M/s Vodafone India Ltd., Mumbai V. CIT-I, Chandigarh

ITA 605/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70756 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 30-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURINDER JIT SINGH
• Keywords: Transfer pricing; Principle of natural justice; International transaction; Competent authority
• Section: 92B; 68; 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI . , !'# $ $ $ $ %& ' , () %*+ ( %# BEFORE SHRI D. MANMOHAN, V. P. AND SHRI SANJAY ARO RA, A. M. %./ I.T.A. NO.605/CHD/2012 ( - $.- - $.- - $.- - $.- / / / / ASSESSMENT YEAR: 2006-07) VODAFONE INDIA LTD. PENINSULA POINT, PENINSULA CORPORATE PARK, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400 013 / VS. COMMISSIONER OF INCOME TAX-1, AAYAKAR BHAWAN, SECTOR-17, CHANDIGARH +/ () % ./ &0 % ./ PAN/GIR NO. AAACH 5332 B ( /1 / APPELLANT ) : ( 23/1 / RESPONDENT ) /1 4 %( / APPELLANT BY : SHRI DEEPAK CHOPRA 23/1 5 4 %( / RESPONDENT BY : SHRI SURINDER JIT SINGH %$ 5 6 ) / // / DATE OF HEARING : 05.06.2013 7. 5 6) / DATE OF PRONOUNCEMENT : 16.08.2013 *(8 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX-I, CHANDIGARH (CIT FOR SHORT) DATED 30 .03.2012 FOR THE ASSESSMENT YEAR (A.Y.) 2006-07 PASSED U/S.263 OF THE INCOME TAX ACT , 1961 (THE ACT HEREINAFTER). THE BACKGROUND FACTS AND RESPECTIVE CASES 2.1 THE ASSESSEE-COMPANY FILED ITS RETURN OF INCOME FOR THE RELEVANT YEAR ON 30.11.2006 AT NIL INCOME; THE ENTIRE POSITIVE INCOM E BEING ABSORBED BY DEDUCTION U/S.80- 2 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT IA OF THE ACT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS OBSERVED THAT THE ASSESSEE HAD ISSUED 709.86 LAC RIGHT SHARES DURING THE RELEVANT YEAR TO 14 PARTIES FOR AN AGGREGATE OF RS.1760.39 CRORES. A PERUSAL OF THE DE TAILS REVEALED THAT A SUBSTANTIAL PORTION OF THE RIGHT SHARE MONEY (RS.795.96 CRORES) HAD CAM E FROM NINE MAURITIUS-BASED (A TAX HAVEN) ENTITIES, SUBSCRIBING TO 344.50 LAC RIGHT SH ARES. THE PARTY-WISE BREAKUP OF THE SHARES ALLOTTED, ALL OF WHICH SHARED THE SAME ADDRE SS, APPEARS AT PG.2 OF THE IMPUGNED ORDER. IN ORDER TO VERIFY THE GENUINENESS OF THE CR EDIT TRANSACTIONS QUA THE SHARES, SUBSCRIBED AND ALLOTTED TO MAURITIUS BASED ENTITIES , THE ASSESSING OFFICER (A.O.) REFERRED THE MATTER TO THE FOREIGN TAX DIVISION OF CBDT (DEP ARTMENT OF REVENUE), MINISTRY OF FINANCE, NEW DELHI (FTD) FOR FURTHER ENQUIRY AND IN VESTIGATION. IMPENDING RECEIPT OF INFORMATION FROM THE FTD, THE A.O. FINALIZED THE DR AFT ASSESSMENT ORDER ON 30.12.2009, AND SENT THE SAME TO THE DISPUTE RESOLUTION PANEL-I I, DELHI (DRP FOR SHORT) FOR ITS OPINION AND DIRECTIONS U/S.144C OF THE ACT. AN OFF ICE NOTE WAS PLACED BY HIM ON THE FILE TO THE EFFECT THAT NECESSARY ACTION AS PER THE PROV ISIONS OF THE ACT WOULD BE TAKEN ON THE RECEIPT ON INFORMATION FROM FTD, CBDT, NEW DELHI. S UBSEQUENTLY, INFORMATION WAS FORWARDED BY FTD TO THE A.O. VIDE THREE LETTERS DAT ED 21.04.2010, 20.05.2010 AND 26.07.2010. THE A.O. FORWARDED THE SAME TO THE DRP VIDE HIS LETTER DATED 05.08.2010, SEEKING DIRECTIONS REGARDING THE INVESTMENT IN THE RIGHT SHARES ISSUED BY THE ASSESSEE TO VARIOUS MAURITIUS-BASED ENTITIES (THE RELEVANT PART OF THE A.O.S LETTER STANDS REPRODUCED AT PARA 4/PGS.4-5 OF THE IMPUGNED ORDER). THE DRP P ASSED ITS ORDER U/S. 144C(5), CONTAINING DIRECTIONS TO THE A.O., ON 04.02.2011. VIDE PARA 6 OF ITS ORDER (REPRODUCED AT PARA 5, PGS.5 & 6 OF THE IMPUGNED ORDER), IT CLARIF IED THAT IT HAD LIMITED POWERS U/S.144C(5)OF THE ACT AND, ACCORDINGLY, DIRECTED TH E A.O. TO EXAMINE THE INFORMATION AT HIS END, AND TAKE SUCH FURTHER ACTION AS CONSIDERED PROPER UNDER THE PROVISIONS OF THE ACT. THE A.O. PASSED THE ASSESSMENT ORDER ON 05.02.2011 WITHOUT EXAMINING THE INFORMATION RECEIVED FROM FTD. 2.2 IN THE VIEW OF THE LD. CIT, THE A.O. HAD AMPLE TIME FOR MAKING NECESSARY INQUIRY AND VERIFICATION IN RELATION TO THE INFORMATION REC EIVED FROM CBDT; FIRSTLY, BETWEEN 3 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT 26.07.2010 (THE DATE OF RECEIPT OF THE LAST OF THE THREE LETTERS FROM FTD) TO 05.02.2011, I.E., THE DATE OF PASSING OF THE ASSESSMENT ORDER A ND, IN FACT, UP TO 31.03.2011 INASMUCH AS THE ASSESSMENT COULD HAVE BEEN VALIDLY MADE BY HIM BY THAT DATE. HE WAS DUTY BOUND U/S.68 OF THE ACT TO DO SO, AND THAT IN FACT WAS AL SO IN SUBSTANCE THE DIRECTIONS BY THE FTD VIDE ITS ORDER DATED 04.02.2011, AND WHICH HE DID N OT CLEARLY DO, PASSING THE ORDER THE VERY NEXT DAY. HIS ORDER WAS, THEREFORE, ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. REVISIONARY PROCEEDINGS U/S.263 OF THE ACT WERE, ACCORDINGLY, INITIATED BY THE LD. CIT. COPY OF THE RELEVANT MATERIAL WAS REQUIRED BY THE ASSESSEE-APPELLANT, WHO CONTESTED THE SAID INITIATION ON BOTH, THE VALIDITY OF THE INITIATION, AS WELL AS TO THE PROPOSED ADDITION ON MERITS. THERE WAS NO QUESTION OF NO ENQUIRY IN THE PRESENT CASE INASMUCH AS THE RELEVANT DETAILS WERE SUBMITTED BEF ORE THE TRANSFER PRICING OFFICER (TPO) WHILE PROPOSING THE ADJUSTMENTS. THE A.O. HAD ACCEPTED THE GENUINENESS OF THE RIGHTS ISSUE TRANSACTIONS, AND NEITHER DID THE DRP FIND ANYTHING WRONG IN THE DETAILS FORWARDED BY THE A.O. IN FACT, THE CIT BEING A SUBO RDINATE AUTHORITY TO THE DRP, HAD NO POWER TO REVISE THE ORDER PURSUANT TO THE ORDER ISS UED BY THE DRP U/S.144C. ON MERITS, THE SHARES HAD BEEN ISSUED UPON OBTAINING WRITTEN C ONSENT OF THE SHAREHOLDERS. THE SUBSCRIBERS ARE WELL KNOWN CORPORATE GROUPS, HAVING WELL ESTABLISHED BUSINESSES IN DIFFERENT PARTS OF THE WORLD. ACCORDINGLY, NO CAUSE FOR ADDITION IS MADE OUT, REFERRING TO THE DECISION BY THE APEX COURT IN THE CASE OF CIT V . LOVELY EXPORTS , 216 CTR 195 (SC). 2.3 THE SAME DID NOT FIND FAVOUR WITH THE LD. CIT. THE ONLY QUESTION THAT IS RELEVANT IS IF THE CONCLUSION AS TO THE NON-VERIFICATION OF THE INFORMATION RECEIVED FROM FTD BY THE A.O. WAS WRONG OR NOT. THE SAID MATERIALS WOULD, IN ANY CASE, BE SUPPLIED TO THE ASSESSEE BY THE A.O. IN COURSE OF THE ASSESSMENT PROCEEDINGS . THERE IS, FIRSTLY, NO QUESTION OF THE REVISIONARY AUTHORITY SEEKING TO REVISE THE ORDER A S PROPOSED/APPROVED BY THE DRP. RATHER, IT IS THE NON-COMPLIANCE ON THE PART OF THE A.O. WITH THE DIRECTIONS BY THE DRP, WHICH WAS SOUGHT TO BE RECTIFIED BY RECOURSE TO SEC TION 263 PROCEEDINGS. SECTION 263 CONFERS WIDE POWERS TO MAKE OR CAUSE TO MAKE SUCH E NQUIRY AS THE COMPETENT AUTHORITY DEEMS PROPER AFTER EXAMINING THE RECORDS, MAKING RE FERENCE TO THE DECISION IN THE CASE OF 4 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT CIT VS. SHREE MANJUNATHESWARE PACKING PRODUCTS AND CAMPHOR WORKS [1998] 231 ITR 53 (SC). THE A.O. WAS DUTY BOUND UNDER THE ACT TO V ERIFY THE GENUINENESS OF THE CREDIT TRANSACTIONS BY WAY OF INVESTMENT FOR AN AMOUNT OF RS.795.96 CRORES IN THE ASSESSEE- COMPANY BY THE NINE MAURITIUS-BASED ENTITIES HAVING A COMMON ADDRESS, AND WHOSE BANK STATEMENTS REVEALED MEAGER ACCOUNT BALANCES BEFORE AND AFTER THE DATE OF INVESTMENT; THE FUNDS BEING DEPOSITED AND WITHDRAWN ON THE SAME DAY (19.12.2005). THE A.O. WAS, ACCORDINGLY, DIRECTED TO EXAMINE THE INFORMATION RE CEIVED FROM FTD, AND TAKE SUCH ACTION UNDER THE ACT AS WARRANTED AS THE RESULT OF HIS ENQUIRY, OF COURSE AFTER PROVIDING FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE TO STAT E ITS CASE BEFORE HIM. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. FINDINGS 3. WE HAVE HEARD THE PARTIES, WHO MADE LENGTHY ARGU MENTS BEFORE US, AND PERUSED THE MATERIAL ON RECORD. 3.1 WE SHALL BEGIN BY DELINEATING THE ISSUE (OR ISS UES) THAT ARISES BEFORE US FOR ADJUDICATION. THE SAME, OR THE FOREMOST AMONG THEM, IN OUR VIEW, IS THE VALIDITY OF THE INVOCATION OF SECTION 263 OF THE ACT BY THE LD. CIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I.E., THE JURISDICTIONAL ASPECT. THE APEX COU RT IN MALABAR INDUSTRIAL CO. LTD. VS. CIT [2000] 243 ITR 83 (SC), EXPLAINED THE PARAMETERS FOR AND C ONDITION UPON EXISTENCE OF WHICH, THERE IS A VALID ASSUMPTION OF REVISIONARY J URISDICTION U/S.263. THE SAME IS BY WAY OF A FOUR-WAY TEST, WHICH SUCCINCTLY PUT, ARE: INCO RRECT ASSUMPTION OF FACTS; INCORRECT APPLICATION OF LAW; WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE; AND WITHOUT APPLICATION OF MIND. THE INSTANT CASE STANDS TO FAL L UNDER THE FOURTH CATEGORY. THE LAW IN THE MATTER IS WELL-SETTLED, AND TOWARD WHICH WE MAY , APART FROM THE DECISION IN MALABAR INDUSTRIAL CO. LTD. (SUPRA), RELIED UPON BY THE ASSESSEE ITSELF, CITE A FEW DECISIONS, AS RAMPYARI DEVI SAROGI V. CIT (1968) 67 ITR 84 (SC); CIT V. MCMILLAN & CO . (1958) 33 ITR 182 (SC); JAI BHARAT TANNERS V. CIT , 264 ITR 673 (MAD.); ASHOK LEYLAND LTD. V. CIT , 260 ITR 599 (MAD.); DUGGAL & CO. V. CIT , 220 ITR 456 (DEL.); SWARUP VEGETABLE 5 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT PRODUCTS V. CIT , 187 ITR 412 (ALL.); THALIBAI F. JAIN V. ITO , 101 ITR 1 (KAR.); GEE VEE ENTERPRISES V. CIT (ADDL.) , 99 ITR 375 (DEL.). NOT CONDUCTING OF PROPER ENQUIRY, I.E., AS WARRANTE D IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AND GIVEN THE POSITION OF THE LAW IN T HE MATTER, WOULD ITSELF MAKE AN ORDER PER SE ERRONEOUS IN-SO-FAR AS IT IS PREJUDICIAL TO THE IN TEREST OF THE REVENUE. THE PRINCIPLES AND PREMISES STAND ENUMERATED LUCIDLY IN GEE VEE ENTERPRISES VS. ADDL. CIT [1975] 99 ITR 375 (DEL). RELYING ON TWO DECISIONS BY THE APEX COU RT, VIZ. RAMPYARI DEVI SARAOGI VS. CIT (SUPRA) AND SMT. TARA DEVI AGGARWAL VS. CIT [1973] 88 ITR 323 (SC), IT STANDS EXPLAINED THAT THE POSITION AND FUNCTIONS OF AN INC OME TAX OFFICER IS DIFFERENT FROM THAT OF A CIVIL COURT. IN IT WORDS, THE STATEMENTS MADE IN A PLEADING PROVED BY THE MIN IMUM OF EVIDENCE MAY BE ADOPTED BY A CIVIL COURT IN THE ABS ENCE OF ANY REBUTTAL. THE CIVIL COURT IS NEUTRAL. IT SIMPLY GIVES A DECISION ON THE BASIS OF THE PLEADING AND THE EVIDENCE WHICH COMES BEFORE IT. THE INCOME-TAX OFFICER, ON THE OTH ER HAND, IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE COULD NOT REMAIN PASSIVE I N THE FACE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER ENQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANCES O F THE CASE ARE SUCH AS TO PROVOKE AN ENQUIRY. IT IS BECAUSE IT IS INCUMBENT ON THE INCOM E TAX OFFICER TO FURTHER INVESTIGATE THE FACTS CITED IN THE RETURN WHEN CIRCUMSTANCES WOULD MAKE SUCH AN ENQUIRY PRUDENT THAT THE WORD ERRONEOUS U/S.263 INCLUDE THE FAILURE TO MAKE SUCH AN ENQUIRY . THE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN ENQUIRY HAS NOT B EEN MADE, AND NOT BECAUSE NOT ANYTHING WRONG IF ALL THE FACTS THEREIN ARE ASSUMED TO BE CORRECT . THIS HAS, OVER THE YEARS, TRANSLATED INTO A SERIES OF DECISIONS BY THE HONBL E COURTS OF LAW, TO SOME OF WHICH WE HAVE REFERRED TO EARLIER, AND WHICH FORMS THE BASIS OF OUR STATING OF IT AS BEING TRITE LAW. 3.2 THE NEXT THING, THEREFORE, TO CONSIDER IS WHETH ER THERE HAS BEEN, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, DUE ENQUIRY OR NOT, AS, WITHOUT DOUBT, NON-CONDUCT THEREOF CANNOT BE EMPLOYED BY THE REVENUE AS THE RUSE TO SC UTTLE ASSESSMENTS MADE ON DUE APPLICATION OF MIND. THE SAME, AS WOULD BE APPARENT , IS QUINTESSENTIALLY A MATTER OF FACT, TO BE DETERMINED ON PROPER APPRECIATION OF ALL THE RELEVANT MATERIALS, VIZ. THE QUERIES 6 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT RAISED; THE REPLIES FURNISHED, ETC. IN THIS REGARD, THE ASSESSEE CONTENDS THAT THE A.O. HAD CALLED FOR AND BEEN FURNISHED THE REQUIRED DETAILS IN RELATION TO THE SHARE TRANSACTIONS. IT WAS FURTHER EXPLAINED THAT THE TRANSACTIONS WERE CA RRIED OUT WITH ALL THE NECESSARY REGULATORY APPROVALS, AND WAS IN CONSONANCE WITH TH E INVESTMENT LAWS OF INDIA. APPROVAL FROM RBI WAS ALSO SECURED. IN FACT, THERE BEING REN UNCIATION (OF RIGHTS) BY SOME SHAREHOLDERS, REFERENCE WAS MADE BY THE A.O. TO THE TPO U/S.92CA OF THE ACT AND, IN FACT, AN ADJUSTMENT WAS RECOMMENDED BY THE TPO U/S. 92CA(3), CLAIMING THE RENUNCIATION BY TWO INDIAN SHAREHOLDERS AS BEING NO T AT ARMS LENGTH, EVEN AS IT WAS EXPLAINED BY THE ASSESSEE THAT THE RIGHTS SHARE ISS UE WAS NOT AN INTERNATIONAL TRANSACTION IN TERMS OF SECTION 92B OF THE ACT. IN SUM, THERE H AD BEEN ADEQUATE ENQUIRY AND FORMULATION OF THE RELEVANT ISSUE/S, SO THAT THE CH ARGE OF NON-VERIFICATION BY THE A.O. WOULD NOT HOLD. WE SHALL CONSIDER THE CONTENTIONS RAISED, ON MERITS . 3.3 TOWARD THE ASSESSEES ARGUMENT THAT THERE WAS I NDEED PROPER VERIFICATION AND ENQUIRY IN RESPECT OF THE IMPUGNED CREDITS, IN OUR VIEW, THE VERY FACT THAT THE A.O. HAD SOUGHT FURTHER DETAILS AND INFORMATION FROM THE FTD WOULD ITSELF GO TO SHOW THAT HE DID NOT CONSIDER THAT ADEQUATE AND SUFFICIENT MATERIAL IS AVAILABLE WITH HIM TO ARRIVE AT AN OPINION IN THE MATTER, AND WAS NOT POSITIVELY SATIS FIED WITH REGARD TO THE NATURE AND THE SOURCE OF THE CREDITS UNDER REFERENCE. HIS OFFICE NOTE, STATING THAT THE MATTER WOULD BE EXAMINED ON RECEIPT OF INFORMATION, WHILE FORWARDIN G THE DRAFT ORDER TO THE DRP, IS AGAIN CLEARLY INDICATIVE OF HIS MIND AND THE STATE OF ENQ UIRY INASMUCH AS HE CONTEMPLATED FURTHER ENQUIRY. THE SAME COULD, THEREFORE, BE REGARDED AS AN INTERI M STAGE OF ENQUIRY BY THE ASSESSING AUTHORITY . THERE COULD IN FACT HARDLY BE ANY DOUBT IN THE MA TTER, GIVEN THE FACTS, AS NARRATED ABOVE; THE SAME BEING UNDISPUTED AND SELF-SPEAKING. THE QUESTION IS NOT IF HE HAD MADE ANY ENQUIRY EARLIER, AND THAT THE AS SESSEE HAD RESPONDED THERETO. WITHOUT DOUBT, IN THE ABSENCE OF INITIAL ENQUIRIES, EVEN AS MUCH AS THE FACT THAT THE CREDITS ARE IN RESPECT OF RIGHTS SHARE ISSUE AND, FURTHER, SUBSCRI BED TO BY NINE MAURITIUS-BASED ENTITIES, WOULD ITSELF NOT COME TO SURFACE. ENQUIRY IS A TANG IBLE PROCESS AND CLEARLY A MATTER OF FACT, AND TILL IT LEADS TO THE FORMULATION OF AN OP INION, ONE WAY OR OTHER, IS A CONTINUOUS 7 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT AND ITERATIVE PROCESS. SOME MATERIALS AND INFORMATI ON MAY BE FURNISHED, AND WHICH MAY PROMPT OR PROPEL THE ENQUIRY OFFICER TO SEEK FURTHE R INFORMATION IN FURTHERANCE OF THE ENQUIRY MADE EARLIER. IT MAY GIVE A CLUE OR LEAD TO AN ENQUIRY ON AN ALTOGETHER DIFFERENT ASPECT OR DIMENSION OF THE MATTER. WE ARE CONSCIOUS THAT IT COULD WITH SOME JUSTIFICATION BE SAID THAT IN THAT CASE NO AMOUNT OF ENQUIRY CAN BE SAID TO BE ADEQUATE OR PROPER. HOWEVER, ITS LIMIT IS IMPLICIT THEREIN INASMUCH AS THE ENQUIRY THAT CAN BE HELD AS PROPER IS ONE WHICH LEADS TO THE FORMATION OF AN INFORMED OPI NION IN THE MATTER. COMING TO THE FACTS OF THE CASE, TO SAY THAT ENQUIR Y HAD BEEN MADE AND INFORMATION SOUGHT AND SUPPLIED, THOUGH RELEVANT, WOULD BE OF N O ASSISTANCE TO THE ASSESSEE IN THE FACE OF THE CLEAR STATE OF ENQUIRY AS AT THE TIME O F FINALIZING THE DRAFT ORDER, AS EVIDENCED BY THE AOS HAVING SOUGHT INFORMATION FROM THE FTD AS WELL AS THE OFFICE NOTE AFORE- REFERRED. ACCORDINGLY, IN OUR CLEAR VIEW, THERE HAS BEEN NO P ROPER ENQUIRY IN THE MATTER EVEN IN THE ESTIMATION AND CONTEMPLATION OF THE A.O . THE QUESTION OF OR THE OCCASION FOR THE REVISIONARY AUTHORITY, THEREFORE, BEING REQUIRE D TO CONSIDER AS TO WHETHER THERE WAS A PROPER ENQUIRY BY THE ASSESSING AUTHORITY IN THE FA CTS AND CIRCUMSTANCES OF THE CASE, DOES NOT ARISE IN THE INSTANT CASE, AND NEITHER ARE WE, ACCORDINGLY, AS AN APPELLATE AUTHORITY, REQUIRED TO ADJUDICATE ON THE SAID VIEW BY THE LD. CIT THE FACTS OF THE CASE BEING CLEAR, UNDISPUTED AND PATENT. IN ANY VIEW OF THE MATTER, T HE FACTS AND CIRCUMSTANCES LEAD UNMISTAKABLY TO THE INFERENCE OF A LACK OF ENQUIRY. FURTHER, IN VIEW OF OUR SAID CLEAR FINDING, THE ASSESSEES RELIANCE ON THE PRESUMPTION OF S. 114(E) OF THE INDIAN EVIDENCE ACT, 1872 WOULD BE TO NO AVAIL. 3.4 THE LD. CIT HAS DWELLED AT LENGTH ON AS TO HOW AND WHY THE TIME LIMIT FOR THE COMPLETION OF THE ASSESSMENT WAS IN FACT NOT ON 07. 02.2011, AS PRESUMED BY THE A.O., AS APPARENT FROM HIS PROCEEDING TO FINALIZE THE ASSESS MENT ON 05.02.2011, BUT IN FACT ON 31.03.2011, SO THAT HE HAD TIME AT HIS HAND, AND OU GHT TO HAVE UTILIZED THE SAME FOR ENQUIRY. WE DO NOT CONSIDER THE SAME AS VERY RELEVA NT TO THE ISSUE BEFORE US. THIS IS FOR THE REASON THAT AFTER HAVING RECEIVED THE DRAFT ORD ER BY THE DRP, THE A.O. IS BOUND BY LAW TO MAKE NO FURTHER ADJUSTMENT OR CHANGES IN THE ORD ER AS APPROVED. IT IS UNDER THESE 8 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT CIRCUMSTANCES THAT THE ASSESSMENT GETS FINALIZED IN THE MANNER THAT IT DOES. THE QUESTION OF THE AVAILABILITY OR OTHERWISE OF THE TIME FOR AS SESSMENT BECOMES SECONDARY, IF NOT IRRELEVANT. THE ONLY MANNER KNOWN AND AVAILABLE IN LAW FOR THE REVENUE TO REVIEW THE MATTER UNDER THE CIRCUMSTANCE OF ABSENCE OR LACK OF PROPER ENQUIRY, WHICH IS PATENT IN THE INSTANT CASE, IS BY RECOURSE TO SECTION 263 OF THE ACT. IN FACT, EVEN IF SOME MATERIAL WERE TO COME TO THE KNOWLEDGE OR NOTICE SUBSEQUENT TO TH E ASSESSMENT, AS WHERE, TAKING THE EXAMPLE OF THE INSTANT CASE, THE INFORMATION SOUGHT FROM THE FTD HAD ACTUALLY BEEN RECEIVED SUBSEQUENT TO THE COMPLETION OF THE ASSESS MENT, THE SAME COULD BE TAKEN COGNIZANCE OF FOR THE PURPOSE OF INITIATION OF REVI SIONARY PROCEEDINGS; IT BEING TRITE THAT RECORD FOR THE PURPOSE OF SECTION 263 IS AS BEFOR E THE REVISIONARY AUTHORITY AT THE TIME OF HIS EXAMINATION (REFER SHREE MANJUNATHESWARE PACKING PRODUCTS AND CAMPHOR WORKS (SUPRA)). 3.5 ONE OF THE ARGUMENTS TAKEN BY THE ASSESSEE IS T HAT THE RELEVANT RECORD, I.E., THE INFORMATION AND DETAILS AS RECEIVED FROM THE FTD, H AVE NOT BEEN EXAMINED BY THE LD. CIT AND, ACCORDINGLY, HIS ACTION FAILS; NOT SATISFYING ONE OF THE BASIC INGREDIENTS OF SEC. 263. THE ARGUMENT IS MISCONCEIVED, AND ARISES, AS WE SEE IT, ON ACCOUNT OF CONFUSION WITH REGARD TO THE SCOPE OF THE WORD EXAMINATION AS US ED IN S.263. THE SAME IS OF INDEFINITE IMPORT, I.E., AS TO ITS EXTENT AND CONTOURS. THE EX AMINATION BY THE CIT WOULD IN EACH CASE BE GUIDED BY, AND IS THEREFORE TO BE SEEN WITH REFE RENCE TO HIS ORDER, I.E., THE FINDINGS ISSUED THEREBY. IN A PARTICULAR CASE, HE MAY MAKE A N ENQUIRY (WHICH IS AGAIN INHERENTLY VARIABLE), WHILE IN ANOTHER HE MAY CAUSE FURTHER EN QUIRY IN THE MATTER. CLEARLY, THE TWO EXAMINATIONS COULD NOT POSSIBLY BE TO THE SAME DE GREE OR AT PAR. IN THE INSTANT CASE, THE LD. CIT HAS ISSUED A FINDING AS TO LACK OF ENQUIRY OR ABSENCE OF PROPER ENQUIRY. COULD IT POSSIBLY BE ISSUED WITHOUT EXAMINATION OF THE RECOR D ? IT IS, IN FACT, ONLY THEREUPON, I.E., THE SAID EXAMINATION, ON WHICH THIS FINDING RESTS. IN THIS REGARD, THE ASSESSEE CLAIMS OF A SELECTIVE REFERENCE TO THE RECORD BY THE LD. CIT, I .E., WHEN HE STATES OF THE SHARE APPLICANTS HAVING COMMON ADDRESS AND MEAGER BANK BALANCES, BOT H BEFORE AND AFTER THE INVESTMENT IN THE ASSESSEE-COMPANY; THE SAME HAVING BEEN MADE ON THE SAME DAY OF RECEIPT OF FUNDS 9 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT IN THEIR BANK ACCOUNTS. THE CHARGE IS POINTLESS. FI RSTLY, IT DISPROVES THE ASSESSEES CLAIM OF NON-EXAMINATION OF THE RECORD. SECONDLY, THE ONL Y INFERENCE DRAWN BY THE LD. CIT IS TOWARD THE RELEVANCY OF THE RECORD UNDER REFERENCE THE PARTICULARS AND BANK ACCOUNTS, AND OF ITS EXAMINATION, I.E., TOWARDS SATISFACTION QUA THE NATURE AND THE SOURCE OF THE CREDITS, WHICH HAS TO BE ARRIVED AT BY THE A.O. ON THE PARAMETERS OF IDENTITY, CAPACITY AND GENUINENESS OF THE CREDIT TRANSACTIONS. THE BANK AC COUNT STATEMENT REFLECTS THE MOVEMENT OF FUNDS; IN FACT, THE RELEVANCY OF THE RECORD IS N EITHER DISPUTED BY THE ASSESSEE NOR POSSIBLY COULD BE. RATHER, BUT FOR THE SAID BANK AC COUNT STATEMENTS, IT MAY NOT BE KNOWN OR COULD BE STATED AS A FACT AS TO WHO HAS AND HOW HAVE THE FUNDS BEEN TRANSFERRED. FURTHER, AS SHALL BE APPARENT, THE SAID OBSERVATION OF MEAGER ACCOUNT BALANCES OSTENSIBLY SHOWS THAT THE MONEYS HAVE NOT COME OUT OF REGULAR BANK ACCOUNTS, SO THAT IT IS NOT CLEAR AS TO WHETHER THE SOURCE OF THE FUNDS INVESTED IS O WN FUNDS (OF THE INVESTING ENTITY) OR FURTHER SOURCED BY IT. AGAIN, HIGHLIGHTING THE RELE VANCY OF THE RECORD, AND PROPER ENQUIRY. AND TO COUNTENANCE THE ASSESSEE IMPUGNING THE SAME! THE ONLY POSSIBLE GRIEVANCE THAT THE ASSESSEE COU LD CLAIM IS OF THE ABSENCE OF OPPORTUNITY TO EXPLAIN ITS CASE, I.E., OF BEING CON FRONTED WITH MATERIALS, AND THE RESULT OF ITS EXAMINATION, BEFORE DRAWING AN ADVERSE INFERENC E. IT IS IN THIS CONTEXT THAT THE LD. CIT STATES THAT THE SAME WOULD BE PROVIDED THERETO DURI NG THE COURSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE A.O., THE PRIMARY AUTHORITY, AS ALSO OBSERVED BY THE HONBLE COURT IN THE CASE OF GEE VEE ENTERPRISES (SUPRA), WHO IS CHARGED UNDER THE ACT TO MAKE ENQU IRY TOWARD THE ASSESSMENT OF THE TOTAL INCOME. THIS IS APART FROM THE FACT THAT SECTION 68, WHICH IS THE PROVISION UNDER REFERENCE, ALSO CONTEM PLATES SATISFACTION OF THE A.O., WHICH IS PATENTLY ABSENT IN THE PRESENT CASE. THE NON-FUR NISHING OF THE SAID BANK STATEMENT TO THE ASSESSEE THUS CANNOT BE BY ANY STRETCH OF IMAGINATI ON CONSIDERED AS VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE, AND THE ASSESSEES C HARGE IN ITS RESPECT, IF ANYTHING, ONLY NEEDS TO BE STATED TO BE REJECTED. FURTHER, HOW WE WONDER COULD THE ASSESSEE CLAIM OF THE SET ASIDE AS HAVING BEEN MADE BY THE LD.CIT FOR FIS HING AND ROVING ENQUIRIES, WHEN FIRSTLY THE RELEVANT RECORD HAD BEEN CALLED FOR BY THE A.O. HIMSELF AND, SECONDLY, WITHOUT ASSAILING THE RELEVANCY OF THE SAID RECORD OR HIS O BSERVATION/S ARISING THERE-FROM. EQUALLY 10 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT FRIVOLOUS IS THE ASSESSEES CLAIM OF THE A.O. HAVIN G NOT MADE OUT ANY CASE FOR ENHANCEMENT OF INCOME TO THE DRP VIDE THE DRAFT ORD ER. THE QUESTION OF THE A.O. BEING SATISFIED OR NOT SO, IN TERMS OF SECTION 68, IS PRE MATURE IN THE ABSENCE OF PROPER ENQUIRY, SO THAT THERE IS NO QUESTION OF HIS FORMING OR HAVI NG FORMED ANY OPINION, MUCH LESS AN INFORMED ONE, WHICH HE IS REQUIRED TO IN LAW, WHEN HE FORWARDED THE DRAFT ORDER TO THE DRP. 3.6 NEXT, THE ASSESSEE SPEAKS OF VALID HOLDING STRU CTURES, WHICH STAND APPROVED OF BY THE HONBLE APEX COURT IN THE CASE OF VODAFONE INTERNATIONAL HOLDINGS B. V. V. UNION OF INDIA [2012] 341 ITR 1 (SC). WE FAIL TO SEE ITS IMPORT IN THE FA CTS AND CIRCUMSTANCES OF THE CASE, GIVEN THAT THE AMBIT OF THE ASSESSMENT PR OCEEDINGS, I.E., TO THE EXTENT RESTORED BY THE IMPUGNED ORDER. THE SAME IS TOWARD EXAMINATION OF THE CREDITS UNDER REFERENCE IN TERMS OF SECTION 68 OF THE ACT. ALL THAT THE HONBL E APEX COURT HAS, AS WE UNDERSTAND, PER PARA 54 OF ITS DECISION, CLARIFIED THAT CROSS HOLDI NGS BETWEEN THE CORPORATES IS A MATTER OF CAPITAL STRUCTURING AS NORMALLY EMPLOYED, AND CANNO T BE SAID TO BE BY FLY BY NIGHT OPERATORS, SO AS TO BE REGARDED AS TAX AVOIDANT. THE PURPORT OF THE SAID OBSERVATION, EVEN PRESUMING THE SAME INVESTORS, IS DIFFERENT. HOW WOU LD THAT HAVE A BEARING INSOFAR AS THE APPLICABILITY OR OTHERWISE OF S.68 IS CONCERNED, IS BEYOND OUR COMPREHENSION. ALL THAT IS RELEVANT FROM THE STAND-POINT OF SECTION 68 IS AS T O WHO HAS INVESTED THE FUNDS, AND WHETHER THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE, I.E., AS WOULD APPEAL TO REASON OF A MAN OF COMMON PRUDENCE, SUITABLY INFORMED, THE CAPA CITY OF THE INVESTOR TO INVEST THE RELEVANT FUNDS, AND THE GENUINENESS OF THE TRANSACT IONS, I.E., AS BEING A REGULAR TRANSACTION BY AN EXISTING SHAREHOLDER OR BY AN INTERESTED PART Y, I.E., IN CASE OF RENUNCIATION OF RIGHTS. TOWARD THIS, THE ASSESSEES ARGUMENT THAT THE INVES TORS ARE EXISTING SHAREHOLDERS HAS SOME MERIT. BUT TO SAY THAT FOR THAT REASON SECTION 68 WOULD NOT APPLY IS LUDICROUS. EQUALLY BASELESS IS THE ARGUMENT THAT SECTION 68 WO ULD NOT APPLY INASMUCH AS THE SHAREHOLDER/S IS A NON-RESIDENT. IT BECOMES ALL THE MORE INCUMBENT TO CLARIFY TOWARD ESTABLISHING THE GENUINENESS - AS TO WHAT IS THE BU SINESS INTEREST OF THE SHAREHOLDER, A CORPORATE ENTITY, IN INVESTING IN THE ASSESSEE-COMP ANY. IS IT PURELY AN INVESTOR, I.E., THE 11 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT COMPANY IN THE BUSINESS OF MAKING INVESTMENTS, ACRO SS SECTORS, FOR STRATEGIC REASONS, TOWARD WEALTH MAXIMIZATION. OR IS IT A CASE OF A BU SINESS PARTNER, OR IS THE INVESTING COMPANY/ENTITY FORMED AND PROMOTED BY THE ASSESSEE- COMPANY ITSELF? THAT ALL THE INVESTORS SHARE THE SAME ADDRESS IMPLIES COMMONALIT Y OR ASSOCIATION, WHICH HAS NOT BEEN EXPLAINED, BESIDES RAISING QUESTION WITH REGARD TO THEIR BUSINESSES. GENUINENESS, A PRIMARY INGREDIENT TOWARDS SATISFACTION U/S.68, A D ECISION OR FORMULATION OF AN OPINION QUA WHICH IS TO BE NECESSARILY ARRIVED AT BY THE A.O., IS OF INDEFINITE SCOPE, AND IS TO BE ARRIVED AT ON THE CONSPECTUS OF THE CASE. WITHOUT D OUBT, IT CANNOT BE IN THE ABSENCE OF FULL FACTS. THAT THE MONEYS COME FROM EXISTING SHAREHOLD ERS LENDS CREDENCE TO THE ASSESSEES CASE IN THE SAME MANNER AND TO THE EXTENT AS THE LO ANS BEING EXTENDED BY AN EXISTING LENDER, SO THAT THE MATTER HAS TO BE SEEN IN CONJUN CTION WITH THE OTHER FACTS ON RECORD. 3.7 NEXT, WE CONSIDER THE ASSESSEES ARGUMENT THAT THE TRANSACTIONS STAND ALSO EXAMINED BY THE TPO, FINDING THE SAME AS NOT AT ARM S LENGTH IN SOME CASES, RECOMMENDING ADJUSTMENT. NO DOUBT, THE SAME REPRESE NTS AN ASPECT OF THE MATTER, EVEN AS IN THE ABSENCE OF FULL FACTS, WE ARE UNABLE TO COMM ENT ON THE CORRELATION BETWEEN THE TWO ASPECTS. AT THIS STAGE IT WOULD BE SUFFICIENT TO SA Y THAT IF AND TO EXTENT IT IS, THE ASSESSEE COULD ADVANCE ITS CASE U/S.68 WITH REFERENCE THERET O BEFORE THE A.O. 3.8 THE LD. AR WAS VEHEMENT IN HIS ARGUMENTS BEFORE US THAT THE ONLY ERROR THE LD. CIT HAS POINTED OUT IN THE IMPUGNED ORDER IS THAT T HE A.O. HAS NOT FOLLOWED THE DIRECTION OF THE DRP, WHICH IS BINDING ON HIM U/S.144C(10). T HE DRP IS PROSCRIBED BY SECTION 144C(8) TO ISSUE ANY DIRECTION FOR FURTHER ENQUIRY AND, THEREFORE, THE SAID DIRECTION IS OF NO CONSEQUENCE. ACCORDINGLY, THE OBJECTION BY THE L D.CIT IS TO NO MOMENT, PARTICULARLY CONSIDERING THAT THE A.O. HAS NOT MADE ANY CASE FOR ENHANCEMENT OF INCOME IN RESPECT OF THE IMPUGNED CREDITS. WE AGREE. BUT FAIL TO SEE AS TO HOW THE SAME ASSISTS THE ASSESSEES CASE. WE HAVE ALREADY NOTED THAT THE A.O. IS BOUND BY THE DIRECTIONS BY THE DRP AND, THEREFORE, WAS JUSTIFIED IN LAW IN PASSING THE ORDE R IN THE MANNER HE DID, I.E., WITHOUT FURTHER ENQUIRY IN THE MATTER, IMMEDIATELY ON THE R ECEIPT OF THE DRP DIRECTIONS 12 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT U/S.144C(5). TO THE EXTENT THESE DIRECTIONS ARE, IF AT ALL, INCONSISTENT WITH THE EXPRESS PROVISION OF THE LAW, I.E., SECTION 144C(8), THE SA ME WOULD BE TO NO EFFECT OR CONSEQUENCE. IN FACT, IN OUR VIEW, THE SAID DIRECTI ON BY THE DRP, REPRODUCED AS UNDER, IS ONLY INCIDENTALLY MENTIONED BY IT, AND IS ONLY IN T HE NATURE OF A DISCLAIMER; THE A.O. HAVING WRITTEN TO IT ON 05.08.2010, SEEKING DIRECTI ONS FOR HIS GUIDANCE TO COMPLETE THE ASSESSMENT, IN TERMS OF SECTION 144C(5), WHILE FORW ARDING INFORMATION RECEIVED FROM THE FTD: 6. INCIDENTALLY, IT MAY BE MENTIONED THAT THE ASSE SSING OFFICER HAD FORWARDED COPIES OF LARGE NUMBERS OF DOCUMENTS RECE IVED BY HIM FROM MAURITUS THROUGH FT & TR DIVISION OF CBDT FOR NECES SARY ACTION BY THE DRP WITHOUT IN ANY MANNER SPECIFYING AS TO WHETHER ANY ENHANCEMENT OF INCOME IS WARRANTED BASED ON THESE DOCUMENTS AND IF YES, TO WHAT EXTENT. THE DRP IS OF THE CONSIDERED VIEW THAT BY VIRTUE OF POWERS VESTED IN DRP U/S.144C(5), IT CANNOT TAKE UPON ITSELF THE ENTIRE RESPONSIBILITY OF THE ASSESSING OFFICER. THE ASSESSING OFFICER IS THEREFO RE, DIRECTED TO EXAMINE THE INFORMATION AT HIS END AND TAKE SUCH FURTHER AC TION AS MAY BE CONSIDERED APPROPRIATE BY HIM IN ACCORDANCE WITH TH E PROVISIONS OF THE INCOME TAX ACT. IN OTHER WORDS, THE DRP PER THE SAME HAS IN EFFECT CLARIFIED THAT IT COULD NOT ISSUE DIRECTIONS ON A MATTER WHICH IS NOT THE SUBJECT MAT TER OF THE DRAFT ORDER AND, CONSEQUENTLY, THE OBJECTION/S FILED BY THE ASSESSEE. THE SAME IS, THEREFORE, ONLY CLARIFICATORY IN NATURE. IT WOULD NOT EFFECT THE SUBSTANTIVE RIGHTS OF EITHER P ARTY, AND EVEN ITS NON-MENTION WOULD HAVE NO MATERIAL EFFECT OR BEARING IN THE MATTER. I N FACT, IT IS PRECISELY ON ACCOUNT OF ANY NON-REFERENCE BY THE DRP A MATTER OF FACT WHICH EFFECTIVELY HAS NOT TAKEN ANY COGNIZANCE OF THE SAID MATERIALS FORWARDED TO IT BY THE A.O., THAT HIS ORDER IS RENDERED LIABLE TO BE SUBJECT TO REVIEW U/S.263, AND WHICH A LSO CONSTITUTES ONE OF THE OBJECTIONS RAISED BY THE ASSESSEE. HAD THE DRP ISSUED ANY DIRE CTION/S QUA THE SAID MATERIALS AND THE A.O. RENDERED HIS REPORT THEREON, SO THAT THE SAME STAND ACTED UPON, A QUESTION ON THE PROPRIETARY OR JURISDICTION OF THE LD. CIT COULD PO SSIBLY ARISE INASMUCH AS THE DRP IS A COLLEGIUM OF THREE COMMISSIONERS. BE THAT AS IT MAY , THE QUESTION DOES NOT ARISE FOR CONSIDERATION IN THE INSTANT CASE, SO THAT THERE IS NO BAR ON THE POWER OF THE CIT U/S.263, WHICH IS OTHERWISE OF WIDE AMPLITUDE (AND TOWARD WH ICH THE LD. CIT HAS CITED A NUMBER 13 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT OF DECISIONS AT PG. 13 OF HIS ORDER); THE RELEVANT MATERIALS HAVING NOT BEEN CONSIDERED B Y EITHER THE DRP OR THE A.O . THE ASSESSEES OBJECTION, RAISED WITH REFERENCE T O THE CIT BEING A SUBORDINATE AUTHORITY TO THE DRP, MADE WITH REFERENCE TO SOME CASE LAW, IS THEREFORE NOT VALID IN THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER, THAT BEING THE CASE, THE MENTION BY THE LD. CIT IN HIS ORDER THAT THE A. O. HAS NOT FOLLOWED THE DIRECTION BY THE LD. DRP WOULD, AS AFORESTATED, BE OF NO LEGAL CONSE QUENCE. THE SAME HAS IN EFFECT NO LEGAL BEARING. HIS ORDER IS BASED ON A DEFINITE FINDING OF ABSENCE OF ENQUIRY IN THE MATTER, AND FOR WHICH FINDING WE MAY ADVERT TO PARAS 3, 7 A ND 14 OF HIS ORDER. IT IS ONLY FOR THE REASON THAT THE A.O. DID NOT, OR COULD NOT, DO WHAT THE LAW ENVISAGES AND OBLIGES HIM TO, BEING WARRANTED IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, THAT THE LD. CIT AS A REVISIONARY AUTHORITY ASSUMES JURISDICTION IN THE I NSTANT CASE . TO SUM UP, NO DOUBT, THE LD. CIT STATES OF THE A.O. HAVING NOT FOLLOWED THE DIRECTION OF THE DRP, AND WHICH ALSO FORMS A GROUND ON WHICH HE ASSAILS THE ASSESSMENT AND CONSIDERS IT AS ERRONEOUS AND PREJUDICIAL TO TH E REVENUE. TO THIS EXTENT HIS ORDER IS NOT VALID INASMUCH AS THE LAW ITSELF RESTRAINS THE DRP FROM ISSUING THE DIRECTION TO THE A.O. FOR FURTHER ENQUIRY, WITH WE HAVING FOUND AS A FACT THAT THE SAME DOES NOT IN FACT CONSTITUTE A DIRECTION BY DRP AS CONTEMPLATED U/S. 144C(5), AND STANDS MENTIONED BY IT ONLY BY WAY OF A DISCLAIMER, HAVING NEITHER PERUSED THE INFORMATION UNDER REFERENCE NOR BEING THE SUBJECT MATTER OF CONSIDERATION BY IT AND , AS SUCH, ONLY CLARIFICATORY IN NATURE. THE ASSESSEES OBJECTION IS, THUS, VALID, THOUGH TH E SAME WOULD BE TO NO CONSEQUENCE. THIS IS AS THE SAME FORMS ONLY ONE OF THE GROUNDS O N WHICH THE LD. CIT FINDS THE A.O.S ORDER AS ERRONEOUS. IT WOULD NOT IN ANY MANNER DETR ACT FROM HIS OTHER PRINCIPAL FINDING, I.E., OF AN ABSENCE OR LACK OF PROPER ENQUIRY IN TH E MATTER BY THE A.O., WHICH ALSO INFORMS HIS ORDER. IN FACT, HIS OBSERVATION WITH REGARD TO THE MEAGER BALANCES IN THE BANK ACCOUNTS OF THE SHAREHOLDERS, I.E., THROUGH WHICH THE FUNDS ARE ROUTED, IS ONLY TOWARD THE SAME. 3.9 THE ASSESSEE HAS ALSO REFERRED TO ITS CASE BEIN G SOUND ON MERITS. THE SAME WOULD BE TO NO EFFECT, GIVEN THE FACT THAT IT IS PRECISEL Y TO DETERMINE THE SAID ISSUE THAT THE LD. CIT HAS SET ASIDE THE ASSESSMENT. HE HAS NOT ISSUED ANY FINDINGS ON MERITS, DECLINING TO 14 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT FORWARD THE SAID MATERIALS RECEIVED FROM THE FTD TO THE ASSESSEE IN THE REVISIONARY PROCEEDINGS AND, THEREFORE, ADVERTING THERETO BY TH E ASSESSEE IS PREMATURE. 3.10 THE ASSESSEE HAS FURNISHED A COMPILATION OF CA SE LAW, TO SOME OF WHICH REFERENCE WAS ALSO MADE BY THE LD. AR DURING HEARING. IT WOUL D BE RELEVANT TO REFER SOME OF THEM, EVEN AS OUR ORDER, AS WOULD BE APPARENT, IS BASED P RINCIPALLY ON FINDINGS OF FACT, I.E., TOWARD ABSENCE OR LACK OF PROPER ENQUIRY, WITH REFE RENCE TO WHICH THE LAW IS TRITE AND WELL SETTLED (REFER PARA 3.1). THE DECISION IN THE CASE OF ITO VS. D G HOUSING PROJECTS LTD. , 343 ITR 329 (DEL) CLARIFIES THAT THE FINDINGS BY THE CIT AS TO THE ABSENCE OF OR LACK OF ENQUIRY MUST ALSO EXHIBIT, ON AN EXAMINATION OF RECORD BY HIM, THAT THE SAME HAS RESULTED IN THE IMPUGNED ORDER BEING ERRONEOUS. THI S IS AS AN ORDER BEING ERRONEOUS IS A PRECONDITION AND, THEREFORE, THE S.263 ORDER HAS TO BEAR A FINDING TO THIS EFFECT. THE SAID DECISION IS CLEARLY NOT APPLICABLE TO THE FACTS OF THE INSTANT CASE INASMUCH AS THE A.O. WAS HIMSELF OF THE CONSIDERED VIEW THAT FURTHER ENQUIRY IS REQUIRED, HAVING SOUGHT MATERIALS FOR THE SAME, THOUGH WAS UNABLE TO, IN THE EXIGENCI ES OF THE CASE, VERIFY AND EXAMINE THE SAME. IN FACT, THE HONBLE COURT ITSELF CLARIFIES T HEREIN THAT THE CIT COULD ESTABLISH THAT THE FACTS ON RECORD OR THE INFERENCE DRAWN FROM THE FAC TS ON RECORD PER SE JUSTIFY AND MANDATE FURTHER ENQUIRY OR INVESTIGATION BY THE A.O., WHICH HAD NOT BEEN CONDUCTED BY HIM. OUR OBSERVATION WITH REGARD TO THE RELEVANCY OF THE REC ORD SOUGHT AND SUPPLIED, AND THE LD. CITS OBSERVATIONS QUA THE COMMON ADDRESSES AND MEAGER BANK BALANCES, WOU LD UNDERSCORE THAT NO ASSISTANCE FROM THIS DECISION CO ULD BE DRAWN IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, AND THAT OUR DEC ISION IN UPHOLDING THE APPLICABILITY OF SECTION 263 IN THE INSTANT CASE IS NOT INCONSISTENT WITH THE SAID DECISION. THIS IS APART FROM THE FACT OF THE MANDATE OF S. 68 OF THE ACT REMAINING UNSATISFIED . AGAIN, IN VIEW OF THESE CLEAR FINDINGS, THE RELIANCE ON TH E DECISION IN THE CASE OF CIT V. GABRIEL INDIA LTD ., 203 ITR 108 (BOM), HOLDING THAT THE REVISIONARY PROCEEDINGS ARE NOT MEANT TO REVIVE CONCLUDED MATTERS AND DOES NOT GIVE UNBRIDLE D POWER TO THE CIT, WOULD NOT APPLY. THE DECISION IN CIT VS. SUNBEAM AUTO LTD. [2011] 332 ITR 167 (DEL) CLARIFIES THAT THE ARGUMENT OF LACK OF ENQUIRY OR INADEQUATE ENQUIRY C ANNOT BE EMPLOYED WHERE THE A.O. 15 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT HAS TAKEN ONE OF THE POSSIBLE VIEWS, SHOWING HIS AP PLICATION OF MIND ON THE ISSUE. THE ARGUMENT AS REGARDS INADEQUATE ENQUIRY PREDICATES O N NON-APPLICATION OF MIND, SO THAT WHERE, THEREFORE, PROPER APPLICATION OF MIND IS REF LECTED, THE ARGUMENT OF LACK OF ENQUIRY WOULD NOT HOLD. THE ENQUIRY, OR ITS ABSENCE, EVEN AS EXPLAINED EARL IER, IS PURELY A MATTER OF FACT, SO THAT THE DECISION TURNS ONCE AGAIN ON F ACTS . IT NEEDS TO BE CLARIFIED AT THIS STAGE THAT IT IS THE NON-APPLICATION OF MIND WHICH RENDER S THE ORDER PER SE ERRONEOUS AND PREJUDICIAL, WITH ENQUIRY, AN INHERENTLY INDEFINITE PHENOMENON, BEING THE RESULT OR CONSEQUENCE. IT IS FOR THIS REASON THAT THE SAME IS COUPLED WITH THE REQUIREMENT TO SHOW THAT ENQUIRY WAS PRIMA FACIE OR IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WAR RANTED. THE SAID DECISION, THEREFORE, IS NOT APPLICABLE. THE DE CISION IN THE CASES OF CIT VS. VODAFONE ESSAR SOUTH , 212 TAXMAN 184 (DEL) AND IN THE CASE OF CIT VS. DESIGN AND AUTOMATION ENGINEERS (BOMBAY) P. LTD. 323 ITR 632 (BOM) IS AGAIN PREMISED ON THE A.O. HA VING TAKEN A POSSIBLE VIEW, WITH THE ARGUMENT OF NON-APP LICATION OF MIND BY HIM HAVING IN FACT NOT EVEN BEEN TAKEN BEFORE THE CIT OR THE TRIB UNAL. IT IS UNDER THESE CIRCUMSTANCES THAT THE REVISION STOOD STRUCK DOWN. TO THE SAME EF FECT AND PURPORT IS THE DECISION IN THE CASE OF RANKA JEWELLERS VS. ADD. CIT [2010] 328 ITR 148 (BOM). THE DECISION IN THE CASE OF CIT VS. DEVELOPMENT CREDIT BANK LIMITED [2010] 323 ITR 206 (BOM), AS ITS READING WOULD SHOW, AGAIN TURNS ON FACTS; THE HONB LE COURT, ON A PERUSAL OF THE RECORD, FINDING SATISFACTORY CONDUCT OF THE ENQUIRY BY THE A.O., REFLECTING DUE APPLICATION OF MIND BY HIM. IN ASST. CIT VS. JEWEL OF INDIA [2010] 325 ITR 92 (BOM), THE REVISION WAS STRUCK DOWN IN THE ABSENCE OF FINDING BY THE REVISI ONARY AUTHORITY THAT THE ORDER REVISED IS PREJUDICIAL TO THE INTEREST OF THE REVENUE INASM UCH AS THE SAME REPRESENTS A PRECONDITION FOR INVOCATION OF SECTION 263. IN THE INSTANT CASE, SUCH A FINDING HAS BEEN ISSUED PER PARA 7 OF THE IMPUGNED ORDER. THE CASE L AW, NOT SPECIFICALLY REFERRED TO, WE MAY CLARIFY, HAS ALSO BEEN PERUSED AND FOUND INAPPL ICABLE ON FACTS. DECISION 4. IN VIEW OF THE FOREGOING, IN OUR CLEAR VIEW, THE RE HAS BEEN A VALID ASSUMPTION OF JURISDICTION U/S.263 IN THE INSTANT CASE AND, FURTH ER, THE DIRECTIONS BY THE LD.CIT AS 16 ITA NO. 605/CHD/2012 (A.Y. 2006-07) VODAFONE INDIA LTD. VS. CIT CONTAINED AT PARA 15 OF HIS ORDER ARE CONSISTENT W ITH HIS FINDINGS PER HIS ORDER. ACCORDINGLY, NO INTERFERENCE WITH THE SAID ORDER IS CALLED FOR, WHICH IS THUS UPHELD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. 9 6: -96 5 )9& 5 &6 ; ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 16, 20 13 SD/- SD/- (D. MANMOHAN) (SANJAY ARORA) !'# / VICE PRESIDENT () %*+ / ACCOUNTANT MEMBER MUMBAI; <* DATED : 16.08.2013 $..%./ ROSHANI , SR. PS *(8 5 26= >(=.6 *(8 5 26= >(=.6 *(8 5 26= >(=.6 *(8 5 26= >(=.6/ COPY OF THE ORDER FORWARDED TO : 1. /1 / THE APPELLANT 2. 23/1 / THE RESPONDENT 3. ? ( ) / THE CIT(A) 4. ? / CIT - CONCERNED 5. =$BC 26 , , / DR, ITAT, MUMBAI 6. C- D / GUARD FILE *(8% *(8% *(8% *(8% / BY ORDER, ! !! !/ // /% & % & % & % & (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI