M/s. Amaanath Building Promoters P. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 599/CHNY/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51729 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-08-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 27-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MEGHANATH CHOWHAN J
• Assessee Lawyers: DR ANITA SUMANTH
• Keywords: Depreciation; Reason to believe
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER] I.T.A.NO.599/MDS/2009 ASSESSMENT YEAR : 2004-05 M/S AMAANATH BUILDING PROMOTERS P. LTD II FLOOR, RAHAT PLAZA NO.172, ARCOT ROAD VADAPALANI CHENNAI 600 026 VS THE ACIT COMPANY CIRCLE I(1) CHENNAI [PAN - AAACA7441G ] (APPELLANT) (RESPONDENT) APPELLANT BY : DR.ANITA SUMANTH RESPONDENT BY : SHRI MEGHANATH CHOWHAN, JCIT/DR DATE OF HEARING : 04-08-2011 DATE OF PRONOUNCEMENT : 23-08-2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE, FOR ASSESSME NT YEAR 2004-05, IS DIRECTED AGAINST THE ORDER OF THE LD. CIT, CHENNAI, DATED 23.3.2009, PASSED U/S 263 OF THE ACT. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF THE ACT ON 11.10.2006 AT A ITA 599/09 :- 2 -: TOTAL LOSS OF ` 26,42,485/-. THE LD. CIT CALLED FOR THE RECORDS O F THIS ORDER AND FOUND THAT IT IS ERRONEOUS IN SO FAR IT I S PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THEREFORE, HE ISSUED NOT ICE U/S 263 OF THE ACT TO THE ASSESSEE. IN FACT, THE ASSESSEE HAS NOT ADMITTED ANY INCOME FROM CONTRACT DURING THE RELEVANT YEAR ON TH E GROUND THAT IT WAS FOLLOWING COMPLETION OF CONTRACT METHOD. THE ASSESSEE-COMPANY IS DOING THE BUSINESS OF REAL ESTATE AND CIVIL CONS TRUCTION. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED, THE ASSESSEE HAS R AISED THE FOLLOWING OBJECTIONS: (A) THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING COMPLETION OF CONTRACT METHOD WHICH IS PERMITTED UNDER A.S 7 (REVISED). (B) THE REVISED STANDARD WOULD ALSO BE APPLICABLE ONLY WITH REGARD TO CONTRACTS COMMENCING ON OR AFTER 1.4.2003. THE ASSESSEE'S PALLAVARAM PROJECT COMMENCED PRIOR TO 1.4.2003 AND THEREFORE THE ASSESSEE IS ENTITLED TO ADOPT COMPLETION OF CONTRACT METHOD. THE ASSESSEE HAS ACTUALLY CAPITALIZED ONLY THE EXPENSES RELATED TO PALLAVARAM PROJECT. EVEN IF THE ENTIRE ADMINISTRATIVE EXPENSES ARE CAPITALIZED, THE NET REVENUE EFFECT WOULD BE THE SAME, AS THE EXPENSES CAPITALIZED WOULD BE ALLOWABLE IN THE NEXT YEAR WHEN THE CONTRACT IS COMPLETED. (C) REGARDING VADAPALANI PROJECT, THE ASSESSEE HAS ALREADY ADMITTED INCOME ON COMPLETION OF PROJECT IN ASST YEAR 2001-02 AND WHAT IS SHOWN AS RECEIVABLE AND PAYABLE IN THE ACCOUNT IS ONLY THE AMOUNT PAYABLE IN INSTALMENTS BY THE FLAT OWNERS. ITA 599/09 :- 3 -: (D) WITH REGARD,: TO PAYABLE, SOME BUYERS EITHER CANCELLED THEIR BOOKING OR PAID EXCESS AMOUNT AND THE SAME HAS BEEN SHOWN AS PAYABLE IN THE LIABILITIES SIDE OF THE BALANCE SHEET. 3. BY REJECTING THE EXPLANATION OF THE ASSESSEE, THE L D. CIT SET ASIDE THE ASSESSMENT. NOW THE ASSESSEE IS AGGRIEVE D AND HAS RAISED THE FOLLOWING GROUNDS: (A) THE ORDER OF THE COMMISSIONER OF INCOME-TAX UND ER SEC. 263 OF THE INCOME TAX ACT IS ERRONEOUS ON FACTS AND IN LAW AND IS TOTALLY WITHOUT JURISDICTION. (B) THE COMMISSIONER OF INCOME-TAX ERRED IN HOLDING THAT HE HAS REASON TO BELIEVE THAT THE ORDER OF THE ASSESSI NG AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE. (C) THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE SE EN THAT THE NON-ADMISSION OF ANY INCOME FROM CONTRACTS DURI NG THE YEAR UNDER APPEAL WOULD CONSTITUTE AN ERROR IN THE ORDER OF ASSESSMENT, MAKING IT PREJUDICIAL TO THE INTERESTS OF THE REVENUE. EVEN ASSUMING WITHOUT CONCEDING THAT ANY I NCOME HAS ACCRUED IN RESPECT OF THE SAID CONTRACTS, IF AN Y INCOME WHICH HAS ACCRUED IS NOT ADMITTED AND CONSEQUENTLY NOT ASSESSED THAT WOULD BE A CASE OF ESCAPEMENT OF INCO ME BUT WOULD NOT CONSTITUTE AN ERROR IN THE ORDER OF ASSES SMENT JUSTIFYING THE INVOCATION OF SEC. 263. (D) THE STAND OF THE COMMISSIONER OF INCOME-TAX THA T THE APPELLANT SHOULD HAVE ADMITTED INCOME UNDER THE PER CENTAGE COMPLETION METHOD IS NOT ONLY FACTUALLY ERRONEOUS B UT IS NOT AN ISSUE WHICH WOULD VEST JURISDICTION IN THE COMMISSI ONER UNDER SEC. 263 OF THE INCOME TAX ACT TO REVISE THE ORDER OF ASSESSMENT. (E) THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE SE EN THAT IN THE ABSENCE OF ANY DISCUSSION IN THE ORDER OF ASSES SMENT WHICH LEADS TO THE ASSUMPTION THAT ANY INCOME WHICH HAS A CTUALLY ACCRUED OR ARISEN WAS EXCLUDED FROM THE ASSESSMENT, THERE IS NO JUSTIFICATION FOR INVOKING SEC. 263 ON THE ASSUM PTION THAT THE ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. ITA 599/09 :- 4 -: (F) THE COMMISSIONER OF INCOME-TAX ERRED IN PROCEE DING ON THE ERRONEOUS ASSUMPTION THAT THE ASSESSING OFFICER HAS NOT VERIFIED WHETHER THE ENTIRE AMOUNT RELATING TO VADA PALANI FLATS HAS BEEN ADMITTED BY THE ASSESSEE. THERE IS NO BAS IS TO ASSUME THAT THERE HAS BEEN ANY NON-DISCLOSURE OF RE CEIPTS. THE REVISION ON THIS ISSUE IS BASED ON MERE SURMISE S WHICH CANNOT FORM THE BASIS FOR INVOKING THE JURISDICTION UNDER SECTION 263. (G) TH E COMMISSIONER OF INCOME-TAX HAS ADMITTED THAT THE REVISION IS INITIATED FOR THE REASON THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSING OFFICER EXAMINED WHETHER THE COST CLAIMED BY THE REVENUE RELATES SPECIFICALLY TO PALL AVARAM PROJECT. THIS CANNOT FORM THE BASIS FOR COMING TO THE CONCLUSION THAT THE ORDER OF ASSESSMENT IS ERRONEOUS OR PREJU DICIAL TO THE INTERESTS OF THE REVENUE. THIS FINDING OF THE COMM ISSIONER SHOWS THAT THE POWER OF REVISION HAS BEEN INVOKED M ERELY TO MAKE A FISHING ENQUIRY WITHOUT ANY BASIS OR JUSTIFI CATION TO ASSUME EITHER THAT THE ORDER OF THE ASSESSING OFFIC ER IS ERRONEOUS OR THAT IT IS PREJUDICIAL TO THE INTEREST S OF THE REVENUE. (H) THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE S EEN THAT HE HAS NO POWER UNDER SECTION 263 TO SET ASIDE THE ASSESSMENT MERELY FOR DIRECTING AN EXAMINATION OF ISSUES, PART ICULARLY IN THE ABSENCE OF ANY MATERIAL WHICH WOULD ESTABLISH THAT THE ORDER IS ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF THE RE VENUE. (I) THE COMMISSIONER OF INCOME-TAX ERRED IN SETTIN G ASIDE THE ASSESSMENT WITH REGARD TO THE VADAPALANI PROJECT M ERELY FOR A FISHING ENQUIRY WITHOUT A CLEAR FINDING THAT THE OR DER IS ERRONEOUS. HE HAS NO JURISDICTION TO SET ASIDE THE ASSESSMENT FOR MERELY MAKING A ROVING ENQUIRY INTO THE BUSINES S TRANSACTION. (J) THE ORDER OF THE COMMISSIONER OF INCOME-TAX I S ERRONEOUS ON FACTS AND IN LAW AND IS LIABLE TO BE SET ASIDE. 4. AFTER HEARING THE RIVAL SUBMISSIONS, WE ARE CONVIN CED THAT THE ASSESSEE HAS NOT BEEN ADMITTING ANY INCOME FROM CON TRACTS ON THE GROUND THAT IT WAS FOLLOWING COMPLETION OF CONTRACT METHOD UNDER AS7- REVISED, THE ASSESSEE SHOULD HAVE ADMITTED INCOME U NDER PERCENTAGE ITA 599/09 :- 5 -: OF COMPLETION METHOD, BUT THE ASSESSEE HAS BEEN CON STANTLY FOLLOWING COMPLETION OF CONTRACT METHOD WHICH IS ALSO PERMITT ED U/S AS-7 REVISED. BUT STILL THERE IS A CONTRADICTION IN THE CLAIMS OF THE ASSESSEE WHICH ARE MENTIONED IN PARA 6 AND 7 OF THE LD. CIT S ORDER WHICH WE REPRODUCED HEREIN BELOW FOR READY REFERENCE: 6. THE ASSESSEE'S REPLY WAS CAREFULLY CONS IDERED. THE ASSESSEE APPEARS TO HAVE CLAIMED AS REVENUE EMPLOYEE REMUNERATION AND BENEFITS OF ` 8,22,437 AND OTHER EXPENSES OF ` 18,68,558. THE OTHER EXPENSES AS PER SCHEDULE 3 TO THE ACCOUNTS CONSISTS OF RENT, ELECTRICITY, PRINTING AND STATIONERY, POST AGE, TELEGRAMS, REPAIRS AND MAINTENANCE, TRAVELLING, BAN K CHARGES, DEPRECIATION ETC. PARA 8.8 OF A.S. 7 (REVISED) STATES THAT GENERAL ADMINISTRATION AND SELLING COST, FINANCE COST, RESEARCH AND DEVELOPMEN T COSTS AND DEPRECIATION OF PLANT AND EQUIPMENT THAT CANNOT BE ALLOCATED TO A PARTICULAR CONTRACT ARE USUALLY EXCLUDED FROM THE ACCUMULATED CONTRACT COST BECAUSE THEY DO NOT RELATE TO REACHING PRESENT STAG E OF COMPLETION OF A SPECIFIC CONTRACT. IT ALSO STATE S 'HOWEVER, IN SOME CIRCUMSTANCES, GENERAL ADMINISTRATIVE EXPENSES, DEVELOPMENT COSTS AND FINANCE COSTS ARE SPECIFICALLY ATTRIBUTABLE TO A PARTICULAR CONTRACT AND ARE SOMETIMES INCLUDED IT'] AS PART OF ACCUMULATED CONTRACT COSTS'. THERE IS NOTHI NG ON RECORD TO SHOW THAT THE ASSESSING OFFICER EXAMINED WHETHER THE COSTS CLAIMED AS REVENUE RELATE SPECIFICALLY TO PALLAVARAM PROJECT CONSIDE RING THAT IT WAS THE ONLY PROJECT EXECUTED BY THE ASSESS EE. I, THEREFORE, CONSIDER IT NECESSARY TO SET ASIDE TH E ISSUE TO THE ASSESSING OFFICER, WITH THE DIRECTION TO EXAMINE WHETHER ANY OF THE COSTS CLAIMED AS REVENUE BY THE ASSESSEE RELATE SPECIFICALLY TO PALLAVARAM PROJECT AND IF SO, CAPITALIZE THE SAME. NEEDLESS TO SAY, THE AMOUNT, IF ANY, CAPITALIZED WOULD BE INCLUDED IN THE OPENING WORK IN PROGRESS OF THE SUBSEQUENT YEAR IN WHICH, ACCORDING TO THE ASSESSEE , ITA 599/09 :- 6 -: THE PALLAVARAM PROJECT WAS COMPLETED. 7. REGARDING THE VADAPALANI PROJECT, EVEN IF THE ENTIRE REVENUE OF VADAPALANI PROJECT HAS BEEN ADMITTED IN THE YEAR' OF COMPLETION, THE EXCESS OF AMOUNT RECEIVED/RECEIVABLE OVER THE ADMITTED RECEIPT WOULD BE LIABLE TO BE TAXED. IN THIS CASE, THOUGH THE PROJECT WAS SAID TO HAVE BEEN COMPLETED IN THE FINANCIAL YEAR 2000-01, HUGE SUMS ARE SHOWN AS RECEIVABLES AND PAYABLE EVEN AFTER THREE YEARS O F COMPLETION OF CONTRACT. IF THE AMOUNT SHOWN AS PAYABLE IS THE AMOUNT TO BE REFUNDED TO THE BUYERS WHO HAD CANCELLED THE BOOKING, THE RESALE OF SUCH FLATS TO THE EXTENT OF CONSIDERATION RECEIVABLE IS IN EXCESS OF THE CONTRACT RECEIPT ORIGINALLY ADMITTED , SHOULD HAVE BEEN BROUGHT TO TAX. IF THE AMOUNT SHOWN AS PAYABLE REPRESENTS EXPENDITURE CLAIMED BUT NOT ACTUALLY PAID, THEN THERE IS A CASE FOR APPLICATION OF SEC.41(1) OF THE ACT. AS THIS HAS NO T BEEN EXAMINED, I SET ASIDE THE ASSESSMENT ON THIS ISSUE WITH A DIRECTION TO THE ASSESSING OFFICER TO EXAMINE THE TOTAL CONTRACT RECEIPTS ADMITTED BY THE ASSESSEE WITH REFERENCE TO THE AMOUNT ACTUALLY RECEIVED AND BRING THE EXCESS, IF ANY, TO TAX. THE A.O MAY ALSO EXAMINE WHETHER ANY AMOUNT IS LIABLE TO BE TAXED UNDER SEC.41(1) OF THE ACT. A.O MAY HOWEVER, CONSIDER THE NET AMOUNT, IF ANY, ADMITTED BY THE ASSESSEE AS INCOME ON CLOSURE OF ACCOUNTS OF THE VADAPALANI PROJECT IN THE SUBSEQUENT YEARS. 5. THE SUBJECT OF REVISION UNDER SECTION 263 HAS BEEN VASTLY EXAMINED AND ANALYSED BY VARIOUS COURTS INCLUDING T HAT OF HONBLE APEX COURT. THE REVISIONAL POWER CONFERRED ON THE CIT VIDE SECTION 263 IS OF VIDE AMPLITUDE. IT ENABLES THE CIT TO CA LL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDING UNDER THE ACT. IT EM POWERS THE CIT TO MAKE OR CAUSE TO BE MADE SUCH AN ENQUIRY AS HE DEEM S NECESSARY IN ITA 599/09 :- 7 -: ORDER TO FIND OUT IF ANY ORDER PASSED BY ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF T HE REVENUE. THE ONLY LIMITATION ON HIS POWERS IS THAT HE MUST HAVE SOME MATERIAL(S) WHICH WOULD ENABLE HIM TO FORM A PRIMA FACIE OPINION THAT THE ORDER PASSED BY THE OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJ UDICIAL TO THE INTEREST OF THE REVENUE. ONCE HE COMES TO THE ABOVE CONCLUSION S ON THE BASIS OF THE MATERIAL THAT THE ORDER OF THE ASSESSING OFFI CER IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE, T HE CIT IS EMPOWERED TO PASS AN ORDER AS THE CIRCUMSTANCES OF THE CASE M AY WARRANT. HE MAY PASS AN ORDER ENHANCING THE ASSESSMENT OR HE MA Y MODIFY THE ASSESSMENT. HE IS ALSO EMPOWERED TO CANCEL THE ASS ESSMENT AND DIRECT TO FRAME A FRESH ASSESSMENT. HE IS EMPOWERE D TO TAKE RECOURSE TO ANY OF THE THREE COURSES INDICATED IN SECTION 26 3. SO, IT IS CLEAR THAT THE CIT DOES NOT HAVE UNFETTERED AND UNCHEQURED DIS CRETION TO REVISE AN ORDER. THE CIT IS REQUIRED TO EXERCISE REVISION AL POWER WITHIN THE BOUNDS OF THE LAW AND HAS TO SATISFY THE NEED OF FA IRNESS IN ADMINISTRATIVE ACTION AND FAIR PLAY WITH DUE RESPEC T TO THE PRINCIPLE OF AUDI ALTERAM PARTEM AS ENVISAGED IN THE CONSTITUTIO N OF INDIA AS WELL IN SECTION 263. AS ORDER CAN BE TREATED AS ERRONE OUS IF IT WAS PASSED IN UTTER IGNORANCE OR IN VIOLATION OF ANY LAW; OR P ASSED WITHOUT TAKING INTO CONSIDERATION ALL THE RELEVANT FACTS OR BY TAK ING INTO CONSIDERATION ITA 599/09 :- 8 -: IRRELEVANT FACTS. THE PREJUDICE THAT IT CONTEMPL ATED UNDER SECTION 263 IS THE PREJUDICE TO THE INCOME TAX ADMINISTRATION A S A WHOLE. THE REVISION HAS TO BE DONE FOR THE PURPOSE OF SETTING RIGHT DISTORTIONS AND PREJUDICES CAUSED TO THE REVENUE IN THE ABOVE CONTE XT. THE FUNDAMENTAL PRINCIPLES WHICH EMERGE FROM THE SEVERA L CASES REGARDING THE POWERS OF THE CIT UNDER SECTION 263 MAY BE SUMM ARIZED BELOW: (I) THE CIT MUST RECORD SATISFACTION THAT THE ORDE R OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. BOTH THE CONDITIONS MUS T BE FULFILLED. (II) SECTION 263 CANNOT BE INVOKED TO CORRECT EAC H AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER AND IT IS ONLY WHEN AN ORDER IS ERRONEOUS, THAT THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCORR ECT APPLICATION OF LAW WILL SUFFICE FOR THE REQUIREME NT OR ORDER BEING ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION OF MIND, SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORD ER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND IF THE ASSESSING OF FICER ITA 599/09 :- 9 -: HAS ADOPTED ONE OF THE COURSES PERMISSIBLE UNDER LA W OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW UNDER WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOU S ORDER, UNLESS THE VIEW TAKEN BY THE ASSESSING OFFIC ER IS UNSUSTAINABLE UNDER THE LAW. (VI) IF WHILE MAKING THE ASSESSMENT, THE ASSE SSING OFFICER EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME, THE CIT, WHILE EXERCISING HI S POWER UNDER SECTION 263, IS NOT PERMITTED TO SUBSTI TUTE HIS ESTIMATE OF INCOME IN PLACE OF THE INCOME ESTIM ATED BY THE ASSESSING OFFICER. (VII) THE ASSESSING OFFICER EXERCISE QUASI-JUDICIA L POWER VESTED IN HIM AND IF HE EXERCISE SUCH POWER IN ACCORDANCE WITH LAW AND ARRIVES AS A CONCLUSION, SU CH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH THE CONCLUSION. (VIII) THE CIT, BEFORE EXERCISING HIS JURISDICTION UNDER SECTION 263, MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE ASSESSING OFFICER HAS MADE ENQU IRIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ITA 599/09 :- 10 - : ISSUES AND THE ASSESSEE HAS GIVEN DETAILED EXPLANAT ION BE A LETTER IN WRITING AND THE ASSESSING OFFICER AL LOWED THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION O F THE ASSESSEE, THE DECISION OF THE ASSESSING OFFICER CAN NOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DOES NOT MAKE AN ELABORATE DISCUSSION IN THAT REGAR D. 6. ADVERTING TO THE FACTS OF THIS CASE, WE FIND THAT T HE ASSESSING OFFICER HAS COMMITTED AN ERROR PARTICULARLY IN RESP ECT OF FINDING GIVEN BY THE LD. CIT IN PARA 7 AS ABOVE. THEREFORE, WE A GREE WITH THE LD. CIT AND CANNOT ALLOW THIS APPEAL AS THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE BECAUSE THE ASSESSING OFFICER HAS NOT CONSIDERED ALL THE ASPECT S OF THE CLAIM OF THE ASSESSEE AND HAS PASSED A VERY SCANTY ORDER IN ON LY THREE SENTENCES: THE ASSESSEE-COMPANY IS IN THE BUSINESS OF REAL ESTATE AND CIVIL CONSTRUCTION. FOR THE ASSESSMENT YEAR 20 04-05, THE ASSESSEE-COMPANY FILED ITS RETURN OF INCOME ON 30.10.2004, DECLARING LOSS OF ` 26,42,485/- WHICH WAS PROCESSED U/S 143(1) ON 09.07.2005. THE CASE WAS T AKEN UP FOR SCRUTINY BY SERVICE OF NOTICE UNDER SECTION 143(2) ON 29.10.2005. SHRI A.MOHAMMED ISMAIL, CHARTERED ACCOUNTANT APPEARED AND PRESENTED THE DETAILS CALLE D FOR. ON THE BASIS OF FACTS PRESENTED, THE ASSESSMENT IS COMPLETED ACCEPTING THE LOSS RETURNED. 7. IN THE GIVEN FACTS AND THE CIRCUMSTANCES, WE HOLD THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE I SSUE IN QUESTION. ITA 599/09 :- 11 - : THE LD.AR COULD NOT SHOW US ANY PROOF OF EXAMINATIO N OF THE IMPUGNED ISSUE EITHER BY FILING ANY COPY OF EXPLANA TION OR OTHERWISE. THIS IS A SHEER CASE OF NON-APPLICATION OF MIND BY THE ASSESSING OFFICER. WE ARE AWARE THAT IT IS NOT THE LENGTH BU T THE STRENGTH OF AN ORDER WHICH MATTERS. THEREFORE, WE ARE LEFT WITH N O OPTION BUT TO CONFIRM THE FINDINGS OF THE LD. CIT. THIS APPEAL C ANNOT BE ALLOWED, HENCE, STANDS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DI SMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.8.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 24 TH AUGUST, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR