Trinity Infra Ventures Ltd., Hyd, Hyderabad V. DCIT, Central Circle-2(1), Hyderabad, Hyderabad

ITA 585/HYD/2015

• Counselvise Citation: 58522514 RSA 2015
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KONDA RAMESH
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Business income; Search and seizure; Question of law; Difference of opinion; Assessment record; Change of opinion
• Section: 143(3); 153A; 145; 263; 63; 132

Judgement Text

1 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 584/H/2015 2005 - 06 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI PAN AABCG1937G DCIT, CENTRAL CIRCLE-2(1) HYDERABAD. 585/H/2015 2006 - 07 586/H/2015 2007 - 08 587/H/2015 2008 - 09 588/H/2015 2009 - 10 589/H/2015 2010 - 11 FOR ASSESSEE : MR. P. MURALI MOHAN RAO FOR REVENUE : MR. KONDA RAMESH DATE OF HEARING : 24.11.2015 DATE OF PRONOUNCEMENT : 04.12.2015 ORDER PER BENCH : IN ALL THESE APPEALS, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE LD. CIT UNDER SECTION 263 OF TH E I.T. ACT, 1961 REVISING THE ASSESSMENT ORDER PASSED UNDE R SECTION 143(3) READ WITH SECTION 153C OF THE I.T. A CT, FOR THE RESPECTIVE ASSESSMENT YEARS. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF REAL ESTATE AND INVESTMENT ACTIVITY. THERE WAS A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE I.T. ACT IN THE CASE OF M/S. MBS JEWELERS P. LTD., AND ITS GROUP ON 11.03.2010. DURING THE COURSE OF SEARCH IN THE PREM ISES 2 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. OF M/S. MBS JEWELERS P. LTD., CERTAIN DOCUMENTS REL ATING TO THE ASSESSEE HEREIN WERE FOUND AND SEIZED. THESE DOCUMENTS WERE COPIES OF CERTAIN SALE DEEDS IN WHIC H CERTAIN PAYMENTS WERE SHOWN TO HAVE BEEN MADE IN FAVOUR OF THE ASSESSEE HEREIN. ON PERUSAL OF THE SA ME, THE A.O. OBSERVED THAT THOUGH THE PROPERTIES WERE BEING TRANSFERRED BY VARIOUS PERSONS, THE SALE CONSIDERAT ION IS RECEIVED BY THE ASSESSEE HEREIN AND HENCE, IT HAS A VERY INTRICATE RELATIONSHIP WITH THE TRANSACTIONS AS REF LECTED IN THE REGISTERED SALE DEEDS. HE THEREFORE, ISSUED A N OTICE UNDER SECTION 153C OF THE I.T. ACT. DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, VARIOUS DETAILS WERE CALLED FOR FROM THE ASSESSEE. THE ASSESSEE PRODUCED THE REQUIR ED DETAILS. HOWEVER, THE A.O. WAS NOT SATISFIED WITH T HE SAME AND HOLDING THAT NO CLARITY WAS EMERGING FROM THE TRANSACTIONS, ISSUED A SHOW CAUSE NOTICE DATED 01.12.2011 FOR THE SPECIAL AUDIT UNDER SECTION 142( 2A). ASSESSEE FILED ITS OBJECTIONS ON 12.12.2011. HOWEVE R, THE SAID OBJECTIONS WERE SET ASIDE AND THE ASSESSEE WAS DIRECTED TO GET ITS ACCOUNTS AUDITED UNDER SECTION 142(2A) OF THE I.T. ACT WITH M/S. RATNAM DAVEJI, CHARTERED ACCOUNTANTS. THE SPECIAL AUDITOR SUBMITTED HIS REPO RT, BUT THE A.O. OBSERVED THAT NONE OF THE ISSUES REFER RED TO THE SPECIAL AUDITOR HAVE BEEN COMMENTED UPON BY HIM IN HIS REPORT. THEREFORE, HE BRUSHED ASIDE THE FINDING S OF THE SPECIAL AUDITOR AND THEREAFTER COMPLETED THE ASSESS MENT BY REJECTING THE BOOKS OF ACCOUNT RELIED UPON BY TH E ASSESSEE AND ESTIMATING THE INCOME OF THE ASSESSEE @ 16% OF THE GROSS RECEIPTS. THEREAFTER, ON PERUSAL O F THE 3 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. ASSESSMENT RECORDS UNDER SECTION 263 OF THE I.T. AC T, THE LD. CIT WAS OF THE OPINION THAT THE A.O. HAS NOT CA RRIED OUT PROPER ENQUIRY WITH REGARD TO THE INVESTMENTS M ADE AND THEREFORE, THE ASSESSMENT ORDERS WERE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. HE ACC ORDINGLY, ISSUED A SHOW CAUSE NOTICE DATED 17.08.2012 UNDER SECTION 263 OF THE I.T. ACT. IN REPLY THERETO, THE ASSESSEE FILED ITS WRITTEN SUBMISSIONS STATING THAT THE ACCO UNTS OF THE ASSESSEE WERE REFERRED FOR SPECIAL AUDIT UNDER SECTION 142(2A) OF THE I.T. ACT AND IT IS AFTER VERIFYING T HE INFORMATION FURNISHED AND AFTER TAKING INTO CONSIDE RATION THE SPECIAL AUDIT REPORT, THAT THE A.O. COMPLETED T HE ASSESSMENT ACCEPTING THE TOTAL INCOME ADMITTED BY T HE ASSESSEE. THEREFORE, ACCORDING TO HIM, THE ASSESSME NT ORDER WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF THE REVENUE AND THE REVISION PROCEEDINGS WERE NOT WARRANTED. THE LD. CIT HOWEVER, WAS NOT CONVINCED W ITH THE CONTENTIONS OF THE ASSESSEE AND HELD THAT NO WORTHWHILE ENQUIRY HAS BEEN CONDUCTED BY THE A.O. BEFORE ACCEPTING THE RETURNED INCOME AND ALLOWING L OSS CLAIMED BY THE ASSESSEE. HE THEREFORE, HELD THAT TH E ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PR EJUDICIAL TO THE INTERESTS OF THE REVENUE. THE LD. CIT, ACCOR DINGLY, SET ASIDE THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 153C OF THE I.T. ACT FOR A LL THE ASSESSMENT YEARS UNDER CONSIDERATION WITH A DIRECTI ON TO EXAMINE ALL THE ISSUES AS SPECIFIED IN THE ORDER IN DETAIL AND RE-DO THE ASSESSMENT AFTER MAKING DETAILED ENQU IRIES AND INVESTIGATION AS DEEMED FIT. AGAINST THESE ORDE RS OF 4 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. THE LD. CIT UNDER SECTION 263, THE ASSESSEE IS IN A PPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE, HAS RAISED AS MANY AS 13 GROUNDS OF APPEAL IN FORM NO.36 AND H AS ALSO FILED A PETITION FOR ADMISSION OF ADDITIONAL G ROUNDS OF APPEAL NUMBERING 14 TO 21 OF THE I.T. ACT. AT THE T IME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SUBMITTE D THAT THE ASSESSEE IS NOT INTERESTED TO PURSUE GROUND NOS . 2 AND 3 OF THE ORIGINAL GROUNDS OF APPEAL AND GROUND NOS. 16 TO 20 OF THE ADDITIONAL GROUNDS OF APPEAL. THESE GROUNDS ARE THEREFORE, REJECTED AS NOT PRESSED. THE OTHER GROUNDS OF APPEAL ON WHICH THE ASSESSEE IS SEEKING ADJUDICATION ARE AS UNDER. FOR THE SAKE OF CONVENIE NCE, THE GROUNDS OF APPEAL RAISED IN A.Y. 2006-07 ARE REPRODUCED HEREUNDER: GROUNDS OF APPEAL 1. THE LD.PR.CIT (CENTRAL), HAS ERRED IN PASSING THE ORDER U/S.263 ON THE GROUND THAT THE ASSESSMENT ORDER PASSED U/S.143(3) RWS 153C BY THE DCIT, CIRCLE-2(1), HYDERABAD FOR THE A.Y 2006-07 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. 2. 3. 4. THE LD.PR.CIT (CENTRAL), ERRED IN PASSING THE ORDER U/S.263 BY FORMING MERE CHANGE OF OPINION AND WITHOUT CONSIDERING THE FACT THAT THE ORIGINAL ASSESSMENT HAD BEEN COMPLETED U/S 143(3) RWS 5 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. 153C OF THE IT ACT, 1961 AFTER CAREFUL VERIFICATION OF ALL THE INFORMATION FURNISHED. 5. THE LD.PR.CIT (CENTRAL), OUGHT TO HAVE APPRECIATED THE SUBMISSIONS OF THE ASSESSEE IN THE FOLLOWING JUDGMENT OF HONORABLE SUPREME COURT OF INDIA IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME TAX (2000)-243-ITR -0083 - (SC). 6. THE LD.PR.CIT (CENTRAL), OUGHT TO HAVE APPRECIATED THAT AS THE ACCOUNTS OF THE ASSESSEE WERE REFERRED FOR SPECIAL AUDIT U/S 142(2A) AND THE AO HAS COMPLETED THE ASSESSMENT AFTER VERIFYING ALL THE INFORMATION FURNISHED. HENCE, THE ASSESSMENT ORDER CANNOT BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. 7. THE LD.PR.CIT (CENTRAL), OUGHT TO HAVE APPRECIATED THAT AS ASSESSMENT U/S 143(3) RWS 153C WAS FRAMED AFTER CONSIDERING THE SPECIAL AUDIT REPORT AND HENCE INVOKING OF PROVISIONS OF SECTION 263 IS NOT CORRECT. 8. THE LD.PR.CIT (CENTRAL), OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAS SUBMITTED ALL THE DETAILS RELATED TO INCOME & EXPENDITURE WHICH WERE DULY VERIFIED BY THE AO. 9. THE LD.PR.CIT (CENTRAL), OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAD PROVIDED THE COMPLETE DETAILS IN RESPECT OF ADVANCE RECEIVED AND CURRENT LIABILITIES TO THE SPECIAL AUDITOR, IN FACT VERIFIC ATION OF SALE AND PURCHASE OF LANDS WAS ONE OF THE POINT OF REFERENCE AND NO ADVERSE FINDING WAS MADE BY THE SPECIAL AUDITOR FOR SUCH. 10. THE LD.PR.CIT (CENTRAL), OUGHT TO HAVE APPRECIATED THAT THE ASSESSEE HAD PROVIDED THE COMPLETE DETAILS IN RESPECT OF TAXATION IN THE HANDS OF LEGAL OWNERS TO SPECIAL AUDITOR AND NO ADVERSE FINDING WAS MADE BY THE SPECIAL AUDITOR AFTER VERIFICATION OF SUCH. 6 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. 11. THE LD. PR. CIT (CENTRAL), ERRED IN CONSIDERING THA T THE VERIFICATION IN RESPECT OF INVESTMENT MADE IN LANDS WAS NOT TAKEN INTO CONSIDERATION AT THE TIME OF MAKING ASSESSMENT. 12. THE LD.PR.CIT (CENTRAL), ERRED WHILE DIRECTING THE A.O. FOR DOING INVESTIGATION/ENQUIRY FOR WHICH THE SAME HAS ALREADY BEEN DONE BY THE A.O. WHILE PASSING ASSESSMENT ORDER UNDER SECTION 143(3) READ WITH SECTION 153C OF THE ACT. 13. THE ASSESSEE MAY ADD, ALTER, OR MODIFY OR SUBSTITUTE ANY OTHER POINTS TO THE GROUNDS OF APPEA L AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. ADDL. GROUNDS OF APPEAL 14. WE WOULD LIKE TO SUBMIT THAT AS PER THE RATIO LAID DOWN BY THE HONOURABLE SUPREME COURT OF INDIA IN THE CASE OF NATIONAL THERMAL POWER CO. LTD V. CIT (1998) 229 ITR 383 (SC) THE IT AT HAS JURISDICTION TO EXAMINE THE QUESTION OF LAW WHICH THOUGH NOT AROSE BEFORE THE AO BUT AROSE BEFORE THE !TAT FOR THE FIR ST TIME. 15. THE REVISIONARY ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (CENTRAL) U/S 263 OF THE ACT DATED 27.03.2015 IS ERRONEOUS BOTH ON FACTS AND IN LAW. 16. 17. 18. 19. 20. 21. THE LD. CIT (CENTRAL) OUGHT TO HAVE APPRECIATED THE FACT HAT AN ORDER PASSED WITH PRIOR APPROVAL OF JCI T 7 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. UNDER SECTION 153D CANNOT BE SUBJECT TO REVISIONARY PROCEEDINGS U/S. 263 OF THE ACT. 3.1. IN SUPPORT OF ITS CONTENTION THAT THE VERY SA ME ISSUE HAS BEEN CONSIDERED BY THE A.O. UNDER SECTION 143(3) READ WITH SECTION 153A OF THE I.T. ACT, 1961 , THE LD. COUNSEL FOR THE ASSESSEE, HAS DRAWN OUR ATTENTI ON TO THE QUESTIONNAIRE ISSUED BY THE A.O. AT THE TIME OF THE ASSESSMENT WHICH ARE PLACED AT PAGES 1 TO 14 OF THE PAPER BOOK. HE SUBMITTED THAT THE VERY SAME ISSUES WERE A LSO REFERRED FOR SPECIAL AUDIT UNDER SECTION 142(2A) OF THE I.T. ACT AND THAT THE ASSESSEE HAS FILED ITS OBJECTIONS BY FILING ITS DETAILED REASONS. THE LD. COUNSEL FOR THE ASSES SEE, HAS DRAWN OUR ATTENTION TO PAGES 15 TO 19 OF THE PAPER BOOK, IN SUPPORT OF ITS CONTENTION THAT THE SPECIAL AUDIT OR HAS ALSO ISSUED A QUESTIONNAIRE ON THE VERY SAME ISSUES . THE LD. COUNSEL FOR THE ASSESSEE, HAS PLACED RELIANCE U PON PAGES 20 TO 33 OF THE PAPER BOOK TO SUBMIT THAT DUR ING THE ASSESSMENT PROCEEDINGS ALSO, THE A.O. HAS CONSI DERED THE ISSUES AND HAS REJECTED THE SPECIAL AUDIT REPOR T OF THE AUDITOR WHICH SHOWS APPLICATION OF MIND BY THE A.O. TO THE RELEVANT MATERIAL ON RECORD. HE SUBMITTED TH AT ALL THIS CLEARLY SHOWS THAT THE A.O. HAS TAKEN ONE OF T HE POSSIBLE VIEWS AND THEREFORE, IT WAS NOT ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE RE VENUE AND HENCE, IT WAS NOT REVISABLE UNDER SECTION 263 OF TH E I.T. ACT. 8 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. 4. THE LD. D.R., ON THE OTHER HAND, SUPPORTED THE ORDER OF THE LD. CIT (CENTRAL) FOR ALL THE RELEVANT ASSESSMENT YEARS. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT AN ASSESSMENT ORDE R CAN BE REVISED UNDER SECTION 263 OF THE ACT BY THE CIT ONLY IF THE ASSESSMENT IS ERRONEOUS IN SO FAR AS IT IS PREJ UDICIAL TO THE INTERESTS OF THE REVENUE. BOTH THE CONDITIONS H AVE TO BE SATISFIED. IN THE CASE BEFORE US, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 15 3C OF THE I.T. ACT CONSEQUENT TO THE SEARCH UNDER SECTION 132 OF THE I.T. ACT IN THE HANDS OF THE GROUP COMPANY OF T HE ASSESSEE I.E., M/S. MBS JEWELERS P. LTD. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. HAD REQUIRED THE ASSESSEE TO EXPLAIN THE BUSINESS ACTIVITY OF THE AS SESSEE. THE ASSESSEE HAD FILED ITS REPLIES DATED 9 TH JULY, 2012 STATING THAT THE MAIN OBJECTS OF THE COMPANY WAS RE AL ESTATE AND INVESTMENT ACTIVITY. THE DETAILS AS REGA RDS ITS INCOME WAS ALSO MENTIONED IN THE SAID REPLY. FROM P AGES 11 TO 14 OF THE PAPER BOOK, WE FIND THAT THE ASSESS EE HAS GIVEN THE VENTURE-WISE DETAILS OF INCOME FROM LAND ALONG WITH THE NAME OF THE PARTY, THE DOCUMENT NO. AND TH E CONSIDERATION RECEIVED AND RECORDED IN ITS BOOKS OF ACCOUNT FOR ALL THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION. WE FIND THAT THE VERY SAME ISSUES WE RE ALSO RAISED BY THE SPECIAL AUDITOR IN HIS QUESTIONNAIRE DATED 19 TH MAY, 2012 WHICH IS AT PAGE NO. 23 OF THE PAPER BOO K. WE FIND THAT THE ASSESSEE HAS FILED ALL THESE DETAI LS BEFORE 9 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. THE SPECIAL AUDITOR AS WELL. FROM THE ASSESSMENT OR DER UNDER SECTION 143(3) READ WITH SECTION 153C OF THE ACT, IT IS SEEN THAT THE A.O. HAS CONSIDERED THE FINDINGS O F THE SPECIAL AUDITOR UNDER SECTION 142(2A) OF THE ACT AN D HAS OBSERVED THAT THE SPECIAL AUDITOR HAS GIVEN ONLY A PROFORMA REPORT WITHOUT COMMENTING ON THE ASPECTS REFERRED TO HIM. HE HELD THAT SINCE THE ISSUE IS CR ITICAL FOR ASSESSING THE CAPITAL GAINS AS ARISING OUT OF THE T RANSFER OF LAND IN THE CORRECT HANDS AND SINCE THE REPORT IS S ILENT ABOUT IT, THE SAME CANNOT BE RELIED UPON. HE OBSERV ED THAT THE SALE CONSIDERATION AS PER THE REGISTERED S ALE DEEDS IS DECLARED BY THE ASSESSEE COMPANY AND THERE FORE, THE SAME IS ASSESSED IN ITS HANDS AS IT IS VOLUNTAR ILY DECLARED BY THE ASSESSEE COMPANY AND PROTECTIVE ASSESSMENT IN THE HANDS OF THE RESPECTIVE ASSIGNEES HAS ALREADY BEEN MADE. IT WAS, AFTER CONSIDERING THESE ASPECTS, THAT THE A.O. ESTIMATED THE INCOME OF THE ASSESSEE. THIS ITSELF CLEARLY DEMONSTRATES THAT THE A.O. HAS APPLIED HIS MIND TO THE FACTS OF THE CASE BEFOR E HIM BEFORE ESTIMATING THE INCOME OF THE ASSESSEE. AS RE GARDS THE ISSUE AS TO WHETHER, THE ASSESSMENT ORDER PASSE D BY THE A.O. AFTER DUE APPLICATION OF MIND, CAN BE REVI SED UNDER SECTION 263 OF THE I.T. ACT, WE FIND THAT THE HONBLE A.P. HIGH COURT IN THE CASE OF SPECTRA SHARES & SCR IPS P. LTD., VS. CIT-III, HYD. (2013) 36 TAXMANN.COM 348 ( A.P.) HAS CONSIDERED THE JUDICIAL PRECEDENTS ON THE ISSUE IN DETAIL AND HAS CULLED OUT THE FOLLOWING PRINCIPLES AS TO THE EXERCISE OF JURISDICTION OF THE CIT UNDER SECTION 2 63 OF THE ACT. 10 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. (A) THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE 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 IT IS PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263 (1) OF THE ACT. (B) EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE: OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. (C) TO INVOKE SUO MOTU REVISIONAL POWERS TO REOPEN A CONCLUDED ASSESSMENT UNDER SEC.263, THE COMMISSIONER MUST GIVE REASONS; THAT A BARE REITERATION BY HIM THAT THE ORDER OF THE INCOME TAX OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WILL NOT SUFFICE; THAT THE REASONS MUST BE SUCH AS TO SHOW THAT THE ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT OR CANCELLATION OF THE ASSESSMENT OR DIRECTIONS ISSUED FOR A FRESH ASSESSMENT WERE CALLED FOR, AND MUST IRRESISTIBLY LEAD TO THE CONCLUSION THAT THE ORDER OF THE INCOME TAX OFFICER WAS NOT ONLY ERRONEOUS BUT WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THUS, WHILE THE INCOME TAX OFFICER IS NOT CALLED UPON TO WRITE AN ELABORATE JUDGMENT GIVING DETAILED REASONS IN RESPECT OF EACH AND EVERY DISALLOWANCE, DEDUCTION, ETC., IT 11 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. IS INCUMBENT UPON THE COMMISSIONER NOT TO EXERCISE HIS SUO MOTU REVISIONAL POWERS UNLESS SUPPORTED BY ADEQUATE REASONS FOR DOING SO; THAT IF A QUERY IS RAISED DURING THE COURSE OF THE SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISFACTION OF THE ASSESSING OFFICER, 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 ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION. (E) THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED; THAT THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON FACTS OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER OF THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE; THAT IF THIS IS PERMITTED, LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. (F) WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION HAS TO BE SEEN; THAT IF THERE WAS AN INQUIRY, EVEN INADEQUATE THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SEC.263 MERELY BECAUSE HE HAS A DIFFERENT OPINION IN THE MATTER; THAT IT IS ONLY IN CASES OF LACK OF INQUIRY THAT SUCH A COURSE OF ACTION WOULD BE OPEN; THAT AN ASSESSMENT ORDER MADE BY THE INCOME TAX OFFICER CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE, ACCORDING TO HIM, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY; THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT THE TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN IMPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN 12 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. INCORRECT OR INCOMPLETE INTERPRETATION, A LESSER TAX THAN WHAT WAS JUST, HAS BEEN IMPOSED. (G) THE POWER OF THE COMMISSIONER UNDER SEC.263 (1) IS NOT LIMITED ONLY TO THE MATERIAL WHICH WAS AVAILABLE BEFORE THE ASSESSING OFFICER AND, IN ORDER TO PROTECT THE INTERESTS OF THE REVENUE, THE COMMISSIONER IS ENTITLED TO EXAMINE ANY OTHER RECORDS WHICH ARE AVAILABLE AT THE TIME OF EXAMINATION BY HIM AND TO TAKE INTO CONSIDERATION EVEN THOSE EVENTS WHICH AROSE SUBSEQUENT TO THE ORDER OF ASSESSMENT. 5.1. APPLYING THE ABOVE PRINCIPLES TO THE FACTS OF THE CASE BEFORE US AS BROUGHT OUT IN DETAIL IN THE ABOVE PARAGRAPH, WE HOLD THAT THE ASSESSMENT ORDER UNDER SECTION 143(3) READ WITH SECTION 153C COULD NOT BE REVISED UNDER SECTION 263 OF THE ACT. IN ADDITION TO THE AB OVE LEGAL GROUND, THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RAISED AN ARGUMENT THAT WHERE THE INCOME IS ESTIMAT ED, NO OTHER ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE. IN SUPPORT OF THIS CONTENTION, THE LD. CO UNSEL FOR THE ASSESSEE, HAS RELIED UPON THE JUDGMENT OF T HE HONBLE A.P. HIGH COURT IN THE CASE OF INDWELL CONSTRUCTIONS (1998) 232 ITR 776 (AP) AND ALSO THE DECISION OF ITAT, HYDERABAD BENCH IN THE CASE OF M/ S. SHANTI TRANSPORT, KOTHAGUDEM VS. ITO, WARD-1, KOTHAGUDEM IN ITA.NO.995/H/2014 DATED 10.10.2014. 5.2. WE FIND THAT IN THE CASE OF THE ASSESSEE, THE A.O. HAS REJECTED THE BOOKS OF THE ASSESSEE AND HAS ESTIMATED THE INCOME @ 16% OF THE GROSS RECEIPTS AN D THE CIT UNDER SECTION 263 IS SEEKING TO EXAMINE THE REC EIPTS 13 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. AND EXPENDITURE CLAIMED BY THE ASSESSEE. IN THE CAS E OF INDWELL CONSTRUCTIONS (SUPRA), THE JURISDICTIONAL H IGH COURT WAS SEIZED OF SIMILAR MATTER AND HAS HELD AS UNDER: HELD: THE PATTERN OF ASSESSMENT UNDER THE ACT IS GIVEN BY SECTION 29 WHICH STATES THAT THE INCOME FROM PROFITS AND GAINS OF BUSINESS SHALL BE COMPUTE D IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN SECTIONS 30 TO 43D. SECTION 40 PROVIDES FOR CERTAIN DISALLOWANCES IN CERTAIN CASES NOTWITHSTANDING THAT THOSE AMOUNTS ARE ALLOWED GENERALLY UNDER OTHER SECTIONS. THE COMPUTATION UNDER SECTION 29 IS TO BE MADE UNDER SECTION 145 ON THE BASIS OF THE BOOKS REGULARLY MAINTAINED BY THE ASSESSEE. IF THOSE BOOK S ARE NOT CORRECT OR COMPLETE, THE ASSESSING OFFICER MAY REJECT THOSE BOOKS AND ESTIMATE THE INCOME TO THE BEST OF HIS JUDGMENT. WHEN SUCH AN ESTIMATE IS MADE IT IS IN SUBSTITUTION OF THE INCOME THAT IS TO BE COMPUTED UNDER SECTION 29. IN OTHER WORDS, ALL THE DEDUCTIONS WHICH ARE REFERRED TO UNDER SECTION 29 A RE DEEMED TO HAVE BEEN TAKEN INTO ACCOUNT WHILE MAKING SUCH AN ESTIMATE. THIS WILL ALSO MEAN THAT THE EMBARGO PLACED IN SECTION 40 IS ALSO TAKEN INTO ACCOUNT. IN THE INSTANT CASE, UNDOUBTEDLY, THERE WAS A BIG DIFFERENCE BETWEEN PROFIT EARNED WITH OWN CAPITAL AND PROFIT EARNED WITH BORROWED CAPITAL AND SUCH A DIFFERENCE COULD HAVE BEEN TAKEN INTO ACCOUNT BY TH E ASSESSING OFFICER, WHILE MAKING AN ESTIMATE. IF THE COMMISSIONER HAD SET ASIDE THE ESTIMATE ON THE GROUND THAT THE VITAL FACT THAT THE BUSINESS WAS CARRIED ON WITH OWN CAPITAL AND NOT WITH BORROWED CAPITAL HAD BEEN IGNORED BY THE ASSESSING OFFICER, THERE MIGHT NOT HAVE BEEN ANY DIFFICULTY IN UPHOLDI NG THAT ORDER. BUT, WHEN HE PROPOSED TO ADD BACK AN EXACT ITEM IN THE PROFIT AND LOSS ACCOUNT, HE WAS RELYING ON THE REJECTED BOOKS WHICH HE COULD NOT DO . THERE WAS ALSO A FURTHER DIFFICULTY, IF SECTION 40 WAS TO BE TAKEN INTO ACCOUNT EVEN AFTER MAKING AN ESTIMATE. WHEN THERE ARE CERTAIN OTHER DEDUCTIONS 14 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. WHICH ARE TO BE DISALLOWED SUCH AS WEALTH-TAX PAYMENT IN SECTION 40, IT CANNOT BE SAID THAT AFTER MAKING AN ESTIMATE, THE WEALTH-TAX CHARGED IN THE PROFIT AND LOSS ACCOUNT SHOULD AGAIN BE ADDED BACK TO THE PROFIT. THEREFORE, NO SEPARATE ADDITION REPRESENTING THE INTEREST AND REMUNERATION PAID TO PARTNERS COULD BE MADE TO THE INCOME ALREADY ESTIMATED AND ASSESSED FROM CONTRACTS. 5.3. HOWEVER, IN THE CASE BEFORE US, WE FIND A SLI GHT DISTINCTION. IN THE CASE OF INDWELL CONSTRUCTIONS ( SUPRA), THE CIT THEREIN SOUGHT TO ADD INTEREST AND SALARY T O THE ESTIMATED INCOME, WHICH WAS FOUND TO BE UNSUSTAINAB LE, WHEREAS, IN THE CASE BEFORE US, THE CIT IS NOT SATI SFIED WITH THE HEAD OF INCOME UNDER WHICH THE A.O. HAS ACCEPTED THE INCOME OF THE ASSESSEE AND ALSO IS NOT SATISFIED WITH THE NON-EXAMINATION OF THE ACCOUNTS OF THE ASSESSEE BEFORE ACCEPTING THE BUSINESS INCOME OF TH E ASSESSEE. THEREFORE, THE ABOVE JUDGMENT IS NOT EXAC TLY APPLICABLE TO THE CASE OF THE ASSESSEE. 5.4. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMITTED THAT THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 153C WAS PASSED AFTER GETTING APPROVAL OF ADDL. CIT UNDER SECTION 153D OF THE I.T. ACT AND TH EREFORE SUCH AN ASSESSMENT CANNOT BE REVISED WITHOUT REVISI NG THE DIRECTIONS OF THE ADDL. CIT UNDER SECTION 153D OF THE I.T. ACT. THE LD. COUNSEL FOR THE ASSESSEE, HAS REL IED UPON THE DECISIONS OF THIS TRIBUNAL IN THE CASE OF CH. K RISHNA MURTHY VS. ACIT, C.C.3, HYDERABAD IN 15 ITA.NOS.584 TO 589/H/2015 M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. ITA.NO.766/HYD/2012 DATED 13.02.2015 AND ALSO THE DECISION OF LUCKNOW BENCH OF ITAT IN THE CASE OF ME HTAB ALAM 288/LUCK/2014 DATED 18.11.2014 IN SUPPORT OF T HIS CONTENTION. HE HAS ALSO PLACED RELIANCE UPON THE DE CISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. DR. ASHOK KUMAR IN I.T. APPEAL NO. 192 OF 2000 WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT ORDER APPROVED BY THE ADDL. CIT UNDER SECTION 153D, CANNOT BE SUBJECTED T O REVISION UNDER SECTION 263 OF THE I.T. ACT. IN VIEW OF THE ABOVE DECISION ALSO, WE HOLD THAT THE REVISION ORDE R UNDER SECTION 263 OF THE I.T. ACT IS NOT SUSTAINABLE. ACC ORDINGLY, WE ALLOW THE GROUNDS OF THE ASSESSEE. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE FOR THE ALL THE ASSESSMENT YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.12.2015. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 04 TH DECEMBER, 2015 VBP/- COPY TO 1. M/S. TRINITY INFRA VENTURES LTD., NEW DELHI. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2. THE DCIT, CENTRAL CIRCLE-2(1), HYDERABAD. 3. PR. CIT (CENTRAL), 3 RD FLOOR, POSNETT BHAVAN, TILAK ROAD, RAMKOTE, HYDERABAD. 4. CIT(A)-11, HYDERABAD. 5. ADDL. CIT, CENTRAL RANGE-3, HYDERABAD 6. D.R. I.T.A.T. A BENCH, HYDERABAD. 7. GUARD FILE