NATVAR PARIKH & CO. P.LTD, MUMBAI V. CIT CEN IV, MUMBAI

ITA 444/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8844 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Assessment record; Capital receipt; Revenue expenditure; Capital expenditure
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.444 /MUM/2014 (ASSESSMENT YEAR: 2009-10) M/S. NATVAR PARIKH & CO. P. LT D. VS. C I T, CENTRAL - IV (NOW APURVA NATVAR PARIKH & CO. P. LTD.) 96, CHEMBUR MANKHURD LINK RD. SHIV AJI NAGAR, MUMBAI 400043 ROOM NO . 660/663 6TH FLOOR, AAYAKAR BHAVAN M.K. ROAD , MUMBAI 400020 PAN AAACN2937Q APPELLANT RESPONDENT APPELLANT BY: SHRI MADHUR AGARWAL RESPONDENT BY: SHRI ANAND MOHAN DATE OF HEARING: 13.09.2017 DATE OF PRONOUNCEMENT: 24.10.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT, CENTRAL-IV, MUMBAI PASSED UNDER SECTION 263 DA TED 19.11.2013 FOR A.Y. 2009-10 BY WHICH THE ASSESSEE HAS CHALLENGED T HE VALIDITY OF THE ORDER BY TAKING AS MANY AS SIX GROUNDS OF APPEAL BU T THE ONLY ISSUE INVOLVED IN ALL THESE GROUNDS IS WHETHER INVOKING O F JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT UNDER THE FACTS A ND CIRCUMSTANCES OF THE CASE IS VALID OR NOT? 2. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE T HE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON 30.12.2011. SUBSEQU ENTLY THE AO MADE A PROPOSAL TO THE CIT, CENTRAL-IV, MUMBAI THROUGH THE ADDITIONAL COMMISSIONER OF INCOME TAX, CENTRAL RANGE-VI, POINT ING OUT THE FOLLOWING SHORTCOMINGS/DISCREPANCIES IN THE ASSESSMENT ORDER: - DURING THE YEAR, THE ASSESSEE COMPANY HAS RECEIVED ONE TIME MEMBERSHIP ENTRANCE FEES OF RS.2,51,78,859/- FROM N EW MEMBERS ADMITTED TO ACRES CLUB, A DIVISION OF THE COMPANY. THIS AMOUNT WAS TAKEN AS CAPITAL RECEIPTS AND HENCE, HAS BEEN DIREC TLY TAKEN TO ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 2 RESERVE & SURPLUS BY THE ASSESSEE IN VIEW OF THE BO MBAY HIGH COURT DECISION, IN THE CASE OF CIT V. DINER BUSINESS SERV ICES PVT. LTD. 263 ITR 1, BOMBAY AND NOT OFFERED TO TAX. IT IS PERTINE NT TO MENTION HERE THAT IN EARLIER ASSESSMENT YEARS I.E. A. YRS. 2003- 04, 2005-06, 2006- 07, 2007-08 AND 2008-09 ONETIME MEMBERSHIP ENTRANCE FEES WAS TREATED AS REVENUE RECEIPTS AND THE SAME WAS BROUGH T TO TAX, WHICH WAS SUBSEQUENTLY UPHELD BY THE LD. CIT (A). THERE IS NO CHANGE IN FACTS AND CIRCUMSTANCES IN A.Y. 2009-10. HOWEVER, T HE ASSESSING OFFICER HAS NOT APPLIED HIS MIND OVER THE ISSUE AN D PASSED THE ORDER WITHOUT APPRECIATING THE FACTS OF THE CASE. THERE FORE, IT APPEARS THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE. THEREFORE, BY NOT TREATING RS.2,51,78,859/- AS A RE VENUE RECEIPT, THE ORDER IS CERTAINLY ERRONEOUS ONE.' . IN VIEW OF THIS THE CIT ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE UNDER SECTION 263 DATED 16.06.2012 BY RECORDING THE FOLLO WING REASONS: - 'ON VERIFICATION OF THE ASSESSMENT RECORDS FOR THE A.Y. 2009-10, IT IS NOTICED THAT THE COMPANY HAS RECEIVED ONE TIME MEMB ERSHIP ENTRANCE FEES OF RS.2,51,78,859/-, FROM NEW MEMBERS ADMITTED TO ACRES CLUB, WHICH HAS BEEN TREATED AS CAPITAL RECEI PTS BY THE ASSESSEE AND DIRECTLY TAKEN TO THE RESERVES & SURPL US ACCOUNT, WITHOUT ROUTING THE SAME THROUGH P & L ACCOUNT. IN THE EARLIER ASSESSMENT YEARS I.E. A.YRS. 2003-04, 2004-05, 2005 -06, 2006-07, 2007-08 AND 2008-09, ONE TIME MEMBERSHIP ENTRANCE F EES WAS TREATED AS REVENUE RECEIPTS AND THE SAME WAS BROUGH T TO TAX AND WAS SUBSEQUENTLY UPHELD BY THE CIT (A). THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES IN A.Y. 2009-10. ON PERUSAL OF THE RECORDS, IT IS SEEN THAT NO ENQUIRY HAS BEEN MADE BY THE ASS ESSING OFFICER ON THIS ISSUE AND THIS ISSUE HAS NOT BEEN EXAMINED BY HIM.' IN RESPONSE THERETO THE ASSESSEE SUBMITTED THAT THE RE IS NO ERROR IN THE ORDER PASSED UNDER SECTION 263. THE ISSUE INVOLVED IS COV ERED BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DI NERS BUSINESS SERVICES PVT. LTD. 263 ITR 1 IN WHICH IT WAS HELD THAT THE ENTRAN CE FEES ARE NOT LIABLE TO BE TAXED. IT WAS FURTHER SUBMITTED THAT FOR A.Y. 2003- 04 ONE TIME NON- REFUNDABLE FEES WAS OFFERED TO TAX BUT A REVISED RE TURN WAS FILED CONTENDING THE SAME TO BE NON-TAXABLE CAPITAL RECEIPTS ON THE BASIS OF THE JUDGEMENT OF THE HON'BLE BOMBAY HIGH COURT. THIS CONTENTION WAS ACCEPTED BY THE AO FOR ASSESSMENT YEARS 2003-04 AND 2004-05. SUBSEQUENT TO STATEMENT RECORDED OF THE MANAGING DIRECTOR IN A SEARCH ACTION, THOUGH LATER RETRACTED, THE AO SUBJECTED SUCH FEES TO TAX FOR ASSESSMENT YEARS 200 3-04 TO 2008-09. WHEN THE MATTER WENT BEFORE THE CIT, THE CIT, ON THE BAS IS OF THE DECISION IN THE ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 3 CASE OF CIT VS. WIAA, 136 ITR 569 HELD THAT PART OF THE ENTRANCE FEES PARTAKE THE NATURE OF ANNUAL SUBSCRIPTION AND PART AS CAPIT AL RECEIPTS. THE REVENUE THEREFORE ACCEPTED FOR ASSESSMENT YEARS 2003-04 AND 2004-05 THAT NON- REFUNDABLE ENTRANCE FEES ARE CAPITAL RECEIPTS AND T HEREFORE NOT TAXABLE. IT WAS FURTHER SUBMITTED THAT IT WAS NOT A CASE OF NO ENQU IRY AS DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE, VIDE LETTERS D ATED 24.06.2011 AND 27.06.2011 SUBMITTED AN EXPLANATION IN RESPECT OF E NTRANCE FEES RECEIPT. MERELY BECAUSE THE AO NOT INCORPORATED THE FACTS IN DETAIL IN HIS ORDER IT DOES NOT MEAN THAT THERE HAS BEEN NO APPLICATION OF MIND BY THE AO. THE CIT DID NOT AGREE WITH THE SUBMISSIONS OF THE ASSESSEE AND ULTIMATELY TOOK THE VIEW THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AS WEL L AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE CIT, THEREFORE, SET ASIDE THE ASSESSMENT ORDER TO THE FILE OF THE AO AND DIRECTED THE AO TO DECIDE THE IS SUE INVOLVED AFRESH AFTER DUE VERIFICATION. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES B ELOW. WE NOTED THAT FOR INVOKING JURISDICTION UNDER SECTION 263 BOTH THE CO NDITIONS THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AS WELL AS PREJUDICIA L TO THE INTEREST OF REVENUE MUST BE SATISFIED. IF THE AO HAD NOT MADE A NY ENQUIRY TO THE ISSUE AND PASSED THE ASSESSMENT ORDER IT WILL TANTA MOUNT THAT THE ORDER PASSED BY THE AO IS ERRONEOUS. IN THIS CASE WE NOTE D THAT THE CIT INVOKED THE JURISDICTION UNDER SECTION 263 BY ISSUING FOLLO WING SHOW CAUSE NOTICE TO THE ASSESSEE: - OFFICE OF THE COMMISSIONER OF INCOME TAX, CENTRAL IV AAYAKAR BHAVAN, 6 TH FLOOR, ROOM NO: 660/661/663, MAHARSHI CARVE ROAD, MUMBAI - 400 020 NO: CTT(C)-IV/PROPOSAL U/S 263/2010-13 DATE: 15 -06-2012 T O THE PRINCIPAL OFFICER, M/S. NATVAR PARIKH & CO. PVT. LTD. 96, CHEMBUR MANKHURD LINK ROAD, SHIVAJI NAGAR, MUMBAI-400043 ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 4 SIR / MADAM, SUB : PROCEEDINGS PURSUANT TO SECTION 263 OF THE INCOME TAX ACT, 1961 IN THE CASE OF M/S NATVAR PARIKH & CO. PVT. LT D. FOR THE A.Y. 2009-IO - AN OPPORTUNITY OF BEING HEARD - NOTICE OF HEARING - REG., ON VERIFICATION OF THE ASSESSMENT RECORDS FOR A.Y. 2009-10, IT IS NOTICED THAT THE COMPANY HAS RECEIVED ONE TIME MEMB ERSHIP ENTRANCE FEES OF RS.2,51,78,859/-FROM NEW MEMBERS ADMITTED T O ACRES CLUB, WHICH HAS BEEN TREATED AS CAPITAL RECEIPTS BY THE A SSESSEE AND DIRECTLY TAKEN TO THE RESERVE &. SURPLUS ACCOUNT WI THOUT ROUTING THE SAME THROUGH P & L A/C. IN THE EARLIER A.Y.'S I.E. A.YS. 2003-04, 2004- 05, 2005-06, 2006-07, 2007-08 AND 2008-09 ONE TIME MEMBERSHIP ENTRANCE FEES WAS TREATED AS REVENUE RECEIPTS AND S AME WAS BROUGHT TO TAX AND WAS SUBSEQUENTLY UPHELD BY CIT(A). THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES IN A.Y. 2009-10. ON PER USAL OF THE RECORDS, IT IS SEEN THAT NO ENQUIRY HAS BEEN MADE B Y THE AO ON THIS ISSUE AND THIS ISSUE HAS NOT BEEN EXAMINED BY HIM. 2. I AM THEREFORE OF THE VIEW THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER REQUIRES TO BE SET ASIDE, SO THAT , HE MAY CARRY OUT REQUISITE INQUIRIES AS DEEMED NECESSARY BEFORE A CO RRECT ASSESSMENT ORDER IS PASSED UNDER I T ACT AT SUBSEQUENT DATE. B EFORE DOING SO, I HEREBY GIVE YOU AN OPPORTUNITY TO SHOW CAUSE AS TO WHY AN ORDER RELATING TO THE AFORESAID ASSESSMENT ORDER DATED 30 -12-2011 SHOULD NOT BE PASSED IN REVISION U/S 263 OF THE ACT. . FROM THE SHOW CAUSE NOTICE IT IS APPARENT THAT THE CIT HAS INVOKED JURISDICTION UNDER SECTION 263 AS HE WAS OF THE OPI NION THAT THE AO HAS NOT MADE ANY ENQUIRY ON THE ISSUE WHETHER ONE TIME MEMBERSHIP AND ENTRANCE FEES RECEIVED BY THE ASSESSEE IS A REVENUE RECEIPT. 4. THE LEARNED A.R. IN THIS REGARD VEHEMENTLY CONTEND ED AND DRAWN OUR ATTENTION TO THE NOTICE ISSUED UNDER SECTION 14 3(2), POINT NO. 26, COPY OF WHICH IS AVAILABLE AT PAGE 4 OF THE PAPER BOOK I N WHICH THE AO HAS ASKED THE ASSESSEE TO GIVE THE DETAILS OF ANY OTHER TAX FREE INCOME EARNED, IF ANY. 5. THE LEARNED A.R. BROUGHT TO OUR KNOWLEDGE THE REPLY DATED 24.06.2011 AT PAGE 10 OF THE PAPER BOOK. THE RELEVA NT PART OF PARA 26 READS AS UNDER: - ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 5 26. THE COMPANY HAS ACCOUNTED DIVIDEND INCOME OF RS.4,47,12,933/- DURING THE YEAR IN WHICH IS CLAIME D AS TAX FREE INCOME U/S 10(34) OF THE I.T. ACT, 1961. BESIDES DIVIDEND INCOME, COMPANY HAS ALSO TREATED THE ONE TIME NON REFUNDABLE ENTRANCE FEES AMOUNTING TO RS.2,51,78,85 9/- COLLECTED FROM THE MEMBERS OF THE THE ACRES CLUB AS CAPITAL RECEIPT. THESE ARE NOT LIABLE TO BE TAXED AS INCOME IN VIEW OF THE BOM BAY HIGH COURT DECISION IN CASE OF COMMISSIONER OF INCOME TAX VS. DINERS BUSINESS SERVICES PVT. LTD. 263 ITR 1 (BOMBAY), DETAILS OF O NE TIME NON REFUNDABLE ENTRANCE FEES ARE ENCLOSED HEREWITH AND MARKED AS ANNEXURE VII ON THIS BASIS THE LEARNED A.R. CONTENDED THAT IT NO T A CASE WHERE THE AO HAS NOT MADE ANY ENQUIRY BUT IT IS A CASE WHERE THE AO HAS MADE DUE ENQUIRY AND THE ASSESSEE HAS SUBMITTED ALL THE DETA ILS EXPLAINING THE NATURE OF ONETIME NON REFUNDABLE ENTRANCE FEES AMOU NTING TO ` 2,51,78,859/-. THE ASSESSEE HAS ALSO POINTED OUT TH AT THE SAID RECEIPT IS A CAPITAL RECEIPT AND NON TAXABLE IN VIEW OF THE DE CISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DINERS BUS INESS SERVICES PVT. LTD. 263 ITR 1. ON THIS BASIS IF THE AO HAS TAKEN O NE OF THE POSSIBLE VIEW, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE AO I S ERRONEOUS. 6. THE LEARNED A.R., TO STRESS HIS CLAIM, DRAWN OUR AT TENTION TOWARDS THE ASSESSMENT ORDER FOR ASSESSMENT YEARS 2003-04 A ND 2004-05 IN WHICH WE NOTED THAT UNDER PARA 4.1 THE AO WHILE DEALING W ITH THE ISSUE IN RESPECT OF ONE TIME MEMBERSHIP ENTRANCE FEES TOOK T HE VIEW THAT ONE TIME MEMBERSHIP FEES IS A CAPITAL RECEIPT AND IS IDENTIC AL TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DIT VS. DI NERS BUSINESS SERVICES PVT. LTD. 263 ITR 1 AND ACCEPTED THE EXPLA NATION OF THE ASSESSEE. SIMILARLY WE NOTED THAT THE AO HAS ACCEPTED THE EXP LANATION OF THE ASSESSEE IN A.Y. 2004-05 TREATING THE ONE TIME MEMB ERSHIP ENTRANCE FEES TO BE A CAPITAL RECEIPT. ON THE OTHER HAND, THE LEA RNED D.R. DRAWN OUR ATTENTION TOWARDS THE DECISION OF THIS TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEARS 2006-07 TO 2008-09 IN WHICH TH E TRIBUNAL WITH REGARD TO THE TREATMENT OF THE ONE TIME MEMBERSHIP FEES TOOK THE VIEW FOLLOWING THE DECISION OF THE ITAT SPECIAL BENCH IN THE CASE OF CLUB MAHINDRA HOLIDAYS 40 DTR 1, THE MEMBERSHIP FEES REC EIVED BY THE ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 6 ASSESSEE WAS LIABLE TO BE SPREAD OVER THE PERIOD OF TIME FOR WHICH SUCH FEES IS RECEIVED AND THEREFORE TREATED 1/25 TH SHARE OF FEES IN EACH YEAR TO BE REVENUE RECEIPT. NOW THE QUESTION BEFORE US IS WHET HER THE VIEW TAKEN BY THE AO CAN BE A POSSIBLE VIEW OR NOT? CAN IT BE SAI D UNDER THE FACTS THAT THE AO HAS NOT MADE ANY ENQUIRY WHILE PASSING THE O RDER UNDER SECTION 143(3)? WE NOTED THAT THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES CO. VS. CIT 243 ITR 83 HAS HELD AS UNDER : - A BARE READING OF PROVISIONS OF SECTION 263 MAKES IT CLEAR THAT THE PREREQUISITE TO EXERCISE OF JURISDICTION B Y THE CIT SUO MOTO UNDER IT, IS THAT THE ORDER OF THE ITO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CI T HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE A. O. SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS ONLY WHEN AN ORDER IS ERRONEOUS THA T THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IF DUE TO AN ERRONEOUS ORDER OF THE ITO , THE REVENUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CE RTAINLY BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PHRASE PREJUD ICIAL TO THE INTERESTS OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A.O. EVERY LOSS OF REVENUE AS A CONS EQUENCE OF AN ORDER OF A.O. CANNOT BE TREATED AS PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. 7. NOW THE QUESTION ARISES WHETHER THE VIEW TAKEN BY T HE AO WAS ONE OF THE POSSIBLE VIEW? IN VIEW OF THE DECISION OF TH E HON'BLE SUPREME COURT WE NOTED THAT THE AO IN ASSESSMENT YEARS 2003-04 AN D 2004-05 HAS DULY ACCEPTED THAT THE ABOVE RECEIPT BY THE ASSESSEE IS A CAPITAL RECEIPT AND IS NOT CHARGEABLE TO TAX WHILE DURING A.Y. 2010-11 ALS O THE ONE TIME MEMBERSHIP RECEIVED WAS TREATED AS CAPITAL RECEIPT IN VIEW OF THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CAS E OF DINERS BUSINESS SERVICES PVT. LTD.(SUPRA) AS DECIDED BY THE CIT(A) VIDE ORDER DATED 11.02.2005. FROM THE NOTICE ISSUED UNDER SECTION 14 3(2) AND THE REPLY SUBMITTED BY THE ASSESSEE, WE NOTED THAT IT IS NOT A CASE OF NO ENQUIRY BUT A CASE WHERE THE AO HAS MADE THE ENQUIRY AND HAS TA KEN A DECISION NOT TO TREAT ONE TIME MEMBERSHIP FEES RECEIVED AS REVENUE RECEIPT. ON THIS BASIS ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 7 IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORD ER OF THE AO. IN OUR OPINION THE ASSESSEE CANNOT DIRECT THE AO AS HOW SH OULD HE DRAFT THE ASSESSMENT ORDER AND WHAT SHOULD BE INCLUDED WHILE PASSING THE ASSESSMENT ORDER. WE NOTED THAT THE HON'BLE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS. GABRIEL INDIA LTD. 203 ITR 108 IN THIS REGARD HELD AS UNDER: - 'HELD, THAT THE INCOME-TAX OFFICER IN THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT R EGARD BY A LETTER IN WRITING. ALL THESE WERE PART OF THE RECORD OF THE C ASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEIN G SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THIS DECISION OF T HE INCOME-TAX OFFICER COULD NOT BE HELD TO BE 'ERRONEOUS' SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REG ARD. MOREOVER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AF TER INITIATING PROCEEDINGS FOR REVISION AND HEARING THE ASSESSEE, COULD NOT SAY THAT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRO NEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT AN EXPENDITURE OF CAPITAL NATURE. HE SIMPLY ASKED THE INCOME-TAX OFFI CER TO RE-EXAMINE THE MATTER. THAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX UNDER SECTION 263.' SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE AL LAHABAD HIGH COURT IN THE CASE OF CIT VS. MAHENDER KUMAR BANSAL, 297 ITR 0099 IN WHICH RESPECTFULLY FOLLOWING THE DECISION OF ALLAHABAD HI GH COURT IN THE CASE OF CIT VS. GOYAL PRIVATE FAMILY SPECIFIC TRUST, 171 IT R 698 (ALLD.) HAS HELD UNDER PARA NO.12 AS UNDER :- AS HELD BY THIS COURT IN THE CASE OF GOYAL PRIVATE FAMILY SPECIFIC TRUST (SUPRA,) WE ARE OF THE CONSIDERED OPINION THA T MERELY BECAUSE THE ITO HAD NOT WRITTEN LENGTHY ORDER, IT WOULD NOT EST ABLISH THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3)/148 OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE WITHOUT BRINGING ON RECORD SPECIFIC INSTANCES, WHICH IN THE PRESENT CASE, THE CIT HAS FAILED TO DO. 8. A PERUSAL OF THE ORDER PASSED BY THE CIT INDICATED THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WA S CANCELLED ON THE GROUND THAT THE ASSESSING OFFICER HAS NOT MADE PROP ER ENQUIRY AND VERIFICATION IN RESPECT OF THE ISSUE AS DISCUSSED A BOVE. THIS, IN OUR ITA NO. 444/MUM/2014 M/S. NATVAR PARIKH & CO. P. LTD. 8 CONSIDERED OPINION, CANNOT BE SUFFICIENT GROUND FOR CANCELLING THE ASSESSMENT. WHILE MAKING THE ASSESSMENT ORDER, IT I S THE SATISFACTION OF THE ASSESSING OFFICER WHO MADE THE ENQUIRY AND IT S HOULD BE TOUCHSTONE OF ASSESSMENT ORDER PASSED BY HIM. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LD. DR WHICH MAY PR OVE THAT VIEW TAKEN BY THE ASSESSING OFFICER IN THE CASE OF THE ASSESSE E WAS UNSUSTAINABLE IN LAW. THEREFORE, WE ARE OF THE VIEW THAT THE ORDER P ASSED BY THE CIT IS ILLEGAL AND WITHOUT JURISDICTION. IF THE ORDER PASSED BY TH E CIT IS SUSTAINED THEN THIS WILL PERMIT THE ILLEGALITY TO CONTINUE AND THE SUBSEQUENT ACTION IS CARRIED OUT ON THE ILLEGAL ORDER IS ALSO ILLEGAL PE R SE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH OCTOBER, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 24 TH OCTOBER, 2017 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT - CENTRAL-IV, MUMBAI 4. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.