Smt. Neelam Sachdeva Prop., Moradabad V. Pr. CIT, Moradabad

ITA 3936/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3046 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 05-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHEFALI SWAROOP
• Keywords: Revision of order; Opportunity of being heard; Corroborative evidences
• Section: 143(3); 133A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH E, NEW DELHI ] BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER A N D MS. BEENA A. PILLAI, JUDICIAL MEMBER I.T. APPEAL NO. 3936/DEL/2016 ASSESSMENT YEAR : 2012-13. SMT. NEELAM SACHDEVA, PROP. M/S. P. M. OVERSEAS, PEETAL BASTI, MORADABAD [U.P.] VS. PRINCIPAL COMMISSIONER OF INCOME TAX, MORADABAD. PAN : ALEPS 3551 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PIYUSH KAUSHIK, ADV.; DEPARTMENT BY : MS. SHEFALI SWAROOP, [CIT] DR; DATE OF HEARING : 26-02-2018; DATE OF PRONOUNCEMENT : 23-03-2018. O R D E R PER R. K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 12 TH FEBRUARY, 2016 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 BY THE PRINCIPAL COMMISSIONER OF INCOME TAX (APPEALS), MORADABAD, RELATING TO THE ASSESSMENT YEAR 2012-13. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND PROPRIETOR OF M/S. P.M. OVERSEAS, PEETAL BASTI, MORADABAD, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURER AND EXPORT OF HANDICRAFT ITEMS. SHE HAD FILED HER RETURN OF INCOME ON 29 TH SEPTEMBER, 2012 DECLARING TOTAL INCOME OF 2 I. T. APPEAL NO. 3936/DEL/2016. RS.8,09,000/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, DECLARING TOTAL INCOME AT RS.11,22,730/- WHEREIN HE HAD MADE DISALLOWANCE OF CERTAIN EXPENSES TOTALING TO RS.3,03,300/-. SUBSEQUENTLY THE LEARNED COMMISSIONER OF INCOME TAX CALLED FOR THE RECORDS AND EXAMINED THE SAME. ON PERUSAL OF THE SAME HE OBSERVED THAT THE CASE WAS PRIMA FACIE SELECTED FOR EXAMINING THE LARGE AMOUNT OF SUNDRY CREDITORS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FILED LIST OF SUNDRY CREDITORS ON 31 ST MARCH, 2012 AMOUNTING TO RS.3,95,04,920.07 IN RESPECT OF 94 CREDITORS. OUT OF THIS NUMBER, CONFIRMATIONS OF ONLY 8 CREDITORS ARE FOUND PLACED ON THE RECORD. FURTHER THOSE CONFIRMATIONS ARE ONLY ON PLAIN PAPER AND NOT ACCOMPANIED WITH ANY OTHER SUPPORTING EVIDENCE WHICH COULD PROVE THE CREDITWORTHINESS OF THE CREDITORS AND THE GENUINENESS OF THE TRANSACTION. HOWEVER, THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOT INVESTIGATED THE SAME PROPERLY. SIMILARLY HE OBSERVED THAT ASSESSEE HAD GIVEN ADVANCE OF RS.45,10,052/- FOR PURCHASE OF LAND / FLAT AND THE ASSESSING OFFICER HAD FAILED TO EXAMINE THE SOURCE AND NATURE OF THIS ADVANCE DURING THE ASSESSMENT PROCEEDINGS. FURTHER A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT IN THE MONTH OF MARCH, 2014 AND THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WERE IMPOUNDED FROM THE BUSINESS PREMISES OF THE ASSESSEE. ALTHOUGH THOSE ACCOUNT BOOKS WERE IN POSSESSION OF THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND SINCE THESE DOCUMENTS AND PAPERS ARE BOUND TO 3 I. T. APPEAL NO. 3936/DEL/2016. HAVE A BEARING ON THE FINANCIAL RESULTS OF THE ASSESSEE IN THE YEAR UNDER CONSIDERATION THE ASSESSING OFFICER DID NOT EXAMINE THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE, THEREFORE, ISSUED A SHOW CAUSE NOTICE ASKING THE ASSESSEE TO EXPLAIN AS TO WHY THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT SHOULD NOT BE REVISED UNDER SECTION 263 OF THE INCOME TAX ACT. 2.1 THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARING BEFORE THE LEARNED COMMISSIONER OF INCOME TAX FILED WRITTEN REPLIES. SUBSEQUENTLY THE LEARNED CIT CAME TO KNOW THREE NEW FACTS WHICH WERE INCORPORATED IN ANOTHER NOTICE. IN THE SAID NOTICE HE OBSERVED THAT ASSESSEE HAD DEBITED EXPENSES TO THE TUNE OF RS.10,03,906/- UNDER THE HEAD FAIR EXPENSES AND EXPENSES TO THE TUNE OF RS.99,166/- UNDER THE HEAD EPCH FAIR EXPENSES. HOWEVER, NO SALES FROM THE FAIR HAD BEEN REFLECTED IN THE TRADING ACCOUNT. THE ASSESSING OFFICER HAD PASSED THE ORDER WITHOUT VERIFYING SUCH EXPENSES. THE ASSESSEE HAS DEBITED FACTORY RENT OF RS.6,10,000/- AND THE ASSESSING OFFICER HAS NOT EXAMINED THE APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. FURTHER ADVANCES FROM BUYERS WERE SHOWN AT RS.67,55,733.74 ON THE LIABILITY SIDE OF THE BALANCE SHEET AS ON 31.03.2012 AND THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS NOT VERIFIED THESE ADVANCES BY RAISING ANY QUERY. IN VIEW OF THE ABOVE, HE PROPOSED TO REVISE THE ORDER PASSED UNDER SECTION 263 OF THE ACT. THE ASSESSEE VEHEMENTLY OPPOSED AND SUBMITTED THAT NO SPECIFIC ERROR HAS BEEN PIN POINTED AND THE ACT DOES NOT PRESCRIBE ANY SPECIFIC METHOD OF 4 I. T. APPEAL NO. 3936/DEL/2016. VERIFICATION OF SUNDRY CREDITORS. IT WAS ARGUED THAT BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE ASSESSING OFFICER, WHO EXAMINED THE SAME AND COMPLETED THE ASSESSMENT. RELYING ON VARIOUS DECISIONS IT WAS ARGUED THAT THE ASSESSMENT ORDER CANNOT BE SAID TO BE ERRONEOUS. FURTHER NOWHERE IN THE NOTICE ISSUED BY THE LEARNED CIT SHOWS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2.2 HOWEVER, THE LEARNED COMMISSIONER OF INCOME TAX WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE OBSERVING THAT THE ASSESSING OFFICER HAS NOT CONDUCTED PROPER ENQUIRY ON THE ISSUES RAISED BY HIM DURING ASSESSMENT PROCEEDINGS AND PASSED THE ORDER WITHOUT DUE APPLICATION OF MIND AND THE ORDER HAS BECOME ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. HE ACCORDINGLY SET ASIDE THE ORDER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE ALL THE ISSUES AFRESH AND FRAME THE ASSESSMENT ORDER DE NOVO AFTER GIVING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AGGRIEVED WITH SUCH ORDER OF THE LEARNED CIT THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW, THE CIT HAS GROSSLY ERRED IN ASSUMING JURISDICTION U/S 263 FOR DIRECTING THE ASSESSING OFFICER (AO) TO FRAME THE ASSESSMENT ORDER DE-NOVO. 2. THAT THE ASSUMPTION OF JURISDICTION U/S 263 BY THE CIT IS IMPROPER & UNJUSTIFIED AS THE AO FRAMED THE ORIGINAL ORDER U/S 143(3) AFTER CONDUCTING 5 I. T. APPEAL NO. 3936/DEL/2016. ENQUIRIES ON THE ISSUES AS ALLEGED IN THE NOTICE ISSUED BY THE CIT & THE CIT ESSENTIALLY ON THE BASIS OF SUSPICION HAD SET ASIDE THE MATTER TO THE FILE OF AO DIRECTING THE AO TO FRAME THE ASSESSMENT DE NOVO. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW THE CIT HAS PASSED ORDER U/S 263 ESSENTIALLY ON THE BASIS OF SUSPICION BY DIRECTING THE AO TO PASS A FRESH ASSESSMENT ORDER AFTER RE-EXAMINATION OF ISSUES CONCERNED AND WITHOUT ANY DEFINITE FINDING / ENQUIRY CONDUCTED BY THE CIT HIMSELF ON ANY OF THE ISSUES INVOLVED RENDERING THE ORDER U/S 263 AS BAD IN LAW. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND / OR AMEND, MODIFY OR WITHDRAW THE GROUNDS OUTLINED ABOVE BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2.3 THE LEARNED COUNSEL FOR THE ASSESSEE CHALLENGED THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX. HE SUBMITTED THAT FULL DETAILS WERE FILED BEFORE THE ASSESSING OFFICER WHO EXAMINED THOSE DETAILS ALONG WITH THE BOOKS OF ACCOUNTS. THE AO HAD ASKED THE ASSESSEE TO SUBMIT THE NAMES AND ADDRESSES OF THE CREDITORS WHICH WERE DULY SUBMITTED. ASSESSEE HAS FILED SAMPLE FORMS FROM THE CREDITORS BEFORE THE AO ALONG WITH THE LEDGER ACCOUNT OF THE CREDITORS. ASSESSEE HAS FILED LEDGER ACCOUNTS FOR PURCHASE OF LAND TOGETHER WITH SUPPORTING DOCUMENTS DETAILS OF WHICH ARE PLACED AT PAGE NOS. 42 TO 58 OF THE PAPER BOOK. HE SUBMITTED THAT THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUES AND BANK ACCOUNT WAS FILED BEFORE THE ASSESSING OFFICER. SO FAR AS PAYMENTS OF ADVANCE FROM BUYERS IS CONCERNED, THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO PAGE NO. 59 OF THE PAPER BOOK DREW THE ATTENTION OF THE BENCH TO THE LIST OF ADVANCES FROM BUYERS AS ON 31.03.2012 ALONG WITH SALES MADE. AS REGARDS THE OBJECTION OF THE LEARNED CIT THAT APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) IS CONCERNED, HE SUBMITTED THAT THE RENT PAID TO VARIOUS PERSONS DOES NOT EXCEED 6 I. T. APPEAL NO. 3936/DEL/2016. RS.1,80,000/- PER ANNUM PER PERSON AND, THEREFORE, THE SAME WAS NOT AT ALL REQUIRED WHICH IS APPARENT FROM THE LEDGER ACCOUNT OF THE FACTORY RENT, COPY OF WHICH IS PLACED AT PAGE 60 OF THE PAPER BOOK. SO FAR AS VARIOUS OTHER ISSUES ARE CONCERNED I.E. FAIR EXPENSES OF RS.10,03,906/- HE SUBMITTED THAT FULL DETAILS WERE GIVEN BEFORE THE ASSESSING OFFICER WHO HAD EXAMINED THE SAME AND AFTER BEING SATISFIED DID NOT MAKE ANY DISALLOWANCE. SO FAR AS THE OBJECTION OF THE LEARNED CIT THAT BOOKS OF ACCOUNTS WERE IMPOUNDED DURING SURVEY WHICH HAS GOT A BEARING ON THE ASSESSMENT YEAR OF THE CURRENT YEAR IS CONCERNED, HE SUBMITTED THAT WHEN FULL DETAILS WERE GIVEN BEFORE THE ASSESSING OFFICER AND HE HAS GONE THROUGH THE SAME THE LEARNED CIT CANNOT PRESUME THAT THE AO HAS NOT GONE THROUGH THE SAME. RELYING ON VARIOUS DECISIONS HE SUBMITTED THAT EVEN INADEQUATE ENQUIRY BY THE ASSESSING OFFICER WILL NOT GIVE RISE TO ASSUMPTION OF JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT, HOWEVER, IN THE INSTANT CASE THE ASSESSING OFFICER HAS CONDUCTED FULL ENQUIRY. HE SUBMITTED THAT THERE IS A DIFFERENCE BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. WHILE THE LEARNED CIT IS EMPOWERED TO ASSUME JURISDICTION UNDER SECTION 263 OF THE ACT IN A CASE OF LACK OF ENQUIRY OR NO ENQUIRY, HOWEVER, HE CANNOT ASSUME JURISDICTION UNDER SECTION 263 IN CASE OF INADEQUATE ENQUIRY. HE SUBMITTED THAT IN THE INSTANT CASE ASSESSEE HAD SUBMITTED FULL DETAILS BEFORE THE ASSESSING OFFICER WHO AFTER BEING SATISFIED HAS PASSED THE ORDER UNDER SECTION 143(3) OF THE INCOME TAX ACT BY MAKING DISALLOWANCE OF VARIOUS EXPENSES. HE HAS APPLIED HIS MIND AND, THEREFORE, THE LEARNED CIT IS NOT JUSTIFIED IN INVOKING POWER UNDER SECTION 263 OF THE ACT. REFERRING TO VARIOUS DECISIONS HE SUBMITTED THAT FOR ASSUMING JURISDICTION UNDER SECTION 263 OF THE ACT, THE TWIN CONDITIONS, NAMELY : (A) THE ORDER MUST BE ERRONEOUS; & (B) THE ORDER IS PREJUDICIAL TO THE INTEREST OF THE REVENUE MUST BE FULFILLED. ABSENCE OF ANY ONE OF THE ABOVE WILL NOT EMPOWER THE LEARNED CIT TO ASSUME JURISDICTION UNDER SECTION 263 OF THE ACT. HE SUBMITTED THAT THE LEARNED CIT CANNOT DIRECT THE 7 I. T. APPEAL NO. 3936/DEL/2016. ASSESSING OFFICER TO PASS THE ORDER IN A PARTICULAR MANNER. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LEARNED CIT BE SET ASIDE AND THE GROUND RAISED BY THE ASSESSEE BE ALLOWED. 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX. SHE SUBMITTED THAT THE ASSESSING OFFICER IN THE INSTANT CASE HAS FAILED TO CONDUCT PROPER ENQUIRY BEFORE COMPLETION OF THE ASSESSMENT. THE ASSESSING OFFICER HAS NOT AT ALL APPLIED HIS MIND AND BLINDLY ACCEPTED HUGE AMOUNT OF SUNDRY CREDITORS, ADVANCE FROM CUSTOMERS AND ADVANCE FOR PURCHASE OF LAND / FLAT. HE HAS NOT AT ALL CONSIDERED THE HUGE AMOUNT OF FAIR EXPENSES DEBITED DESPITE NO SALE FROM THE FAIR. THE ADMISSIBILITY OF FACTORY RENT IN THE LIGHT OF THE PROVISIONS OF SECTION 40(A)(IA) WAS NOT AT ALL CONSIDERED. SIMILARLY THE IMPUGNED DOCUMENTS DURING THE COURSE OF SURVEY WERE NOT AT ALL CONSIDERED BEFORE COMPLETION OF THE ASSESSMENT. THEREFORE, IT IS A CASE OF NO ENQUIRY AND, THEREFORE, THE LEARNED CIT IS FULLY JUSTIFIED IN ASSUMING JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT. 3. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE, IN THE INSTANT CASE, HAS FILED A LIST OF 94 CREDITORS TO EXPLAIN THE DETAILS OF CREDITORS TOTALING TO RS.3,95,04,920.07. A PERUSAL OF THE AUDITED ACCOUNTS SHOWS THAT THE LIST WAS VERY SMALL. FURTHER THERE ARE CERTAIN DISCREPANCIES IN THE AMOUNTS SHOWN UNDER THE NAMES OF DIFFERENT PERSONS AS PER THE AUDITED ACCOUNTS AND THE LIST FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. SINCE THE ASSESSING OFFICER, IN THE INSTANT CASE, HAS NOT AT ALL APPLIED HIS MIND AND HAS NOT ASKED FOR THE RECONCILIATION OF THOSE CREDITORS, THEREFORE, THERE IS NON-APPLICATION OF MIND ON 8 I. T. APPEAL NO. 3936/DEL/2016. THE ISSUE OF SUNDRY CREDITORS WHICH WAS THE BASIS FOR SELECTING THE CASE FOR SCRUTINY. THEREFORE, DUE TO NON-APPLICATION OF MIND BY THE ASSESSING OFFICER ON THE ISSUE OF SUNDRY CREDITORS, THE ORDER OF THE LEARNED CIT ASSUMING JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT IS UPHELD. 3.1 SO FAR AS THE SECOND ISSUE IS CONCERNED I.E. ADVANCE OF RS.45,09,962/- FOR PURCHASE OF LAND / FLAT, WE FIND THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS FILED FULL DETAILS, COPIES OF WHICH ARE PLACED AT PAGES 42 TO 58 OF THE PAPER BOOK. ALL THE PAYMENTS WERE MADE THROUGH THE BANKING CHANNELS. THEREFORE, IT CANNOT BE SAID THAT ASSESSING OFFICER HAS NOT APPLIED HIS MIND. THEREFORE, THE ORDER OF THE LEARNED CIT ON THIS ISSUE IS SET ASIDE. 3.2 SO FAR AS THE ADMISSIBILITY OF FACTORY RENT DEBITED AT RS.6,10,000/- IN THE LIGHT OF THE PROVISIONS OF SECTION 40(A)(IA) IS CONCERNED, WE FIND FROM THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT NONE OF THE LAND LORDS HAS BEEN GIVEN MORE THAN RS.1,80,000/- AND, THEREFORE, THERE IS NO QUESTION OF DEDUCTION OF TAX AND CONSEQUENTLY APPLICATION OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. WE, THEREFORE, SET ASIDE THE ORDER OF THE LEARNED CIT ON THIS ISSUE. 3.3 SO FAR AS THE ISSUE RELATING TO FAIR EXPENSES OF RS.10,03,906/- AND EXPENSES TO THE TUNE OF RS.99,166/- UNDER THE HEAD EPCH FAIR EXPENSES IS CONCERNED, WE FIND THE ASSESSEE HAS FILED THE DETAILS REGARDING SUCH EXPENSES. A PERUSAL OF THE AUDITED PROFIT AND LOSS ACCOUNT, COPY OF WHICH IS PLACED AT PAGE 95 OF THE PAPER BOOK, SHOWS THAT SUCH FAIR EXPENSES IS CLUBBED WITH FOREIGN TOUR AND FAIR EXPENSES. THE ASSESSING OFFICER IN THE BODY OF THE ASSESSMENT ORDER HAS DISALLOWED AN AMOUNT OF 10% OF SUCH EXPENSES, THEREFORE, THERE IS 9 I. T. APPEAL NO. 3936/DEL/2016. DUE APPLICATION OF MIND BY THE ASSESSING OFFICER ON THIS ISSUE. WE, THEREFORE, SET ASIDE THE ORDER OF THE LEARNED CIT ON THE ISSUE OF FAIR EXPENSES AND EPCH FAIR EXPENSES. 3.4 SO FAR AS THE ISSUE RELATING TO SURVEY IS CONCERNED, THERE IS NO DOUBT THAT THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS WERE IN THE POSSESSION OF THE ASSESSING OFFICER. THE LEARNED CIT CANNOT DICTATE THE MANNER IN WHICH THE ASSESSING OFFICER HAS TO PASS THE ORDER. IN THE INSTANT CASE, WE FIND VARIOUS ISSUES RAISED BY THE LEARNED CIT HAVE BEEN EXAMINED BY THE ASSESSING OFFICER, EXCEPT THE ISSUE OF SUNDRY CREDITORS WHERE THE ASSESSING OFFICER HAS FAILED TO APPLY HIS MIND PROPERLY. HOWEVER, IN THE REMAINING OTHER ISSUE FOR WHICH THE LEARNED CIT HAS ALSO ASSUMED JURISDICTION UNDER SECTION 263 IS CONCERNED, WE FIND THERE IS ENQUIRY BY THE ASSESSING OFFICER. IT MAY BE A CASE OF INADEQUATE ENQUIRY BY THE ASSESSING OFFICER AS PER THE VERSION OF THE LEARNED CIT BECAUSE ACCORDING TO HIM THE ASSESSING OFFICER SHOULD HAVE CONDUCTED FURTHER ENQUIRIES. HOWEVER, IT CANNOT BE SAID THAT IT IS A CASE OF NO ENQUIRY. THE VARIOUS COURTS ARE HOLDING THAT LEARNED CIT CAN ASSUME JURISDICTION UNDER SECTION 263 ONLY IN A CASE OF NO ENQUIRY, HOWEVER, HE CANNOT ASSUME JURISDICTION UNDER SECTION 263 IN A CASE OF INADEQUATE ENQUIRY. THE LEARNED CIT CANNOT DICTATE THE ASSESSING OFFICER TO PASS AN ORDER IN A PARTICULAR MANNER. SINCE IN THE INSTANT CASE, THE ASSESSEE HAS FILED THE REQUISITE DETAILS BEFORE THE ASSESSING OFFICER ON VARIOUS OTHER ISSUES EXCEPT SUNDRY CREDITORS AND THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND HAS PASSED THE ORDER UNDER SECTION 143(3) OF THE ACT AND HAS MADE CERTAIN DISALLOWANCES OUT OF VARIOUS EXPENSES, THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ONLY TO THE EXTENT OF SUNDRY CREDITORS AND THERE IS NO ERROR IN THE ORDER PASSED BY THE ASSESSING OFFICER ON THE REMAINING ISSUES. WE, THEREFORE, UPHOLD THE ORDER 10 I. T. APPEAL NO. 3936/DEL/2016. OF THE LEARNED CIT ASSUMING JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT ONLY TO THE EXTENT OF SUNDRY CREDITORS WHERE THE ASSESSING OFFICER HAS FAILED TO APPLY HIS MIND BY RECONCILING THE CREDITORS SHOWN IN THE AUDITED BALANCE SHEET AND IN THE LIST OF CREDITORS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE ORDER OF THE LEARNED CIT IS UPHELD ONLY TO THIS EXTENT I.E. THE ISSUE REGARDING THE SUNDRY CREDITORS. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY PARTLY ALLOWED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON : 23 RD MARCH, 2018 . SD/- SD/- ( BEENA A. PILLAI ) ( R. K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 23-03-2018 . *MEHTA * COPY OF ORDER FORWARDED TO :- 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT (APPEALS) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI 11 I. T. APPEAL NO. 3936/DEL/2016. DATE DRAFT DICTATED ON 2 1 .0 3 .201 8 DRAFT PLACED BEFORE AUTHOR 2 3 .0 3 .201 8 DRAFT PROPOSED & PLACED BEFO RE THE SECOND MEMBER 23 .0 3 .201 8 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 23 .0 3 .201 8 APPROVED DRAFT COMES TO THE SR.PS/PS 23 .0 3 .201 8 KEPT FOR PRONOUNCEMENT ON 23 .0 3 .201 8 FILE SENT TO THE BENCH CLERK 23 .0 3 .201 8 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.