M/s Khushi Ram & Sons Foods (P) Ltd., Ludhiana V. CIT III, Ludhiana

ITA 469/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80978 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-09-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 01-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Depreciation; Deemed to accrue or arise in india; Question of law; Difference of opinion; Assessment record; Unabsorbed depreciation; Change of opinion; Revenue expenditure; Capital expenditure
• Section: 143(3); 133A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 469/CHD/2014 ASSESSMENT YEAR: 2010-11 M/S KHUSHI RAM & SONS V THE CIT-III, FOODS (P) LTD., LUDHIANA. FEROZEPUR ROAD, OPP. CIRCUIT HOUSE, LUDHIANA. PAN: AADCP5438M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI AMARVEER SINGH DATE OF HEARING : 14.10.2014 DATE OF PRONOUNCEMENT : 28.10.2014 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT-II, LUDHIANA DATED 31.03.2014 FOR ASSESSMEN T YEAR 2010-11 CHALLENGING THE ORDER UNDER SECTION 263 OF THE INCOME TAX ACT ON THE FOLLOWING GROUNDS : 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX-ILL, LUDHIA NA HAS ERRED IN CANCELING THE ASSESSMENT AS FRAMED BY T HE ASSESSING OFFICER U/S 143 (3) BY TREATING THE SAME AS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE. 2. THAT THE WORTHY CIT HAS FAILED TO CONSIDER THAT ON V ARIOUS OCCASIONS, THE REPLIES HAD BEEN FILED TO HIM BY WAY O F WRITTEN SUBMISSIONS AND DETAILED DISCUSSION HAVE BEEN TAKEN P LACE ON VARIOUS DATES AND HAS FAILED TO CONSIDER THE SU BMISSIONS MADE BEFORE HIM VIDE LETTERS, DATED 10.05 .2013, 27.05.2013, 14.07.2013 AND 15.07.2013. 2 3. THAT THE CIT HAS FAILED TO CONSIDER THAT THE ASSESSM ENT AS FRAMED BY THE ASSESSING OFFICER WAS AFTER DUE APPLI CATION OF MIND AND AFTER CONSIDERING THE DETAILED REPLIES ON VARIO US DATES AS FILED BEFORE HIM DURING THE COURSE OF ASSESSMENT PR OCEEDINGS. 4. THAT THE CANCELLATION OF EARLIER ASSESSMENT BY THE C IT AND DIRECTING THE ASSESSING OFFICER TO MAKE AFRESH ASSES SMENT, CONFIRMS THAT THE CIT IS NOT OF THE CONFIRMED VIEW ABOUT TH E ASSESSMENT BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 5(A) WITHOUT PREJUDICE TO GROUND NOS.1 TO 4 ABOVE, T HE LEARNED CIT HAS ERRED IN CONCLUDING THAT THE JUDGMENT OF THE HON' BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF KIM PHARMA (P) LTD . IS APPLICABLE TO THE FACTS OF THE CASE OF APPELLANT ADVERSELY AND THEREBY CONCLUDING THAT THE ASSESSING OFFICER HAS FAILED TO MA KE NECESSARY INQUIRIES AND FAILED TO APPLY HIS MIND AS REGARDS T HE SET OFF OF LOSS AGAINST THE SURRENDERED INCOME. 5(B) THAT EVEN OTHERWISE, THE LEARNED CIT HAS ERRED IN NOT APPRECIATING THE FACTUAL POSITION AS PER OUT WRITTEN S UBMISSIONS WITH REGARD TO THE ABOVESAID JUDGMENT AND NEITHER GIV EN ANY DIRECTION WITH REGARD TO THE SET OFF OF LOSS AGAINST SURRENDERED INCOME. 6. THAT THE LEARNED CIT HAS FAILED TO POINT OUT AS TO H OW NON- MAINTENANCE OF DAY TO DAY OTHERWISE PRODUCTION DATA/ STOCK RECORDS HAS LEAD HIM TO THE CONCLUSION THAT THE ASSE SSMENT FRAMED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF THE REVENUE. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DIS POSED OFF. 2. THE LD. COMMISSIONER OF INCOME TAX NOTED IN THE IMPUGNED ORDER THAT HE HAS EXAMINED THE ASSESSMENT RECORD IN QUESTION AND FOUND THAT ASSESSMENT ORDER UNDER S ECTION 143(3) OF THE ACT HAS BEEN PASSED ON 01.06.2012. I N THIS CASE, SURVEY UNDER SECTION 133A WAS CONDUCTED AND A SSESSEE MADE SURRENDER OF RS. 80 LACS WHICH IS SHOWN IN THE COMPUTATION OF INCOME. THE ASSESSEE CLAIMED SET OF F OF UNABSORBED LOSSES FOR ASSESSMENT YEAR 2007-08 AND F OR 2006-07 IN A SUM OF RS. 14,84,641/- AND DECLARED TO TAL INCOME OF RS. 63,42,648/-. THE ASSESSEE HAS SHOWN ADDITION 3 TO THE FIXED ASSETS OF RS. 50 LACS IN RESPECT OF BU ILDING. THE ASSESSING OFFICER ISSUED DETAILED QUESTIONNAIRE AND ASSESSEE MADE SURRENDER ON ACCOUNT OF BUILDING RENOVATION OF RS. 50 LACS, OFFICE EQUIPMENTS RS. 15 LACS AND SUNDRY RE CEIVABLE RS. 15 LACS. THE ASSESSEE ATTACHED COPIES OF THE BILLS IN RESPECT OF BUILDING RENOVATION/OFFICE EQUIPMENT. T HE ASSESSEE HAS ALSO GIVEN COMPARATIVE DATA IN RESPECT OF TURN OVER/GP/NP. THE LD. COMMISSIONER OF INCOME TAX, TH EREFORE, NOTED THAT AO FAILED TO MAKE ENQUIRIES IN RESPECT O F CLAIM OF SET OFF OF UNABSORBED LOSSES AND ALSO WRONGLY ALLOW ED SET OFF OF UNABSORBED LOSSES AGAINST SURRENDERED INCOME AND FA ILED TO MAKE ENQUIRY IN THIS REGARD. THE ASSESSEE DID NOT PLACE ON RECORD EVIDENCES WITH RESPECT TO SURRENDER OF OFFIC E EQUIPMENT OR CONSTRUCTION OF BUILDING. 3. THE ASSESSING OFFICER FAILED TO MAKE ENQUIRY WHE THER DEPRECIATION COULD BE ALLOWED IN THE ABSENCE OF VOU CHERS AND THAT ASSESSEE HAS SHOWN GP OF 10.85% EVEN AFTER INC LUDING SURRENDERED AMOUNT. AFTER EXCLUDING THE SURRENDERE D AMOUNT, THE ASSESSEE HAS SHOWN LOSS. THEREFORE, AS SESSING OFFICER SHOULD HAVE REJECTED THE BOOKS OF ACCOUNT A ND HAS FAILED TO MAKE ENQUIRY ON THE SAME. SHOW CAUSE NOT ICE WAS ISSUED TO THE ASSESSEE UNDER SECTION 263 OF THE INC OME TAX ACT WHICH WAS ATTENDED TO BY HIS COUNSEL. THE LD. COMMISSIONER OF INCOME TAX ALSO DIRECTED AS TO WHY BOOK RESULTS BE NOT REJECTED. THE ASSESSEE REPLIED THAT THE BOOK RESULTS COULD NOT BE REJECTED MERELY ON IMPOSSIBILI TY OF FURNISHING THE INFORMATION WITH REGARD TO CLOSING S TOCK, AS IN THE NATURE OF THE BUSINESS OF THE ASSESSEE, IT IS I MPOSSIBLE. 4 THE ASSESSEE FILED WRITTEN REPLIES BEFORE LD. COMMI SSIONER OF INCOME TAX EXPLAINING THE POINTS RAISED BY THE LD. COMMISSIONER OF INCOME TAX. THE LD. CIT ALSO NOTED THAT NO QUANTITATIVE RECORDS HAVE BEEN MAINTAINED AND REPLI ES HAVE BEEN GIVEN IN GENERAL. THE ASSESSEE WAS ASKED TO F URNISH LIST OF ITEMS MANUFACTURED BY THE ASSESSEE AND CORRESPON DING UNIT COST AND UNIT SALE. HOWEVER, THE ASSESSEE EXPLAINE D THAT IT MANUFACTURED SWEETS IN LARGE QUANTITY AND LARGE ITE MS WHICH ARE PREPARED BY THE WORKERS AND IT IS HIGHLY IMPOSS IBLE IN THE NATURE OF BUSINESS OF ASSESSEE TO FURNISH DETAILED QUANTITIES OF SALE. THE LD. CIT ALSO ASKED THE ASSESSEE TO EXPLA IN WHY THE PROFIT RATE SHOULD NOT BE DISTURBED BY REJECTING BO OKS OF ACCOUNT. 4. LD. CIT, AFTER CONSIDERING REPLIES OF THE ASSESS EE AND MATERIAL ON RECORD NOTED THE REPLY OF THE ASSESSEE IN THE IMPUGNED ORDER IN WHICH ASSESSEE AGAIN EXPLAINED TH AT IN THE NATURE OF BUSINESS OF ASSESSEE, IT IS IMPOSSIBLE TO KEEP DETAILS OF LARGE NUMBER OF SWEETS OF DIFFERENT QUANTITIES B EING MANUFACTURED. LD. CIT DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND FOUND THE PROFIT RATE OF THE ASSESSEE TO BE LOW AS COMPARED TO THE EARLIER YEARS AND WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. LD. CIT NOTED CERTAIN JUDGEMENTS IN THE IMPUGNED ORDER AND CAME TO THE FINDING THAT ORDER OF THE ASSESSING OFFICER IS PREJUDICIAL IN SO FAR AS I T IS PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY, CANCELL ED THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO MAKE FRESH ASSESSMENT IN THE MATTER. 5 5. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED MATERIAL ON RECORD. 6. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMI TTED THAT SURVEY WAS CONDUCTED AT THE FAG END OF THE FINANCIA L YEAR ON 18.02.2010 AND ASSESSEE MADE SURRENDER OF RS. 80 LA CS ON ACCOUNT OF BUILDING RENOVATION, OFFICE EQUIPMENT AN D SUNDRY RECEIVABLES WHICH WERE SHOWN IN THE RETURN OF INCOM E. COPY OF THE RETURN OF INCOME IS FILED ON RECORD. THE COM PUTATION OF INCOME IS FILED AT PAGE 24 OF THE PAPER BOOK WHICH SHOWS THAT NET INCOME WAS DECLARED AT RS. 87.41 LACS AND AFTER REDUCING THE BUSINESS LOSS AND UNABSORBED DEPRECIATION ON EA RLIER YEARS, TAXABLE INCOME WAS SHOWN AT RS. 63.42 LACS. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO AUDIT REPORT, PROFIT & LOSS ACCOUNT AND VARIOUS STATUTORY NOTICES ISSUED BY THE ASSESSING OFFICER AT THE ASSESSMENT STAGE, COPIES OF WHICH AR E FILED IN THE PAPER BOOK IN WHICH THE ASSESSING OFFICER CALLE D FOR THE COMPLETE DETAILS OF COMPUTATION OF INCOME, AUDIT RE PORT AND DETAILS OF THE PROFIT & LOSS ACCOUNT, DETAILS OF MA NUFACTURING PROCESS, COMPARATIVE CHART OF THE GP, DETAILS OF PU RCHASES AND RECONCILIATION OF THE RAW MATERIAL ALONGWITH RATES OF THE LAST THREE YEARS. THE ASSESSEE FILED COMPLETE REPLIES B EFORE ASSESSING OFFICER. THE ASSESSING OFFICER, THEREAFT ER CALLED FOR FURTHER REPLY FROM THE ASSESSEE REGARDING QUANTITAT IVE DETAILS OF RAW MATERIAL CONSUMED AND PRODUCTION DATA AND TH E ASSESSEE EXPLAINED THAT IN THE NATURE OF BUSINESS O F ASSESSEE, WHERE LARGE QUANTITIES OF SWEET ITEMS HAVE BEEN MAN UFACTURED AND DIFFERENT ITEMS HAVE BEEN USED, IT WAS NOT POSS IBLE TO 6 MAINTAIN CONSUMPTION AND PRODUCTION DATA. THE SUMM ARY OF THE STOCK HELD ON 31.3.2010 WAS EXPLAINED. THE REA SON FOR FALL OF THE GP RATE WAS ALSO EXPLAINED BECAUSE THE PRICE OF THE RAW MATERIAL HAVE INCREASED BUT THE SALE PRICES HAV E NOT INCREASED. THE COMPARATIVE CHART OF PURCHASES IN T HE YEAR UNDER CONSIDERATION AND EARLIER YEARS WERE FILED. THE ASSESSEE ALSO EXPLAINED AS TO WHY ASSESSEE WAS ENTITLED FOR SET OFF OF UNABSORBED LOSSES AND DEPRECIATION AND COMPARATIVE CHART OF PRE-SURVEY OPERATION AND AFTER SURVEY OPERATION WER E ALSO EXPLAINED TO SHOW THAT GP RATE WAS ALMOST STATIC. THE LD. COUNSEL FOR THE ASSESSEE, BY REFERRING TO THESE DET AILS SUBMITTED BEFORE ASSESSING OFFICER AND BOOKS OF ACC OUNT PRODUCED BEFORE HIM, SUBMITTED THAT THE LD. CIT CAN CELLED THE ASSESSMENT ORDER MAINLY ON THE REASON BECAUSE ASSES SING OFFICER HAS FAILED TO EXAMINE THE ISSUE OF SET OFF OF UNABSORBED LOSSES/DEPRECIATION AND FALL IN GP RATE. THE LD. CO UNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT SINCE AT THE AS SESSMENT STAGE, ASSESSING OFFICER MADE EXHAUSTIVE ENQUIRY IN TO THE WORKING OF THE ASSESSEE AND ACCEPTED THE CLAIM OF A SSESSEE, THEREFORE, VIEW OF THE ASSESSING OFFICER SHOULD NOT HAVE BEEN SUBSTITUTED BY THE LD. CIT. HE HAS RELIED UPON DEC ISION OF HON'BLE GUJRAT HIGH COURT IN TAX APPEAL NO. 2583 OF 2010 IN THE CASE OF CIT-I VS AMIT CORPORATION, IN WHICH IT WAS HELD AS UNDER : TRIBUNAL WAS OF OPINION THAT, WHILE FRAMING ORIGIN AL ASSESSMENT, AO HAD CARRIED OUT FULL INQUIRIES AND THEREAFTER FRAM ED ASSESSMENT. TRIBUNAL, THEREFORE, OBSERVED THAT, ORDE R OF AO COULD NOT HAVE BEEN CATEGORIZED AS ERRONEOUS ON GROUNDS ST ATED BY CIT. TRIBUNAL COMMITTED NO ERROR. WHEN, DURING COURSE OF FRAMING OF ASSESSMENT, AO HAD ACCESS TO ALL RECORDS OF ASSESSE E, AFTER PURSUING SUCH RECORD AO FRAMED ASSESSMENT, SUCH ASS ESSMENT COULD NOT HAVE BEEN RE-OPENED IN EXERCISE OF REVISION POWER U /S 263 FOR 7 MAKING FURTHER INQUIRIES. IN FACTS OF CASE, TRIBUNAL RI GHTLY INTERFERED WITH SUCH ORDER. NO QUESTION OF LAW ARISES. TAX APP EAL DISMISSED. 7. HE HAS ALSO RELIED UPON ORDER OF ITAT DELHI BENC H IN THE CASE OF VODAFONE ESSAR SOUTH LTD. V CIT 141 TTJ 84, IN WHICH IT WAS HELD AS UNDER : WHERE THE A.O. HAD CALLED FOR THE DETAILS OF EXPENDITURE WHICH WERE DULY FURNISHED BY THE ASSESSEE, IT CANNOT BE SAID THAT THERE WAS LACK OF ENQUIRY SO AS TO CONFER POWER ON THE CIT TO INVOKE S. 263. 8. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMIT TED THAT ASSESSING OFFICER HAS NOT FAILED TO MAKE ENQUIRY IN TO THE MATTER, THEREFORE ORDER OF REVISION IS UNJUSTIFIED IN LAW. 9. ON THE OTHER HAND, LD. DR RELIED UPON THE IMPUGNED ORDER AND SUBMITTED THAT SURRENDER OF INCOME WAS MA DE FOR DEEMED INCOME AND ASSESSING OFFICER DID NOT MAKE PR OPER ENQUIRY INTO THE MATTER. THE ASSESSING OFFICER DID NOT APPLY HIS MIND AND NO DETAILS OF THE CLOSING STOCK OF MAN UFACTURED ITEMS HAVE BEEN FURNISHED. THEREFORE, LD. CIT WAS JUSTIFIED IN CANCELING THE ASSESSMENT ORDER IN THE MATTER. THE LD. DR RELIED UPON FOLLOWING DECISIONS : I) FAKIR MOHMED HAJI HASAN V CIT, 247 ITR 290 (GUJ) II) TUDOR KNITTING WORKS P.LTD. V CIT 360 ITR 453 (P&H) III) AXIA ENGINEERING WORKS V CIT 292 ITR 577 (P&H) 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE BEFORE US THAT THE ASSESSING OFFICER MA DE DETAILED 8 ENQUIRY AT THE ASSESSMENT STAGE WITH REGARD TO THE FALL IN GP RATE SET OFF OF THE BROUGHT FORWARD LOSSES AND DEPR ECIATION. THE ASSESSING OFFICER ISSUED SEVERAL STATUTORY NOTI CES TO THE ASSESSEE AND CALLED FOR COMPLETE DETAILS WITH REGAR D TO MANUFACTURING PROCESS, MONTH-WISE PRODUCTION, CONSU MPTION, QUANTITATIVE SALES AND JUSTIFICATION OF MAJOR EXPEN SES. THE ASSESSEE FURNISHED COMPLETE DETAILS AND REPLIES BEF ORE ASSESSING OFFICER AT THE ASSESSMENT STAGE AND ALSO PRODUCED THE BOOKS OF ACCOUNT WHICH HAVE BEEN TEST CHECKED B Y THE ASSESSING OFFICER AND NO INFIRMITY IN THE REPLIES O F THE ASSESSEE AND BOOKS OF ACCOUNT HAVE BEEN FOUND AT THE ASSESSM ENT STAGE. THE ASSESSING OFFICER, ALMOST TAKEN UP EACH AND EVERY ISSUE WITH REGARD TO MANUFACTURING ACTIVITY OF THE ASSESSEE AND WAS SATISFIED WITH THE EXPLANATION OF ASSESSEE. TH E ASSESSEE HAS SHOWN SURRENDER OF INCOME AS WAS MADE DURING TH E COURSE OF SURVEY IN THE COMPUTATION OF INCOME AND AFTER CL AIMING SET OFF OF BUSINESS LOSS AND UNABSORBED DEPRECIATION, S HOWN TAXABLE INCOME AT RS. 63.42 LACS. THE NATURE OF BU SINESS OF THE ASSESSEE IS MANUFACTURING OF SWEET ITEMS ON WHI CH THE ASSESSEE EXPLAINED THAT IT WAS NOT POSSIBLE TO MAIN TAIN THE DETAILS OF MANUFACTURED ITEMS OR OF THE CLOSING STO CK. THE NATURE OF BUSINESS OF THE ASSESSEE CLEARLY REVEALED THAT IT MAY NOT BE POSSIBLE TO GIVE THE EXACT DETAILS OF THE MA NUFACTURING OF THE SWEET ITEMS. THE ASSESSING OFFICER HAS EXAM INED THIS ASPECT CONSIDERING THE HISTORY OF THE ASSESSEE AND THE LD. CIT DID NOT ADVERSELY COMMITTED UPON THE SAME IN THE IM PUGNED ORDER THAT WHEN ASSESSEE IS CONTINUING WITH THE SAM E NATURE OF BUSINESS FROM THE EARLIER YEAR AND SIMILAR DATA OF 9 MANUFACTURED ITEMS HAVE NOT BEEN PREPARED AND HAVE NOT BEEN DOUBTED BY THE REVENUE DEPARTMENT WHY SUCH AN ITEM IS CONSIDERED IN THE PROCEEDINGS UNDER SECTION 263 OF THE ACT. NOTHING IS ALSO ADVERSELY COMMENTED UPON AS TO WHY THE ASSESSEE WOULD NOT BE ENTITLED TO SET OFF OF LOSS A ND THE DEPRECIATION. THE ASSESSEE HAS ALSO EXPLAINED THE REASON FOR FALL IN THE GP BECAUSE IN THE EARLIER YEAR, THE PUR CHASE PRICE OF THE ITEMS USED FOR MANUFACTURE OF THE SWEETS WERE LOWER AND IN THE YEAR UNDER CONSIDERATION, THE PURCHASE PRICE S HAVE INCREASED AND A COMPLETE DATA OF THE SAME WAS ALSO PRODUCED BEFORE ASSESSING OFFICER. THE ASSESSING OFFICER WA S SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. 11. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CAS E OF CIT VS K.S.BHATIA 269 ITR 577 HELD THAT, MERE FACT THAT THE PROFITS WERE LOW COMPARED TO THE EARLIER YEAR WAS N OT A CIRCUMSTANCE OR MATERIAL WHICH COULD JUSTIFY AN EST IMATE IN THE CIRCUMSTANCES OF THE CASE. 12. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS GIRDHARI LAL [258 ITR 331] HELD THAT WHEN THE ASSESSING OFFICER AFTER GOING THROUGH THE MATERIAL ON RECORD AND AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, MADE S OME ADDITION AND REJECTED THE BOOKS OF ACCOUNT, IT COUL D NOT BE SAID THAT HE HAD NOT APPLIED HIS MIND. IT IS NOT ALWAYS NECESSARY THAT EVERY ASSESSEE IN THE LINE OF THE BUSINESS SHO ULD HAVE THE SAME RATE OF PROFIT. 10 13. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CI T V GABRIEL INDIA LTD. 203 ITR 108 HELD AS UNDER : HELD, THAT THE INCOME-TAX OFFICER IN THIS CASE HAD MA DE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE IN CURRED BY THE ASSESSEE. THE ASSESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL T HESE WERE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME-TAX OFFICER ON BEING SATISFIED W ITH THE EXPLANATION ASSESSEE. THIS DECISION OF THE INCOME-TA X OFFICER COULD NOT BE HELD TO BE ERRONEOUS' SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSIO N IN THAT REGARD. MOREOVER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDIN GS FOR REVISION AND HEARING ASSESSEE, COULD NOT SAY TH AT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOU S AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BU T AN EXPENDITURE OF CAPITAL NATURE. HE SIMPLY ASKED THE INCOME-TAX OFFICER TO RE-EXAMINE THE MATTER. THAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASI DE THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX IT SE CTION 263. 14. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V DEEPAK MITTAL 324 ITR 411 HELD AS UNDER : CHANGE OF OPINION BY REAPPRAISING THE EVIDENCE IS NOT WITHIN THE PARAMETERS OF REVISIONAL JURISDICTION OF THE COMMISSIONER UNDER SECTION 263 OF THE INCOME TAX ACT,1961. HELD, DISMISSING THE APPEAL THAT THE TRIBUNAL HAD F OUND THAT THE ASSESSING OFFICER HAD GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE WAS ENGAGED IN THE PROCES S OF MANUFACTURING OF PRODUCTS AND ACCORDINGLY HE HAD GRANTED CONCESSION UNDER SECTION 80IB. THE CLAIM OF THE ASSESSEE HAD BEEN FOUND TO BE GENUINE. THE ASSESSIN G OFFICER HAD ALSO EXAMINED THE VARIOUS WORKERS OF TH E ASSESSEE AND THEN RECORDED THE FINDING. THE ASSESS ING OFFICER WAS JUSTIFIED IN GRANTING THE SPECIAL DEDUC TION UNDER SECTION 80IB. THE ORDER OF REVISION DISALLOWI NG THE SPECIAL DEDUCTION WAS NOT VALID. 15. THE HON'BLE SUPREME COURT IN THE CASE OF MALABA R INDUSTRIAL CO. LTD. V CIT 243 ITR 83 HELD AS UNDER : EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED AS PREJUDI CIAL 11 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 R EVENUE 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. 16. THE RECORD FURTHER REVEALED THAT WHATEVER OBJEC TIONS HAVE BEEN RAISED BY LD. CIT, HAVE BEEN MET BY THE ASSESS EE BY EXPLAINING SAME BEFORE A.O. AT ASSESSMENT STAGE. T HE ASSESSEE EXPLAINED THE ISSUE OF SET OFF OF UNABSORB ED LOSS OF RS. 14,84,641/- BY REFERRING TO REPLY FILED BEFORE ASSESSING OFFICER DATED 21.05.2012 PB-103 ALONGWITH THE DETAI LS. THE ASSESSEE ALSO REPLIED TO THE QUERY RAISED BY THE AS SESSING OFFICER WITH REGARD TO SURRENDERED INCOME, COPIES O F THE REPLIES ARE FILED ON RECORD. THE ASSESSEE ALSO EXP LAINED THAT ASSESSING OFFICER, AFTER CONSIDERATION OF ALL THE R EPLIES, HAS ALLOWED THE DEPRECIATION AND THE DEPRECIATION CHART IS FILED AT PAGE 44 OF THE PAPER BOOK. IT IS, THEREFORE, CLEAR THAT THE ASSESSEE SUBMITTED COMPLETE DETAILS BEFORE ASSESSIN G OFFICER AT THE ASSESSMENT STAGE REGARDING ALL THE ISSUES WH ICH HAVE BEEN RAISED BY THE LD. CIT IN THE IMPUGNED ORDER UN DER SECTION 263 OF THE ACT. IT IS, THEREFORE, CLEAR TH AT ASSESSING OFFICER WAS SATISFIED WITH ALL THE ITEMS WHICH HAVE BEEN RAISED IN NOTICE UNDER SECTION 263 OF THE ACT AND ALLOWED THE CLAIM OF ASSESSEE AFTER CONDUCTING PROPER ENQUIRY INTO THE M ATTER. THE ASSESSING OFFICER, AFTER MAKING COMPLETE ENQUIRIES HAS MADE PART ADDITION, WHICH WILL PROVE THAT THE ISSUES RAI SED IN THE PROCEEDINGS UNDER SECTION 263 OF THE ACT HAVE BEEN CORRECTLY 12 EXAMINED BY ASSESSING OFFICER AT ASSESSMENT STAGE. THEREFORE, WHEN THE ASSESSING OFFICER ADOPTED ONE O F THE COURSES PERMISSIBLE IN LAW AND THE VIEW TAKEN BY TH E ASSESSING OFFICER WAS NOT FOUND TO BE UNSUSTAINABLE IN LAW, THE LD. CIT SHOULD NOT SUBSTITUTE THE OPINION OF TH E ASSESSING OFFICER IN THE PROCEEDINGS UNDER SECTION 263 OF THE ACT. THE LD. CIT HAS NOT GIVEN ANY ELABORATE REASONS AS TO H OW THE ASSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS PREJUDI CIAL TO THE INTEREST OF REVENUE. THE CASE LAWS RELIED UPON BY LD. DR FOR THE REVENUE ARE DISTINGUISHABLE ON FACTS OF THIS CA SE. THE LD. CIT, THEREFORE, SHOULD NOT HAVE INVOKED THE JURISDI CTION UNDER SECTION 263 OF THE ACT. IT, THEREFORE, APPEARS THA T LD. CIT CHANGED THE OPINION BY RE-APPRAISING THE EVIDENCES AND EXPLANATION FILED ON RECORD, THUS IT WOULD NOT GIVE REVISIONAL JURISDICTION TO HIM UNDER SECTION 263 OF THE ACT TO SET ASIDE THE ASSESSMENT ORDER. 17. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F THE DECISIONS MENTIONED IN THE ORDER, WE ARE OF THE VIE W THAT SINCE ALL THE ISSUES RAISED IN NOTICE UNDER SECTION 263 O F THE ACT HAVE BEEN EXAMINED BY ASSESSING OFFICER IN DETAIL A T THE ASSESSMENT STAGE, THEREFORE THE OPINION OF THE ASSE SSING OFFICER SHOULD NOT HAVE BEEN SUBSTITUTED BY THE LD. CIT AND AS SUCH THE ASSESSMENT ORDER WOULD NOT BE TREATED AS E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND SHOU LD NOT HAVE BEEN SET ASIDE IN THE PROCEEDINGS UNDER SECTION 263 OF THE ACT. IN VIEW OF ABOVE DISCUSSION, WE SET ASIDE THE IMP UGNED ORDER 13 UNDER SECTION 263 OF THE ACT AND QUASH THE SAME. RESULTANTLY, THE ORIGINAL ASSESSMENT ORDER IS RESTO RED. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER,2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH OCTOBER,2014. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH