Smt. Ruchi Singla, Mandi Gobindgarh V. Principal Commissioner of Income Tax, Ludhiana

ITA 424/CHANDI/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5232 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-02-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Revision of order; Difference of opinion; Tax effect; Documents seized
• Section: 143(3); 153A; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.429/CHD/2015 (ASSESSMENT YEAR : 2006-07) SMT.RADHA AGGARWAL VS. THE PRINCIPAL CIT (CENTRA L), W/O SH.PARSHOTAM AGGARWAL LUDHIANA. PROP. M/S R.P. STEEL INDUSTRIES, # 378, SECTOR 3-C, MANDI GOBINDGARH. PAN: ABFPA2163G ITA NO.424/CHD/2015 (ASSESSMENT YEAR : 2006-07) SMT.RUCHI SINGLA VS. THE PRINCIPAL CIT (CENTRAL ), W/O SH.ASHISH SINGLA LUDHIANA. 379, SECTOR 3-C, MANDI GOBINDGARH. PAN: ADFPJ1791D AND ITA NO.431/CHD/2015 (ASSESSMENT YEAR : 2006-07) SH.MANISH SINGLA VS. THE PRINCIPAL CIT (CEN TRAL), C/O M/S NARAIN & COMPANY LUDHIANA. #379, SECTOR 3-C, MANDI GOBINDGARH. PAN: AYIPS0436J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI SUSHIL KUMAR, CIT DR DATE OF HEARING : 22.02.2017 DATE OF PRONOUNCEMENT : 18.04.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : ALL THE ABOVE THREE APPEALS FILED BY THE DIFFEREN T ASSESSEES ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED 2 BY THE LEARNED PR. COMMISSIONER OF INCOME TAX (CENT RAL), LUDHIANA, U/S 263 OF THE INCOME TAX ACT,1961, EACH DATED 26.2.2015 AND RELATING TO ASSESSMENT YEARS 2006-07. 2. SINCE THE ISSUE INVOLVED IN ALL THE ABOVE THREE APPEALS IS COMMON, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. FOR THE S AKE OF CONVENIENCE WE SHALL BE DEALING WITH THE CASE OF TH E ASSESSEE IN ITA NO.429/2015. ITA NO.429/CHD/2015 (SMT.RADHA AGGARWAL): 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ORIGINAL RETURN IN THIS CASE WAS FLED ON 16.8.2012 DECLARING INCOME AT RS.8,03,140/-. THE ASSESSMENT WAS COMPLETED U/S 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) VIDE ORDER DATED 25.3.201 3 DETERMINING THE TOTAL INCOME AT RS.11,53,142/-. THEREAFTER THE LD. PRINCIPAL CIT(CENTRAL), LUDHIANA ISSUED SHOW CAUSE NOTICE U/S 263 OF THE ACT DATED 8.1.2015 , WHICH IS REPRODUCED IN THE IMPUGNED ORDER, IN WHICH THE LD.PRINCIPAL CIT NOTED THAT THE ASSESSEE HAD PURCH ASED 3150 SHARES OF M/S PRAGATI NIRMAN PVT. LTD. FOR A CONSIDERATION OF RS.1,22,85,000/- @ RS.3900/- PER S HARE. THE LD.PRINCIPAL CIT NOTED THAT SEARCH U/S 132 OF T HE ACT WAS CARRIED OUT ON 30.10.2006 ON THE FOLLOWING GROU P OF CASES: 1) NARAIN & COMPANY GROUP OF CASES 2) RAJINDER PURI GROUP OF CASES 3 3) GULATI GROUP OF CASES 4) H.S. CHADHA GROUP OF CASES 5) VTC GROUP OF CASES 4. THE LD.PRINCIPAL CIT POINTED OUT THAT DURING TH E COURSE OF SEARCH CERTAIN DOCUMENTS WERE FOUND AND S EIZED AT THE RESIDENCE OF SHRI SURINDER GULATI, ONE OF TH E ORIGINAL SHAREHOLDERS OF M/S PRAGATI NIRMAN PVT. LT D. AND THEREBY ONE OF THE SELLERS OF THE SHARES, WHICH SHO WED THAT THE ACTUAL SALE PRICE OF EACH SHARE WAS RS.655 4/- AS AGAINST THE ACCOUNTED SALE PRICE OF RS.3900 PER SHA RE. THE LD.PRINCIPAL CIT ON THE BASIS OF THE ABOVE FOUN D THAT THE ASSESSEE HAD PAID EXTRA CONSIDERATION OF RS.265 0/- PER SHARE FOR THE PURCHASE OF 3150 SHARE OF M/S PRA GATI NIRMAN PVT. LTD. HE FURTHER FOUND THAT NO ADDITION ON ACCOUNT OF THE SAME WAS MADE BY THE ASSESSING OFFIC ER. THE ASSESSMENT ORDER WAS, THEREFORE, FOUND TO BE ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN RESPONSE TO THE NOTICE, THE ASSESSEE SUBMITTED REPLY VIDE HIS LETTER DATED 4.2.2015, WHI CH IS REPRODUCED AT PARA 2 OF THE IMPUGNED ORDER, IN WHIC H THE ASSESSEE SUBMITTED THAT THE DOCUMENTS ON THE BASIS OF WHICH THE PURCHASE PRICE OF THE SHARES WAS WORKED O UT AT RS.6554/- WERE NOT CONNECTED TO THE ASSESSEE, NOR A NY AMOUNT HAVING BEEN PAID OR RECEIVED BY THE ASSESSEE MENTIONED IN THE SAME. THE ASSESSEE SUBMITTED THAT IT HAD NOT PURCHASED ANY SHARES FROM SHRI SURINDER KUM AR GULATI AND HAD IN FACT PURCHASED THE SHARES FROM SH RI 4 NARAIN DASS SHAH OF VARANASI. THE DETAILS OF PURCH ASE OF SHARES MADE BY THE ASSESSEE ALONGWITH AFFIDAVIT OF SHRI NARAIN DASS SHAH WERE SUBMITTED. THE ASSESSEE ALSO CONTENDED THAT EVEN OTHERWISE THE ADDITIONS ON ACCO UNT OF THE ALLEGED HIGHER SALE PRICE FETCHED BY SHRI SURIN DER KUMAR GULATI HAD BEEN DELETED BY THE COMMISSIONER O F INCOME TAX, GURGAON. THE ASSESSEE ALSO SUBMITTED T HAT NO DOCUMENT WAS FOUND FROM THE POSSESSION OF THE ASSESSEE AND THE SAME DOCUMENTS WERE FOUND FROM THE RESIDENCE OF SHRI SURINDER KUMAR GULATI WHICH WERE NOT INCRIMINATING IN NATURE AGAINST THE ASSESSEE. THE LD.PRINCIPAL CIT, HOWEVER, DID NOT ACCEPT THE CONTE NTION OF THE ASSESSEE AND NOTED THAT THE SUBMISSIONS MADE IN THE IMPUGNED CASE WERE IDENTICAL TO THAT IN THE CAS E OF M/S GOPAL CASTINGS (P) LTD. FOR ASSESSMENT YEAR 200 6-07 EXCEPT FOR THE FACT THAT THE ASSESSEE HAD CLAIMED T O HAVE PURCHASED SHARES FROM SHRI NARAIN DASS SHAH OF VARANASI. THE LD.PRINCIPAL CIT HELD THAT THIS FACT MADE NO DIFFERENCE SINCE THE VERY LOW RATE OF SHARES PUR CHASED COULD NOT BE SAID TO BE GENUINE RATE IN VIEW OF THE EVIDENCE OF HIGHER RATE PER SHARE FOUND IN THE COUR SE OF SEARCH. THEREAFTER THE LD.PRINCIPAL CIT RELIED UPO N HIS ORDER PASSED IN THE CASE OF M/S GOPAL CASTINGS (P) LTD. FOR ASSESSMENT YEAR 2006-07 IN PROCEEDINGS INITIATE D U/S 263 OF THE ACT AND FOR THE REASONS DISCUSSED IN THE SAID ORDER, HELD THE ORDER PASSED BY THE ASSESSING OFFIC ER IN THE PRESENT CASE ALSO AS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE 5 LD.PRINCIPAL CIT SET ASIDE THE ORDER OF THE ASSESSI NG OFFICER WITH THE DIRECTION TO MAKE FRESH ASSESSMENT DE- NOVO AFTER PROPERLY EXAMINING THE FACTS OF THE CASE AND RELEVANT LEGAL PROVISIONS AND CONDUCTING PROPER ENQ UIRY. 5. THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGING THE AFORESAID ORDER PASSED U/S 263 OF THE ACT. DUR ING THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL FOR TH E ASSESSEE AT THE OUTSET POINTED OUT THAT THE ORDER P ASSED U/S 263 OF THE ACT IN THE CASE OF M/S GOPAL CASTIN GS (P) LTD., WHICH HAD BEEN HEAVILY RELIED UPON BY THE LD.PRINCIPAL CIT IN THE PRESENT CASE HAD BEEN SET S IDE BY THE I.T.A.T. IN ITS ORDER PASSED IN ITA NO.430/CHD/ 2015 DATED 29.4.2016. THE LD. COUNSEL FOR THE ASSESSEE FURTHER PLEADED THAT PROPER ENQUIRIES RELATING TO THE ISSUE OF SHARES PURCHASED OF M/S PRAGATI NIRMAN PVT. LTD. HA D BEEN MADE DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE CERTIFIED COPIES OF ORDER SHEET ENTRIES MADE IN THE CASE OF THE ASSESSEE FOR THE IMPUGNED YEAR I.E. ASSESSMENT YEAR 2006-07 AND SPECIFICALLY POINTED OUT TO THE ORDER S HEET ENTRY DATED 20.2.2013 ASKING FOR THE DETAILS OF THE SHARES PURCHASED OF M/S PRAGATI NIRMAN PVT. LTD. THE RELE VANT ORDER SHEET ENTRY IS REPRODUCED HEREUNDER: 20.02.2013 PRESENT SH.JEEWAN BANSAL, CA, PRODUCED BOOKS OF ACCOUNT AND TEST CHECKED. THE ASSESSEE WAS ASKED TO FILE THE DETAIL OF SHARE PURCHASE OF M/S 6 PRAGATI NIRMAN PVT. LTD. THE CASE IS ADJOURNED TO 07.03.2013. 6. THE LD. COUNSEL FOR THE ASSESSEE THEREAFTER DRE W OUR ATTENTION TO THE REPLY FILED BY THE ASSESSEE IN THIS REGARD VIDE ITS LETTER DATED 7.3.2013 AND POINTED O UT THAT ALL DETAILS PERTAINING TO THE SHARES PURCHASED HAD BEEN FILED TO THE ASSESSING OFFICER AND FURTHER THE ASSE SSEE HAD ALSO SUBMITTED AS TO WHY THE SHARE PRICE OF RS.6554 PER SHARE BE NOT APPLIED IN THE PRESENT CASE. THE RELE VANT REPLY OF THE ASSESSEE IS REPRODUCED HEREUNDER: I HAVE PURCHASED 3150 SHARES OF PRAGATI NIRMAN PRI VATE LIMITED FROM SH.NARAYAN DASS SHAH CK 19/17 CHOWK VARANASI FOR CONSIDERATION OF RS.L2285000/-PAID VID E DD THROUGH OREINTAL BANK OF COMMERCE CHANDIGARH ON 14/02/2006 @ RS.3900/-PER SHARE. THE SOURCE OF THE S AME WAS PROVIDED DURING THE COURSE OF ASSESSMENT. 3150 SHARES OF PRAGATI NIRMAN PRIVATE LIMITED WAS P URCHASED BY THE APPLICANT FORM THE ABOVE SAID PERSON @ RS.390 0/-PER SHARE AND THE PAYMENT WAS MADE BY THE ACCOUNT PAYEE DRAFT. THE SOURCE OF THE INVESTMENT AND THE PROOF FOR THE PURCHASE OF SHARES WAS PROVIDED DURING THE COURSE OF ASSESSMENT AND THE SAME WAS VERIFIED BY YOUR GOOD SELF. 2.AS REGARDS TO TREAT THE SHARE PRICE AT RS.6554/-PE R SHARE, WE SUBMIT AS UNDER: DUIRNG THE ASSESSMENT PROCEEDINGS YOUR GOOD SELF CO NFRONT THE DOCUMENTS FOUND DURING THE SEARCH OPERATION FORM TH E RESIDENCE OF SH SURINDER GULATI AND THE STATEMENT G IVEN BY SH SURINDER GULATI. ON PERUSAL OF THE DOCUMENTS FOUND FROM THE RESIDENCE OF SURINDER GULATI, IT IS VERY CLEAR THAT THE APPLICANT N AME IS NOT MENTIONED ANYWHERE IN THE DOCUMENTS TO PROVE THE RE CEIPT OF CONSIDERATION IN CASH FROM THE APPLICANT. IT IS PERTI NENT TO MENTION THAT THE IN THE STATEMENT OF SH SURINDER GU LATI HE CLEARLY ADMIT THAT HE SOLD THE SHARES OF PRAGATI NIR MAN PRIVATE LIMITED AT RS.3900/-PER SHARE AND NO EXTRA CONSIDER ATION WAS RECEIVED. ON THE BASIS OF DOCUMENTS FOUND FROM THE THIRD PARTY PREMISES, IN WHICH THE APPLICANT NAME IS NOT MENTIONE D ANY WHERE, NO ADVERSE INFERENCE CAN BE TAKEN IN THIS REGARD. 7 7. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT IT IS EVIDENT FROM THE ABOVE THAT ALL NECESSAR Y ENQUIRIES RELATING TO THE TRANSACTION OF SHARES PUR CHASED OF M/S PRAGATI NIRMAN PVT. LTD. WERE MADE DURING ASSESSMENT PROCEEDINGS AND ASSESSING OFFICER BEING SATISFIED WITH THE REPLY FILED BY THE ASSESSEE IN T HIS REGARD HAD FORMED A REASONABLE OPINION AND MADE NO ADDITIO N ON ACCOUNT OF THE SAME. THE LD. COUNSEL FOR THE ASSES SEE STATED THAT IT IS EVIDENT FROM THE ABOVE THAT THE A SSESSING OFFICER HAD DULY APPLIED HIS MIND ON THE ISSUE AND HAD FORMED AN OPINION. THE LD. COUNSEL FOR THE ASSESSE E CONTENDED THAT IN SUCH CIRCUMSTANCES IT COULD NOT B E SAID THAT THERE WAS ANY ERROR IN THE ORDER OF THE ASSESS ING OFFICER SO AS TO INITIATE REVISIONERY PROCEEDINGS U /S 263 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE RELIED U PON THE ORDER OF THE ITAT IN THE CASE OF DCIT VS. SHRI NARA IN SINGLA & OTHERS IN ITA NO.127/CHD/2014 DATED 15.2.2 016 IN THIS REGARD. FURTHER THE LD. COUNSEL FOR THE AS SESSEE CONTENDED THAT THE ISSUE OF HIGHER SALE PRICE OF TH E SHARES OF M/S PRAGATI NIRMAN PVT. LTD. HAD BEEN SETTLED BY THE I.T.A.T. IN THE CASE OF DCIT VS. SHRI ASHISH SINGLA IN ITA NO.129/CHD/2014 VIDE ORDER DATED 15.2.2016 WHEREIN IDENTICAL ADDITION MADE IN THE HANDS OF THE ASSESSE E ON ACCOUNT OF ALLEGED HIGHER PURCHASE PRICE PAID WAS D ELETED BY THE I.T.A.T. THE LD. COUNSEL FOR THE ASSESSEE S TATED THAT SINCE THE ISSUE OF ALLEGED HIGHER SALE PRICE O F SHARES OF M/S PRAGATI NIRMAN PVT. LTD. HAS ALSO BEEN SETTL ED BY THE I.T.A.T., THE LD.PRINCIPAL CIT COULD NOT HAVE T AKEN 8 THIS AS THE BASIS FOR INVOKING THE REVISIONERY PROC EEDINGS U/S 263 OF THE ACT. IN SUPPORT OF ITS SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF T HE I.T.A.T., CHANDIGARH BENCH IN THE CASE OF M/S LAKS HMI ENERGY & FOODS LTD. VS. CIT IN ITA NO.329/CHD/2015 DATED 18.4.2016. 8. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER OF THE LD.PRINCIPAL CIT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE PRIMARY BASIS FOR HOLDING THE ASSES SMENT ORDER PASSED IN THE PRESENT CASE AS ERRONEOUS U/S 263 IS THAT AS PER THE LD.PRINCIPAL CIT THE ASSESSING OFFI CER HAD NOT CONSIDERED THE ISSUE OF PURCHASE OF 3150 SHARES OF M/S PRAGATI NIRMAN PVT. LTD. BY THE ASSESSEE @ 3900 /- PER SHARE IN THE LIGHT OF DOCUMENTS FOUND DURING TH E COURSE OF SEARCH AT THE PREMISES OF ONE SHRI SURIND ER KUMAR GULATI WHICH SHOWED THAT THE SHARES OF M/S PRAGATI NIRMAN PVT. LTD. WERE SOLD @ RS.6554/- PER SHARE. HAVING HEARD AND CONSIDERED THE ARGUMENTS MADE BEFO RE US, WE HOLD THAT THE JURISDICTION ASSUMED U/S 263 BY THE LD.PRINCIPAL CIT IN THE PRESENT CASE IS ILLEGAL. F IRSTLY, WE FIND THAT THE LD.PRINCIPAL CIT HAD ASSUMED JURISDIC TION U/S 263 AND PASSED THE IMPUGNED ORDER RELYING HEAVI LY ON THE REASONINGS GIVEN IN THE CASE OF M/S GOPAL CAST INGS (P) LTD. ON IDENTICAL SET OF FACTS AND CIRCUMSTANCE S. THE SAID ORDER IN THE CASE OF M/S GOPAL CASINGS (P) LT D. AS HAS BEEN POINTED OUT TO US BY THE LD. COUNSEL FOR T HE 9 ASSESSEE HAS BEEN SET ASIDE BY THE I.T.A.T. IN THE ORDER PASSED IN ITA NO.430/CHD/2015 DATED 29.4.2016. IN T HE SAID ORDER THE I.T.A.T. HELD THE PROCEEDINGS U/S 26 3 TO BE UNJUSTIFIED AND UNREASONABLE BECAUSE ALL THE SEIZED MATERIAL WHICH FORMED THE BASIS OF THE ADDITION MAD E WAS FOUND BY THE I.T.A.T. TO HAVE BEEN DULY CONSIDERED BY THE ASSESSING OFFICER. IT WAS FURTHER FOUND BY THE I. T.A.T. THAT NO EVIDENCE WAS FOUND AGAINST SO AS TO CONNECT WITH THE ADDITION ON MERITS. THE I.T.A.T. ALSO FOUND TH AT THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN PURCHASE PRICE OF M/S PRAGATI NIRMAN PVT. LTD. MADE IN THE CASE OF SHRI ASHISH SINGHA & OTHERS HAD BEEN DELETED BY THE TRIB UNAL VIDE ITS ORDER DATED 15.2.2016 AND, THEREFORE, THER E WAS NO JUSTIFICATION THEREAFTER FOR MAKING ADDITION BY THE LD.PRINCIPAL CIT ON IDENTICAL ISSUE. THE RELEVANT FINDINGS OF THE I.T.A.T. IN THE CASE OF M/S GOPAL CASTINGS (P) LTD. IN WHICH THE ORDER PASSED IN THE CASE OF SHRI PARS HOTAM AGGARWAL VS. PRINCIPAL CIT IN ITA NO.428/CHD/2015 H AS BEEN FOLLOWED ARE AS UNDER: 12. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE ABOVE ORDER, IT IS CLEAR THAT WHEN MATTER IN ISSUE HAS BEEN CONSIDERED IN APPEAL AND DECIDED BY THE APPELLATE AUTHORITY, SAME WOULD NOT BE SUBJECT MATTER OF PROCEEDINGS UNDER SECTION 263 OF THE ACT. ALL THE ORIGINAL SEIZED MATERIAL HAVE ALREADY BEEN CONSIDERED BY THE ASSESSING OFFICER AND THE LD. CIT(APPEALS), THERE WAS NO JUSTIFICATION TO INITIATE THE PROCEEDINGS UNDER SECTION 263 AFTER PASSING OF THE ASSESSMENT ORDER AND THE APPELLATE ORDER. FURTHER, NO 10 EVIDENCE WAS FOUND AGAINST ASSESSEE TO CONNECT WITH THE ADDITION ON MERIT. THEREFORE, THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF M/S R.P. IMPORT & EXPORT PVT. LTD. AND THERE IS NO JUSTIFICATION FOR THE LD. PR. CIT TO INITIATE PROCEEDINGS UNDER SECTION 263 OF THE ACT. 13. WE MAY ALSO NOTE HERE THAT WHEN ADDITIONS ON MERIT HAVE BEEN MADE ON THE IDENTICAL ISSUE IN THE CASES OF SHRI ASHISH SINGLA AND OTHERS AND LD. CIT(APPEALS) DELETED ON MERIT, REVENUE PREFERRED APPEALS TITLED AS DCIT VS ASHISH SINGLA & OTHERS IN ITA 129/2014 FOR SAME ASSESSMENT YEAR 2006-07, THE TRIBUNAL VIDE ORDER DATED 15.02.2016 DISMISSED THE DEPARTMENTAL APPEAL HOLDING NO JUSTIFICATION FOR MAKING ADDITION ON IDENTICAL ISSUE. THE FINDINGS OF THE TRIBUNAL IN THIS CASE IN PARA 10-11 ARE REPRODUCED AS UNDER : 10. WE HAVE HEARD RIVAL SUBMISSIONS. IT IS NOT IN DISPUTE THAT SEIZED PAPERS WERE FOUND AND RECOVERED DURING THE COURSE OF SEARCH IN THE CASE OF SHRI SURINDER GULATI. THESE DOCUMENTS WERE USED AGAINST SHRI SURINDER GULATI IN HIS ASSESSMENT AND ALL THESE SEIZED PAPERS HAVE BEEN MENTIONED IN THE ASSESSMENT ORDER OF SHRI SURINDER GULATI DATED 28.02.2013 FOR ASSESSMENT YEAR 2006-07. THE STATEMENT OF SHRI SURINDER GULATI AT THE TIME OF SEARCH WAS RECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT WHICH IS ALSO REPRODUCED IN HIS ASSESSMENT ORDER AS ABOVE. THE SEIZED PAPER ALONGWITH SMALL BLUE DIARY MARKED RAYMOND WERE CONFRONTED TO HIM IN WHICH HE HAS ADMITTED THAT DIARY WAS WRITTEN IN HIS HANDWRITING AND BELONGS TO HIM. HE HAS ALSO 11 EXPLAINED THE ABBREVIATIONS CONTAINED IN THE SEIZED PAPER BUT NONE OF THE ABBREVIATIONS WERE HAVING ANY LINK OR CONNECTION WITH THE ASSESSEE. IN ANSWER TO ONE OF THE QUESTION, WHILE REFERRING TO THE SEIZED PAPER, HE HAS EXPLAINED THAT THESE ARE ESTIMATES AND THE ACTUAL FACT REMAINED THAT HE HAS RECEIVED MONEY @ RS. 3900/- PER SHARE. SHRI SURINDER GULATI DID NOT MAKE ANY ALLEGATION AGAINST THE ASSESSEE IN RESPECT OF SHARES PURCHASED BY THE ASSESSEE. THE SEIZED PAPER AS REFERRED IN HIS ASSESSMENT ORDER HAVE BEEN REPRODUCED IN WHICH, ON CERTAIN SHARES THE VALUE HAVE BEEN SHOWN @ 3900/- AS WELL AS IN ANOTHER PAPER, THE SAME RATE IS MENTIONED AGAINST THE TOTAL SHARES OF 3258 AND IN THE THIRD SEIZED PAPER, TOTAL SALE PROCEEDS OF 3258 SHARES HAVE BEEN CONSIDERED BY ASSESSING OFFICER IN A SUM OF RS. 2.13 CRORES. THIS SALE CONSIDERATION WAS DIVIDED BY 3258 SHARES AND ASSESSING OFFICER CONCLUDED THE VALUE OF EACH SHARE AT RS. 6554/-. HOWEVER, ALL THE ABOVE MATERIAL ON RECORD I.E. STATEMENT OF SHRI SURINDER GULATI AND THE SEIZED PAPER DID NOT MAKE ANY ALLEGATION AGAINST THE ASSESSEE OF PURCHASE OF SHARES AT RS.6554/-. IT WAS A PRESUMPTION OF THE ASSESSING OFFICER THAT WHEN ONE OF THE TRANSACTIONS IS CONDUCTED BY SHRI SURINDER GULATI FOR A SUM OF RS. 6554/- THEN PRESUMPTION WOULD BE THAT OTHER SHARES HAVE ALSO BEEN TRANSFERRED AT THE SAME VALUE. HOWEVER, IT IS WELL SETTLED LAW THAT PRESUMPTION, WHAT-SO-EVER MAY BE STRONG BUT SAME CANNOT TAKE PLACE OF PROOF. IT IS ALSO ADMITTED FACT THAT ASSESSEE DID NOT HAVE ANY TRANSACTION WITH SHRI SURINDER GULATI OR ANY OF HIS FAMILY MEMBERS. THE ASSESSEE HAD 12 PURCHASED SHARES FROM CHADHA FAMILY AND EVEN IN SEARCH IN THE CASE OF CHADHA FAMILY, NO MATERIAL OR DOCUMENT WAS FOUND MAKING ANY ALLEGATION AGAINST THE ASSESSEE. 10(I) IT IS INTERESTING TO NOTE THAT WHEN ADDITION IS MADE BY THE ASSESSING OFFICER IN THE CASE OF SHRI SURINDER GULATI BASED ON THE SAME SEIZED MATERIAL BY TAKING THE SAME VALUE OF THE SHARE AT RS. 6554/-, SHRI SURINDER GULATI PREFERRED APPEAL BEFORE LD. CIT(APPEALS), CENTRAL, GURGAON AND THE ENTIRE ADDITION, ON THE BASIS OF THE SAME SEIZED MATERIAL HAVE BEEN DELETED VIDE ORDER DATED 25.03.2014. COPIES OF THE SAME ASSESSMENT ORDER AND APPELLATE ORDER IN THE CASE OF SHRI SURINDER GULATI HAVE BEEN PLACED ON RECORD. THE LD. DR ADMITTED THAT SINCE TAX EFFECT WAS LOW IN THE CASE OF SHRI SURINDER GULATI, THEREFORE, NO DEPARTMENTAL APPEAL HAVE BEEN FILED BEFORE THE TRIBUNAL. IT, THEREFORE, STANDS CONCLUDED THAT THE ADDITION MADE ON THE BASIS OF THE SAME SEIZED MATERIAL FOUND FROM THE RESIDENCE OF SHRI SURINDER GULATI WAS NOT RELIABLE AND WOULD NOT LEAD TO ANY ADDITION EVEN IN THE CASE OF SHRI SURINDER GULATI FROM WHOSE POSSESSION, SEIZED PAPERS WERE FOUND AND RECOVERED. IT IS NOT EXPLAINED DURING THE COURSE OF ARGUMENTS HOW THE SAME SEIZED PAPERS CONTAINING NO ALLEGATION AGAINST THE ASSESSEE ARE ADMISSIBLE IN EVIDENCE AGAINST THE ASSESSEE. WHERE THERE IS NO INCRIMINATING EVIDENCE AVAILABLE AGAINST THE ASSESSEE ON RECORD, THE ABOVE ADDITION FOR ENHANCING VALUE OF THE ASSET COULD NOT BE MADE ON SUSPICION AND SURMISES. THE PRESUMPTION UNDER SECTION 132(4A) IS, THEREFORE, NOT AVAILABLE WHEN THE SEIZED PAPER IS RECOVERED 13 FROM THE THIRD PARTY AND NOT FROM THE ASSESSEE. WE ARE FORTIFIED IN OUR VIEW BY ORDER OF ITAT AHMEDABAD BENCH IN THE CASE OF AKSHAY PUSHPVANDAN VS DCIT (SUPRA). ONCE THE SEIZED PAPERS WERE NOT FOUND RELIABLE IN THE CASE OF SHRI SURINDER GULATI FROM WHOSE POSSESSION SAME WERE RECOVERED, THERE IS NOTHING LEFT FOR CONSIDERATION AGAINST THE ASSESSEE. 10(II) THE ASSESSEE IN ADDITION TO THE ABOVE ALSO EXPLAINED THAT WHEN STATEMENT OF SHRI SURINDER GULATI WAS ALSO RECORDED IN THE CASE OF SHRI MADAN GULATI, HE HAS NOT SUPPORTED THE CASE OF THE REVENUE IN HIS STATEMENT. HE HAS ALSO EXPLAINED IN THE STATEMENT THAT RS. 80 LACS WAS SURRENDERED ON ACCOUNT OF DEALING WITH THE VARANASI PARTY WHICH HAS ALSO NO CONNECTION WITH THE ASSESSEE. THE ASSESSEE ALSO FILED PROFIT & LOSS ACCOUNT OF THE PNPL TO SHOW THAT THERE WAS VERY LITTLE PROFIT IN THEIR CASE AND THAT PROPERTY WAS LEASE-HOLD HELD BY THEM AND THAT RE-VALUATION OF THE SHARES SHOWS THE LESSER AMOUNT AS AGAINST THE PURCHASE CONSIDERATION DECLARED BY ASSESSEE WOULD CLEARLY SUPPORT THE CASE OF THE ASSESSEE THAT ADDITION WAS MADE AGAINST HIM WITHOUT ANY BASIS. THE ASSESSEE ALSO CITED A COMPARABLE CASE OF JAGAT THEATER IN WHICH THE VALUE PER SHARE WAS LESSER AND THE SALE CONSIDERATION WAS ALSO LESSER. THESE EVIDENCES AND MATERIAL ON RECORD ALSO SUPPORT THE FINDINGS OF THE LD. CIT(APPEALS) THAT ADDITION WAS MADE MERELY ON PRESUMPTION AND WITHOUT ANY BASIS. SINCE NO DOCUMENT OR MATERIAL WAS FOUND DURING THE SEARCH AGAINST THE ASSESSEE TO PROVE THAT ASSESSEE PAID ANY AMOUNT OVER AND ABOVE WHAT IS PAID THROUGH 14 THE BANKING CHANNEL, WOULD CLEARLY INDICATE THAT ASSESSING OFFICER, WITHOUT ANY JUSTIFICATION MADE THE ADDITION AGAINST THE ASSESSEE. THE LD. DR, HOWEVER, RELIED UPON DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF JOGINDER LAL (SUPRA). IN THIS CASE, THE ASSESSEE PURCHASED A PLOT VIDE REGISTERED SALE DEED FOR CONSIDERATION OF RS. 3.70 LACS AND DURING THE SURVEY CONDUCTED UNDER SECTION 133A, VENDORS DECLARED SALE CONSIDERATION OF THE SAID PLOT AT RS. 38 LACS. IN THE CASE OF HIREN VASANT LAL SHAH (SUPRA) PURSUANT TO THE SEARCH AT THE ASSESSEE'S PREMISES, CERTAIN DOCUMENTS WERE FOUND AND ONE OF THE SAID DOCUMENT CONTAINED WORKING OF INTEREST @ 3% ON THE TOTAL SUM OF RS. 3 LACS. HOWEVER, IN THE CASE OF THE ASSESSEE, NO DOCUMENT OR MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE WHEN THE SEARCH WAS CONDUCTED IN THE CASE OF SHRI SURINDER GULATI OR IN THE CASE OF THE ASSESSEE. THEREFORE, BOTH DECISIONS ARE DISTINGUISHABLE ON FACTS. THE DECISION IN THE CASE OF R.P. VASHISHT (SUPRA) RELIED UPON BY LD. DR IS ALSO NOT APPLICABLE TO THIS CASE. 11. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES IN THE LIGHT OF THE FINDINGS OF LD. CIT(APPEALS), PARTICULARLY WHEN THE ADDITIONS HAVE BEEN DELETED IN THE CASE OF SHRI SURINDER GULATI AND THE MATTER HAS REACHED FINALITY, NOTHING SURVIVE IN FAVOUR OF THE REVENUE TO MAKE ANY ADDITION AGAINST THE ASSESSEE. IN THE ABSENCE OF ANY EVIDENCE ON RECORD AGAINST THE ASSESSEE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF THE LD. CIT(APPEALS) FOR DELETING THE ADDITION. NO ERROR HAVE BEEN 15 POINTED OUT IN THE ORDER OF THE LD. CIT(APPEALS). THE CONTENTION OF LD. DR HAVE NO FORCE THAT WHEN ONE TRANSACTION IS CONDUCTED AT THE SAME RATE, THE SAME RATE SHOULD BE APPLIED IN OTHER CASES. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE SAME IS ACCORDINGLY DISMISSED. 13(I) FOLLOWING THE FINDINGS OF THE TRIBUNAL IN THE CASES OF SHRI ASHISH SINGLA (SUPRA), THERE WOULD BE NO JUSTIFICATION TO PROCEED WITH THE PROCEEDINGS UNDER SECTION 263 OF THE ACT AND NO PURPOSE WOULD SERVE TO UPHOLD THE ORDER OF LD. PR. CIT UNDER SECTION 263 OF THE INCOME TAX ACT, PARTICULARLY WHEN THE DEPARTMENTAL APPEAL IN THE CASE OF THE ASSESSEE HAS ALREADY BEEN DISMISSED BY THE TRIBUNAL CONFIRMING DELETION OF ADDITIONS ON MERIT BY THE LD. CIT(APPEALS). 14. CONSIDERING THE ABOVE DISCUSSION AND IN THE LIGHT OF VARIOUS ORDERS REFERRED TO ABOVE, WE ARE OF THE VIEW THAT PROCEEDINGS UNDER SECTION 263 ARE CLEARLY BEYOND THE COMPETENCE OF LD. PR. CIT AND WHOLE PROCEEDINGS ARE UNJUSTIFIED AND UNREASONABLE, THEREFORE, THE IMPUGNED ORDER COULD NOT BE SUSTAINED IN LAW. WE, ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER UNDER SECTION 263 OF THE ACT AND QUASH THE SAME. 10. THE FACTS IN THE PRESENT CASE ADMITTEDLY ARE IDENTICAL TO THAT IN THE CASE OF M/S GOPAL CASTING S (P) LTD. (SUPRA). THE ERROR IN THE ASSESSMENT ORDER IN THE PRESENT CASE IS ON ACCOUNT OF NON CONSIDERATION OF THE DIFFERENCE IN PURCHASE PRICE OF SHARES OF M/S PRAGA TI NIRMAN PVT. LTD. WHICH AS PER THE LD.PRINCIPAL CIT WERE @ 16 RS.6554 PER SHARE BASED ON CERTAIN DOCUMENTS FOUND AT THE PREMISES OF SHRI SURINDER KUMAR GULATI WHO WAS SEARCHED, INSTEAD OF RS.3900/- PER SHARE SHOWN BY T HE ASSESSEE, WHICH IN TURN WARRANTED ADDITION TO BE MA DE ON ACCOUNT OF UNACCOUNTED INVESTMENTS. IN THE PRESENT CASE ALSO, AS DEMONSTRATED ABOVE BY THE LD. COUNSEL FOR THE ASSESSEE, ENQUIRY RELATING TO THE PURCHASE PRICE OF THE SHARES WERE MADE DURING ASSESSMENT PROCEEDINGS AND DUE REPLY FILED BY THE ASSESSEE. A PERUSAL OF THE REPL Y FILED BY THE ASSESSEE, AS REPRODUCED ABOVE, SHOWS THAT HE HA D ALSO EXPLAINED WHY THE PRICE OF RS.6554/-, BASED ON THE DOCUMENTS SEIZED FROM THE PREMISES OF SHRI SURINDER KUMAR GULATI, BE NOT SUBSTITUTED. THEREFORE, IT IS CLEAR FROM THE ABOVE THAT THE ISSUE HAD BEEN DULY ENQUIRE D INTO DURING ASSESSMENT PROCEEDINGS. THE ASSESSING OFFIC ER HAD APPLIED HIS MIND ON THE ISSUE AND THEREAFTER FO RMED AN OPINION MAKING NO ADDITION OF THE SAME.FURTHER W E FIND THAT THE ISSUE RELATING TO THE PRICE OF THE SH ARES OF PRAGATI NIRMAN HAD BEEN SETTLED BY THE ITAT IN THE CASE OF ASHISH SINGLA(SUPRA) WHEREIN ADDITION MADE ON ACCOU NT OF ALLEGED HIGHER PRICE FETCHED WAS DELETED. THEREFOR E THE VIEW FORMED BY THE AO WAS IN CONSONANCE WITH THAT O F THE ITAT. THERE WAS THEREFORE, WE HOLD, NO JUSTIFICAT ION FOR THE LD.PRINCIPAL CIT TO INITIATE PROCEEDINGS U/S 26 3 AS THERE WAS NO ERROR IN THE ASSESSMENT ORDER AS HELD BY THE I.T.A.T. IN THE CASE OF M/S GOPAL CASTINGS (P) LTD . (SUPRA) AND IN THE CASE OF SHRI NARAIN SINGLA & OTHERS. T HE RELEVANT FINDINGS OF THE I.T.A.T. IN THE CASE OF SH RI NARAIN 17 SINGLA & OTHERS AT PARAS 11 TO 16 OF THE ORDER ARE AS UNDER: 11. NOW ON THE LEGALITY OF ASSUMPTION OF JURISDICTION BY THE CIT(A) U/S 263 OF THE ACT, AN ORDER CAN BE REVISED UNDER SECTION 263 OF THE ACT BY THE LEARNED COMMISSIONER OF INCOME TAX ONLY IF IT SATISFIES THE TWIN CONDITIONS OF BEING ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF REVENUE. IN THE PRESENT CASE, WE FIND NO ERROR IN THE ORDER OF THE ASSESSING OFFICER. OUR VIEW GETS STRENGTHEN BY THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT(2000) 243 ITR 83 (SC), WHEREIN IT WAS HELD AS UNDER : WHEN AN INCOME TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. 12. THE SAID VIEW HAS ALSO BEEN HELD IN A JUDGMENT OF THE HON'BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. INDO GERMAN FABS, ITA NO.248 OF 2012, DATED 24 TH DECEMBER, 2014, IN THE FOLLOWING WORDS : SECTION 263 OF THE ACT CONFERS POWER TO EXAMINE AN ASSESSMENT ORDER SO AS TO ASCERTAIN WHETHER IT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BUT DOES NOT CONFER JURISDICTION UPON THE CIT TO SUBSTITUTE HIS OPINION FOR THE OPINION OF THE ASSESSING OFFICER. THE WORDS PREJUDICIAL AND 18 ERRONEOUS HAVE TO BE READ IN CONJUNCTION AND THEREFORE, IT IS NOT EACH AND EVERY ERROR IN AN ASSESSMENT THAT INVITES EXERCISE OF POWERS UNDER SECTION 263 OF THE ACT, BUT ONLY ORDERS THAT ARE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 12. ONE SITUATION IN SUCH A BACKGROUND OF FACTS, FOR CIT TO ASSUME JURISDICTION U/S 263 IS THAT IN CASE, ON AN APPRAISAL OF SUCH ENQUIRY, THE ASSESSING OFFICER TAKES A VIEW WHICH IS NOT IN ACCORDANCE WITH LAW. PRESENT IS NOT A CASE WHERE SOMETHING AS PRESCRIBED UNDER THE LAW HAS NOT BEEN DONE BY THE ASSESSING OFFICER. ANOTHER SITUATION IN WHICH CIT CAN ASSUME JURISDICTION U/S 263 IS THAT HE BRINGS ON RECORD SOMETHING TO DISPROVE THE FINDING ARRIVED AT BY THE ASSESSING OFFICER. I.E. IN SUCH CASES, WHERE THOUGH APPARENTLY NOTHING ILLEGAL HAS BEEN DONE BY THE ASSESSING OFFICER, CIT HAS TO COME TO A CONCLUSION HIMSELF AND DECIDES THAT THE ORDER IS ERRONEOUS BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED BEFORE HE PASSES THE ORDER U/S 263. IN THE PRESENT CASE, NO SUCH FINDING HAS BEEN RECORDED BY CIT AND THE MATTER IS RESTORED TO THE ASSESSING OFFICER TO MAKE FURTHER ENQUIRY/INVESTIGATION. IN THIS CONTEXT, OUR VIEW GET STRENGTHENED BY THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF ITO VS. D.G. HOUSING PROJECTS LTD (2012) 343 ITR 329 (DELHI.), WHEREIN IT HAS BEEN HELD THAT THE MATTER CANNOT BE REMITTED TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION BY THE CIT WITHOUT RECORDING A FINDING THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. 14. THE LEARNED COMMISSIONER OF INCOME TAX CAN ALSO INVOKE JURISDICTION UNDER SECTION 263 OF THE ACT IN A SITUATION WHEN THERE IS A LACK 19 OF ENQUIRY. IF THERE IS AN INQUIRY, HOWEVER, INADEQUATE IT MAY BE, IT DOES NOT GIVE JURISDICTION TO THE LEARNED COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT TO SUBSTITUTE HIS OPINION. IN THE PRESENT CASE CIT HIMSELF HAS QUOTED THE REPLY OF THE ASSESSEE IN HIS SHOW CAUSE. THOUGH IT MAY NOT BE PROPER IN HIS OPINION. IN CASE OF DIFFERENCE OF OPINION, THE LEARNED COMMISSIONER OF INCOME TAX CANNOT INVOKE THE JURISDICTION UNDER SECTION 263 OF THE ACT. THIS VIEW ALSO GET SUPPORTED BY THE LANDMARK JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GABRIEL INDIA LTD. (1993) 203 ITR 108 (BOM). 15. IT IS A MATTER OF FACT THAT THE ASSESSING OFFICER BEING AN ADJUDICATING OFFICER HAS TO FORM AN OPINION ON THE BASIS OF EVIDENCE, WHICH HE HAS DULY DONE. IF THE LD. CIT ON THE SAME SET OF EVIDENCE FORMS AN OPINION, IT BEING A QUESTION OF FACT, DOES NOT GIVEN HIM JURISDICTION TO REVISE THE SAME U/S 263 OF THE ACT. THIS IS CERTAINLY A CASE OF DIFFERENCE OF OPINION BETWEEN ASSESSING OFFICER AND CIT. THE ONLY CONTENTION OF THE CIT SEEMS THAT THE ASSESSING OFFICER SHOULD HAVE MADE FURTHER ENQUIRES/INVESTIGATION, WHICH HE HAS NOT DONE. HOWEVER, FOR ASSUMING JURISDICTION U/S 263, ONE HAS TO KEEP IN MIND THE DISTINCTION BETWEEN LACK OF INQUIRY AND INADEQUATE ENQUIRY. IF THERE WAS AN ENQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE CIT TO PASS ORDER U/S 263, MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER. IT IS ONLY IN CAS E OF LACK OF INQUIRY THAT SUCH A CAUSE OF ACTION COULD BE OPEN. ASSESSING OFFICER CALLED FOR ACTION, ASSESSEE REPLIED TO THE ASSESSING OFFICER, ASSESSING OFFICER ACCEPTED AND EVEN IN THE OFFICE 20 NOTE MEANT FOR INTERNAL PURPOSES HE MENTIONS THAT THE ASSESSEE HAS SUBSTANTIATED THE JEWELLERY SEIZED. IN VIEW OF THESE EVIDENCES, THIS IS NOT A CASE OF LACK OF INQUIRY EITHER. 16. IN VIEW OF THE ABOVE ANALYSIS, WE DO NOT FIND ANY ERROR IN THE ORDER OF ASSESSING OFFICER. HENCE, WE SET ASIDE THE ORDER OF LD. CIT MADE U/S 263 OF THE ACT AS THE ORDER OF THE ASSESSING OFFICER IS NOT FOUND TO BE ERRONEOUS. 11. FURTHER AS HELD IN THE CASE OF M/S GOPAL CASTINGS (P) LTD. ALSO, THE ADDITION ON MERIT MADE ON IDENTICAL ISSUE IN THE CASE OF SHRI ASHISH SINGLA & OTHERS HAS BEEN DELETED BY THE I.T.A.T. IN ITA NO.129/CHD/ 2014 FOR THE SAME ASSESSMENT YEAR. IN SUCH CIRCUMSTANCE S, WHERE IT WAS SETTLED THAT THERE WAS NO BASIS FOR SUBSTITUTING THE PURCHASE PRICE OF THE SHARES OF PR AGATI NIRMAN AT RS.6154/- LEAST OF ALL ON THE BASIS OF DOCUMENTS FOUND DURING SEARCH FROM THE PREMISES OF SHRI SURINDER GULATI, THERE WOULD BE NO JURISDICTION WI TH THE LEARNED COMMISSIONER OF INCOME TAX TO PROCEED WITH THE PROVISION U/S 263 OF THE ACT AND NO PURPOSE WOULD S ERVE TO UPHOLD THE ORDER OF THE LD.PRINCIPAL CIT U/S 263 OF THE ACT. THE I.T.A.T., CHANDIGARH BENCH IN M/S LAKSHMI ENERGY & FOODS LTD. VS. CIT CENTRAL IN ITA NO.329/CHD/2015 VIDE ORDER DATED 18.4.2016 HAS HEL D THAT WHEN PARTICULAR ISSUE HAS BEEN DECIDED BY THE I.T.A.T. IN FAVOUR OF THE ASSESSEE, THE SAME IS BIN DING ON ALL LOWER AUTHORITIES AND THE ASSESSING OFFICER HAV ING TAKEN THE SAME VIEW AS THAT OF THE I.T.A.T. THE ORD ER OF THE 21 ASSESSING OFFICER CANNOT BE TINKERED WITH BY THE COMMISSIONER U/S 263 OF THE ACT. THE RELEVANT FIND INGS AT PARAS 10 AND 11 OF THE ORDER ARE AS UNDER: 10. FOR INVOKING JURISDICTION UNDER SECTION 263 OF THE ACT, TWIN CONDITIONS OF THE ORDER BEING ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE ARE TO BE SATISFIED SIMULTANEOUSLY. WE ARE UNABLE TO UNDERSTAND THAT ONCE THE PARTICULAR ISSUES HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE I.T.A.T., EVEN IF IN EARLIER ASSESSMENT YEARS, HOW THE COMMISSIONER OF INCOME TAX CAN INFER THAT THE SAME VIEW HAVING BEEN TAKEN BY THE ASSESSING OFFICER IN SUBSEQUENT ASSESSMENT YEAR, IS ERRONEOUS. THIS IS TOTALLY AGAINST THE PRINCIPLES OF JUDICIAL DISCIPLINE AND BINDING PRECEDENT. IT IS THE SPIRIT OF LAW THAT THE VIEW TAKEN BY A HIGHER AUTHORITY IS BINDING ON ALL THE LOWER AUTHORITIES. VIEW TAKEN BY I.T.A.T. IS BINDING ON ASSESSING OFFICER AS WELL AS CIT (APPEALS) AND EVEN ON COMMISSIONER OF INCOME TAX, ASSUMING JURISDICTION UNDER SECTION 263 OF THE ACT. EVEN IF AT THE TIME OF PASSING THE ORDER, THE ASSESSING OFFICER DID NOT HAVE THE BENEFIT OF THE ORDER OF THE I.T.A.T. IN EARLIER YEARS, THE COMMISSIONER OF INCOME TAX, WHILE ASSUMING JURISDICTION UNDER SECTION 263 HAD THE BENEFIT OF THE SAME. THEREFORE, THE ORDER WAS BINDING ON COMMISSIONER OF INCOME TAX. 11. SINCE THE ISSUES HAVE BEEN SETTLED BY THE I.T.A.T. AND THE SAME VIEW HAS BEEN TAKEN BY THE ASSESSING OFFICER, NOW IN THE GARB OF PROCEEDINGS UNDER SECTION 263 OF THE ACT, THE COMMISSIONER OF INCOME TAX CANNOT TINKER WITH HER ACT STATING THAT THE SAME DOES NOT 22 COMMENSURATE WITH THE FINDINGS GIVEN BY THE ASSESSING OFFICER AND CIT (APPEALS) IN EARLIER YEARS. IN THIS ORDER OF THE COMMISSIONER OF INCOME TAX, WE DO NOT FIND EVEN AN IOTA OF EVIDENCE AND OBSERVE THAT THE COMMISSIONER OF INCOME TAX HAS NOT BEEN ABLE TO BRING ON RECORD ANY OF THE INFERENCES DRAWN BY THE ASSESSING OFFICER, WHICH IS NOT AS PER THE VIEW OF THE I.T.A.T. GIVEN IN EARLIER ASSESSMENT YEARS. IN VIEW OF THIS, WE DO NOT FIND ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER, NOT TO TALK ABOUT THE PREJUDICE TO THE INTEREST OF THE REVENUE. THEREFORE, IN OUR VIEW, THE JURISDICTION ASSUMED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT IS NOT AS PER LAW. 12. IN VIEW OF THE ABOVE AND IN THE LIGHT OF VARIO US ORDERS REFERRED TO ABOVE, WE ARE OF THE VIEW THAT T HE PROCEEDINGS U/S 263 OF THE ACT ARE CLEARLY BEYOND COMPETENCE OF THE LD.PRINCIPAL CIT AND WHOLE PROCEE DINGS ARE UNJUSTIFIED AND UNREASONABLE. WE, THEREFORE, S ET ASIDE THE IMPUGNED ORDER U/S 263 OF THE ACT. 13. THE APPEAL OF THE ASSESSEE IS ALSO IN THE ABOV E TERMS. ITA NO.424/CHD/2015(SMT.RUCHI SINGLA): & ITA NO.431/CHD/2015(SHRI MANISH SINGLA): 14. IT IS RELEVANT TO OBSERVE HERE THAT THE FACTS AND CIRCUMSTANCES OF THESE TWO APPEALS ARE SIMILAR TO T HAT OF SMT.RADHA AGGARWAL IN ITA NO.429/CHD/2015 AND THE FINDINGS GIVEN IN ITA NO.429/CHD/2015 SHALL APPLY TO THESE APPEALS ALSO WITH EQUAL FORCE. 23 15. BOTH THESE APPEALS OF THE ASSESSEES ARE ALLOWE D IN THE ABOVE TERMS. 16. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE S ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18 TH APRIL, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH