Al Champdany Industries Ltd., Kolkata V. CIT, KOLKATA-1, Kolkata

ITA 655/KOL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4905 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-04-2014
• Court: TRIBUNAL
• Department Lawyers: ANGAM SHAIZA
• Assessee Lawyers: SHTRI SUBASH AGARWAL
• Keywords: Assessment record; Revised return
• Section: 143(3); 115JB; 263

Judgement Text

I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 655 /KOL/ 2014 ASSESSMENT YEAR: 2009-2010 AI CHAMPDANY INDUSTRIES LIMITED,.................. .........................APPELLANT 25, PRINCEP STREET, KOLKATA-700 072 [PAN : AACCA 4860 D] -VS.- COMMISSIONER OF INCOME TAX,........................ ..........................RESPONDENT KOLKATA-1, KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHTRI SUBASH AGARWAL, ADVOCATE, FOR THE ASSESSEE SHRI ANGAM SHAIZA, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 16, 2016 DATE OF PRONOUNCING THE ORDER : MAY 06, 2016 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX, KOLKATA-I, KOLKATA DATE D 26.03.2014 FOR THE ASSESSMENT YEAR 2009-10 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF JUTE, JUTE BLENDED AND FLAX GOODS. IN THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, TOTAL INCOME WAS SHOWN BY THE ASSESSEE AT A LOSS OF RS.71,62,440/- AND BOOK PROFIT UNDER SECTION 115JB AT RS.5,85,16,032/-. I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 8 IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VI DE AN ORDER DATED 14.12.2011, TOTAL INCOME OF THE ASSESSEE WAS DETERM INED BY THE ASSESSING OFFICER AT A LOSS OF RS.17,95,513/- AND BOOK PROFIT AT RS.6,03,76,206/-. THE RECORDS OF THE SAID ASSESSMENT SUBSEQUENTLY CAM E TO BE EXAMINED BY THE LD. CIT AND ON SUCH EXAMINATION, HE WAS OF THE PRIMA FACIE VIEW THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) SUFFERED FROM THE FOLLOWING ERRORS, WHICH WE RE PREJUDICIAL TO THE INTERESTS OF THE REVENUE:- DURING THE PREVIOUS YEAR ENDED ON 31.03.2009, 'REL EVANT TO THE A. Y.: 2009-10', THE ASSESSEE WAS ENGAGED IN TH E BUSINESS OF MANUFACTURE AND TRADING OF JUTE, JUTE BLENDED AN D FLAX GOODS. IT IS OBSERVED FROM THE ASSESSMENT RECORDS T HAT THE ASSESSEE COMPANY, VIDE ITS LETTER DATED 13.10.2011, HAD SUBMITTED THE 'PARTY WISE DETAILS OF PURCHASES' (AB OVE RS.20 LACS) WITH DETAILED POSTAL ADDRESS. IT IS OBSERVED FROM THE 'DETAILS OF PARTY WISE PURCHASES' THAT THE RAW MATE RIAL OF JUTE AMOUNTING TO RS.34,70,63,898/- WAS PURCHASED BY ASS ESSEE FROM M/S. THE JUTE CORPORATION OF INDIA LTD. DURING THE YEAR ENDED AN 31.03.2009. 2.2 HOWEVER, IN RESPONSE TO NOTICE ISSUED U/S 133( 6), M/S THE JUTE CORPORATION OF INDIA LTD., VIDE ITS LETTER DATED 25.11.2011 HAD FURNISHED THE DETAILS OF ITS TRANSAC TIONS MADE WITH THE ASSESSEE I.E. M/S AI CHAMPDANY INDUSTRIES LTD. DURING THE YEAR ENDED ON 31.03.2009. IT IS OBSERVED FROM T HE AFORESAID INFORMATION DATED 25.11.2011 FURNISHED BY THE JUTE CORPORATION OF INDIA LTD. THAT THE ONLY TRANSACTION OF RS.17,84,30,679/- TOWARDS SALE(RAW JUTE) WAS UNDERT AKEN WITH THE ASSESSEE COMPANY AND A TOTAL PAYMENT OF RS.18,02,99,556/- INCLUDING AMOUNT OUTSTANDING FOR IMMEDIATE PREVIOUS YEAR WAS RECEIVED DURING THE YEA R ENDED ON 31.03.2009 THEREBY LEAVING A CLOSING BALANCE (DR .) OF RS. 1,34,22,716/- AS ON 31.3.2009 PAYABLE BY THE ASSESS EE COMPANY. 2.3. THUS, THERE WAS A DIFFERENCE OF RS. 16,86,33,2 19/- (RS.34,70,63,898/- - RS.17,84,30,6791-) BETWEEN THE AMOUNT OF TRANSACTION TOWARDS SALE(RAW JUTE) UNDERTAKEN AS STATED BY 'M/S THE JUTE CORPORATION OF INDIA LTD.' WITH TH E ASSESSEE COMPANY AND THE AMOUNT OF PURCHASE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. HENCE THE ASSESSEE HAD SH OWN EXCESS & INFLATED PURCHASES RECORDED IN ITS ACCOUNTS FOR T HE YEAR ENDED ON 31.03.2009, TO THE EXTENT OF RS.16,86,33,2 19/-, WHICH WAS REQUIRED TO BE DISALLOWED AND ADDED BACK TO TOT AL INCOME. AS THIS WAS NOT DONE THE SAME HAS RESULTED IN UNDER ASSESSMENT OF INCOME BY SUCH AMOUNT. I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 8 3.1. IT IS FURTHER OBSERVED FROM THE PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED AS ON 31.3.2009 AND FROM 'SERIAL NO.22 OF THE NOTES TO ACCOUNTS' (SCHEDULE-17 OF THE BALANCE SHEET IN THE AUDITED ACCOUNTS DATED 28.06.2009) THAT THE 'NE T PROFIT' OF RS.18,501,548/- WAS ARRIVED AT BY REDUCING THE A MOUNT OF EXCEPTIONAL ITEMS (NET) OF RS.1,65,40,487/-. AS PER AFORESAID 'SERIAL NO.22 OF THE NOTES TO ACCOUNTS', THE EXCEPT IONAL ITEM WAS THE NET OF PROVISION FOR DOUBTFUL EXPORT DEBTOR OF RS.401.46 LACS, FLUCTUATION LOSS ON CONVERSION OF D OLLAR LOANS TO RUPEE LOANS OF RS.476.01 LACS AND SURPLUS ON TRA NSFER OF RAMPUR TEXPRO UNIT OF RS.712.07 LACS I.E. (RS.401.4 6 + RS.476.01 - RS.712.07) LACS I.E. RS.1,65,40,487/-. THEREFORE, THE 'FLUCTUATION LOSS' OF RS.476.01 LACS, INTER ALI A, WAS CLAIMED AND ALLOWED IN THE ASSESSMENT U/S 143(3) DATED 29.1 2.2011. 3.2 'SERIAL NO. 1.8 OF THE NOTES TO ACCOUNTS' (SCHE DULE -17 OF THE BALANCE SHEET) FURNISHED ALONG WITH THE AUDITED ACCOUNTS DATED 28.06.2009, STATES AS FOLLOWS: 'FOREIGN CURRENCY TRANSACTIONS: (I) MONETARY ASSETS AND LIABILITIES RELATING TO FOR EIGN CURRENCY TRANSACTIONS REMAINING UNSETTLED AT THE YEAREND ARE TRANSLATED AT CLOSING SPOT RATES ON THE LAST DAY OF THE YEAR. (II) THE DIFFERENCE IN TRANSLATION IN MONETARY ASSE TS AND LIABILITIES AND REALIZED GAINS AND LOSSES IN FOREIG N EXCHANGE TRANSACTIONS OTHER THAN THOSE RELATING TO FIXED ASS ETS ARE RECOGNIZED IN THE PROFIT & LOSS ACCOUNT. (III) EXCHANGE DIFFERENCES IN RESPECT OF LIABILITIE S INCURRED TO ACQUIRE FIXED ASSETS ARE ADJUSTED TO THE CARRYING A MOUNT OF SUCH FIXED ASSETS. 3.3. FURTHER AS PER ACCOUNTING POLICY OF THE ASSESS EE COMPANY, AS REFERRED TO IN AFORESAID 'SI. NO. 1.8 OF SCHEDUL E-17 OF THE NOTES OF ACCOUNTS', IT APPEARS THAT THE DIFFERENCE IN TRANSLATION IN MONETARY ASSETS AND LIABILITIES AND REALIZED GAINS AND LOSSES IN FOREIGN EXCHANGE TRANSACTIONS R EMAINED UNSETTLED AT THE YEAR END HAD BEEN RECOGNIZED IN TH E PROFIT & LOSS ACCOUNT. AS PER ASSESSEE'S SUBMISSION STATED A BOVE, IT APPEARS THAT THE SAID LOSS WAS ARISEN DUE TO DIFFER ENCE BETWEEN THE PURCHASE PRICE AND THE VALUE AS ON VALU ATION DATE AT THE YEAR-END IN RESPECT OF FOREIGN EXCHANGE DERI VATIVE TRANSACTION THAT REMAINED UNSETTLED DURING THE PREV IOUS YEAR. THEREFORE, THE SAID LOSS WAS A NOTIONAL LOSS SINCE NO SALE/CONCLUSION/SETTLEMENT OF CONTRACT WAS TAKEN PL ACE AND THE ASSET CONTINUED TO BE OWNED BY THE ASSESSEE. AN Y LOSSES IN FOREIGN EXCHANGE TRANSACTIONS REMAINED UNSETTLED (U NEXPIRED CONTRACT) AT THE END OF THE YEAR CANNOT BE REGARDED AS AN ASCERTAINED LIABILITY FOR THE PURPOSE OF CLAIMING D EDUCTION AS I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 8 AN EXPENDITURE LAID OUT OR EXPENDED WHOLLY AND EXCL USIVELY FOR THE PURPOSES OF THE BUSINESS OF THE ASSESSEE DURING THE PREVIOUS YEAR ENDED AS ON 31.3.2009 AND RELEVANT TO THE ASSESSMENT YEAR: 2009-10. 3.4. IN ADDITION, THE ASSESSEE WAS REQUIRED TO JUS TIFY IN RESPECT OF ANY LOSS NOT BEING A NOTIONAL LOSS WITH DETAILED KEY DOCUMENTS, CONFIRMATION ETC. FROM THE RESPECTIVE AU THORITIES IN SUPPORT OF THE ADMISSIBILITY OF CLAIM AS TO HOW THE FLUCTUATION LOSS ON CONVERSION OF DOLLAR LOANS TO R UPEE LOANS WAS RECOGNIZED WHICH HAD A DIRECT RELATION WITH THE BUSINESS OF THE ASSESSEE. ANY DETAILS OR COPY OF THE RELEVAN T DOCUMENT IS NOT AVAILABLE ON THE RECORDS AND FURTHER THIS IS SUE HAS NOT BEEN DISCUSSED IN THE ASSESSMENT RECORDS. 3.5. IN VIEW OF THE ABOVE, THE FLUCTUATION LOSS ON CONVERSION OF DOLLAR LOANS TO RUPEE LOAN OF RS.476.01 LACS, DE BITED TO THE PROFIT AND LOSS, ACCOUNT FOR THE YEAR ENDED ON 31.0 3.2009, IS REQUIRED TO BE DISALLOWED AND ADDED TO THE TOTAL IN COME OF THE ASSESSEE. AS THIS WAS NOT DONE THE SAME HAS RESULTE D IN UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.4,76,01,39 6/-. ACCORDINGLY, A NOTICE UNDER SECTION 263 WAS ISSUED BY THE LD. CIT POINTING OUT THE ABOVE ERRORS TO THE ASSESSEE AND SEEKING EX PLANATION AS TO WHY THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) SHOULD NOT BE REVISED BY EXERCISING THE POWERS CONF ERRED UPON HIM UNDER SECTION 263. IN REPLY, WRITTEN SUBMISSION WAS FILED BY THE ASSESSEE OFFERING ITS EXPLANATION IN THE MATTER. THE SAME, H OWEVER, WAS NOT FOUND ACCEPTABLE BY THE LD. CIT AND AFTER DISCUSSING THE VARIOUS CASE LAWS EXPLAINING THE SCOPE OF REVISION UNDER SECTION 263, HE HELD THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UN DER SECTION 143(3) TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE GROUND THAT THERE WAS FAILURE ON THE PART OF THE AS SESSING OFFICER TO PROPERLY SCRUTINIZE AND ENQUIRE INTO THE VARIOUS AS PECTS POINTED OUT BY HIM WHILE COMPLETING THE ASSESSMENT. ACCORDINGLY, T HE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) WAS SET ASIDE BY THE LD. CIT WITH A DIRECTION TO THE ASSESSING OFFICER TO DO THE SAME AFRESH AFTER EXAMINING ALL THE RELEVANT FACTS AND FIGURES. AGGRI EVED BY THE ORDER OF THE LD. CIT PASSED UNDER SECTION 263, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 8 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT VIDE HIS IMPUGNED ORDER PASSED UNDER SECTION 263 HAS VIRTUAL LY DONE RE- ASSESSMENT, WHICH IS NOT PERMISSIBLE IN LAW. HE SUB MITTED THAT THE ASSESSEE DURING THE COURSE OF PROCEEDINGS UNDER SEC TION 263 HAD FILED A WRITTEN SUBMISSION ON ALL THE POINTS RAISED BY THE LD. CIT IN THE NOTICE UNDER SECTION 263. HE INVITED OUR ATTENTION TO A CO PY OF THE SAID WRITTEN SUBMISSION PLACED AT PAGE NOS. 23 TO 28 OF HIS PAPE R BOOK AND CONTENDED THAT THE LD. CIT IN HIS IMPUGNED ORDER HAS NOT GIVE N ANY FINDING ON THE SAID SUBMISSIONS MADE BY THE ASSESSEE IN ORDER TO P OINT OUT WHAT EXACTLY WAS THE ERROR IN THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3). HE CONTENDED THAT THE LD. CIT HAS SIMPLY SE T ASIDE THE ORDER OF THE ASSESSING OFFICER WITH A DIRECTION TO MAKE IT D E NOVO BY EXERCISING HIS POWERS UNDER SECTION 263 WHILE IT WAS INCUMBENT UPO N HIM TO GIVE SPECIFIC FINDING ON THE SUBMISSIONS MADE BY THE ASS ESESE ON EACH AND EVERY POINT IN ORDER TO ARRIVE AT THE CONCLUSIONS A BOUT THE ERRORS BEFORE EXERCISING THE POWERS UNDER SECTION 263. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE HONBLE RAJASTHAN HIG H COURT IN THE CASE OF CIT VS.- JAI MEWAR WINE CONTRACTORS REPORTED IN 25 1 ITR 785 AND THAT OF HONBLE DELHI HIGH COURT IN THE CASE OF ITO VS.- D .G. HOUSING PROJECTS LIMITED REPORTED IN 343 ITR 329. 4. THE LD. D.R., ON THE OTHER HAND, STRONGLY RELIED ON THE IMPUGNED ORDER PASSED BY THE LD. CIT UNDER SECTION 263 AND S UBMITTED THAT IN THE ABSENCE OF MANY ISSUES RELEVANT TO THE ASSESSMENT O F THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAVING NOT BEEN EXAMINED B Y THE ASSESSING OFFICER AS POINTED OUT BY THE LD. CIT, THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) WAS ERRONEOUS AS WELL A S PREJUDICIAL TO THE INTEREST OF THE REVENUE JUSTIFYING REVISION BY THE LD. CIT UNDER SECTION 263. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT THE MAIN ERROR I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 6 OF 8 POINTED OUT BY THE LD CIT IN THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) IS THAT THE VARIOUS ISSUES REL EVANT TO THE ASSESSMENT OF THE ASSESSEES INCOME AS POINTED OUT BY HIM WERE NOT EXAMINED BY THE ASSESSING OFFICER. THE LD. CIT, THEREFORE, ISSUED A NOTICE UNDER SECTION 263 BRINGING SUCH ISSUES TO THE NOTICE OF THE ASSES SEE AND ALTHOUGH IN REPLY FILED TO THE SAID NOTICE, THE ASSESSEE TRIED TO EXPLAIN ITS CASE ON MERIT IN RESPECT OF THE SAID ISSUES, THERE WAS NOTH ING IN THE SAID SUBMISSION TO SHOW THAT THE ISSUES RAISED BY THE LD . CIT IN THE NOTICE UNDER SECTION 263 HAD ALREADY BEEN EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD . CIT, THEREFORE, HELD THE ORDER OF THE ASSESSING OFFICER TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE GROUND THAT T HERE WAS FAILURE ON THE PART OF THE ASSESSING OFFICER TO SCRUTINIZE AND ENQ UIRE INTO THE VARIOUS ASPECTS WHILE COMPLETING THE ASSESSMENT IN THE CASE OF THE ASSESSEE AND SET ASIDE THE SAME BY EXERCISING HIS POWERS UNDER S ECTION 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO DO THE SAME D E NOVO AFTER EXAMINING ALL THE RELEVANT FACTS AND FIGURES. 6. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE HAS MAINLY CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT PASSED UNDER SECTION 263 ON THE GROUND THAT HE HAS NOT GIVEN ANY FINDING ON THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE HIM TO POINT OUT EXACTL Y THE ERRORS IN THE ORDER OF THE ASSESSING OFFICER. HOWEVER, AS ALREADY NOTED BY US, THERE WAS NOTHING CONTAINED IN THE WRITTEN SUBMISSION FILED B Y THE ASSEESSEE TO SHOW HOW THE VARIOUS ISSUES RAISED BY THE LD. CIT W ERE EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND SINCE THE LD. CIT VIDE HIS IMPUGNED ORDER HAS SET ASIDE T HE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER NOT ON THE GROUND THA T THE SAME WAS WRONG ON MERIT ON THE ISSUES RAISED BY HIM, BUT THE SAME WAS ERRONEOUS FOR LACK OF INQUIRIES BY THE ASSESSING OFFICER ON THE SAID I SSUES AS WARRANTED IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT IT WAS NOT NECESSARY FOR THE LD. CIT TO GIVE ANY FINDING ON TH E RELEVANT ISSUES ON MERIT BEFORE EXERCISING HIS POWERS UNDER SECTION 26 3. IN THE CASES OF JAI I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 7 OF 8 MEWAR WINE CONTRACTORS (SUPRA) AND D.G. HOUSING PRO JECTS LIMITED (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ORDERS OF THE ASSESSING OFFICER WERE HELD TO BE ERRONEOUS BY THE LD. CIT ON THE GROUND THAT THE DECISION RENDERED BY THE ASSESSING OFFICER ON CERTAIN ISSUES WAS WRONG ON MERITS AND IN THESE FACTS AND CIRCUMSTANCE S OF THE SAID CASES, IT WAS HELD THAT IT WAS INCUMBENT UPON THE LD. CIT TO RECORD SPECIFIC FINDING, AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS MAD E BY THE ASSESSEE, THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOU S IN ANY MANNER, WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT W AS HELD THAT WHEN NO SUCH FINDING HAS BEEN RECORDED BY THE LD. CIT, IT I S VERY DIFFICULT TO ASSUME THAT HE MUST HAVE ARRIVED AT A FINDING AS TO THE ERRONEOUS NATURE OF THE ORDER SOUGHT TO BE REVISED OR IF SUCH ORDER IS ALLOWED TO STAND, IT WILL BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. 7. IT IS PERTINENT TO NOTE HERE THAT THE HONBLE DE LHI HIGH COURT IN THE CASE OF D.G. HOUSING PROJECTS LIMITED (SUPRA) HAS D RAWN A DISTINCTION IN THE CASES WHERE THE ASSESSING OFFICER DOES NOT COND UCT AN ENQUIRY; AS LACK OF ENQUIRY BY ITSELF RENDERS THE ORDER ERRONEO US AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND CASES WHERE THE AS SESSING OFFICER CONDUCTS AN ENQUIRY BUT THE FINDING RECORDED IS ERR ONEOUS WHICH IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT WAS HELD THAT ONLY IN THE LATTER CASES, THE COMMISSIONER HAS TO EXAMINE THE O RDER OR THE DECISION TAKEN BY THE ASSESSING OFFICER ON THE MERITS AND TH EN FORM AN OPINION ON THE MERITS THAT THE ORDER PASSED BY THE ASSESSING O FFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THE PRESENT CASE, THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) HAS BEEN REVISED BY THE LD. CIT UNDER SECTION 263 FOR LACK OF ENQUIRY B Y THE ASSESSING OFFICER AS POINTED OUT BY HIM AND SINCE SUCH LACK OF ENQUIR Y BY ITSELF RENDERS THE ORDER ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, WE ARE OF THE VIEW THAT IT WAS NOT REQUIRED FOR THE LD. CIT W HILE SETTING ASIDE THE ORDER OF THE ASSESSING OFFICER WITH A DIRECTION TO MAKE IT DE NOVO BY EXERCISING HIS POWERS UNDER SECTION 263 TO EXAMINE THE SUBMISSION OF THE ASSESSEE ON THE VARIOUS ISSUES RAISED BY HIM AND TO GIVE A FINDING ON I.T.A. NO. 655/KOL./2014 ASSESSMENT YEAR: 2009-2010 PAGE 8 OF 8 MERITS OF THE SAID ISSUES IN ORDER TO POINT OUT THA T THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE DECISION OF THE HONBLE DELHI HIGH CO URT IN THE CASE OF D.G. HOUSING PROJECTS LIMITED (SUPRA) AS WELL AS THE VAR IOUS JUDICIAL PRONOUNCEMENTS DISCUSSED BY THE LD. CIT IN HIS IMPU GNED ORDER SUPPORTS THIS VIEW. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE LD. CIT PASSED UNDER SECTION 263 AND UPHOLDING THE SAME, WE DISMISS THIS APPEAL FILED BY THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 06, 2016. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 6 TH DAY OF MAY, 2016 COPIES TO : (1) AI CHAMPDANY INDUSTRIES LIMITED, 25, PRINCEP STREET, KOLKATA-700 072 (2) COMMISSIONER OF INCOME TAX, KOLKATA-1, KOLKATA, AAYAKAR BHAWAN, 7 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX, KOLKATA-I, KOLKAT A (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.