M/s Noorani Properties Ltd., V. CIT,

ITA 742/BANG/2013

• Counselvise Citation: 74221114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 28-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 21-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRISCILLA SINGSIT
• Assessee Lawyers: DR C P RAMASWAMI
• Keywords: Capital asset; Revision of order; Cost of acquisition; Revenue expenditure; Capital expenditure
• Section: 143(3); 263

Judgement Text

ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 1 OF 10 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.742/BANG/2013 (ASSESSMENT YEAR:2008-09) M/S NOORANI PROPERTIES PRIVATE LIMITED APARANTA NO.2208, 80FEET ROAD, HAL 3 RD STAGE, KODIHALLI, BANGALORE 560008 PAN: AAACN 5905 C/NA 299 VS. COMMISSIONER OF INCOME TAX, BANGALORE-III BANGALORE (APPELLANT) (RESPONDENT) ASSESSEE BY: DR.C.P.RAMASWAMI, ADVOCATE DEPARTMENT BY: MS. PRISCILLA SING SIT, (DR) DATE OF HEARING: 28/10/2014 DATE OF PRONOUNCEMENT: 28/10/2014 O R D E R PER RAJPAL YADAV, J.M. AGGRIEVED WITH THE ORDER OF THE LEARNED COMMISSIONE R, DATED 31.03.2013 PASSED U/S 263 OF THE INCOME TAX A CT, THE ASSESSEE IS IN APPEAL BEFORE US IN ASSESSMENT YEAR 2008-09. THOUGH THE ASSESSEE HAS TAKEN EIGHT GROUNDS OF APPE AL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY IT HAS PLEADED THAT THE LEARNED COMMISSIONER HAS ERRED IN TAKING C OGNIZANCE U/S 263 OF THE INCOME TAX ACT AND SETTING ASIDE THE ASSESSMENT ORDER DATED 31.10.2010 PASSED U/S 143(3) OF THE INC OME TAX ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 26.09.2008. IT HAS REVISED THE RETURN OF ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 2 OF 10 INCOME ON 4.3.2009 DECLARING A TOTAL INCOME OF RS.8 ,50,65,890/. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE U/S 143(2) WAS ISSUED ON 31.08.2009. O N SCRUTINY OF THE ACCOUNTS IT REVEALED THAT THE ASSESSEE HAS D ISCLOSED THE CAPITAL GAIN ON SALE OF A PROPERTY MEASURING 4 ACRE S 1 GUNTAS COMPRISED IN SURVEY NO.163 AND 113/1 AT PATTANDUR A GRAHARA, K.R. PURAM HOBLI, BANGALORE WHICH WAS PURCHASED FRO M ONE MR. NAGINBHAI PATEL. THE PROPERTY WAS TRASNFERRED TO IT C VIDE SALE DEED DATED 29.08.2007. WHILE COMPUTING THE CAPITAL GAIN, THE ASSESSEE HAS REDUCED A SUM OF RS.22.00 LAKHS FROM S ALE CONSIDERATION AND INCLUDED IT IN THE COST OF ACQUIS ITION. ACCORDING TO THE ASSESSEE SHRI MARIAPPA AND OTHERS HAVE FILED A CIVIL SUIT BEARING NO.05/507/2001 AGAINST MR.NAGINB HAI PATEL AS WELL AS THE ASSESSEE. IN THE CIVIL SUIT, A RELIEF W AS CLAIMED THAT PLAINTIFF BE DECLARED AS ABSOLUTE OWNER AND IN POSS ESSION OF THE SIUT PROPERTY; ALTERNATIVELY IT WAS CLAIMED THAT IF THE LEARNED CIVIL COURT ARRIVED AT A CONCLUSION THAT THE PLAINTIFFS A RE NOT IN POSSESSION OF THE SUIT PROPERTY, THEN A DECREE BE P ASSED TO HAND OVER THE POSSESSION TO THE PLAINTIFF. THIS CIVIL SU IT WAS RESOLVED BY AN AMICABLE SETTLEMENT AND A SUM OF RS.22.00 LAKHS WAS PAID TO MR. KRISHNAPPA FAMILY. THE SCHEDULE OF PAYMENT AND DD NOS. ARE BEING MENTIONED IN THE MEMORANDUM OF SETTLEMENT . ACCORDING TO THE ASSESSEE A TOTAL SUM OF RS.22.00 L AKHS WAS PAID, RS.16.00 LAKHS WAS PAID IN FINANCIAL YEAR 200 5-06 AND RS.6.50 LAKHS WAS PAID IN FINANCIAL YEAR 2006-07. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE LEARNED ASSESS ING OFFICER HAS EXAMIEND THE DETAILS OF THE COST OF ACQUISITION AND COST OF IMPROVEMENT. HE DIRECTED THE ASSESSEE TO SUBMIT THE BREAK-UP OF THE COST OF ACQUISITION/IMPROVEMENT. THE ASSESSEE H AS ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 3 OF 10 SUBMITTED THE DETAILS. ASSESSING OFFICER HAS ACCEPT ED THE CONTENTION OF THE ASSESSEE, QUA, RS.22,50,000/- ALL EGED TO BE PAID IN VIEW OF THE SETTLEMENT BETWEEN KRISHNAPPA F AMILY, MR. N.B PATEL AND THE ASSESSEE. 3. THE LEARNED COMMISSIONER AFTER GOING THROUGH THE RECORD ARRIVED AT A CONCLUSION THAT PAYMENTS MADE FOR IMPR OVING THE TITLE IN THE PROPERTY IS NOT TO BE CONSIDERED AS CO ST OF IMPROVEMENT OR COST OF ACQUISITION. FOR BUTTERESSIN G HIS CONCLUSION, HE MADE REFERENCE TO THE DECISION OF TH E HON'BLE MADRAS HIGH COURT IN THE CAS OF CIT VS. V. INDIRA R EPORTED IN 119 ITR 837 (MAD). HE FURTHER FORMED A BELIEF THAT THE ASSESSING OFFICER FAILED TO CONDUCT A PROPER INQUIRY BEFORE A LLOWING THE SUM OF RS.22.50 LAKHS AS COST OF IMPROVEMENT. HENCE HE ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE U/S 263 OF THE IN COME TAX ACT AND DIRECTED THE ASSESSEE TO EXPLAIN AS TO WHY THE ASSESSMENT ORDER BE NOT TREATED AS ERRONEOUS AS WELL AS PREJUD ICIAL TO THE INTERESTS OF THE REVENUE. A COPY OF THE SHOW CAUSE NOTICE HAS BEEN PLACED ON RECORD BY THE ASSESSEE AND AVAILABLE ON PAGE NOS. 1 & 2 OF THE PAPER BOOK. IN RESPONSE TO THE SHOW CA USE NOTICE, THE ASSESSEE SUBMITED A REPLY AND CONTENDED THAT TH E DISPUTED CAPITAL ASSET WAS PURCHASED FROM MR. N.B. PATEL. JO INT AGREEMENT FOR DEVELOPMENT OF THE LAND WAS EXECUTED BY THE ASSESSEE WITH M/S TRIAD RESORT AND HOTELS PVT. LTD AND VERDE DEVELOPERS PVT LTD. BECAUSE OF THE LITIGATION, IT W AS DIFFICULT FOR THE ASSESSEE TO UTILISE THE LAND OPTIMALLY. IN ORDE R TO ELIMINATE THE ENCUMBRANCE ON THE PROPERTY, THE ASSESSEE BEING THE DEFENDANT NO.2 IN THE CIVIL SUIT RESOLVED THE DISPU TE BY AMICABLE MEANS AND PAID A SUM OF RS.22.50 LAKHS TO THE PLAIN TIFF. THE ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 4 OF 10 AMOUNT WAS SHOWN AS AN ADVANCE TO THE VENDEE OF THE ASSESSEE NAMELY MR. N.B. PATEL, BECAUSE IT WILL ULTIMATELY B ECOME THE COST OF THE PROPERTY. IT WAS ALSO SUBMITTED THAT THE HON 'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. SHAKUNTALA KANTI LAL REPORTED IN 190 ITR 56 HAS HELD THAT REMOVING OF ENCUMBRANCE OVER THE PROPERTY WOULD CONSTITUTE IMPROVEMENT AS WELL AS WO ULD BE CONSIDERED AS PART OF ACQUISITION COST. THE ASSESSE E FURTHER RELIED UPON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ABRAR ALVI REPORTED IN 247 ITR 312. WITH REGARD TO THE CONTENTION OF THE LEARNED CIT THAT NO PROPER INQUIR Y WAS CONDUCTED BY THE ASSESSING OFFICER, IT WAS CONTENDE D THAT THE ASSESSEE HAS SUBMITED ORDERSHEET ENTRIES IN THE CIV IL SUIT PROCEEDINGS, SETTLEMENT DEED, AFFIDAVIT OF THE PLAI NTIFF, DETAILS OF PAYMENTS, AND COPY OF THE DECREE SHEET EXHIBITING T HE PAYMENT OF RS.22.50 LAKHS AND THE DETAILS OF THE DD NOS. TH E ASSESSING OFFICER HAS RECOGNISED FILING OF THESE DOCUMENTS IN PARAGRAPHS NO.4.2 OF THE ASSESSMENT ORDER. THE ASSESSING OFFIC ER HAS CONSIDERED THIS MATERIAL IN PARAGRAPH NO.4.4, WHERE IN HE MADE A REFERENCE OF RS.7.00 LAKHS INCURRED BY THE ASSESSEE ON SUIT SETTLEMENT. THE LEARNED COMMISSINOER WAS NOT SATISF IED WITH THE EXPLANATION OF THE ASSESSEE AND HE SET ASIDE THE AS SESSMENT ORDER DIRECTING THE ASSESSING OFFICER TO PASS A DE NOVA ORDER AFTER CONSIDERING THE DISALLOWANCE OF INDEXED VALUE OF PA YMENT OF RS.16.00 LAKHS AND RS.6.50 LAKHS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER OF THE COMMISSIONER TOOK US THROUGH THE SETTL EMENT DEED, DETAILS OF ORDER SHEET ENTRIES AND APPRAISED US THE CIRCUMSTANCES UNDER WHICH THE PAYMENT WAS MADE. HE POINTED OUT TH AT THE ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 5 OF 10 LEARNED COMMISSIONER HAS PUT RELIANCE UPON THE DECI SION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. V. INDIRA (SUPRA). IN THAT CASE THE PAYMENT WAS MADE WITH REG ARD TO ESTATE DUTY. IN THAT CONTEXT THE HON'BLE MADRAS HIGH COURT HAS HELD THAT IT IS NOT THE COST OF IMPROVEMENT. HE FURTHER CONTENDED THAT ONCE THE ASSESSING OFFICER HAS TAKEN A VIEW WHICH I S ONE OF THE POSSIBLE VIEW IN LAW, THE LEARNED CIT HAS NO JURISD ICTION TO SET ASIDE THE ASSESSMENT ORDER. HE FURTHER CONTENDED TH AT THE ASSESSING OFFICER HAS CONDUCTED INQUIRY, COLLECTED THE MATERIAL, MADE A DISCUSSION WITH THE A.R AND ONLY THEREAFTER ACCEPTED THE CLAIM. IT IS EXPLICITLY CLEAR FROM THE READING OF T HE ASSESSMENT ORDER. THE LEARNED COUNSEL SPECIFICALLY TOOK US THR OUGH PARAGRAPH NO.4 ONWARDS. ON THE OTHER HAND, THE LEAR NED DR RELIED UPON THE ORDER OF THE CIT. SHE TOOK US THROU GH PARAGRAPH NOS. 5 & 6 OF THE IMPUGNED ORDER. ACCORDING TO THE LEARNED CIT (DR), THE LEARNED CIT HAS OBSERVED THAT EVEN IF THE ASSESSEE WAS ABLE TO DEMONSTRATE THE PAYMENTS TO THE PLAINTIFF, THEN ALSO THESE COULD NOT BE CONSIDERED AS PART OF ACQUISITION COST OR IMPROVEMENT. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD. THE ITAT IN THE CASE OF MRS. KH ATIZA S. OOMERBHOY VS. ITO, MUMBAI, 101 TTJ 1095, ANALYZED I N DETAIL VARIOUS AUTHORITATIVE PRONOUNCEMENTS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIES 243 ITR 83 AND HAS PROPOUNDED THE FOLLOWING BROADER PRI NCIPLE TO JUDGE THE ACTION OF CIT TAKEN UNDER SECTION 263. ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 6 OF 10 (I) THE CIT MUST RECORD SATISFACTION THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BOTH THE CONDITIONS MUST BE FULFILLED. (II) SEC. 263 CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE AO AND IT WAS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SUFFICE THE REQUIREMENT OF ORDER BEING ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION OF MIND, SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND IF THE AO HAS ADOPTED ONE OF THE COURSES PERMISSIBLE UNDER LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE. IF CANNOT BE TREATED AS AN ERRONEOUS ORDER, UNLESS THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE UNDER LAW (VI) IF WHILE MAKING THE ASSESSMENT, THE AO EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINE THE INCOME, THE CIT, WHILE EXERCISING HIS POWER UNDER S 263 IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME IN PLACE OF THE INCOME ESTIMATED BY THE AO. (VII) THE AO EXERCISES QUASI-JUDICIAL POWER VESTED IN HIS AND IF HE EXERCISES SUCH POWER IN ACCORDANCE WITH LAW AND ARRIVE AT A CONCLUSION, SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE CIT DOES NOT FEE STRATIFIED WITH THE CONCLUSION. (VIII) THE CIT, BEFORE EXERCISING HIS JURISDICTION UNDER S. 263 MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 7 OF 10 (IX) IF THE AO HAS MADE ENQUIRIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND THE ASSESSEE HAS GIVEN DETAILED EXPLANATION BY A LETTER IN WRITING AND THE AO ALLOWS THE CLAIM ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE DECISION OF THE AO CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DOES NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. 6. APART FROM THE ABOVE PRINCIPLES, WE DEEM IT APPR OPRIATE TO MAKE REFERENCE TO THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUN BEAM AUTO REPORTED IN 227 C TR 113 WHEREIN THE HON'BLE HIGH COURT HAS POINTED OUT A DI STINCTION BETWEEN LACK OF INQUIRY AND INADEQUATE INQUIRY. IF THERE IS A LACK OF ENQUIRY, THEN THE ASSESSMENT ORDER CAN BE BRANDE D AS ERRONEOUS. THE FOLLOWING OBSERVATIONS OF THE HON'BL E DELHI HIGH COURT ARE WORTH TO NOTE: 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE COUNSEL ON THE OTHER SIDE AND HAVE GONE THROUGH THE RECORDS. THE FIRST ISSUE THAT ARISES FO R OUR CONSIDERATION IS ABOUT THE EXERCISE OF POWER BY THE COMMISSIONER OF INCOME-TAX UNDER SECTION 263 OF THE INCOME-TAX ACT. AS NOTED ABOVE, THE SUBMISSION OF LEARNED COUNSEL FOR THE REVENUE WAS THAT WHILE PASSING THE ASSESSMENT ORDER, THE ASSESSING OFFICER DID NOT CONSIDER THIS ASPECT SPECIFICALLY WHETHER THE EXPENDITURE IN QUESTION WAS REVENUE OR CAPITAL EXPENDITURE. THIS ARGUMENT PREDICATES ON THE ASSESSMENT ORDER WHICH APPARENTLY DOES NOT GIVE ANY REASONS WHILE ALLOWING THE ENTIRE EXPENDITURE AS REVENUE EXPENDITURE. HOWEVER, THAT BY ITSELF WOULD NOT BE INDICATIVE OF THE FACT THAT THE ASSESSING OFFICER H AD NOT APPLIED HIS MIND ON THE ISSUE. THERE ARE JUDGMENTS GALORE LAYING DOWN THE PRINCIPLE THAT THE ASSESSING OFFICER IN THE ASSESSMENT ORDER IS NOT REQUIRED TO GIVE DETAILED REASON IN RESPECT OF EACH ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 8 OF 10 AND EVERY ITEM OF DEDUCTION, ETC. THEREFORE, ONE HA S TO SEE FROM THE RECORD AS TO WHETHER THERE WAS APPLICATION OF MIND BEFORE ALLOWING THE EXPENDITURE IN QUESTION AS REVENUE EXPENDITURE. LEARNED COUNSEL FOR THE ASSESSEE IS RIGHT IN HIS SUBMISSION THAT ONE HAS TO KEEP IN MIND THE DISTINCTION BETWEEN LACK OF INQUIRY AND INADEQUATE INQUIRY. IF THERE WAS ANY INQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF, GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SECTION 263 OF THE ACT, MERELY BECAUSE HE HAS DIFFERENT OPINION IN THE MATTER. IT IS ONLY IN CASES OF LACK OF INQUIRY , THAT SUCH A COURSE OF ACTION WOULD BE OPEN. 7. THE HON'BLE DELHI HIGH COURT IN THE CASE OF GEE VEE ENTERPRISES VS. ADDL. CIT & ORS. (1975) 99 ITR 375 (DEL . ) HAS PROPOUNDED THE ROLE REQUIRED TO BE PLAYED BY THE AS SESSING OFFICER. THE REASON IS OBVIOUS. THE POSITION AND FUNCTION O F THE INCOME TAX OFFICER IS VERY DIFFERENT FROM THAT OF A CIVIL COURT. THE STATEMENTS MADE IN A PLEADING PRO VED BY THE MINIMUM AMOUNT OF EVIDENCE MAY HE ACCEPTED BY A CIVIL COURT IN THE ABSENCE OF ANY REBUTTAL. TH E CIVIL COURT IS NEUTRAL. IT SIMPLY GIVES DECISION ON THE B ASIS OF THE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. TH E INCOME TAX OFFICER IS NOT ONLY AN ADJUDICATOR BUT A LSO AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FA CE OF A RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER INQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TR UTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANC ES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. THE MEANING TO BE GIVEN TO THE WORD 'ERRONEOUS' IN SECT ION 263 EMERGES OUT OF THIS CONTRACT. IT IS BECAUSE IT IS INCUMBENT ON THE INCOME TAX OFFICER TO FURTHER INVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES WOULD MAKE SUCH AN INQUIRY PRUDENT THAT THE WORD 'ERRONEOUS' IN SECTION 263 INCLUDES T HE FAILURE TO MAKE SUCH AN INQUIRY. THE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN INQUIRY HAS NOT BEEN MADE AND NOT BECAUSE THERE IS ANY THING WRONG WITH THE ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 9 OF 10 ORDER IF ALL THE FACTS STATED THEREIN ARE ASSUMED T O BE CORRECT. 8. IN THE LIGHT OF THE ABOVE, LET US CONSIDER THE F ACTS OF THE PRESENT CASE. ON PERUAL OF THE PARA 5 OF THE CITS ORDER, IT REVEALS THAT THE LEARNED CIT HAS SET ASIDE THE ASSESSMENT O RDER FOR TWO REASONS. HIS FIRST REASONING IS THAT IMPROVEMENT IN THE TITLE OF THE PROPERTY COULD NOT BE CONSIDERED AS IMPROVEMENT IN THE ASSET. FOR BUTTERESSING HIS CONCLUSION, HE PUT RELIANCE ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT. IN HIS SECOND REA SONING, HE OBSERVED THAT PROPER INQUIRY WAS NOT CONDUCTED. A P ERUSAL OF THE ASSESSMENT ORDER SUGGEST THAT THE ASSESSING OFFICER HAS COLLECTED ALL THE DETAILS WITH REGARD TO THIS ISSUE . THOUGH A SPECIFIC DISCUSSION ABOUT ALLOWABILITY OF THESE EXP ENSES IS NOT DISCERNIBLE, BUT THE ASSESSMENT ORDER DISCLOSES THA T THE ASSESSING OFFICER HAS APPLIED HIS MIND ON THE DETAI LS. IF ASSESSING OFFICER HAS ACCEPTED THE ACCOUNTING ENTRI ES AS IT IS WITHOUT APPLICATION OF MIND, THEN PROBABLY THE LEAR NED COMMISSIONER WOULD BE JUSTIFIED IN DIRECTING THE AS SESSMENT ORDER AS ERRONEOUS. BUT THERE CANNOT BE ANY YARDSTI CK TO SUGGEST THAT WHAT COULD BE THE PROPER INQUIRY. IT IS A VERY SUBJECTIVE ISSUE. IT IS DIRECTLY RELATED WITH THE SATISFACTION OF THE ADJUDICATOR FOR A PARTICULAR ANGLE. AFTER GOING THROUGH THE DE TAILS, THE ASSESSING OFFICER WAS SATISFIED THAT THE CLAIM OF T HE ASSESSEE IS ACCEPTABLE. HE ACCEPTED IN THE ASSESSMENT ORDER. TH US IT IS NOT A CASE OF LACK OF INQUIRY AND INSUFFICIENCY OF INQUIR Y CANNOT BE THE MAIN REASON FOR TERMING THE ASSESSMENT ORDER AS ERR ONEOUS. AS FAR AS THE SECOND REASON IS CONSIDERED, WE FIND THA T THE HON'BLE BOMBAY HIGH COURT HAS CONSIDERED THE EXPENSES INCUR RED IN REMOVING ENCUMBRANCE AS AN EXPENSES INCURRED FOR ITA NO.742 OF 2013 NOORANI PROPERTIES PVT LTD BANGA LORE PAGE 10 OF 10 IMPROVEMENT. IT IS RELATABLE TO ACQUISITION OF ASSE T. IF AN ISSUE IS DEBATABLE ON THE STRENGTH OF THE DECISION OF THE TW O HON'BLE HIGH COURTS AND THERE IS NO DECISION FROM THE HON'BLE SU PREME COURT OR OF THE HON'BLE JURISDICTIONAL HIGH COURT, THEN T HE VIEW TAKEN BY THE ASSESSING OFFICER IS A POSSIBLE VIEW, IT CAN NOT BE INTERFERED IN 263 PROCEEDINGS, MERELY ON THE GROUND THAT SUCH A VIEW DOES NOT MATCH WITH THE VIEW OF THE LEARNED COMMISSIONER . THEREFORE, IN VIEW OF THE ABOVE DISCUSSIONS, WE ARE OF THE VIE W THAT THE ORDER OF THE LEARNED COMMISSIOENR IS NOT SUSTAINABLE AND HENCE QUASHED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2014. SD/- SD/- (JASON P. BOAZ) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 28 TH OCTOBER, 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE