGAR, NAGPUR 440010. PAN AAACD6682J APPELLANT. RESPONDENT. APPELLANT BY : SHRI C.J. THAKAR & SHRI S.C. THAKAR. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 03 - 09 - 2015 DATE OF PRONOUNCEMENT : 24 TH SEPT. , 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. . THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATING FROM AN ORDER OF LEARNED C.I.T. - I, NAGPUR DATED 22 11 2013 PASSED UNDER SECTION 263 OF I.T. ACT. THE GROUNDS RAISED ARE REPRODUCED BELOW: 1. ON THE FACTS OF THE CASE AND IN LAW, THE LEARNED CIT ERRED IN INVOKING JURISDICTION UNDER SECTION 263 TO THE CASE OF THE APPELLANT ONLY ON GUESS AND SURMISES, WITHOUT POINTING OUT ANY ERROR IN THE ORDER OF THE A.O. FOR A.Y. 2009 10. 2. THAT ON THE FACTS AND IN CIRCU MSTANCES OF THE CASE, THE CIT I, NAGPUR GROSSLY ERRED IN INVOKING THE JURISDICTION U/S 263 AND PASSING ORDER 2 ITA NO. 37/NAG/2014. THEREON ONLY ON THE BASIS OF DISALLOWANCE OF ORDER PROCUREMENT CHARGES IN ASSESSMENT YEAR 2010 11. 3. THAT ON THE FACTS OF THE CASE AND IN LAW, THE S HOW CAUSE NOTICE AND/OR ORDER U/S 263, ALLEGING ERRORS AND PREJUDICE, ITSELF IS ERRONEOUS AND WITHOUT JURISDICTION. 4. THE APPELLANT PRAYS THAT THE IMPUGNED ORDER PASSED BY THE CIT I, NAGPUR U/S 263 FOR A.Y. 2009 10 MAY PLEASE BE SET ASIDE. 2. LATER ON AN ADDITIONAL GROUND HAS ALSO BEEN RAISED WHICH IS REPRODUCED BELOW: ORDER PASSED BY LEARNED C.I.T. U/S 263 OF I.T. ACT, 1961 IS WITHOUT JURISDICTION AS THE SCRUTINY ASSESSMENT U/S 143(3) WAS PASSED AFTER EXAMINING ALL THE EXPENSES INCLUDING PROCUREMENT C HARGES WHICH WERE CONSISTENTLY ALLOWED IN ALL EARLIER YEARS. ASSESSMENT ORDER WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. 2.1 ASSESSMENT WAS MADE UNDER SECTION 143(3) DATED 18 10 2011 ACCORDING TO WHICH THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. THE INCOME DECLARED WAS AT ` 71,81,827/ , HOWEVER, THE ASSESSMENT WAS MADE AT ` 72,40,330/ AFTER MAKING FEW NOMINAL ADDITIONS UNDER THE HEADS PROFESSIONAL TAX, POOJA EXPENSES AND ENTERTAINMENT EXPENSES. THE NATURE OF BUSINESS A CTIVITY OF THE ASSESSEE IS STATED TO BE A DE A LER FOR KIRLOSKAR PUMPS AND SPARE PARTS. ACCORDING TO THE LEARNED CIT, THE ASSESSING OFFICER HAD NOT EXAMINED A HUGE CLAIM OF EXPENDITURE OF ` 1,13,90,356/ DEBITED UNDER THE HEAD SELLING AND DISTRIBUTION EXPEN SES. THE CLAIM WAS TOWARDS ORDER PROCUREMENT CHARGES. THE ALLEGATION OF LEARNED CIT WAS THAT THE ASSESSING OFFICER HAD ALLOWED THE SAID DEDUCTION WITHOUT VERIFYING THE GENUINENESS OF THE CLAIM. IN THE OPINION OF LEARNED COMMISSIONER, AN EXPENDITURE UNDE R SECTION 37 CAN BE ALLOWED IF LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. IN RESPECT OF COMMISSION EXPENSES THE ASSESSEE HAS TO ESTABLISH THAT THE COMMISSION AGENT HAD RENDERED SERVICES TO THE ASSESSEE. IN CASES WHERE THE 3 ITA NO. 37/NAG/2014. ASSE SSEE HAS BEEN UNABLE TO PROVE THESE SERVICES RENDERED BY A COMMISSION AGENT THEN THE DEDUCTION ON ACCOUNT OF THE COMMISSION EXPENSES HAS NOT BEEN ALLOWED. ACCORDING TO THE LEARNED COMMISSIONER, THE BURDEN IS ON THE ASSESSEE TO PROVE THAT THE SERVICES WERE RENDERED AND COMMISSION WAS PAID WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. FOR THIS VIEW LEARNED COMMISSIONER HAS CITED FOLLOWING DECISIONS : (I) MADURA KNITTING CO. V/S. CIT 30 ITR 764 (MAD). (II) CIT V/S. RAMDAS RAMLAL 149 ITR 256 (MP). (III) VISHNU AGENC IES (P) LTD. V/S. CIT 117 ITR 754 (CAL.) 2.2 ACCORDING TO HIM EVEN IF THE PAYMENT OF COMMISSION WAS MADE BY THE ACCOUNT PAYEE CHEQUE, THEN BY ITSELF DO NOT PROVE THAT THE AGENT HAD IN FACT PROCURED SALE ORDERS FOR THE ASSESSEE. THE CASE LAW CITED WAS SCHNEIDER ELECTRIC INDIA LTD.304 ITR 360 (DEL.). 2.3 ACCORDING TO THE LEARNED C.I.T. IF IT IS FOUND IN ANY SUBSEQUENT YEAR THAT NO SERVICES WERE RENDERED BY THE AGENT THEN ON THE BASIS OF THE SAID FINDING IN SUBSEQUENT YEARS THE CASE WHICH WAS ORIGINALLY FINALIZED IN THE PAST YEAR COULD BE REOPENED. CASE LAW CITED IS BASTI SUGAR MILLS LTD. V/S. CIT 142 ITR 4 87 (DEL.). 3. ACCORDING TO THE LEARNED COMMISSIONER IT WAS IMPERATIVE ON THE PART OF THE ASSESSING OFFICER TO MAKE ENQUIRIES AS TO WHETHER THE AGENTS TO WHOM COMMISSION PAYMENT WAS MADE HAD IN FACT RENDERED SERVICES TO THE ASSESSEE. IN HIS OPINION NO INTE GRAL OR EXTERNAL ENQUIRY WAS MADE BY THE ASSESSING OFFICER. THERE WAS NO MENTION IN THE ASSESSMENT ORDER TO INDICATE THAT THE ASSESSING OFFICER HAD MADE ANY ENQUIRY PERTAINING TO THE RENDERING OF SERVICES BY THE COMMISSION AGENTS. THE ASSESSING OFFICER HAD PASSED THE ORDER WITHOUT APPLICATION OF MIND, THEREFORE, IT WAS AN ERRONEOUS ORDER. THE CASE LAW CITED WERE AS UNDER : 4 ITA NO. 37/NAG/2014. 1. CIT V/S. EMERY STONE MANUFACTURING CO. 213 ITR 843 (RAJ.) 2. MOFUSSIL WAREHOUSE & TRADING CO. LTD. V/S. CIT 238 ITR 867. 3. ASHOK LEYLAND LTD . V/S. CIT 260 ITR 599. 4. CIT V/S. BHAGWANDAS 272 ITR 367. 5. SHERAFFUDIN V/S. CIT 41 DTR (KER) 263. 6. CIT V/S. ASSAM TEA HOUSE 344 ITR 507 (P&H). 7. CIT V/S. HIMACHAL PRADESH FINANCIAL CORPN. 186 TAXMAN 105. 3.1 FINALLY IT WAS HELD THAT IF AN ORDER IS PASSED WITHO UT APPLICATION OF MIND THEN SUCH AN ORDER CAN BE TREATED AS AN ERRONEOUS ORDER. (MALABAR INDUSTRIAL CO. 243 ITR 83 (SC) ). THE SAID ASSESSMENT ORDER DATED 18 10 2011 PASSED UNDER SECTION 143(3) WAS SET ASIDE AND THE ASSESSING OFFICER WAS DIRECTED TO REDO T HE ASSESSMENT AFTER VERIFYING THE GENUINENESS OF THE CLAIM AS REGARDS ORDER PROCUREMENT CHARGES CLAIMED TO BE AT ` 1,13,90,356/ . HE HAS ALSO DIRECTED THE ASSESSING OFFICER TO VERIFY ABOUT THE RENDERING OF SERVICES BY THE SAID COMMISSION AGENT. AGAINST T HE SAID DIRECTION OF LEARNED COMMISSIONER, NOW THE ASSESSEE IS IN APPEAL. 4. FROM THE SIDE OF THE APPELLANT, LEARNED A.R. MR. C.J. THAKAR AND SHRI S.C. THAKAR APPEARED. HE HAS EMPHASIZED THAT THIS IS NOT THE CASE WHERE NO ENQUIRY AT ALL WAS MADE BY THE AS SESSING OFFICER BEFORE PASSING THE SAID ASSESSMENT ORDER. HE HAS DRAWN OUR ATTENTION ON THE CONTENTS OF THE PAPER BOOK ENCLOSED THEREIN IS A SHOW CAUSE NOTICE UNDER SECTION 142(1) DATED 29 06 2011 FOR ASSESSMENT YEAR 2009 10. THE ASSESSING OFFICER HAD I SSUED A SHOW CAUSE NOTICE UNDER SECTION 142(1) DATED 29 TH JUNE, 2011 ADDRESSED TO THE PRINCIPAL OFFICER DIRECTING HIM TO FURNISH CERTAIN DETAILS SO AS TO COMPLETE THE ASSESSMENT. ONE OF THE REQUIREMENT OF THE SAID NOTICE WAS TO FURNISH CERTAIN DETAILS OF E XPENSES LISTED THEREIN, WHICH 5 ITA NO. 37/NAG/2014. INCLUDED THE DETAILS PERTAINING TO COMMISSION EXPENSES. IN COMPLIANCE THE ASSESSEE HAS FURNISHED THE WRITTEN SUBMISSION ON 8 TH JULY. 2011 AND ENCLOSED THEREIN THE DETAILED COMPARATIVE CHART OF VARIOUS EXPENSES, TDS DEDUCTED AND THE ACCOUNTS OF COMMISSION EXPENSES ETC. IT WAS INFORMED IN THE SAID WRITTEN SUBMISSION THAT THE COMPANY WAS DEALING WITH CUSTOMERS OF COAL FIELD FOR THE SUPPLY OF PUMPS, PUMP SPARES, VALVES AND OTHER ACCESSORIES. LEARNED A.R. HAS ALSO INFORMED THAT A COMPARATIVE CHART OF GROSS PROFIT AND NET PROFIT OF LAST THREE YEARS WAS ALSO SUBMITTED TO THE ASSESSING OFFICER. HE HAS ALSO INFORMED THAT THE LIST OF ALL PARTIES TO WHOM SALES WERE MADE AS WELL AS A PARTYWISE DETAILS FROM WHOM THE PURCHASES WERE MADE WERE ALSO FURNISHED FORMING PART OF THE ASSESSMENT RECORD. THE ASSESSEE HAS ALSO FURNISHED COMPARATIVE FIGURES OF VARIOUS EXPENSES SUCH AS COMMISSION, INTEREST ETC. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS ALSO INFORMED THAT AS PER THE COMPARATI VE CHART OF GROSS PROFIT AND NET PROFIT WAS FURNISHED SHOWING PROFIT AT THE RATE OF 24.59% AS COMPARED TO 26.67% OF THE PAST YEAR. HOWEVER, IT WAS EXPLAINED THAT THE SALES HAVE GONE UP DURING THE YEAR. EARLIER SALES WERE ` 7,30,98,877/ AND THE SALES FOR T HE YEAR UNDER CONSIDERATION WERE ` 8,03,59,728/ . IT HAS ALSO BEEN INFORMED THAT THE PERSONS TO WHOM THE COMMISSION WAS PAID WERE TAX PAYERS, THEREFORE, THEIR PAN NO., ORDER NO., VALUE OF THE ORDER ETC. HAVE BEEN PLACED ON RECORD. PAYMENTS HAVE BEEN MADE T HROUGH ACCOUNT PAYEE CHEQUES WHICH WAS DULY REFLECTED BY THE COMMISSION AGENTS IN THEIR RESPECTIVE INCOME TAX RETURNS. OUR ATTENTION HAS ALSO BEEN DRAWN ON THE CLAUSES OF AGENCY AGREEMENT DULY EXECUTED BETWEEN THE ASSESSE AND THE AGENTS. COPIES OF FEW A GREEMENTS HAVE BEEN PLACED IN THE COMPILATION. 4.1 THE CRUX OF THE ARGUMENT OF THE LEARNED A.R. IS THAT THERE WAS NO LACK OF ENQUIRY, HENCE THE ALLEGATION OF LEARNED COMMISSIONER WAS INCORRECT. FOR THIS LEGAL PROPOSITION, CASE LAWS CITED WERE AS UNDER : 6 ITA NO. 37/NAG/2014. 1 ) CIT V/S. SUNBEAM AUTO LTD. (2011) 332 ITR 167 (DEL.) 2) CIT V/S. ESCORTS LTD. (2011) 338 ITR 435 (DEL.) 3) CIT V/S. VODAFONE ESSAR SOUTH LTD. (2013) 212 TAXMAN 184. 5. FROM THE SIDE OF THE REVENUE LEARNED D.R. MR. NARENDRA KANE APPEARED AND VEHEMENTLY SUPPORTED THE ORDER PASSED UNDER SECTION 263 OF I.T. ACT. ACCORDING TO HIM THE ASSESSMENT ORDER WAS AN ERRONEOUS ORDER BECAUSE ON THE FACE OF IT NO ENQUIRY WAS MADE BY THE ASSESSING OFFICER. ONCE THE CASE WAS SELECTED FOR SCRUTINY THEN THE ASSESSING OFFIC ER WAS DUTY BOUND TO EXAMINE THE NATURE OF COMMISSION PAYMENT. IN THE BODY OF ASSESSMENT ORDER THERE WAS NO WHISPER OF SUCH ENQUIRY, IF AT ALL HAD BEEN MADE. IN HIS OPINION IT WAS A CASE OF LACK OF ENQUIRY, HENCE RIGHTLY QUASHED BY LEARNED COMMISSIONER. 6. WE HAVE HEARD BOTH THE SIDES AND CAREFULLY PERUSED THE COMPILATION FILED BEFORE US, EVIDENCES ON RECORD, ORDERS OF THE REVENUE AUTHORITIES IN THE LIGHT OF THE CASE LAWS CITED. AT THE OUTSET IT IS WORTH TO MENTION THAT AS FAR AS THE IMPUGNED ORDER OF TH E ASSESSING OFFICER DATED 18 10 2011 IS CONCERNED IT IS CORRECT TO ALLEGE THAT ALTHOUGH THE SAME WAS PASSED UNDER SECTION 143(3) BUT THERE WAS NO DISCUSSION IN THE BODY OF THE ORDER IN RESPECT OF THE EXPENDITURE UNDER THE HEAD ORDER PROCUREMENT CHARGES AMOUNTING TO ` 1,13,90,354/ . BUT SIDE BY SIDE IT IS ALSO WORTH TO MENTION THAT A NOTICE UNDER SECTION 142(1) WAS ISSUED BY THE ASSESSING OFFICER ON 29 06 2011 FOR THE YEAR UNDER CONSIDERATION AND THE ASSESSEE WAS ASKED TO SUBMIT THE DETAILS IN RESPECT OF SEVERAL EXPENSES ALONG WITH COMMISSION EXPENSES. THE ASSESSEE WAS ALSO ASKED TO FURNISH THE DETAILS OF TDS DEDUCTED. IN COMPLIANCE A REPLY WAS FURNISHED BY THE ASSESSEE DATED 8 TH JULY, 2011 WHEREIN IT WAS INFORMED THAT THE ASSE SSEE IS AUTHORIZED DEALER APPOINTED BY KIRLOSKAR BROS. LTD. A ND DEALING WITH THE CUSTOMERS OF COAL FIELD FOR THE SUPPLY OF PUMPS AND OTHER ACCESSORIES OF THE PUMP. THE ASSESSEE HAS ALSO FURNISHED A COMPARATIVE CHART OF 7 ITA NO. 37/NAG/2014. VARIOUS EXPENSES AS PER THE REQUIREME NT OF THE SAID NOTICE. THE ASSESSEE HAS ALSO FURNISHED THE DETAILS OF THE COMMISSION EXPENSES ALONG WITH THE TDS DETAILS. THE ASSESSEE HAS ALSO FURNISHED A COMPARATIVE CHART OF GROSS PROFIT AND NET PROFIT OF THE PAST THREE YEARS TO DEMONSTRATE THAT THE SAL ES HAVE INCREASED AND THEREUPON THE NET PROFIT AMOUNT HAD ALSO INCREASED IN COMPARISON TO THE PAST YEARS. HOWEVER, THERE WA S A SLIGHT DECLINE IN THE PERCENTAGE OF THE GROSS PROFIT. BECAUSE OF THIS REASON THAT THE ASSESSEE HAS FURNISHED THE REQUISITE DETAI LS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAD APPLIED HIS MIND AND THEREUPON ARRIVED AT A CONSCIOUS DECISION NOT TO DISALLOW THE COMMISSION EXPENDITURE. HENCE IT WAS WRONG ON THE PART OF THE LEARNED COMMISSIONER TO HOLD THAT THE ASSESSING OFFICER SHOULD HAVE MADE THE ENQUIRY AND IN THE ABSENCE OF ANY INVESTIGATION OR ENQUIRY IN RESPECT OF SERVICES RENDERED BY THE COMMISSION AGENT THE SAID ASSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, A LEGAL POINT HAS BEEN RAISED BEFORE US TO EXAMINE WHETHER THIS IS A CASE OF NO ENQUIRY OR A CASE OF INADEQUATE ENQUIRY. 7. TO RESOLVE THIS PRELIMINARY ISSUE WE HAVE FURTHER EXAMINED SOME OF THE BASIC FACTS OF THIS CASE. WE HAVE NOTICED THAT AT PARA 4 OF THE ORDER PASSED UNDER SECTION 263 LEARNED C.I.T. HAS MENTIONED THAT THE ASSESSEE IS A DEALER IN PUMPS AS WELL AS SPARE PARTS MANUFACTURED BY KIRLOSKAR BROS. LTD. THE MAIN CLIENTS OF THE ASSESSEE ARE WESTERN COAL FI E LDS LTD. (WCL) , NAGPUR AND SOUTH E ASTERN COAL FIELDS LTD. (SECL), BILASPUR. THE ASSESSEE USED TO MAKE PAYMENT OF COMMISSION TO AGENTS FOR PROCURING INFORMATION REGARDING THE REQUIREMENT OF PUMPS AND SPARE PARTS AT VARIOUS MINES OF WCL AND SECL. THOSE AGENTS ARE SAID TO BE COLLECTIN G THE REQUIRED INFORMATION FROM VARIOUS MINES WHICH ARE LOCATED IN REMOTE PLACES. LEARNED COMMISSIONER IN PARA 3 HAS ALSO MENTIONED THAT SIMILAR TYPE OF EXPENDITURE WAS DULY ALLOWED IN ASSESSMENT YEAR 2000 01 AND ASSESSMENT YEAR 2004 05 ON SCRUTINY ASSESS MENT. THE ASSESSEE HAS FURNISHED SUBMISSIONS TO 8 ITA NO. 37/NAG/2014. LEARNED COMMISSIONER TO DEMONSTRATE THE GENUINENESS OF THE EXPENDITURE, CLAIMED AS ORDER PROCUREMENT CHARGES WHEREIN THE FOLLOWING FACTS WERE PLACED ON RECORD : (I) THE PAYMENT IS MADE TO AGENTS BY VIRTUE OF AGENCY AGREEMENT EXECUTED WITH THEM; (II) THE PAYMENT OF COMMISSION IS FOR THE SERVICES RENDERED BY THEM AND ACCORDING TO THE TERMS AND CONDITIONS LAID DOWN IN THE AGREEMENT; (III) ALL THE PAYMENTS ARE MADE BY A/C PAYEE CHEQUES WHICH ARE ALSO PROVED FACT; (IV) PROPER TAX WAS DEDUCTED AT SOURCE AS PER INCOME TAX ACT. PROVISIONS AND COPIES OF TDS CERTIFICATES AS GIVEN TO AGENTS WERE SUBMITTED DURING ASSESSMENT PROCEEDINGS. (V) TDS CERTIFICATES WERE DULY ISSUED TO THE AGENTS BY THE COMPANY; (VI) NO AGENT IS RELATIV E OF ANY OF THE DIRECTORS OF THE COMPANY OR DIRECTLY OR INDIRECTLY RELATED WITH THE COMPANY. (VII) THE AGENTS WERE ASSOCIATED WITH THE ASSESSEE COMPANY FROM MANY YEARS. (VIII) THERE IS A STEADY INCREASE IN THE BUSINESS OF THE COMPANY WITH INCREASE IN SALES AND PROFITS DUE TO EFFORTS AND SERVICES RENDERED BY THE AGENTS. 7.1 IT HAS ALSO BEEN PLACED ON RECORD THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH THOSE AGENTS TERMED AS AGENCY AGREEMENT DEPICTING THE TERMS AND CONDITIONS OF THE COMMISSION TO BE PAID TO THE AGENTS. FROM THE SIDE OF THE ASSESSEE IT IS VEHEMENTLY C LAIMED THAT ALL THOSE AGENCY AGREEMENTS EXECUTED WITH RESPECTIVE AGENT WERE PLACED IN THE ASSESSMENT RECORD IN THE PAST SPECIALLY WHEN THE ASSESSMENT WAS CARRIED OUT FOR ASSESSMENT YEAR 2000 01. DUE TO THE REASON 9 ITA NO. 37/NAG/2014. THAT ALL THE RELEVANT INFORMATION IN RES PECT OF THE PAYMENT OF COMMISSION WAS VERY MUCH AVAILABLE IN THE ASSESSMENT RECORD, THEREFORE, IT IS NOT JUDICIALLY CORRECT TO ALLEGE THAT THE ASSESSING OFFICER HAD PASSED THE IMPUGNED ASSESSMENT ORDER IN THE ABSENCE OF PROOF OF GENUINENESS OF THE EXPENDIT URE. IT HAS ALSO BEEN STATED THAT THE COMMISSION WAS PAID THROUGH ACCOUNT PAYEE CHEQUES, HENCE THE AGENTS WERE IDENTIFIABLE. MOREOVER, TDS HAD ALSO BEEN DEDUCTED WHICH WAS CLAIMED AS TAX PAID BY THE RESPECTIVE AGENTS IN THEIR RESPECTIVE INCOME TAX RETURNS. 7.2 IN THE BACKGROUND OF ABOVE DISCUSSION AND EVIDENCES IN OUR CONSIDERED OPINION PRIMA FACIE IT IS WRONG TO ALLEGE THAT THE ASSESSING OFFICER HAD ALLOWED THE EXPENDITURE WITHOUT VERIFYING THE GENUINENESS OF THE CLAIM. AT THE OUTSET , WE ALSO OBSERVE THA T THE ASSESSMENT ORDER IN QUESTION CANNOT BE SAID TO BE A CASE OF NO ENQUIRY AT ALL, BUT AT BEST COULD ALLEGED TO BE A CASE OF INADEQUATE ENQUIRY , BUT NOT ABSOLUTELY CORRECT . THEREFORE, IN THE LIGHT OF THE ABOVE DISCUSSION AND THE FACTUAL MATRIX OF TH E CASE, WE STUDIED A PRECEDENT CITED AS SUNBEAM AUTO LTD. 332 ITR 167 (DEL.). IN THE SAID DECISION IT WAS HELD THAT IF THERE WAS AN ENQUIRY, EVEN INADEQUATE, WOULD NOT BY ITSELF GIVE OCCASION TO THE C.I.T. TO PASS ORDER UNDER SECTION 263 OF I.T. ACT. ACCO RDING TO THE HONBLE COURT AN ACTION UNDER SECTION 263 IS OPEN ONLY IN CASES WHERE THERE WAS LACK OF ENQUIRY BY THE ASSESSING OFFICER. WE HAVE ALSO EXAMINED THE DECISION OF CIT V/S. VODAFONE ISSAR SOUTH LTD. 212 TAXMAN 184 (DEL.) WHEREIN IT WAS FOUND TH AT THE SAID CASE WAS NOT A CASE OF NO ENQUIRY, RATHER SPECIFIC QUERIES WERE MADE BY THE ASSESSING OFFICER AND THOSE WERE DULY REPLIED. THE ASSESSING OFFICER HAD TAKEN ONE VIEW AND NOW THE LEARNED COMMISSIONER UNDER REVISIONARY POWERS WANTED TO ADOPT AN A NOTHER VIEW. ACCORDING TO THE HONBLE COURT DUAL VIEWS COULD BE POSSIBLE, ONE COULD BE A PLAUSIBLE VIEW AND THE OTHER COULD BE A REASONABLE VIEW. ONE MORE CASE OF MAX INDIA LTD. 292 ITR 282 (SC) HAS ALSO BEEN REFERRED FOR THE LEGAL PROPOSITION THAT 10 ITA NO. 37/NAG/2014. THE C.I .T. COULD NOT VALIDLY EXERCISE HIS REVISIONARY POWER UNDER SECTION 263 BY HOLDING A PROBABLE VIEW. 8. EVEN THE ORDER OF LEARNED COMMISSIONER DOES NOT CONTAIN A FINDING TO THE EFFECT THAT HE WAS IN POSSESSION OF SOME MATERIAL TO INDICATE OR DEMONSTRATE THA T THE COMMISSION PAID TO THE AGENT WAS NOT GENUINE OR EVEN DOUBTFUL. THE ONLY REASON GIVEN BY THE LEARNED COMMISSIONER TO INVOKE THE REVISIONARY POWER WAS THAT THE ENQUIRY HAS NOT BEEN MADE BY THE ASSESSING OFFICER AND THE CLAIM WAS ALLOWED WITHOUT EXAMINI NG THE GENUINENESS OF THE EXPENDITURE. IN OUR HUMBLE UNDERSTANDING OF LAW THE C.I.T. COULD NOT TAKE RECOURSE TO REVISIONARY POWERS UNDER SECTION 263 BY DRAWING MER ELY FRESH ENQUIRIES OF A PARTICULAR TRANSACTION WHICH WAS OTHERWISE ACCEPTED BY THE REVENUE DEPARTMENT FOR SEVERAL YEARS IN THE PAST. NOT ONLY THIS, WE HAVE BEEN INFORMED THAT IN THE SUBSEQUENT YEARS NO SUCH DISALLOWANCE WAS MADE. HOWEVER, WE ARE NOT CONCERNED ABOUT THE MERITS OF THE EXPENDITURE WHETHER RIGHTLY ALLOWED CONSIDERING THE BUSINESS E XIGENCIES OF THE ASSESSEE , ALTHOUGH THAT TOO WAS PROVED BY THE ASSESSEE , BUT WE ARE CONCERNED IN THIS APPEAL ONLY IN RESPECT OF A LEGAL POSITION THAT WHETHER THE REVISIONARY POWERS UNDER SECTION 263 WERE RIGHTLY INVOKED BY THE COMMISSIONER OR NOT. WE HAVE ADJUDICATED THIS LEGAL ISSUE IN THE BACKGROUND OF LIMITED FACTS AND CIRC UMSTANCES AND THEREUPON WE HEREBY HOLD THAT IN A SITUATION WHEN RELEVANT DETAILS HAVE BEEN FILED BY THE ASSESSEE AND THE ASSESSING OFFICER HAD ALLOWED THE CLAIM THEN SUCH DECISION OF THE ASSESSING OFFICER WOULD NOT BE HELD TO BE ERRONEOUS ORDER SIMPLY BECA USE IN HIS ORDER HE HAD NOT MADE ANY ELABORATE DISCUSSION IN THAT REGARD. ON THIS VERY 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 ASSESSMENT ORDER, WOULD NOT BY ITSELF LEAD TO A CONCLUSION THAT THERE WAS NO ENQUIRY WITH RESPECT TO PAYMENT OF COMMISSION BY THE ASSESSEE. HENCE WE HEREBY HOLD THAT A 11 ITA NO. 37/NAG/2014. REVISION ARY ORDER PASSED UNDER SECTION 263 IS NOT SUSTAINABLE IN THE EYES OF LAW. HENCE THE SAME IS HEREBY QUASHED . THE GROUNDS RAISED BY THE ASSESSEE ARE, THEREFORE, ALLOWED. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF SEPT., 2015. SD/ SD/ (SHAMIM YAHYA) (MUKUL K. SHRAWAT) (ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 24 TH SEPT. 2015. COPY OF ORDER FORWARDED TO : 1. THE ASSESSEE. 2. REVENUE. 3. THE CIT(A) 4. THE CIT, NAGPUR. 5. THE D.R., ITAT, NAGPUR. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE