Smt. .E.Usha Rani, Hyderabad V. Dy.CIT, Circle-1, Khammam

ITA 543/HYD/2013

• Counselvise Citation: 54322514 RSA 2013
• Duration Of Justice: 2 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-11-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA SINHA
• Assessee Lawyers: S RAMA RAO
• Keywords: Revision of order; Audit objection; Non-deduction of tax; Assessment record; Commercial expediency
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 543/HYD/2013 & 1757/HYD/2014 ASSESSMENT YEAR: 2008-09 SMT. E. USHA RANI, KHAMMAM. PAN AADPE308G VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 1, KHAMMAM. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SMT. VASUNDHARA SINHA DATE OF HEARING 10-11-2015 DATE OF PRONOUNCEMENT 30-11-2015 O R D E R PER S. RIFAUR RAHMAN, A.M.: BOTH THESE APPEALS ARE FILED BY SAME ASSESSEE FOR THE AY 2008-09. ITA NO. 543/HYD/2013. 2. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST TH E ORDER OF CIT, VIJAYAWADA, DATED 26/02/2013. 3. ASSESSEE IS THE PROPRIETRIX OF M/S SRI SRI AUTOM OBILES, ENGAGED IN THE BUSINESS OF RETAIL SALE OF HERO HONDA TWO WH EELERS DIRECTLY TO THE CUSTOMERS AND THROUGH SUB-DEALERS. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE AY 2008-09, ADMITTING TOTAL INCOM E OF RS. 13,47,050/- AND AGRICULTURAL INCOME OF RS. 84,000/- . THE RETURN WAS PROCESSED U/S 143(1) AND THE ASSESSMENT WAS COMPLET ED U/S 143(3) ON 29/12/2010, DETERMINED THE TOTAL INCOME AT RS. 1 8,59,680/- BY THE ASSESSING OFFICER (IN SHORT AO). 2 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI 4. BY VIRTUE OF POWERS VESTED U/S 263 OF THE INCOME -TAX ACT (IN SHORT ACT), CIT CALLED FOR ASSESSMENT RECORDS. TH E CIT NOTICED CERTAIN DEFICIENCIES AND ISSUED SHOW CAUSE NOTICE O N 06/12/2012. HE NOTICED TWO DEFICIENCIES AS DETAILED BELOW: A) ASSESSEE CLAIMED AN EXPENDITURE OF RS. 34,35,58 7 IN THE PROFIT & LOSS STATEMENT TOWARDS SUB-DEALERS CASH D ISCOUNT, IT REPRESENTS THE PAYMENTS MADE TO SUB-DEALERS BY PAR TING 50% OF PROFIT MARGIN ON SALE OF TWO WHEELERS BY THE RESPE CTIVE DEALERS TO THE CUSTOMERS IN THEIR AREA OF OPERATION. HE AL SO NOTICED THAT THE ACTUAL SALE BILL WAS RAISED IN THE NAME OF THE ULTIMATE CUSTOMERS AND NOT IN THE NAME OF THE SUB-DEALERS. THE SUB- DEALERS INCOME ARE THE SHARE OF MARGIN AND THEY NE VER SHOW ANY SALES TURNOVER IN THEIR STATEMENT OF ACCOUNTS. THE PROFIT MARGIN IS REDUCED FROM THE DEALER TO THE EXTENT AG REED WITH THE SUB-DEALERS. ACCORDING TO CIT, IT WAS COMMISSION W HICH FALLS UNDER SECTION 194A. THE EXPENDITURE NEEDS TO BE DI SALLOWED U/S 40(A)(IA) OF THE ACT FOR NON-COMPLIANCE OF TDS PRO VISIONS ON THE PAYMENTS MADE TO SUB-DEALERS. B) ASSESSEE DEBITED AN AMOUNT OF RS. 3,61,74,769/- AND RS. 9,20,541/- TOWARDS VAT IN THE TRADING ACCOUNT IN R ESPECT OF VEHICLES, SPARES, OILS AND ACCESSORIES SOLD. THE E VIDENCE WAS NOT BROUGHT ON RECORD BY THE AO DURING THE COURSE OF ASSESSMENT. IT NEEDS VERIFICATION. 5. SUBSEQUENTLY, THE ASSESSEE FILED WRITTEN SUBMISS IONS FOR THE ABOVE DEFICIENCIES POINTED OUT BY THE CIT ON 30/12/ 12 (REFER PAGES 42 TO 45 OF THE PAPER BOOK). THE LD. CIT PASSED AN ORD ER U/S 263 ON 26/02/13 REJECTING THE SUBMISSIONS OF THE ASSESSEE AND TERMED THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF REVENUE. LD. CIT HAD REJECTED THE SUBMISSIONS OF T HE ASSESSEE ON PAYMENT TO SUB-DEALERS AND CONSIDERED THE SAME AS C OMMISSION PAYMENTS. HE ACCEPTED THE SUBMISSIONS OF THE ASSESS EE ON PAYMENT OF VAT IN RESPECT OF VEHICLES, SPARES, OILS AND ACC ESSORIES. 3 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI CONSIDERING THE ABOVE, HE DIRECTED THE AO TO REDO T HE ASSESSMENT DENOVO. 6. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE IS IN A PPEAL BEFORE US. 7. THE LD. AR SUBMITTED THAT THE AO HAD ALREADY VER IFIED THE ISSUE RAISED BY THE LD. CIT IN DETAIL. HE SUBMITTED A COP Y OF THE LETTER FILED BY THE ASSESSEE BEFORE THE AO IN RESPONSE TO THE QU ERIES RAISED BY HIM. (REFER PAGES 31 TO 36 OF THE PAPER BOOK). HE B ROUGHT TO OUR NOTICE POINT NO. 26 OF THE LETTER, WHEREIN, ASSESSE E HAD CLEARLY EXPLAINED THE SALES DISCOUNT AS CLAIMED BY THE ASSE SSEE. THE SPECIFIC DETAILS OF SUCH PAYMENTS AND NATURE OF THE AGREEMEN TS WITH THE SUB- DEALERS. IT WAS AGREED BY THE AO. HE SUBMITTED THAT THE AO HAD TAKEN A VIEW ON THIS ISSUE BUT HE HAD NOT DISCUSSED ANYTH ING IN HIS REPORT. HE ALSO BROUGHT TO OUR NOTICE THAT THE LD. CIT HAD INITIATED THIS PROCEEDING ONLY BECAUSE AUDIT OBJECTIONS WERE RAISE D (REFER PAGES 46 TO 48 OF THE PAPER BOOK) ON THESE ISSUES. IT WAS NO T THE FINDING OF THE LD. CIT. HE ALSO SUBMITTED THAT THERE MAY BE TWO VI EWS, ONE OF THE VIEWS WERE TAKEN BY THE AO. HENCE, IT IS NOT ERRONE OUS. FOR THIS PROPOSITION HE RELIED ON THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF CIT VS. GREEN WORLD CORPORATION, 314 IT R 81. 8. LD. AR SUBMITTED THAT SECTION 194H HAS NO APPLIC ATION IN ASSESSEES CASE AS NO AGENT AND PRINCIPAL RELATIONS HIP EXISTS BETWEEN ASSESSEE AND SUB-DEALERS. THE SUB-DEALERS P AY ONLY THE NET AMOUNT AFTER DEDUCTING THEIR SHARE OF DISCOUNT. HE SUBMITTED THE CONFIRMATION OF ALL THE SUB-DEALERS THAT THEY ARE D EALING WITH THE ASSESSEE ONLY AS PRINCIPAL TO PRINCIPAL BASIS NOT A S AGENTS (REFER PAGES 57 TO 69 OF PAPER BOOK). HE RELIED ON THE HON BLE DELHI HIGH COURTS JUDGMENT IN THE CASE OF JAI DRINKS P. LTD., [2011] 336 ITR 303. 9. LD. AR SUBMITTED THAT SECTION 40(A)(IA) HAS NO A PPLICATION IN THIS CASE. SECTION 40(A)(IA) APPLIES TO EXPENDITURE PAYABLE AS PER THE PLAIN LANGUAGE OF THAT SECTION. IT DOES NOT APPLY T O EXPENDITURE WHICH 4 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI IS PAID DURING THE YEAR. THE EXPENDITURE IN QUESTIO N IS A SALES DISCOUNT PASSED THROUGH JOURNAL AND NOT A CASH PAYM ENT. THE SUB- DEALERS PAY THE MRP LESS DISCOUNT WHILE TAKING THE GOODS. HOWEVER THE MRP IS DEBITED TO THEIR ACCOUNT AND CREDIT FOR DISCOUNT IS PASSED THROUGH A JOURNAL ENTRY. THUS THIS EXPENDITURE IS N EITHER PAID NOR PAYABLE BUT ONLY A BOOK ADJUSTMENT ENTRY. THERE IS NO OUTSTANDING ON THIS ACCOUNT IN THE BALANCE SHEET. HENCE THE PROVIS IONS OF S.40(A)(IA) DO NOT APPLY. HE RELIED ON THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF M/S MERLYN SHIPPING TRANSPORT & OTHERS, 136 ITD 23(SB)(VIZAG). 10. LD. DR BY REFERRING TO THE PAGE OF 35 OF PAPER BOOK, SUBMITTED THAT THE SALES WAS EFFECTED IN THE NAME OF CUSTOMERS AND PAYMENTS TO SUB- DEALERS ARE NOT DISCOUNT, BUT, COMMISSION. SHE SUB MITTED THAT THE PRINCIPAL IS ONLY THE ASSESSEE NOT THE SUB-DEALERS. THE VIEW OF THE CIT WAS CORRECT. SHE ALSO RELIED ON THE DECISION OF THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. JAI DRINKS P. LTD. (SUPRA) WHERE THE ASSESS EE AND THE DISTRIBUTOR WERE COLLECTING AND PAYING THEIR SALES TAX SEPARATE LY. IN THE PRESENT CASE, THE SALES ARE ONLY IN THE BOOKS OF ASSESSEE AND, TH EREFORE, THE SALES ARE NOT ON PRINCIPAL TO PRINCIPAL BASIS. 11. LD. DR ALSO SUBMITTED THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. CRESCENT EXPORTS SYNDICATE HAD REJE CTED MAJORITY VIEWS EXPRESSED IN THE CASE OF MERLYN SHIPPING AND TRANSP ORT AS NOT APPLICABLE. SIMILARLY THE HONBLE GUJARAT HIGH COURT IN THE CAS E OF CIT VS. SIKANDARKHAN N TUMAR HAD REJECTED THE VIEWS EXPRESS ED IN THE MERLYN SHIPPING TRANSPORT S CASE (SUPRA). 12. WE HAVE CONSIDERED THE SUBMISSIONS OF THE BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE LD. AR SUBMITTE D THAT THE AO HAD CONSIDERED ALL THE FACTS AND INFORMATION BEFORE COM PLETING THE ASSESSMENT. HE HAD SUBMITTED THE LETTERS FILED BY T HE ASSESSEE BEFORE THE AO ON THE SAME POINTS WHICH WERE RAISED BY THE CIT IN HIS ORDER U/S 263 OF THE ACT. THE SAME WAS SUBMITTED BY LD. AR IN HIS PAPER BOOK AT PAGES 31-36. THESE INFORMATIONS WERE CONSIDERED BY THE AO WHICH WERE SUBMITTED BY THE ASSESSEE IN PARA NO. 21. IT IS THE 5 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI FACT THAT THE AO HAD CONSIDERED THE FACTS AND FORME D AN OPINION ON THE SUBMISSIONS OF THE ASSESSEE. IT SHOWS THAT THER E EXISTS TWO VIEWS ON THE POINT OF SUB-DEALERS CASH DISCOUNT. THE AO H AD TAKEN THE VIEW, WHICH HE FOUND ACCEPTABLE, IT CANNOT BE CONST RUED AS ERRONEOUS AND AS PER THE VIEW OF CIT, AO HAD NOT VERIFIED PRO PERLY. 13. ANOTHER ASPECT WHICH REQUIRES ATTENTION ARE THA T THE CIT MUST APPLY HIS OWN MIND. HE CAN ACT ON THE BASIS OF THE RECORDS AND SUGGESTIONS PUT UP TO HIM BY HIS SUBORDINATES BUT H E CANNOT INITIATE ACTION ON THE BASIS OF AUDIT OBJECTIONS. IT WAS BR OUGHT TO OUR NOTICE BY THE LD. AR THAT THE AUDIT OBJECTIONS WERE RAISED EXACTLY ON THE SAME POINTS AND CIT HAD NOT APPLIED HIS OWN MIND AN D COPIED THE SAME CONTENTS FROM THE AUDIT OBJECTIONS. HENCE, CIT HAD NOT APPLIED HIS OWN MIND. (REFER PAGES 46-48 OF PAPER BOOK). 14. BOTH THE COUNSELS ARGUED ON THE MERITS OF THE C ASE, BUT, LET US DISCUSS FIRST THE ISSUE OF REVISION ORDER U/S 263 O F THE ACT. ON THIS ISSUE, WE ARE RELYING ON THE FOLLOWING DECISIONS OF THE COORDINATE BENCHES OF THE ITAT/HIGH COURT: 1. IN THE CASE OF SHRI JASWINDER SINGH VS. CIT IN I TA NO. 690/CH/2010, THE CHANDIGARH BENCH HELD AS FOLLOWS: IN THE BACK DROP OF THE ABOVESAID SETTLED LEGAL PRE CEDENTS, WE FIND THAT THE COMMISSIONER OF INCOME TAX IN THE PRESENT CASE HAD ALSO INITIATED THE PROCEEDINGS UNDER SECTION 263 OF THE ACT ON THE BASIS OF THE AUDIT OBJECTIONS. SHOW CAUSE NOTICE WAS ISSUED IN THE PRESENT CASE F OR NON-DEDUCTION OF TAX AT SOURCE, OUT OF CERTAIN EXPENSES INCURRED BY THE AS SESSEE AND ORDER PASSED B Y THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT DIRECTING THE ASSESSING OFFICER TO RE-DETERMINE THE INCOME OF TH E ASSESSEE BY APPLYING A RATE OTHER THAN THE RATE APPLIED BY THE ASSESSING OFFIC ER, BEING WITHOUT JURISDICTION, IS NOT TENABLE IN LAW. WE FIND NO MERIT IN THE PLE A OF THE LEARNED D.R. FOR THE REVENUE THAT THE SOURCE OF INFORMATION IN THE PRES ENT CASE WAS AUDIT OBJECTION, BUT THERE WAS INDEPENDENT APPLICATION OF MIND BY T HE COMMISSIONER OF INCOME TAX . THE PROVISIONS OF SECTION 263 OF THE ACT ARE CLEAR AND ABSOLUTE THAT THE POWER IS TO BE EXERCISED BY THE COMMISSIONER OF IN COME TAX FROM THE EXAMINATION OF THE RECORDS OF THE PROCEEDINGS UNDE R THE ACT. THE EXPLANATION UNDER SECTION 263 OF THE ACT DEFINES 'RECORDS' AS ALL RECORDS RELATI NG TO ANY PROCEEDINGS UNDER THE ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER. THE AUDIT OBJECTIONS UNDER NO CIRCUM STANCES CAN BE CALLED AS RECORD EMPOWERING THE COMMISSIONER OF INCOME TAX T O EX ERCISE JURISDICTION UNDER SECTION 263 OF THE ACT. FURTHER IT IS APPARENT THAT THE COMMIS SIONER OF INCOME TAX HAS INITIATED THE REVISION PROCEEDINGS ONL Y ON THE BASIS OF AUDIT OBJECTION. SUCH EXERCISE OF POWER UNDER SECTION 263 OF THE ACT IS NOT TENABLE IN 6 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI LAW. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS ALLOWED. 2. IN THE CASE OF CIT V. SOHANA WOOLLEN MILLS [200 7] 296 ITR 238 (P&H) (HC), THE HONBLE HIGH COURT HELD AS FOLLOWS: A REFERENCE TO THE PROVISIONS OF SECTION 263 OF THE ACT SHOWS THAT JURISDICTION THEREUNDER CAN BE EXERCISED IF THE CIT FINDS THAT THE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. MERE A UDIT OBJECTION AND MERELY BECAUSE A DIFFERENT VIEW COULD BE TAKEN, WERE NOT ENOUGH TO SAY THAT THE ORDER OF THE AO WAS ERRONEOUS OR PREJUDICIAL TO THE INTERES T OF THE REVENUE. THE JURISDICTION COULD BE EXERCISED IF THE CIT WAS SATISFIED THAT T HE BASIS FOR EXERCISE OF JURISDICTION EXISTED. NO RIGID RULE COULD BE LAID DOWN ABOUT T HE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE CIT FOR EXERCISING JURISDICTION WAS CALLED FOR OR NOT, HAS TOBE DECIDED HAVING REGARD TO A GIVEN FACT SITUATION. 15. ON THE OTHER HAND, ON MERITS, THE ASSESSEE IS A DEALER AND ALLOWED THE SUB-DEALERS TO SELL THE SCOOTERS ON SH ARING OF DISCOUNT BASIS AND PRINCIPAL TO PRINCIPAL BASIS. THE BUSINES S MODEL DIFFERS FROM INDUSTRY TO INDUSTRY. IN THIS LINE OF BUSINESS, IT IS NOT POSSIBLE TO CARRY OUT DEALERSHIP IN ONE PLACE, IT HAS TO SPREAD OUT W ITH MORE SHOW ROOMS. IT IS THE DECISION OF ASSESSEES COMMERCIAL EXPEDIENCY, WHETHER SHE CAN CHOOSE TO OPEN SHOW ROOMS AT DIFFER ENCE PLACES BY INCURRING EXPENSES AND ALSO PAY COMMISSION TO THE A GENTS OR GIVE SUB-DEALERSHIP TO OTHERS, WHO WILL OPEN THE SHOW RO OMS AND SHARE THE REVENUES. IN THE PRESENT CASE, ASSESSEE HAS CHOSEN THE SECOND OPTION AS APPROPRIATE MODEL FOR ITS BUSINESS. REVEN UE CANNOT QUESTION THE WISDOM OF THE ASSESSEE, HOW TO CARRY O N THEIR BUSINESS. MOREOVER, LOOKING AT THE FACTS, NO BUSINESSMAN WILL SHARE 50% OF THE REVENUE AS COMMISSION. 16. IN THE PRESENT CASE, THE SUB-DEALERS WERE DEPOS ITING SALE PROCEEDS AFTER DEDUCTING THEIR SHARE OF DISCOUNT. I T CLEARLY ESTABLISHES THAT IT IS SHARE OF DISCOUNT NOT COMMISSION. DISCOU NT ON SALE OF SCOOTERS DOES NOT ATTRACT SECTION 194H. WE ARE RELY ING ON APEX COURT JUDGMENT IN THE CASE OF CIT VS. AHEMDABAD STAMP VEN DORS ASSOCIATION, [2012] 348 ITR 378 (SC) WHEREIN IT HAS HELD AS UNDER: HEARD LEARNED COUNSEL ON BOTH SIDES. 7 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI THE RESPONDENT IN THIS CIVIL APPEAL IS THE AHMEDAB AD STAMP VENDORS ASSOCIATION AND THE MEMBERS OF THE SAID ASSOCIATIO N ARE LICENSED STAMP VENDORS. WE ARE SATISFIED THAT 0.50 PER CENT TO 4 PER CENT DISCOUNT GIVEN TO THE STAMP VENDORS IS FOR PURCHASING THE STAMPS IN BULK QUANTITY AND THE SAID DISCOUNT IS IN THE NATURE OF CASH DISCOUNT. IN THE CIRCUMSTANCES, WE CONCUR WITH THE IMPUGNED JUDGMENT THAT THE IMPUGNED TRANSACTION IS SALE. CONSEQUENTLY, SECTIO N 194H OF THE INCOME- TAX ACT, 1961, HAS NO APPLICATION. THE CIVIL APPEAL FILED BY THE DEPARTMENT IS DISMIS SED WITH NO ORDER AS TO COSTS. 17. IN VIEW OF THE ABOVE DISCUSSION, WE QUASH THE O RDER PASSED BY THE CIT U/S 263 AND RESTORE THAT OF THE ORDER OF AO . ITA NO. 1757/HYD/2014 18. THIS APPEAL OF THE ASSESSEE BECOMES INFRUCTUOUS AS WE HAVE QUASHED THE ORDER PASSED BY CIT U/S 263, AGAINST WH ICH THE AO PASSED THE ORDER U/S 143(3) R.W.S. 263 OF THE ACT, AS PER THE DIRECTIONS OF THE CIT. 19. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 543/H/13 IS ALLOWED AND ITA NO. 1757/H/14 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2015. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 30 TH NOVEMBER, 2015 KV 8 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI COPY TO:- 1) SMT. E. USHA RANI, SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H. NO. 3-6-643 , ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029 2) DCIT, CIRCLE I, KHAMMAM 3 CIT(A), VIJAYAWADA 4) ADDL. CIT, KHAMMAM RANGE, KHAMMAM 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 9 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI 1. IN THE CASE OF ANIK DEVELOPMENT CORPORATION V. ACIT [2011] 44 SOT 100 (UO) (MUM.)(TRIB.), THE TRIBUNAL HELD AS FOLLO WS: 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 8. WE FIND THAT THE ONLY REASON FOR LEARNED COMM ISSIONERS COMING TO THE CONCLUSION THAT THE ASSESSMENT ORDERS ARE ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, IS THAT, ACCORDING TO HIM, SECTION 80 IB(10), AS IT STOOD PRIOR TO THE AMENDMENT WITH EFFECT FROM 1ST APRIL 2006, DID NOT PERMIT ANY COMMERCIAL CONSTRUCTION IN A HOUSING PROJECT. IN S UPPORT OF THIS PROPOSITION, LEARNED COMMISSIONER HAS RELIED UPON A DECISION O F THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF LAUKIK DEVELOPERS (SUPRA). HOWEVER, THAT VIEW OF THE MATTER IS, AT THE MINIMUM, IS NOT AT ALL FREE FR OM DOUBT. AS A MATTER OF FACT, THERE HAS BEEN A CLEAVAGE OF OPINION ON THIS ISSUE SO FA R AS COORDINATE BENCHES OF THIS TRIBUNAL WERE CONCERNED. IT WAS FOR THIS REASON T HAT A SPECIAL BENCH WAS CONSTITUTED IN THE CASE OF BRHAMA ASSOCIATES VS JC IT (119 ITD SB 255) TO RESOLVE THESE CONFLICTING VIEWS OF THE CO ORDINATE BENCHES. THI S SPECIAL BENCH, INTER ALIA, HELD THAT MERELY BECAUSE AN ASSESSEE HAS BUILT SOME COMMERCI AL AREA, DEDUCTION UNDER SECTION 80 IB (10) CANNOT BE DECLINED AS LONG AS PROJECT I S A PREDOMINANTLY A HOUSING PROJECT IN NATURE. AS A MATTER OF FACT, THE VIEW CANVASSED BY THE LEARNED COMMISSIONER IN THE IMPUGNED ORDER, I.E. THERE CA NNOT BE ANY COMMERCIAL CONSTRUCTION IN A HOUSING PROJECT AS WAS ALSO H ELD BY THE DIVISION BENCH IN THE CASE OF LAUKIK DEVELOPERS (SUPRA), IS MUCH MORE HARSH T HAN THE VIEW CANVASSED BY THE DEPARTMENT BEFORE THE SPECIAL BENCH, AS WILL BE EVIDENT FROM THE FOLLOWING OBSERVATIONS IN THE SPECIAL BENCH ORDER: WE HAVE ALSO NOTED REVENUES PLEA THAT AS LONG AS IT IS USE OF BUILT-UP AREA FOR COMMERCIAL PURPOSES IS CONFINED TO CONVENIENCE S HOPPING WITHIN PERMISSIBLE LIMITS AND SUBJECT TO THE CONDITIONS AS PER DEVEL OPMENT CONTROL RULES, ELIGIBILITY FOR DEDUCTION UNDER S. 80-IB(10) REMA INS INTACT AND THAT THE MOMENT SUCH USAGE GOES BEYOND WHAT IS PERMISSIBL E AS CONVENIENCE SHOPPING AS PER DEVELOPMENT CONTROL RULES, THE ELIGIBILITY FOR DEDUCTION UNDER S. 80-IB(10) IS LOST. 8. IT IS THUS CLEAR THAT THE VERY FOUNDATION OF T HE IMPUGNED REVISION ORDER CONSISTS OF A LEGAL PROPOSITION WHICH HAS NOT ONLY BEEN DISAPPROVED BY A SPECIAL BENCH OF THIS TRIBUNAL, BUT ALSO ABANDONED BY THE INCOME TAX DEPARTMENT ITSELF IN PLEADINGS BEFORE THE SPECIAL BENCH. IN ANY EVENT, IN VIEW OF THE SPECIAL BENCH DECISION IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) WHICH IS A BINDING PRECEDENT SO FAR AS THIS DIVISION BENCH OF THE TRIBUNAL IS CONC ERNED, WE CAN NOT APPROVE THE STAND OF THE COMMISSIONER TO THE EFFECT THAT MERELY BEC AUSE THERE HAS BEEN AN ELEMENT OF COMMERCIAL CONSTRUCTION IN THE HOUSING PROJECT, THE ASSESSEE IS DISENTITLED TO DEDUCTION UNDER SECTION 80 IB(10) P ARTICULARLY WHEN THE COMPONENT OF COMMERCIAL CONSTRUCTION IS MUCH LESS THAN NORMS LA ID DOWN BY THE SPECIAL BENCH. WHEN WE PUT THIS POSITION TO THE LEARNED DEPARTMEN TAL REPRESENTATIVE, HE FAIRLY STATED THAT THE SPECIAL BENCH DECISION DIRECTLY CO VERS THE ISSUE BUT ADDED THAT THE SPECIAL BENCH DECISION IS NOT BINDING ON US BECAUS E IT IS PER INCURIUM INASMUCH AS IT DOES NOT TAKE INTO ACCOUNT CORRECT LEGAL POSITION AND BINDING JUDICIAL PRECEDENTS. WE DO NOT, HOWEVER, SHARE THAT PERCEPTION. IT IS NOT OPEN TO US TO QUESTION CORRECTNESS OF 10 ITA NOS. 543 /HYD/2013 & 1757/H/14 SMT. E. USHA RANI THE SPECIAL BENCH DECISION AND IT WOULD INDEED BE AGAINST THE NORMS OF JUDICIAL DISCIPLINE TO QUESTION THE CORRECTNESS OF DECISION S OF THE HIGHER FORUMS. 9. IT IS ALSO IMPORTANT TO BEAR IN MIND THAT, AS HELD BY HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO LTD VS CIT (243 ITR 83), E VERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASSESSING OFFICER CANNO T BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, FOR EXAMPLE, WHEN AN ITO ADOPTS ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN A LOSS O F REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE, ITO HAS TAKEN A VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ORDER PREJUDICIAL TO THE INTEREST OF THE REV ENUE, UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. VIEWED IN THIS LIGHT, CA N IT BE SAID THAT AN ORDER ALLOWING THE DEDUCTION UNDER SECTION 80 IB (10) IN THE RELEVANT ASSESSMENT YEARS, EVEN WHEN THERE IS AN ELEMENT OF COMMERCIAL CONSTRUCTION IN A HOUS ING PROJECT, CAN BE SAID TO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE R EVENUE ? THE VIEW THAT AN ELEMENT OF COMMERCIAL CONSTRUCTION PER SE WOULD NOT VITIATE C LAIM OF DEDUCTION UNDER SECTION 80 IB (10) IS NOT ONLY A POSSIBLE VIEW OF THE MATTER, IT IS A VIEW ADOPTED BY THE SPECIAL BENCH OF THIS TRIBUNAL AS ALSO A VIEW ACCEPTED BY THE TAX DEPARTMENT IN PROCEEDINGS BEFORE THE SPECIAL BENCH; THE POINT OF DEBATE, IF AT ALL, HAS BEEN QUANTUM OF SUCH COMMERCIAL CONSTRUCTION. LEARNED COMMISSIONERS VI EW OF THE MATTER MAY BE ONE OF THE POSSIBLE VIEWS OF THE MATTER, BUT THE VIEW HE CLAIMS TO BE WHOLLY ERRONEOUS IS ALSO A POSSIBLE VIEW OF THE MATTER, AND IS NOT ONLY VIEW OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES (SUPRA) BUT ALSO A VIEW FAIRLY ACCEPTED BY THE DEPARTMENT ITSELF IN PROCEEDINGS BEFORE THE SPECIA L BENCH. THE VERY FOUNDATION OF LEARNED COMMISSIONERS IMPUGNED REVISION ORDERS IS THUS DEVOID OF LEGALLY SUSTAINABLE MERITS. THERE ARE NO LEGALLY SUSTAINABLE FINDINGS BY THE LEARNED COMMISSIONER TO THE EFFECT THAT THE ASSESSMENT ORDERS IN QUESTION ARE ERRONEOUS IN LAW, AND , IN THE ABSENCE OF SUCH A FINDING, WHICH IS SINE QUA NON F OR EXERCISE OF POWERS UNDER SECTION 263, WE CANNOT UPHOLD THE ACTION OF THE LEARNED CO MMISSIONER. 10. IN VIEW OF THE ABOVE DISCUSSIONS, AND RESPECTFULLY FOLLOWING THE ESTEEMED VIEWS OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO LTD (SU PRA) AS ALSO OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES (SU PRA), WE VACATE THE IMPUGNED REVISION ORDERS PASSED BY THE LEARNED COMMISSIONER . THE ASSESSEE GETS THE RELIEF ACCORDINGLY.