M/S OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR V. PRINCIPAL COMMISSIONER OF INCOME TAX, KOTA

ITA 416/JPR/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6784 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 02-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT DHK
• Keywords: Revision of order; Cost of acquisition; Tangible material; Valuation report; Assessment record
• Section: 143(3); 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 416/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14. M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., C/O SARDAR CYCLE STORE, BAJARIYA, SAWAI MADHOPUR. CUKE VS. THE PRINCIPAL CIT, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCO 4209 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22.10.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20/12/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE REVISION ORDER DATED 31 ST JANUARY, 2018 OF LD. PRINCIPAL CIT, KOTA PASSED UND ER SECTION 263 OF THE IT ACT FOR THE ASSESSMENT YEAR 2013-14. THE ASSESSEE HAS RAI SED THE FOLLOWING GROUNDS :- 1. UNDER THE FACTS & CIRCUMSTANCES OF THE CASE, T HE ORDER PASSED BY LD. CIT U/S 263 IS ILLEGAL & BAD IN LAW. 2. THE LD. CIT HAS ERRED ON FACTS AND IN LAW IN HOL DING THAT AO HAS COMPLETED THE ASSESSMENT IN ROUTINE MANNER BY ACCEP TING THE VALUE OF FIXED ASSET DECLARED BY THE ASSESSEE BY NO T CONSIDERING THAT SURVEYOR CUM VALUER HAS CERTIFIED SUCH VALUE A T RS. 3.52 CRORES IGNORING THAT AO HAS TAKEN INTO CONSIDERATIO N THE VALUE CERTIFIED BY THE SURVEYOR BUT IT BEING SKETCHY HAS NOT RELIED ON THE SAME AFTER TAKING INTO CONSIDERATION THE VALUAT ION REPORT OF THE REGISTERED VALUER WHICH IS IN CONSONANCE WITH T HE AMOUNT OF INVESTMENT RECORDED IN BOOKS OF ACCOUNTS. 2 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. 3. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 4. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE . 2. THE ASSESSEE IS A COMPANY AND ENGAGED IN THE BUS INESS OF RUNNING OF HOTEL AT SAWAI MADHOPUR. THE ASSESSEE FILED ITS RETURN O F INCOME ON 28 TH SEPTEMBER, 2013 DECLARING NIL INCOME. THE AO COMPLETED THE SC RUTINY ASSESSMENT UNDER SECTION 143(3) ON 14.03.2016 AT NIL INCOME BY ACCEP TING THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME. SUBSEQUENTLY, O N EXAMINATION OF ASSESSMENT RECORD, THE LD. PRINCIPAL CIT CONSIDERED THAT THE A SSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE ISSUE OF INVESTMENT IN THE FIXED ASSETS UNDER THE HEAD INCOME FROM BUSI NESS AND PROFESSION WHICH WAS DECLARED AND ACCEPTED AT RS. 2,20,03,275/- WHEREAS THE VALUE OF THE SAME WAS SHOWN IN THE BANKS SURVEY AT RS. 3.52 CRORES. THE LD. PRINCIPAL CIT HAS ALSO MADE A REFERENCE TO THE SURVEYOR-CUM-VALUERS CERTIFICATE DATED 2 ND OCTOBER, 2012 WHICH WAS WITH THE BANK FOR OBTAINING THE LOAN FOR CONSTR UCTION OF THE HOTEL BUILDING. ACCORDINGLY, A SHOW CAUSE NOTICE UNDER SECTION 263 OF THE IT ACT WAS ISSUED ON 22 ND SEPTEMBER, 2017 WHEREBY THE ASSESSEE WAS CALLED UPO N TO EXPLAIN AS TO WHY THE ORDER PASSED BY THE AO SHOULD NOT BE REVISED OR CAN CELLED ON THE ISSUE OF VALUATION AND INVESTMENT MADE IN THE FIXED ASSETS. IN RESPON SE, THE ASSESSEE FILED ITS REPLY DATED 16.01.2018 AND CONTENDED THAT THE VALUATION R EPORT WITH THE BANK IS NOT BASED ON THE ACTUAL COST OF CONSTRUCTION BUT IT WAS A PROJECTED OR ESTIMATED COST OF CONSTRUCTION AT THE TIME OF APPLYING THE TERM LOAN FOR CONSTRUCTION OF THE BUILDING, THEREFORE, THE SAME CANNOT BE CONSIDERED AS THE ACT UAL VALUE OF COST OF CONSTRUCTION 3 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. OF THE HOTEL BUILDING. THE ASSESSEE ALSO FURNISHED THE VALUATION REPORT OF THE REGISTERED VALUER WHEREIN THE VALUATION OF THE HOTE L BUILDING WAS VALUED AT RS. 1,57,76,400/- AS AGAINST THE ACTUAL COST OF CONSTRU CTION RECORDED IN THE BOOKS OF ACCOUNT AT RS. 1,81,49,072/-. THE ASSESSEE ALSO CO NTENDED THAT THE AO PASSED THE ORDER AFTER CONDUCTING AN ENQUIRY AND VERIFICATION OF THE RELEVANT RECORD ON THE ISSUE OF COST OF CONSTRUCTION. THEREFORE, ONCE THE A.O. WAS SATISFIED WITH THE COST OF CONSTRUCTION AS RECORDED IN THE BOOKS OF ACCOUNT, T HEN THE VALUATION REPORT WITH THE BANK FOR TAKING LOAN CANNOT BE A BASIS FOR REVISION OF THE ASSESSMENT ORDER. THE LD. PRINCIPAL CIT DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND HELD THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF THE REVENUE AS THE AO FAILED TO CONDUCT THE PROPER ENQUIRY ON THE VALU ATION OF THE COST OF CONSTRUCTION AND FOR NOT REFERRING THE MATTER TO THE DEPARTMENTA L VALUATION OFFICER. ACCORDINGLY, THE ASSESSMENT ORDER WAS SET ASIDE WITH THE DIRECTI ON TO THE AO TO FRAME IT DENOVO AFTER MAKING PROPER ENQUIRY AND VERIFICATION OF THE RECORD AND BY REFERRING THE MATTER TO THE DVO. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO VIDE LETTER DATED 9 TH SEPTEMBER, 2015 REQUIRED FROM THE BANK MANAGER THE COPY OF LOAN APPLICATION, PROJ ECT REPORT AND VALUATION REPORT OF THE RESORT IN QUESTION. THE BANK MANAGER VIDE LETT ER DATED 11 TH SEPTEMBER, 2015 FURNISHED THE NECESSARY DOCUMENTS WHICH INCLUDED AN APPLICATION FOR SANCTION OF THE TERM LOAN OF RS. 2.00 CRORES, PROJECT REPORT SHOWIN G THE COST OF HOTEL BUILDING, CIVIL WORK, KITCHEN EQUIPMENT, LINEN AND BLANKETS AS WELL AS PLANT AND MACHINERY ESTIMATED AT RS. 2.33 CRORES. THE BANK SANCTIONED THE LOAN OF RS. 2.00 CRORE BASED 4 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. ON THE REPORT OF ESTIMATED COST OF THE RESORT AT RS . 2.33 CRORES. THE AO AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD AND TH E FACT THAT WORK COMPLETION AND LOAN UTILIZATION CERTIFICATE DATED 2 ND OCTOBER, 2012 WAS ALSO FURNISHED BY THE BANK HAS ACCEPTED THE COST OF CONSTRUCTION AS RECORDED I N THE BOOKS OF ACCOUNT AT RS. 1,81,49,000/-. THE LD. A/R HAS FURTHER SUBMITTED T HAT THE ASSESSEE ALSO FURNISHED A VALUATION REPORT OF REGISTERED VALUER WHO HAS ESTIM ATED THE COST OF CONSTRUCTION OF THE HOTEL BUILDING AT RS. 1,57,76,000/-, THEREFORE, THE COST OF CONSTRUCTION RECORDED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT CANNOT BE F AULTED WITH. SINCE THE AO HAS MADE SPECIFIC INVESTIGATION AND ENQUIRY ON THE ISSU E AND ABOUT THE COST OF CONSTRUCTION OF THE HOTEL BUILDING, THE LD. PRINCI PAL CIT CANNOT ASSUME JURISDICTION UNDER SECTION 263 MERELY BECAUSE THE ACCEPTANCE OF THE COST OF CONSTRUCTION BY THE AO WAS NOT AGREED TO BY THE LD. PRINCIPAL CIT. FUR THER, THE WHOLE BASIS OF INVOKING THE PROVISIONS OF SECTION 263 IS THE PROJECT REPORT FILED WITH THE BANK AT THE TIME OF TAKING THE LOAN OF RS. 2.00 CRORES WHICH WAS ALSO P ART OF THE ASSESSMENT RECORD AS THE AO HIMSELF HAS CALLED FOR ALL THESE DOCUMENTS D URING THE ASSESSMENT PROCEEDINGS. HENCE, IT IS NOT A CASE OF LACK OF ENQ UIRY BUT THE AO AFTER PROPER ENQUIRY WAS SATISFIED WITH THE COST OF CONSTRUCTION OF THE HOTEL BUILDING. THE LD. A/R HAS FURTHER CONTENDED THAT THE LD. PRINCIPAL CIT HA S INVOKED THE PROVISIONS OF SECTION 263 ONLY TO MEET THE OBJECTION OF THE AUDIT PARTY A ND, THEREFORE, THE AUDIT NOTE CANNOT BE A BASIS OF INVOKING THE PROVISIONS OF SEC TION 263. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE FOLLOWING DECISI ONS :- CIT VS. SOHANA WOOLLEN MILLS (2007) 296 ITR 238 (P&H) 5 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. SARLABEN BHANSALI CHARITIES TRUST VS. CIT (E) (2017) 51 CCH 464 (KOL. TRIB.) SURINDER KUMAR JAIN VS. ITO (2016) 48 CCH 158 (DEL. TRIB.) DASHMESH MOTORS MUKTSAR VS. PCIT (2016) 47 CCH 506 (ASR. TRIB.) 4. ON THE OTHER HAND, THE LD. CIT D/R HAS SUBMITTED THAT SINCE THERE IS A HUGE DIFFERENCE IN THE VALUATION AS SHOWN IN THE PROJECT REPORT AT THE TIME OF APPLYING THE LOAN FROM THE BANK AND THE VALUATION RECORDED IN TH E BOOKS OF ACCOUNT, THEREFORE, IT WAS INCUMBENT UPON THE AO TO CONDUCT A PROPER ENQUI RY ON THE ISSUE WHICH WAS NOT DONE BY THE AO. THE AO HAS ACCEPTED THE CLAIM OF T HE ASSESSEE DESPITE THE FACT THAT A HUGE VARIANCE IN THE COST OF CONSTRUCTION OF THE BUILDING SHOWN IN THE DIFFERENT REPORTS INCLUDING THE VALUATION REPORT, PROJECT REP ORT AND VALUE SHOWN IN THE BOOKS OF ACCOUNT. THEREFORE, WHEN THE ASSESSEES OWN REC ORD AND DOCUMENTS ARE SHOWING DIFFERENT VALUATIONS OF COST OF CONSTRUCTION OF THE HOTEL BUILDING, THEN THE CLAIM OF THE ASSESSEE CANNOT BE ACCEPTED WITHOUT PROPER ENQU IRY AND GETTING THE CORRECT VALUATION OF CONSTRUCTION OF THE HOTEL BUILDING FRO M THE DVO. THE LD. CIT D/R HAS SUBMITTED THAT THE ASSESSEE CANNOT BE ALLOWED TO TA KE THE BENEFIT OF A HIGHER VALUATION AT THE TIME OF TAKING LOAN AND THEN SUPPR ESSED THE SAME IN THE BOOKS OF ACCOUNTS FOR AVOIDING THE TAX LIABILITY. IN SUPPOR T OF HIS CONTENTION HE HAS RELIED UPON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF BINOD KUMAR AGARWALA VS. CIT, 257 TAXMAN 58 (CAL.). HE HAS ALS O RELIED UPON THE DECISIONS OF HONBLE MADRAS HIGH COURT IN THE CASE OF M/S. COIMB ATORE SPINNING & WEAVING CO. LTD. VS. CIT, 95 ITR 375 (MAD.) AND HONBLE GAUHAT I HIGH COURT IN THE CASE OF 6 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. DHANSIRAM AGARWALLA VS. CIT, 201 ITR 192 (GAU.). T HUS THE LD. D/R HAS SUBMITTED THAT ONCE THE AO HAS FAILED TO CONDUCT A PROPER ENQ UIRY ON THE ISSUE, THEN IT RENDERS THE ORDER PASSED BY THE AO ERRONEOUS IN SO FAR AS I T IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. PRINCIPAL CIT WAS JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 WHEN THERE IS A TANGIBLE MATERIAL SHOWING THAT THE ASSESSEE UNDERSTATED THE COST OF CONSTRUCTION IN THE BOOKS OF ACCOUNTS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. SINCE THE ASSESSEE HAS CONSTRUCTED THE RES ORT IN QUESTION AND HAS NOT SHOWN ANY INCOME DURING THE YEAR UNDER CONSIDERATIO N, THEREFORE, THE LIMITED SCRUTINY DURING THE ASSESSMENT PROCEEDINGS WAS ONLY WITH RESPECT TO THE COST OF CONSTRUCTION/INVESTMENT MADE IN THE FIXED ASSETS BY THE ASSESSEE. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD ISSUED A Q UERY LETTER DATED 3 RD MARCH, 2015 WHEREIN VARIOUS QUERIES WERE RAISED INCLUDING THE DETAILS OF ADDITIONS OF RS.2,20,03,275/- AS PER THE SCHEDULE OF FIXED ASSET S OF THE AUDIT REPORT AND COPY OF THE SUPPORTING BOOKS AND VOUCHERS FOR ACQUISITION O F THE FIXED ASSETS WAS ALSO CALLED FROM THE ASSESSEE. THE AO HAS ALSO ASKED THE ASSES SEE TO FURNISH THE VALUATION REPORT IN SUPPORT OF THE COST OF CONSTRUCTION AS SH OWN IN THE BOOKS OF ACCOUNT. IN RESPONSE, THE ASSESSEE PRODUCED THE VALUATION REPOR T DATED 14 TH MAY, 2013. THE AO HAS ALSO CALLED FOR THE RELEVANT DOCUMENTS SUBMITTE D WITH THE BARODA RAJASTHAN GRAMIN BANK INCLUDING APPLICATION FORM AND OTHER RE CORD IN THE SHAPE OF PROJECT REPORT FOR AVAILING THE TERM LOAN FOR CONSTRUCTION OF THE HOTEL BUILDING. ALL THESE RECORDS WERE SUPPLIED BY THE BANK TO THE AO ALONG W ITH THE SANCTION LETTER DATED 26 TH JULY, 2011 WHEREBY A LOAN OF RS. 2.00 CRORES WAS S ANCTIONED BY THE BANK FOR 7 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. CONSTRUCTION OF THE HOTEL BUILDING. THUS IT IS CLE AR THAT AT THE TIME OF APPLYING FOR TERM LOAN, THE ASSESSEE FURNISHED THE ESTIMATED AND PROJECTED COST OF CONSTRUCTION OF THE HOTEL BUILDING FOR A TOTAL COST OF RS. 3.52 CRORES WHEREAS THE ASSESSEE HAS SHOWN THE FIXED ASSETS IN THE BALANCE SHEET AS ON 3 1.03.2013 AT RS. 2,69,26,206/-. THIS PROJECT REPORT SUBMITTED WITH THE BANK WAS AN ESTIMATED COST OF THE HOTEL BUILDING TO BE INCURRED IN FUTURE AND WAS NOT BASED ON THE VALUATION OF ANY EXISTING ASSETS OF THE ASSESSEE. THEREFORE, THE SAID PROJEC T REPORT CANNOT CONSTITUTE ACTUAL COST OF CONSTRUCTION ONCE THE ASSESSEE HAS RECORDED THE ACTUAL COST OF CONSTRUCTION IN THE BOOKS OF ACCOUNTS WHICH WAS DULY VERIFIED BY THE AO ALONG WITH THE REPORT OF THE REGISTERED VALUER. THE AO HAS ALSO EXAMINED AL L THESE DOCUMENTS INCLUDING THE PROJECT REPORT WHEREIN THE TOTAL COST OF THE PROJEC T WAS SHOWN AT RS. 3.52 CRORES AS AGAINST VALUE OF FIXED ASSETS SHOWN IN THE BALANCE SHEET AT RS. 2.69 CRORES AND AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AS WELL AS THE RELEVANT VALUATION REPORT, THE AO WAS SATISFIED WITH THE COST OF FIXED ASSETS AS SHOWN IN THE BALANCE SHEET. THERE IS NO DISPUTE THAT THE PROJECT REPORT PRODUCE D BY THE ASSESSEE BEFORE THE BANK AT THE TIME OF TAKING THE LOAN FOR THE PURPOSE OF CONSTRUCTION OF HOTEL BUILDING WAS ONLY A PROJECTED ESTIMATED OF THE COST AND NOT THE ACTUAL COST OF CONSTRUCTION INCURRED BY THE ASSESSEE. THE ASSETS MUST BE SHOWN IN THE BOOKS AS PER THE ACTUAL COST OF ACQUISITION AND NOT ON THE PROJECTED COST O F ACQUISITION. THE DECISION AS RELIED UPON THE LD. CIT D/R IN THE CASE OF BONOD KU MAR AGARWALA VS. CIT (SUPRA) IS ON THE ASPECT OF TWO SETS OF BOOKS OF ACCOUNT/FINAN CIAL STATEMENTS ONE WAS PRESENTED BEFORE THE BANK FOR TAKING THE CREDIT FAC ILITY AND HAVING INFLATED VALUE AND ANOTHER WAS PRODUCED BEFORE THE AO FOR THE PURPOSE OF INCOME-TAX. THE ASSESSEE 8 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. TOOK THE PLEA IN THE SAID CASE THAT THE BALANCE SHE ET PRODUCED BEFORE THE BANK FOR TAKING THE LOAN DOES NOT REFLECT TRUE FINANCIAL POS ITION OF THE ASSESSEE AND, THEREFORE, NOT RELEVANT. HOWEVER, THE HONBLE HIGH COURT WHIL E DISMISSING THE APPEAL OF THE ASSESSEE CONFIRMED THE ORDER OF THE TRIBUNAL BY HOL DING THAT THE ASSESSEE CANNOT BE PERMITTED TO TAKE THE BENEFIT OF THE FINANCIAL STAT EMENTS PRODUCED BEFORE THE BANK SHOWING AN ATTRACTIVE FINANCIAL POSITION FOR TAKING THE LOAN AND THEN PREPARE A DIFFERENT BALANCE SHEET AND FINANCIAL STATEMENT FOR THE PURPOSE OF INCOME TAX. IN THE CASE IN HAND, IT IS NOT THE CASE OF TWO SETS OF FINANCIAL STATEMENTS PREPARED BY THE ASSESSEE, ONE FOR TAKING THE LOAN AND ANOTHER F OR THE PURPOSE OF INCOME TAX AND OTHER ACCOUNTING PURPOSES. THEREFORE, IN OUR OPINI ON, THE DECISION RELIED UPON BY THE LD. CIT D/R IS NOT APPLICABLE IN THE FACTS OF T HE PRESENT CASE WHERE ONLY THE PROJECT COST OF CONSTRUCTION OF THE BUILDING WAS PR ODUCED BEFORE THE BANK FOR THE PURPOSE OF TAKING THE LOAN FOR CONSTRUCTION OF THE HOTEL BUILDING. THE BUILDING WAS CONSTRUCTED SUBSEQUENTLY AND THE ASSESSEE HAS RECOR DED THE COST OF CONSTRUCTION AS PER THE ACTUAL EXPENDITURE INCURRED FOR THE PURPOSE OF ACQUIRING THE FIXED ASSETS. 