M/s Ved Parkash Contractors, Patiala V. Commssioner of Income Tax, Patiala

ITA 573/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95641 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 25-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Depreciation; Opportunity of being heard; Proportionate interest; Assessment record; Right to appeal
• Section: 143(3); 263; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 573/CHD/2015 ASSESSMENT YEAR: 2010-11 M/S VED PARKASH CONTRACTORS, VS. THE CIT, PATIALA PATIALA PAN NO. AAAFV7011Q (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHWANI KUMAR RESPONDENT BY : SH. S.K.MITTAL DATE OF HEARING : 14.09.2015 DATE OF PRONOUNCEMENT : 03.11.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT, PATIALA DATED 27.3.2015 PASSED U/S 263 OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR ASSESSMENT YEAR 2010-11. 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS:- 1. THAT ORDER PASSED U/S 263(1) BY THE LD. CIT PATIAL A IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY HOLD THAT THE ASSESSME NT ORDER DATED 28.1.2013 PASSED BY THE LD. ASST. CIT, 2 CIRCLE-PATIALA IS ERRONEOUS IN AS MUCH AS PREJUDICI AL TO THE INTEREST OF REVENUE. 2. THAT HE WAS NOT JUSTIFIED TO SET ASIDE THE ASSESSME NT ORDER DATED 28.1.2013 BY GIVING THE FOLLOWING DIRECTIONS A) TO MAKE AN ADDITION OF RS. 5,95,970/- ON ACCOUNT O F UNDERSTATEMENT OF CLOSING STOCK. B) DISALLOWANCE OF INTEREST US/ 36(1)(III) IN RESPECT OF INVESTMENT IN LAND AND MIXING PLANT. C) DISALLOWANCE OF DEPRECIATION IN RESPECT OF THE MIXING PLANT D) DISALLOWANCE OF DEDUCTION ON ACCOUNT OF INTEREST AND SALARY PAID TO THE PARTNERS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAN ON AN EXAMINATION OF THE ASSESSMENT RECORD OF THE ASSESSEE FOR THE ASSESSMEN T YEAR UNDER CONSIDERATION, THE CIT OBSERVED THAT THE ASSESSMENT ORDER DATED 20 .01.2013 PASSED IN THIS CASE U/S 143(3) OF THE ACT WAS ERRONEOUS AND IN A S MUCH AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. COMMISSIONER IS SUED A NOTICE TO THE ASSESSEE U/S 263 OF THE ACT LISTING EIGHT ISSUES IN RESPECT TO WHICH IT WAS FOUND THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. IN RESPONSE TO THE AFORESAID NOTICE, THE ASSESSEE CONTENDED THAT ALL THE QUERIES RAISED IN THE SHOW CAUSE NOTICE HAD BEE N LOOKED INTO BY THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT ORDE R AND THE ASSESSING OFFICER WAS FULLY SATISFIED WITH THE RECORD PRODUCED BEFORE HIM AND THE CONTENTION PUT FORTH BEFORE HIM BY THE ASSESSEE WITH REGARD TO THE POINTS RAISED BY THE LD. COMMISSIONER. THE NEXT CONTENTION OF THE ASSESSEE W AS THAT IT IS THE PREROGATIVE OF THE ASSESSING OFFICER TO MAKE ENTRIE S IN THE NOTING SHEET OF THE RECORD HE VERIFIED AND IT IS ALSO HIS PREOPERATIVE TO WRITE THE WORDING OF THE ASSESSMENT ORDER AS PER HIS CHOICE, BUT THIS DOES N OT MEAN THAT THE ASSESSING 3 OFFICER DID NOT VERIFY THE POINTS RAISED IN THE SHO W CAUSE NOTICE. THE ASSESSEE ALSO RELIED ON THE DECISION OF HON'BLE JURISDICTION AL HIGH COURT IN THE CASE OF HARI IRON AND TRADING CO. V CIT (2003) 131 TAXMAN 5 35 (P&H) AND THE DECISION OF ITAT, KOLKATA BENCH IN ZAMIRUN BIBI VS. CIT IN ITA NO. 661/KOLKATA/2011 DATED 1.9.2011 FOR THE PROPOSITION THAT MERELY BECAUSE THE ORDER OF THE ASSESSING OFFICER WAS CRYPTIC WOULD NO T BE A SUFFICIENT REASON TO BRAND THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. 4. THE LD. CIT OBSERVED THAT ON SOME OF THE ISSUES RAISED IN THE SHOW CAUSE NOTICE U/S 263(1) OF THE ACT, THE ASSESSING O FFICER HAD ALSO RAISED QUERIES AND REPLY / EXPLANATION WAS FILED BY THE AS SESSEE TO THOSE QUERIES. HE HAS ALSO STATED THAT THE ASSESSING OFFICER HAD NOTE D THAT ON 24.1.2013, THE ASSESSEE HAD PRODUCED BOOKS OF ACCOUNT, BILLS AND VOUCHERS WHICH WERE VERIFIED AND CERTAIN DISCREPANCIES WERE NOTED AND CERTAIN DISALLOWANCE WERE MADE ON ACCOUNT OF THE SAME. HOWEVER, IN RESPECT OF SOME OF THE ISSUES, THE LD. CIT WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS NEITHER EXAMINED THE ISSUE NOR APPLIED HIS MIND TO THE ISSUE AND HAS TAK EN A DECISION CONTRARY TO LAW AND, THEREFORE, THE ASSESSMENT ORDER WAS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. CIT SET ASIDE THE ASSE SSMENT ORDER WITH THE DIRECTION TO THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AFTER MAKING AN ADDITION OF RS. 5,95,970/- ON ACCOUNT OF UNDERST ATEMENT OF CLOSING STOCK, DISALLOWANCE OF INTEREST U/S 36(1)(III) IN RESPECT OF INVESTMENTS IN LAND AND MIXING PLANT AND DEPRECIATION IN RESPECT OF MIXING PLANT AND DISALLOWANCE OF DEDUCTION ON ACCOUNT OF INTEREST AND SALARY PAID TO THE PARTNERS. 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT IS OBSER VED THAT COMMISSIONER HAS DIRECTED THE ASSESSING OFFICER TO MAKE AN ADDIT ION OF RS. 5,95,970/- ON ACCOUNT OF UNDERSTATEMENT OF CLOSING STOCK. ACCORDI NG TO LD. CIT, OUT OF THE PURCHASES FROM M/S JAY BUILDING MATERIAL SUPPLIER A ND RAKESH YADAV AGGREGATING TO RS. 6,95,970/- ON 31.3.2015, THE ASS ESSEE HAD SHOWN MATERIAL WORTH RS. 1 LAKH IN HIS CLOSING STOCK. HE FURTHER S TATED THAT SINCE THE MATERIAL WAS PURCHASED ON THE LAST DATE BUT COULD NOT HAVE B ECOME PART OF THE WORK-IN- PROGRESS OF THE ASSESSEE AS THAT WOULD HAVE BEEN PH YSICALLY IMPOSSIBLE. THE LD. CIT OBSERVED THAT NO QUERY WAS RAISED BY THE AS SESSING OFFICER ABOUT THE PURCHASES MADE ON THE LAST DAY OF THE YEAR FIGURING IN THE CLOSING STOCK OF THE ASSESSEE. THE LD. CIT HELD THAT THE ASSESSEE HAS UN DERSTATED ITS CLOSING STOCK ON ACCOUNT OF PAYMENTS TO M/S JAY BUILDING MATERIAL SUPPLIER AND RAKESH YADAV TO THE EXTENT OF RS. 5,95,970/- (RS. 6,95,97 0/- - RS. 1,00,000 SHOWN). THE LD. COMMISSIONER TOOK THE VIEW THAT THE ORDER O F THE ASSESSING OFFICER IS ERRONEOUS SINCE HE DID NOT EXAMINE THE VALUE OF THE CLOSING STOCK WITH REFERENCE TO THE PURCHASES MADE AT THE END OF THE Y EAR AND IS PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE NON VERIFICATION HAS LE D TO UNDERSTATEMENT OF THE CLOSING STOCK AS WELL AS INCOME TO THE EXTENT OF RS . 5,95,970/-. IN THIS REGARD, THE REPLY OF THE ASSESSEE DATED 16.2.2015 WAS AS UN DER:- 4.1 IN RESPONSE TO THE AFORESAID QUERY, T HE LD. COUNSEL HAS SUBMITTED ITS REPLY DATED 16.03.2015, WHICH IS REPR ODUCED AS UNDER:- 'OUR SUPPLIERS OF DIESEL, DUST, RORI, BRICKS & RETA /SAND ETC. RAISED THE BILLS FORTNIGHTLY. THEY SUPPLY THE GOODS TO US ON VARIOUS DATES AND AFTER 15 DAYS THEY RAISED THE BILL AGAINST US. SO, THE BILLS OF DIESEL, DUST, RORI, BR ICKS & RETA/SAND ETC. DEBITED IN OUR ACCOUNTS ON 31.03.201 0 DOES NOT MEANS THAT GOODS SUPPLIED TO US ON 31.03.2010 O NLY. 5 THESE GOODS WERE SUPPLIED TO US FROM 16.03.2010 TO 31.03.2010 TENTATIVELY. AS A MATTER OF PROOF WE ARE HEREBY PRODUCING BEFORE YOU THE BILLS OF THE ABOVE SAID MA TERIAL OF THE SUPPLIERS FOR YOUR REFERENCE. COPY OF MITTI PUR CHASED ACCOUNT ALSO ENCLOSED FOR YOUR REFERENCE. SO,. VALU ATION OF CLOSING STOCK GIVEN BY US IS VERY MUCH CORRECT, TH E GOODS SUPPLIED TO US FROM 16.03.2010 TO 31.03.2010 MINUS CLOSING STOCK OF THAT GOODS INCLUDED IN WORK DONE FIGURE OF RS. 22,00,000/-. 6. FROM THE ABOVE REPLY IT IS CLEAR THAT THE GOODS HAVE BEEN SUPPLIED TO THE ASSESSEE ON VARIOUS DATES AND AFTER 15 DAYS THE SAI D PARTY RAISED THE BILLS AGAINST THE ASSESSEE. IT WAS ALSO CONTENDED BY THE ASSESSEE THAT THE BILLS OF DIESEL, DUST, RORI, BRICKS & RETA / SAND ETC. DEBIT ED IN ITS ACCOUNT ON 31.3.2010 DID NOT MEAN THAT THE GOODS WERE SUPPLIED TO THE ASSESSEE FROM 16.3.2010 TO 31.3.2010. IT APPEARS THAT LD. COMMISS IONER HAS NOT PROPERLY APPRECIATED THE EXPLANATION OF THE ASSESSEE. SHRI ASHWANI KUMAR, LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE POINTS / QUERY RAISED BY THE LD. COMMISSIONER HAVE BEEN DULY LOOKED INTO BY THE ASSE SSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER WAS SATISFIED WITH THE RECORD PRODUCED BEFORE HIM AND EXPLANATION GIVEN TO HIM WI TH REGARD TO THE ABOVE POINT. SHRI ASHWANI KUMAR, LD. COUNSEL FOR THE ASSE SSEE INVITED OUR ATTENTION TO THE QUERIES RAISED BY THE ASSESSING OFFICER VIDE HIS LETTER DATED 18.11.2012 (COPY PLACED AT PAGE 19 OF THE PAPER BOOK), WHICH R EADS AS UNDER:- 3. THE PERUSAL OF THE BALANCE SHEET REVEALS THAT Y OU HAD SHOWN:- I) WORK IN PROGRESS : RS. 30,20,830/- 6 IN THIS CONNECTION, YOU ARE REQUIRED TO FILE THE BA SIS OF CALCULATION OF THE CLOSING STOCK OF EACH ITEM ALONG WITH THE STOCK INVENTORY PREPARED. SIMILARLY, THE ASSESSING OFFICER VIDE HIS QUESTIONN AIRE DATED 10.12.2010 ASKED THE ASSESSEE TO FURNISH DETAILS REGARDING VALUATION OF OPENING AND CLOSING STOCK. IN RESPONSE TO THE ABOVE QUERY, THE ASSESSEE SUBMITTED HIS REPLY ON 17.12.2012 AND THE RELEVANT PARA OF THE REPLY IS RE PRODUCED HEREIN BELOW:- REPLY TO POINT NO. 7 OF YOUR QUESTIONNAIRE: THERE WAS OPENING STOCK OF RS. 10 LACS AS ON 1.4.20 09. THIS OPENING STOCK MAINLY CONSISTS OF MATERIAL LYING AT SITES, WORK DONE BUT NOT CERTIFIED BY THE CONCERN DEPARTMENT. DETAIL OF CLOSING STOCK /WORK- IN - PROGRESS AS ON 31.3.2010 WAS AS FOLLOWS: 1) CEMENT 2714 BAGS RS. 5,86,224.00 (BILL DT. 30.3.2010 OF ADIYA CEMENT, CHITTORGARGH ENCLOSED FOR YOUR RECORD) 2) RORI / DUST / RETA RS. 1,00,000.00 3) WORK DONE BUT NOT YET CERTIFIED BY RS. 22,00,000.00 THE DEPARTMENT AS ON 31.3.2010 4) OTHER MATERIAL (INC. MISC. ITEMS) RS. 1,34,606.00 TOTAL RS. 30,20,830.00 7. IT IS ALSO OBSERVED THAT THE ASSESSING OFFICER V IDE HIS QUESTIONNAIRE DATED 8.11.2012 (PARA 5) REQUIRED THE ASSESSEE TO FURNISH THE DETAILS OF MONTH WISE PURCHASE AND SALES OF EACH ITEM SEPARATELY. THE ASS ESSING OFFICER ALSO REQUIRED THE ASSESSEE TO SUBMIT THE LIST OF THE PURCHASER / SELLER EXCEEDING TO RS. 20,000/- ALONGWITH COMPLETE POSTAL ADDRESS. THE ASS ESSEE ALONG WITH ITS REPLY DATED 3.12.2012 SUBMITTED THE COPY OF THE ACCOUNT O F ALL PURCHASES MADE 7 DURING THE ASSESSMENT YEAR 2010-11. IN OUR OPINION, THE LD. COMMISSIONER HAS WRONGLY PRESUMED THAT THE ASSESSING OFFICER HAD NOT PROPERLY EXAMINED THE ISSUE. THE ORDER OF THE ASSESSING OFFICER MAY BE BR IEF AND CRYPTIC BUT THAT BY ITSELF DOES NOT SUFFICIENT REASON TO BRAND THE ASSE SSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS WELL SETTLED LAW THAT WRITING AN ORDER IN DETAILS MAY BE A LEGAL REQUIREMENT BUT THE ORDER NOT FULFILLING THIS REQUIREMENTS CANNOT BE SAID TO BE ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF REVENUE. IT IS APPARENT FROM THE RECORDS THAT THE A SSESSEE SUBMITTED IT REPLY AND ALSO FURNISHED THE REQUISITE INFORMATION OR DET AILS TO SUBSTANTIATE ITS CLAIM DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING O FFICER HAVING CONSIDERED ALL THESE ISSUES ON WHICH THE ASSESSMENT ORDER IS R EVISED U/S 263, THE EXERCISE OF POWERS U/S 263 IS BAD IN LAW. IT IS ALSO TRUE TH AT IF AN ENQUIRY IS MADE BY THE ASSESSING OFFICER AND THEN OBJECTION OF THE CIT IS THAT SUCH INQUIRY IS NOT ADEQUATE, THE CIT WOULD HAVE NO JURISDICTION U/S 26 3 OF THE ACT TO REVISE THE ORDER OF THE ASSESSING OFFICER. IN OUR CONSIDERED VIEW THE ASSESSING OFFICER HAS MADE PROPER AND DESIRED ENQUIRES BEFORE PASSING THE ASSESSMENT ORDER. THEREFORE, THE VIEW TAKEN BY THE LD. CIT CANNOT BE HELD JUSTIFIABLE. WHILE TAKING SUCH A VIEW WE ARE FORFEITED BY THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GABRIAL INDIA LTD (199 2) 203 ITR 108 (BOMBAY) WHEREIN IT HAS BEEN HELD THAT ITO HAD MADE ENQUIRES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE ASSES SEE HAD GIVEN DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE ARE PART OF THE RECORD OF THE CASE. THE HON'BLE HIGH COURT FURTHER OBSERVED THAT THE CLAIM WAS ALLOWED BY THE ASSESSING OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THE HON'BLE HIGH COURT OPINED THAT SUCH DECISION OF THE ITO CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE ANY ELABORATE DISCUSSION IN THAT REGARD. IN THE INS TANT CASE ALSO, THE ASSESSEE HAD FURNISHED DETAILED EXPLANATION WITH REGARD TO T HE CLOSING STOCK OF RORI / 8 DUST / RETA AND OTHER MATERIAL SHOWN BY THE ASSESSE E BY A REPLY IN WRITING. ALL THESE ARE PART OF THE RECORD OF THE CASE. AFTER EXA MINING THE RECORDS AND THE DETAILS SUBMITTED BY THE ASSESSEE, THE CLAIM WAS AL LOWED BY THE ASSESSING OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THEREFORE, THE ORDER OF THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE ANY ELABORATE DISCUSSION IN THAT REGARD. IN THE CASE O F CIT V SUNBEAM AUTO LTD. (2011) 332 ITR 167(DELHI), THE HONBLE HIGH COURT H ELD THAT WHERE THE ASSESSING OFFICER ALLOWED THE CLAIM ON BEING SATISF IED WITH THE EXPLANATION OF THE ASSESSEE, SUCH DECISION OF THE ASSESSING OFFICE R COULD NOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDERS HE DID NOT M AKE AN ELABORATE DISCUSSION IN THAT REGARD. 8. THE LD. CIT ALSO DIRECTED THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AFTER MAKING DISALLOWANCE OF INTER EST U/S 36(1)(III) IN RESPECT OF LAND AND MIXING PLANT AND ALSO DEPRECIATION ON M IXING PLANT. THE LD. COMMISSIONER OBSERVED THAT ASSESSEE PURCHASED LAND OF RS. 66 LAKHS AND MACHINERY OF RS. 20 LAKHS DURING THE RELEVANT PREVI OUS YEAR. ACCORDING TO HIM, THE PURCHASE OF LAND BY THE ASSESSEE WAS NOT SHOWN TO BE FOR BUSINESS PURPOSE AND PROPORTIONATE INTEREST EXPENDITURE SHOULD HAVE BEEN CONSIDERED FOR DISALLOWANCE. THE LD. CIT ALSO OBSERVED THAT ALTER NATIVELY SINCE THE ASSET WAS NOT USED FOR BUSINESS PURPOSE DURING THE YEAR, INTE REST EXPENDITURE SHOULD HAVE BEEN DISALLOWED. HE FURTHER OBSERVED THAT THE SAME WAS THE POSITION IN RESPECT TO THE BILLS BEARING NOS. 1 & 2 DATED 10.04.2009 F OR PURCHASE OF MIXING PLANT. THE LD. CIT POINTED OUT THAT MACHINERY WAS PURCHASE D FROM AHMADABAD. HOWEVER, NO TRANSPORTATION CHARGES HAD BEEN DEBITED AND / OR CAPITALIZED. IN THIS REGARD, IT WAS SUBMITTED THAT THE ASSESSEE IS DOING THE BUSINESS OF 9 GOVERNMENT CONTRACTOR AND REQUIRED STORAGE SPACE FO R THE STORAGE OF CONSTRUCTION MATERIAL, SO ASSESSEE PURCHASED THE LA ND MEASURING 2 ACRES 3 KANALS AND 20 MARLAS ON GURGAON TO BADLI ROAD, VILL AGE BUDHEDA IN THE MONTH OF JUNE 2009 FOR AMOUNTING TO RS. 66.71 LAKHS. LAT ER ON, THE ASSESSEE INSTALLED MIXING BATCHING PLANT AT THE SITE. ACCORDINGLY, IT WAS CONTENDED BY THE ASSESSEE THAT THE ABOVE LAND WAS VERY MUCH USED FOR BUSINESS PURPOSE DURING THE YEAR UNDER CONSIDERATION. AS REGARDS THE PURCHA SE OF THE MACHINERY FOR RS. 20 LAKHS FROM M/S BHAWANI ENGINEERS, AHMEDABAD IT W AS CONTENDED THAT THESE PLANTS HAVE BEEN PURCHASED F.O.R AT GURGAON WORK SI TE, SO NO TRANSPORT CHARGES ETC. WERE PAID BY THE ASSESSEE. IT WAS ALS O STATED THAT PLANT RUNS ON DIESEL AND DIESEL EXPENSES AMOUNTING TO RS. 56.83 L AKHS WERE INCURRED DURING THE YEAR UNDER CONSIDERATION. THE LD. COMMISSIONER OBSERVED THAT THE DETAILS OF THE PURCHASE OF LAND MUST HAVE BEEN SUBMITTED DU RING THE COURSE OF ASSESSMENT PROCEEDINGS, HOWEVER, NO QUERY WAS EITHE R RAISED BY THE ASSESSING OFFICER NOR PUT FORTH BY THE ASSESSEE TO SHOW THAT THE LAND WAS USED FOR THE PURPOSE OF ASSESSEES BUSINESS. THE LD. CIT OPINED THAT IN THE ABSENCE OF ABOVE INFORMATION AND BECAUSE LAND IS NOT RAW MATER IAL IN THE ASSESSEES BUSINESS AND IS NOT A NORMAL FIXED ASSET ALSO THE ASSESSING OFFICER SHOULD HAVE DISALLOWED THE INTEREST IN RESPECT OF MONEY INVESTE D IN PURCHASE OF THESE NON BUSINESS ASSET WHICH HE HAS NOT DONE. ON THE OTHER HAND, THE ASSESSEE HAS INCURRED SUBSTANTIAL INTEREST EXPENDITURE ON ACCOUN T OF LOAN TAKEN FROM BANK AND OTHERS AND ALSO PAID TO PARTNERS. ACCORDING TO LD. CIT, THE ASSESSING OFFICER DID NOT RAISE ANY QUERY IN THIS REGARD NOR EXAMINED THE ISSUE, HE DID NOT APPLY THE PROVISIONS OF SECTION 36(1)(III) OF T HE ACT OR THE PROVISO TO SECTION 36(1)(III) OF THE ACT. ACCORDINGLY, THE LD. COMMISSIONER HAS DIRECTED THE ASSESSING OFFICER TO DISALLOW INTEREST U/S 36(I )(III) IN RESPECT OF LAND AND MIXING PLANT AND DEPRECIATION IN RESPECT OF MIXING PLANT. 10 9. SHRI ASHWANI KUMAR, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ABOVE POINTS / QUERIES RAISED BY LD. CIT HAVE BEEN DULY LOOKED INTO BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . HE REITERATED THAT THE ASSESSING OFFICER WAS VERY MUCH SATISFIED WITH THE RECORD PRODUCED BEFORE HIM AND THE EXPLANATION GIVEN TO HIM BY THE ASSESSEE WI TH REGARD TO THE ABOVE SAID POINTS. THE ASSESSING OFFICER ISSUED QUESTIONNAIRE DATED 8.11.2012 AND 10.12.2012. VIDE PARA 4 OF THE QUESTIONNAIRE DATED 8.11.2012, THE ASSESSING OFFICER ASKED THE ASSESSEE TO FILE THE DETAILS OF L IST OF ITEMS MENTIONED UNDER THE HEAD FIXED ASSETS ALONGWITH THE SOURCE OF INVES TMENT IN ACQUISITION OF THE SAME. SIMILARLY, VIDE PARA 9 OF THE QUESTIONNAIRE DATED 10.12.2012, THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH COPIES OF THE BILLS WITH RESPECT TO THE ADDITION TO FIXED ASSETS. IN RESPONS E TO THE SAID QUERY, THE ASSESSEE SUBMITTED A DETAILED REPLY ON 3.12.2012 AN D 17.12.2012 ALONG WITH COPY OF THE ACCOUNTS OF FIXED ASSETS SUPPORTED BY V OUCHERS / EVIDENCE OF ADDITION IN THE FIXED ASSETS DURING THE ASSESSMENT YEAR 2010-11. FROM THE RECORDS, IT IS CLEAR THAT THE ASSESSING OFFICER HAS MADE THE REQUISITE ENQUIRIES BEFORE FRAMING THE ASSESSMENT ORDER FOR THE YEAR UN DER CONSIDERATION. IN OUR CONSIDERED OPINION THE ASSESSING OFFICER WAS SATISF IED WITH THE RECORD PRODUCED BEFORE HIM AND EXPLANATION GIVEN TO HIM BY THE ASSESSEE WITH REGARD TO THE AFORESAID POINTS / QUERIES. IN THE INSTANT C ASE, THE LD. COMMISSIONER INITIATED THE PROCEEDINGS BY POINTING OUT WHAT HE S AW AS GLARING ILLEGALITIES IN THE ASSESSMENT ORDER WHICH WAS SUBJECTED TO REVISIO N PROCEEDINGS, BUT WHAT HE CONCLUDED WAS THAT THE SUCH ASSESSMENT ORDER WAS PASSED WITHOUT MAKING PROPER INQUIRES. THE COMMISSIONER FINALLY REVISED T HE ORDER FOR WANT OF PROPER AND DESIRED INQUIRES THEN SHIFTED THE STAND, WHICH IS NOT PERMISSIBLE UNDER THE PROVISIONS OF LAW. AS WE HAVE ALREADY OBSERVED HER EINABOVE THAT THE ORDER OF 11 THE ASSESSING OFFICER MAY BRIEF AND CRYPTIC BUT THA T BY ITSELF IS NOT A SUFFICIENT REASON TO BRAND THE ASSESSMENT ORDER AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, WE HOLD THAT THE COMMISSIONER WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO DIS ALLOW INTEREST U/S 36(1)(III) IN RESPECT OF LAND AND MIXING PLANT AND DEPRECIATION I N RESPECT OF MIXING PLANT. IN VIEW OF THE DETAILED FINDINGS GIVEN IN RESPECT O F POINT NO.1, GROUND NO.2 (A), THE ASSESSMENT ORDER CANNOT BE HELD ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IN RESPECT OF ISSUES MENTIONED IN GROUND NO. 2(B) AND (C) OF THE APPEAL. 10. IN THE IMPUGNED ORDER, THE LD. COMMISSIONER HAS ALSO DIRECTED THE ASSESSING OFFICER TO DISALLOW DEDUCTION ON ACCOUNT OF INTEREST, SALARY ETC. PAID TO THE PARTNERS. THE LD. COMMISSIONER OBSERVED THAT DURING GHE YEAR UNDER CONSIDERATION, THERE WAS A CHANGE IN THE PARTNERSHI P DEED. THE LD. CIT OBSERVED THAT THE ASSESSEE SUBMITTED A COPY OF THE PARTNERSHIP DEED BEFORE THE ASSESSING OFFICER, WHICH WAS ATTESTED BY THE ASSESS EES C.A. HOWEVER, AS PER THE PROVISIONS OF SECTION 184(2) OF THE ACT, IT SHO ULD HAVE BEEN CERTIFIED BY ALL THE PARTNERS IN WRITING. ACCORDING TO HIM, THE ASSE SSING OFFICER WITHOUT EXAMINING THIS ASPECT ALLOWED SALARY AND INTEREST P AID TO THE PARTNERS TO THE TUNE OF RS. 15,00,000/- AND RS. 15,95,955/- RESPECT IVELY WHICH WAS NOT ALLOWABLE AS PER THE PROVISIONS OF THE ACT. IN THIS REGARD THE EXPLANATION OF THE ASSESSEE WAS THAT THE PARTNERSHIP DEED WAS RE-WRITT EN ON 1.4.2009 AND THE COPY OF THE SAME WAS PRODUCED BEFORE THE ASSESSING OFFIC ER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ORIGINAL COPY OF THE DE ED AT THE TIME OF FILING OF PHOTOCOPY OF THE DEED WAS SHOWN TO THE ASSESSING OF FICER. ACCORDINGLY, IT WAS SUBMITTED THAT THE ASSESSEE HAS FULLY COMPLIED WITH TERMS AND CONDITIONS OF FURNISHING THE PARTNERSHIP DEED DATED 1.4.2009. INTEREST & SALARY PAID TO 12 THE PARTNERS AS PER THE CLAUSE OF THE PARTNERSHIP D EED. THE ASSESSING OFFICER VIDE QUESTIONNAIRE DATED 10.12.2012 (PARA 13) REQUI RED THE ASSESSEE TO FURNISH THE COPY OF THE PARTNERSHIP DEED DULY CERTIFIED BY THE PARTNERS. IN RESPONSE TO THE SAID QUERY, THE ASSESSEE SUBMITTED ITS REPLY ON 17.12.2012 TOGETHER WITH COPY OF THE PARTNERSHIP DEED. SHRI ASHWANI KUMAR, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER WAS S ATISFIED WITH THE COPY OF THE PARTNERSHIP DEED DATED 1.4.2009 PRODUCED BEFORE HIM . IT WAS ALSO CONTENDED THAT ORIGINAL PARTNERSHIP DEED DATED 1.4.2009 WAS S HOWN TO THE ASSESSING OFFICER. THE ASSESSING OFFICER WAS SATISFIED WITH T HE DOCUMENTS PRODUCED BEFORE HIM AND HE HAS ALLOWED INTEREST AND SALARY P AID TO THE PARTNERS AS PER THE CLAUSE OF THE PARTNERSHIP DEED DATED 1.4.2009. SIMILARLY, PROFITS HAVE ALSO BEEN DISTRIBUTED AMONGST THE PARTNERS AS PER THE PR OFIT SHARING RATIO WRITTEN IN THE AFORESAID PARTNERSHIP DEED. IN OUR OPINION, TH E CONCLUSION DRAWN BY THE CIT ON THIS ISSUE IS ERRONEOUS. THEREFORE, THE CIT WAS NOT JUSTIFIED IN STATING THAT ASSESSMENT ORDER IS ERRONEOUS IN AS MUCH AS PR EJUDICIAL TO THE INTEREST OF THIS REVENUE. RECENTLY, THE HON'BLE CALCUTTA HON'B LE HIGH COURT IN THE CASE OF CIT VS. S.R. BATLIBOI & ASSOCIATES IN ITA NO. 19 0 OF 2009 VIDE ITS ORDER DATED 24.2.2015 HELD THAT SECTION 185 READ WITH SEC TION 184, ALTHOUGH WORDED IN EMPHATIC TERMS, IS NOT INTENDED TO BE A MANDATOR Y PROVISIONS. THE QUESTION BEFORE THE HON'BLE HIGH COURT WAS AS UNDER:- WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS JUST IFIED IN UPHOLDING THE DELETION OF THE DISALLOWANCE AMOUN TING TO A SUM OF RS.4,49,60,000/- ON ACCOUNT OF REMUNERATIO N OF THE PARTNERS UNDER SECTION 185 OF THE INCOME TAX AC T WHEN THE INSTRUMENT OF CHANGE IN PARTNERSHIP WAS NOT FIL ED ALONG WITH THE RETURN? 11. IN THE ABOVE CASE, THE TRIBUNAL HAS MADE THE FOLLOWING OBSERVATIONS:- 13 'WE OBSERVE THAT THERE WAS A CHANGE IN PARTNERSHIP DEED WITH EFFECT FROM 1ST AUGUST, 2004 AND THE ASSE SSEE WAS REQUIRED TO FILE A CERTIFIED COPY OF THE PARTNERSHI P DEED ALONG WITH THE RETURN AS PER SECTION 184 (4) OF THE ACT. SECTION 185 OF THE ACT PROVIDES THAT IF A FIRM DOES NOT COMPLY WITH THE PROVISIONS OF SECTION 184 FOR ANY ASSESSMENT YEAR, FIRM SHALL BE SO ASSESSED THAT NO DEDUCTION BY WAY OF ANY PAYMENT OF INTEREST, SALARY , BONUS, COMMISSION OR REMUNERATION, BY WHATEVER NAME CALLED MADE BY SUCH FIRM TO ANY PARTNER OF SUCH FIRM SHALL BE ALLOWED IN COMPUTING THE INCOME CHARGEABLE UNDER TH E HEAD 'PROFIT AND GAINS OF BUSINESS OR PROFESSION'. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE F ILED THE CERTIFIED COPY OF THE DEED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE QUESTION ARISES AS TO W HETHER NON FILING OF THE COPY OF THE CHANGES IN PARTNERSHI P DEED ALONG WITH THE RETURN IS A VIOLATION OF SUBSTANTIVE PROVISION AND MAKE THE RETURN INVALID OR IT IS ONLY A PROCEDU RAL DEFAULT AND IS AN IRREGULARITY IN FILING THE RETURN . WE ARE OF THE CONSIDERED VIEW THAT NON-FILING OF THE COPY OF THE CHANGES IN PARTNERSHIP DEED ALONG WITH THE RETURN I S ONLY AN OMISSION AND DOES NOT MAKE THE RETURN FILED BY T HE ASSESSEE AS INVALID SO AS TO DISALLOW THE CLAIM OF THE ASSESSEE. SECTION 292B OF THE ACT PROVIDES THAT MER ELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH R ETURN OF INCOME, ASSESSMENT, ETC. SHALL NOT BE INVALID OR SH ALL NOT BE DEEMED TO BE INVALID. THE HON'BLE KERALA HIGH COURT HAS HELD IN THE CASE OF CIT -VS- MASONEILAN (INDIA) LTD . [242 ITR 569] THAT SECTION 292B PROVIDES THAT NO RETURN OF INCOME SHALL BE INVALID OR SHALL BE DEEMED TO BE IN VALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME IF IT IS IN SUBSTANCE AND EFFECT I N CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURP OSE OF THE ACT. IT IS FURTHER OBSERVED THAT SECTION 139 AL SO THROWS SOME LIGHT ON THE QUESTION, IF THERE IS ANY DEFECT, THE A.O. IS REQUIRED TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO RECTIFY 14 THE DEFECT WITHIN A STIPULATED TIME. WE ARE OF THE CONSIDERED VIEW THAT THE PURPOSE OF FILING THE COPY OF THE CHANGES IN THE PARTNERSHIP DEED BEFORE THE A.O. IS TO ENABLE THE A.O. TO EXAMINE AS TO WHETHER THERE IS A GENUINE PARTNERSHIP IN EXISTENCE AND THE REMUNERATION BEING PAID TO THE PARTNERS IS PROPERLY DISTRIBUTED AND PAID IN AC CORDANCE WITH THE PARTNERSHIP DEED. FURNISHING OF CERTIFIED COPY OF THE REVISED INSTRUMENT OF PARTNERSHIP DEED AS PER S ECTION 184(4) OF THE ACT IS PROCEDURAL IN NATURE THOUGH TH E WORD 'SHALL' IS STATED BUT THE FILING OF THE INSTRUMENT OF PARTNERSHIP DEED IS REQUIRED BY THE A.O. AS MENTION ED HEREINABOVE TO ASCERTAIN THE GENUINENESS OF THE EXI STENCE OF THE PARTNERSHIP AND TO ASCERTAIN THE SHARE OF EACH OF THE PARTNER AS TO WHETHER THE REMUNERATION BEING PAID I S IN ACCORDANCE WITH THE DEED OF PARTNERSHIP DEED AND IS ALSO IN ACCORDANCE WITH THE LIMIT PRESCRIBED UNDER SECTION 40 (B) OF THE ACT. THE DEFECT IN NOT FILING THE COPY OF TH E CHANGE IN INSTRUMENT OF PARTNERSHIP DEED ALONG WITH THE RETUR N IS A CURABLE DEFECT ONLY THROUGH SECTION 184(4) PROVIDES THAT THE SAME SHOULD BE FURNISHED ALONG WITH THE RETURN OF INCOME. 12. IN THE ABOVE CASE, THE TRIBUNAL OBSERVED THAT F URNISHING OF CERTIFIED COPY OF THE REVISED INSTRUMENT OF PARTNERSHIP DEED AS PE R SECITON184(4) OF THE ACT IS PROCEDURAL IN NATURE, THOUGH THE WORD SHALL IS STATED BUT THE FILING OF THE INSTRUMENT OF PARTNERSHIP DEED IS REQUIRED BY THE A SSESSING OFFICER TO ASCERTAIN THE GENUINENESS OF THE EXISTENCE OF THE PARTNERSHIP AND TO ASCERTAIN THE SHARE OF EACH OF THE PARTNER AS TO WHETHER THE REMUNERATI ON BEING PAID IS IN ACCORDANCE WITH THE LIMIT PRESCRIBED U/S 40(B) OF THE ACT. IN THIS CASE THE TRIBUNAL OBSERVED THAT THE FILING OF THE REVISED/CH ANGED INSTRUMENT OF PARTNERSHIP DEED ALONG WITH THE RETURN IS DIRECTORY IN NATURE AND IT CAN BE FILED AT ANY TIME BEFORE COMPLETION OF THE ASSESSMENT BY THE A.O. THE TRIBUNAL 15 FURTHER OBSERVED THAT WE DO NOT AGREE WITH THE CONT ENTION OF THE REVENUE THAT AFTER AMENDMENT BY THE FINANCE ACT 2003, NON FILING OF INSTRUMENT OF PARTNERSHIP DEED ALONG WITH RETURN WILL MAKE THE CL AIM OF ASSESSEE ILLEGAL SO AS TO DENY THE CLAIM OF THE ASSESSEE THOUGH THE REQUIS ITE DETAILS AND THE EVIDENCE IS MADE AVAILABLE TO THE ASSESSING OFFICER BEFORE H E COMPLETES THE ASSESSMENT. THE REVENUE CHALLENGED THE ORDER OF THE TRIBUNAL DA TED 13.2.2009 BY WAY OF APPEAL BEFORE THE HON'BLE CALCUTTA HIGH COURT AND THE HON'BLE HIGH COURT VIDE ITS ORDER DATED 24.2.2015, CONFIRMED THE ORDE R OF THE TRIBUNAL OBSERVING AS UNDER:- MRS DAS DE, LEARNED ADVOCATE APPEARING FOR THE APP ELLANT REITERATED THE SUBMISSIONS ADVANCED BEFORE THE LEAR NED TRIBUNAL THAT SECTION 185 IS EMPHATIC AND ALSO STAR TS WITH A NON-OBSTANTE CLAUSE. THEREFORE, OMISSION ON PART OF THE ASSESSEE TO COMPLY WITH THE REQUIREMENT OF SUB-SECT ION 4 OF SECTION 184 PRECLUDES THE ASSESSEE FROM CLAIMI NG ANY DEDUCTION BY WAY OF SALARY PAID TO THE PARTNERS. SH E CONTENDED THAT THE LEARNED TRIBUNAL ERRED IN TAKING A VIEW WHICH IS PLAINLY CONTRARY TO THE SECTION NAMELY SEC TION 185. WE HAVE NOT BEEN IMPRESSED BY SUCH SUBMISSION. WE ARE OF THE OPINION THAT THE VIEW TAKEN BY THE LE ARNED TRIBUNAL IS THE CORRECT VIEW. WE MAY ADD FURTHER RE ASONS WHY THE VIEW TAKEN BY THE LEARNED TRIBUNAL IS UNIMPEACH ABLE. THE ASSESSEE IS REQUIRED TO FILE RETURN UNDER SUB- SECT ION 1 OF SECTION 139 WITHIN THE TIME PRESCRIBED THEREIN. WHA T IS THE TIME PRESCRIBED HAS BEEN DEALT WITH IN EXPLANATION 2 APPENDED TO SUB-SECTION 1 OF SECTION 139. THIS REQU IREMENT OF LAW HAS TO BE HELD SUBJECT TO THE PROVISION OF SUB- SECTION 4 WHICH PERMITS AN ASSESSEE TO FILE A RETURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF RELEVANT ASS ESSMENT YEAR OR EVEN BEFORE THE COMPLETION OF THE ASSESSMEN T WHICHEVER IS EARLIER. 16 THE APEX COURT IN THE CASE OF CIT, PUNJAB V. KULU VALLEY TRANSPORT CO.P.LTD., REPORTED IN 77 ITR 518 HELD THAT SUB-SECTION 3 OF SECTION 22 IS TO BE READ AS A PROV ISO TO SUB- SECTION 1 OF SECTION 22. SUB-SECTION 1 OF SECTION 2 2 IS IN PARI MATERIA WITH SUB-SECTION 1 OF SECTION 139. THE RELEVANT PORTION OF THE SAID JUDGEMENT READS AS FOLLOWS : 'IT CAN WELL BE SAID THAT SECTION 22(3) IS MERELY A PROVISO TO SECTION 22(1). THUS, A RETURN SUBMITTED AT ANY TIME BEFORE ASSESSMENT IS MADE IS A VALID RETUR N. IN CONSIDERING WHETHER A RETURN MADE IS WITHIN TIME SU B- SECTION (1) OF SECTION 22 MUST BE READ ALONG WITH S UB- SECTION (3) OF THAT SECTION. A RETURN WHETHER IT IS A RETURN OF INCOME, PROFITS OR GAINS OR OF LOSS MUST BE CONSIDERED AS HAVING BEEN MADE WITHIN THE TIME PRESCRIBED IF IT IS MADE WITHIN THE TIME SPECIFIED IN SECTION 22(3). IN OTHER WORDS IF SECTION 22(3) I S COMPLIED WITH SECTION 22(1) MUST ALSO BE HELD TO HA VE BEEN COMPLIED WITH. IF COMPLIANCE HAS BEEN MADE WITH THE LATTER PROVISION THE REQUIREMENTS OF SECTI ON 22(2A) WOULD STAND SATISFIED.' MRS.DAS DE HAS NOT DISPUTED BEFORE US THAT THE ASSE SSEE COULD HAVE FILED HIS RETURN ALONG WITH THE CERTIFIED COPY OF THE INSTRUMENT OF CHANGE WITHIN THE PERIOD PRESCRIBED B Y SUB- SECTION 4 OF SECTION 139. IN THAT CASE, THE RETURN WOULD HAVE BEEN PERFECTLY VALID AND THERE WOULD HAVE BEEN NO V IOLATION OF SUB-SECTION 4 OF SECTION 184. BUT BECAUSE THE AS SESSEE FILED THE INSTRUMENT OF CHANGE BEFORE THE DAY ON WHICH TH E ASSESSEE COULD HAVE FILED UNDER SUB-SECTION 4 OF SECTION 139 , THE RETURN IS TO BE TREATED AS INVALID, IS A SUBMISSION WHICH WE ARE IN A POSITION TO ACCEPT. THE RECORDS REVEAL THAT A PRAYER WAS MADE BEFORE TH E ASSESSING OFFICER ON BEHALF OF THE ASSESSEE TO TREA T THE RETURN AS A DEFECTIVE RETURN BECAUSE THE INSTRUMENT OF CHA NGE IN THE 17 PARTNERSHIP DEED WAS NOT ANNEXED TO THE RETURN. IN THAT CASE, THE ASSESSEE WOULD BE ENTITLED TO AN OPPORTUNITY TO CURE THE DEFECT. THE ASSESSING OFFICER REFUSED TO TREAT THE RETURN AS A DEFECTIVE RETURN. ONCE HEREFUSED TO TREAT THE RETUR N AS A DEFECTIVE ONE HE COULD NOT HAVE ALSO HELD THAT THE RETURN WAS IN DEROGATION OF SUB-SECTION 4 OF SECTION 184 OF TH E ACT NOR COULD HE IN THAT CASE HAVE REFUSED TO ALLOW THE DED UCTIONS. IF, ON THE CONTRARY, HE HAD HELD THAT THE RETURN WAS DE FECTIVE, THEN UNDER SUB-SECTION 9 OF SECTION 139 THE ASSESSE E WOULD GET A CHANCE TO CURE THE DEFECT. IN EITHER CASE, TH E RESULT IS THAT SECTION 185 READ WITH SECTION 184, ALTHOUGH WO RDED IN EMPHATIC TERMS, IS NOT INTENDED TO BE A MANDATORY P ROVISIONS. FOR THE AFORESAID REASONS, THE QUESTION IS ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. 13. IN THE INSTANT CASE, LD. COMMISSIONER HAS OBSER VED THAT AS PER THE REQUIREMENT OF SECITON 184(2) AND 184(4), THE ASSES SEE IS REQUIRED TO SUBMIT A CERTIFIED COPY OF THE PARTNERSHIP DEED. ACCORDING TO HIM, THE ASSESSEE HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 184(2) AND 184(4) OF THE ACT AND THEREFORE, ASSESSMENT ORDER WAS ERRONEOUS IN AS MUC H AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. CIT PRESUMED THAT TH E ABOVE PROVISIONS OF THE ACT ARE MANDATORY. THIS OBSERVATION OF THE LD. CIT IS CONTRARY TO THE DECISION OF THE HON'BLE CALCUTTA HON'BLE HIGH COURT (SUPRA) , WHEREIN THE HON'BLE HIGH COURT HAS CATEGORICALLY HELD THAT SECTION 185 READ WITH SECTION 184, ALTHOUGH WORDED IN EMPHATIC TERMS, IS NOT INTENDED TO BE A MANDATORY PROVISIONS. 14. IN THE INSTANT CASE THE REVENUE HAS ACCEPTED TH E RETURN FILED BY THE ASSESSEE AS PERFECTLY VALID AND, THEREFORE, THERE I S NO OCCASION TO HELD THAT THE 18 RETURN WAS IN DEROGATION TO SUB SECTION (4) OF SECT ION 184 OF THE ACT. IN VIEW OF THE DECISION OF HON'BLE CALCUTTA HIGH COURT RE FERRED TO ABOVE, WE FIND THAT ORDER OF THE CIT ON THIS ISSUE IS NOT TENABLE AND A CCORDINGLY WE HOLD THAT THE ASSESSMENT ORDER CANNOT BE HELD ERRONEOUS IN AS MU CH AS PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS ISSUE. 15. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE T HE ORDER OF THE CIT IN TOTO AND HOLD THAT THE ASSESSMENT ORDER DATED 28.01.2013 PASSED U/S 143(3) OF THE ACT CANNOT BE HELD ERRONEOUS IN AS SUCH AS PREJUDIC IAL TO THE INTEREST OF THE REVENUE. 16. AT HIS STAGE, WE MAY ALSO MENTION YET ANOTHER ASPECT OF THE MATTER. THE LD. CIT HAS FINALLY HELD AS UNDER:- 7. IN LIGHT OF THE DISCUSSION ABOVE, THE ASSESS MENT ORDER DATED 28.01.2013 PASSED BY THE AO IS, THEREFO RE; SET ASIDE TO THE AO ON THE AFORESAID ISSUES WITH THE DI RECTION TO THE AO TO PASS A FRESH ASSESSMENT ORDER AFTER MA KING AN ADDITION OF RS.5,95,970/- ON ACCOUNT OF UNDERSTATEM ENT OF CLOSING STOCK, DISALLOWANCE OF INTEREST U/S 36(L)(I II) IN RESPECT OF LAND AND MIXING PLANT AND OF DEPRECIATIO N IN RESPECT OF MIXING PLANT, AND DISALLOWANCE OF DEDUCT ION ON ACCOUNT OF INTEREST, SALARY ETC. PAID TO THE PARTNE RS. OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED TO THE ASSESSEE BEFORE PASSING THE FRESH ASSESSMENT ORDER. 17. FROM THE ABOVE, IT IS ABUNDANTLY CLEAR THAT CIT HAS EXCEEDED ITS JURISDICTION IN VIRTUALLY REASSESSING THE CASE. IT IS TRUE THAT THE REVISIONAL 19 AUTHORITY ITSELF HAS WIDE POWER TO EXAMINE THE CASE WHETHER THE DECISION HAS BEEN ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF R EVENUE AND IN EXERCISE OF THESE POWER MODIFICATIONS ARE PERMISSIBLE, AND FURT HERMORE THAT IF THE COMMISSIONER COMES TO THIS CONCLUSION THAT THE ASSE SSMENT IS REQUIRED TO BE REDONE, THAT SUCH DIRECTION CAN STILL BE ISSUED TO THE ASSESSING OFFICER . HOWEVER, IT IS TRITE LAW THAT IT IS NOT PERMISSIBLE FOR THE CIT BEING A REVISIONAL AUTHORITY TO STEP INTO THE SHOES OF THE ASSESSING O FFICER AND TO REDO THE ASSESSMENT AND PASS FRESH ASSESSMENT ORDER. IN THE INSTANT CASE, THE COMMISSIONER HAS SET ASIDE THE ORDER OF THE ASSESSI NG OFFICER ON THE AFORESAID ISSUES WITH A DIRECTION TO THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER. AT THE SAME TIME, THE LD. COMMISSIONER HAS DIRECTED THE ASSESSING OFFICER TO MAKE THE ADDITION OF RS. 5,95,970/- ON A CCOUNT OF UNDERSTATEMENT OF CLOSING STOCK, DISALLOW INTEREST U/S / 36(1)(III) I N RESPECT OF MIXING PLANT AND DEPRECIATION IN RESPECT OF MIXING PANT AND DISALLOW OF DEDUCTION ON ACCOUNT OF INTEREST, SALARY ETC. PAID TO THE PARTNERS. IN OUR CONSIDERED VIEW, REMANDING THE MATTER TO THE ASSESSING OFFICER IS OF NO CONSEQUENC E, PARTICULARLY WHEN THE CIT HIMSELF HAS REFRAMED THE ASSESSMENT. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE CIT HAS NOT LEFT ANY SCOPE FOR THE ASSESSING OFFICER TO REDO THE ASSESSMENT OR PASS A FRESH ASSESSMENT ORDER. IT IS ALSO OBSERVED THAT LD. CIT HAS DIRECTED THE ASSESSING OFFICER TO GIVE AN O PPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE PASSING THE FRESH ASSESSMENT OR DER. IN OUR VIEW, GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BY THE A SSESSING OFFICER IS ALSO MEANINGLESS, PARTICULARLY WHEN THE LD. CIT HIMSELF HAS REFRAMED THE ASSESSMENT ORDER. THE DIRECTIONS GIVEN BY THE LD. CIT IN PARA 7 OF THE IMPUGNED ORDER ARE ALSO CONTRARY TO THE SETTLED POS ITION OF LAW. WHEN THE LD. CIT DIRECTS THE ASSESSING OFFICER TO PASS A FRESH A SSESSMENT ORDER, THE ONLY PROPER COURSE FOR THE COMMISSIONER WAS NOT TO EXPRE SS ANY FINAL OPINION AS REGARDS TO THE CONTROVERSIAL POINTS. WHILE TAKING S UCH A VIEW, WE ARE FORTIFIED 20 BY THE DECISION OF HON'BLE GUJRAT HON'BLE HIGH COUR T IN THE CASE OF ADDL. CIT V MUKUR CORPORATION (1978) 111 ITR 312 (GUJARAT). I T IS ALSO OBSERVED THAT IN THE CONCLUDING PART OF THE ORDER OF THE COMMISSIONE R HE HAS ISSUED A DIRECTION TO THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER THEN HE WAS NOT REQUIRED TO EXPRESS ANY FINAL VERDICT AS REGARDS TH E CONTROVERSIAL POINTS. IN THIS CASE, THE COMMISSIONER HAS DIRECTED THE ASSESSING O FFICER TO MAKE THE SPECIFIC ADDITIONS / DISALLOWANCES, AS MENTIONED IN THE IMPU GNED ORDER. THEREFORE, THE DIRECTIONS GIVEN TO THE ASSESSING OFFICER TO FRAME A FRESH ASSESSMENT ORDER IS BAD IN LAW AS THIS IS CLEARLY A CASE IN WHICH THE L D. CIT HAS EXCEEDED HIS JURISDICTION IN REASSESSING THE CASE. EVEN THE DIRE CTION GIVEN BY THE CIT TO THE ASSESSING OFFICER TO PROVIDE AN OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE IS ALSO OF NO CONSEQUENCE. 18. IT IS RELEVANT TO OBSERVE HERE THAT WHILE DECID ING THE APPEAL ON MERITS WE HAVE CONCLUDED THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE, THEREFORE, THE ORDER PASSED U/S 263 OF THE ACT IS NOT MAINTAINABLE. AT THE SAME TIME, WE HAVE ALSO CONCLUDED THAT THE IMPUGNED ORDER IS NOT TENABLE ON THE GROUND THAT THE LD. COMMISSIONER HAS EXCEEDED H IS JURISDICTION IN VIRTUALLY REASSESSING THE CASE INSTEAD OF REMANDING THE MATTE R TO THE ASSESSING OFFICER FOR FRESH ASSESSMENT ORDER WITHOUT RECORDING HIS FI NAL CONCLUSION ON THE POINTS OF ISSUES INVOLVED. WE ALSO AGREE WITH THIS SUBMISS ION OF THE LD. COUNSEL OF THE ASSESSEE THAT WHEN A FRESH ASSESSMENT IS DONE, THERE COULD ALWAYS BE GROUNDS ON WHICH ONE OF THE PARTIES IS AGGRIEVED AN D THE LAW PRESCRIBES A CORRECTIVE REMEDY BY WAY OF APPEAL, REVISION ETC. IF THE CIT WHO IS A HIGHLY PLACED AUTHORITY OF THE REVENUE, IS TO EXERCISE THE POWERS OF WHICH DOING A FRESH ASSESSMENT, THEN THE RIGHT OF APPEAL, REVISIO N ETC. IS TOTALLY ANNIHILATED 21 AND THIS COULD NEVER BE THE INTENTION OF THE LEGISL ATURE. WE FULLY ENDORSE THE ABOVE SUBMISSIONS MADE BY SHRI ASHWANI KUMAR, LD. C OUNSEL FOR THE ASSESSEE. 19. VIEWED FROM ANY ANGLE, THE IMPUGNED ORDER DESER VES TO BE QUASHED AND WE ORDER ACCORDINGLY. 20. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.11.2015 SD/- SD/- (ANNAPURNA MEHROTRA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED : 3 RD NOV., 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR