Kailashchandra Khandelwal, Sendhwa V. Pr. CIT -2, Indore

ITA 562/Ind/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4760 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 09-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: GIRISH AGRAWAL; VIJAY BANSAL NISHA LAHOTI ARS
• Keywords: Business expenditure; Opportunity of being heard; Audit objection; Proportionate interest; Question of law; Right to appeal; Commercial expediency; TDS; Set aside
• Section: 143(3); 54F; 142(1); 14A; 143(2); 44AB; 13; 54; 263; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE HON'BLE MANISH BORAD,ACCOUNTANT MEMBER AND HON'BLE MADHUMITA ROY, JUDICIAL MEMBER ITA NO.562/IND/2019 ASSESSMENT YEAR:2014-15 SHRI KAILASH KHANDELWAL PROP. M/S. VIKASH KRISHI SEVA KENDRA, BUS STAND, SENDHWA, BARWANI / VS. PR. CIT - 2 , INDORE (APPELLANT) (R ESPONDENT ) P.A. NO. ACMPK2991E APPELLANT BY SHRI GIRISH AGRAWAL & SHRI VIJAY BANSAL , NISHA LAHOTI, ARS REVENU E BY SHRI S.B. PRASAD , CIT - DR DATE OF HEARING: 8.04.2021 DATE OF PRONOUNCEMENT: 30.04.2021 / O R D E R PER MANISH BORAD, A.M: BY WAY OF THIS APPEAL, THE APPELLANT HAS CHALLENGED THE ASSUMPTION OF JURISDICTION U/S 263 OF THE INCOME TA X ACT 1961( HEREINAFTER REFERRED TO AS THE ACT FOR SHORT) BY LD. PR. CIT-2 INDORE VIED ORDER DATED 24.03.2019.THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- SHRI KAILASH KHANDELWAL 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND APPLICABLE LAW, LD. PR. CIT-II, INDORE ERRED IN HOLDING THAT T HE ORDER PASSED BY LD. AO U/S 143(3) IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF REVENUE WITHIN THE MEANING OF SECTION 263 WHICH IS CONTRARY TO THE MATERIAL ON RECORD AND PROVISIONS OF THE ACT , UNJUST AND BAD IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PPLICABLE LAW, LD. PR. CIT-II, INDORE ERRED IN INVOKING THE P ROVISION OF SECTION 263 AND PASSING THE ORDER THEREUNDER BY HOL DING THAT THE ASSESSING OFFICER HAS PASSED THE ORDER WITHOUT MAKING REQUIRED EXAMINATION/INVESTIGATION WHICH HAS RESULT ED THE ASSESSMENT ORDER BEING ERRONEOUS IS SO FAR AS IT IS ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE A ND APPLICABLE LAW, LD. CIT-II, INDORE ERRED IN INVOKIN G THE PROVISION OF SECTION 263 AND PASSING THE ORDER THEREUNDER BY RESORTING THE HYPOTHETICAL CALCULATION FOR CHARGING OF INTERE ST ON LOANS AND ADVANCES AND SETTING ASIDE THE ASSESSMENT TO THE FI LE OF AO TO RE-EXAMINE THE ISSUE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PPLICABLE LAW, LD. PR. CIT-II, INDORE ERRED IN HOLDING THAT T HE ORDER PASSED BY LD. AO U/S 143(3) IS ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF REVENUE WITHIN THE MEANING OF SECTION 263 WHICH IS CONTRARY TO THE MATERIAL ON RECORD AND PROVISIONS OF THE ACT , UNJUST AND BAD IN LAW, MORE PARTICULARLY WHEN IT IS NOT A CASE OF LACK OF ENQUIRY. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND APPL ICABLE LAW, LD. PR. CIT-II, INDORE ERRED IN INVOKING THE PROVIS ION OF SECTION 263 AND PASSING THE ORDER THEREUNDER ON THE BASIS O F AUDIT OBJECTION. 6. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER OR OTHERWISE RAISE ANY OTHER GROUND OF APPEAL. 2. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL RUNNING SOLE PROPRIETORSH IP CONCERN M/S VIKASH KRISHI SEVA KENDRA. RETURN OF INCOME FOR A.Y . 2014-15 WAS SHRI KAILASH KHANDELWAL 3 E-FILED ON 13.09.2014 DECLARING INCOME AT RS.53,98, 610/-. THE ASSESSEE IS ENGAGED IN THE BUSINESS TRADING IN SEED S, PESTICIDES, FERTILIZERS, MACHINERY PART, OIL PAINTS & COLORS. E TC. BOOKS OF ACCOUNT ARE AUDITED U/S 44AB OF THE ACT. CASE SELECTED FOR SCRUTINY BY COMPUTER ASSISTED SCRUTINY SYSTEM (CASS) FOLLOWED B Y SERVING OF NOTICES 143(2) & 142(1) OF THE ACT ALONG WITH QUEST IONNAIRE. THE LD. ASSESSING OFFICER HAS MENTIONED TO HAVE EXAMINED TH E BOOKS OF ACCOUNT PRODUCED BEFORE HIM ON TEST CHECK BASIS. SU BMISSIONS MADE BY THE ASSESSEE WERE CONSIDERED AND ASSESSMENT WAS COMPLETED AFTER MAKING DISALLOWANCE U/S 14A OF THE ACT AT RS.56,09,870/-. 3. SUBSEQUENTLY, LD. PR. CIT ASSUMING JURISDICTION U/S 263 OF THE ACT ISSUED FOLLOWING SHOW CAUSE NOTICE: PLEASE REFER TO THE ASSESSMENT ORDER DATED 26.10.201 6 FOR A.Y. 2014-15 IN YOUR CASE. ON PERUSAL OF CASE RECORD IN YOUR CASE FOR THE A.Y.2014-15 IT IS FOUND THAT YOU HAVE FURNISHED YOUR RETURN OF INCOME DECLARING TOTAL INCOME AT RS.53,98,610/- ON 3 0.09.2014. ASSESSMENT IN YOUR CASE U/S 143(3) OF I.T. ACT 1961 WAS COMPLETED BY THE ACIT, KANDWA VIDE ORDER DATED 26.10.2016 ASSE SSING TOTAL INCOME AT RS.56,09,870/-. 2. THE ENTIRE RECORDS WERE GONE THROUGH BY ME AND ON PERUSAL AND EXAMINATION OF RECORDS IT APPEARS THAT THE ORDER DAT ED 26.10.2016 FOR A.Y. 2014-15 IS ERRONEOUS AS ALSO PREJUDICIAL T O THE INTEREST OF REVENUE ON ACCOUNT OF PASSING OF THE ORDER WITHOUT M AKING PROPER ENQUIRIES/INVESTIGATIONS. 3. AS PER THE INFORMATION AVAILABLE ON RECORDS, IT IS NOTED THAT THE ASSESSEE HAS DEBITED INTEREST PAID OF RS.2,45,31,692/- DURING THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2014-15 IN RESPE CT OF SECURED/UNSECURED LOANS OF RS.25,73,26,860/- AGAINST THIS THE ASSESSEE HAS SHOWN LOAN AND ADVANCES TO ASSOCIATED CONCERNS AT RS.11,41,73,105/- BUT CHARGED INTEREST OF RS.83,82,5 61/- ONLY WHICH IS DISPROPORTIONATE. IN VIEW OF THE ABOVE, TH E PROPORTIONATE INTEREST CHARGEABLE FROM LOAN AND ADVANCES OF RS.11,4 1,73,105/- SHRI KAILASH KHANDELWAL 4 WORKS OUT AT RS.1,08,84,443/-(24531692* 114173105/2 57326860) AND AMOUNT OF DIFFERENCE OF LESS CHARGED INTEREST FRO M ASSOCIATED CONCERNS IS RS.25,01,882/-)10884443-8382561). THE AO HAS NOT EXAMINED THIS FACTOR. THEREFORE, THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. YOU ARE, THEREFORE, RE QUIRED TO SHOW CAUSE WHY PROVISION OF SECTION 263 BE NOT INVOKED IN YOUR CASE FOR THE REASONS MENTIONED ABOVE. 4. IN THE ABOVE REFERRED SHOW CAUSE NOTICE IT WAS A LLEGED THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE CLAIM OF INT EREST EXPENDITURE PROPERLY AS THE ASSESSEE HAS CLAIMED EXCESS INTERES T EXPENDITURE BY NOT CHARGING INTEREST ON THE ADVANCE GIVEN TO ITS A SSOCIATES/SISTER CONCERN. THE SHOW CAUSE NOTICE WAS DULY REPLIED BY THE ASSESSEE SUBMITTING THAT THE LD. AO COMPLETED ASSESSMENT BY CONDUCTING APPROPRIATE ENQUIRIES AND APPLIED HIS MIND. IT WAS ALSO SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E AO EXAMINED NUMEROUS ISSUES AND RELIED ON JUDGMENTS LAYING DOWN THE RATIO THAT FOR THE VERY REASON THAT NO SUCH OBSERVATION O F THE ISSUE RAISED IN THE SHOW CAUSE NOTICE IS APPEARING IN THE BODY O F ASSESSMENT ORDER CANNOT GIVE RISE TO TAKE A VIEW THAT THE ORDE R OF ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF REVENUE. HOWEVER, LD. PR. CIT WAS NOT SATISFIED WITH THE SUB MISSIONS MADE BY THE ASSESSEE AND CONCLUDED TO HOLD THE ORDER OF THE ASSESSING OFFICER AS ERRONEOUS SO FOR AS PREJUDICIAL TO THE I NTEREST OF REVENUE AS THE AO HAD NOT MAKE REQUIRED ENQUIRY/INVESTIGATI ON REGARDING THE CLAIM OF INTEREST EXPENDITURE AND SHORT/NOT CHA RGING OF INTEREST ON ADVANCE GIVEN TO ASSOCIATES CONCERN. SHRI KAILASH KHANDELWAL 5 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUN AL LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED REFERRING TO THE FOL LOWING WRITTEN SUBMISSION AND PLACING RELIANCE ON DECISIONS MENTIO NED HEREIN: 1. ASSESSEE IS ENGAGED IN THE TRADING OF SEEDS, PESTIC IDES, FERTILIZERS, MACHINERY PART, OIL PAINTS AND COLOURS UNDER THE NA ME AND STYLE OF VIKAS KRISHI SEWA KENDRA. 2. ASSESSMENT U/S 143(3) WAS COMPLETED ON 26.10.2016. DISALLOWANCE OF RS. 2,11,259 BY APPLYING THE PROVISIONS OF SECTI ON 14A. 3. NOTICE U/S 263 WAS ISSUED ON 05.07.2018 PARA 3 [PB 01] AS PER THE INFORMATION AVAILABLE ON RECORDS, IT IS NOTED THAT THE ASSESSEE HAS DEBITED INTEREST PAID OF RS. 2,45,31,6 92/- DURING THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2014-15 IN RESPE CT OF SECURED/UNSECURED LOANS OF RS. 25,73,26,860/- AGAIN ST THIS THE ASSESSEE HAS SHOWN LOANS AND ADVANCES TO ASSOCIATED CONCERNS AT RS. 11,41,73,105/- BUT CHARGED INTEREST OF RS. 83,82,56 1/- ONLY WHICH IS DISPROPORTIONATE. IN VIEW OF THE ABOVE, THE PROPORT IONATE INTEREST CHARGEABLE FROM LOANS AND ADVANCES OF RS. 11,41,73, 105/- WORKS OUT AT RS. 1,08,84,443/- (24531692*114173105/257326860) AN D AMOUNT OF DIFFERENCE OF LESS CHARGED INTEREST FROM ASSOCIATED CONCERNS IS RS. 25,01,882/- (10884443-8382561). 4. LD. AO HAS SUO MOTO PASSED THE ORDER U/S 154 ON 31. 03.2021 BY MAKING AN ADDITION OF RS. 25,01,820 ON THE SAME CA USE FOR WHICH THE PROCEEDINGS U/S 263 WERE INITIATED. THUS, THE INSTA NT PROCEEDINGS OF SECTION 263 ARE INFRUCTUOUS. HOWEVER, ASSESSEE RESE RVES HIS RIGHT TO APPEAL AGAINST THE ORDER PASSED U/S 154 BY LD. AO. 5. IT IS MOST HUMBLY SUBMITTED THAT THE INSTANT APPEAL BE ALLOWED AND THE ORDER PASSED U/S 263 BE QUASHED AS INFRUCTUOUS. 6. WITHOUT PREJUDICE TO ABOVE, REFERENCE MAY PLEASE BE MADE TO THE DETAILED QUESTIONNAIRE ISSUED U/S 142(1) ON 31.08.2 016. SPECIFIC QUESTIONS WERE RAISED RELATING TO INTEREST EARNED A ND INTEREST PAID ON THE LOAN TRANSACTIONS. IN RESPONSE TO WHICH ALL THE DOCUMENTARY EVIDENCES WERE PLACED ON RECORD BEFORE LD. AO. DETA ILS OF WHICH ARE AS UNDER SR. NO. Q. NO. OF THE QUESTIONNAIRE ISSUED U/S 142(1) QUERY RAISED IN THE RESPECTIVE Q. NO. DETAILS SUBMITTED 1 10 PARTY WISE AND SECTION WISE DETAILS WITH NATURE OF PAYMENT OF TDS A. COMPLETE DETAILS OF TDS DEDUCTED IN THE SPECIFIED FORMAT. B. COPY OF TDS RETURNS. SHRI KAILASH KHANDELWAL 6 DONE IN THE SPECIFIC FORMAT. [PB 142] C. CHALLANS FOR THE PAYMENT OF TDS. D. NO DEFAULT IN EITHER DE DUCTING THE TDS OR DEPOSITING THE TAX WITH GOVERNMENT. [PB 146] 2 15 CONFIRMATIONS OF ALL UNSECURED LOANS TAKEN. CONFIRMATIONS FOR THE LARGE SQUARED UP LOANS IN THE SPECIFIED FORMAT. [PB 142] CONFIRMATIONS ALONG WITH COPY OF LEDGER ACCOUNTS WERE SUBMITT ED. [PB 83-116, 146] 3 16 DETAILS OF INTEREST EARNED ON THE LOANS AND ADVANCES MADE. IF INTEREST NOT CHARGED OR CHARGED AT A LOWER RATE, GIVE EXPLANATION FOR THE SAME SHOWING CAUSE WHY PROPORTIONATE AND SUITABLE DISALLOWANCE BE NOT MADE OUT OF THE INTERES T PAID. [PB 142] DETAILS OF THE INTEREST EARNED WERE SUBMITTED ALONG WITH THE LEDGER ACCOUNTS AND CONFIRMATIONS. ASSESSEE STATED THAT INTEREST WAS CHARGED ON ALL THE INTEREST BEARING LOANS AND ADVANCES. [PB 117-138, 147] 4 20 PARTY WISE DETAILS OF INTERES T PAID ON THE LOANS AND ADVANCE TAKEN ALONG WITH LEDGER ACCOUNTS OF THE PARTIES IN THE FORMAT SPECIFIED. [PB 143] DETAILS OF PARTY WISE INTEREST PAID ON THE LOANS AND ADVANCES WERE PLACED ON RECORD. [PB 83- 117, 147] FROM THE ABOVE TABLE IT IS EVIDENT THAT, LD. AO HAS MADE PROPER ENQUIRIES AND VERIFIED ALL THE TRANSACTIONS RELATIN G TO THE UNSECURED LOANS AND LOANS AND ADVANCES MADE INCLUDING INTERES T THEREON. 7. CONSIDERING THE ABOVE FACTS AND THE DOCUMENTARY EVI DENCES, IT IS EVIDENT THAT THE TRANSACTIONS RELATING TO UNSECURED LOANS, LOANS AND ADVANCES AND INTEREST THEREON HAS BEEN DULY CONSIDE RED BY THE LD. AO. THUS, IT IS NOT A CASE OF LACK OF ENQUIRY. SHRI KAILASH KHANDELWAL 7 8. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED U/S 263 , ASSESSEE MADE ALL THE REQUIRED SUBMISSIONS ALONG WITH DOCUMENTARY EVIDENCES WHICH WERE PLACED ON RECORD BEFORE LD. AO DURING THE ASSE SSMENT PROCEEDINGS. INTEREST HAS BEEN CHARGED TO EACH ACCO UNT. HENCE DISALLOWANCE CANNOT BE MADE ON HYPOTHETICAL BASIS. [PB 04-82, 83-116, 117-138, 145-150] 9. LD. AO HAS CONDUCTED PROPER ENQUIRY TO VERIFY THE T RANSACTIONS RELATING TO UNSECURED LOANS, LOANS AND ADVANCES MAD E AND THE INTEREST THEREON. LD. PR. CIT HAS NOT POINTED OUT ANY SPECIF IC SHORTCOMING IN THE VERIFICATION CONDUCTED BY LD. AO SO THAT THE ASSESS MENT ORDER BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE. ON THE CONTRARY IT IS MENTIONED THAT RECORDS SHOW THAT THE AO DID NOT PROPERLY EXAMINE THIS ISSUE, NECESSARY ENQUIRY AND INVESTIGATIONS HAVE NOT BEEN CARRIED OUT BY THE AO. [ORDER U/S 263 PAGE 13 PARA 4 AND 4.1] 10. LD. AO HAS APPLIED HIS MIND WHILE CONDUCTING THE AS SESSMENT PROCEEDINGS WHICH IS EVIDENT FROM THE QUESTION NOS. 10,15,16 AND 20 OF THE DETAILED QUESTIONNAIRE ISSUED U/S 142(1) DATED 31.08.2016 AND THE SUBMISSION ALONG WITH DOCUMENTARY EVIDENCES FILED. [PB 141-144, PB 83-116, 117-138] 11. THE SEASONAL NATURE OF BUSINESS OF THE ASSESSEE REQ UIRES HUGE AVAILABILITY OF LIQUID FUNDS TO MAKE THE PAYMENT. T HE DEPLOYMENT OF THESE BORROWED FUNDS FOR THE PURPOSE OF BUSINESS ST ARTS FROM THE MONTH OF FEBRUARY AND MARCH EVERY YEAR AS ADVANCE FOR THE PURCHASE OF SEEDS. BY THE END OF DECEMBER/JANUARY MONTH CERTAIN LIQUID FUNDS BECOME AVAILABLE TO THE ASSESSEE WHICH IS GIVEN AS TEMPORARY LOANS TO REDUCE THE BURDEN OF INTEREST. ASSESSEE HAS CHARGED INTEREST ON ALL THE ACCOUNTS WHICH HAS REDUCED THE BURDEN OF INTEREST O N THE ASSESSEE. 12. LD. AO ALLOWED THE CLAIM ON BEING SATISFIED WITH TH E EXPLANATION OF ASSESSEE, ON AN ENQUIRY MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS, THE DECISION OF LD. A O CANNOT BE HELD TO BE ERRONEOUS. 13. DISTINCTION IS TO BE APPRECIATED BETWEEN LACK OF EN QUIRY AND INADEQUATE ENQUIRY. IF THERE WAS ANY ENQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO LD. PR. CIT TO PASS ORDERS U/S 263, MERELY BECAUSE HE HAS DIFFERENT OPINION IN THE MATT ER. IT IS ONLY IN CASES OF LACK OF ENQUIRY THAT SUCH A COURSE OF ACTION W OULD BE OPEN FOR THE LD. PR. CIT. 14. IN THE INSTANT CASE, NECESSARY ENQUIRIES WERE CONDU CTED BY LD. AO DURING THE ASSESSMENT PROCEEDINGS AND ALL THE DO CUMENTARY EVIDENCES RELATING TO UNSECURED LOAN, LOANS AND ADV ANCES AND INTEREST THEREON HAS BEEN DULY CONSIDERED. THUS, IT CANNOT B E CONSTRUED AS CASE OF LACK OF ENQUIRY. 15. RELIANCE IS PLACED ON THE FOLLOWING DECISIONS SHRI KAILASH KHANDELWAL 8 A. HONBLE JURISDICTIONAL ITAT INDORE BENCH IN THE CAS E OF VINOD BHANDARI IN ITA 350/IND/2017 & OTHERS, ORDER DTD 20 .03.2020: B. HONBLE JURISDICTIONAL BENCH OF INDORE ITAT IN THE CASE OF NAROTTAM MISHRA [2015] 25 ITJ 206 C. HONBLE DELHI HIGH COURT IN THE CASE OF VIKAS POLYM ERS [2010] 194 TAXMAN 57 D. HONBLE DELHI HIGH COURT IN THE CASE OF ASHISH RAJP AL [2009] 320 ITR 674 E. HONBLE MUMBAI BENCH OF ITAT IN THE CASE OF ANIL SH AH [2007] 162 TAXMAN 39 16. APPLICATION OF MIND BY LD. AO - IN THE INSTANT CASE , LD. AO DURING THE ASSESSMENT PROCEEDINGS HAS MADE ENQUIRIE S RELATED TO UNSECURED LOAND, LOANS AND ADVANCES AND INTEREST TH EREON AS IS EVIDENT FROM THE DETAILED QUESTIONNAIRE ISSUED U/S 142(1) D ATED 31.08.2016. AFTER DUE VERIFICATION OF THE EVIDENCES AND PROOFS PLACED ON RECORD, THE LD. AO DID NOT MADE ANY ADDITION ON THIS ISSUED. 17. IT IS NOT A CASE OF NON-APPLICATION OF MIND BY THE LD. AO. IT IS ALSO NOT A CASE WHERE LD. AO HAS PASSED THE ORDER W ITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MA DE. INVOKING PROVISIONS OF SECTION 263 IS NOT IN ACCORDANCE WITH THE LAW. 18. RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRECEDENTS A. HONBLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF RATLAM COAL ASH CO. [1987] 34 TAXMAN 443 B. HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR SHARMA [2010] 194 TAXMAN 504 C. HONBLE JURISDICTIONAL HIGH COURT OF MADHYA PRADESH IN THE CASE OF MEHROTRA BROTHERS [2004] 270 ITR 157 D. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIA L CO. LTD. [2000] 243 ITR 83 E. HONBLE DELHI HIGH COURT IN THE CASE OF SUNBEAM AUT O LIMITED [2010] 189 TAXMAN 436 F. HONBLE DELHI HIGH COURT IN THE CASE OF HINDUSTAN M ARKETING & ADVERTISING CO. LIMITED [2011] 196 TAXMAN 368 G. HONBLE DELHI HIGH COURT IN THE CASE OF D.G. HOUSIN G PROJECTS LTD [2012] 20 TAXMANN.COM 587 H. HONBLE JURISDICTIONAL BENCH OF INDORE ITAT IN THE CASE OF FLEXITUFF INTERNATIONAL LIMITED ITA NO. 282/IND/2 017 I. HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIANCE COMMUNICATION LIMITED [2016] 69 TAXMANN.COM 103 SHRI KAILASH KHANDELWAL 9 J. HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF DR . KODELA SIVA PRASADA RAO [2013] 29 TAXMANN.COM 18 6. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE(DR) TOOK US THROUGH THE FINDING OF LD. PR. CIT AND RELIED ON THE DECISI ONS REFERRED IN THE IMPUGNED ORDER WHICH READS AS FOLLOWS: 4. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER, THE SUBMISSION OF THE ASSESSEE AN D THE REPORT GIVEN BY THE AO. AS PER THE INFORMATION AVAI LABLE ON RECORDS, IT IS NOTED THAT THE ASSESSEE HAS DEBITED INTEREST PAID OF RS. 2,45,31,692/ - DURING THE PREVIOUS YEAR RELE VANT TO THE A.Y. 2014-15 IN RESPECT OF SECURED/UNSECURED LOANS OF RS. 25,73,26,860/- AGAINST THIS THE ASSESSEE HAS SHOWN LOAN AND ADVANCES TO ASSOCIATED CONCERNS AT RS. 11,41,73,105 /- BUT CHARGED INTEREST OF RS. 83,82,561/- ONLY WHICH IS DISPROPORTIONATE. THE RECORDS SHOW THAT THE AO DID NOT PROPERLY EXAMINE THIS ISSUE. HE DID HOT EXAMINE WHE THER THE LOANS WERE GIVEN WITHOUT INTEREST OR WHAT WAS QUANT UM OF INTEREST CHARGED AND ALSO WHAT WAS THE PURPOSE OF S UCH LOANS. DURING THE COURSE OF PROCEEDINGS BEFORE THE UNDERSI GNED THE ASSESSEE HAS GIVEN CERTAIN SUBMISSIONS IN WHICH THE CALCULATIONS FOR INTEREST CHARGED_ WERE GIVEN AND I T HAS BEEN CLAIMED BY THE ASSESSEE THAT THE INTEREST RECEIVED AS SHOWN IN THE BOOKS OF ACCOUNT WERE CORRECT. AS DISCUSSED ABOVE THEJ; SUBMIESION 'OF THE ASSESSEE WAS FORWARDED TO THE AO FOR VERIFICATION AND' EXAMINATION BUT THE SAME COULD NO T BE EXAMINED PROPERLY BY HIM DUE TO NON_ AVAILABILITY O F COUNSEL OF THE ASSESSEE. THEREFORE, THE SUBMISSION OF THE ASSE SSEE CANNOT BE ACCEPTED WITHOUT PROPER VERIFICATION BY THE AO A S THE AO HAS NOT EXAMINED THIS FACTOR AT THE ASSESSMENT STAG E. ACCORDINGLY, THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. 4.1 THEREFORE, IN VIEW OF THE ABOVE DISCUSSIONS, THE ASSESSMENT ORDER U/S 143(3) DATED 26.10.2016 IS ERR ONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVE NUE IN RESPECT OF THE ISSUES DISCUSSED ABOVE, IN WHICH NECESSARY ENQU IRY AND INVESTIGATIONS HAVE NOT BEEN CARRIED OUT BY THE AO. HE COMPLETED THE ASSESSMENT WITHOUT MAKING NECESSARY INVESTIGATION AND ENQUIRIES WHICH WERE NECESSARY TO ARRIVE AT THE CORRECT TAXABLE INCOME OF THE ASSESSEE. IT MAY NOT BE OUT OF PLACE TO REFER TO THE PROVISIONS OF EXPLANATION-2 T O SECTION 263 SHRI KAILASH KHANDELWAL 10 WHICH READS AS UNDER:- EXPLANATION 2.-FOR THE PURPOSES OF THIS SECTION, I T IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFI CER SHALL BE DEEMED 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; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WIHOUT INQU IRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH AN Y DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, REND ERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE C ASE OF THE ASSESSEE OR ANY OTHER PERSON. ACCORDINGLY, IT WAS INCUMBENT UPON THE AO TO HAVE M ADE NECESSARY ENQUIRIES OR VERIFICATION, WHICH WERE REQ UIRED TO VERIFY THE ISSUE. 5. THE EXCERPTS FROM IMPORTANT JUDGMENT ON THE REVI SIONARY POWER OF COMMISSIONER, ON WHICH THE RELIANCE IS PLA CED, ARE REPRODUCE HEREUNDER: 1. CIT VS. AMITABH BACHCHAN (2006) 384 ITR 200(SC) 2. TOYOTA MOTOR CORPN. (2008) 174 TAXMAN 395 (DELHI ) AFFIRMED IN (2008) 173 TAXMAN 458 (SC) 3. JAGDISH KUMAR GULATI (2004) 139 TAXMAN 369(ALL.) 4. MALABAR INDUSTRIES CO. LTD. (2000) 109 TAXMAN 66 (SC) 5. CROMPTON GREAVES LTD. (2017) 82 TAXMANN.COM 246 (MUMBAI I.T.A.T. BENCH C 6. CIT VS. VALLABHDASVITHALDAS GUJARAT HIGH COURT (2002) 253 ITR 0543) THEREFORE, IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE CONSIDERED OPINION THAT THE ORDER DATED 26.10.2016 FOR A.Y.2014-15 IS ERRONEOUS IN SO FAR AS IT IS ALSO PR EJUDICIAL TO THE INTEREST OF REVENUE ON ACCOUNT OF PASSING OF THE OR DER WITHOUT MAKING REQUIRED ENQUIRIES/INVESTIGATIONS. ACCORDING LY, I AM SATISFIED THAT PROVISIONS OF SECTION 263 OF THE ACT ARE REQUIRED TO BE INVOKED. THEREFORE, THE ASSESSMENT FOR A.Y.20 14-15 FRAMED ON 26.10.2016 IS HEREBY SET-ASIDE THE FILE O F AO TO RE- EXAMINE ISSUES, INDICATED IN THE PRECEDING DISCUSSI ON, U/ 263 AND PASSING AN ORDER AS PER THE LAW AFTER MAKING NE CESSARY VERIFICATION, INQUIRIES AND INVESTIGATIONS. IT WOUL D BE NOT OUT OF PLACE TO MENTION THAT THE AO SHALL RE-EXAMINE ONLY THE ISSUES WHICH HAVE BEEN INDICATED FOR FURTHER INVESTIGATION IN THE SHRI KAILASH KHANDELWAL 11 PRECEDING DISCUSSION. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US BY TO THE SIDES AND WITH THE ASSISTANCE O F THE LD. COUNSEL, WE HAVE CONSIDERED THE DOCUMENTARY EVIDENCES BROUGH T ON RECORD IN THE FORM OF PAPER BOOK IN LIGHT OF RULE 18(6) OF ITAT RULES AND HAVE ALSO PERUSED THE JUDICIAL DECISIONS RELIED UPO N BY BOTH THE SIDES. 8. IT IS A SETTLED POSITION OF LAW THAT POWERS U/S 263 OF THE ACT CAN BE EXERCISED BY THE LD. PR. COMMISSIONER ON SATISFA CTION OF TWIN CONDITIONS, I.E., THE ASSESSMENT ORDER SHOULD BE ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BY 'ERR ONEOUS' IS MEANT CONTRARY TO LAW. THUS, THIS POWER CANNOT BE EXERCIS ED UNLESS THE LD. PR. COMMISSIONER IS ABLE TO ESTABLISH THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE. THUS, WHERE THERE ARE TWO POSSIBLE VIEWS A ND THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIE WS, NO ACTION TO EXERCISE POWERS OF REVISION CAN ARISE, NOR CAN REVI SIONAL POWER BE EXERCISED FOR DIRECTING A FULLER ENQUIRY TO FIND OU T IF THE VIEW TAKEN IS ERRONEOUS. THIS POWER OF REVISION CAN BE EXERCIS ED ONLY WHERE NO ENQUIRY, AS REQUIRED UNDER THE LAW, IS DONE. IT IS NOT OPEN TO ENQUIRE IN CASE OF INADEQUATE INQUIRY. OUR VIEW IS FORTIFIED BY THE DECISION OF HON'BLE HIGH COURT OF BOMBAY IN THE CAS E OF CIT VS. NIRAV MODI , [2016] 71 TAXMANN.COM 272 (BOMBAY). 9. THIS VIEW IS FURTHER SUPPORTED BY THE DECISION O F THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF SHRI PRAKASH BHAG CHAND KHATRI IN SHRI KAILASH KHANDELWAL 12 TAX APPEAL NO. 177 WITH TAX APPEAL NO.178 OF 2016 , WHEREIN THE HON'BLE GUJARAT HIGH COURT WAS SEIZED WITH THE FOLL OWING SUBSTANTIAL QUESTION OF LAW:- 'WHETHER THE TRIBUNAL IS RIGHT IN LAW AND ON FACTS IN UPHOLDING THE ORDER PASSED BY THE CIT UNDER SECTION 263 OF THE ACT ON MERITS AND STILL STORING THE ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 54 OF THE ACT TO THE FILE OF ASSESSING OFFICER EVEN THOUG H THE WORKING OF ALLOWABILITY OF DEDUCTION UNDER SECTION 54F IS AVAILABLE IN THE ORDER UNDER SECTION 263 WHICH IS NOT DISPUTED BY THE ASSESSEE BEFORE ITAT.' 10. AND THE HON'BLE HIGH COURT, AFTER CONSIDERING T HE FACTS, HELD AS UNDER:- '6. IT CAN THUS BE SEEN THAT THOUGH FINAL ORDER OF ASSESSMENT WAS SILENT ON THIS ASPECT, THE ASSESSING OFFICER HAD CAR RIED OUT INQUIRIES ABOUT THE NATURE OF SALE OF LAND AND ABOUT THE VALID ITY OF THE ASSESSEE'S CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT. LEARNED COUNSEL FOR THE REVENUE HOWEVER SUBMITTED THAT THESE INQUIRIES WERE CONFINED TO THE CLAIM OF DEDUCTION UNDER SECTION 54F OF THE ACT IN THE CONTEXT OF FULFILLING CONDITIONS CONTAINED THEREIN A ND MAY POSSIBLY HAVE NO RELEVANCE TO THE QUESTION WHETHER THE SALE OF LAND GAVE RISE TO A LONG TERM CAPITAL GAIN. LOOKING TO THE TENOR O F QUERIES BY THE ASSESSING OFFICE AND DETAILS . A.Y. 2009-10 SUPPLIE D BY THE ASSESSEE, WE ARE UNABLE TO ACCEPT SUCH A CONDITION. IN THAT VIEW OF THE MATTER, THE OBSERVATION OF THE TRIBUNAL THAT TH E ASSESSING OFFICER HAVING MADE INQUIRIES AND WHEN TWO VIEWS ARE POSSIBL E, REVISIONAL POWERS COULD NOT BE EXERCISED, CALLED FOR NO INTERFERE NCE. SINCE WITH RESPECT TO COMPUTATION AND ASSERTIONS OF OTHER ASPEC TS OF DEDUCTION UNDER SECTION 54FOFTHE ACT, THE TRIBUNAL HAS REMANDED THE PROCEEDINGS, NOTHING STATED IN THIS ORDER WOULD AFFECT EITHER SIDE IN CONSIDERATIONS OF SUCH CLAIM. 7. NO QUESTION OF LAW ARISES. TAX APPEALS ARE DISMI SSED.' 11. WE FIND THE HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. ANIL KUMAR REPORTED IN 335 ITR 83 HAS HELD THAT WHERE IT WAS DISCERNIBLE SHRI KAILASH KHANDELWAL 13 FROM RECORD THAT THE A.O HAS APPLIED HIS MIND TO TH E ISSUE IN QUESTION, THE LD. CIT CANNOT INVOKE SECTION 263 OF THE ACT MERELY BECAUSE HE HAS DIFFERENT OPINION. RELEVANT OBSERVAT ION OF THE HIGH COURT READS AS UNDER: '63. WE FIND THE HON'BLE DELHI HIGH COURT IN THE CA SE OF VIKAS POLYMER REPORTED IN 341 ITR 537 HAS HELD AS UNDER: 'WE ARE THUS OF THE OPINION THAT THE PROVISIONS OF S. 263 OF THE ACT, WHEN READ AS A COMPOSITE WHOLE MAKE IT INCUMBENT UPON TH E CIT BEFORE EXERCISING REVISIONAL POWERS TO : (I) CALL FOR AND EXAMINE THE RECORD, AND (II) GIVE THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND THEREAFTER TO MAKE OR CAUSE TO BE MADE SUCH ENQUIRY AS HE DEEMS NECESSARY . IT IS ONLY ON FULFILMENT OF THESE TWIN CONDITIONS THAT THE CIT MA Y PASS AN ORDER EXERCISING HIS POWER OF REVISION. MINUTELY EXAMINED , THE PROVISIONS OF THE SECTION ENVISAGE THAT THE CIT MAY CALL FOR THE RECO RDS AND IF HE PRIMA FACIE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE AO I S ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, H E MAY AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MA KING OR CAUSING TO BE MADE SUCH ENQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY. THE TWIN REQ UIREMENTS OF THE SECTION ARE MANIFESTLY FOR A PURPOSE. MERELY BECAUSE THE CI T CONSIDERS ON EXAMINATION OF THE RECORD THAT THE ORDER HAS BEEN E RRONEOUSLY PASSED SO AS TO PREJUDICE THE INTEREST OF THE REVENUE WILL NO T SUFFICE. THE ASSESSEE MUST BE CALLED, HIS EXPLANATION SOUGHT FOR AND EXAM INED BY THE CIT AND THEREAFTER IF THE CIT STILL FEELS THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE CIT MAY PASS REVIS IONAL ORDERS. IF, ON THE OTHER HAND, THE CIT IS SATISFIED, AFTER HEARING THE ASSESSEE, THAT THE ORDERS ARE NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F THE REVENUE, HE MAY CHOOSE NOT TO EXERCISE HIS POWER OF REVISION. THIS IS FOR THE REASON THAT IF A QUERY IS RAISED DURING THE COURSE OF SCRUTINY BY TH E AO, WHICH WAS ANSWERED TO THE SATISFACTION OF THE AO, BUT NEITHER THE QUERY NOR THE ANSWER WERE REFLECTED IN THE ASSESSMENT ORDER, THIS WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE AO CAL LED FOR INTERFERENCE AND REVISION. IN THE INSTANT CASE, FOR EXAMPLE, THE CIT HAS OBSERVED IN THE ORDER PASSED BY HIM THAT THE ASSESSEE HAS NOT FILED CERTA IN DOCUMENTS ON THE RECORD AT THE TIME OF ASSESSMENT. ASSUMING IT TO BE SO, IN OUR OPINION, THIS DOES NOT JUSTIFY THE CONCLUSION ARRIVED AT BY THE C IT THAT THE AO HAD SHIRKED HIS RESPONSIBILITY OF EXAMINING AND INVESTI GATING THE CASE. MORE SO, IN VIEW OF THE FACT THAT THE ASSESSEE EXPLAINED THAT THE CAPITAL INVESTMENT MADE BY THE PARTNERS, WHICH HAD BEEN CAL LED INTO QUESTION BY THE CIT WAS DULY REFLECTED IN THE RESPECTIVE ASSESS MENTS OF THE PARTNERS SHRI KAILASH KHANDELWAL 14 WHO WERE I.T. ASSESSEES AND THE UNSECURED LOAN TAKE N FROM M/S STUTEE CHIT & FINANCE (P) LTD. WAS DULY REFLECTED IN THE A SSESSMENT ORDER OF THE SAID CHIT FUND WHICH WAS ALSO AN ASSESSEE.' 64. SINCE IN THE INSTANT CASE THE A.O AFTER CONSIDE RING THE VARIOUS SUBMISSIONS MADE BY THE ASSESSEE FROM TIME TO TIME AND HAS TAKEN A POSSIBLE VIEW, THEREFORE, MERELY BECAUSE THE DIT DO ES NOT AGREE WITH THE OPINION OF THE A.O, HE CANNOT INVOKE THE PROVISIONS OF SECTION 263 TO SUBSTITUTE HIS OWN OPINION. IT HAS FURTHER BEEN HEL D IN SEVERAL DECISIONS THAT WHEN THE A.O HAS MADE ENQUIRY TO HIS SATISFACT ION AND IT IS NOT A CASE OF NO ENQUIRY AND THE DIT/CIT WANTS THAT THE CASE C OULD HAVE BEEN INVESTIGATED/ PROBED IN A PARTICULAR MANNER, HE CAN NOT ASSUME JURISDICTION U/S 263 OF THE ACT. IN VIEW OF THE ABO VE DISCUSSION, WE HOLD THAT THE ASSUMPTION OF JURISDICTION BY THE DIT U/S 263 OF THE ACT IS NOT IN ACCORDANCE WITH LAW. WE, THEREFORE, QUASH THE SAME AND GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED.' 12. IN THE LIGHT OF ABOVE AFOREMENTIONED JUDICIAL D ECISIONS, WE HAVE CAREFULLY PERUSED THE QUESTIONNAIRE ISSUED BY THE A SSESSING OFFICER DATED 31.08.2016 AND FIND THAT IN RESPONSE TO QUEST ION NO.15 OF THIS QUESTIONNAIRE ASSESSEE FILED DETAILS OF UNSECU RED LOANS APPEARING AS ON 31.03.2014 ALONG WITH LEDGER ACCOUN TS AND IN SOME CASES COPIES OF INCOME TAX RETURNS OF VARIOUS CASH CREDITORS (PLACED AT PAGE 83 TO 116 OF THE PB). WE HAVE ALSO EXAMINED THE DOCUMENTS FILED BY THE ASSESSEE IN RESPONSE TO POIN T 16 OF THE QUESTIONNAIRE WHICH CONTAINS DETAILS OF LOANS AND A DVANCES GIVEN TO VARIOUS PARTIES TOTALLING TO RS.11.42 CR. (APPROX.) ALONG WITH LEDGER ACCOUNTS OF EACH OF THESE PARTIES AND THERE INCOME TAX RETURN PLACED AT PAGES NO.117 TO 138. WE HAVE ALSO PERUSED WRITTEN SUBMISSION DATED 14.10.2016 FILED BEFORE THE LD. AO WHICH CONTAINED VARIOUS DETAILS OF INTEREST EARNED ON LOA NS AND ADVANCES, PARTY WISE DETAILS OF INTEREST PAID IN THE REQUIRED FORMAT. FURTHER BEFORE THE LD. AO ASSESSEE HAD ALSO FILED SUBMISSIO NS REGARDING SHRI KAILASH KHANDELWAL 15 UNSECURED LOAN, HIGH INTEREST EXPENDITURE, AND ALLO WABILITY OF INTEREST EXPENDITURE. IT WAS ALSO CLAIMED BY THE AS SESSEE THAT ENTIRE UNSECURED AND SECURED LOANS TAKEN DURING THE YEAR H AS ONLY BEEN UTILIZED FOR THE BUSINESS OF ASSESSEE. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF S.A. BUILDERS LTD. 2007 288 ITR 1 (SC) CONTENDING THAT THE INTEREST ON MONEY BORROWED AND LENT TO SISTER CONCERN WITHOUT CHARGIN G INTEREST IS ALLOWABLE ON THE SAME TEST AS THAT FOR ALLOWANCE OF BUSINESS EXPENDITURE VIZ FOR THE PURPOSE OF BUSINESS ALLOW ABLE IF MADE AS A MEASURE OF COMMERCIAL EXPEDIENCY. 13. LD. DR FAILED TO CONTROVERT THIS FACT THAT ALL THESE DETAILS WERE VERY MUCH AVAILABLE BEFORE THE ASSESSING OFFICER AN D SUBMISSIONS WERE DULY MADE BY THE ASSESSEE SUPPORTED BY SETTLED JUDICIAL PRECEDENCE FOR THE CLAIM OF INTEREST EXPENDITURE. F URTHER THESE FACTS WHICH WERE VERY MUCH AVAILABLE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS ITSEL F WERE ALSO BEFORE THE LD. PR. CIT DURING PROCEEDINGS U/S 263 O F THE ACT. NO NEW ENQUIRY WAS CONDUCTED BY LD. PR. CIT, IN THIS R EGARD AT ITS OWN MOTION AS REQUIRED IN THE PROVISIONS OF SECTION 263 OF THE ACT. THUS, THIS IS A CASE WHERE COMPLETE ENQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER WITH APPLICATION OF MIND AND IN O UR CONSIDERED VIEW, IT IS NOT OPEN FOR LD. PR. CIT TO ORDER FOR A FRESH ENQUIRY WHEN ADEQUATE ENQUIRY HAS ALREADY BEEN DONE AND ONE OF T HE PLAUSIBLE VIEW HAS BEEN TAKEN BY THE ASSESSING OFFICER AS PER MISSIBLE UNDER THE LAW. THEREFORE, LD. PR. CIT ERRED IN ASSUMING SHRI KAILASH KHANDELWAL 16 JURISDICTION U/S 263 OF THE ACT IN ORDER TO SUBSTIT UTE HIS VIEW WITH THAT OF THE ASSESSING OFFICER. THUS, CONSIDERING FA CTS OF THE CASE IN TOTALITY IN LIGHT OF JUDICIAL DECISIONS DISCUSSED H EREINABOVE, WE SET ASIDE THE ORDER OF LD. PR. CIT DATED 24.03.2019 AND RESTORE THAT OF THE ASSESSING OFFICER DATED 26.10.2016 FRAMED U/S 1 43(3) OF THE ACT. ACCORDINGLY, THE IMPUGNED ORDER U/S 263 OF THE ACT IS QUASHED. 14. IN RESULT, APPEAL FILED BY THE ASSESSEE IN ITAN O. 562/IND/2019 IS ALLOWED. ORDER WAS PRONOUNCED AS PER RULE 34 OF THE I.T.A.T. R ULES 1963 ON 30.04.2021. SD/- (MADHUMITA ROY) SD/- (MANISH BORAD) JUDICIAL MEMBER A CCOUNTANT MEM BER INDORE; DATED : 30 / 04/2021 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE