SHRI RAGHAV CHANDRA, Bhopal V. The CIT, Bhopal

ITA 425/IND/2014

• Counselvise Citation: 42522714 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Revision of order; Depreciation; Search and seizure; Loose papers; Document seized; Question of law; Corroborative evidences; Documents seized; Revenue expenditure; Capital expenditure
• Section: 142(1); 80HHC; 133(6); 263; 63; 132; 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO.425/IND/2014 A.Y. : 2009-10 SHRI RAGHAV CHANDRA, C/O A.K. SURANA & COMMISSIONER OF INCOME-TAX, ASSOCIATES, VS. BHOPAL H-38, NISHAT COLONY, 74, BUNGALOWS, BHOPAL APPELLANT RESPONDENT PAN NO. AAEPC2866J APPELLANT BY : SHRI SUMIT NEMA, ADVOCATE RESPONDENT BY : SMT.A S HIMA GUPTA, CIT DR DATE OF HEARING : 24.06.2015 DATE OF PRONOUNCEMENT : 04 .0 8 .2015 -: 2: - O R D E R PER GARASIA, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX, BHOPAL, DATED 27.03 .2014 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSING OFFICER HAS MADE THE ASSESSMENT OF ONE SHRI RAGHAV CHANDRA, WHO WAS THEN PRINCIPAL SECRETA RY, URBAN DEVELOPMENT & ADMINISTRATION, GOVERNMENT OF M ADHYA PRADESH. DURING THE SEARCH ARID SEIZURE ACTION U/S 132 OF INCOME TAX ACT 1961 AT THE RESIDENCE OF SHRI MUKESH SHARMA ON 21.07.2008 CERTAIN DOCUMENTS WERE FOUND AND SEIZ ED. BASED ON THESE DOCUMENTS, DETAILED ENQUIRIES WERE C ARRIED BY THE INCOME TAX AUTHORITIES. THE NATURE OF THESE SEI ZED DOCUMENTS AND THE FINDINGS OF THESE ENQUIRES ARE EL ABORATELY DISCUSSED IN PARAS 1 & 2 OF NOTICE U/S 142(1) DATE D 09.12.2010 ISSUED BY THE ASSESSING OFFICER. THESE D OCUMENTS SHOW RECEIPT OF ILLEGAL GRATIFICATION BY THE ASSESS EE WHILE WORKING AS PRINCIPAL SECRETARY, URBAN DEVELOPMENT A ND -: 3: - ADMINISTRATION, GOVERNMENT OF MADHYA PRADESH FROM V ARIOUS COMPANIES TO WHOM CONTRACTS WERE AWARDED BY URBAN DEVELOPMENT AND ADMINISTRATION DEPARTMENT, GOVERNME NT OF MADHYA PRADESH. THE SEIZED DOCUMENTS ALSO SHOW RECE IPT OF ILLEGAL GRATIFICATION BY THE ASSESSEE ALONG WITH SH RI NAROTTAM MISHRA, THEN MINISTER, URBAN DEVELOPMENT & ADMINIST RATION, GOVERNMENT OF MADHYA PRADESH AND OTHERS. IN THE CAS E OF SHRI NAROTTAM MISHRA, THE ASSESSING OFFICER ISSUED NOTIC E U/S. 133(6) TO MUNICIPAL COMMISSIONER, INDORE PRINCIPAL SECRETARY, DEPARTMENT OF URBAN DEVELOPMENT, BHOPAL AND THE COMMISSIONER, URBAN DEVELOPMENT, BHOPAL. THROUGH TH ESE NOTICES, THE ASSESSING OFFICER HAS CALLED FOR ORIGI NAL FILES OF AWARD OF CONTRACT OF SEWERAGE LINE TO M/S.NAGARJUN CONSTRUCTION CO. LTD AND M/S. SIMPLEX INFRASTRUCTUR E LTD, ALONGWITH A SET OF XEROX COPIES OF ORIGINAL FILES. THESE NOTICES WERE NOT COMPLIED BY THESE PERSONS. THE ASSESSING O FFICER PASSED THE ASSESSMENT ORDERS WITHOUT COMPLETING THE SE ENQUIRIES. IN THE ASSESSMENT ORDER THE ASSESSING OF FICER HAS ELABORATELY DISCUSSED THE FIVE PRIMARY EVIDENCES FO UND DURING SEARCH AND SEIZURE ACTION U/S. 132 AT THE RESIDENCE OF SHRI -: 4: - MUKESH SHARMA, WHICH READS AS UNDER :- S.NO. PANCHNAMA AND OTHER DETAILS OF EVIDENCE COLLECTION TRUTH DISCLOSED BY THIS EVIDENCE RELEVANCE OF EVIDENCE TO THE PRESENT CASE OF ASSESSEE PRIMARY EVIDENCE NUMBER 1 OPERATIONS OF SEARCH & SEIZURE U/S 132 OF THE INCOME-TAX ACT WERE CARRIED OUT AT THE OFFICE AND RESIDENTIAL PREMISES OF SHRI MUKESH SHARMA WHO WAS AT THAT TIME RESIDING AT B- 99, RAJ VAIDH COLONY, KOLAR ROAD, BHOPAL. THE DOCUMENTS FOUND AT RESIDENCE OF MUKESH SHARMA ARE CONSIDERED TRUE IN VIEW OF SECTION 292C OF INCOME-TAX ACT, 1961.. (I)DOCUMENTS RELATING TO, REQUESTS FOR TRANSFER & POSTING OF OFFICIALS/OFFICERS OF URBAN DEVELOPMENT DEPARTMENT. (II) DOCUMENTS RELATING TO REQUESTS FOR FUNDS ALLOCATION IN THE URBAN DEV ELOPEMENT DEPARTMENT. (III) DOCUMENTS RELATING TO INCURRING OF EXPENDITURE BY SHRI MUKESH SHARMA FOR TRAVEL AND STAY OF OFFICIALS/OFFICERS OF URBAN DEVELOPMENT DEPARTMENT. (IV) DOCUMENTS RELATING TO ILLEGAL GRATIFICATION PAID TO OFFICIALS/OFFICERS OF URBAN DEVELOPMENT DEPARTMENT. (V) DOCUMENTS RELATING TO TENDERS/CONTRACTS OF VARIOUS NAGAR NIGAMS/NAGAR PALIKAS ETC. LINK OF ASSESSEE WITH SRI MUKESH SHARMA WITH MINISTER OF URBAN DEVELOPMENT THE NUMBER OF DOCUMENT SIS VERY LARGE. THESE DOCUMENTS HAVE BEEN FOUND IN THE RESIDENCE & OFFICE OF PRIVATE INDIVIDUAL. THESE DOCUMENTS CONCLUSIVELY PROVE THAT SHRI MUKESH SHARMA WAS YIELDING SUBSTANTIAL INFLUENCE IN THE URBAN DEVELOPMENT DEPARTMENT AND WAS IN A SO POWERFUL POSITION AS TO INFLUENCE TRANSFER/POSTINGS., AWARD OF CONTRACTORS/TENDERS ETC. YOU WERE ASKED FOLLOWING QUESTIONS WHICH HAVE BEEN DENIED BY YOU. (I) WHETHER YOU KNOW OR HAVE EVER KNOWN SHRI MUKESH SHARMA. (II) HAVE YOU EVER MET HIM ? IF SO, HOW MANY TIMES AND WHAT WAS THE PURPOSE OF SUCH MEETINGS. (III) WHETHER HE USED TO VISIT YOUR RESIDENCE & OFFICE. IF SO, HOW MANY TIMES AND WHAT WAS THE PURPOSE OF SUCH VISITS. (IV) WHETHER YOU & YOUR FAMILY MEMBERS EVER VISITED HIS OFFICE OR RESIDENCE. IF SO, HOW MANY TIMES AND WHAT WAS THE PURPOSE OF SUCH VISITS. (V) HAVE YOU EVER TALKED TO HIM ON LAND LINE OR MOBILE PHONES. IF SO, HOW MANY TIMES AND WHAT WAS THE PURPOSE OF SUCH -: 5: - CALLS. (VI) HAVE YOU EVER TALKED TO HIM ON MOBILE NOS. IF SO, HOW MANY AND WHAT WAS THE PURPOSE OF SUCH CALLS. (VII) WHETHER YOU OR YOUR FAMILY MEMBERS EVER HAD ANY FINANCIAL TRANSACTIONS WITH HIM. PLEASE GIVE DETAILS. THOUGH YOU HAVE DENIED THE ABOVE QUESTIONS IN SUBMISSION, BUT IT WAS PROVED TO THE CONTRARY. IT IS FOUND FROM THE DOCUMENTS SEIZED THROUGH SEARCH ACTION ON SRI MUKESH SHARMA U/S 132 OF INCOME-TAX ACT, 1961, THAT HE WAS AN INTERMEDIARY FOR FACILITATING THE WORK FROM THE MINISTERS AND OFFICERS OF DEPARTMENT OF URBAN DEVELOPMENT. SRI MUKESH SHARMA HAS BEEN FOUND TO BE A LIASIONING INTERMEDIARY FOR THE PRACTICES OF TRANSFER AND POSTING AND FUND ALLOCATION. THE DOCUMENTS IN HIS POSSESSION ARE PROVING HIM TO BE A LIAISONING INTERMEDIARY A LIASIONING INTERMEDIARY. PRIMARY EVIDENCE NO. 2 LOOSE SHEETS 1/1, PAGE FROM MATRIX PAD, COLLECTED FROM RESIDENCE OF MUKESH SHARMA (B-99, RAJVED COLONY, KOLAR ROAD, BHOPAL I.THE WORD MAYOR IS CLEARLY WRITTEN ON THIS PIECE OF EVIDENCE. II.M & NETAJI MENTIONED IN THESE DOCUMENTS REFERS TO THE MINISTER URBAN DEVELOPMENT, M.P. BECAUSE SHRI MUKESH SHARMA ADDRESSED THE THEN MINISTER OF URBAN DEVELOPMENT, AS NETAJI III.PP MENTIONED IN THESE NO. 267 HAS BEEN CORROBORATED WITH PERFECT PROOF. THE PERCENTAGE FIGURE OF 6 % IS RS. 16.02 CRORE WHICH HAS BEEN PROVED TO BE TRANSFERRED FROM NAGARJUNA CONSTRUCTION COMPANY THROUGH AN ELABORATE CHAIN OF PERSONS. THIS EVIDENTIARY PROOF OF TRANSFER OF FUND IS DESCRIBED IN -: 6: - DOCUMENTS REFERS TO PRINCIPAL SECRETARY, URBAN DEVELOPMENT DEPARTMENT, M.P. IV. THE C MENTIONED IN THESE DOCUMENTS REFERS TO COMMISSIONER. V. THE NUMBER 267 IS HAVING MONETARY VALUE IN RUPEE AND IN CRORES. THIS AMOUNT OF 267 IS EXACTLY MATCHING WITH THE AMOUNT OF CONTRACT AWARDED TO NAGARJUNA CONSTRUCTION COMPANY FOR SEWERAGE WORK IN INDORE SUPERVISED OUT BY NAGAR NIGAM, INDORE. VI. THE FIGURE IN PERCENTAGES ARE EXACTLY MATCHING WITH THE COMPUTED FIGURES OF 16.02 CRORES, 3.337 CRORES, 1.3350 CRORES, 2.67 CRORES AND 1.3350 CRORES. DETAIL IN SUBSEQUENT PARAGRAPHS. THE WORD MAYOR IS CLEARLY WRITTEN AGAINST 1.0 THEREFORE IT IS THE SECOND M IN THE SECOND PAGE. THEREFORE FIRST M HAS TO BE A PERSON FROM CHAIN OF HIERARCHY. THE EVIDENCE NO. 3 IS CLEARLY SHOWING THE WORD COMMISSIONER. THEREFORE, THIS VERTICAL ARRANGEMENT S OF ALPHABETS ARE DESCRIBING THE CHAIN OF HIERARCHY IS THE SET UP OF GOVERNMENT OF M.P. THE AMOUNT OF MONEY WHICH IS RECEIVED IS HIGHEST FOR THE WORD M WRITTEN AT TOP WHICH IS 6 % OF TOTAL AMOUNT. THEREFORE, THIS PERSON M HAS TO BE A PERSON WHO IS OCCUPYING THE TOP PLACE IN THE HIERARCHY. THE TOP PLACE IS OCCUPIED BY MINISTER. THEREFORE, FOLLOWING 3 INFERENCES ARE LEADING TO INTERPRETATION OF WORD M AS MINISTER OF URBAN DEVELOPMENT. 1. THE EXISTENCE OF WORDS MAYOR AND EXISTENCE OF WORD COMMISSIONER IS SHOWING THIS VERTICAL ARRANGEMENT OF WORDS TO BE A GOVERNMENT HIERARCHY. 2. THE RELATIVE WEIGHTAGE OF MONEY DISTRIBUTION IS ASSIGNING THE RELATIVE POST WHICH IS DESCRIBED BY THIS HIERARCHY. THE HIGHEST SHARE HAS GONE TO PERSON REFERRED BY 1 ST M WHO HAS AGREED TO RECEIVE RS. 16.02 CRORE FROM SHRI MUKESH SHARMA. 3. THE SECOND PERSON WHO IS BEING REFERRED IS P IS THE PRINCIPAL SECRETARY WHO IS -: 7: - THE SECOND PERSON IN HIERARCHY. THE PRINCIPAL SECRETARY HAS AGREED TO RECEIVE RS. 3.33 CRORE FROM SHRI MUKESH SHARMA. 4. THE THIRD PERSON REFERRED TO AS C IS THE COMMISSIONER OF URBAN DEVELOPMENT DEPARTMENT WHOSE OFFICE IS LOCATED IN BHOPAL. THE SHARE OF PERCENT SHOWS HIS RELATIVELY LESSER INVOLVEMENT IN THE DEAL BUT HOWEVER HE AGREED TO RECEIVE THIS AMOUNT. 5. THE FOURTH PERSON WHO HAS BEEN REFERRED I 3 RD M WHICH IS WRITTEN CLEARLY AS MAYOR OF NAGAR NIGAM INDORE WHO IS THE INSPECTING AND APPROVING AUTHORITY FOR THE WORK OF SEWERAGE. THE MAYOR HAS AGREED TO RECEIVE RS. 2.67 CRORE. 6. THE 5 TH PERSON WHOSE NAME HAS NOT BEEN REFERRED IS COMMISSIONER OF NAGAR NIGAM INDORE WHO HAS AGREED TO RECEIVE RS. 1.33 CRORE. THIS NAME OF COMMISSIONER OF NAGAR NIGAM HAS NOT BEEN WRITTEN IN THIS PLACE. BUT THE VERTICAL CHAIN OF ARRANGEMENT OF GOVERNMENT HIERARCHY IS CLEARLY INDICATING THIS MISSING PERSON TO BE THE COMMISSIONER OF NAGAR NIGAM, INDORE. PRIMARY EVIDENCE NO. 3 LOOSE PAPER PAPER SHEETS 1/1, PAGE FROM MATRIX PAD, COLLECTED FROM RESIDENCE OF MUKESH SHARMA (B-99, RAJVED COLONY, KOLAR ROAD, BHOPAL THIS CONTAINS THE ACRONYM OF NAGAR AND SIMPLEX. THE NUMBER WRITTEN AGAINST THEM ARE EXPRESSED IN THE MONETARY VALUE IN RUPEES IN CRORE. THIS AMOUNT IS EXACTLY MATCHING WITH THIS RS. 266.87 CRORE HAS BEEN ROUNDED OFF AND SHOWN AS RS. 267 CRORE IN THE 1 ST EVIDENCE. -: 8: - AMOUNT OF AWARDED CONTRACT PRIMARY EVIDENCE NO. 4 LOOSE PAPER SHEETS 1/1, PAGE FROM MATRIX PAD COLLECTED FROM RESIDENCE OF MUKESH SHARMA (B-99, RAJVED COLONY, KOLAR ROAD, BHOPAL. THIS EVIDENCE SHOWS THE LETTER M, LETTER P AND WORD COMMISSIONER. THE USE OF NUMBERS 15 TH AND 30 TH ARE INFERRED TO BE THE DATES. THE USE OF ACRONYM CR SHOWS TO BE CRORE. IT IMPLIES THE RELATION OF RS. ONE CRORE ON 15 TH WITH REFERENCE TO MINISTER. SIMILARLY 30 TH IS ALSO HAVING A RELATION WITH RUPEES 1.6 CRORE. SIMILARLY, THE COMMISSIONER IS ALSO HAVING LINKAGES WITH RS. 44 LAKH ON 15 TH AND ANOTHER TRANCH OF RS. 44 LAKH ON 30 TH . THIS EVIDENCE PROVES THAT VERTICAL ARRANGEMENT OF LETTERS DENOTES THE BUREAUCRATIC HIERARCHY OF URBAN DEVELOPMENT DEPARTMENT. PRIMARY EVIDENCE NUMBER 5 LOOSE PAPER SHEETS 1/1, PAGE FROM MATRIX PAD, COLLECTED FROM RESIDENCE OF MUKESH SHARMA (B-99, RAJVED COLONY, KOLAR ROAD, BHOPAL. THE EVIDENCE SCANNED SHOWS DETAILED COMPUTATION DONE BY SHRI MUKESH SHARMA. THE MOST STRIKING DISPLAY HERE IS OF USE OF WORD NETAJEE. THIS EVIDENCE PROVES THAT VERTICAL ARRANGEMENT OF LETTERS DENOTES THE BUREAUCRATIC HIERARCHY OF URBAN DEVELOPMENT DEPARTMENT. 3. AFTER CONSIDERING THESE EVIDENCES, THE AO HELD THAT NO. 267 HAS BEEN CORROBORATED WITH PERFECT PROOF. THE R ELATIVE WEIGHTAGE MONEY DISTRIBUTION IS ASSIGNED TO RELATIV E POST, WHICH IS DESCRIBED BY HIERARCHY, HIGHEST SHARE HAS GONE TO PERSON RECORDED BY M, WHO HAS AGREED TO RECEIVE R S. 16.04 CRORES FROM MUKESH SHARMA. THE SECOND PERSON BEING REFERRED AS S.P. AND PRINCIPAL SECRETARY AGREED TO RECEIVE RS. 3.33 CRORES FROM MUKESH SHARMA. THE AO HAS MADE ENQ UIRY AND FOUND THAT THE ASSESSEE HAS RECEIVED ILLEGAL GR ATIFICATION OF RS. 3.3 CRORES @ RS. 1.25 CRORE OF TOTAL AMOUNT OF RS -: 9: - 266087 CRORES AWARDED TO NAGARJUN CONSTRUCTION DURI NG THE ASSESSEES TENURE AS PRINCIPAL SECRETARY, URBAN DEV ELOPMENT AND ADMINISTRATION, GOVERNMENT OF MADHYA PRADESH. T HE AO HAS HELD THAT THESE EVIDENCES OF UNACCOUNTED GRATIF ICATION FOUND DURING THE COURSE OF SEARCH WERE NOT ADEQUATE AND SUFFICIENT TO MAKE ADDITION IN VIEW OF SECTION 34 O F THE EVIDENCE ACT. MOREOVER, THE AO HAS REFERRED THE SEI ZED DOCUMENTS, WHICH SHOWS THE FIGURE OF 175.34 APPEARS AGAINST SIMPLEX AND 26687 AGAINST NAGAR. THIS IS ACRONYM OF NAGAR AND SIMPLEX, PRINCIPAL WRITTEN AGAINST THEM ARE EXP RESSED IN MONETARY VALUE IN RUPEES AND CRORES. THIS AMOUNT IS EXECUTED MATCHING WITH THE AMOUNT OF AWARD. THESE DOCUMENTS ALSO LEAD TO REASONABLE CONCLUSION THAT T HE ASSESSEE HAS RECEIVED ILLEGAL GRATIFICATION OF RS. 2.18 CRORES @ RS.1.25 CRORE OF TOTAL CONTRACT AMOUNT ON RS. 175.3 0 CRORES ALLOTTED TO SIMPLEX INFRASTRUCTURE DURING THE TENUR E OF PRINCIPAL SECRETARY, URBAN & DEVELOPMENT, M.P. THE AO HELD THAT UNACCOUNTED GRATIFICATION FOUND DURING THE COU RSE OF SEARCH WAS NOT ADEQUATE AND NOT SUFFICIENT TO MAKE ADDITION IN VIEW OF SECTION 34 OF EVIDENCE ACT. DURING THE C OURSE OF -: 10: - SEARCH AND SEIZURE U/S 132 OF THE INCOME-TAX ACT, 1 961, AT THE RESIDENCE OF SHRI MUKESH SHARMA, CERTAIN DOCUME NTS WERE FOUND AND SEIZED. THE SEIZED DOCUMENTS INCLUDE D DOCUMENTS REGARDING AWARD OF CONTRACT OR RE-ORGANIZ ATION OF WATER SUPPLY OF UJJAIN CITY. THE SEIZED DOCUMENTS R EAD ALONGWITH OTHER SEIZED DOCUMENTS GIVE A REASON TO B ELIEF THAT UNACCOUNTED GRATIFICATIONS HAVE BEEN RECEIVED IN RE SPECT OF THIS CONTRACT. THE AO DID NOT CARRY OUT ANY ENQUIRY ON THIS ISSUE AND COMPLETED THE ASSESSMENT ORDER WITHOUT CA RRYING OUT PROPER ENQUIRIES. THUS, THE ORDER IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. THEREFO RE, SHOW CAUSE NOTICE WAS GIVEN AND IN REPLY TO SHOW CAUSE N OTICE, THE ASSESSEE FILED THE WRITTEN SUBMISSIONS, WHICH READS AS UNDER :- IN THE INITIAL PARA OF THE ORDER, THE A.O. HAS RECO RDED ABOUT HIS METHODOLOGY AND THE PROCEDURE HE FOLLOWED, AS ALSO THE BASIS FOR HIS EVENTUAL FINDINGS: THAT THE ASSESSEE WAS SERVED WITH A DETAILED SPECIF IC QUESTIONNAIRE U/S. 142(1) OF THE L.T. ACT 1961. ASSESSEE SUBMITTED REPLIES FROM TIME TO TIME. ASSESSEE AGAIN SUBMITTED A DETAILED SUBMISSION ON -: 11: - ADMISSIBILITY OF DIARIES, AS EVIDENCE ON 15.12.2011 . THE EXECUTIVE ENGINEER SHRI JADON WAS CALLED FOR EN QUIRY ON SUMMONS. VARIOUS BANK ACCOUNTS OF THE ASSESSEE WERE ALSO EXA MINED IN DETAIL. GUIDANCE WAS SOUGHT FROM JOINT COMMISSIONER OF INCO ME TAX U/S 144A, WHICH WAS DULY RECEIVED AND KEPT ON R ECORD ON 28 TH DECEMBER, 2011 THE EVIDENCES WERE APPRAISED OR ASSESSED AS PER THE PROVISIONS OF THE INCOME TAX ACT, 1961. THE FURTHER FINDINGS OF THE A.O. ARE THAT IN THE SE ARCH ACTION U/S. 132 ON SHRI MUKESH SHARMA, VARIOUS EVIDENCES WERE F OUND, AND THESE EVIDENCES WERE APPRAISED. THE A.O. THEN IN TH E COURSE OF ASSESSMENT PROCEEDINGS MADE A DETAILED ENQUIRY OF T HESE LOOSE SLIPS / DUMB PAPERS FOUND WITH MUKESH SHARMA. HE HA S ALSO RECORDED A FINDING THAT THE EVIDENCES HAVE BEEN CLA SSIFIED IN THE FORM OF TABLE OF PRIMARY EVIDENCES AND TABLE OF COR ROBORATIVE EVIDENCES AND THEN THE EVIDENCES HAVE BEEN APPRAISE D OR ASSESSED AS PER THE PROVISIONS OF THE INCOME TAX AC T, 1961. THE ASSESSING OFFICER HAS FURTHER STATED THAT APPRAISAL OF EVIDENCE HAS BEEN CARRIED OUT IN VIEW OF SECTION 34 OF INDIA N EVIDENCE ACTTHAT AN ENTRY MAY BE RELEVANT BUT IS NOT SUFFIC IENT WITHOUT OTHER EVIDENCE TO PROVE THE CREDENCE OF AN ALLEGATI ON. FINALLY THE -: 12: - A.O. CONCLUDED HIS FINDINGS IN THE LAST PARA OF THE ORDER AS UNDER: THEREFORE THE TABLE OF PRIMARY EVIDENCE PROVIDES T HE FIVE ROWS CONTAINING DETAILS OF FIVE PRIMARY EVIDEN CES WHICH HAVE FORMED THE BASIS OF ENQUIRY IN THE INSTA NT ASSESSMENT. THE COLLECTION OF INFORMATION AFTER THE COLLECTION OF PRIMARY EVIDENCE HAS BEEN SHOWN IN TH E FORM OF TABLE OF CORROBORATIVE EVIDENCES WHICH HAS NOT YIELDED ANY RESULT. OTHER CORROBORATIVE EVIDENCE IS NOT PRESENT IN THE INSTANT CASE OTHER THAN DIARY ENTRIE S. THEREFORE ASSESSEE CANNOT BE CHARGED TO THE TAX WIT H AVAILABLE INFORMATION. THE ASSESSEE HAS PLACED RELIANCE ON SEVERAL CASES. HOWEVER 1 CONSIDER SECTI ON 34 TO INTERPRET THE FIVE ROWS OF THE TABLE OF PRIMA RY EVIDENCES IN LIGHT OF NIL CORROBORATIVE EVIDENCES. THEREFORE, RETURNED INCOME OF THE ASSESSEE IS ACCEPTED HOWEVER, DESPITE THE AFORESAID BACKGROUND OF THIS C ASE, IT IS SURPRISING THAT YOU HAVE CHOSEN TO ISSUE A NOTICE U /S. 263 ON THE GROUND THAT THE ASSESSMENT ORDER PASSED BY T HE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. -: 13: - IN THE SAID NOTICE, YOUR CONTENTIONS ARE THAT (I) T HAT THE SEIZED DOCUMENTS FOUND IN THE COURSE OF SEARCH WITH MUKESH SHARMA SHOW THE RECEIPT OF ILLEGAL GRATIFICA TION FOR THE AWARD OF CONTRACT OF SEWERAGE LINE FROM NAGARJU NA CONSTRUCTION CO. LTD., AND SIMPLEX INFRASTRUCTURE L IMITED (II) THAT CONTRACTS IN QUESTION WERE AWARDED BY THE URBA N DEVELOPMENT DEPARTMENT OF THE GOVERNMENT OF MADHYA PRADESH (III) THAT THE A.O. PASSED THE ASSESSMENT O RDER WITHOUT COMPLETING THE REQUISITE ENQUIRIES OF CONTR ACTS AWARDED BY THE MUNICIPAL CORPORATIONS OF INDORE AND UJJAIN (IV) THAT RIGORS OF EVIDENCE ACT DO NOT APPLY TO PR OCEEDINGS UNDER I.T. ACT (V) THAT A.O. HAS NOT CONDUCTED ANY ENQUIRY AND HAS COMPLETED THE ASSESSMENT BY HOLDING THAT NO CORROBORATIVE EVIDENCES HAVE BEEN FOUND, AND, THERE FORE, THE ORDER IS ERRONEOUS. IT IS POINTED OUT AND REITERATED YET AGAIN THAT THE SO-CALLED EVIDENCES AS REFERRED TO IN THE AFORESAID NOTICE U/ S. 263 ARE PURELY DUMB PAPERS, BECAUSE SUCH NOTING IS SENSELES S AND DOES NOT SPEAK ANYTHING EVEN REMOTELY DEFINITIVE AN D CREDIBLE (THE LETTER P CAN HAVE DIFFERENT GENRES OF MEANING, SUCH GENRES BEING PARLIAMENT, POLICE, PRESS, PARISH AD, POLITICS, PLACE, PARTY, AND FOR EACH GENRE COUNTLES S DIFFERENT NAMES CAN BE ASCRIBED). SO CALLED ALLEGED EVIDENCES ARE NOT -: 14: - F EVIDENCE AT ALL, AND ARE NOT CAPABLE OF AFFORDING A NY ADVERSE INFERENCE WHATSOEVER AGAINST THE ASSESSEE. EVIDENCE THAT IS DUMB IS NOT FIT TO BE EVEN CALLED PRIMARY EVIDENCE, AS IT IS AB-INITIO MISLEADING AND MENDACI OUS. THEY DO NOT SHOW AT ALL THAT THE ASSESSEE WAS INVOLVED W ITH THE MATTER LET ALONE PAID ILLEGAL GRATIFICATION AS ALLE GED IN YOUR AFORESAID NOTICE, AS THERE CANNOT BE AND THEREFORE HAS NOT BEEN ANY DEMONSTRATION OF FLOW OF FUNDS TO THE ASSE SSEE. EVEN BASED ON THE SO-CALLED EVIDENCE, THERE IS NO S UBSTANTIVE BASIS OR COGENT MATERIAL AGAINST THE ASSESSEE. THER E IS NO MATERIAL ON FACTS OR UNDER LAW WHICH CAN ON ANY REA SONABLE FAIR BASIS BE CONSIDERED TO BE MATERIAL AGAINST THE ASSESSEE. IF MERELY ON THE BASIS OF ONE INITIAL OF THE ALPHABET ON A DUMB PAPER AN UNRELATED PERSON TO THE TRANSACTION CAN BE SAID TO HAVE EARNED UNDISCLOSED INCOME, THEN SUCH ALLEGATIO N CAN WITHOUT MERIT OR FAIR PLAY BE MADE AGAINST ANY INNO CENT PERSON. IF THIS WAS PERMISSIBLE IT WOULD CAUSE GRAV E IRREPARABLE LOSS AND HARDSHIP TO INNOCENT PEOPLE. C LEARLY THIS CANNOT BE DONE. AS PER SETTLED LAW, ADDITION TO INC OME CANNOT BE MADE ON SUSPICION, CONJECTURES AND SURMISESPART ICULARLY WHEN THEY ARE UNFOUNDED AND UNWARRANTED. IN FACT, WHEN THE AO INITIALLY REFERRED TO THE SUSP ICIONS AS -: 15: - PRIMARY EVIDENCE HE HAS SELF-CORRECTED HIMSELF BY T AKING TIME TO CONDUCT AN INQUIRY INTO THE MATTER. AFTER THE IN QUIRY HE HAS ARRIVED AT THE CONCLUSION THAT SUSPICIONS OF UNACCO UNTED GRATIFICATION RAISED BY THE PIECES OF EVIDENCE FOUN D DURING THE COURSE OF SEARCH WERE NOT ADEQUATE AND SUFFICIENT T O MAKE ADDITION. BECAUSE THE A.O. MADE A DETAILED ENQUIRY IN THIS REGARD, AND BECAUSE HE DID NOT FIND ANY CORROBORATI VE MATERIAL, THAT IS THE REASON WHY EVEN AFTER THE DET AILED EXAMINATION, BECAUSE THERE WAS A SHEER ABSENCE OF CORROBORATIVE MATERIAL HE DID NOT MAKE ANY ADDITION . AT PAGE 3 OF THE ORDER, THE A.O. HAD ONLY MADE HIS OWN PREL IMINARY OBSERVATIONS ON ASSUMPTIONS AND PRESUMPTIONS WITH R EGARD THE EVIDENCE NO.2, AND INTERPRETED THE SAID DUMB PA PER IN A PARTICULAR WAY ONLY FOR THE PURPOSE OF ENQUIRY. HOW EVER, AFTER MAKING SUCH DETAILED ENQUIRY, THE AO STAUNCHL Y AVERRED THAT IN ABSENCE OF ANY CORROBORATING EVIDENCES, THE ASSESSEE CANNOT BE CHARGED TO TAX, AND THEREFORE HE RIGHTLY ACKNOWLEDGED AND CONCLUDED THE ASSESSMENT THAT THE ALLEGATIONS WERE NOT PROVEN AND ACCORDINGLY DID NOT MAKE ANY ADDITION ON THE BASIS OF SUCH DUMB DOCUMENTS. 4. WHILE ONCE AGAIN REECHOING THE SUSPICIONS THAT WERE RAISED AT THE -: 16: - ENQUIRY STAGE (AND THAT WERE THE CAUSE FOR THE ASSE SSING OFFICER TO TAKE THE HASTY STEP OF ISSUING A NOTICE UNDER SECTION 142 OF THE IT ACT BUT WERE FINALLY SETTLED AS UNCOR ROBORATED AND UNSUBSTANTIATED BY HIM), YOU HAVE OVERLOOKED TH E FACTS THAT CAME TO BE PLACED BEFORE THE ASSESSING OFFICER IN THE COURSE OF HIS DETAILED ENQUIRY. THESE SIGNIFICANT F ACTS ARE: I. THE ASSESSEE HAD NOTHING TO DO WITH THE PREPARATION OF EITHER THE DETAILED PROJECT REPORT F OR THE PROJECTS MENTIONED OR FOR THEIR REQUEST FOR QUALIFICATION/RFQ OR REQUEST FOR PROPOSAL/RFP PROCE SS, NOR DID HE EVALUATE OR APPROVE OR ISSUE LETTERS OF INTENT OR AWARD THE PROJECTS MENTIONED BY YOU (THIS HAS ALREADY BEEN DULY AFFIRMED BY THE ASSESSEE BEFORE T HE AO VIDE OUR LETTER DATED 29/12/2011) II. THE MUNICIPAL CORPORATIONS OF INDORE AND UJJAIN, AS ALSO ALL OTHER MUNICIPAL CORPORATIONS AND MUNICIPAL BODI ES ARE AUTONOMOUS BODIES. ACCORDINGLY, THEY ARE LOCAL SELF GOVERNMENTS, WITH FULL AUTONOMY TO PREPARE AND EXEC UTE PROJECTS (THIS HAS ALREADY BEEN DULY AFFIRMED BY TH E ASSESSEE BEFORE THE AO VIDE OUR LETTER DATED 29/12/2011). TH EY ARE SO EMPOWERED, NOT BY ANY EXECUTIVE DICTATE BUT BY VIRT UE OF THE DELEGATION OF POWERS UNDER THE 74 TH CONSTITUTIONAL AMENDMENT. SUCH PROJECTS ARE NEITHER BID OUT, NOR A WARDED, -: 17: - BY THE URBAN ADMINISTRATION DEPARTMENT, AS WRONGFUL LY SURMISED BY YOU, WHEN YOU HAVE STATED: VARIOUS COM PANIES TO WHOM CONTRACTS WERE AWARDED BY URBAN DEVELOPMENT AND ADMINISTRATION DEPARTMENT, GOVERNMENT OF MADHYA PRA DESH. HENCE, TO HYPOTHESIZE THAT EXAMINATION OF ANY DOCUM ENTS PERTAINING TO THESE CONTRACTS MIGHT HELP TO SUBSTAN TIATE THE ALLEGATIONS, IS UNFOUNDED, DILATORY AND ITSELF GROS SLY ERRONEOUS. PROJECTS OF THE KIND REFERRED TO ARE PREPARED, BID OUT, BIDS SCRUTINIZED, AND FINALLY APPROVED AND AWARDED NOT BY THE GOVERNMENT BUT BY THE MUNICIPAL CORPORATIONS O WN BODY OF TECHNICAL OFFICERS AND CONSULTANTS, THROUGH THEI R OWN INTERNAL SYSTEMS WHICH INCLUDE: COMMITTEES OF ENGIN EERS AND OFFICERS, ASSISTED BY CONSULTANTS. THE BIDS ARE EXA MINED AT VARIOUS LEVELS WITHIN THE MUNICIPAL CORPORATION AND FINALLY APPROVED BY THE MAYOR-IN-COUNCIL (PARISHAD SAMITI) COMPRISING OF THE MAYOR, THE MUNICIPAL COMMISSIONER , AND THE PARSHADS OR PARISHAD MEMBERS CHOSEN/SELECTED BY THE MAYOR FOR VARIOUS DIFFERENT VERTICALS WITHIN THE MUNICIPA L CORPORATION. THE PARISHAD COMPRISING OF PARSHADS OR CORPORATORS OF THE MUNICIPAL CORPORATION, THE PRESI DENT OF THE MUNICIPAL CORPORATION AND THE MAYOR ARE ALL ELECTED PUBLIC REPRESENTATIVES WHO HAVE EXECUTIVE AND STATUTORY PO WERS -: 18: - UNDER THE MUNICIPAL CORPORATION ACT, READ ALONG WIT H THE 74 TH CONSTITUTIONAL AMENDMENT. 5. THAT THE ASSESSEE DID NOT GRANT ANY FAVORS OR AWARD PROJECTS TO EITHER NAGARJUNA CONSTRUCTION OR SIMPLEX COMPANIES AND THAT THE ALLEGATIONS OF ILLEG AL GRATIFICATION ARE PREPOSTEROUS TO SAY THE LEAST (TH IS HAS ALREADY BEEN DULY AFFIRMED BY THE ASSESSEE BEFORE T HE AO VIDE OUR LETTER DATED 29/12/2011). 6. THAT THE PERSON SEARCHED HAD INFORMED THAT HE HAD SUBMITTED AN AFFIDAVIT TO THE EFFECT THAT HE HA S HAD NOTHING TO DO WITH THE ASSESSEE IN ANY WAY, NOR HAD HE ALLUDED REMOTELY TO HIM IN ANY WAY ANYWHERE (THIS H AS ALREADY BEEN DULY AFFIRMED BY THE ASSESSEE BEFORE T HE AO VIDE OUR LETTER DATED 29/12/2011). III. THE MAIN RATIONALE FOR YOUR NOTICE OF 31/12/2012 RELATES TO THE CASE OF ANOTHER TAX-PAYER. THIS IS A NOTHER CASE AND NOT ASSESSEES CASE. YOU HAVE STATED THAT CERTA IN FILES OF AWARD OF CONTRACTS WERE CALLED FROM THE MUNICIPAL C ORPORATION INDORE, BUT THE ASSESSING OFFICER PASSED THE ORDER WITHOUT COMPLETING THESE ENQUIRIES. AS YOU YOURSELF HAVE ST ATED, THESE FILES WERE REQUIRED FOR THE CASE OF SHRI NAROTTAM M ISRA, AND NOT IN ASSESSEES CASE. THIS IS A DIFFERENT CASE AND OF A DIFFERENT TAX-PAYER. AS STATED ABOVE, THESE DOCUMEN TS -: 19: - HAD NO DIRECT RELEVANCE TO ASSESSEES CASE. IN THIS CASE THE ASSESSING OFFICER LOOKED AT ALL THE FACTS OF TH E MATTER AND AFTER CONDUCTING DETAILED ENQUIRY HE WAS CONVINCED AND ACCORDINGLY PASSED A LEGAL ORDER. HENCE, TO NOW SAY THAT THESE FILES WERE SOUGHT BY HIM IN A SSESSEES CASE IS INCORRECT. THIS, THEREFORE, CANNOT BE GROUN D FOR SAYING THAT ENOUGH INQUIRY HAD NOT BEEN CONDUCTED BY THE A SSESSING OFFICER IN ASSESSEES CASE. MOREOVER, THE ASSESSEE FERVENTLY BELIEVES THAT THERE IS NOTHING ADVERSE AGAINST HIM IN ANY OTHER PAPER OR IN ANY OTHER DOCUMENT; NOR HAS ANY SPECIFI C MATERIAL JUSTIFYING ADDITION TO INCOME IN HIS CASE BEEN POIN TED OUT. 7. THE ASSESSEE FURTHER SUBMITS THAT IT IS ALSO NOT LA WFUL ON YOUR PART TO HOLD THAT THE RIGORS OF THE EVIDENC E ACT DO NOT APPLY IN THE TAX PROCEEDINGS. THE ASSESSEE SUBMITS THAT IT IS THE SETTLED LAW THAT THE BASIC TENETS AND PRINCIPLE S OF EVIDENCE ACT DO APPLY. THE HONBLE SUPREME COURT IN THE CASE OF CHUHARMAL V/S. CIT REPORTED IN 172-ITR-250/251 ( SC) HELD THAT WHAT WAS MEANT BY SAYING THAT THE EVIDENCE AC T DID NOT APPLY TO PROCEEDINGS UNDER INCOME TAX ACT 1961, WAS THAT THE RIGOR OF THE RULES OF EVIDENCE CONTAINED IN THE EVIDENCE ACT WAS NOT APPLICABLE; BUT THAT DID NOT MEAN THAT WHEN THE TAXING AUTHORITIES WERE DESIROUS OF INVOKING THE PRINCIPLES OF THE EVIDENCE ACT IN PROCEEDINGS BEFOR E -: 20: - THEM, THEY ARE PREVENTED FROM DOING SO. IN FACT, T HERE IS NOT AN IOTA OF EVIDENCE WHETHER PRIMARY, CORROBORATIVE OR OTHERWISE AGAINST THE ASSESSEE IN RESPECT OF THE ALLEGATION IN THIS CASE. THE NOTICE ISSUED U/S. 263 IS CLEARLY NOT LAWFUL. F OR THE FOLLOWING REASONS IT WAS WRONG TO ALLEGE THAT THE O RDER OF THE ASSESSMENT PASSED BY THE A.O. IS ERRONEOUS: THE A.O. MADE ALL DUE ENQUIRIES TO THE EXTENT POSSI BLE. THE AO ISSUED A DETAILED QUESTIONNAIRE TO THE ASSES SEE, AND A CONTINUOUS BARRAGE OF QUESTIONS WERE RAISED W HICH WAS DULY REPLIED. THE AO CONSIDERED THE DETAILED EXPLANATION OF THE ASSESSEE FURNISHED FROM TIME TO TIME VIDE HIS REPLI ES DATED 16/11/2011, 12/12/2011, 13/12/2011, 19/12/2011 AND 21/12/2011 AND 29/12/2011. THE AO TOOK THE GUIDANCE OF THE JOINT COMMISSIONER, ANOTHER QUASIJUDICIAL AUTHORITY UNDER SECTION 144: THUS, -: 21: - THERE HAS BEEN APPLICATION OF MIND BY NOT ONE AUTHO RITY, BUT OF TWO DIFFERENT SENIOR OFFICERS. THE AO AFTER CONSIDERING ALL THE MATERIALS ON RECOR D, MADE THE ASSESSMENT. THE A.O. COULD NOT HAVE FOUND ANYTHING TO SUBSTANTI ATE THE LOOSE SUSPICION THAT THE ASSESSEE WAS PAID ANY ILLEGAL GR ATIFICATION AND SO HE DID NOT FIND ANY CORROBORATIVE EVIDENCES THE ORDER OF THE A.O. IS IN ACCORDANCE WITH THE LAW AS HE QUOTED FROM THE RELEVANT LEGAL CASE LAW. THE A.O.S SAID ORDER HAS ALSO NOT BEEN PASSED IN A UNDUE HASTE IN FACT, THE ENTIRE PROCEEDING TO SEEK FACTS STARTE D WITH A NOTICE DATED 30/9/2010 AND THE DETAILED ENQUIRY ENDED WITH THE ASSESSMENT ORDER DATED 30/12/2011, I.E. FOR OVER TH E COURSE OF MORE THAN A YEAR. REVISION PROCEEDINGS DO NOT PERMIT ROVING OR FISHIN G ENQUIRIES. THE ASSESSEES CASE IS SUPPORTED BY BINDING DECISIO NS OF THE HONBLE APEX COURT AND HONBLE HIGH COURTS INCLUDIN G, INTER ALIA, AS REFERRED ABOVE. -: 22: - FOR THE AFORESAID REASONS THE AOS ORDER OF ASSESSME NT CANNOT BE DUBBED AS ERRONEOUS. 7. THE HONBLE SUPREME COURT HAS ESTABLISHED BASIC GUI DELINES IN THE CASE OF CENTRAL BUREAU OF INVESTIGATION VS. VC SHUKLA AND OTHERS ON 2 ,,D MARCH 1998 WHEREIN THE JAIN HAWALA CASE WAS ADJUDICATED. THE OPERATIVE PARAGRAPH FROM THE JUDGE MENT IS: AFTER HAVING HELD THAT THE DOCUMENTS WERE NEITHER BOOKS OF ACCOUNT NOR KEPT IN THE REGULAR COURSE OF BUSINESS THE HIGH COU RT OBSERVED THAT EVEN IF THEY WERE ADMISSIBLE UNDER SECTION 34, THEY WERE NO T, IN VIEW OF THE PLAIN LANGUAGE OF THE SECTION, SUFFICIENT ENOUGH TO FASTE N THE LIABILITY ON THE HEAD OF A PERSON, AGAINST WHOM THEY WERE SOUGHT TO BE USED. AS, ACCORDING TO THE HIGH, THE PROSECUTION CONCEDED THA T BESIDES THE ALLEGED ENTRIES IN THE DIARIES AND THE LOOSE SHEETS THERE W AS NO OTHER EVIDENCE IT OBSERVED THAT THE ENTRIES WOULD NOT FURTHER THE CAS E OF THE PROSECUTION. AS REGARDS THE ADMISSIBILITY OF THE DOCUMENTS UNDER SE CTION 10 THE HIGH COURT HELD THAT THE MATERIALS COLLECTED DURING INVE STIGATION DID NOT RAISE A REASONABLE GROUND TO BELIEVE THAT A CONSPIRACY EXIS TED, FAR LESS, THAT THE RESPONDENTS WERE PARTIES THERETO AND, THEREFORE, TH OSE DOCUMENTS WOULD NOT BE ADMISSIBLE UNDER SECTION 10 ALSO. BASED ON THE AFORESAID DECISION -: 23: - OF THE HONORABLE APEX COURT, NO ADVERSE INFERENCE C AN BE MADE OR IS JUSTIFIED IN THIS CASE. IT IS WELL SETTLED THAT IF THERE IS SOME ENQUIRY BY THE ASSESSING OFFICER IN THE ORIGINAL PROCEEDINGS EVEN IF INADEQUATE THAT CANNOT CLOTHE THE COMMISSIONER WITH JURISDICTION UNDER SECTION 263 MERELY BECAUSE HE CA N FORM ANOTHER OPINION. IN THE INSTANT CASE, THE ASSESSEE WAS SPECIFICALLY QUERIED REGARDING THE NATURE AND CHARACTER OF THE O NE- TIME REGULATORY FEE PAID BY IT AS WELL AS THE BANK AND STAMP DUTY CHARGES. A DETAILED EXPLANATION AND OTHE R DOCUMENTS REQUIRED BY THE ASSESSING OFFICER WERE PRODUCED AT THE STAGE OF ORIGINAL ASSESSMENT. CLEARLY THIS WAS NOT A CASE OF NO ENQUIRY. THE LA CK OF ANY DISCUSSION ON THIS CANNOT LEAD TO THE ASSUMPTIO N THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND. THE PROCEEDING, IN FACT, SHOW THAT THE ASSESSING OFFICE R DIRECTED HIS MIND SPECIFICALLY ON THIS ASPECT AND T HEN CONCLUDED THAT THE EXPENDITURE WAS IN THE REVENUE F IELD. IT CONSTITUTED ONE PLAUSIBLE OR REASONABLE VIEW. UN DER -: 24: - THESE CIRCUMSTANCES, THE COMMISSIONER COULD NOT HAV E VALIDLY EXERCISED HIS SUPERVISORY OR REVISIONARY PO WER U/S 263. IT IS SUBMITTED THAT THERE WAS COMPLETE ENQUIRY IN THIS CASE. IN ANY CASE, THERE IS A DISTINCTION BETWEEN L ACK OF ENQUIRY AND INADEQUATE ENQUIRY. INADEQUATE ENQUIRY WOULD NOT GIVE JURISDICTION UNDER SECTION 263. 8. LAW DOES NOT VISUALIZE A CASE OF SUBSTITUTION/SUPERIMPOSITION OF JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ITO, NOR IS THE AO EXPECTED TO PASS AN ORDER IN A PARTICULAR WAY ONLY BECAUSE HIS SUPERIOR OFFICER THINKS THAT AN ORDER SHOULD YIELD A PARTICULAR RESULT. THE HONBLE COURT S HAVE FURTHER HELD THAT THE ITO IS A QUASI-JUDICIAL AUTHORITY, AND HAS EXERCISED QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH THE LAW, AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. -: 25: - 9. IN VIEW' OF THE ABOVE FACTS THAT DUE ENQUIRY WAS DONE BY THE ASSESSING OFFICER AND SINCE THE ENTIRE PROCEEDINGS, INCLUDING THOSE U/S. 263, BEING BASED ON AB-INITIO ERRONEOUS SURMISES ARE UNTENABLE, AND THERE BEING ADEQUATE CASE LAW TO SUPPORT THIS, AND THIS BEING A CASE OF SUBSTITUTION/SUPERIMPOSITION O F THE OPINION OF A SUPERIOR FUNCTIONARY UPON THAT OF THE ASSESSING OFFICER, THE PROCEEDINGS U/S 263 SHOU LD BE DROPPED FORTHWITH. 4. AFTER CONSIDERING THE REPLY, THE LD. COMMISSIONER H AS EXAMINED THE RECORD AND WRITTEN STATEMENT OF THE AS SESSEE AND AO HAS FAILED TO EXAMINE THE DETAILS AND HAS NO T CONDUCTED ANY ENQUIRY IN RESPECT OF SEIZED DOCUMENT S REGARDING AWARD OF CONTRACT OF SEWERAGE LINE FROM N AGARJUN CONSTRUCTION AND SIMPLEX INFRASTRUCTURE. THE SEIZED DOCUMENTS READ TOGETHER WITH SEIZED DOCUMENTS GIVE A REASON TO BELIEF THAT UNACCOUNTED GRATIFICATION HAS BEEN R ECEIVED IN RESPECT OF THESE CONTRACTS. THEREFORE, THE LD. CIT HAS HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONE OUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THEREF ORE, THE ORDER -: 26: - OF THE AO WAS CANCELLED AND THE AO WAS DIRECTED TO REFRAME THE ASSESSMENT AFTER EXAMINING THE ABOVE ISSUE AFTE R AFFORDING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED - THAT THE ASSESSEE WAS SERVED WITH A DETAILED SPECI FIC QUESTIONNAIRE U/S. 142(1) OF THE I.T. ACT 1961. ASSESSEE SUBMITTED REPLIES FROM TIME TO TIME. ASSESSEE AGAIN SUBMITTED A DETAILED SUBMISSION ON ADMISSIBILITY OF DIARIES, AS EVIDENCE ON 15.12.2011 . THE EXECUTIVE ENGINEER SHRI JADON WAS CALLED FOR ENQUIRY ON SUMMONS. VARIOUS BANK ACCOUNTS OF THE ASSESSEE WERE ALSO EXAMINED IN DETAIL. NO INVESTMENT OR UNEXPLAINED ENTRIES WERE FOUND BY THE AO. DETAILS OF MOVABLE AN D IMMOVABLE PROPERTIES WERE ALSO CALLED FOR BY THE AO AND NOTHING ADVERSE OR UNEXPLAINED WAS FOUND. GUIDANCE WAS SOUGHT FROM JOINT COMMISSIONER OF INCOME TAX U/S 144A, WHICH WAS DULY RECEIVED AND KEPT ON RECORD ON 28 TH DECEMBER, 2011 -: 27: - THE EVIDENCES WERE APPRAISED OR ASSESSED AS PER THE PROVISIONS OF THE INCOME TAX ACT, 1961. THE FURTHER FINDINGS OF THE A.O. ARE THAT IN T HE SEARCH ACTION U/S. 132 ON SHRI MUKESH SHARMA, VARIOUS EVIDENCES WERE FOUND, AND THESE EVIDENCES WERE APPRAISED. THE A.O. THEN IN THE COURSE OF ASSESSMEN T PROCEEDINGS MADE A DETAILED ENQUIRY OF THESE LOOSE SLIPS / DUMB PAPERS FOUND WITH MUKESH SHARMA. HE HAS ALSO RECORDED A FINDING THAT THE EVIDENCES HAVE BEEN CLASSIFIED IN THE FORM OF TABLE OF PRIMARY EVI DENCES AND TABLE OF CORROBORATIVE EVIDENCES AND THEN THE EVIDENCES HAVE BEEN APPRAISED OR ASSESSED AS PER TH E PROVISIONS OF THE INCOME TAX ACT, 1961. THE ASSESSI NG OFFICER HAS FURTHER STATED THAT APPRAISAL OF EVIDEN CE HAS BEEN CARRIED OUT IN VIEW OF SECTION 34 OF INDIAN EVIDENCE ACT---THAT AN ENTRY MAY BE RELEVANT BUT IS NOT SUFFICIENT WITHOUT OTHER EVIDENCE TO PROVE THE CRED ENCE OF AN ALLEGATION. FINALLY THE A.O. CONCLUDED HIS FI NDINGS IN THE LAST PARA OF THE ORDER AS UNDER: THEREFORE THE TABLE OF PRIMARY EVIDENCE PROVIDES THE FIVE ROWS CONTAINING DETAILS OF -: 28: - FIVE PRIMARY EVIDENCES WHICH HAVE FORMED THE BASIS OF ENQUIRY IN THE INSTANT ASSESSMENT. THE COLLECTION OF INFORMATION AFTER THE COLLECTION OF PRIMARY EVIDENCE HAS BEEN SHOWN IN THE FORM OF TABLE OF CORROBORATIVE EVIDENCES WHICH HAS NOT YIELDED ANY RESULT. OTHER CORROBORATIVE EVIDENCE IS NOT PRESENT IN THE INSTANT CASE OTHER THAN DIARY ENTRIES. THEREFORE ASSESSEE CANNOT BE CHARGED TO THE TAX WITH AVAILABLE INFORMATION. THE ASSESSEE HAS PLACED RELIANCE ON SEVERAL CASES. HOWEVER I CONSIDER SECTION 34 TO INTERPRET THE FIVE ROWS OF THE TABLE OF PRIMARY EVIDENCES IN LIGHT OF NIL CORROBORATIVE EVIDENCES. THEREFORE, RETURNED INCOME OF THE ASSESSEE IS ACCEPTED DESPITE THE AFORESAID BACKGROUND OF THIS CASE AN OR DER HAS BEEN PASSED U/S. 263 ON THE GROUND THAT THE ASSESSMENT ORDER PASSED BY THE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENU E. -: 29: - IN THE SAID ORDER U/S 263 THE CONCLUSIONS ARE BASE D ON THE ASSUMPTIONS THAT (I) THAT THE SEIZED DOCUMENTS FOUND IN THE COURSE O F SEARCH WITH MUKESH SHARMA SHOW THE RECEIPT OF ILLEGAL GRATIFICATION FOR THE AWARD OF CONTRACT OF SEWERAGE LINE FROM NAGARJUNA CONSTRUCTION CO. LTD., AND SIMPLEX INFRASTRUCTURE LIMITED (II) THAT CONTRACTS IN QUESTION WERE AWARDED BY THE URBAN DEVELOPMENT DEPARTMENT OF THE GOVERNMENT OF MADHYA PRADESH (III) THAT THE A.O. PASSED THE ASSESSMENT ORDER WIT HOUT COMPLETING THE REQUISITE ENQUIRIES OF CONTRACTS AWA RDED BY THE MUNICIPAL CORPORATIONS OF INDORE AND UJJAIN (IV) THAT RIGORS OF EVIDENCE ACT DO NOT APPLY TO PR OCEEDINGS UNDER I.T. ACT (V) THAT A.O. HAS NOT CONDUCTED ANY ENQUIRY AND HAS COMPLETED THE ASSESSMENT BY HOLDING THAT NO CORROBORATIVE EVIDENCES HAVE BEEN FOUND, AND THEREF ORE THE ORDER IS ERRONEOUS. -: 30: - THAT THE SO-CALLED EVIDENCES AS REFERRED TO IN T HE AFORESAID ORDER U/S. 263 ARE PURELY DUMB PAPERS, BECAUSE SUCH NOTING IS SENSELESS AND DOES NOT SPEAK ANYTHING EVEN REMOTELY DEFINITIVE AND CREDIBLE (THE LETTER P CAN HAVE DIFFERENT GENRES OF MEANING, SUCH GENRES BEING PARLIAMENT, POLICE, PRESS, PARISHAD, POLITICS , PLACE, PARTY, AND FOR EACH GENRE COUNTLESS DIFFERENT NAMES CAN BE ASCRIBED). SO CALLED ALLEGED EVIDENCES ARE NOT EVIDENCE AT ALL, AND ARE NOT CAPABLE OF AFFORDING A NY ADVERSE INFERENCE WHATSOEVER AGAINST THE ASSESSEE. EVIDENCE THAT IS DUMB IS NOT FIT TO BE EVEN CAL LED PRIMARY EVIDENCE, AS IT IS AB-INITIO MISLEADING AND MENDACIOUS. THEY DO NOT SHOW AT ALL THAT THE ASSESS EE WAS INVOLVED WITH THE MATTER LET ALONE PAID ILLEGAL GRATIFICATION AS ALLEGED IN YOUR AFORESAID NOTICE, AS THERE CANNOT BE AND THEREFORE HAS NOT BEEN ANY DEMONSTRATION OF FLOW OF FUNDS TO THE ASSESSEE. EVE N BASED ON THE SO-CALLED EVIDENCE, THERE IS NO SUBSTA NTIVE BASIS OR COGENT MATERIAL AGAINST THE ASSESSEE. THE RE IS NO MATERIAL ON FACTS OR UNDER LAW WHICH CAN ON ANY REASONABLE FAIR BASIS BE CONSIDERED TO BE MATERIAL AGAINST THE ASSESSEE. IF MERELY ON THE BASIS OF ON E INITIAL OF THE ALPHABET ON A DUMB PAPER AN UNRELATE D -: 31: - PERSON TO THE TRANSACTION CAN BE SAID TO HAVE EARNE D UNDISCLOSED INCOME, THEN SUCH ALLEGATION CAN WITHOU T MERIT OR FAIR PLAY BE MADE AGAINST ANY INNOCENT PER SON. IF THIS WAS PERMISSIBLE IT WOULD CAUSE GRAVE IRREPA RABLE LOSS AND HARDSHIP TO INNOCENT PEOPLE. CLEARLY THIS CANNOT BE DONE. AS PER SETTLED LAW, ADDITION TO IN COME CANNOT BE MADE ON SUSPICION, CONJECTURES AND SURMISES--PARTICULARLY WHEN THEY ARE UNFOUNDED AND UNWARRANTED. IN FACT, WHEN THE AO INITIALLY REFERRED TO THE SUSP ICIONS AS PRIMARY EVIDENCE HE HAS SELF-CORRECTED HIMSELF B Y TAKING TIME TO CONDUCT AN INQUIRY INTO THE MATTER. AFTER THE INQUIRY HE HAS ARRIVED AT THE CONCLUSION THAT SUSPICIONS OF UNACCOUNTED GRATIFICATION RAISED BY T HE PIECES OF EVIDENCE FOUND DURING THE COURSE OF SEARC H WERE NOT ADEQUATE AND SUFFICIENT TO MAKE ADDITION. BECAUSE THE A.O. MADE A DETAILED ENQUIRY IN THIS REGARD, AND BECAUSE HE DID NOT FIND ANY CORROBORATI VE MATERIAL, THAT IS THE REASON WHY EVEN AFTER THE DET AILED EXAMINATION, BECAUSE THERE WAS A SHEER ABSENCE OF CORROBORATIVE MATERIAL HE DID NOT MAKE ANY ADDITION . AT PAGE 3 OF THE ORDER, THE A.O. HAD ONLY MADE HIS OWN PRELIMINARY OBSERVATIONS ON ASSUMPTIONS AND -: 32: - PRESUMPTIONS WITH REGARD THE EVIDENCE NO.2, AND INTERPRETED THE SAID DUMB PAPER IN A PARTICULAR WAY ONLY FOR THE PURPOSE OF ENQUIRY. HOWEVER, AFTER MA KING SUCH DETAILED ENQUIRY, THE AO STAUNCHLY AVERRED THA T IN ABSENCE OF ANY CORROBORATING EVIDENCES, THE ASSESSE E CANNOT BE CHARGED TO TAX, AND THEREFORE HE RIGHTLY ACKNOWLEDGED AND CONCLUDED THE ASSESSMENT THAT THE ALLEGATIONS WERE NOT PROVEN AND ACCORDINGLY DID NOT MAKE ANY ADDITION ON THE BASIS OF SUCH DUMB DOCUMENTS. THE ASSESSEE FURTHER SUBMITS THAT IT IS ALSO NOT LA WFUL ON THE PART OF THE LD. CIT TO HOLD THAT THE RIGORS OF THE EVIDENCE ACT DO NOT APPLY IN THE TAX PROCEEDINGS. THE ASSESSEE SUBMITS THAT IT IS THE SETTLED LAW THAT TH E BASIC TENETS AND PRINCIPLES OF EVIDENCE ACT DO APPLY. TH E HONBLE SUPREME COURT IN THE CASE OF CHUHARMAL V/S. CIT REPORTED IN 172-ITR-250/251 (SC) HELD THAT WHAT WAS MEANT BY SAYING THAT THE EVIDENCE ACT DID NOT A PPLY TO PROCEEDINGS UNDER INCOME TAX ACT 1961, WAS THAT THE RIGOR OF THE RULES OF EVIDENCE CONTAINED IN THE EVI DENCE ACT WAS NOT APPLICABLE; BUT THAT DID NOT MEAN THAT WHEN -: 33: - THE TAXING AUTHORITIES WERE DESIROUS OF INVOKING TH E PRINCIPLES OF THE EVIDENCE ACT IN PROCEEDINGS BEFOR E THEM, THEY ARE PREVENTED FROM DOING SO. IN FACT, THERE IS NOT AN IOTA OF EVIDENCE WHETHER PRIMARY, CORROBORATIVE OR OTHERWISE AGAINST THE ASSESSEE IN RESPECT OF THE ALLEGATION IN THIS CASE. THE LEARNED CIT HAS ALSO OVERLOOKED THE FACTS THA T CAME TO BE PLACED BEFORE THE ASSESSING OFFICER IN THE CO URSE OF HIS DETAILED ENQUIRY. THESE SIGNIFICANT FACTS ARE: THE ASSESSEE HAD NOTHING TO DO WITH THE PREPARATION OF EITHER THE DETAILED PROJECT REPORT FOR THE PROJECTS MENTIONED OR FOR THEIR REQUEST FOR QUALIFICATION/RF Q OR REQUEST FOR PROPOSAL/RFP PROCESS, NOR DID HE EVALUA TE OR APPROVE OR ISSUE LETTERS OF INTENT OR AWARD THE PROJECTS MENTIONED BY YOU (THIS HAS ALREADY BEEN DU LY AFFIRMED BY THE ASSESSEE BEFORE THE AO VIDE OUR LET TER DATED 29/12/2011) THE MUNICIPAL CORPORATIONS OF INDORE AND UJJAIN, AS ALSO ALL OTHER MUNICIPAL CORPORATIONS AND MUNICIPAL BODI ES ARE AUTONOMOUS BODIES. ACCORDINGLY, THEY ARE LOCAL SELF -: 34: - GOVERNMENTS, WITH FULL AUTONOMY TO PREPARE AND EXECUTE PROJECTS (THIS HAS ALREADY BEEN DULY AFFIRM ED BY THE ASSESSEE BEFORE THE AO VIDE OUR LETTER DATED 29/12/2011). THEY ARE SO EMPOWERED, NOT BY ANY EXECUTIVE DICTAT BUT BY VIRTUE OF THE DELEGATION OF POWERS UNDER THE 74 TH CONSTITUTIONAL AMENDMENT. SUCH PROJECTS ARE NEITHER BID OUT, NOR AWARDED, BY THE U RBAN ADMINISTRATION DEPARTMENT, AS WRONGFULLY SURMISED B Y YOU, WHEN YOU HAVE STATED: VARIOUS COMPANIES TO WHOM CONTRACTS WERE AWARDED BY URBAN DEVELOPMENT AND ADMINISTRATION DEPARTMENT, GOVERNMENT OF MADHYA PRADESH. HENCE, TO HYPOTHESIZE THAT EXAMINATION OF ANY DOCUMENTS PERTAINING TO THESE CONTRACTS MIGHT H ELP TO SUBSTANTIATE THE ALLEGATIONS, IS UNFOUNDED, DILA TORY AND ITSELF GROSSLY ERRONEOUS. PROJECTS OF THE KIND REFERRED TO ARE PREPARED, BID OUT, BIDS SCRUTINIZED, AND FINALLY APPROVED AND AWARDED NOT BY THE GOVERNMENT BUT BY THE MUNICIPAL CORPORATION S OWN BODY OF TECHNICAL OFFICERS AND CONSULTANTS, THR OUGH THEIR OWN INTERNAL SYSTEMS WHICH INCLUDE: COMMITTEE S OF ENGINEERS AND OFFICERS, ASSISTED BY CONSULTANTS. THE BIDS ARE EXAMINED AT VARIOUS LEVELS WITHIN THE -: 35: - MUNICIPAL CORPORATION AND FINALLY APPROVED BY THE MAYOR-IN-COUNCIL (PARISHAD SAMITI) COMPRISING OF TH E MAYOR, THE MUNICIPAL COMMISSIONER, AND THE PARSHADS OR PARISHAD MEMBERS CHOSEN/SELECTED BY THE MAYOR FO R VARIOUS DIFFERENT VERTICALS WITHIN THE MUNICIPAL CORPORATION. THE PARISHAD COMPRISING OF PARSHADS OR CORPORATORS OF THE MUNICIPAL CORPORATION, THE PRESI DENT OF THE MUNICIPAL CORPORATION AND THE MAYOR ARE ALL ELECTED PUBLIC REPRESENTATIVES WHO HAVE EXECUTIVE A ND STATUTORY POWERS UNDER THE MUNICIPAL CORPORATION AC T, READ ALONG WITH THE 74 TH CONSTITUTIONAL AMENDMENT. THAT THE ASSESSEE DID NOT GRANT ANY FAVORS OR AWARD PROJECTS TO EITHER NAGARJUNA CONSTRUCTION OR SIMPLE X COMPANIES AND THAT THE ALLEGATIONS OF ILLEGAL GRATIFICATION ARE PREPOSTEROUS TO SAY THE LEAST (TH IS HAS ALREADY BEEN DULY AFFIRMED BY THE ASSESSEE BEFORE T HE AO VIDE OUR LETTER DATED 29/12/2011). THAT THE PERSON SEARCHED HAD INFORMED THAT HE HAD S UBMITTED AN AFFIDAVIT TO THE EFFECT THAT HE HAS HAD NOTHING TO DO WITH THE ASSESSEE IN ANY WAY, NOR HAD HE ALLUDED REMOTEL Y TO HIM -: 36: - IN ANY WAY ANYWHERE (THIS HAS ALREADY BEEN DULY AFF IRMED BY THE ASSESSEE BEFORE THE AO VIDE OUR LETTER DATED 29/12/2011). THUS THE NOTICE AND THE CONSEQUENT ORDER ISSUED U/S . 263 ARE CLEARLY NOT LAWFUL AND ARE WITHOUT JURISDICTION. FO R THE FOLLOWING REASONS IT WAS WRONG TO ALLEGE THAT THE O RDER OF THE ASSESSMENT PASSED BY THE A.O. IS ERRONEOUS: THE A.O. MADE ALL DUE ENQUIRIES TO THE EXTENT POSSI BLE. THE AO ISSUED A DETAILED QUESTIONNAIRE TO THE ASSES SEE, AND A CONTINUOUS BARRAGE OF QUESTIONS WERE RAISED WHICH WAS DULY REPLIED THE AO CONSIDERED THE DETAILED EXPLANATION OF THE ASSESSEE FURNISHED FROM TIME TO TIME VIDE HIS REPLI ES DATED 16/11/2011, 12/12/2011, 13/12/2011, 19/12/2011 AND 21/12/2011 AND 29/12/2011. THE AO TOOK THE GUIDANCE OF THE JOINT COMMISSIONER, ANOTHER QUASI-JUDICIAL AUTHORITY UNDER SECTION 144: THUS, THERE HAS BEEN APPLICATION OF MIND BY NOT ONE AUTHORITY, BUT OF TWO DIFFERENT SENIOR OFFICERS. THE AO AFTER CONSIDERING ALL THE MATERIALS ON RECOR D, MADE THE ASSESSMENT -: 37: - THE A.O. COULD NOT HAVE FOUND ANYTHING TO SUBSTANTI ATE THE LOOSE SUSPICION THAT THE ASSESSEE WAS PAID ANY ILLEGAL GRATIFICATION AND SO HE DID NOT FIND ANY CORROBORATIVE EVIDENCES THE ORDER OF THE A.O. IS IN ACCORDANCE WITH THE LAW AS HE QUOTED FROM THE RELEVANT LEGAL CASE LAW THE A.O.S SAID ORDER HAS ALSO NOT BEEN PASSED IN A UNDUE HASTEIN FACT, THE ENTIRE PROCEEDING TO SEEK FACTS STARTED WITH A NOTICE DATED 30/9/2010 AND THE DETAI LED ENQUIRY ENDED WITH THE ASSESSMENT ORDER DATED 30/12/2011, I.E. FOR OVER THE COURSE OF MORE THAN A YEAR REVISION PROCEEDINGS DO NOT PERMIT ROVING OR FISHIN G ENQUIRIES. THE ASSESSEES CASE IS SUPPORTED BY BINDING DECISIO NS OF THE HONBLE APEX COURT AND HONBLE HIGH COURTS INCLUDING, INTER ALIA, AS REFERRED ABOVE. FOR THE AFORESAID REASONS THE AOS ORDER OF ASSES SMENT CANNOT BE DUBBED AS ERRONEOUS. -: 38: - IN THE CASE OF CIT V. MAULIKKUMAR K SHAH 307 ITR 137 (GUJ) , HON'BLE HIGH COURT HAS HELD THAT ADDITIONS MADE BY THE AO TOWARDS ON MONEY ON THE BASIS OF SEIZED PAPER ALONE WITHOUT ANY CORROBORATIVE EVIDEN CE CANNOT BE SUSTAINED. NO ADDITION CAN BE MADE BASED ON SURMISES AND GUE SS WORK. RELIANCE IS PLACED ON THE DECISION OF DELHI H IGH COURT IN THE CASE OF CIT V. KULWANT RAI 291 ITR 36 (DELHI) . RELIANCE IS ALSO PLACED ON THE DECISION OF HON'BL E MADRAS HIGH COURT IN THE CASE OF ACIT V. KENCES FOUNDATION PVT LTD 289 ITR 509 WHEREIN, IT HAS BEEN HELD THAT SEIZED DOCUMENTS ARE NOT A CONCLUSIVE PRO OF TO ARRIVE AT UNDISCLOSED INCOME. SINCE THERE IS NO CORROBORATIVE OR DIRECT EVIDENCE TO PRESUME THAT THE NOTINGS/JOTTINGS HAD MATERIALISED INTO TRANSACTIONS GIVING RISE TO INCOME NOT DISCLOSED IN THE BOOKS BY THE ASSESSEE, THE DEPARTMENT'S PRESUMPTION CANNOT BE TENABLE IN LAW. RELIANCE IS PLACED ON THE DECISION -: 39: - OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. D.K. GUPTA 308 ITR 230 (DEL) . IN THE CASE OF CIT VS. RAM NARAIN GOEL - 224 ITR 180, THE HON'BLE P&H HIGH COURT HAS HELD THAT SUSPICION, HOWEVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE O R PROOF. THE HON'BLE P&H HIGH COURT IN THE CASE OF CIT VS. FAQIR CHAMAN LAL - 262 ITR 295 HAS HELD THAT IT IS A WELL SETTLED PROPOSITION THAT THE PRESUMPTION HOWSOEVER STRONG CANNOT SUBSTITUTE EVIDENCE. IN THE CASE OF CIT VS. EMERALD COMMERCIAL LTD. & ANR. -250 ITR 539 , THE HON'BLE CALCUTTA HIGH COURT FOLLOWING ITS OWN JUDGMENT REPORTED IN 244 ITR 422 HAS HELD THAT TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE FINDINGS OF THE INCOME-TAX OFFICER AND THE COMMISSIONER OF INCOME-T AX (APPEALS) WERE BASED ON PRESUMPTION AND NOT WARRANT ED BY THE FACTS OF THE CASE. FURTHER RELIANCE IS PLACED ON THE FOLLOWING DECISIO NS ON THE ISSUE OF LOOSE PAPERS BEING DUMB DOCUMENTS :- 1. CBI V. V.C. SHUKLA 1998 SCC 410 -- 2. CIT VS. ATAM VALVES (P) LTD. 332 ITR 468 (P&H) -: 40: - 3. STRAPTEX (INDIA) P. LTD. V. DCIT (2003) 84 ITD 3 20 (MUM) 4. BANSAL STRIPS V. ACIT 99 ITD 177 (DEL) THUS THE VIEW TAKEN BY THE AO WAS A LEGAL AND SUSTAINABLE VIEW AND CANNOT BE TERMED AS ERRONEOUS . ON THE SCOPE OF SECTION 263 :- ALL THE EVIDENCES HAVE BEEN DULY CONSIDERED AND DIS CUSSED BY THE AO AND AS SUCH THE CIT HAS NO POWER U/S. 263 TO TAKE A CONTRARY VIEW. THE POINTS HAVE BEEN CONSIDERED VE RY MUCH IN DETAIL AND AFTER DISCUSSING ONLY IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE THE AO CHOSE NOT TO MAKE ANY ADDITION. THUS, IT IS SUBMITTED THAT THE ACTION U/S. 263 CANN OT BE TAKEN WHEN THE POINTS HAVE BEEN CONSIDERED BY THE LD. AO WHILE FRAMING THE ASSESSMENT. I) VAM RESORTS & HOTELS PVT. LTD. V. CIT - DEL ITAT ( ITA NO. 2982/DEL/2013) II) K.N. RAMCHANDRA NAIDU V. CIT (PANAJI ITAT) IT A NO. 47/PNJ/2013 -: 41: - FURTHER RELIANCE IS PLACED ON THE FOLLOWING DECISIO NS :- A. CIT V/S. SOFTWARE CONSULTANTS 341 ITR 240 (DEL.) B. CIT V/S. ANIL CORPORATION 213 TAXMANN 19 C. CIT V/S. SUNBEAM AUTO LTD. 332 ITR 167 (DEL.) D. CIT V/S. MAKAL SUTA COTTON CO. P. LTD. 275 ITR 5 4(M.P) E. CIT V/S R.K. CONSTRUCTION CO., 313 ITR 65 (GUJ.) F. CIT V/S MAX INDIA, 295 ITR 282 (SC) G. CIT V/S RATLAM COAL ASH CO., 171 ITR 141 (M.P) H. CIT V/S ARVIND JEWELLERS, 259 ITR 502 (GUJ.) I. CIT V/S VODAFONE ESSAR SOUTH LTD, 212 TAXMANN 18 4 (DEL.) J. CIT V/S MEHROTRA BROTHERS, 270 ITR 157 (M.P) K. CIT V/S SHRI GOVINDRAM SEKSARIYA CHARITY TRUST, 166 ITR 580 (M.P) L. HARI IRON TRADING CO. V/S CIT, 263 ITR 437 (P&H) M. CIT V/S HARI SINGH & ASSOCIATES, 267 CTR 442 (RA J.) N. 335 ITR 83, CIT VS. ANIL KUMAR SHARMA (DELHI), O. 341 ITR 537 (DELHI), CIT VS. VIKAS POLYMERS P. 343 ITR 342, CIT VS. HERO AUTO LTD. (DELHI H.C.) , Q. 344 ITR 554, CIT VS. INTERNATIONAL TRAVEL HOUSE LTD. (DELHI H.C.), -: 42: - R. 343 ITR 329, CIT VS. D.G. HOUSING PROJECTS LTD. (DELHI H.C.), S. 111 ITR 326, J.P. SRIVASTAVA & SONS VS. CIT, (AL LHD. H.C) T. 320 ITR 674, CIT VS. ASHISH RAJPAL (DELHI H.C.). U. 323 ITR 632, CIT VS. DESIGN AND AUTOMATION ENGIN EERS (BOMBAY) P. LTD. (BOMBAY H.C.), V. 323 ITR 206, CIT VS. DEVELOPMENT CREDIT BANK LTD . W. 243 ITR 83, MALABAR INDUSTRIAL CO. LTD. VS. CIT, (SUPREME COURT) X. 203 ITR 108 CIT VS. GABRIEL INDIA LTD., (BOMBAY H.C.) Y. MUKESH SHARMA V. CIT 25 ITJ 341 (INDORE ITAT) 3. ON THE ISSUE OF CIT NOT MAKING ANY INQUIRY HIMSELF OR CAUSING ANY INQUIRY TO BE MADE AND MERELY MAKING A BALD ALLEGATION THAT THE AO DID NOT MAKE ANY FURTHE R INQUIRY :- 3.1 IN THE PRESENT CASE THE SHOW CAUSE NOTICE U/S 2 63 WAS ISSUED ON 31.12.2012 BY THE LD. CIT AND THE FINAL O RDER WAS PASSED ON 27/3/2014. IN THE MEANWHILE NO ENQUIR Y -: 43: - WAS CONDUCTED BY THE CIT HIMSELF NOR WAS ANY ENQUIR Y GOT CONDUCTED THROUGH SOMEONE ELSE. 3.2 THERE ARE TWO LIMBS IN SECTION 263 . THE FIRST IS REGARDING THE ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE SECOND IS TO PASS SUCH ORDER AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS DEEMED NECESSARY 3.3 IN THE MATTER OF DIRECTOR OF INCOME TAX VS. JYO TI FOUNDATION (2013) 357 ITR 388 (DELHI) IT WAS OBSERV ED : THUS, IN CASES OF WRONG OPINION OR FINDING ON MERI TS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFOR E THE ORDER UNDER SECTION 263 IS PASSED. IN SUCH CASE S, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOU S BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECID E WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CAS ES -: 44: - WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDI NG THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM F ACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRES H DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHE R ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRON EOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSIN G OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS -: 45: - ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. 3.4 THE ASPECT OF THE AO NOT CONDUCTING FURTHER INQ UIRY IN RELATION TO THESE VERY LOOSE PAPERS WAS EXAMINED BY THIS HONBLE ITAT IN THE CASE OF SHRI NAROTTAM MISHRA IN 25 ITJ PG. 506(INDORE ITAT). IT WAS HELD THAT WE HAVE NOTED THAT LD. CIT HAS IN VOKED THE PROVISIONS OF SECTION 263 MAINLY FOR THE REASON THAT INVESTIGATION WAS NOT PROPERLY CONDUCTED BY THE AO. BUT CONSIDERING THE FACTS OF THIS CASE THIS ALLEGATION IS NOT APPRECIABLE BECAUSE THERE SHOULD BE A LIMIT OF FOR A REASONABLE INVESTIGATION. OTHERWISE ALSO, THE LINE OF INVESTIGATION DEPENDS UPON THE INVESTIGATING AUTHOR ITY AND MAY DIFFER FROM OFFICER TO OFFICER. THERE IS NO PROPER STANDARD OR LINE OF DIRECTION PRESCRIBED FOR AN INVESTIGATION, THEREFORE IF THE INVESTIGATION IS RE ASONABLE THROUGH WHICH A PROPER RESULT CAN BE ACHIEVED, THEN SUCH AN INVESTIGATION CAN BE TERMED AS A REASONABLE OR THROUGH INVESTIGATION. FROM THE CONTENTS OF THE ORD ER PASSED U/S 263, IT APPEARS THAT THE LD. CIT WANTS REINVESTIGATION OF THE ENTIRE MATTER. BUT SUCH A FISHING OR ROVING INQUIRIES HAVE NEVER B EEN ENCOURAGED BY THE HONBLE COURTS. IN THE LIKEWISE -: 46: - MANNER, THE LD. CIT WAS NOT CORRECT IN ASKING THE A O TO CONDUCT INQUIRIES AFRESH ON THE BASIS OF THOSE SEIZ ED DOCUMENTS WHICH WERE ALREADY APPRECIATED DURING THE ASSESSMENT PROCEEDINGS. EVEN THIS IS NOT THE CASE O F THE LD. CIT THAT CERTAIN EVIDENCES WERE OVERLOOKED WHIC H WERE VERY MUCH ON RECORD OR IN THE KNOWLEDGE OF THE AO. EVEN THIS IS NOT THE CASE OF LD. CIT THAT CERTAIN N EW FACTS OR EVIDENCES WERE BROUGHT TO THE NOTICE OF THE REVE NUE DEPARTMENT WHICH WERE HAVING A DIRECT IMPACT ON THE INCOME ASSESSED BY THE AO. NEITHER THERE WAS AN ESCAPEMENT OF EVIDENCE NOR THERE WAS ANY EVIDENCE N OW BROUGHT TO THE NOTICE OF THE REVENUE DEPARTMENT, TH EREFORE IF THAT WAS NOT THE POSITION, THEN WE ARE NOT INCLI NED TO GIVE OUR APPROVAL TO SUCH DIRECTIONS. ISSUE IS THUS ALSO COVERED BY THE DECISION OF THIS HONBLE ITAT IN THE CASE OF SHRI NAROTTAM MISHRA (SUPRA) WHEREIN THESE VERY LOOSE PAPERS WERE UNDER CONSIDERATION AND THE HONBLE ITAT HELD THAT THE AO HAD MADE DUE INQUIRY INTO THE MATTER AND HENCE THE CIT COULD NOT HAVE EXERCISE HIS POWERS U/S 263. COPY OF THIS DECISION IS PLACED IN THE PAPER BOOK ON PAGES 60 TO 68. -: 47: - 7. THE LD. CIT DR HAS DRAWN OUR ATTENTION TO THE STATE MENT RECORDED OF ONE SHRI MUKESH SHARMA. THE LD. CIT DR HAS DRAWN OUR ATTENTION ON PAGE 8 OF THE STATEMENT RECO RDED DURING THE COURSE OF SEARCH AND DURING THE COURSE O F SEARCH, THE AO INVESTIGATION OFFICER HAS SPECIFICALLY HELD THAT ON 267 1.25% WAS PAID AND THAT COMES TO, 3.3375. THAT DOCU MENT WAS SEIZED DURING THE COURSE OF SEARCH AND DURING T HE COURSE OF SEARCH IT WAS ADMITTED BY ONE MUKESH SHARMA THAT HE HAS PAID RS. 3.33 CRORES TO THE ASSESSEE AND THAT ALLEG ATION HAS BEEN NOT ENQUIRED BY THE AO. THE AO HAS CALLED FOR THE RECORDS PERTAINING TO THE CONTRACT OF SEWERAGE LINE AWARDED TO M/S. NAGARJUN CONSTRUCTION AND M/S. SIMPLEX INFRAST RUCTURE. THE AO HAS CALLED FOR THE RECORD OF AWARD OF CONTRA CT, BUT HE HAS NOT RESPONDED WITH THE NOTICE ISSUED U/S 133(6) AND AO HAS WITHOUT MAKING TO THIS ENQUIRY OF ALLEGATION HA S PASSED THE ASSESSMENT ORDER. THEREFORE, THE LD. COMMISSION ER HAS DIRECTED THE AO TO REFRAME THE ASSESSMENT AFTER MAK ING ENQUIRY IN RESPECT OF HIS CONTRACT OF SEWERAGE LINE . IN THE CASE OF MUKESH SHARMA, DURING THE COURSE OF SEARCH, P IS WRITTEN FROM ONE DOCUMENT, WHEREIN IT IS CLEARLY SHOWN THAT PRINCIPAL -: 48: - SECRETARY HAS AGREED TO RECEIVE RS. 3.33 CRORES FRO M MUKESH SHARMA. THEREFORE, THIS ENQUIRY IS NECESSARY AND WI THOUT MAKING THE ENQUIRY THE AO JUMPED TO THE CONCLUSION THAT IT IS A DUMB DOCUMENT AND NO ADDITION CAN BE MADE. THE LD . CIT JDR HAS RELIED UPON THE DECISION OF DELHI BENCH IN THE CASE OF BHARTI HEXACOM LIMITED VS. CIT, (2014) 147 ITD 0526 (DELHI). THE LD. CIT DR HAS ALSO RELIED UPON THE DECISION OF HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF M.I.OVERSEAS LIMITED VS. DIRECTOR OF INCOME-TAX, INTERNATIONAL TAXATION, IN ITA NO. 25 OF 2012. THE LD. CIT DR SUBMITTED THAT THE AO HA S NOT MADE ANY ENQUIRY IN RESPECT OF SEWERAGE CONTRACT LI NE GIVEN TO NAGARJUN CONSTRUCTION COMPANY AND SIMPLEX INFRASTRU CTURE LIMITED. THEREFORE, WITHOUT MAKING THE ENQUIRY, THE AO HAS PASSED THE ORDER, WHICH CAUSES PREJUDICIAL TO THE I NTERESTS OF REVENUE. THEREFORE, IT IS THE DUTY OF AO TO MAKE EN QUIRY AND ASCERTAIN THE FACTS REGARDING CONTRACT OF SEWERAGE LINE. THEREFORE, THERE WAS ERROR IN ORDER OF AO AND LD. COMMISSIONER IS JUSTIFIED IN SETTING ASIDE THE ORDE R. 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PAR TIES. WE HAVE ALSO GONE THROUGH THE STATEMENT RECORDED OF ONE SHRI -: 49: - MUKESH SHARMA AND HAVE ALSO GONE THROUGH THE SEARCH STATEMENT AND WE HAD VERIFIED WHETHER ANY ADVERSE S TATEMENT IS GIVEN AGAINST THE ASSESSEE OR NOT. THE QUESTION NOS. 10 & 11 IN WHICH SOME QUESTIONS WERE ASKED TO SHRI MUKES H SHARMA RELATING TO THE DIARY LPS-1/1 AND IN THE DIA RY, IT WAS WRITTEN 267 M 6%, 16.02, 267 P 1.25% 3.3375 2.67 C 0.5 % 1.3350 ETC. AND QUESTION WAS ASKED RELATING TO T HIS CODIFICATION, SHRI MUKESH SHARMA REPLIED THAT HE DO ES NOT REMEMBER ANYTHING REGARDING THIS AND NO OTHER QUEST IONS WERE PUT BY SEARCH PARTY TO SHRI MUKESH SHARMA. SHR I MUKESH SHARMA IS MANAGING DIRECTOR OF ONE PREM PRAK ASH TUBES PRIVATE LIMITED AND MUKESH SHARMA WAS THE MIDDLEMAN. HE WAS THE MIDDLEMAN TO AWARD OF SEWERAG E LINE CONTRACT TO NAGARJUN CONSTRUCTION AND SIMPLEX INFRA STRUCTURE. IN HIS DIARY, THESE THREE SENTENCES WERE FOUND. FRO M THE ABOVE DIARY, THERE IS NOT A SINGLE IOTA OF EVIDENCE WAS F OUND AGAINST THE ASSESSEE. WE HAVE ALSO GONE THROUGH THE STATEME NT AND IN THE STATEMENT SHRI MUKESH SHARMA DID NOT POINT OUT OR GIVE STATEMENT AGAINST THE ASSESSEE. -: 50: - 9. WE FIND FROM THE ASSESSMENT ORDER THAT THE CONTRACT OF SEWERAGE LINE WAS GIVEN TO M/S. NAGARJUN CONSTRUCTI ON AND SIMPLEX INFRASTRUCTURE. THE AO HAS RECORDED A STATE MENT OF ONE GYANCHANDRA AND SHRI JADON AND IN THE STATEMENT HE HAS INFORMED THAT HE DID NOT KNOW ABOUT THIS CONTRACT B UT HE WAS PROJECT OFFICER AT THE RELEVANT TIME AND DETAILS RE LATING TO PROJECT IS KEPT IN INDORE MUNCIPAL CORPORATION. THE AO HAS MADE AN ENQUIRY FROM THIS PROJECT OFFICER, AO ANALY ZED THE DOCUMENTS, WHICH WERE FOUND DURING THE COURSE OF SE ARCH AND IN HIS ASSESSMENT ORDER, HE HAS ACCEPTED THE RETURN FILED BY THE ASSESSEE. 10. THE QUESTION ARISES BEFORE US WHETHER THE SEIZED DOCUMENTS SHOW THAT SOME ILLEGAL GRATIFICATION HAS BEEN GIVEN TO THE ASSESSEE FROM MUKESH SHARMA. THE AO HAS ISSU ED THE NOTICE TO THE PRINCIPAL COMMISSIONER AND INDORE PRI NCIPAL SECRETARY, DEPARTMENT OF URBAN DEVELOPMENT, BHOPAL AND COMMISSIONER, URBAN DEVELOPMENT, BHOPAL. THOUGH NOT ICES WERE SERVED BY THE ASSESSING OFFICER, THEY DID NOT RESPONDS TO THE NOTICES ISSUED U/S 133(6) OF THE INCOME-TAX ACT , 1961, AND WITHOUT EXAMINING THESE RECORDS, THE AO HAS ACCEPTE D THAT -: 51: - THE ASSESSEE HAS NOT RECEIVED ANY MONEY OF ILLEGAL GRATIFICATION FROM SHRI MUKESH SHARMA. THE CONCLUSION OF THE AO T HAT THIS IS A DUMB DOCUMENT AND IT CANNOT BE RELIED. THEREFO RE, THIS ORDER IS PREJUDICIAL TO THE INTERESTS OF REVENUE OR NOT. WE ARE OF THE VIEW THAT IF AT ALL THE NOTICES SHOULD HAVE BEE N SERVED TO THE CONCERNED PERSONS, THEN WHAT INFORMATION THEY C AN GIVE TO THE DEPARTMENT. THE CONTRACT OF SEWERAGE LINE GIVEN TO NAGARJUN CONSTRUCTION AND SIMPLEX INFRASTRUCTURE IS NOT DENIED. MUNICIPAL COMMISSIONER, INDORE, PRINCIPAL S ECRETARY, INDORE AND BHOPAL, HOW THEY CAN THROW THE LIGHT ON IT ? WE ARE OF THE VIEW THAT IF THE AO FAILED TO CALL FOR THE R ECORD OF THIS SEWERAGE LINE CONTRACT, THEN THE LD. CIT SHOULD HAV E CALLED FOR THE RECORD AND HE SHOULD HAVE EXAMINED IT. IF THE COMMISSIONER FAILS TO MAKE THE ENQUIRY, THE ORDER C ANNOT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF THE REVENUE. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. MAX IN DIA LIMITED, 295 ITR 282 (SC) HAS HELD THAT THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REVENUE IN SECTION 263 OF THE INC OME-TAX ACT, 1961, HAS TO BE READ IN CONJUNCTION WITH THE EXPRES SION -: 52: - ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSE SSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. FOR EXAMPLE, WHEN THE ASSESSING OFFICER AD OPTS ONE OF TWO COURSES PERMISSIBLE IN LAW AND IT HAS RESULT ED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE AS SESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIO NER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORD ER PREJUDICIAL TO THE REVENUE, UNLESS THE VIEW TAKEN BY THE ASSESS ING OFFICER IS UNSUSTAINABLE IN LAW. IN CIT VS. ARVIND JEWELLERS, 259 ITR 502, (GUJARAT H.C.),IN WHICH IT WAS HELD THAT THE FINDING OF FACT BY THE T RIBUNAL WAS THAT THE ASSESSEE HAD PRODUCED RELEVANT MATERIAL AN D OFFERED EXPLANATION IN PURSUANCE OF THE NOTICES ISSUED UNDE R SECTION 142(1) AS WELL AS SECTION 143(2) OF THE ACT AND AFT ER CONSIDERING THE MATERIAL AND EXPLANATIONS, THE INCO ME-TAX OFFICER HAD COME TO A DEFINITE CONCLUSION. SINCE TH E MATERIAL WAS THERE ON RECORD AND THE SAID MATERIAL WAS CONSI DERED BY THE INCOME-TAX OFFICER AND A PARTICULAR VIEW WAS TA KEN, THE -: 53: - MERE FACT THAT DIFFERENT VIEW CAN BE TAKEN SHOULD N OT BE THE BASIS FOR AN ACTION UNDER SECTION 263. THE ORDER OF REVISION WAS NOT JUSTIFIED. IN CIT VS. GABRIEL INDIA LTD., 203 ITR 108 (BOMBAY H.C.). AT PAGE 110, IT WAS HELD THAT THE INCOME-TAX OFFICER I N THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE E XPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE WERE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAI M WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEING SATISFIED WITH T HE EXPLANATION OF THE ASSESSEE. THIS DECISION OF THE INCOME-TAX OF FICER COULD NOT BE HELD TO BE 'ERRONEOUS' SIMPLY BECAUSE IN HIS ORD ER HE DID NOT MAKE AN ELABORATE DISCUSSION -IN THAT REGARD. MOREO VER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDINGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT AN EXPENDITURE OF CAPITAL NATURE. H E SIMPLY ASKED THE INCOME-TAX OFFICER TO RE- EXAMINE THE MAT TER. THAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE -: 54: - THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX UNDER SECTION 263. IN MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 , (SUPREME COURT) THAT A BARE READING OF SECTION 263 OF THE INCOME-TAX ACT, 1961, MAKES IT CLEAR THAT THE PRERE QUISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MO TU UNDER IT, IS THAT THE ORDER OF THE INCOME-TAX OFFICER IS ERRO NEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENU E. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS , NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REV ISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERE STS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. THE PRO VISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAK E OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. -: 55: - THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REV ENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASS ED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSE QUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED A S PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, 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 A S AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. ' IN CIT VS. DEVELOPMENT CREDIT BANK LTD. 323 ITR 206 , THAT THE ASSESSING OFFICER AFTER MAKING AN ENQUIRY AND ELICI TING A RESPONSE FROM THE ASSESSEE CAME TO THE CONCLUSION T HAT THE ASSESSEE WAS ENTITLED TO DEPRECIATION ON THE VALUE OF SECURITIES HELD ON THE TRADING ACCOUNT. THE COMMISSIONER COULD NOT HAVE TREATED THIS FINDINGS TO BE ERRONEOUS OR TO BE PREJ UDICIAL TO THE -: 56: - INTERESTS OF THE REVENUE. THE OBSERVATION OF THE CO MMISSIONER THAT THE ASSESSING OFFICER HAD ARRIVED AT A FINDING WITHOUT CONDUCTING AN ENQUIRY WAS ERRONEOUS, SINCE AN ENQUI RY WAS SPECIFICALLY HELD WITH REFERENCE TO WHICH A DISCLOS URE OF DETAILS WAS CALLED FOR BY THE ASSESSING OFFICER AND FURNISH ED BY THE ASSESSEE. THE TRIBUNAL WAS JUSTIFIED IN HOLDING THA T RECOURSE TO THE POWERS UNDER SECTION 263 WAS NOT WARRANTED IN T HE FACTS AND CIRCUMSTANCES OF THE CASE. IN CIT VS. DESIGN AND AUTOMATION ENGINEERS (BOMBAY) P. LTD. 323 ITR 632, (BOMBAY H.C.), BE SAID THAT THE ASSESSING OFFICER HAD NOT APPLIED HIS MIND WHILE GRANTING DEDUCTION U NDER SECTION 80HHC OF THE ACT AS REGARDS THE NET PROFIT EARNED BY THE ASSESSEE PERTAINING TO ITS EXPORT BUSINESS. THE TRI BUNAL WAS RIGHT IN HOLDING THAT THE VIEW TAKEN BY THE ASSESSI NG OFFICER WAS A POSSIBLE VIEW AND THAT THE CONDITION PRECEDEN T FOR INVOKING JURISDICTION UNDER SECTION 263 BY THE COMM ISSIONER DID NOT EXIST. THE TRIBUNAL WAS JUSTIFIED IN UPSETTING THE ORDER PASSED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT. -: 57: - IN CIT VS. D.G. HOUSING PROJECTS LTD. 343 ITR 329, DELHI H.C. HELD THAT A DISTINCTION MUST BE DRAWN IN THE CASES WHERE THE ASSESSING OFFICER DOES NOT CONDUCT AN ENQUIRY; AS L ACK OF ENQUIRY BY ITSELF RENDERS THE ORDER ERRONEOUS AND P REJUDICIAL TO THE INTERESTS OF REVENUE AND CASES WHERE THE ASSESS ING OFFICER CONDUCTS AN ENQUIRY BUT THE FINDING RECORDED IS ERR ONEOUS AND WHICH IS ALSO PREJUDICIAL TO THE INTERESTS OF REVEN UE. IN THE LATTER CASES, THE COMMISSIONER HAS TO EXAMINE THE ORDER OR THE DECISION TAKEN BY THE ASSESSING OFFICER ON THE MERI TS AND THEN FORM AN OPINION ON THE MERITS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. IN THE SECOND SET OF CASES, THE COMMIS SIONER CANNOT DIRECT THE ASSESSING OFFICER TO CONDUCT FURT HER ENQUIRY TO VERIFY AND FIND OUT WHETHER THE ORDER PASSED IS ERR ONEOUS OR NOT. IN CIT VS. HERO AUTO LTD. 343 ITR 342, DELHI H.C. HELD THAT THERE WAS NO DISCUSSION IN THE ORDER OF THE COMMISS IONER AS TO HOW AND IN WHAT MANNER THE ENQUIRY WAS LACKING AND WHAT WAS THE FAULT AND DEFAULT COMMITTED BY THE ASSESSIN G OFFICER. -: 58: - THE ASSESSING OFFICER HAD EXAMINED THIS ASPECT IN T HE ORIGINAL ASSESSMENT PROCEEDINGS AND ACCEPTED THE STAND OF TH E ASSESSEE. THERE WAS NO FINDING OF THE COMMISSIONER THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE QU ESTION OF WARRANTY CLAIM WAS REOPENED IN THE ASSESSMENT YEAR 1999- 2000 AFTER AN ORDER UNDER SECTION 263 OF THE ACT. T HIS ORDER PASSED WAS STRUCK DOWN BY THE TRIBUNAL AND THAT DEC ISION HAD BEEN UPHELD BY THE HIGH COURT. THAT THE CLAIM FOR DEDUCTION UNDER SECTION 35DDA WA S MADE BY THE ASSESSEE FOR THE FIRST TIME IN ASSESSMENT YEAR 2002-03. ONE-FIFTH OF THE AMOUNT PAYABLE UNDER THE VOLUNTARY RETIREMENT WAS ALLOWED AS A DEDUCTION. IN THIS YEAR, THE ASSES SING OFFICER HAD FOLLOWED THE EARLIER ASSESSMENT ORDERS. THE COM MISSIONER OBSERVED THAT NOTE 2 IN THE AUDIT REPORT DID CREATE DOUBT AS TO WHETHER EXPENDITURE TO ESS WAS ACTUALLY INCURRED OR NOT. THE ASSESSEE HAD CLARIFIED THAT THE NOTE WAS WRITTEN BY THE AUDITOR AS A PRECAUTIONARY MEASURE FOR REPORTING THAT THE A MOUNT HAD BEEN CLAIMED UNDER SECTION 35DDA. THE COMMISSIONER IN THE -: 59: - ORDER DID NOT APPRECIATE AND DEAL WITH THIS ASPECT. HE HAD WRONGLY INTERPRETED AND OBSERVED THAT THE CLAIM ITS ELF WAS MADE AS A PRECAUTIONARY MEASURE. THE TRIBUNAL, WAS, THEREFORE, RIGHT IN SETTING ASIDE THIS PART OF THE ORDER. IN CIT VS. GREEN WORLD CORPORATION , 341 ITR 81,( S. C.) WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT ORDER CANNOT B E INTERFERED ONLY BECAUSE ANOTHER VIEW IS POSSIBLE. IN CIT V. SUNBEAM AUTO, 341 ITR 81 (DELHI) WHEREI N IT HAS BEEN HELD THAT IF THERE IS AN ENQUIRY, EVEN INADEQU ATE, THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE CIT TO PAS S ORDER UNDER SECTION 263 MERELY BECAUSE HE HAS DIFFERENT OPINION IN THE MATTER. IN CIT VS. VIKAS POLYMERS, 341 ITR 537 (DELHI), WHEREIN IT HAS BEEN HELD THAT IF QUERY IS RAISED DURING THE SCRUTI NY BY THE AO, WHICH WAS ANSWERED TO THE SATISFACTION OF THE AO, B UT NEITHER THE QUERY NOR THE ANSWER WAS REFLECTED IN THE ASSES SMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUS ION THAT THE ORDER OF THE AO CALLED FOR INTERFERENCE AND REVISIO N. -: 60: - IN CIT VS. ANIL KUMAR SHARMA, 335 ITR 83, (DELHI) , WHEREIN IT HAS BEEN HELD THAT TRIBUNAL HAS ARRIVED AT A CONCLU SIVE FINDING THAT THOUGH THE ASSESSMENT ORDER DOES NOT PATENTLY INDICATE THAT ISSUE OF THE TAXABILITY OF THE COMPENSATION HA S BEEN CONSIDERED BY THE AO, THE RECORD SHOWS THAT THE AO HAD APPLIED HIS MIND. IN THE CASE OF CIT VS MEHROTRA BROTHERS, 270 ITR 15 7 (M.P) , THE HON'BLE M.P. HIGH COURT HELD, DISMISSING THE APPEAL , THAT THE TRIBUNAL HAD FOUND THAT WHEN THE ASSESSEE HAD FURNI SHED REQUISITE INFORMATION AND THE INCOME TAX OFFICER HA D CONSIDERED THE EVIDENCE FILED AND AFTER HIS SATISFACTION ABOUT THE GENUINENESS OF CASH CREDITS, THE ORDER OF REVISION U/S 263 OF THE INCOME TAX ACT, 1961, ON THE VAGUE GROUND THAT THE ASSESSING OFFICER DID NOT MAKE PROPER ENQUIRY WAS NOT VALID. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER OF REVISIO N. NO SUBSTANTIAL QUESTION OF LAW AROSE FROM THE ORDER. THE SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE P ETITION FILED BY THE DEPARTMENT AGAINST THIS JUDGMENT. -: 61: - 11. WE FIND THAT IN THE MATTER OF DIRECTOR OF INCOME-TA X VS. JYOTI FOUNDATION, 357 ITR 388 (DEL), WHEREIN IT IS HELD THAT IF THERE IS ANY WRONG OPINION OR WRONG FINDING ON MERI T, THE COMMISSIONER OF INCOME-TAX HAS TO COME TO THE CONCL USION AND HIMSELF DECIDE THAT ORDER IS ERRONEOUS BY CONDU CTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY BEFORE THE ORDER U/S 263 IS PASSED. THE ORDER OF THE AO WILL BE ERRO NEOUS, BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. THE COMMISSIONER OF INCOME- TAX CANNOT REMAND THE MATTER TO THE AO TO DECIDE WH ETHER THE FINDINGS RECORDED ARE ERRONEOUS. WHERE THERE IS INA DEQUATE INQUIRY BUT NOT LACK OF INQUIRY, AGAIN THE COMMISSI ONER OF INCOME-TAX MUST RECORD HIS FINDING THAT THE ORDER A ND INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF THE INQUIRY A ND VERIFICATION IS CONDUCTED BY COMMISSIONER OF INCOME -TAX AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTA KE MADE BY THE ASSESSING OFFICER MAKING THE ORDER UNSUSTAINABL E IN LAW. WE FIND THAT IN THIS CASE THE FACTS OF THE CASE ARE THAT ONE LOOSE PAPER WAS FOUND DURING SEARCH ACTION U/S 132 OF MUKESH SHARMA AND HIS EVIDENCE WAS APPRISED. THE AO IN -: 62: - ASSESSMENT PROCEEDINGS MADE A DETAILED INQUIRY OF T HIS LOOSE PAPER FOUND WITH MUKESH SHARMA. THE AO HAS CLASSIFI ED THE PRIMARY EVIDENCE AND CORROBORATIVE EVIDENCE AND THE INCOME WAS ASSESSED AS PER PROVISIONS OF INCOME-TAX ACT, 1 961. THE AO HAS FOUND THAT DURING THE COURSE OF SEARCH, MUKE SH SHARMA HAS GIVEN ILLEGAL GRATIFICATION FOR AWARD OF CONTRACT OF SEWERAGE LINE TO NAGARJUNA CONSTRUCTION AND SIMPLEX INFRASTRUCTURE LIMITED. THE AO IN THE CASE OF MUKES H SHARMA HAD BEEN FINALIZED AND NO ADDITION WAS MADE IN THE CASE OF MUKESH SHARMA FOR THIS AMOUNT. WE FIND THAT THE COMMISSIONER HAS REMANDED THIS ASSESSMENT ORDER ON THE GROUND THAT THE AO SHOULD HAVE MADE INQUIRY FROM MU NICIPAL CORPORATIONS OF INDORE AND UJJAIN. THESE TWO CORPOR ATIONS ARE LOCAL SELF-GOVERNMENT WITH FULL AUTONOMY TO PREPARE AND EXECUTE THE PROJECT. SUCH PROJECTS ARE NEITHER BID OUT OR AWARDED BY URBAN ADMINISTRATION DEPARTMENT. THE COMMISSIONER HAS WRONGLY HELD THAT THE AO SHOULD HA VE MADE INQUIRY FROM THESE TWO CORPORATIONS. IF AT ALL THE INQUIRY SHOULD HAVE BEEN MADE, THEN WHAT EVIDENCE THEY CAN GIVE. THEY CAN GIVE ONLY THE EVIDENCE WHICH IS OFFICIAL I N NATURE. WE -: 63: - FIND THAT IT IS NOT THE CASE OF SOME MONEY HAVE BEE N GIVEN BY MUNICIPAL CORPORATION TO THIS ASSESSEE. MOREOVER, O NE OF THE ILLEGAL GRATIFICATION GIVEN TO NAROTTAM MISHRA AND THERE WAS NO ADDITION MADE IN THE CASE OF NAROTTAM MISHRA, BUT U NDER SECTION 263, THE COMMISSIONER HAS ORDERED TO MAKE A FURTHER INQUIRY IN THIS CASE, BUT THE I.T.A.T. TRIBUNAL HAS REJECTED. I.T.A.T. HAS PASSED THE ORDER IN FAVOUR OF NAROTTAM MISHRA AND TRIBUNAL IN HIS JUDGMENT HAS HELD THAT THE AO HAS M ADE DUE INQUIRY IN THE CASE OF NAROTTAM MISHRA AND COMMISSI ONER SHOULD NOT HAVE EXERCISED HIS POWER U/S 263. THE TR IBUNAL HAS HELD AS UNDER :- THUS, IN CASES OF WRONG OPINION OR FINDING ON MER ITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFOR E THE ORDER UNDER SECTION 263 IS PASSED. IN SUCH CASE S, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOU S BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECID E WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CAS ES -: 64: - WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDI NG THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM F ACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRES H DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHE R ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRON EOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSIN G OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS -: 65: - ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. 12. WE, RESPECTFULLY FOLLOWING THE DECISION OF THE TRIB UNAL, ARE OF THE VIEW THAT THE TRIBUNAL HAS ALREADY EXAMI NED THE SAME PAPERS IN CASE OF SHRI NAROTTAM MISHRA. THEREF ORE, THIS TRIBUNAL CANNOT TAKE A DIFFERENT VIEW. THEREFORE, T HIS MATTER IS COVERED IN FAVOUR OF THE ASSESSEE. IT IS WELL SETT LED THAT IF THE SAME INQUIRY BY THE ASSESSING OFFICER IN ALL ORIGIN AL PROCEEDINGS EVEN IF IT INADEQUATE THAT CANNOT FLOUT THE COMMISSIONER WITH JURISDICTION U/S 263 MERELY BECAU SE HE CAN FORM ANOTHER OPINION. 13. NOW LOOKING TO THE ABOVE CASE LAWS AND FACTS OF THE CASE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS SERVED WIT H DETAILS IN SPECIFIC QUESTIONNAIRE U/S 141 OF THE INCOME-TAX AC T, 1961. THE ASSESSEE HAS ALSO GIVEN THE DETAILED SUBMISSION REGARDING THE ADMISSIBILITY OF DIARY AND AO HAS MADE THE ENQU IRY FROM THE EXECUTIVE ENGINEER. VARIOUS BANK ACCOUNTS WERE EXAMINED IN DETAIL. NO INVESTIGATION OR UNEXPLAINED ENTRY WA S FOUND BY THE ASSESSING OFFICER. DETAILS OF MOVABLE AND IMMOV ABLE -: 66: - PROPERTIES WERE CALLED FOR BY THE ASSESSING OFFICER . NOTHING ADVERSE OR UNEXPLAINED WAS FOUND. THE GUIDANCE WAS FOUND FROM JT. COMMISSIONER OF INCOME TAX U/S 144A WAS DU LY RECEIVED AND KEPT ON RECORD. THE AO HAS DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE A DETAILED ENQUIRY OF T HIS LOOSE SLIPS/ DUMB LOOSE SLIPS FOUND WITH MUKESH SHARMA. A LL THESE EVIDENCES HAVE BEEN CLASSIFIED IN THE FORM OF TABLE AND PRIMARY EVIDENCE AND EVIDENCE HAS BEEN APPRISED AS PER INCO ME-TAX ACT, 1961. THE AO HAS MADE THE ASSESSMENT AS PER TH E CBDT GUIDELINES AND AS PER THE CBDT GUIDELINES, IN THE F IRST STAGE, THE AO ACQUAINTED WITH THE APPRAISAL REPORT AND SEI ZED MATERIAL AND TOOK UP THE CASE FOR ASSESSMENT AND TH EREAFTER, THE AO HAS MADE THE DETAILED ENQUIRY AND AFTER FILI NG THE RETURN, THE AO HAD ACCEPTED, PRIMA FACIE, ACCEPTABL E EVIDENCE AND HE HAS MADE A PROPER ENQUIRY AND AFTER MAKING T HE ENQUIRY THE AO HAS ALSO CALLED FOR HIS REPORT U/S 1 44A OF THE ACT AND AFTER GETTING THE REPORT OF 144A, THE AO HA S COME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT RECEIVED A NY MONEY. WHATEVER THE DOCUMENTS ARE ON THE RECORD ARE DUMB DOCUMENT AND ON THE BASIS OF THESE DOCUMENTS, NO AD DITION -: 67: - CAN BE MADE. WE FIND THAT THE LD. COMMISSIONER HAS DIRECTED TO COLLECT THE ORIGINAL FILE FROM INDORE COMMISSION ER AND BHOPAL COMMISSIONER, WHICH DO NOT SUGGEST ANYTHING. WE FOUND THAT IF THE AO HAD INITIALLY ANY SUSPICION AS TO PRIMARY EVIDENCE, HE COULD HAVE HIMSELF CORRECTED IT BY TAK ING TIME TO CONDUCT THE ENQUIRY INTO THIS MATTER. AFTER ENQUIRY , HE ARRIVED AT THE CONCLUSION THAT SUSPICION OF UNACCOUNTED GRA TIFICATION RECEIVED BY THE ASSESSEE BY THE PIECE OF EVIDENCE F OUND DURING THE COURSE OF SEARCH WERE NOT ADEQUATE AND SUFFICIE NT TO MAKE ADDITION. THEREFORE, WE ARE OF THE VIEW THAT LD. CO MMISSIONER IS NOT JUSTIFIED IN HIS ACTION AND HIS CASE IS DULY COVERED BY THE DECISION OF CIT VS. ASHISH RAJPAL, 320 ITR 674 (DEL ), WHEREIN IT IS HELD THAT IF DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, IF THE ENQUIRY HAS BEEN MADE BY THE ASSESSING OFFICER AND IF THE SUFFICIENT ENQUIRY IS MADE, THEN IT CANNOT BE TERMS AS PREJUDICIAL TO THE INTERESTS OF REVENUE. -: 68: - 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 4 TH AUGUST, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED : 4 TH AUGUST, 2015. CPU*