KAMAL KUMAR GUPTA, Jaipur V. CIT, Kota

ITA 39/JPR/2011

• Counselvise Citation: 3923114 RSA 2011
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONS KOTA RAMGANJ MANDI KOTA
• Keywords: Charitable institution; Opportunity of being heard; Assessment record
• Section: 143(3); 263; 63

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO. 39/ JP/2011 ASSESSMENT YEAR 2007-08 PAN: ABYPG 2558 G SHRI KAMAL KUMAR GUPTA VS. THE CIT PROP. M/S. KAMAL KUMAR & SONS KOTA RAMGANJ MANDI, KOTA (APPELLANT ) (RESPONDENT) ASSESSEE BY: SHRI MAHENDRA GARGIEYA DEPARTMENT BY : SHRI SUNIL MATHUR DATE OF HEARING: 14-09-2011 DATE OF PRONOUNCEMENT: 23-09-2011 ORDER PER N.L. KALRA, AM:- THE ASSESSEE HAS FILED AN APPEAL AGAINST RESPECT IVE ORDERS OF THE LD. CIT, KOTA DATED 06-12-2010 PASSED U/S 263 OF THE ACT. 2.1 THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AR E AS UNDER:- 1 THE LD. CIT. KOTA ERRED IN LAW AS WELL AS ON TH E FACTS IN INVOKING SECTION 263 OF THE ACT. THE SAME IS PURELY CONTRARY TO THE PROVISIONS OF LAW THEREFORE, THE IMPUGNED ORDER U/S 263 OF THE ACT KINDLY BE QUASHED . 2. THE LD. CIT. KOTA ERRED IN LAW AS WELL AS ON THE FACTS OF THE CASE IN TAKING THE ACTION U/S 263 OF T HE ACT ON THE ALLEGATION THAT THE AO DID NOT VERIFY THE GENUI NENESS OF THE CLAIM OF THE ASSESSEE REGARDING OUTSTANDING SUNDRY CREDITORS WHICH IS CONTRARY TO THE FACTS AND SUCH A FINDING 2 BEING PERVERSE, THE IMPUGNED ACTION IS BAD IN LAW WITHOUT JURISDICTION AND BEING VOID AB INITIO, THE IMPUGNED ORDER U/S 253 OF THE ACT KINDLY BE QUASHED . 2.2 THE LD. CIT ISSUED A NOTICE U/S 263 DATED 1-11- 2010 IN WHICH THE LD. CIT MENTIONED THAT THE ASSESSMENT ORDER PASSED U/S 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON ACCOUNT O F FOLLOWING REASONS. AS PER SCHEDULE OF THE BALANCE SHEET, SUNDRY CRED ITORS BEING AGRICULTURISTS HAS BEEN SHOWN AT RS. 19,65,61 4/- BUT NO VERIFICATION / ENQUIRY IN THIS REGARD HAS BEEN MADE . EVEN NAMES AND ADDRESSES OF THE FARMERS HAVE NOT BEEN TAKEN ON RECORD. 2.3 IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSES SEE FILED THE WRITTEN SUBMISSIONS WHICH ARE AVAILABLE AT PAGES 1 AND 2 OF THE ORDER OF THE LD. CIT. THE SUBMISSIONS GIVEN BEFORE THE LD. CIT ARE SUMMAR IZED AS UNDER:- 1. THE BUSINESS OF THE ASSESSEE IS KACHCHA ADATIYA AND THE ASSESSEE SELL THE CROPS OF THE FARMERS IN K RISHI UPAJ MANDI YARD IN AUCTION. THE HIGHEST BIDDERS PURCHASE S THE GOODS IN AUCTION. THE SALE PARCHI IS ISSUED AFTER A UCTION AND WEIGHING OF THE CROPS. WHENEVER THE TRADERS MAKE PA YMENT DURING THE SIGHT PERIOD, KACHCHA ADATIYA MAKES THE PAYMENTS TO THE FARMERS. HENCE, DURING THIS SIGHT PERIOD, THERE IS ALWAYS OUTSTANDING PAYABLE TO THE FARMERS. THIS IS A ROUTI NE PROCESS AND FOLLOWED DURING WHOLE YEAR. 3 2. THE KACHCHA ADATIYA GETS ARHAT/COMMISSION FROM THE TRADERS WHERE THE TRADERS DEDUCT THE TDS ON SUC H COMMISSION AS PER NORMS OF THE INCOME TAX ACT. 3. THE SALE OF FARMERS CAN BE VERIFIED ON DAY TO DA Y SALE REGISTER 4. THE SALE PARCHI (VIKRAY PARCHI) BOOKS ARE PREPAR ED AND ISSUED BY KRISHI UPAJ MANDI SAMITI TO KACHCHA A DATIYA 5. LOOKING TO THE ABOVE SYSTEM OF SALE AND PAYMENT BY KACHCHA ADATIYA TO FARMERS, THERE IS NO POSSIBIL ITY OF ANY FAKE CREDITORS IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. 6. THE ASSESSEE PRODUCED THE COMPLETE BOOKS OF ACCOUNTS BEFORE THE AO 7. AFTER EXAMINING THE BOOKS OF ACCOUNTS, THE AO PASSED THE ASSESSMENT ORDER AND THEREFORE, THE ASSE SSMENT ORDER IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IF ANYTHING IS NOT MENTIONED IN THE ASSESSMENT ORDER B Y THE AO THEN IT DOES NOT MEAN THAT THE ORDER IS COMPLETELY WRONG AT ASSESSEE'S LEVEL 2.4 THE LD. CIT CONSIDERED THE WRITTEN SUBMISSION A ND RECORDED HIS FINDINGS AS UNDER:- THE ONLY POINT INVOLVED IS THE NON VERIFICATION OF THE GENUINENESS OF THE ASSESSEES CLAIM THAT THERE ARE OUTSTANDING SUNDRY CREDITORS OF AN AMOUNT OF RS.19, 65,614/- AT THE END OF THE 4 YEAR 2007-08 (CORRECT 2006-07). THE ORDER PASSED BY AO FOR A.Y.2008-09 ( CORRECT A.Y.2007-08) HAS BEEN HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE, THE NECESSARY DETAILS TO VERIFY THIS CLAIM I.E. THE FULL ADDRESSE S OF THE FARMERS AND DATE OF TRANSACTIONS WITH THEM ETC. HAVE NOT BEEN T AKEN ON RECORD BY AO WHILE FRAMING THE ASSESSMENT ORDER. THE ASSES SEE HAS SUBMITTED A DETAILED EXPLANATION AS TO HOW A KACHCH A ADATIA WORKS AND HOW THE PAYMENTS TO BE MADE TO FARMERS REMAIN O UTSTANDING IN THE NORMAL FUNCTIONING OF A KACHCHA ADATIA. THIS ME THODOLOGY IS UNDERSTOOD BUT STILL THIS ALONE WILL NOT PROVE THE GENUINENESS OF THE CREDITORS. TO PROVE OR TO VERIFY THE GENUINENESS OF THE OUTSTANDING CREDIT BALANCES THE ENTIRE ACCOUNT OF EACH FARMER I N THE BOOKS IS REQUIRED ALONG WITH THEIR COMPLETE ADDRESSES. THE D ATE WISE DETAILS OF THE TRANSACTIONS UNDERTAKEN ON BEHALF OF FARMER BY THE ASSESSEE WOULD HAVE HELPED THE AO IN FINDING OUT AS TO WHETH ER THE OUTSTANDING CREDITORS ARE OLD OR RECENT. IF THE OUT STANDING CREDITORS ARE VERY OLD IT IS SUSPICIOUS AS TO WHY THEY ARE NO T PRESSING FOR PAYMENTS. THIS SUSPICION CAN BE VERIFIED ONLY IF TH E FARMERS ARE IDENTIFIABLE. FOR IDENTIFYING THEM OTHER DETAILS SU CH AS THEIR COMPLETE RESIDENTIAL ADDRESS ETC ARE REQUIRED. BUT THESE DETAILS HAVE ADMITTEDLY BEEN NOT FURNISHED EVEN THOUGH THEY WERE SPECIFICALLY ASKED BY AO IN THE COURSE OF HEARING T HEY HAVE BEEN NOW SUBMITTED BEFORE ME AND ARE ENCLOSED HEREWITH F OR VERIFICATION. THIS MAKES THE ASSESSMENT ORDER PASSED BY AO ERRONE OUS IN THE SENSE THAT IT IS PREJUDICIAL TO THE INTEREST OF REV ENUE. THE AMOUNT INVOLVED IS LARGE AND THEREFORE, THE CHANCES OF FIN DINGS OUT BOGUS CREDITORS ARE MORE. THEREFORE, THE ASSESSMENT ORDER DATED 18/03/2009 IS SET-ASIDE TO BE MADE AFRESH AFTER FOL LOWING & DIRECTIONS GIVEN ABOVE & PROPERLY VERIFYING THE CLA IM OF THE ASSESSEE. 5 2.5 BEFORE US, THE LD. AR HAS FILED THE WRITTEN SUB MISSION ALONGWITH PAPER BOOK CONTAINING 39 PAGES. THE LD. AR HAS SUBMITTED THAT THE LD. CIT CAN ASSUME JURISDICTION U/S 263 IF TWIN CONDITIONS OF T HE ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE SATISFIED. IF THE VIEW TAKEN BY THE AO IS ONE OF THE POSSIBLE VIEW THEN LD. CIT CANNOT ASSUME JURISDICTION. FOR THIS PURPOSE, RELIANCE HAS BEEN P LACED ON THE FOLLOWING DECISIONS. 1. MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC ) 2. CIT VS. MAX INDIA LTD., 295 ITR 282 (SC) IT HAS BEEN SUBMITTED THAT THE AO RAISED THE DETAIL ED QUERIES AND THE ASSESSEE FILED VARIES REPLIES ON DIFFERENT DATES. IT IS NOT DENIED BY THE LD. CIT THAT AO DID APPLY HIS MIND ON THE ISSUE OF CREDITS IN THE N AME OF AGRICULTURISTS. OUR ATTENTION WAS DRAWN TO THE REPLY FILED VIDE LETTER DATED 12-02-2009. AS PER THIS REPLY, THE ASSESSEE FILED THE COPY OF ACCOUNT OF FEW DEBTORS/ CREDITOR FROM WHOM THE ASSESSEE HAS MADE PURCHASES/ SALES OF GOODS OVER RS. 5.00 LACS DURING THE YEAR UNDER CONSIDERATION . THE COPY OF ACCOUNT OF FOUR CREDITORS IS ALSO FILED. THE DETAILS OF SUNDRY CRED ITORS WERE FURNISHED TO THE AO. THE PERUSAL OF THESE DETAILS SHOWS THAT MOST OF THE TRANSACTIONS WERE CARRIED OUT IN THE MONTH OF MARCH, 2007 I.E. FROM 1 5-03-07 TO 18-03-07. 6 THESE DETAILS WERE FURNISHED BEFORE THE AO AND IT I S NOT A CASE OF MAKING NO ENQUIRY. 2.6 OUR ATTENTION WAS DRAWN TO OFFICE NOTE CONTAINE D IN THE ASSESSMENT RECORD. THE ASSESSEE OBTAINED THE COPY OF THE OFFIC E NOTE AFTER PASSING OF ORDER OF LD. CIT U/S 263 OF I.T. ACT. IN THE OFFICE NOTE, THE AO HAS MENTIONED THAT TRADE CREDITORS ARE IN ORDER AND APPEARS GENUI NE. THE AO HAS MENTIONED THAT OFFICE NOTE IS SELF EXPLANATORY RELATING TO RE PLIES OF ALL THE QUERIES AND SUSPICION ARISING IN THE MIND OF THE LD. CIT. REFER ENCE HAS BEEN MADE TO THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CA SE OF ANIL BULK CARRIER VS. CIT, 276 ITR 625. 2.7 IT WAS FURTHER SUBMITTED THAT PROCEEDINGS U/S 2 63 CANNOT BE TAKEN ON THE GROUND THAT THE AO HAS NOT MADE SUFFICIENT ENQU IRY. THE LD. CIT CAN ASSUME JURISDICTION IF THERE HAS BEEN LACK OF ENQUI RY. IN THE INSTANT CASE, THE ENQUIRY HAS BEEN MADE THOUGH THE ENQUIRY MAY NOT BE SUFFICIENT IN THE OPINION OF THE LD. CIT. THE LD. AR RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN MARKETI NG & ADVERTISING CO. LTD. (2010) 46 DTR 109. OUR ATTENTION WAS DRAWN TOW ARDS THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. TRUSTEES ANUPAM CHARITABLE TRUST (1987) 167 ITR 129 IN WHICH HON'BL E JURISDICTIONAL HIGH COURT HELD THAT ERROR ENVISAGED BY SECTION 263 WAS NOT ONE WHICH DEPENDED 7 ON POSSIBILITY OR GUESSWORK BUT IT SHOULD BE ACTUAL LY8 AN ERROR EITHER OF FACT OR LAW. 2.8 THE LD. DR HAS ALSO FILED THE WRITTEN SUBMISSIO NS. THE LD. DR SUBMITTED THAT ASSESSEE HAS NOT BEEN ABLE TO BRING ON RECORD ANY EVIDENCE THAT THE ISSUES RAISED BY THE LD. CIT WERE EXAMINED AT ALL BY THE AO OR ANY INVESTIGATION WORTH ITS NAME WAS CONDUCTED B HIM WH ILE PASSING THE ORDER U/S 143(3) OF THE ACT. IN CASE NO ENQUIRY HAS BEEN CONDUCTED BY THE AO THEN THE LD. CIT CAN ASSUME JURISDICTION U/S 263 OF THE ACT. FOR THIS PROPOSITION, THE LD. DR PLACED FOLLOWING RELIANCE. 1. J.A. RANMASWAMY CHATTIAR AND ANOTHER VS. CIT , 2 20 ITR 657 (MAD.) 2. DUGGAL & CO. VS. CIT, 220 ITR 456 (DEL.) 3. GEE VEE ENTERPRISE VS. ADDL. CIT , 99 ITR 375 (DEL.) 4. CIT VS. KOHINOOR TOBACCO PRODUCTS (P) LTD., 234 ITR 557 (M.P.) 5. CIT VS. ACTIVE TRADER (P) LTD. , 214 ITR 583 ( CAL.) 2.9 DURING THE COURSE OF PROCEEDING BEFORE US, THE LD. DR ALSO STATED THAT THE DETAILS WHICH HAVE NOW BEEN FILED OR FILED BEFO RE THE LD. CIT WERE NOT GIVEN BEFORE THE AO. THE DETAILED ADDRESSES AND NAT URE OF TRANSACTION RESULTING INTO TRADE CREDITORS WERE NOT GIVEN 8 2.10 WE HAVE HEARD BOTH THE PARTIES. VIDE ORDER SHE ET ENTRY DATED 12-02- 2009, THE ASSESSEE WAS ASKED BY THE AO TO FILE THE DETAILS OF TRADE CREDITORS WHICH ARE SHOWN IN THE NAME OF AGRICULTURISTS. THE ASSESSEE WAS ALSO ASKED TO GIVE THE COMPLETE NAMES AND ADDRESSES OF THESE P ERSONS. THE ASSESSEE FILED REPLY VIDE LETTER DATED 10-03-09. IN THE ORDE R SHEET, IT IS MENTIONED THAT THE ASSESSEE HAS FILED THE WRITTEN SUBMISSION. VIDE THIS WRITTEN SUBMISSION; THE ASSESSEE HAS ENCLOSED THE LIST OF SUNDRY CREDIT ORS AGRICULTURISTS. AFTER RECEIPT OF THESE DETAILS, THE AO HAS NOT MADE ANY F URTHER ENQUIRY. PAGE 14 OF THE PAPER BOOK FILED BEFORE US BY THE LD. AR CONTAI NS THE TRUE COPY OF THE OFFICE NOTE. IN THE OFFICE NOTE, IT IS MENTIONED AS UNDER:- ISSUE OF TRADE CREDITORS HAVE BEEN VERIFIED WITH THE HELP OF PURCHASE BILLS AND COPY OF A/C. IT IS FOUND THAT THE AMOUNT OUTSTANDING AT THE END OF THE YEAR IS MOSTLY RELATI NG TO PURCHASE OF MARCH, 07. ALL TRADE CREDITORS ARE IN ORDER AND APPEARS GENUINE, HENCE NO ADVERSE CAN BE DRAWN ON THIS ISSU E. THUS IT IS CLEAR THAT THE AO HAS MADE ENQUIRY BUT S UFFICIENCY OF ENQUIRY CAN DEPEND UPON FROM PERSON TO PERSON. IT IS TRUE THAT ALL THE CREDITORS IN THE NAME OF AGRICULTURISTS START FROM 15-03-07 TO 18-03 -07 AND BILL NOS. ARE IN CONSECUTIVE ORDERS. THE LD. DR DURING THE COURSE OF PROCEEDINGS STATED THAT THE ADDRESSES AND BILL NOS. WERE NOT MENTIONED IN T HE DETAILS FILED BEFORE THE 9 AO. HOWEVER, THE OFFICE NOTE SHOWS THAT THE AO WAS AWARE OF THE FACTS THAT THE CREDITS RELATED TO PURCHASES OF MARCH, 2007. IT IS TRUE THAT JURISDICTION U/S 263 CAN BE ASSUMED BY THE LD. CIT IN CASE THERE IS LACK OF ENQUIRY. THE ITAT SPECIAL BENCH IN THE CASE OF RAJALAKSHMI MILLS LTD. VS. ITO 121 ITD 343 (CHENNAI) HAS HELD THAT THE AO IS NOT ONLY AN A DJUDICATOR BUT IS ALSO AN INVESTIGATOR. THE AO CANNOT REMAIN PASSIVE IN THE F ACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER ENQUIRY. IT IS THE DUTY OF THE AO TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETU RN WHEN THE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN ENQUIRY. THE WOR D ERRONEOUS INCLUDES THE FAILURE TO MAKE ENQUIRY. WE HAD ALSO NOTICED TH AT THE AO MADE THE ENQUIRY AND IT IS NOT A CASE OF LACK OF ENQUIRY BUT CAN BE A CASE OF INSUFFICIENT ENQUIRY. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIKAS POLYMERS, 236 CTR 476 HAD AN OCCASION TO CONS IDER THE PASSING OF ORDER U/S 263 OF THE ACT BY THE LD. CIT WHEN THE AO MADE AND ENQUIRY AND THE ASSESSEE FILED THE REPLY. THE HON'BLE DELHI HIG H COURT HELD THAT ASSUMPTION OF JURISDICTION U/S 263 OF THE ACT BY L D. CIT IS NOT WARRANTED. IT WILL BE USEFUL TO REPRODUCE THE HEAD NOTE FROM THIS DECISION. PROVISIONS OF S.263 WHEN READ AS A COMPOSITE WHOL E MAKE IT INCUMBENT UPON THE CIT BEFORE EXERCISING RE VISIONAL POWERS TO: (I) CALL FOR AND EXAMINE THE RECORD, AND (II) GIVE THE ASSESSEE AND OPPORTUNITY OF BEING HEARD AND THE REAFTER 10 TO MAKE OR CAUSE TO BE MADE SUCH ENQUIRY AS HE DEEM S NECESSARY. IT IS ONLY ON FULFILLMENT OF THESE TWIN CONDITIONS THAT THE CIT MAY PASS AN ORDER EXERCISING HIS POWER OF REVISION. MINUTELY EXAMINED, THE PROVISIONS OF THE SECTION ENVISAGE THAT THE CIT MAY CALL FOR THE RECORDS AND IF HE PRIMA FACIE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUS ING TO BE MADE SUCH ENQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY. T HE TWIN REQUIREMENTS OF THE SECTION ARE MANIFESTLY FOR A PU RPOSE. MERELY BECAUSE THE CIT CONSIDERS ON EXAMINATION OF THE RECORD THAT THE ORDER HAS BEEN ERRONEOUSLY PASSED S O AS TO PREJUDICE THE INTEREST OF THE REVENUE WILL NOT SUFF ICE. THE ASSESSEE MUST BE CALLED, HIS EXPLANATION SOUGHT FOR AND EXAMINED BY THE CIT AND THEREAFTER IF THE CIT STILL FEELS THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE, THE CIT MAY PASS REVISIONAL ORDERS. IF, ON THE OTHER HAND, THE CIT IS SATISFIED, AFTER HEARING THE ASSESSEE, THAT THE ORDERS ARE NOT ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF THE REVENUE, HE MAY CHOOSE NOT TO EXERC ISE HIS POWER OF REVISION. THIS IS FOR THE REASON THAT IF A QUERY IS RAISED DURING THE COURSE OF SCRUTINY BY THE AO, WHI CH WAS ANSWERED TO THE SATISFACTION OF THE AO, BUT NEITHER THE QUERY NOR THE ANSWER WAS REFLECTED IN THE ASSESSMENT ORDE R, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE AO CALLED FOR INTERFERENCE AND REVISION. IN THE INS TANT CASE, FOR EXAMPLE, THE CIT HAS OBSERVED IN THE ORDER PASS ED BY HIM THAT THE ASSESSEE HAS NOT FILED CERTAIN DOCUMEN TS ON THE RECORD AT THE TIME OF ASSESSMENT, ASSUMING IT TO BE SO, THIS 11 DOES NOT JUSTIFY THE CONCLUSION ARRIVED AT BY THE C IT THAT THE AO HAD SHIRKED HIS RESPONSIBILITY OF EXAMINING AND INVESTIGATING THE CASE. MORE SO, IN VIEW OF THE FAC T THAT THE ASSESSEE EXPLAINED THAT THE CAPITAL INVESTMENT MADE BY THE PARTNERS, WHICH HAD BEEN CALLED INTO QUESTION BY TH E CIT WAS DULY REFLECTED IN THE RESPECTIVE ASSESSMENTS OF THE PARTNERS WHO WERE INCOME-TAX ASSESSEES AND THE UNSE CURED LOAN TAKEN FROM (SC) P LTD. WAS DULY REFLECTED IN T HE ASSESSMENT ORDER OF THE SAID CHIT FUND WHICH WAS AL SO AN ASSESSEE. MERELY ON THE BASIS THAT THE AO HAS NOT EXAMINED THE CASH CREDITS OF THE PARTNERS OR DEPOSI TS FROM SC) P LTD., CIT WAS NOT JUSTIFIED IN INVOKING HIS S UO MOTU POWERS, ESPECIALLY WHERE THE ASSESSEE HAD EXPLAINED THAT THE CAPITAL INVESTMENT MADE BY THE PARTNERS, WHICH HAD BEEN CALLED INTO QUESTION BY THE CIT WAS DULY REFLECTED IN THE RESPECTIVE ASSESSMENTS OF THE PARTNERS AND THE UNSE CURED LOAN TAKEN FROM THE SC) P LTD. WAS DULY REFLECTED I N THE ASSESSMENT ORDER OF THE SAID PERSON. 2.11 THE HON'BLE DELHI HIGH COURT IN THE CASE OF CI T VS. ANIL KUMAR SHARMA, 335 ITR 83 HAS HELD THAT JURISDICTION U/S 2 63 CANNOT BE ASSUMED IF ENQUIRY IS INADEQUATE AS PER OPINION OF THE LD. CIT . IT WILL BE USEFUL TO REPRODUCE THE HELD PORTION. HELD, DISMISSING THE APPEAL, THAT PRESENT CASE WO ULD NOT BE ONE OF LACK OF ENQUIRY EVEN IF THE ENQUIRY W AS TERMED INADEQUATE. THE TRIBUNAL FOUND THAT COMPLETE DETAIL S WERE FILED BEFORE THE ASSESSING OFFICER AND THAT HE APPLIED HI S MIND TO THE RELEVANT MATERIAL AND FACTS, ALTHOUGH SUCH APPLICAT ION OF MIND 12 WAS NOT DISCERNIBLE FROM THE ASSESSMENT ORDER. THE TRIBUNAL HELD THAT THE COMMISSIONER IN PROCEEDINGS U/S 263 A LSO HAD ALL THESE DETAILS AND MATERIAL AVAILABLE BEFORE HIM, BU T HAD NOT BEEN ABLE TO POINT OUT DEFECTS CONCLUSIVELY IN THE MATERIAL, FOR ARRIVING AT A CONCLUSION THAT PARTICULAR INCOME HAD ESCAPED ASSESSMENT ON ACCOUNT OF NON-APPLICATION OF MIND B Y THE ASSESSING OFFICER. THE TRIBUNAL WAS RIGHT AND THE O RDER OF REVISION WAS NOT VALID. 2.12 CONSIDERING THE FACTS AS INDICATED ABOVE AND L OOKING TO THE PROPOSITION OF LAW LAID DOWN BY THE HON'BLE DELHI HIGH COURT, WE HOLD THAT THE LD. CIT WAS NOT JUSTIFIED IN PASSING THE ORDER 263 OF THE ACT. HENCE, THE ORDER OF THE LD. CIT IS CANCELLED. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23-09 -2011 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 23/09/2011 *MISHRA COPY FORWARDED TO :- 1. SHRI KAMAL KUMAR GUPTA 2. THE CIT , KOTA 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.39/JP /11) A.R, ITAT, JAIPUR 13 14 15 16 17 18