CHANDAN M PARMAR, MUMBAI V. ASST CIT 11(2), MUMBAI

ITA 4601/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1663 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 13-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 04-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Capital asset; Revision of order; Rule of consistency; Earning of tax free income; Difference of opinion; Change of opinion
• Section: 143(3); 2(14); 142(1); 234B; 14A; 43(5); 68; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, MU MBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4601/MUM/2014 FOR ASSESSMENT YEAR: 2010-11 CHANDAN MAGRAJ PARMAR 801, 8 TH FLOOR, GLENRIDGE, 16, RIDGE ROAD, MALABAR HILL, MUMBAI -400006 PAN: AABPP1116F V S. CIT-16, R.NO. 437, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020. (APPELLANT) (RESPONDENT) ITA NO.2996/MUM/2016 FOR ASSESSMENT YEAR: 2011- 12 CHANDAN MAGRAJ PARMAR 801, 8 TH FLOOR, GLENRIDGE, 16, RIDGE ROAD, MALABAR HILL, MUMBAI -400006 PAN: AABPP1116F VS. CIT-16, R.NO. 437, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJIV KHA NDELWAL (AR) REVENUE BY : SHRI SUBHLACHAN RAM & MS. BEENA SANTOSH (CIT-DR) DATE OF HEARING : 16.11.2016 DATE OF PRONOUNCEMENT : 30.11.2016 O R D E R PER PAWAN SINGH, JM: 1. THESE TWO APPEALS U/S 253 OF THE INCOME-TAX ACT (TH E ACT) ARE DIRECTED BY THE ASSESSEE. IN ITA NO.2996/M/2016 THE ASSESSEE HAS CH ALLENGED THE ORDER U/S 263 DATED 28.03.2016 PASSED BY THE PRINCIPAL COMMIS SIONER OF INCOME-TAX- 16, MUMBAI FOR AYS-2011-12. IN ITA NO.4601/M/2014 T HE ASSESSEE HAS CHALLENGED THE ORDER OF CIT (A) DATED 15.05.2014 FO R AY 2010-11. AS IN ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 2 BOTH THE APPEALS ARE DIRECTED BY ASSESSEE THUS BOTH THE APPEALS WERE CLUBBED TOGETHER, HEARD AND ARE DECIDED BY CONSOLIDATED ORD ER. 2. FIRST WE SHALL TAKE ITA NO. 2996/MUM/2016 FOR AY 2 011-12. THOUGH, THE ASSESSEE HAS RAISED AS MANY AS FOUR GROUNDS OF APPE AL. HOWEVER, AS PER OUR CONSIDERED OPINION ONLY SUBSTANTIAL GROUND OF APPEA L IS; WHETHER THE ORDER PASSED BY THE PRINCIPAL COMMISSI ONER U/S. 263, DATED 28.03.2016 IS ERRONEOUS AND CONTRARY TO THE PROVISI ONS OF LAW. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 29.07.2011 DECLARING TOTAL INCOME OF RS. 2,21 ,880/-. THE ASSESSMENT WAS COMPLETED ON26.02.2014 U/S 143(3) OF THE ACT DE TERMINING THE INCOME OF ASSESSEE AT RS. 7,06,540/-. WHILE FRAMING THE ASSES SMENT, THE ASSESSING OFFICER (AO) MADE THE DISALLOWANCE OF RS. 4.50 LAKH ON ACCOUNT OF INTEREST PAID TO SMT. MANJU GOEL, AND DISALLOWANCE U/S. 14A OF RS. 34,660/- AND GRANTED DEDUCTION UNDER CHAPTER VIA OF THE ACT. THE ASSESSMENT ORDER WAS REVISED BY LD. PR COMMISSIONER HOLDING THAT IN THE RETURN OF INCOME, ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN (LTCG) OF RS. 6,77 ,55,890/- IN RESPECT OF SALE OF AGRICULTURAL LAND WHICH WAS CLAIMED AS EXEM PTED. THE ASSESSEE PURCHASED TWO PIECE OF LAND ADMEASURING 8 HECTARE A ND 36 GUNTA FROM HARISH PATEL AND RAGHAVJI PATEL FOR A CONSIDERATION OF RS. 54,87,320/- ON 17.02.2010. ON 15.04.2010 THE ASSESSEE JOINED THE FIRM M/S SYNE RGY DEVELOPER AS A PARTNER AND THE SAID LAND WAS GIVEN AS AN ASSESSEE S SHARE OF CAPITAL IN SAID FIRM ON AGREED VALUE OF RS. 7,32,83,210/-. THE REM AINING OTHER PARTNER OF THE SAID FIRM ARE THE SELLER OF SAID LAND. THE LD. PR COMMISSIONER FURTHER OBSERVED THAT DURING THE COURSE OF ASSESSMENT, THE AO DID NOT MAKE ANY QUERY NOR ANY INQUIRY REGARDING CIRCUMSTANCES IN WHICH TH E SELLER OF LAND WITHIN TWO MONTHS OF AGREED EVALUATION WHICH WAS 1335% HIGHER THAN THE PURCHASE PRICE. THE AO SIMPLY ACCEPTED THE TRANSACTION AS GE NUINE ON THE BASIS OF PAPER FILED IN THE COURSE OF ASSESSMENT. THUS, THE FAILURE ON THE PART OF AO TO EXAMINE THE UNUSUAL TRANSACTION FROM THE POINT OF V IEW, GENUINENESS RENDERED ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 3 THE ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, LD. CIT ISSUED A SHOW-CAUSE NOTICE DATED 16.03.2016 ASKING AS TO WHY THE ORDER DATED 26.02.2014 SHOULD NOT BE REVISED AND GAIN SHOWN AS EXEMPT LTCG BE TAXED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. THE A SSESSEE CONTESTED THE REVISION PROCEEDING BY FILING REPLY DATED 23.03.201 6. IN THE REPLY THE ASSESSEE CONTENDED THAT THE AO PASSED THE ORDER OF ASSESSM ENT AFTER MAKING NECESSARY ENQUIRY AND EXAMINING THE NECESSARY DOCU MENT. THE UNUSUAL PRICE IN THE VALUATION OF THE LAND WAS THAT ASSESSEE-FIRM ALSO PURCHASED OTHER ADJOINING LAND TO MAKE IT 260 ACRE PLOT ON WHICH A TOWNSHIP PROJECT WAS FEASIBLE. IT WAS FURTHER CONTENDED THAT AS PER SECT ION 43(5) THE RATE RECORDED IN THE BOOKS OF ACCOUNTS IS TO BE TREATED AS FULL VALU E CONSIDERATION. THE PROVISIONS OF SECTION 68 ARE NOT APPLICABLE AS THER E IS NO INFLOW OF FUNDS. THE ASSESSEE ALSO CONTENDED THAT THE ORDER PASSED BY AO IS NEITHER PREJUDICIAL NOR ERRONEOUS TO THE INTEREST OF REVENUE. THE LD PR. CO MMISSIONER AGAIN ISSUED AS NOTICE U/S 263 DATED 20.11.2015. IN THIS NOTICE, TH E LD. PR. COMMISSIONER MENTIONED THAT THE EXEMPTION IS ALLOWABLE TO THE AS SESSEE ONLY IF LAND IS SITUATED BEYOND 8 KM FROM LOCAL LIMIT OF ANY MUNICI PALITY OR ANY CANTONMENT BOARD REFERRED IN THE PROVISO TO SECTION 2(1A) AND SECTION 2(14) OF THE ACT. THE NOTICE FURTHER MENTIONED THAT THREE LANDS ARE SITUATED IN VILLAGE CHICHAWALI, NASARAPUR AND ANJAP WHICH COMES UNDER K ARJAT TALUKA. THE NOTICE FURTHER MENTIONED THAT THE AO NEITHER RAISED ANY SPECIFIC QUERY NOR DISCUSSED THE MATTER IN THE ASSESSMENT ORDER, THUS, THE ASSESSMENT ORDER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSEE FILED HIS REPLY TO THE FRESH SHOW-CAUSE NOTICE VIDE REPLY DATED 17.12.2015 AND SPECIFICALLY CONTENDED THAT AGRICULTURAL LAND SOLD (TRANSFERRED) BY HIM ARE NOT SUCH ASSET WHICH FALLS WITHIN THE JURISDICTION OF M UNICIPALITY OF POPULATION OF WHICH IS MORE THAN 10,000/-. THE VILLAGE CHINCHAWAL I, NASARAPUR AND ANJAP ARE VERY SMALL VILLAGES WITH A POPULATION OF LESS T HAN 1000. MOREOVER, THE NEAREST MUNICIPALITY IS KARJAT, WHICH IS NOT NOTIFI ED MUNICIPALITY AS PER THE ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 4 PROVISIONS OF SECTION 2(1A) AND 2(14) OF INCOME TAX ACT. THE ASSESSEE ALSO FILED THE NOTIFICATION NO. SO10(E)[NO.9447(F.NO.164 /3/87-I)] U/S (1A) R.W.S. 2(14) OF INCOME-TAX ACT DATED 06.01.1994 AS A AMEND ED UP TO 18.12.1999 SHOWING THAT KARJAT IS NOT THE NOTIFIED MUNICIPAL A REA/URBAN AREA AS PER THE PROVISIONS OF INCOME-TAX ACT. THE REPLY OF THE ASSE SSEE WAS NOT ACCEPTED BY LD PR. COMMISSIONER. THE LD. PR. COMMISSIONER FURTH ER CONCLUDED THAT AO HAS NOT MADE ANY ENQUIRY NOR ANY SUCH EVIDENCE PRODUCED BY ASSESSEE EITHER IN THE COURSE OF ASSESSMENT OR IN THE PROCEEDING U/S 2 63 TO SHOW THAT IN FEBRUARY 2010, THE LAND IN THAT AREA BEING SOLD AT RS. 6.85 LAKHS PER HECTARE AND IN APRIL 2010 IT ROSE UP TO 91.6 PER HECTARE, THUS THE ORDER DATED 26.02.2014 PASSED BY AO U/S 143(3) WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSMENT ORDER DATED 26.02.2014 WAS SET-ASIDE WIT H THE DIRECTION TO MAKE THE ASSESSMENT AFRESH. THUS, BEING AGGRIEVED BY THE ORDER OF PR COMMISSIONER U/S 263, THE ASSESSEE HAS FILED THIS A PPEAL. 4. WE HAVE HEARD THE LD. AUTHORISED REPRESENTATIVE (AR ) FOR THE ASSESSEE AND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE RE VENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASS ESSEE ARGUED THAT ASSESSEE IN THE RETURN OF INCOME CLAIMED CAPITAL GAIN OF RS. 7,30,30,890/- AS EXEMPT FROM TAX WHICH INCLUDES GAIN OF RS. 6,77,95,890/- I N RESPECT OF RURAL AGRICULTURAL LAND AT VILLAGE ANJAP. THE ASSESSEE HA S PURCHASED TWO PIECE OF LAND ON 17.02.2010 ADMEASURING 8 HECTARE AND 36 GUN TA FROM PRATIK HARISH PATEL AND RAGHAVJI P. PATEL FOR A CONSIDERATION OF RS. 54,87,320/-. ON 15.04.2010, THE ASSESSEE-FIRM JOINED THE FIRM SYN ERGY DEVELOPER AS A PARTNER AND THE SAID LAND HAD BEEN INTRODUCED BY TH E ASSESSEE AS HIS SHARE OF CAPITAL AS MUTUALLY AGGRIEVED BY THE PARTNER FOR A VALUE OF RS. 7,32,83,210/-, THE REMAINING OTHER TWO PARTNER WERE PRATIK H. PATE L AND RAGHAVJI P. PATEL. IT WAS FURTHER ARGUED BY THE LD. AR FOR ASSESSEE THAT ALL THESE DOCUMENTS RELATING TO THE TRANSACTION OF TRANSFER OF LAND AS A SHARE O F PARTNERSHIP ALONG WITH OTHER DETAILS AS WELL AS SUPPORTING DOCUMENTS WERE FILED BEFORE THE AO. SIMILARLY ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 5 ALL THOSE DOCUMENTS WERE FILED BEFORE LD PR COMMISS IONER IN RESPONSE TO THE SHOW-CAUSE NOTICE OF THE REVISION PROCEEDING. THE L D. AR FURTHER ARGUED THAT THE SAID AGRICULTURAL LAND IS A RURAL AGRICULTURAL LAND AND IS NOT QUALIFIED AS A CAPITAL ASSET WITHIN THE MEANING OF SECTION 2(14) O F THE ACT. ACCORDINGLY, THE GAIN ARISING ON THE TRANSFER OF SAID LAND IS NO T CHARGEABLE TO TAX. THE AMOUNT RECORDED IN THE CAPITAL ACCOUNT OF THE ASSES SEE IN HIS BOOKS OF ACCOUNT FOR CAPITAL CONTRIBUTION OF THE AGRICULTURAL LAND I S DEEMED TO BE FULL VALUE OF CONSIDERATION AS PER SECTION 45(3) OF THE ACT. IT W AS FURTHER ARGUED THAT THE DIRECTION OF PR. COMMISSIONER TO AO TO LOOK INTO TH E ASPECT OF SECTION 68 OF THE ACT IS INCORRECT. THE ASSESSEE HAS NOT MADE THE SALE OF AGRICULTURAL LAND BUT A TRANSFER TO THE FIRM AS HIS SHARE. THE LD. AR FOR THE ASSESSEE FURTHER ARGUED THAT THERE WAS NO INFLOW OF CASH IN THE BOOK S OF ACCOUNTS OF THE ASSESSEE WHICH IS A PRIMARY AND NECESSARY INGREDIEN T TO INVOKE THE PROVISIONS OF SECTION 68 OF THE ACT. THUS, THE PROVISION OF SE CTION 68 IS NOT APPLICABLE. IT WAS ARGUED THAT THE AO PASSED ASSESSEEMENT ORDER AF TER HIS COMPLETE SATISFACTION. THE ORDER OF ASSESSMENT IS NEITHER ER RONEOUS NOR PREJUDICE TO THE INTEREST OF REVENUE. THE LD AR FOR ASSESSEE FURTHER ARGUED THAT ALL DOCUMENTS WHICH WERE PLACED BEFORE HE AO AS WELL AS BEFORE LD PR COMMISSIONER IS FILED IN THE FORM OF THE PAPER BOOK PLACED BEFORE TRIBUNAL. THE LD AR FOR THE ASSESSEE RELIED UPON THE DECISION OF CALCUTTA HIGH COURT IN J.P. INVESTMENT CO. VS. CIT [206 ITR 718], DECISION OF COCHIN TRIBU NAL IN ACIT VS. KERLA TRANSPORT COMPANY [51 ITD 405] AND THE DECISION OF ALLAHABAD HIGH COURT IN SUNDARLAL JAIN VS. CIT [117 ITR 316]. ON THE OTH ER HAND, THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF PR. COMMISSIONER AND ARGUED THAT THE AO HAS NOT MADE ANY ENQUIRY IN RESPECT OF CAPITAL GAIN CLA IMED BY THE ASSESSEE. THERE IS NO REFERENCE IN THE ASSESSMENT ORDER ABOUT THE GAIN ON AGRICULTURAL LAND, THUS THE ORDER PASSED BY AO IS NOT ONLY ERRON EOUS BUT PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. DR FOR REVENUE RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CIT VS. AMITABH BACHCHAN ( 2016) 384 ITR 200 ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 6 (SC) AND THE DECISION OF MUMBAI TRIBUNAL IN ARVEE I NTERNATIONAL VS ACIT (2006) 101 ITD 495(MUMBAI). 5. WE HAVE CONSIDERED THE RIVAL CONTENTION OF LD. AR O F THE PARTIES AND PERUSED THE ORDER OF AO AS WELL AS THE ORDER PASSED BY LD P R. COMMISSIONER U/S 263 OF THE ACT. IN THE RETURN OF INCOME, THE ASSESSEE CLAI MED GAIN OF RS. 7,30,30,890/- ON SALE OF AGRICULTURAL LAND AND CLAI MED EXEMPTION FROM TAX. THE ASSESSMENT ORDER U/S 143(3) PASSED ON 26.02.201 4. IN THE ASSESSMENT ORDER, THE AO OBSERVED DURING THE YEAR ASSESSEE HAS DECLARED INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCE ALONG W ITH GAINS ON SALE OF AGRICULTURAL LAND AT KARJAT, DISTRICT-RAIGAD . THE CLAIM OF THE ASSESSEE WAS ACCEPTED BY AO IN THE ORDER U/S 143(3). THE LD. PR. COMMISSIONER ISSUED SHOW-CAUSE NOTICE U/S 263, DATED 16.03.2016. IN THE SHOW-CAUSE NOTICE, THE PR. COMMISSIONER SHOW-CAUSED THE ASSESSEE AND SOUGH T EXPLANATION AND THE DETAILS AS TO HOW THE LAND PURCHASED BY ASSESSEE ON 17.02.2010 FOR A CONSIDERATION OF RS. 54,87,320/- AND GIVEN AS HIS S HARE IN CAPITAL IN THE FIRM M/S SYNERGY DEVELOPERS WITHIN TWO MONTH ON 15.04.20 10 FOR RS. 7,32,83,210/-. THE ASSESSEE WAS FURTHER ASKED AS TO WHY THE DIFFERENCE IN CAPITAL ACCOUNT SHOULD NOT BE TREATED AS UNEXPLAINE D AND BE ADDED AS INCOME FROM OTHER SOURCES U/S 68 OF THE ACT. THE ASSESSEE FILED HIS REPLY VIDE REPLY DATED 23.03.2016. IN THE REPLY THE ASSESSEE EXPLAIN ED THAT DURING THE ASSESSMENT PROCEEDING ASSESSEE FURNISHED ALL DETAIL S CALLED FROM HIM AND AFTER CONSIDERING ALL THE MATERIAL AND INFORMATION, THE A SSESSMENT U/S 143(3) WAS COMPLETED. THE ASSESSEE FURTHER EXPLAINED THAT THER E IS NO ERROR IN THE ASSESSMENT ORDER. THE ISSUE RAISED IN THE NOTICE (NOTICE U/S 263) HAVE ALREADY BEEN PROPERLY CONSIDERED BY AO DURING THE COURSE OF ASSESSMENT PROCEEDING. THE ASSESSEE SPECIFICALLY CONTENDED THAT THE DIFFER ENCE BETWEEN THE COST OF LAND AND THE AMOUNT CREDITED IN HIS CAPITAL ACCOUNT WITH M/S SYNERGY DEVELOPERS SHOULD NOT BE TREATED AS UNEXPLAINED. TH E ISSUE WAS CONSIDERED BY AO WHILE FRAMING ASSESSMENT. THE ASSESSEE SPECIFICA LLY CONTENDED THAT AS THE ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 7 AGRICULTURAL LAND SITUATED IN RURAL AREA IN INDIA A RE NOT CAPITAL ASSET IN ACCORDANCE WITH THE DEFINITION OF ASSET AS DEFINED U/S 2(14) OF THE ACT, AND THE GAIN ON TRANSFER OF SUCH AGRICULTURAL LAND ARE NOT LIABLE TO TAX. THE ASSESSEE FURTHER CONTENDED WITH REGARD TO THE CONTR IBUTION OF CAPITAL ASSET IN THE PARTNERSHIP FIRM, THAT BESIDES THE LAND (ASSET) IN QUESTION, THE OTHER PERSONS WERE HOLDING 96 ACRE AND 33 GUNTA IN ADJOIN ING AREA. FURTHER IN ORDER TO MAKE ALL PIECES OF LAND BELONGING TO DIFFERENT PERSONS INTO A SINGLE PIECE OF LAND OF 104 HECTARE AND 69 GUNTA EQUIVALENT TO 261 ACRE WERE CONTRIBUTED AT THE AGREED RATE OF RS. 87,50,000/- PER HECTARE TO MAKE IT VIABLE FOR COMMERCIAL DEVELOPMENT. AND AS PER RATE RECORDED IN THE ACCOUNTS SHALL BE DEEMED TO BE FULL VALUE OF CONSIDERATION AS PERMITT ED U/S 45(3). THE LD. PR. COMMISSIONER AFTER A GAP OF ABOUT SIX MONTHS AGAIN ISSUED AS NOTICE U/S 263 DATED 20.11.2015. IN THIS NOTICE, THE LD. PR. COMMI SSIONER MENTIONED THAT THE EXEMPTION IS ALLOWABLE TO THE ASSESSEE ONLY IF LAND IS SITUATED BEYOND 8 KM FROM LOCAL LIMIT OF ANY MUNICIPALITY OR ANY CANTONM ENT BOARD REFERRED IN THE PROVISO TO SECTION 2(1A) AND SECTION 2(14) OF THE A CT. THE NOTICE FURTHER MENTIONED THAT THREE LANDS ARE SITUATED IN VILLAGE CHICHAWALI, NASARAPUR AND ANJAP WHICH COMES UNDER KARJAT TALUKA. THE NOTICE F URTHER MENTIONED THAT THE AO NEITHER RAISED ANY SPECIFIC QUERY NOR DISCUS SED THE MATTER IN THE ASSESSMENT ORDER, THUS, THE ASSESSMENT ORDER IS ERR ONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSE E FILED HIS REPLY TO THE FRESH SHOW-CAUSE NOTICE VIDE REPLY DATED 17.12.2015 AND S PECIFICALLY CONTENDED THAT AGRICULTURAL LAND SOLD (TRANSFERRED) BY HIM AR E NOT SUCH ASSET WHICH FALLS WITHIN THE JURISDICTION OF MUNICIPALITY OF POPULATI ON OF WHICH IS MORE THAN 10,000/-. THE VILLAGE CHINCHAWALI, NASARAPUR AND AN JAP ARE VERY SMALL VILLAGES WITH A POPULATION OF LESS THAN 1000. MOREO VER, THE NEAREST MUNICIPALITY IS KARJAT, WHICH IS NOT NOTIFIED MUNIC IPALITY AS PER THE PROVISIONS OF SECTION 2(1A) AND 2(14) OF INCOME TAX ACT. THE ASSESSEE ALSO FILED THE NOTIFICATION NO. SO10(E)[NO.9447(F.NO.164 /3/87-I)] U/S (1A) R.W.S. ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 8 2(14) OF INCOME-TAX ACT DATED 06.01.1994 AS A AMEND ED UP TO 18.12.1999 SHOWING THAT KARJAT IS NOT THE NOTIFIED MUNICIPAL A REA/URBAN AREA AS PER THE PROVISIONS OF INCOME-TAX ACT. THE ASSESSEE ALSO FIL ED COPY OF VARIOUS CERTIFICATES ISSUED BY VILLAGE- TALATHI OF CHINCHAW ALI, NASARAPUR, KARJAT CERTIFYING THAT THE IMPUGNED LAND IS OUTSIDE THE AR EA OF MUNICIPAL COUNCIL. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY LD. CIT(A) HOLDING THAT A SUM OF RS. 7,32,83,210/- HAS BEEN CREDITED IN THE C APITAL ACCOUNT OF THE ASSESSEE AND THERE IS INFLOW OF FUND. IT WAS FURTHE R CONCLUDED THAT THE PARTNERSHIP-DEED IS A NEGOTIABLE INSTRUMENT WHICH M ENTIONS THAT IN THE EVENT OF ASSESSEES WITHDRAWING FROM THE PARTNERSHIP A SU M OF RS. 7,32,83,210/-, CAPITAL CONTRIBUTION SHALL BE PAYABLE TO HIM. FURTH ER, THIS AMOUNT HAS BEEN CREDITED IN THE ASSESSEES BOOKS AS A CAPITAL IN TH E FIRM. HENCE, THIS CREDIT IS SQUARELY COVERED BY THE DEFINITION SUM AS USED IN SECTION 68 AND IS DEEMED TO BE INCOME OF THE ASSESSEE. THE LD. PR. COMMISSIO NER HOLD THAT THE AO INSTEAD OF MAKING NECESSARY ENQUIRY AND EXAMINING T HE ISSUE IN CORRECT PERSPECTIVE PROCEEDED WITH THE BLINKERS AND ACCEPTE D THE TRANSACTION AS LTCG. THE LD. CIT FURTHER CONCLUDED THAT ORDER DATE D 26.02.2014 U/S 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REV ENUE AND DIRECTED THE AO TO PASS ORDER AFRESH AFTER GIVING THE OPPORTUNITY TO T HE ASSESSEE. 6. WE HAVE SEEN THAT DURING THE ASSESSMENT THE AO RAIS ED QUERIES WITH REGARD TO THE CLAIM OF CAPITAL GAIN ON TRANSFER OF LAND. THE ASSESSEE VIDE HIS REPLY DATED 31.01.2014 FURNISHED THE DETAILS IN RESPECT O F DISTANCE OF AGRICULTURAL LAND FROM MUNICIPAL LIMITS, RECORD OF POPULATION AS PER LAST CENSUS INCLUDING CERTIFICATE OF GRAM PANCHAYAT, CHINCHAWALI, KARJAT AND ANJAP. THE AO AFTER CONSIDERING THE REPLY OF ASSESSEE ACCEPTED THE CLAI M OF ASSESSEE. WE HAVE FURTHER NOTICED THAT THE CLAIM OF CAPITAL GAIN WAS ACCEPTED AFTER MAKING NECESSARY ENQUIRY. THE ORDER WAS MADE 143(3) OF THE ACT. THE CLAUSE (II) OF SUB SECTION (3) OF SECTION 143 DOES NOT PRESCRIBED ANY SPECIFIC CONDITION THAT THE ORDER OF AO MUST STATE THE POINTS OF DETERMINAT ION, DECISION THEREON AND ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 9 THE REASONS FOR SUCH DECISION. ALTHOUGH, THE AO HA S NOT PASSED/ WRITTEN DETAILED ORDER WHILE ACCEPTING THE GAIN OF ASSESSEE , YET THE O RDER PASSED BY ASSESSING OFFICER IS IN ACCORDANCE WITH LAW, PASSED AFTER CONSIDERING RELEVANT REPLIES DULY SUPPORTED BY EVIDENCE. THE ORDER CANNO T BE BRANDED AS ERRONEOUS, MERELY BECAUSE LD PR. COMMISSIONER IS OF OTHER VIEW OR IN HIS OPINION ORDER PASSED IS WEAK AND NOT A DETAILED ORD ER. SO FAR AS CASH CREDIT IN THE ACCOUNT OF FIRM IS CONCERNED NO CASH COME INTO BUSINESS OR WENT OUT OF THE BUSINESS BY MEANS OF SUCH ENTRIES. IT CAN BE TREATE D WHEN MONEY IS, IN FACT, INTRODUCED INTO THE BOOKS BY MEANS OF CREDITS OF SO ME ACCOUNT. HOWEVER, IN THE PRESENT CASE THE LAND WAS GIVEN AS SHARE OF PAR TNER IN THE FIRM. THUS SECTION 68 HAS NO APPLICATION IN THE PRESENT CASE. OUR VIEW IS FURTHER STRENGTHEN BY THE DECISION IN CASE OF ACIT VS KERA LA TRANSPORT CO.[1994] 51 ITD 405 (COCH) AND CIT VS BALCHAND GANDHI [1982] TA XMAN59( BOM). HENCE, THE ORDER IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE. 7. THE HONBLE BOMBAY HIGH COURT IN CIT VS. GABRIEL IN DIA LTD. (203 ITR 108) HELD: THAT THE ORDER OF AO CANNOT BE HELD TO BE ERRONEOUS ON THE MERE GROUND THAT IT SHOULD HAVE BEEN WRITTEN MORE ELABOR ATELY. IT IS FURTHER HELD THAT IF ENQUIRIES MADE, BUT COMMISSION ER HOLD THAT ENQUIRY WAS INSUFFICIENT OR WAS NOT ON PROPER LINES , ASSESSMENT WAS MADE IN HURRY, THAT RE-EXAMINATION WOULD PRODUCE BE TTER RESULTS, THAT ASSESSMENT IS SOUGHT AND CRYPTIC, A BETTER VIE W COULD HAVE BEEN TAKEN ON THE FACTS AND EVIDENCE OR THAT THERE WAS A SUSPICIOUS, ALL FACTS ARE NOT REVEALED, THE COMMISSIONER INTERFEREN CE WOULD NOT BE JUSTIFIED. FURTHER, IN CASE OF CIT VS. TRUSTEES OF ANUPAM CHAR ITABLE TRUST 167 ITR 129 (RAJ.) THE HONBLE RAJASTHAN HIGH COURT HELD: THAT THE ERROR ENVISAGE BY SECTION 263 IS N OT ONE WHICH DEPEND ON POSSIBILITY OF GUESS WORK, BUT SHOULD BE ACTUALLY A N ERROR EITHER ON FACT OR ON LAW. ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 10 THE HONBLE DELHI HIGH COURT IN CIT V. ASHISH RAJPAL [2009] 320 ITR 674 (DELHI) (HC), AND FURTHER CIT V. VIKASH POLYMERS [ 2010] 194 TAXMAN 57 (DELHI) (HC) HELD : WHERE THE ASSESSING OFFICER DURING THE SCRUTINY AS SESSMENT PROCEEDING RAISED A QUERY WHICH WAS ANSWERED BY THE ASSESSEE T O THE SATISFACTION OF THE ASSESSING OFFICER BUT THE SAME WAS NOT REFLECTE D IN THE ASSESSMENT ORDER BY HIM, A CONCLUSION CANNOT BE DRAWN BY THE C OMMISSIONER THAT NO PROPER ENQUIRY WITH RESPECT TO THE ISSUE WAS MAD E BY THE ASSESSING OFFICER, AND ENABLE HIM TO ASSUME JURISDICTION UNDE R SECTION 263 OF THE ACT. 8. THE HONBLE APEX COURT IN CASE OF CIT VS MAX INDIA LTD.[295 ITR 282(SC)] RELYING UPON ITS EARLIER DECISION IN THE CASE OF MA LABAR INDUSTRIAL CO. LTD. VS CIT 243 ITR 83 (SC) (SUPRA) HELD AS UNDER: 'THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE RE VENUE' IN SECTION 263 OF THE INCOME-TAX ACT, 1961, HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION 'ERRONEOUS' ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CA NNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EX AMPLE, WHEN THE ASSESSING OFFICER ADOPTS ONE OF TWO COURSES PERMISSIBLE IN LA W AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE RE VENUE, UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW'. 9. HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS R. K. CONSTRUCTION CO. 313 ITR 65 HELD AS UNDER: 'AS FAR AS LAW IS CONCERNED, THE ASSESSING OFFICER HAS TAKEN A PARTICULAR VIEW ON THE BASIS OF EVIDENCE PRODUCED BEFORE HIM. ON THE BASIS OF THE SAID MATERIAL AND MATERIALS WHICH WERE COLLECTED BY THE CIT IN REVISIONAL PROCEEDINGS, THE COMMISSIONER HAS TAKEN A DIFFERENT VIEW. HOWEVER, IN THE REVISIONAL PROCEEDINGS UNDER SECTION 263 , IT IS NOT OPEN FOR THE COMMISSIONER TO TAKE SUCH A DIFFERENT VIEW IN VIEW OF THE DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. THERE IS NOTHING ON RECORD TO S UGGEST THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE AT LAW. THIS COURT HAS ALSO TAKEN THE SAME VIEW IN CASE OF ARVIND JEWELLER S WHEREBY THE ORDER PASSED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT WAS QUASHED AND SET ASIDE.'. 10. HONBLE GUJRAT HIGH COURT IN THE CASE OF CIT V. ARVIND JEWELLERS [2003] 259 ITR 502(GUJ) , HELD ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 11 THAT THE FINDING OF FACT GIVEN BY THE TRIBUNAL WAS THAT THE ASSESSEE HAD PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANATIONS IN PURSUANCE OF THE NOTICES ISSUED UNDER SECTION 142(1) AS WELL AS SECTION 143(2) OF THE ACT AND AFTER CONSIDERING THE MATERIAL AND EXPLANATIONS, TH E INCOME-TAX OFFICER HAD COME TO A DEFINITE CONCLUSION. SINCE THE MATERIAL W AS THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE INCOME-TAX OFFI CER AND A PARTICULAR VIEW WAS TAKEN, THE MERE FACT THAT A DIFFERENT VIEW CAN BE TAKEN SHOULD NOT BE THE BASIS FOR AN ACTION UNDER SECTION 263 . THE HON'BLE JURISDICTIONAL HIGH COURT, THEREFORE, TOOK THE VIEW THAT THE ORDER OF REVISION WAS NOT JUSTIFIED. IN THE WORDS OF THE HON'BLE HIGH COURT IT WAS HELD AS UNDE R: 'COMING TO THE FACTS OF THE PRESENT CASE, IT IS THE FINDING OF FACT GIVEN B Y THE TRIBUNAL THAT THE ASSESSEE HAS PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANAT IONS IN PURSUANCE OF THE NOTICES ISSUED UNDER SECTION 142(1) AS WELL AS SECTION 143(2) OF THE ACT AND AFTER CONSIDERING THE MATERIALS AND EXPLANATION, TH E INCOME-TAX OFFICER HAS COME TO A DEFINITE CONCLUSION. THE COMMISSIONER OF INCOME-TAX DID NOT AGREE WITH THE CONCLUSION REACHED BY THE INCOME-TAX OFFIC ER. SECTION 263 OF THE ACT DOES NOT EMPOWER HIM TO TAKE ACTION ON THESE FACTS TO ARRIVE AT THE CONCLUSION THAT THE ORDER PASSED BY THE INCOME-TAX OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. SINCE THE MATERIAL WA S THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE INCOME-TAX OFFI CER AND A PARTICULAR VIEW WAS TAKEN, THE MERE FACT THAT A DIFFERENT VIEW CAN BE TAKEN, SHOULD NOT BE THE BASIS FOR AN ACTION UNDER SECTION 263 OF THE ACT AND IT CANNOT BE HELD TO BE JUSTIFIED.' 10. THE MADHYA PRADESH HIGH COURT IN CIT V. MEHROTRA BROTHERS 270 ITR 157 (MP), APPROVED THE ORDER OF THE TRIBUNAL WHICH, AFTER RE LYING ON CIT V. RATLAM COAL ASH CO . [1988] 171 ITR 141, HAD HELD THAT WHEN THE AO CON SIDERED THE RECORDS BEFORE HIM AND COMPLETED THE ASSESSMENT AFTER ITANO .1646/AHD/2010 CONSIDERING THE EVIDENCE FILED AND AFTER HIS SATISFACTION ABOUT THE GENUINENESS OF CASH CREDITS, THE ORDER OF REVISION UNDER SECTION 263 ON THE VAGUE GROUND THAT THE AO DID NOT MAKE PROPER ENQUIRY WAS NOT VALID. 11. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS DEEPAK MITTAL 324 ITR 411 HELD THAT CHANGE OF OPINION BY REAPPRAI SING THE EVIDENCE IS NOT WITHIN THE PARAMETERS OF REVISIONAL JURISDICTION OF THE COMMISSIONER UNDER SECTION 263 OF THE ACT. FURTHER HON'BLE DELHI HIGH COURT IN CIT VS. INTERNATIONAL TRAVEL HOUSE ,194 TAXMAN 324(DEL), WHILE RELYING, INTER ALIA, ON THE DECISION OF HON'BLE GUJRAT HIGH COURT IN ARVIND JEWELLERS (SUPRA) OBSER VED THAT THE COMMISSIONER HAD REALLY MADE AN EFFORT TO CAUSE A ROUTINE INQUIR Y WITH REGARD TO THE MATTER THAT ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 12 HAD ALREADY BEEN CONCLUDED AND HE THOUGHT THAT HE H AD THE AUTHORITY TO BEGIN A FRESH LITIGATION BECAUSE OF THE VIEW ENTERTAINED BY HIM. HON'BLE HIGH COURT HELD THAT A MERE CHANGE OF OPINION OR VIEW WOULD NOT ENA BLE THE COMMISSIONER TO EXERCISE JURISDICTION UNDER SECTION 263 OF THE ACT, MORE SO, WHEN THE ASSESSING OFFICER HAD CONSIDERED THE DETAILS AND THE EXPLANAT ION OFFERED BY THE ASSESSEE. 12. THE DECISION RELIED BY LD DR FOR REVENUE A RE DISTINGUISHABLE ON THE FACTS OF THE PRESENT CASE. WITH UTMOST REGARDS TO THE FINDINGS O F THE HONBLE APEX COURT IN CASE OF AMITABH BACHCHAN (SUPRA), THE APEX COURT EX AMINED IF THE POWER CAN BE EXERCISE BY LD COMMISSIONER BEYOND THE REASONS (I SSUES) MENTIONED IN THE NOTICE U/S 263. FURTHER, IN CASE OF ARVEE INTERNATIONAL (S UPRA) THE ORDER OF ASSESSMENT WAS PASSED MECHANICALLY. 13. NOW, TURNING TO THE FACT OF THE PRESENT CASE THE AO MADE ENQUIRY WITH REGARD TO THE CLAIM OF CAPITAL GAIN THE AND PASSED ORDER U/S 14(3). THE ORDER PASSED BY ASSESSING OFFICER IS IN ACCORDANCE WITH LAW PASSED AND WAS PASSED AFTER CONSIDERING RELEVANT REPLIES DULY SUPPORTED BY EVID ENCE. THE ORDER CANNOT BE CALLED AS ERRONEOUS, MERELY BECAUSE LD PR. COMMISSI ONER IS OF THE VIEW THAT AO NOT MADE NECESSARY ENQUIRY OR NOT EXAMINED THE ISSU E/ CLAIM IN CORRECT PERSPECTIVE. THUS, THE ORDER OF LD PR COMMISSIONER DOES NOT SAT ISFIED WITH THE TWIN CONDITION I.E. ERRONEOUS AS WELL AS PREJUDICE TO THE INTEREST OF REVENUE. ACCORDINGLY, THE ORDER PASSED BY THE LD PR. COMMISS IONER U/S 263, DATED 28.03.2016 IS SET-ASIDE AND THE APPEAL OF THE ASSES SEE IS ALLOWED. 14. IN ITA NO.4601/M/2014(AY 2010-11) THE ASSESSE E THE FOLLOWING GROUNDS OF APPEALS. ( I). THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 21,680/- U/S 14A. (II). THE LD CIT(A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 4,50,000/- PAID ON BORROWED FUNDS. III). THE LD CIT(A) ERRED IN HOLDING THE LEVY OF INTEREST U/S 234B AND 234C. ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 13 (IV). THE LD CIT(A) ERRED IN HOLDING THAT INITIATI ON OF PENALTY U/S 271(1) (C) IS CONSEQUENTIAL IN NATURE. 15. THE BRIEF FACTS FOR THE CASE FOR THIS YEAR ARE THAT ASS ESSEE FILED RETURN OF INCOME FOR RELEVANT ASSESSMENT YEAR ON 14 OCTOBER 2010 DECLARI NG TOTAL INCOME OF RS.21,26,130/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON 30 JANUARY 2013. IN THE ASSESSMENT ORDER AO DISALLOWED RS 21,6 80/-UNDER SECTION 14A AND RS. 4,50,000/-ON ACCOUNT OF INTEREST EXPENSES. ON APPEA L BEFORE COMMISSIONER (APPEALS) BOTH THE DISALLOWANCE WAS SUSTAINED. THUS, FURTHER AGGRIEVED BY THE ORDER OF COMMISSIONER (APPEALS) THE ASSESSEE HAS FILED THIS SECOND APPEAL BEFORE TRIBUNAL. 16. FIRST GROUND OF APPEAL RELATES TO DISALLOWANCE UNDER SECTION 14A OF THE ACT. WE HAVE HEARD LD AR FOR THE ASSESSEE AND THE LD DR FOR REVE NUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD AR OF THE ASSESSEE ARGU ED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE EARNED DIVIDEND INCOME O F RS. 24,752 /-. THE ASSESSEE HAS NOT INCURRED ANY EXPENSES FOR EARNING THE EXEMPT IN COME. THE LD AR FOR THE ASSESSEE FURTHER ARGUED THAT THE ASSESSEE HAD SUFFICIENT INT EREST FREE FUNDS AVAILABLE WITH HIM. THE ASSESSEE HAS NOT BORROWED ANY FUND FOR MAKING A NY INVESTMENT. THE LD AR OF THE ASSESSEE SHOWN US THE BALANCE-SHEET OF ASSESSEE AS ON 31 MARCH 2010 AND THE DETAIL OF INVESTMENT MADE DURING THE YEAR UNDER CONSIDERATION . THE BALANCE SHEET IS AVAILABLE AT PAGE 13/14 AND DETAIL OF INVESTMENT AT PAGE 15 O F THE PAPER BOOK. ON THE OTHER HAND THE LD DR FOR REVENUE SUPPORTED THE ORDER OF AUTHO RITIES BELOW AND WOULD ARGUE THAT ASSESSEE HIMSELF OFFERED THE DISALLOWANCE U/S 14A D URING THE ASSESSMENT WHICH WAS ACCEPTED BY AO. IN THE REJOINDER ARGUMENT THE LEARN ED AR FOR THE ASSESSEE DISPUTED THE CONTENTION OF LD DR AND THE FINDING OF AO. 17. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND PERUSED THE ORDER OF AUTHORITIES BELOW. WHILE FRAMING ASSESSMENT THE AO DISALLOWED RS 21,680/- U/S 14A HOLDING THAT ASSESSEE VOLUNTARILY OFFERED THIS AMOU NT. HOWEVER, IN THE FIRST APPEAL BEFORE COMMISSIONER (APPEALS) THE ASSESSEE CHALLENG ED THE DISALLOWANCE. THE LD COMMISSIONER (APPEALS) WHILE CONSIDERING THIS GROUN D OF APPEAL OBSERVED THAT THE ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 14 ASSESSEE HAS NOT MADE SUO-MOTO DISALLOWANCE UNDER S ECTION 14A IN THE RETURN OF INCOME. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW CONC LUSIVELY THAT THE INDIRECT EXPENSES DEBITED TO THE APPELLANT ACCOUNT ARE NOT A TTRIBUTABLE TO THE EARNING OF TAX FREE INCOME. ON THE BASIS OF DECISION OF MUMBAI TRIBUNAL IN SISTENS INDIA P. LTD 44 TAXMAN.COM 340, THE LD COMMISSIONER (APPEALS) HELD THAT THE AO WAS WELL WITHIN ITS RIGHT TO INVOKE PROVISION OF SECTION 14A(3) RWR 8D AND SUSTAIN THE DISALLOWANCE. WE HAVE SEEN THAT THE DISALLOWANCE SUSTAINED BY LD COMMISSIONER (APPEAL IS) IS IN ACCORDANCE WITH SECTION 14A READ WITH RULE 8D(III). THE DISALLOWANCE IS IN ACCORDANCE WITH LAW, THUS, WE DO NOT CONSIDER IT APPROPRIATE T O INTERFERE IN THE FINDINGS OF LD COMMISSIONER (APPEALS). THEREFORE THIS GROUND OF AP PEAL IS DISMISSED. 18. GROUND NO. 2 RELATES WITH THE DISALLOWANCE OF INTEREST EXPENSES OF RS. 4,50,000/-. THE LD AR FOR ASSESSEE ARGUED THAT THE ASSESSEE HAS AVAILED LOAN FROM SMT. MANJU GUPTA. THE LOAN WAS TAKEN IN EARLIER YEARS FOR BUSI NESS PURPOSE TO MEET OUT THE FINANCIAL COMMITMENT IN A CLOSELY HELD COMPANY IN W HICH ASSESSEE WAS HAVING SUBSTANTIAL INTEREST. IT WAS FURTHER ARGUED THAT TH E SIMILAR DISALLOWANCE WAS MADE IN THE SUBSEQUENT ASSESSMENT YEAR (AY 2011-12) HOWEVER , THE SAME WAS ALLOWED ON APPEAL BY COMMISSIONER (APPEAL). THE LD AR ARGUED T HAT THE DEPARTMENT MUST FOLLOW THE PRINCIPLE OF CONSISTENCY. THE COPY OF OR DER OF COMMISSIONER (APPEALS) IN APPEAL NO.:IT-249/13-14/135/15-16 FOR AY 2011-12, D ATED 28 SEPTEMBER 2015 IS PLACED ON RECORD. ON THE OTHER HAND THE LEARNED DR FOR REVENUE SUPPORTED THE ORDER OF AUTHORITIES. HOWEVER THE ORDER OF COMMISSIONER ( APPEALS) IN THE SUBSEQUENT YEAR WAS NOT DISPUTED BY LD DR FOR REVENUE. 19. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PARTIES AND PERUSED THE ORDER OF AUTHORITIES BELOW. WE HAVE ALSO PERUSED THE ORDER D ATED 28 SEPTEMBER 2015 FOR ASSESSMENT YEAR 2011-12 PASSED BY COMMISSIONER (APP EALS) WHEREIN THE SIMILAR DISALLOWANCE ON ACCOUNT OF INTEREST EXPENSES OF RS. 4,50,000/- WAS DELETED. THUS KEEPING IN VIEW THE ORDER OF COMMISSIONER (APPEAL) IN SUBSEQUENT YEAR IN ASSESSEES ITA NOS.299 6/M/16 & 4601/M/014, CHANDAN MAGRAJ PARMAR 15 OWN CASE THE AO IS DIRECTED TO DELETE THE DISALLOWA NCE. THUS THIS GROUND OF APPEAL IS ALLOWED. 20. GROUND NO3 AND 4 ARE CONSEQUENTIAL AND NEEDS NO ADJUDICATION. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 21. IN THE RESULT, APPEAL OF ASSESSEE FOR AY-2010-1 1 IS ALLOWED AND FOR AY 2011-12 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH NOVEMBER, 2016 SD/- SD/- (B.R.BASKARAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 30/11/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : / BY ORDER, (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/