6. THERE IS NO QUARREL ON THE POINT THAT IF THE ORD ER PASSED BY THE AO IS WITHOUT ANY INVESTIGATION OR ENQUIRY ON AN ISSUE, THEN IT W OULD BE ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE G ROUND OF LACK OF ENQUIRY. IN THE CASE IN HAND, ADMITTEDLY, IT IS NOT A COMPLETE LACK OF ENQUIRY ON THE PART OF THE AO RATHER THE AO HAS CONDUCTED A DETAILED ENQUIRY ON T HIS ISSUE AND CALLED FOR ALL THE RELEVANT RECORDS FROM THE BANK FOR THE PURPOSE OF E XAMINING THE COST OF CONSTRUCTION OF THE HOTEL BUILDING. IT MAY BE A CASE OF INADEQU ATE ENQUIRY SO FAR AS NOT REFERRING THE MATTER TO THE DVO. HOWEVER, IT IS NOT MANDATOR Y FOR THE AO TO REFER THE 9 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. VALUATION TO THE DVO ONCE THE AO WAS SATISFIED WITH THE COST OF CONSTRUCTION AND COST OF FIXED ASSETS AS RECORDED IN THE BOOKS OF AC COUNT. FURTHER, EVEN IF THE PR. COMMISSIONER FOUND THAT THE DECISION OF THE AO ACCE PTING THE COST OF CONSTRUCTION/COST OF FIXED ASSETS IS CONTRARY TO TH E FACTS OR OTHERWISE NOT PERMISSIBLE AS PER THE PROVISIONS OF THE ACT, THEN THE ORDER OF THE AO COULD HAVE BEEN REVERSED BY GIVING A CONCLUDING FINDING ON THE ISSUE. THE P R. COMMISSIONER HAS SET ASIDE THE IMPUGNED ORDER ONLY FOR THE PURPOSE OF REFERRING TH E SAME TO THE DVO. THEREFORE, THE PR. CIT WAS ALSO NOT SURE ABOUT THE CORRECTNESS OF THE COST OF CONSTRUCTION OR COST OF FIXED ASSETS EITHER SHOWN IN THE PROJECT RE PORT OR RECORDED IN THE BOOKS OF ACCOUNT. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANC ES OF THE CASE WHEN IT IS NOT A CASE OF LACK OF ENQUIRY BUT THE AO HAS TAKEN A VIEW BY ACCEPTING THE COST OF FIXED ASSETS AS RECORDED IN THE BOOKS OF ACCOUNT WHICH WE RE ALSO SUPPORTED BY THE VALUATION REPORT, THEN THE ORDER OF THE AO CANNOT B E HELD TO BE ERRONEOUS ON THE GROUND OF LACK OF ENQUIRY. IT IS SETTLED PROPOSIT ION OF LAW THAT IF THE AO HAS TAKEN ONE OF THE POSSIBLE VIEWS THEN THE PR. CIT CANNOT B E PERMITTED TO INVOKE THE PROVISIONS OF SECTION 263 SIMPLY BECAUSE HE DOES NO T AGREE WITH THE VIEW TAKEN BY THE AO. IN THIS CASE IT IS ALL MATTER OF POSSIBILI TIES ABOUT THE CORRECTNESS OF THE CLAIM BUT ONCE NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT THE COST OF FIXED ASSETS AS RECORDED IN THE BOOKS OF ACCOUNT IS NOT THE ACTU AL COST OF THE ASSETS OR THE ASSESSEE HAS COMPLETELY FAILED TO PRODUCE THE SUPPO RTING EVIDENCE THEN THE ACCEPTANCE OF COST OF FIXED ASSETS BY THE AO CANNOT BE HELD TO BE ERRONEOUS LEADING TO INVOCATION OF PROVISIONS OF SECTION 263 OF THE I T ACT. ACCORDINGLY, IN THE FACTS AND 10 ITA NO. 416/JP/2018 M/S. OM RUDRA PRIYA HOLIDAY RESORT PVT. LTD., SAWAI MADHOPUR. CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE IMPUGNE D REVISION ORDER PASSED UNDER SECTION 263 OF THE ACT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 20/12/201 8. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 20/12/2018. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. OM RUDRA PRIYA HOLIDAY RESOR T PVT. LTD., SAWAI MADHOPUR. 2. THE RESPONDENT THE PRINCIPAL CIT, KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 416/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR