NENNI BUILDERS & DEVELOPERS P. LTD, MUMBAI V. THE CIT 7, MUMBAI

ITA 7205/MUM/2008

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3812 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 08-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 22-12-2008
• Court: TRIBUNAL
• Assessee Lawyers: G P MEHTA
• Keywords: Revision of order; Assessment record; Condonation of delay
• Section: 143(3); 263

Judgement Text

, , F , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.7205/MUM/2008 ASSESSMENT YEAR: 2005-06 NENNI B UILDERS & DEVELOPERS P. LTD., C/O G.P. MEHTA & CO., CAS 807, TULSIANI CHAMBERS, 212, NARIMAN POINT, MUMBAI-400021 / VS. THE CIT 7 6 TH FLOOR, AAYAKAR BHAVAN, M.K. RD. MUMBAI-20 (REVENUE ) (RESPONDENT ) P.A. NO. AAACN1968K ASSESSEE BY SHRI G.P. MEHTA (AR) REVENUE BY SHRI G.M. DOSS ( CIT - DR) / DATE OF HEARING: 20/07/2016 / DATE OF ORDER: 10/08/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST ORDER OF LD. COMMISSIONER OF INCOME TAX-7, MUMBAI, {(IN S HORT CIT}, DATED 14.10.2008 PASSED U/S 143(3) R.W. SEC TION 263 OF THE ACT, FOR THE A.Y.2005-06 ON THE FOLLOWING GROUN DS: 1.THE REVISIONAL ORDER PASSED U/S.263 OF THE I.T. ACT, 1961, BY THE LEARNED COMMISSIONER OF INCOME TAX, IS BAD IN LAW AND BAD IN FACTS. NANNI BUILERS 2 2.THE REVISIONAL ORDER PASSED U/S.263 IS ABINITIO V OID, IN AS MUCH AS, THE ORIGINAL ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE I. T. ACT, 1961 WAS PASSED AFTER CONSIDERING ALL FACTS AND INFORMATION GATHERED. 3. THE LEARNED CIT HAS ERRED IN HOLDING THAT THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE I. T. ACT , 1961 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE, MERELY ON THE BASIS OF CONJECTURES AND SUR MISES. 4.THE LEARNED CIT HAS GROSSLY ERRED IN HOLDING THAT NO PROPER INQUIRY WAS CONDUCTED BY THE ASSESSING OFFIC ER PRIOR TO PASSING OF ORDER U/S.143(3) OF THE I. T. A CT, 1961 THOUGH THERE IS NOTHING ON RECORD TO SUPPORT HIS CONVICTIONS. 5. HAVING REGARD TO THE FACTS OF THE CASE, PROVISIO NS OF LAW AND JUDICIAL PROPOSITIONS, THE IMPUGNED ORDER PASSE D U/S. 263 OF THE I.T. ACT, 1961, SHOULD NOT HAVE BEEN PAS SED. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI G.P. MEHTA, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI G.M. DOSS, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. DURING COURSE OF HEARING IT WAS NOTED THAT THIS AP PEAL IS FILED LATE BY 5 DAYS. 3.1. WE HAVE HEARD BOTH THE PARTIES TO ANALYSED THE REA SONS FOR FILING THE APPEAL LATE. NO SERIOUS OBJECTIONS H AVE BEEN RAISED BY THE LD. DR FOR CONDONATION OF DELAY AND W E FIND THAT THERE WERE SUFFICIENT REASONS DUE TO WHICH DELAY OC CURRED IN FILING THIS APPEAL. THUS, WE CONDONE THE DELAY OF 5 DAYS AND ADMIT THIS APPEAL FOR ADJUDICATION. 3.2. THE BRIEF FACTS ARE THAT DURING THE YEAR THE ASSES SEE HAD SHOWN INCOME FROM SALE OF LAND AFTER UNDERTAKING DE VELOPMENT OF THE SAID LAND. THE ORIGINAL ASSESSMENT WAS FRAME D BY THE AO U/S 143(3) VIDE ORDER DATED 28.12.2007. SUBSEQUE NTLY, THE CIT PERUSED THE ASSESSMENT RECORDS AND NOTICED THAT THE ORIGINAL ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDI CIAL TO THE NANNI BUILERS 3 INTEREST OF REVENUE IN CERTAIN ASPECTS AND ACCORDIN GLY NOTICE U/S 263 WAS ISSUED ON THE GROUND THAT ASSESSEE HAD PAID COMPENSATION AGGREGATE TO RS.37.50 LAKHS IN THE NAM E OF FOLLOWING PARTIES:- NAME OF THE PARTY AMOUNT 1.M/S. SAIBABA DEVELOPERS- BANGALORE 28,00,000 2. SMT. SHILPA JHAVERI BANGALORE 2,25 ,000 3. SMT. YAKSHA SHAH - BANGALORE 2,25, 000 4.SMT. MAYA SHETH, BANGALORE 2,25,000 5.SMT. SONALI MARWAHA - BANGALORE 2,25,000 6.CAPT. DHEERAJ .BHARGAVA - BANGALORE 25,000 7.DR. PANKAJ BHARGAVA BANGALORE 25,000 37,50,000 3.3 . IT WAS ANALYSED BY THE LD. CIT(A) THAT THE COMPEN SATION WAS CLAIMED TO HAD BEEN PAID TO THESE PARTIES ON TH E GROUND THAT TRANSACTIONS OF SALE OF LAND TO THESE PERSONS WERE CANCELLED. IT WAS FURTHER NOTED THAT THOUGH THE ASS ESSEE HAD SUBMITTED FEW DETAILS DURING THE ASSESSMENT PROCEED INGS, BUT NO EXAMINATION OF THE SAME WAS DONE BY THE AO. THER EAFTER LD CIT POINTED OUT VARIOUS APPARENT FALLACIES IN THE S UBMISSIONS MADE BY THE ASSESSEE FOR JUSTIFYING ITS CLAIM, WHIC H WERE NOT EXAMINED BY THE AO. FINALLY, AFTER TAKING INTO CONS IDERATION REPLY BY THE ASSESSEE, LD. CIT HELD THAT THE ORIGIN AL ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE AND THE SAME WAS SET ASIDE WITH THE DIRE CTION TO PASS A FRESH ASSESSMENT ORDER, AFTER CONDUCTING NEC ESSARY INQUIRIES AND AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO NANNI BUILERS 4 THE ASSESSEE IN RESPECT OF THE ISSUES WHICH WERE CO VERED IN THE REVISION ORDER. 3.4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFO RE THE TRIBUNAL. DURING THE COURSE OF HEARING, LD. COUNSEL SUBMITTED THAT DETAILS IN THIS REGARD WERE PLACED ON THE FILE OF THE AO AND THEREFORE, IT CAN BE PRESUMED THAT AO HAD MADE NECE SSARY INQUIRIES, AND THUS, IT IS AT BEST A CASE OF INSUFF ICIENT ENQUIRY, AND AN ASSESSMENT ORDER CANNOT BE HELD TO BE ERRONE OUS FOR INSUFFICIENT INQUIRIES. 3.5. PER CONTRA, LD. DR SUBMITTED THAT IT IS A CASE OF TOTAL ABSENCE OF INQUIRY ON THE PART OF THE AO QUA IMPUGN ED ISSUES. THE PERUSAL OF ASSESSMENT RECORDS REVEALS THAT ONLY PRIMARY EVIDENCES WERE GIVEN, WHEREAS THERE WERE ALARMING DISCREPANCIES WHICH WERE FLOATING ON THE SURFACED I T AND ANY PERSON OF ORDINARY PRUDENCE WOULD HAVE MADE FURTHER INQUIRIES TO MAKE AT LEAST BASIC EXAMINATION OF THE EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE. IT WAS A CASE OF NON- APPLICATION OF MIND ON THE PART OF THE AO QUA ALL T HE ISSUES AS HAVE BEEN RAISED IN THE ORDER PASSED BY U/S 263. IT WAS FURTHER STATED BY HIM THAT IN ANY CASE, LD CIT HAS MERELY SET ASIDE THE ASSESSMENT ORDER FOR DE-NOVO ASSESSMENT, AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE AND THEREFORE, NO PREJUDICE IS CAUSED TO THE ASSESSEE. IN VIEW OF THESE FACTS, HE REQUESTED FOR UPHOLDING THE ORDER P ASSED U/S 263. 3.6. WE HAVE GONE THROUGH THE ORIGINAL ORDER PASSED BY THE AO, DETAILS/EVIDENCES SHOWN TO US AND ORDER PASSED U/S 263 NANNI BUILERS 5 AND ALSO CONSIDERED THE SUBMISSIONS MADE BY BOTH TH E SIDES BEFORE US. IT IS NOTED FROM THE PAPER BOOK FILED BE FORE US THAT ASSESSEE HAD SUBMITTED TO THE AO, DETAILS OF WORK-I N-PROGRESS, LAND DEVELOPMENT CHARGES AND COMPENSATION PAID VIDE LETTER DATED 17 TH /18 TH DECEMBER 2007. THESE EVIDENCES WERE PLACED ON RECORD BY THE AO AND THEREAFTER ASSESSMENT ORDER WAS PASSED ON 28.12.2007. NOTHING HAS BEEN BROUGHT BEFO RE US BY THE LD. COUNSEL DESPITE OUR SPECIFIC QUERY IN THIS REGARD TO SHOW THAT WHAT QUERIES WERE RAISED BY THE AO IN THI S REGARD. NOTHING WAS BROUGHT BEFORE US TO SHOW ANY APPLICATI ON OF MIND BY THE AO WITH RESPECT TO THE DETAILS SUBMITTE D. ON THE OTHER HAND, LD. CIT HAS MADE THREADBARE ANALYSIS OF THE COMPENSATION CLAIMED TO HAVE BEEN PAID TO EACH OF T HE PARTIES AND POINTED OUT GLARING DISCREPANCIES AND CONTRADIC TIONS IN THE CLAIM MADE BY THE ASSESSEE ON ACCOUNT OF COMPEN SATION CHARGES AND DETAILS/EVIDENCES FILED IN SUPPORT OF T HIS CLAIM. THE ANALYSIS MADE BY THE LD. CIT WITH RESPECT TO IM PUGNED CLAIM IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: M/S. SAL BABA DEVELOPERS :- AS PER THE MEMORANDUM OF UNDERSTANDING DATED 08/08/2000 FOR 1.09 ACRES OF LAND, THE SALE CONSIDERATION PAYABLE IS RS.7.35 LAKHS. IN THE SAID AGREEMENT IT IS STATED THAT THE SUM OF RS.5 LAKHS HAS ALREADY BEEN RECEIVED VIDE CHEQUE NO. 412535 DATED 30/06/2000 DRAWN ON UNION BANK OF INDIA. THE BALANCE CONSIDERATION WAS TO BE PAID WITHIN ONE YEAR FROM T HE DATE OF THE SAID AGREEMENT. THE RELEVANT DEED OF CANCELLATION IS DATED 10/12/2003. IT HAS BEEN STATE D IN THE SAID DEED OF CANCELLATION THAT THE PREVIOUS MEMORANDUM OF UNDERSTANDING DATED 08/08/2000 AND 07/02/2002 SHALL BE CANCELLED ON RECEIVING THE NANNI BUILERS 6 COMPENSATION OF RS.5 LAKHS PER ACRE. AS REGARDS THE AMOUNT RECEIVED FROM M/S. SAI BABA DEVELOPERS, THE DEED OF CANCELLATION CONFIRMS THAT THE PAYMENT OF RS.4.50 LAKHS ONLY HAD BEEN RECEIVED AS UNDER :- 13/11/2002 RS.0,50,000/- 12/06/2003 RS.2,00,000/- 02/09/2003 RS.2,00,000/- TOTAL RS.4,50,000/- THE ASSESSEE HAS AGREED TO RETURN THE SAID AMOUNT OF RS.4.50 LAKHS ALONG WITH COMPENSATION OF RS.6,12,500/-. THUS, THE ASSESSEE WAS TO REFUND THE TOTAL AMOUNT OF RS.10,62,500/- IN ALL AS PER THE SA ID DEED OF CANCELLATION. THE OBVIOUS INCONSISTENCY THU S NOTICED IS THAT THE FACT THAT THE ASSESSEE HAD ALRE ADY PAID A SUM OF RS.5,00,000/- AS PER THE MEMORANDUM OF UNDERSTANDING DATED 08/08/2000 IS NOT FOUND TO B E TRUE AS PER THE DEED OF CANCELLATION DATED 10/12/2003. SECONDLY, THE AMOUNT RECEIVED BY THE ASSESSEE WAS ONLY RS.4.50 LAKHS AND THAT TOO TOWARDS THE END OF 2002 AND IN YEAR 2003 AS STATED ABOVE. HENCE, THE COMPENSATION BEING PAID IS NOT RELATABLE TO THE INTEREST THAT MIGHT HAVE BEEN PAYA BLE 12% BY THE ASSESSEE AND THE RATE OF COMPENSATION FIXED IS ARBITRARY. AS AGAINST THE RATE OF RS.6 LAK HS PER ACRE AT WHICH THE ASSESSEE HAD AGREED TO SALE T HE LAND, THE COMPENSATION IS BEING PAID RS.5 LAKHS PE R ACRE WHICH ON THE FACE OF IT IS UNREASONABLE IN THE GIVEN CIRCUMSTANCES. FURTHER, AS PER THE MEMORANDUM OF UNDERSTANDING DATED 08/08/2000, THE AGREEMENT WAS TO SALE 3.27 ACRES OF LAND TO M/S. SAI BABA DEVELOPERS FOR A SUM OF RS.22.05 LAKHS. IN THE SAID MEMORANDUM, THE ASSESSEE HAS STATED TO HAVE RECEIVED A SUM OF RS.10,000/- BY CHEQUE DATED 08/08/2000. AS PER THE DEED OF CANCELLATION DATED 10/122003, THE ASSESSEE HAD RECEIVED A TOTAL AMOUNT OF RS.12.10 LAKHS AS UNDER :- 30/06/2000 RS.5,00,000/- 04/03/2002 RS. 1,00,000/- NANNI BUILERS 7 04/03/2002 RS. 1,00,000/- 20/07/2002 RS.0,10,000/- 04/08/2002 RS.2,00,000/- 31/10/2002 RS. 1,00,000/- 16/01/2003 RS. 1,00,000/- 26/08/2003 RS.1,00,000L TOTAL RS. 12,10,000/- AS PER THE DEED OF CANCELLATION, THE ASSESSEE AGREED TO PAY COMPENSATION RS.5 LAKHS PER ACRE I.E. TOTAL AMOUNT OF RS.18,37,500/-. THUS, THE ASSESSEE AGREED TO PAY TOTAL AMOUNT OF RS.30,47,500/- TOWARDS REFUND OF THE AMOUNT RECEIVED AS WELL AS THE COMPENSATION. HERE ALSO IT IS SEEN THAT THE AMOUNT OF RS.10,000/- STATED TO HAVE BEEN RECEIVED ON 08/08/2000 AS PER THE MEMORANDUM OF UNDERSTANDING DOES NOT FIND PLACE IN THE DEED OF CANCELLATION. THE PAYMENTS RECEIVED AGAINST THE AGREEMENT OF SALE ARE MOSTLY IN THE YEAR 2002 AND 2003. HERE ALSO, THE BASIS OF COMPENSATION OF RS.5 LAKHS PER ACRE IS NOT BASED ON ANY DEFINITE LOGIC. THE LAST AGREEMENT WITH M/S. SAI BABA DEVELOPERS IS IN RESPECT OF SALE OF 28 GUNTHAS OF LAND. THE AGREEMEN T IS DATED 01.07.2002. THE DEED OF CANCELLATION STATES T HE RATE OF COMPENSATION AT RS.6 LAKHS PER ACRE. AN AMOUNT OF RS.2.60 LAKHS HAD BEEN RECEIVED AS PER THE DEED OF CANCELLATION DATED 10/12/2003 AS UNDER: 08/08/2000 RS.0,10,000/- 06/03/2003 RS.1,00,000/- 31/05/2003 RS. 1,00,000/- 20/11/2003 RS.0,50,000/- TOTAL RS.2,60,000/- THE ASSESSEE AGREED TO PAY THE COMPENSATION @RS.5 LAKHS PER ACRE AND THE TOTAL COMPENSATION PAYABLE WAS AGREED TO BE RS-3.50 LAKHS. THE ASSESSEE WAS TO RETURN THE TOTAL AMOUNT OF RS.6.10 LAKHS INCLUDING THE NANNI BUILERS 8 COMPENSATION AS PER THE AGREEMENT IN THE DEED OF CANCELLATION. THE RATE OF COMPENSATION BEING PAID I N THIS CASE ALSO HAS NO CONNECTION WITH THE INTEREST THAT WOULD HAVE BEEN PAYABLE ON THE AMOUNTS RECEIVED. THE BULK OF THE AMOUNTS RECEIVED AND IN THE YEAR 2003. HENCE, THE PAYMENT OF COMPENSATION WAS ARBITRARY IN THIS CASE ALSO. FROM THE ABOVE DISCUSSION IT IS CLEAR THAT THERE WAS A CASE FOR THE ASSESSING OFFICER TO HAVE EXAMINED THE CIRCUMSTANCES IN WHICH THE ASSESSEE HAD AGREED TO PAY COMPENSATION TO M/S. SAI BABA DEVELOPERS AS PER THE DEEDS OF CANCELLATION AS AFORESAID, THE CREDENTIALS OF M/S. SAI BABA DEVELOP ERS AND TO MAKE FURTHER ENQUIRIES BY ISSUING SUMMONS AND RECORDING THE STATEMENT OF THE PARTNERS OF M/S. SAL BABA DEVELOPERS TO ASCERTAIN THE TRUTH REGARDING THE PAYMENT OF COMPENSATION AT THE RATES AGREED AS PER THE DEEDS OF CANCELLATION. THE CONDUC T OF THE ASSESSEE IN PAYING THE AMOUNT OF COMPENSATIO N AS AGREED TO IS ALSO NOT BASED ON SOUND BUSINESS CONSIDERATIONS. THE REASON FOR CANCELLATION OF AGREEMENTS AS STATED IN THE DEED OF CANCELLATION IS THAT THE PURCHASERS HAD DECIDED NOT TO PROCEED WITH THE PURCHASE OF THE PROPERTY SINCE THE PROJECT HAD BEEN DELAYED. THIS REASON DOES NOT APPEAR TO BE A SOUND REASON FOR THE ASSESSEE TO HAVE PAID SUCH A HEAVY COMPENSATION TO THE PURCHASERS. HENCE, THE TRUTH IN THIS REGARD WAS REQUIRED TO BE FOUND OUT. THE ASSESSING OFFICER HAS ACCEPTED THE FACTS MENTIONED IN THE AGREEMENT WITHOUT MAKING ANY EXTERNAL ENQUIR IES WHICH MAKES THE ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. PAYMENT OF COMPENSATION TO SMT. SHILPA JHAVERI, SMT. YAKSHA SHAH, SMT. MAYA SHETH AND SMT. SONALI MARWAHA :- THE ASSESSEE'S A.R. HAS FILED BEFORE ME THE XEROX COPY OF THE IDENTICAL AGREEMENT TO SALE DATED 26/08/1999 BETWEEN THE ASSESSEE AND THE AFORESAID PERSONS. AS PER THE AGREEMENT, THE AFORESAID PERSON S HAD PAID THE AGGREGATE CONSIDERATION OF RS.8.25 LAK HS EACH FOR THREE PLOTS. THE DETAILS OF PAYMENTS ON DIFFERENT DATES MADE ARE ALSO MENTIONED IN THE NANNI BUILERS 9 AGREEMENT. THE AGREEMENT OF CANCELLATION IS DATED 05/07/2004 BETWEEN THE AFORESAID PERSONS AND THE ASSESSEE. THE AGREEMENT STARTS WITH THE WORDS ' ..AND WERE AS THE FIRST PARTY HAS ERRONEOUSLY EXECU TED AND REGISTERED AND IN FACT THE PURCHASER THEREIN AN D (THE FIRST PARTY HEREIN) NEVER DESIRED OF EXECUTING THE SALE DEEDS DATED 2211212001 AND ACQUIRING ANY RIGHTS UNDER THE SCHEDULE PROPERTY THEREIN AND SHE HAS NOT TAKEN THE POSSESSION OF THE SCHEDULE PROPER TY OR PORTION THEREFORE AND WHEREAS IT/S THEREFORE NECESSARY TO CANCEL THE AGREEMENT TO SELL DATED 26/08/1999 DECIDED NOT TO PROCEED FURTHER SINCE THE PROJECT HAS BEEN DELAYED AND HAS AGREED TO CANCEL THE AGREEMENT DATED 26/08/1999 ON RECEIVING A COMPENSATION OF RS.75,000/- (RUPEES SEVENTY FIVE THOUSAND ONLY) PER PLOT, TOTALING TO RS.2,25,000/- (RUPEES TWO LAKHS TWENTY FIVE THOUSAND ONLY)....... FROM THIS AGREEMENT OF CANCELLATION, IT IS CLEAR TH AT IT IS THE PURCHASERS WHO HAD ERRONEOUSLY EXECUTED THE SALE DEEDS DATED 22/10/2001 AND WHICH THEY NEVER DESIRED OF EXECUTING. UNDER THESE CIRCUMSTANCES, TH E RATIONALE OF PAYING COMPENSATION BY THE ASSESSEE IS QUESTIONABLE. THIS ASPECT WAS NOT EXAMINED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS . THE ASSESSEE'S A.R. HAS ALSO PRODUCED BEFORE ME THE COPY OF THE DEED OF SALE EXECUTED ON 22/12/2001. IT IS ABSOLUTE DEED OF SALE TO THE ASSESSEE UNDER WHICH THE PURCHASER HAD DELIVERED ALL THE COPIES OF TITLE. THIS SALE DEED IS IN RESPECT OF THE SINGLE P LOT OF LAND FOR WHICH SALE CONSIDERATION OF RS.2,75,000/- HAD BEEN PAID AND NOTHING ELSE WAS PAYABLE TO THE ASSESSEE BY THE PURCHASER. THE DEED OF SALE IS IDENTICAL IN RESPECT OF THE REMAINING PLOTS OF LAND WHICH FIND PLACE IN THE AGREEMENT TO SALE DATED 26/08/1999. THE AGREEMENT TO SALE IN RESPECT OF THE REMAINING THREE PERSONS ALONG WITH THE TERMS AND CONDITIONS ARE IDENTICAL AND NEED NOT BE REPEATED. IT IS NEEDLESS TO SAY THAT THE RATIONALE OF PAYING COMPENSATION IN SUCH A CIRCUMSTANCE WAS NEVER EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. CAPT. DHEERAJ BHARGAVA & DR. PANKAJ BHARGAVA:- NANNI BUILERS 10 THESE PERSONS HAVE BEEN PAID COMPENSATION OF RS.25,000/- EACH. THE ASSESSEES A.R. HAS PRODUCED THE COPY OF DEED OF CANCELLATION DATED 22/09/2004 IN TH ESE CASES. THE REASON FOR CANCELLATION OF AGREEMENT DAT ED 15/12/2000 IS AGAIN STATED TO BE DELAY IN THE PROJECT. THESE PERSONS PAID ONLY RS.25,000/- AGAINST PURCHASE OF THE SITE AS MENTIONED. THE GENUINENESS AND THE REASONS FOR PAYMENTS OF COMPENSATION NEEDED TO BE EXAMINED BY THE ASSESSING OFFICER WHICH WAS NOT DONE. IN VIEW OF THE ABOVE, THE ENTIRE AMOUNT OF COMPENSATION OF RS.37.50 LAKHS PAID BY THE ASSESSEE WAS NEEDED TO BE EXAMINED AND NECESSARY ENQUIRIES CONDUCTED WHICH WAS NOT DONE BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3.7. SIMILARLY, WITH REGARD TO TRAVELING EXPENSES ALSO, LD. CIT(A) POINTED OUT FOLLOWING DISCREPANCIES AND CONT RADICTIONS: (III) TRAVELLING EXPENSES: - IN THE SHOW CAUSE NOTICE U/S.263, THE ISSUE RELATIN G TO TRAVEL EXPENSES OF RS.4,02,521/- HAD BEEN RAISED. I N REPLY THE ASSESSEE'S A.R. HAS STATED THAT THE ASSESSING OFFICER HAS ALREADY DISALLOWED FOREIGN TRAVEL EXPENSES OF A DIRECTOR AMOUNTING TO RS.1,10,414/-. THE BALANCE AMOUNT OF RS.2,92,107/- IS STATED TO BE ATTRIBUTABLE TO DOMESTIC TRAVEL UNDERTAKEN BY THE DIRECTORS OF THE COMPANY FOR THE PURPOSE OF BUSINESS OF THE COMPANY. THE REPLY GIVEN IS GENERAL. APART FROM THE VISIT TO MUMBAI AN D BANGALORE WHICH ARE THE PLACES OF BUSINESS, THE EXPENSES DEBITED ARE FOR VISIT TO DELHI AND CHENNAI ALSO. THE ASSESSING OFFICER SHOULD HAVE EXAMINED WHETHER THE EXPENSES WERE ACTUALLY INCURRED FOR BUSINESS PURPOSES. 3.8. IT IS NOTED BY US THAT PERUSAL OF THE ASSESSMENT R ECORDS ALONG WITH ORIGINAL ASSESSMENT ORDER REVEALS THAT T HERE HAS NOT BEEN ANY APPLICATION OF MIND ON THE PART OF AO. NOT HING HAS BEEN SHOWN TO US IF ANY QUERIES WERE RAISED BY THE AO IN THIS NANNI BUILERS 11 REGARD, DESPITE THE FACT THAT THERE WERE NUMEROUS DISCREPANCIES AS HAVE BEEN POINTED OUT BY LD. CIT, FOR WHICH NO ANSWERS WERE AVAILABLE ON RECORD. IT APPEARS THA T ASSESSMENT ORDER HAS BEEN PASSED IN A HIGHLY CASUAL MANNER WITHOUT GOING INTO THE FACTS AT ALL. IT IS APPARENT LY A CASE OF ABSENCE OF INQUIRY. UNDER THESE CIRCUMSTANCES, WE F IND ORIGINAL ASSESSMENT ORDER TO BE ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF REVENUE SINCE THE CIT HAS BEEN ABLE TO SHOW SERIOUS DOUBTS ON THE ALLOWABILITY OF THE CLAIM MAD E BY THE ASSESSEE. DESPITE THAT, THE CLAIM WAS NOT DISALLOWE D BY LD. CIT AND HE HAS ONLY GIVEN DIRECTION TO THE AO TO PA SS AFRESH ASSESSMENT ORDER AFTER CONDUCTING NECESSARY INQUIRE S AS INDICATED BY THE CIT IN THE REVISION ORDER AND AFTE R GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE FOL LOWING THE PRINCIPLES OF NATURE JUSTICE. WE DO NOT FIND ANY NE ED OR JUSTIFICATION TO INTERFERE IN THE REVISION ORDER PA SSED BY THE LD. CIT AND THEREFORE, SAME IS UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH AUGUST, 2016. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; # DATED : 10/08/2016 CTX? P.S/. .. NANNI BUILERS 12 #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. % &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. * * ( % ) / THE CIT, MUMBAI. 4. * * / CIT(A)- , MUMBAI 5. -. / (01 , * % 012 , / DR, ITAT, MUMBAI 6. / 34 5 / GUARD FILE. / BY ORDER, ) -% ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI