HARI O STONES, Jaipur V. CIT, Alwar

ITA 534/JPR/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6216 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLEE AGARWAL CIT DHK
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Source of fund; Tangible material; Difference of opinion; Change of opinion
• Section: 143(3); 80HHC; 194C; 68; 69; 263; 63; 2

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA-@ ITA NO. 534/JP/2016 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2011-12 M/S HARI OM STONES, C/O- SH. OM PRAKASH SHARMA, MANDAPURA ROAD, RUDAWAL, TEH- ROOPWAS, BHARATPUR. CUKE VS. PR. COMMISSIONER OF INCOME TAX, ALWAR AAYAKAR BHAWAN, MOTI DOONGRI, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAFFH 6684 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. ROLEE AGARWAL (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 20/03/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 04/04/2018 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. PR. CIT(A), ALWAR DATED 15/03/2016 FOR THE A. Y. 2011-12 PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE A CT). 2. THE ASSESSEE IS ENGAGED IN DOING BUSINESS OF ROYA LTY COLLECTION IN TERMS OF THE CONTRACT AWARDED BY THE MINING DEPARTME NT, GOVT. OF RAJASTHAN FOR COLLECTION OF ROYALTY IN BAYANA TEHSIL AND ROOPWAS TEHSIL. THE ASSESSEE FILED ITS RETURN OF INCOME ON 31/3/2013 DECLARING TOTAL ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 2 INCOME OF RS. 2,99,820/-. THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER HAS PASSED ASSESSMENT ORDER U/S 1 43(3) OF THE ACT BY MAKING VARIOUS ADDITIONS AND ESTIMATED TOTAL INCOME OF RS. 4,55,560/- AND ADDED THE SAME TO THE TOTAL DECLARED INCOME OF THE ASSESSEE. THE LD. PR. CIT(A) HAS PASSED ORDER U/S 263 OF THE ACT AND S ET ASIDE THE ISSUE TO THE ASSESSING OFFICER TO BE DECIDED AFRESH. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE THE ITAT BY T AKING FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, LD. COMMISSIONER OF INCOME TAX (CIT) ERRED IN PASSING O RDER U/S 263 OF THE INCOME TAX ACT, 1961 (THE ACT), WHEN THE ASS ESSMENT FOR THE IMPUGNED ASSESSMENT YEAR HAD ALREADY BEEN CONCL UDED BY ASSESSING OFFICER (AO), U/S 143(3) OF THE ACT, AFTE R SEEKING EXPLANATIONS AND MAKING ALL THE ENQUIRIES NECESSARY FOR THE COMPLETION OF ASSESSMENT. APPELLANT PRAYS ORDER SO PASSED U/S 263 MAY PLEASE BE HELD AS BAD IN LAW. WITHOUT PREJUDICE TO GROUND NO.1: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT ERRED IN DIRECTING THE AO TO EXAMINE THE ISSUE OF COMPUTATION OF REMUNERATION TO THE WORKING PARTNERS BY NOTING THAT PARTNERS REMUNERATION HAS BEEN CLASSIFIED IN 3 DIFFERENT WAYS IN AUDIT REPORT, P&L A/C AND COMPUTATION OF T OTAL INCOME. THE APPELLANT PRAYS THAT SO FAR AS REMUNERATION CLA IMED IN COMPUTATION IS IN PARITY WITH PROVISIONS OF PARTNER SHIP DEED, THE SAME CANNOT BE OBJECTED. 3. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AN D IN LAW, LD. CIT ERRED IN DIRECTING THE AO TO EXAMINE THE ISSUE REGA RDING DECLARATION OF PROFITS/ INCOME FROM PROVIDING L&T A ND JCB ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 3 MACHINES IGNORING THE FACT THAT APPELLANT FIRM WAS NOT HAVING CRANE OR JCB MACHINES. THUS APPELLANT PRAYS THE SAI D DIRECTION OF LD. CIT MAY PLEASE BE HELD AS BAD IN LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT ERRED IN DIRECTING THE AO TO EXAMINE THE CLAIM OF LATE FEE CHARGES AT RS. 1,08,300/- MADE IN P & L A/C IF THE SAME IS PENAL IN NATURE IGNORING THE EXPLANATION THAT THE SAME IS IN THE NATURE OF LATE FEES. APPELLANT PRAYS THE SAID DIRECTION OF LD. CIT MAY PLEASE BE HELD AS BAD IN LAW. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E IN LAW, LD. CIT ERRED IN DIRECTING THE AO TO EXAMINE THE NATURE OF CONTRACT WORK AGREEMENTS EXECUTED BY THE APPELLANT WHICH ARE MERE LY CHANGE OF OPINION. APPELLANT PRAYS THE SAID DIRECTION MAY PLEASE BE HELD AS BAD IN LAW. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT ERRED IN DIRECTING THE AO TO EXAMINE THE DETAIL S PERTAINING TO CAPITAL INTRODUCED BY PARTNERS BY IGNORING THE FACT THAT ALL THE PARTNERS WERE BEING ASSESSED TO INCOME TAX REGULARL Y IN THEIR INDIVIDUAL CAPACITY AND ALL THE EVIDENCES IN SUPPOR T THEREOF WERE ALREADY SUBMITTED AND EXAMINED BY LD. AO. THUS APPE LLANT PRAYS THE SAID DIRECTION MAY PLEASE BE HELD AS BAD IN LAW. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD. CIT ERRED IN DIRECTING THE AO TO VERIFY THE FREIGHT PAYMENTS MADE, WITH RESPECT TO THE TDS LIABILITY U/S 194C OF THE ACT, IGNORING THE FACT THAT ALL THE NECESSARY DETAILS IN THIS REGARD WERE ALREADY SUBMITTED DURING THE COURSE OF ASSESSM ENT PROCEEDINGS AND WERE EXAMINED BY LD. AO. THUS, THE SAID DIRECTION OF CIT MAY PLEASE BE HELD AS BAD IN LAW. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, LD, CIT ERRED IN DIRECTING THE AO TO INQUIRE INTO THE I DENTITY, GENUINENESS AND CREDITWORTHINESS OF UNSECURED LOANS IGNORING THE FACT THAT NECESSARY DETAILS IN THIS REGARD WERE ALREADY BEEN SUBMITTED BEFORE AO DURING ASSESSMENT PROCEEDINGS A ND EXAMINED BY LD. AO. THUS APPELLANT PRAYS THE DIRECT ION OF CIT IS BAD IN LAW. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 4 9. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. 4. ALL THE GROUNDS OF APPEAL IS INTERLINKED AND THE MAIN ISSUE INVOLVED IN THE APPEAL IS PASSING ORDER U/S 263 OF THE ACT B Y THE PR.CIT, ALWAR. 5. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR HAS SUBMITTED AS UNDER: BRIEF FACTS OF THE CASE ARE THAT THIS IS THE FIRST YEAR OF BUSINESS OF THE APPELLANT ASSESSEE WHO IS FORMED AS PARTNERSHIP FIRM DURING T HE YEAR UNDER APPEAL HAVING SOLE OBJECT OF DOING BUSINESS OF ROYALTY COLLECTION IN TERMS OF THE CONTRACT AWARDED BY THE MINING DEPARTMENT, GOVERNMENT OF RAJ ASTHAN FOR COLLECTION OF ROYALTY IN BAYANA TEHSIL AND ROOPWAS TEHSIL. THE AS SESSEE HAS INSTALLED 36 CHECK-POSTS AS PER TERMS OF THE CONTRACT AT DIFFERE NT PLACES OF THE AREAS IN THE ABOVEMENTIONED TEHSIL FOR THE COLLECTION OF ROYALTY . THE RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME AT RS. 2,99,820/-. THE REAFTER THE CASE OF ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS WHICH WAS LIMI TED TO EXAMINE LARGE OTHER EXPENSES AS CLAIMED IN PROFIT & LOSS ACCOUNT (AO PAGE 1 PARA 1). VARIOUS QUERY LETTERS / NOTICES WERE ISSUED BY THE LD. AO FROM TIME TO TIME AND AFTER DUE ENQUIRIES AND VERIFICATIONS INTO THE MATT ER, THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT VIDE DATED 24.03.20 14 WHEREIN CERTAIN DISALLOWANCES TO THE EXTENT OF RS. 1,55,740/- WERE MADE OUT OF VARIOUS EXPENSES CLAIMED IN P&L ACCOUNT. THEREAFTER, THE LD. CIT (ADMN.) INVOKED THE PROVISI ONS OF SECTION 263 OF THE INCOME TAX ACT, 1961 BY ALLEGING THAT THE LD. AO HA S NOT MADE PROPER ENQUIRIES AND VERIFICATION INTO THE MATTER AND ISSU ED SHOW CAUSE NOTICE U/S 263 TO THE ASSESSEE REQUIRING HIM TO SHOW CAUSE WITH RE GARD TO THE PROPOSED ACTION U/S 263 ( APB 1-12 ). IN RESPONSE TO SHOW CAUSE NOTICE WAS SUBMITTED O N 03.03.2016 (APB 13-25) WHEREIN IT WAS VEHEMENTLY EMPHASIZED THAT ALL THE ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 5 ASPECTS OF THE CASE WERE THOROUGHLY EXAMINED BY THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT WAS FURTHER SUBMITTED BEFORE LD. CIT(ADMN.) THAT VARIOUS INFORMATION WAS CALLED FOR BY THE LD. AO AN D SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS THEREFO RE THE ENTIRE ISSUES WERE DULY CONSIDERED BY THE LD. AO AND AFTER GIVING A PR OPER CONSIDERATION TO THE FACTS & CIRCUMSTANCES OF THE CASE AND THE RECORDS A S WELL AS THE DETAILS SUBMITTED BY ASSESSEE, THE LD. AO HAVING BEEN SATIS FIED BY ASSESSEES EXPLANATIONS AND AS PER HIS WISDOM AND JUDGMENT, P ASSED THE ASSESSMENT ORDER. ON MERITS ALSO, IT WAS SUBMITTED THAT THE IS SUES WHICH HAVE BEEN ALLEGED BY THE LD. CIT AS NOT INQUIRED INTO WERE NOT TENABL E AND WERE SETTLED B Y THE LD. AO AFTER DUE APPLICATION OF MIND. HOWEVER, THE LD. CIT(ADMN.), COMPLETELY BRUSHED ASI DE THE SUBMISSION OF ASSESSEE AND ARBITRARILY PROCEEDED TO PASS THE IMPU GNED ORDER U/S 263 THEREBY DIRECTING THE ASSESSING OFFICER TO CONSIDER THE MAT TER AFRESH IN LIGHT OF THE DIRECTIONS GIVEN BY HIM IN THE IMPUGNED REVISION OR DER. AGGRIEVED BY THE AFORESAID REVISION ORDER OF LD. CI T (ADMN.), THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THIS HONBLE TR IBUNAL. IN SUPPORT OF AND ELABORATION TO THE GROUNDS OF APPEAL ALREADY TAKEN, GROUND-WISE SUBMISSION IS MADE AS UNDER: GROUNDS OF APPEAL NOS. 1 TO 8: UNDER ALL THESE GROUNDS OF APPEAL, THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(ADMN.) IN PASSING THE IMPUGNED REVISION ORDER U /S 263 OF THE ACT ARBITRARILY AND WITHOUT IN ANY MANNER ESTABLISHING AS TO HOW THE ASSESSMENT ORDER PASSED BY LD. AO WAS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE. AS STATED ABOVE, THE YEAR UNDER APPEAL IS THE FIRST YEAR OF BUSINESS OF THE ASSESSEE WHO HAS COMMENCED ITS OPERATION W.E.F. 30. 09.2010 AFTER AWARDING THE ROYALTY COLLECTION CONTRACT FROM MINING DEPARTMENT, STATE OF RAJASTHAN. AS ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 6 PER THE PARTNERSHIP DEED DT. 1/4/2010,THE THE ASSES SEE FIRM CONSTITUTED OF TOTAL 17 PARTNERS WHO ALL HAD CONTRIBUTED TOWARDS THE CAPITA L OF THE FIRM TOTALING TO RS. 2,74,05,000/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, COMPLETE BOOKS OF ACCOUNTS OF THE ASSESSEE INCLUDING BILLS & VOUCHERS WERE PRODUCED FOR EXAMINATION WHICH IS CLEARLY APPARENT FROM THE LETT ER OF ASSESSEE DATED 11.03.2014, POINT NO. 14 ( APB-105) WHICH STOOD EXAMINED BY LD. AO ON TEST CHECK BASIS. FURTHER, OTHER DETAILS AS AND WHEN CALLED FOR BY TH E LD. AO WERE SUBMITTED BY THE ASSESSEE FROM TIME TO TIME INCLUDING LEDGER ACC OUNT OF MAJOR EXPENSES SUCH AS: I) CRANE AND JCB WAY EXPENSE, II) REMUNERATION TO PARTNERS , III) INTEREST TO PARTNERS, IV) ROYALTY INSTALLMENT PAYMENT. APART FROM THE ABOVE THERE WERE VARIOUS MINOR EXPEN SES ALSO, LEDGER ACCOUNTS PERTAINING TO WHICH WERE ALSO SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH IS APPARENT FROM THE LETTER DATE D 11.03.2014, POINT NO. 7, FILED BEFORE THE LD. AO ( APB-106). BESIDES THIS ASSESSEE ALSO FILED CONFIRMATIONS / AFFIDAVITS OF PARTIES WHO PROVIDED UNSECURED LOANS TO ASSESSEE - POINT NO. 5 (APB-105). FURTHER, ATTENTION OF THE HONBLE BENCH IS INVITED TO THE FACT THAT DUE ENQUIRY WITH REGARD TO THE CAPITAL CONTRIBUTIONS MADE BY PA RTNERS WAS ALSO MADE BY THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IN RESPONSE TO WHICH THE ASSESSEE FURNISHED ALL THE PLAUSIBLE DETAILS AND EX PLANATIONS ALONGWITH RELEVANT EVIDENCES TO ESTABLISH THE SOURCE OF INCOME IN THE HANDS OF THE PARTNERS ( APB 50-52) . A PERUSAL OF THE AFORESAID LETTER ( APB 50-52) WOULD SHOW THAT THE ASSESSEE HAS SUBMITTED THE INCOME TAX RETURN, BALAN CE SHEET, CAPITAL ACCOUNT DETAILS OF SUNDRY DEBTORS AND INVESTMENTS. THUS, THOUGHT THE ASSESSMENT WAS SELECTED FOR SCRUT INY LIMITED FOR THE VERIFICATION OF LARGE OTHER EXPENSES CLAIMED IN THE PROFIT & LOSS A/C HOWEVER, COMPLETE DETAILS / RECORDS WERE SUMMONED BY THE ASS ESSING OFFICER DURING THE ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 7 COURSE OF ASSESSMENT PROCEEDINGS AND WERE DULY SUBM ITTED, WHICH WERE SCRUTINIZED/ANALYZED/EXAMINED HIM BEFORE CONCLUDING THE ASSESSMENT PROCEEDINGS. THUS, BY WAY OF SUCH SCRUTINY / EXAMIN ATION OF THE DETAILS SO SUBMITTED, THE LD. AO SATISFIED HIMSELF WITH REGARD TO THE CAPITAL CONTRIBUTIONS OF PARTNERS AS WELL AS REMUNERATION OF PARTNERS, AN D ALSO THE DETAILS / EVIDENCES PERTAINING TO VARIOUS EXPENDITURES AND RECEIPTS OF THE ASSESSEE. ACCORDINGLY, HE PASSED THE ASSESSMENT ORDER AND MADE SOME DISALLOWA NCES OUT OF CERTAIN EXPENSES CLAIMED IN THE P & L ACCOUNT, NO OTHER ADV ERSE REMARK WAS MADE WITH RESPECT TO ANY OTHER ASPECT, EVEN THOUGH AS SU BMITTED ABOVE ALL THE ASPECTS WERE DULY SCRUTINIZED / EXAMINED BY HIM. HOWEVER, BY COMPLETELY IGNORING THE ABOVE FACTUAL P OSITION, THE LD. CIT(ADMN.) WITHOUT ANY BASIS ALLEGED THAT THE LD. A O HAD NOT MADE PROPER INQUIRY DURING THE COURSE OF ASSESSMENT PROCEEDINGS , AND THEREFORE, HE ARBITRARILY HELD THE ORDER OF LD. AO AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF REVENUE VIDE THE IMPUGNED REVISION ORDER PASSED U/S 263 OF THE INCOME TAX ACT, 1961. IN THIS REGARD, IT IS SUBMITTED THAT THE MAIN ISSUE POINTED OUT BY THE LD. CIT IN THE IMPUGNED REVISION ORDER PERTAINS TO THE CAPITAL CONTRIBUTIONS OF THE PARTNERS IN THE ASSESSEE FIRM. THE LD. CIT HAS FRAMED AN OPI NION THAT THE SOURCE OF CAPITAL CONTRIBUTIONS IN THE HANDS OF ASSESSEE FIRM HAS NOT BEEN EXPLAINED PROPERLY BY THE ASSESSEE DURING THE COURSE OF ASSES SMENT PROCEEDINGS, NOR WAS ENQUIRED INTO BY THE LD. ASSESSING OFFICER. IN THIS CONNECTION, IT IS SUBMITTED THAT COMPLETE EVIDENCES PERTAINING TO THE SOURCE OF SHARE CAPITAL WERE FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NOT ON LY THIS, EVEN THE SOURCE IN THE HANDS OF CONTRIBUTORS OF THIS CAPITAL I.E. PART NERS, WAS ALSO EXPLAINED BY SUBMITTING THE COPIES OF THEIR INCOME TAX RETURNS A LONGWITH BALANCE SHEET, CAPITAL ACCOUNT, DETAILS OF SUNDRY DEBTORS AND INVE STMENTS., ALL OF WHICH WERE SCRUTINIZED / VERIFIED BY THE LD. AO. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 8 HOWEVER, THE LD. CIT HAS HELD THAT THE SOURCE OF CA PITAL CONTRIBUTIONS IN THE HANDS OF PARTNERS HAS NOT BEEN SATISFACTORILY EXPLA INED. WHILE HOLDING SO, THE LD. CIT HAS ALLEGED THAT THE COPIES OF INCOME TAX R ETURNS OF THE PARTNERS INCLUDING THE BALANCE SHEET, CAPITAL ACCOUNT ETC. A RE NOT SUFFICIENT EVIDENCES TO PROVE THE SOURCE OF CAPITAL CONTRIBUTIONS. IN THIS REGARD, IT IS SUBMITTED THAT THE YEAR UNDER APPEAL IS THE FIRST YEAR OF BUSINESS OF ASSESSEE FIRM AND THEREFORE, THE SOURCE OF CAPITAL CANNOT BE ALLEGED AS UNEXPLAINED IN THE HANDS OF ASSESSEE FIRM. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, IT HAS BEEN ESTABLISHED WITH AMPLE EVI DENCES THAT THE CAPITAL HAS BEEN CONTRIBUTED BY THE 17 PARTNERS AND THE AVAILAB ILITY OF FUNDS IN THEIR RESPECTIVE HANDS HAS BEEN DULY ESTABLISHED BY THE A SSESSEE WITH THE HELP OF RELEVANT EVIDENCE / RECORD. THEREFORE, IN VIEW OF T HE ABOVE, IT IS SUBMITTED THAT: 1. FIRSTLY, THE ASSESSEE IS NOT OBLIGED TO ESTABLISH THE SOURCE OF SOURCE INASMUCH AS THIS IS THE FIRST YEAR OF OPERATION OF ASSESSEES BUSINESS. IN THIS CONNECTION, RELIANCE IS PLACED ON THE FOLLOWING JUD ICIAL PRONOUNCEMENTS: (I) CIT VS M/S KEWAL KRISHNAN & PARTNERS 18 DTR 12 1 (RAJ. HC) WHEREIN IT HAS BEEN HELD AS UNDER: 7. IT IS NOT IN DISPUTE THAT THE MEMBERS OF THE A OP S/SHRI ALI MOHD. DEPOSITED RS. 5,00,000/-, AMARNATH DEPOSITED RS. 3, 00,000/- AND KEWAL KRISHAN DEPOSITED RS. 50,000/- AS CAPITAL CON TRIBUTION ON THE FIRST DAY OF COMMENCEMENT OF THE BUSINESS BY THE FI RM I.E. 01.04.1989. ALL THE PARTNERS HAVE CONFIRMED THAT THEY HAD INTRO DUCED THESE AMOUNTS AS THEIR CAPITAL CONTRIBUTION. OBVIOUSLY, I T WAS FOR THE PARTNERS TO EXPLAIN THE SOURCE OF THE DEPOSITS AND IF THEY FAILED TO DISCHARGED THE ONUS THEN, SUCH DEPOSITS COULD BE AD DED IN THE HANDS OF THE PARTNERS ONLY AND NOT IN THE HANDS OF THE AS SESSEE FIRM. IN ANY CASE, SUCH CAPITAL CONTRIBUTIONS ENTERED INTO THE B OOKS OF THE ACCOUNTS OF THE ASSESSEE FIRM PRIOR TO THE COMMENCE MENT OF THE BUSINESS CANNOT BE TREATED TO BE THE INCOME OF THE ASSESSEE FIRM. IN CONSIDERED OPINION OF THIS COURT, SUCH UNEXPLAINED CREDITS MAY BE ADDED TO THE INCOME OF THE PARTNERS CONCERNED IN TE RMS OF SECTION 69 AND NOT U/S 68 OF THE ACT, 1961. (II) ABHYUDAYA PHARMACEUTICALS V. CIT [2013] 32 TAXMANN.COM 68 ALLAHABAD) ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 9 SECTION 68 OF THE INCOME-TAX ACT, 1961 - CASH CREDITS - (IN C ASE OF FIRM/PARTNER) - ASSESSMENT YEAR 1991-92 - ASSESSEE WAS A PARTNERSHIP FIRM CONSTITUTED VIDE PARTNERSHIP DEED DATED 5-7-1990 - A MINOR, 'S', WAS ADMITTED TO BENEFITS OF PARTNERSHIP FIRM ON 7-7-1990 WHO CONTRIBUTED TOWARDS HIS CAPITAL ACCOUNT IN SHAP E OF TWO DEMAND DRAFTS - IN ASSESSMENT PROCEEDINGS, ASSESSING OFFIC ER REQUIRED ASSESSEE FIRM TO EXPLAIN SOURCE OF CONTRIBUTION MAD E BY 'S' - EXPLANATION OFFERED WAS NOT FOUND SATISFACTORY AND ASSESSING OFFICER ADDED AMOUNT CONTRIBUTED IN HANDS OF ASSESSEE - TRI BUNAL CONFIRMED SAID ADDITION - ON APPEAL, IT WAS NOTED THAT IT WAS FIRST YEAR OF OPERATION OF ASSESSEE-FIRM AND, THUS, ASSESSEE COUL D NOT HAVE ITS SEPARATE INCOME AT TIME OF FORMATION - FURTHER, IDE NTITY OF DEPOSITOR, I.E., 'S', WAS NOT IN DISPUTE AND, THUS, IF FOR ONE REASON OR OTHER, REVENUE AUTHORITIES WERE NOT SATISFIED WITH FINANCI AL CAPABILITY OF 'S', AMOUNT IN QUESTION COULD HAVE BEEN ADDED AT HANDS O F 'S' BUT NOT IN HANDS OF FIRM - WHETHER IN VIEW OF ABOVE, IMPUGNED ADDITION MADE IN CASE OF ASSESSEE-FIRM WAS TO BE DELETED - HELD, YES [PARA 25] [IN FAVOUR OF ASSESSEE] (III) CIT VS. JAISWAL MOTOR FINANCE (ALLAHABAD HC) 141 ITR 706 CASH CREDITS FIRM DEPOSITS IN ACCOUNTS OF PARTN ERS IN BOOKS OF FIRM IN FIRST YEAR OF ASSESSMENT OF FIRM DEPOSITS MADE BY PARTNERS TOWARDS CAPITAL WITHOUT THE DEPOSITS THEY COULD N OT HAVE BECOME PARTNERS DEPOSITS CANNOT BE ASSESSED AS INCOME OF FIRM INCOME TAX ACT, 1961, S. 68. (IV) INDIA RICE MILLS VS. CIT (ALLAHABAD) 218 ITR 508 INCOME FROM UNDISCLOSED SOURCES FIRM PARTNERS C ONTRIBUTING CAPITAL BEFORE FIRM COMMENCED BUSINESS ONUS ON P ARTNERS TO EXPLAIN SOURCE OF DEPOSITS MAY BE ADDED TO PARTNE RS INCOME IF THEY FAIL TO EXPLAIN SOURCE CANNOT BE TREATED AS INCOM E OF FIRM INCOME TAX ACT, 1961. (IV) SURENDRA MAHAN SETH VS. CIT (ALLAHABAD HC) 221 ITR 239 INCOME FIRM PARTNERS MAKING DEPOSIT IN FIRM ON ITS FIRST DAY OF EXISTENCE ONUS ON PARTNERS TO EXPLAIN SOURCE PA RTNERS FALLING TO DO SO AMOUNT TO BE ADDED IN THEIR ASSESSMENT AND NOT IN ASSESSMENT OF FIRM INCOME TAX ACT, 1961. 2. SECONDLY, IN SPITE OF THE LEGAL POSITIONS AS STATED ABOVE, TH E ASSESSEE HAS SATISFACTORILY EXPLAINED THE AVAILABILITY OF FUNDS IN THE HANDS OF THE PARTNERS, THEREBY THE ASSESSEE HAS PROVED THE SOURC E OF SOURCE AS WELL. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 10 3. THIRDLY, THE LD. CIT HAS GROSSLY ERRED IN HOLDING THAT THE M ERE FILING OF INCOME TAX RETURNS BY THE PARTNERS DOES NOT ESTABLI SH THE SOURCE OF CAPITAL CONTRIBUTION MADE BY THEM. IN THIS REGARD, IT IS SU BMITTED THAT SINCE THE INCOME TAX RETURNS FILED BY THEM HAVE BEEN ACCEPTED BY THE DEPARTMENT, THE INCOME DECLARED THEREIN FORMS PART OF THE FUNDS AVA ILABLE WITH THEM AT THEIR DISPOSAL. FURTHER, THE CAPITAL ACCOUNTS AS WELL AS BALANCE SHEETS OF THE PARTNERS CLEARLY SHOW THAT THERE WAS OPENING CAPITA L BALANCE CARRIED OVER FROM THE PRECEDING YEARS, SOURCE OF WHICH CANNOT BE INQUIRED INTO IN THE YEAR UNDER APPEAL, AND CERTAINLY BY NOT CONDUCTING SUCH ENQUIRIES THERE WAS NO LOSS TO THE REVENUE FOR THE YEAR UNDER APPEAL. 4. FOURTHLY, INCOME TAX RETURNS OF MOST OF THE PARTNERS FOR THE PRECEDING YEARS WERE ALSO FILED BEFORE THE LD. CIT TO ESTABLISH THE IR INCOME IN THE PRECEDING YEARS AS WELL. (APB 13-25). WITH REGARD TO ISSUES OTHER THAN THE ISSUE OF CAPI TAL CONTRIBUTION, IT IS SUBMITTED AS UNDER: 1. ON THE ISSUE OF SALARY / REMUNERATION OF PARTNERS IT IS SUBMITTED THAT, THE SALARY WAS DISTRIBUTED AMONG THE PARTNERS AS PER CL AUSE 10 OF THE PARTNERSHIP DEED (APB- 29) . THE TOTAL SALARY CREDITED IN THE CAPITAL ACCOUNTS WAS RS. 14,70,000/- (APB 46-49) AND ACCORDINGLY, THE ADMISSIBLE AMOUNT RS. 674,723/- WAS CLAIMED AS DEDUCTION IN TH E COMPUTATION SHEET. THOUGH, THERE MAY BE SOME MISTAKE IN BIFURCATION OF SALARY AT THE TIME OF PREPARING THE COMPUTATION SHEET, WHEREIN THE TOTAL SALARY AS CLAIMED FOR THE DEDUCTION WAS SAME I.E. RS. 14,70,000/- BUT THE SAM E WAS SHOWN AS DISTRIBUTED BETWEEN 7 (SEVEN) PARTNERS ONLY, INSTEA D OF 10 PARTNERS, AS PER CLAUSE 10 OF PARTNERSHIP DEED HOWEVER, THE SAME DID NOT AFFECT THE TOTAL INCOME OF THE FIRM, IF THE SALARY IS CALCULATED AS PRESCRIBED IN THE DEED OF PARTNERSHIP AND IS CLAIMED IN PROFIT & LOSS ACCOUNT (APB-46) AND DISTRIBUTED BETWEEN THE PARTNERS (APB 47-49). MERELY DUE TO MISTAKE IN COMPUTATION OF INCOME WHERE INADVERTENTLY THE TOTAL SALARY OF RS. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 11 14,70,000/- WAS SHOWN AS DISTRIBUTED AMONGST 7 (SEV EN) PARTNERS INSTEAD OF 10 (TEN) PARTNERS, IT DOES NOT MAKE ORDER PASSED AS PREJUDICIAL TO THE INTEREST OF REVENUE SINCE THE AMOUNT ALLOWABLE TOWARDS PARTN ERS REMUNERATION AS PER PROVISIONS OF SECTION 40(B) OF THE INCOME TAX A CT,1961 REMAINED THE SAME (I.E. 14,70,000/-). ALSO, FURTHER THAT, IN THE FINANCIAL STATEMENTS, AS AUDITED BY THE AUDITORS, THE TOTAL SALARY WAS CORRE CTLY DISTRIBUTED AMONGST ALL 10 PARTNERS, AS PRESCRIBED IN THE PARTNERSHIP D EED (APB 47-49) . HENCE, THERE WAS NOTHING PREJUDICIAL TO THE REVENUE, ON TH IS ACCOUNT SO AS TO WARRANT ISSUING NOTICE U/S 263 OF THE I T ACT. 2. ON THE ISSUE OF ALLEGED INCOME FROM JCB OR CRANE , IT IS SUBMITTED THAT THE ASSESSEE FIRM DO NOT OWN ANY CRAIN AND JCB, THU S QUESTION OF SHOWING ANY RECEIPT / INCOME FROM JCB OR CRANE DID NOT ARIS E AT ALL. THE ASSESSEE USED THE JCB/ CRANES FOR CLEARING THE WAYS (RASTA) FROM CHECK POSTS ESTABLISHED TO REACH THE MAIN ROAD, AND FOR GETTING CONNECTIVITY WITH THE QUERIES. THE ASSESSEE HAD SUBMITTED THE LEDGER ACCO UNT OF THE ABOVE SAID EXPENSES DURING THE COURSE OF ASSESSMENT AND ALSO P RODUCED COMPLETE VOUCHERS FOR THE SAME WHICH IS CLEARLY APPARENT FRO M THE LETTERS FILED BEFORE THE LD. AO (APB-106) AND AFTER EXAMINING THE SAME, A SUM OF RS. 25,200/- WAS DISALLOWED . 3. ON THE ISSUE OF EXPENDITURE OF RS. 1,08,300/- DEBITED IN PROFIT AND LOSS ACCOUNT, IT IS SUBMITTED THAT THE SAME IS LATE FEE CHARGED BY THE MINING DEPARTMENT FOR LATE DEPOSITS OF MONTHLY INSTALLMENT OF ROYALTY AMOUNT. THE ASSESSEE DEBITED THE ABOVE AMOUNT IN PROFIT AND LOS S ACCOUNT, SUBMITTED THE COPY OF ABOVE SAID ACCOUNT AND ALSO PRODUCED THE RE CEIPT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER AFTER BEING SATISFIED ALLOWED THE ABOVE EXPENDITURE (APB-106) . 4. ON THE ALLEGATION OF NON-EXAMINATION BY AO OF THE C OPY OF AGREEMENT BETWEEN GOVERNMENT AND ASSESSEE REGARDING CONTRACT WORK IT IS SUBMITTED THAT, AS MENTIONED AT PARA 1 OF THE REPLY SUBMITTED ON 11.03.2014 (APB- ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 12 105) , THE CONTRACT OF COLLECTION OF ROYALTY FROM THE LE ASE HOLDERS WAS AWARDED BY THE MINING DEPARTMENT TO THE ASSESSEE. T HE AMOUNT WORTH RS. 7,69,42,109/- WAS RECOVERED AS ROYALTY ON BEHALF OF GOVERNMENT OF RAJASTHAN, THE SAME WAS SHOWN IN THE DULY AUDITED T RADING, PROFIT & LOSS ACCOUNT (APB-46). THE ASSESSEE PRODUCED THE CARBON COPIES OF RECEIPT S ISSUED AGAINST THE MONTHLY INSTALLMENT DEPOSITED BE FORE THE ASSESSING AUTHORITY AT THE TIME OF ASSESSMENT AND THE ASSESSI NG OFFICER WAS SATISFIED WITH THE RECEIPTS SHOWN IN PROFIT & LOSS ACCOUNT. 5. ON THE ISSUE OF DEPOSITS MADE BY PARTNERS IN THE BA NK ACCOUNT OF ASSESSEE , IT IS SUBMITTED THAT, THE AMOUNT DEPOSITED BY THE PARTNERS IN THE BANK ACCOUNTS, HAD ALREADY BEEN SHOWN IN THE CONCER NING CAPITAL ACCOUNTS AS WELL AS IN THE BALANCE SHEET ETC. SUBMITTED AT T HE TIME OF ASSESSMENT. THE ASSESSEE HAS ALSO EXPLAINED THE SOURCE OF DEPOS ITS AT THE TIME OF ASSESSMENT BEFORE THE ASSESSING AUTHORITY AS MENTIO NED IN THE PRECEDING PARAS IN DETAIL. 6. ON THE ISSUE OF PAYMENT OF VEHICLE RENT TO VARIOUS TRUCK OWNERS, IT IS SUBMITTED THAT, THE ASSESSEE EXPENDED A SUM OF RS. 46,44,301/- ON VEHICLES RENT, THE ASSESSEE SUBMITTED THE COPY OF ABOVE ACCO UNT BEFORE THE ASSESSING AUTHORITY, THE ASSESSEE ALSO PRODUCED THE VOUCHERS OF EACH AND EVERY ENTRY OF PAYMENT IN THE ABOVE SAID HEADS (APB-106) . NO PAYMENT EXCEEDING RS. 50,000/- WAS MADE TO ANY PARTY, THUS THE ASSESSEE W AS NOT LIABLE TO MAKE ANY TDS, THE ASSESSING OFFICER WAS SATISFIED WITH T HE ABOVE SUBMISSIONS AND THUS MADE NO DISALLOWANCE. 7. WITH REGARD TO UNSECURED LOAN TAKEN BY ASSESSEE , IT IS SUBMITTED THAT ALL THE PARTIES ARE ASSESSED TO INCOME TAX SINCE LONG AND T HE AMOUNTS WERE RECEIVED THROUGH ACCOUNT PAYEE CHEQUES AND ALSO SH OWN THE SAID AMOUNT IN THEIR RESPECTIVE RETURNS, COPIES OF INCOME TAX R ETURN, COPIES OF CAPITAL ACCOUNTS AND COPIES OF BALANCE SHEET WERE DULY SUBM ITTED BEFORE THE LD. AO DURING THE COURSE OF ASSESSMENT AS MENTIONED IN PARA 6 OF THE REPLY ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 13 SUBMITTED (APB-105, 111-112) . THUS, THE DOCUMENTS REQUIRED FOR THE PURPOSES OF VERIFICATION OF LOANS TAKEN HAD ALREADY BEEN SUBMITTED AND TREATED AS GENUINE BY THE LD. ASSESSING AUTHORITY A T THE TIME OF ASSESSMENT. IN VIEW OF THE ABOVE FACTUAL BACKGROUND OF THE CAS E, IT IS HUMBLY SUBMITTED THAT ESSENTIAL ELEMENTS NECESSITATED FOR INVOKING S ECTION 263 ARE NOT FULFILLED. THE BASIC INGREDIENTS TO BE FULFILLED BE FORE INVOKING SECTION 263 HAVE BEEN EXPLAINED BY THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT REPORTED IN 243 ITR 83 (SC) (APB 28-29) IN THE FOLLOWING WORDS: A BARE READING OF SECTION 263 OF THE INCOME TAX A CT, 1961, MAKES IT CLEAR THAT THE PREREQUISITE FOR THE EXERCISE OF JUR ISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER O F THE INCOME TAX OFFICER IS ERRONEOUS IS SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TW IN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS ; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF TH E 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. IT IS THUS SUBMITTED THAT THE ORDER OF LD. AO IS NE ITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. AT THIS JUNCTURE, KIND ATTENTION OF HONBLE BENCH IS INVITED TO EXPLANATION 2 INSERTED IN SECTION 263 BY FINANCE ACT, 2015, W.E.F . 01.06.2015, WHICH HAS WIDENED THE POWERS OF CIT TO REVISE THE ALREADY COM PLETED ASSESSMENT AND HAS BEEN TAKEN SHELTER BY THE LD.CIT (ADMN.) IN THE PRESENT CASE ALSO, WHICH READS AS UNDER: EXPLANATION 2 . FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECL ARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE D EEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ( A ) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 14 ( B ) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; ( C ) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH A NY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119 ; OR ( D ) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISD ICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OT HER PERSON. ] A PERUSAL OF ABOVE CLARIFIES THAT ORDER PASSED BY A SSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF THE REVENUE IF AO HAS PASSED SUCH ORDER WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; IT IS WORTHWHILE TO NOTE HERE THAT THE PHRASE WHICH SHOULD HAVE BEEN MADE HERE IN NO WAY MEANS THAT ENQUIRIES SHOULD HAVE BE EN MADE IN MANNER AS DESIRED BY CIT, RATHER IT MEANS THAT BEFO RE HOLDING AN ORDER TO BE ERRONEOUS, CIT SHOULD HAVE CONDUCTED NECESSARY E NQUIRIES OR VERIFICATION WHICH BRINGS ON RECORD CERTAIN MATERIA L IN ORDER TO SHOW THAT THE FINDING GIVEN BY THE ASSESSING OFFICER IS ERRON EOUS. IN THIS REGARD RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: (1) SHRI NARAYAN TATU RANE VS ITO ITA NO.2690 & 2691/MUM/16 (APB 1- 11) DATED 06.05.2016 20. FURTHER CLAUSE (A) OF EXPLANATION STATES THAT AN OR DER SHALL BE DEEMED TO BE ERRONEOUS, IF IT HAS BEEN PASSED WITHO UT MAKING ENQUIRIES OR VERIFICATION, WHICH SHOULD HAVE BEEN M ADE. IN OUR CONSIDERED VIEW, THIS PROVISION SHALL APPLY, IF THE ORDER HAS BEEN PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATION WHI CH A REASONABLE AND PRUDENT OFFICER SHALL HAVE CARRIED OUT IN SUCH CASES, WHICH MEANS THAT THE OPINION FORMED BY LD PR. CIT CANNOT BE TAKEN AS FINAL ONE, WITHOUT SCRUTINISING THE NATURE OF ENQUI RY OR VERIFICATION CARRIED OUT BY THE AO VIS--VIS ITS REASONABLENESS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. HENCE, IN OUR CONSIDERED VIEW, WHAT IS RELEVANT FOR CLAUSE (A) OF EXPLANATION 2 TO SEC. 26 3 IS WHETHER THE AO HAS PASSED THE ORDER AFTER CARRYING OUT ENQUIRIE S OR VERIFICATION, WHICH A REASONABLE AND PRUDENT OFFICE R WOULD HAVE CARRIED OUT OR NOT. IT DOES NOT AUTHORISE OR GIVE U NFETTERED POWERS TO THE LD PR. CIT TO REVISE EACH AND EVERY ORDER, I F IN HIS OPINION, THE SAME HAS BEEN PASSED WITHOUT MAKING ENQUIRIES O R VERIFICATION WHICH SHOULD HAVE BEEN MADE. IN OUR VIEW, IT IS THE RESPONSIBILITY OF ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 15 THE LD PR. CIT TO SHOW THAT THE ENQUIRIES OR VERIFI CATION CONDUCTED BY THE AO WAS NOT IN ACCORDANCE WITH THE ENQURIES O R VERIFICATION THAT WOULD HAVE BEEN CARRIED OUT BY A PRUDENT OFFIC ER. HENCE, IN OUR VIEW, THE QUESTION AS TO WHETHER THE AMENDMENT BROUGHT IN BY WAY OF EXPLANATION 2(A) SHALL HAVE RETROSPECTIVE OR PROSPECTIVE APPLICATION SHALL NOT BE RELEVANT. (2) SANJEEV KR. KHEMKA VS PR. CIT (KOLKATTA ITAT) (APB 12-17) 5.1 IN VIEW OF THE ABOVE WE FIND THAT LD. CIT HAS PASSED IMPUGNED ORDER U/S. 263 OF THE ACT BY HOLDING THE ORDER OF A O AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE ON ACCOUNT OF INADEQUATE ENQUIRY MADE BY AO WHILE PASSING ORDER U /S. 143(3) OF THE ACT. HOWEVER, WE FIND THAT PROPER AND SUFFICIEN T ENQUIRIES WERE CONDUCTED BY THE AO AT THE TIME OF ASSESSMENT AS EV IDENT FROM THE ORDER OF AO. THEREFORE IT CANNOT BE CONCLUDED THAT NO PROPER ENQUIRY HAS BEEN CONDUCTED BY THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS. THE AO HAS TAKEN CONSCIOUS VIEW AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND GIVING PROPER OPPORTUNITY TO THE ASSESSEE. THUS, THE VIEW EXPRESS ED BY AO IN THE FORM IN HIS ASSESSMENT ORDER CANNOT BE REPLACED WIT H THE VIEW OF LD. CIT U/S 263 OF THE ACT. IN HOLDING SO, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS. M/S. J.L. MORRISON (INDIA) LTD. (ITA NO 168 OF 2011) IN GA NO 1541 OF 2012 DATED 15.05.2014, WHERE IN IT WAS HELD AS UNDER:- BY SECTIONS 3 AND 4, THE INDIAN INCOME-TAX ACT, 1 922, IMPOSES A GENERAL LIABILITY TO TAX UPON ALL INCOME. BUT THE ACT DOES NOT PROVIDE THAT WHATEVER IS RECEIVED BY A PERSON MUST BE REGARDED AS INCOME LIABLE TO TAX. IN ALL CASES IN WHICH A RE CEIPT IS SOUGHT TO BE TAXED AS INCOME, THE BURDEN LIES UPON THE DEP ARTMENT TO PROVE THAT IT IS WITHIN THE TAXING PROVISION. WE ALSO RELY ON THE JUDGMENT OF THE HONBLE SUPREM E COURT IN THE CASE OF CIT VS. MAX INDIA LIMITED REPORTED IN 295 I TR 282 WHEREIN IT WAS HELD AS UNDER : WHEN THE CIT PASSED THE IMPUGNED ORDER UNDER S. 263 , TWO VIEWS WERE INHERENTLY POSSIBLE ON THE WORD 'PROFITS ' OCCURRING IN THE PROVISO TO S. 80HHC(3) AND THEREFORE, SUBSEQ UENT AMENDMENT OF S. 80HHC MADE IN THE YEAR 2005, THOUGH RETROSPECTIVE, DID NOT RENDER THE ORDER OF THE AO E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, AND CIT COULD NOT EXERCISE POWERS UNDER S. 263. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 16 IN VIEW OF THE ABOVE PROPOSITION, AND RESPECTFULLY FOLLOWING PRINCIPLE LAID DOWN BY THE HON'BLE COURTS AND KEEPI NG IN VIEW ALL THESE DISCUSSION, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPER TO UPHOLD THE GRIEVANCE OF T HE ASSESSEE AND QUASH THE IMPUGNED REVISION ORDER AS DEVOID OF JURI SDICTION. THE ASSESSEE GETS THE RELIEF, ACCORDINGLY. IN VIEW OF ABOVE, IT IS SUBMITTED THAT : 1. THE ORDER OF LD. AO IS NOT ERRONEOUS: IT HAS ALREADY BEEN ESTABLISHED ABOVE THAT THIS IS THE FIRST YEAR OF OPERATION OF ASSESSEES BUSINESS AND THEREFORE, THE SOURCE OF SHARE CAPITAL CANNOT BE ALLEGED AS UNEXPLAINED IN THE HANDS OF ASSESSEE. NE VERTHELESS, THE LD. AO HAD MADE INQUIRY ON THIS ASPECT AND COMPLETE DETAIL S AS ASKED FOR BY THE LD. AO WERE SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND, AS SUBMITTED ABOVE, THE LD. AO PAS SED THE ASSESSMENT ORDER AFTER TAKING INTO CONSIDERATION ALL THOSE DET AILS AND EVIDENCES. SIMILARLY, WITH REGARD TO THE OTHER ASPECTS SUCH AS REMUNERATION OF PARTNERS AND OTHER EXPENSES / RECEIPTS, DUE ENQUIRY WAS COND UCTED BY THE LD. AO, IN RESPONSE TO WHICH ENTIRE DETAILS / EVIDENCES WERE S UBMITTED, WHICH IS APPARENT FROM THE LETTER DATED 11.03.2014 ( APB 105-106 ) AND ANOTHER LETTER OF EVEN DATE ( APB 50-52) WHICH WERE EXAMINED BY THE LD. AO ALONGWITH THE BOOKS OF ACCOUNTS TENDERED BEFORE HIM. IT IS THEREFORE, SUBMITTED THAT THE LD. AO HAS TAK EN A LEGAL AND CORRECT VIEW OF THE ENTIRE MATERIAL AVAILABLE BEFORE HIM AND AFT ER DUE APPLICATION OF MIND ON LAW AND ON FACTS HAD REACHED TO A REASONABL E SATISFACTION OF CONCLUDING THE ASSESSMENT, WITHOUT TAKING ANY ADVER SE VIEW ON THESE ISSUES, THUS THE ORDER OF LD. AO IS NOT ERRONEOUS O N ANY COUNT NOR PREJUDICIAL TO THE INTEREST OF REVENUE. INDEED, IN THE INSTANT CASE THE LD. AO HAS PASSED THIS ORDER AFTER CONSIDERING ENTIRE MATERIAL AVAILABLE ON RECORD, CA LLED FOR AND SUBMITTED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING S. IT IS NOT THE CASE THAT ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 17 THE LD. AO HAD PASSED THE ORDER WITHOUT CONDUCTING NECESSARY AND PROPER INQUIRIES INTO THE ISSUE BEFORE HIM. AS A MATTER OF FACT, THE LD. AO HAD RAISED SPECIFIC QUERIES WITH REGARD TO THE ISSUES R AISED BY THE LD. CIT, TO WHICH, DETAILED REPLIES WERE SUBMITTED BEFORE THE L D. AO ALONGWITH AMPLE EVIDENCES AS MENTIONED ABOVE. AFTER CONSIDERING THE ENTIRE MATERIAL AVAILABLE ON RECORD IN THE SHAPE OF THE SUBMISSIONS AND DEPARTMENTAL RECORD, THE LD. AO HAS PASSED A REASONED ORDER. THU S, THE ORDER OF LD. AO CANNOT AT ALL BE HELD AS ERRONEOUS AND THUS THE ACT ION OF LD. CIT(ADMN.) IN PASSING THE IMPUGNED ORDER CONCLUDING THAT THE SAID ORDER IS ERRONEOUS AND PREJUDICIAL TO THE REVENUE IS BAD IN LAW. IT IS FURTHER SUBMITTED THAT, THE HONBLE BOMBAY H IGH COURT IN THE CASE OF CIT VS. GABRIAL INDIA LTD ., REPORTED IN 203 ITR 108 , HAS HELD THAT, CIT CANNOT REVISE ORDER MERELY BECAUSE HE DISAGREES WIT H THE CONCLUSION ARRIVED AT BY THE ITO . FURTHER, IN THE CASE OF CIT VS. SUNBEAM AUTO LTD. , REPORTED IN 227 CTR 133 , THE HONBLE DELHI HIGH COURT DREW A DISTINCTION BETWEEN LACK OF INQUIRY AND INADEQUA TE ENQUIRY AND HELD THAT, IN THE CASE OF INADEQUATE ENQUIRY, PROVISION S UNDER SECTION 263 CANNOT BE INVOKED . IT MAY HOWEVER, BE NOTED THAT THE INSTANCE CASE IS NEITHER THE CASE OF INADEQUATE ENQUIRY NOR LACK OF ENQUIRY DURING ASSESSMENT PROCEEDINGS AS IT CAN BE SEEN THAT DUE, NECESSARY AND MOST PERTINENT ENQUIRIES TO ALL THE ISSUES EMERGING FROM THE RETURN FILED BY THE ASSESSEE WERE CONDUCTED BY THE LD. AO. THEREFORE, I N VIEW OF SUCH LEGAL POSITION, NO ACTION U/S 263 COULD HAVE BEEN TAKEN. IT IS A WELL ESTABLISHED LAW BY NOW THAT SECTION 2 63 DOES NOT CONTEMPLATE MERE SUBSTITUTION OF THE OPINION OF AO WITH THAT OF CIT. IT HAS FURTHER BEEN HELD BY THE COURTS THAT WHERE TWO VIEWS ARE POSSIBL E IN THE MATTER AND THE AO HAS CHOSEN ANY ONE OF THEM, THEN REVISION CANNOT BE MADE MERELY BECAUSE THE CIT IS OF THE OPINION THAT THE OTHER VI EW SHOULD HAVE BEEN TAKEN BY THE AO. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 18 2. THE ORDER OF LD. AO IS NOT PREJUDICIAL TO THE INTER EST OF REVENUE: IN LIGHT OF THE FACTS OF THE PRESENT CASE, IT IS S UBMITTED THAT THE LD. CIT IN THE IMPUGNED ORDER HAS NOT DOUBTED THE SOURCE OF CA PITAL IN THE HANDS OF ASSESSEE FIRM, WHICH IS CLEARLY ESTABLISHED FROM TH E FACT THAT THE SAME IS CONTRIBUTION OF PARTNERS. HOWEVER, THE LD. CIT HAS DOUBTED THE SOURCE OF INCOME OR AVAILABILITY OF FUNDS IN THE HANDS OF THE PARTNERS. IN THIS REGARD IT IS SUBMITTED THAT THE SOURCE OF SOURCE CANNOT BE IN QUIRED BY THE LD. AO WHICH CAN BE DONE IN THEIR RESPECTIVE ASSESSMENTS O NLY. FURTHER, THE ASSESSEE BY ADDUCING PROPER EVIDENCE HAS ESTABLISHE D THE SOURCE OF FUNDS IN THE HANDS OF THE PARTNERS AND THEREFORE, THE SAME I N ANY CIRCUMSTANCES COULD NOT BE TREATED AS UNEXPLAINED CASH CREDITS IN THE HANDS OF ASSESSEE. THEREFORE, THE ACTION OF THE LD. AO WAS NOT AT ALL PREJUDICIAL TO THE INTEREST OF REVENUE. IT HAS BEEN HELD IN THE CASE OF CIT V. MAX INDIA LTD. REPORTED IN 295 ITR 282 (SC) THAT EVERY LOSS OF REVENUE CANNOT BE SAID TO BE PR EJUDICIAL TO THE INTERESTS OF REVENUE, HOWEVER IN THIS CASE INTERES TINGLY, THERE HAS BEEN NO LOSS AT ALL TO THE REVENUE, ACCORDINGLY, IT CANNOT BE SAID THAT THE ACTION OF LD. AO WAS PREJUDICIAL TO THE INTEREST OF REVENUE. THIS SUBMISSION OF ASSESSEE IS FORTIFIED FROM THE OBSERVATIONS OF HON BLE SUPREME COURT IN THE CASE OF CIT VS. MAX INDIA ( SUPRA ) WHEREIN IT WAS HELD AS UNDER: THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE REV ENUE IN SECTION 263 OF THE INCOME-TAX ACT, 1961, HAS TO BE READ IN CONJ UNCTION WITH THE EXPRESSION ERRONEOUS ORDER PASSED BY THE ASSESSIN G OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE. FOR EXAMPLE, WHEN THE ASSESSING OFFICER ADOPTS ONE OF T WO COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF R EVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TA KEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE REVENUE, UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 19 THUS, IT IS SUBMITTED WITHOUT ADMITTING THAT THE DE FECT (IF ANY) DOES NOT IN ANYWAY LEAD TO SUPPLY THE FOUNDATION FOR REVISING A N OTHERWISE VALID ORDER WHICH CAN NEITHER BE SAID ERRONEOUS NOR PREJUDICIAL TO INVOKE SECTION 263 OF THE INCOME TAX ACT, 1961, WHICH SECTION CANNOT B E PERMITTED TO BE BROUGHT INTO PLAY UNLESS BOTH THE CONDITIONS I.E. T HE ORDER HAS TO BE PREJUDICIAL AS WELL AS ERRONEOUS BOTH, MEANING THER EBY THAT THE TWIN CONDITIONS ARE TO BE CUMULATIVELY SATISFIED BEFORE PROCEEDING TO REVISE AN ASSESSMENT ORDER. IN LIGHT OF THE FACTS / CIRCUMSTANCES OF THE CASE, SUBMISSIONS MADE ABOVE, AND THE CASE LAWS RELIED UPON, IT IS VERY HUMBLY PR AYED THAT THE IMPUGNED REVISION ORDER OF LD. CIT(ADMN.) MAY PLEASE BE QUAS HED AND HELD BAD IN LAW, THEREBY RESTORING THE ASSESSMENT ORDER OF LD. AO. FURTHER, RELIANCE IS PLACED ON THE FOLLOWING CASE LAWS: 1. CIT VS. M/S CHAMBAL FERTILIZERS & CHEMICALS LTD. (R AJ HC) (2014) 51 TW (III) 157 THEREFORE, IT IS CLEAR THE CIT DOES NOT HAVE UNFET TERED AND UN-CHECKED DISCRETION / POWER TO REVERSE THE ORDER. HE CAN DO SO WITHIN THE BOUNDS OF THE LAW AND HAS TO SATISFY THE NEED OF FAIRNESS IN ACTION AND FAIR PLAY WITH DUE RESPECT TO THE PRINCIPLE OF AUDI ALTEREM P ARTEM AS ENVISAGED IN THE CONSTITUTION. THE LAW IS WELL SETTLED THAT T HE CIT CANNOT INVOKE THE POWERS TO CORRECT EACH AND EVERY MISTAKE OR ERR OR COMMITTED BY THE AO. EVERY LOSS TO THE REVENUE, CANNOT BE TREATE D AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND IF THE ASSESSING OF FICER HAS ADOPTED ONE OF THE COURSE PERMISSIBLE UNDER THE LAW OR WHER E TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW WHICH THE CI T DOES NOT AGREE WITH, IT CANNOT BE TREATED AS AN ORDER ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE AO EXERCISES QUASI JUD ICIAL POWER VESTED IN HIM AND IF HE EXERCISES SUCH POWERS IN ACCORDANC E WITH LAW, ARRIVES AT A JUST CONCLUSION SUCH CONCLUSION CANNOT BE TERM ED AS ERRONEOUS ONLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH T HE CONCLUSION. 2. CIT VS. M/S DEEPAK REAL ESTATE DEVELOPERS P. LTD. ( RAJ HC) (2014) 51 TW (IV) 186 IT IS NO LONGER RES-INTEGRA THAT THE REVISIONAL JU RISDICTION AVAILABLE TO A COMMISSIONER U/S 263 OF THE ACT, IS ESSENTIALLY CIR CUMSCRIBED BY THE ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 20 DETERMINANT THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS SO MUCH SO THAT IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THIS STATUTORY ENJOINMENT CARVES OUT AN EXTREMELY CONSTR ICTED AMBIT OF SUCH DISCRETIONARY JURISDICTION. THE WORD CONSIDERS AP PLIED IN THE STATUTORY PROVISION INVOLVED, SIGNIFIES A GENUINE S ATISFACTION OF THAT AUTHORITY THAT THE ORDER OF THE ASSESSING OFFICER I S ERRONEOUS AND THAT THE INTEREST OF REVENUE IS PREJUDICING THEREBY. ANY EXERCISE OF THE REVISIONAL JURISDICTION, BEREFT OF SUCH SATISFACTIO N AND / OR FINDING THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND THAT IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THAT TOO, BASED ON TANGIBLE MATERIALS ON RECORD, IS IMPERMISSIBLE RENDERING THE RESULTANT ORDER VOID. 3. CIT VS. GREEN WORLD CORPORATION 314 ITR 81 (SC) THE INCOME-TAX OFFICER, WHILE PASSING AN ORDER OF ASSESSMENT PERFORMS A JUDICIAL FUNCTION. A REVISION APPLICATIO N LIES BEFORE THE COMMISSIONER. IT IS TRITE THAT THE JURISDICTION EXE RCISED BY THE REVISIONAL AUTHORITY PERTAINS TO HIS APPELLATE JURI SDICTION. THE JURISDICTION UNDER SECTION 263 CAN BE EXERCISED ONL Y WHEN BOTH THE FOLLOWING CONDITIONS ARE SATISFIED (I) THE ORDER OF THE ASSESSING OFFICER SHOULD BE ERRONEOUS, AND (II) IT SHOULD BE PREJUDIC IAL TO THE INTERESTS OF THE REVENUE. THESE CONDITIONS ARE CONJUNCTIVE. AN O RDER OF ASSESSMENT PASSED BY THE ASSESSING OFFICER SHOULD N OT BE INTERFERED WITH ONLY BECAUSE ANOTHER VIEW IS POSSIBLE. 4. M/S EMGEE CABLES & COMMUNICATION LTD. VS. CIT (2014 ) 51 TW (IV) 197 SECTION 263 POWER OF REVISION BY COMMISSIONER AO COMPLETED ASSESSMENT AT NIL ASSESSEE INVOLVED IN MANUFACTUR E / TRADING OF CABLE/COPPER/WIRE DECLARED INCOME FROM INTEREST & COMMISSION AS BUSINESS INCOME ACCEPTED BY AO CIT INVOKED SEC 263 AND SET- ASIDE THE ORDER OF AO DIRECTING HIM TO CONSIDER THE SAID INCOME AS INCOME FROM OTHER SOURCES AND NOT FROM BUSINESS W HETHER CIT JUSTIFIED IN INVOKING SEC 263? HELD : NO CIT ONLY WANTED AO TO MAKE RE-VERIFICATION CANNOT BE SAID THAT THAT ORD ER OF AO WAS WITHOUT MAKING PROPER ENQUIRY AO HAVING TAKEN ONE OF THE POSSIBLE VIEW CANNOT BE SAID THAT ASSESSMENT ORDER WAS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS THUS SUBMITTED THAT FOR THE SAKE OF CLARIFICA TION AND AT THE COST OF REPETITION IT IS SUBMITTED THAT TWIN CONDITIONS AS LAID DOWN U/S 263 I.E. ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE HAVE TO BE CUMULATIVELY SATISFIED AND IN THE ABSENCE OF ONE OF THE CONDITIONS, NOT BEING ATTRACTED THE OTHER WOULD BECOME NONEST FOR T HE PURPOSES OF REVISION. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 21 THEREFORE, IN VIEW OF THE ABOVE IT IS PRAYED THAT T HE IMPUGNED ORDER OF LD. CIT(ADMN.) BE QUASHED AND HELD BAD IN LAW. 6. ON THE OTHER HAND, THE LD CIT DR HAS RELIED ON TH E ORDER OF THE PR. CIT, ALWAR. 7. THE BENCH HAVE HEARD BOTH THE SIDES ON THIS ISSUE , PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO PERUSED T HE CASE LAWS RELIED UPON. ASSESSMENT YEAR 2011-12 WAS THE FIRST YEAR OF OPERATION OF THE ASSESSEE COMPANY. IT WAS A PARTNERSHIP FIRM HAVING 1 7 PARTNERS AND THE SHARE OF THE EACH PARTNER WAS SPECIFIED AS EVIDENCE FROM PAGE NO. 28 OF THE PAPER BOOK. THE ASSESSEE FIRM COMMENCED THE BUSI NESS OF CONTRACTOR SHIP IN THE NAME AND STYLE OF HARI OM ST ONES WITH MINING DEPARTMENT AND SALES TAX DEPARTMENT TO COLLECT THE REVENUE FOR GOVERNMENT. THE PARTNERSHIP DEED IS PLACED AT PAGE N OS. 26 TO 31 OF THE PAPER BOOK. THIS PARTNERSHIP DEED ALSO SPECIFIES IN PARA 10 THAT THE PARTNERS TO WHOM THE REMUNERATIONS IS TO BE PAID AND LIMIT OF THE SAME IS ALSO SPECIFIED. THIS DOCUMENT WAS SUBMITTED TO THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. THIS CASE WAS SELECTED FOR COMPULSORY AND COMPLETE SCRUTINY. THE ASSESSMENT FOR ASSESSMENT YEAR 2011-12 WAS MADE U/S 143(3) OF THE ACT ON 24/3/2014. THE RETU RNED INCOME OF RS. 2,99,820/- WAS ENHANCED TO RS. 4,55,556/- AND TH E ADDITIONS WERE MADE OUT OF VARIOUS EXPENSES. THE ASSESSING OFFICER MADE ENQUIRIES ON ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 22 VARIOUS ISSUES AND THE ASSESSEE SUBMITTED SUCH DETA ILS ASKED FOR. THE ENQUIRY WITH REGARD TO REMUNERATION TO THE PARTNERS AND EXPENSES/RECEIPTS WERE ALSO CONDUCTED BY THE ASSESS ING OFFICER. SUCH FACTS ARE EVIDENT FROM PAGE NOS. 105 TO 106 OF THE PAPER BOOK WHICH IS A LETTER DATED 11/3/2014 SUBMITTED BEFORE THE ASSESSI NG OFFICER. ANOTHER LETTER PLACED AT PAGE NOS. 50 TO 52 OF THE PAPER BO OK WAS ALSO ESTABLISHES THAT THE BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE ASSESSING OFFICER. THUS, THESE FACTS SUGGEST THAT TH E ASSESSING OFFICER HAS TAKEN INTO CONSIDERATION THE MATERIAL BEFORE HI M AND AFTER DUE APPLICATION OF LAW AND OF FACTS AND THEN REACHED AT THE CONCLUSION TO CONCLUDE THE ASSESSMENT U/S 143(3) OF THE ACT. IT WA S NOT A CASE WHERE ASSESSING OFFICER COMPLETED THE ASSESSMENT WITHOUT C ONDUCTING NECESSARY AND PROPER ENQUIRIES. THE ISSUE RAISED BY THE LD. PR.CIT HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AT THE TIM E OF ASSESSMENT AND THE ASSESSEE HAS SUBMITTED EVIDENCES AND DETAILS IN SUPPORT OF ITS CLAIM MADE IN P&L ACCOUNT. THEREFORE, IN OUR CONSIDERED VI EW, THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE A CT ON 24/3/2014 WAS NOT AN ERRONEOUS ORDER, WHICH COULD BE SAID TO BE PR EJUDICIAL TO THE INTEREST OF THE REVENUE. CONSIDERING THE RATIO LAID DOWN IN VARIOUS CASE LAWS RELIED UPON, WE SET ASIDE THE ORDER PASSED BY TH E LD. PR.CIT. ITA 534/JP/2016_ M/S HARI OM STONES VS PR.CIT 23 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/04/2018. SD/- SD/- FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO FOT; IKY JKO HKKXPAN HKKXPAN HKKXPAN HKKXPAN (VIJAY PAL RAO) (BHAGCHAND) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 04 TH APRIL, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S HARI OM STONES, BHARATPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE PR.CIT, ALWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 534/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR