Shri Abhimanyu Gupta, Patiala V. Pr. CIT, Patiala

ITA 771/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4890 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 09-01-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 04-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR GULSHAN RAJ
• Keywords: Capital asset; Principle of natural justice; Corroborative evidences; Assessment record
• Section: 143(3); 54F; 142(1); 133(6); 263; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISIN BENCH A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 SHRI ABHIMANYU GUPTA VS. PR. CIT # 62-B, MODEL TOWN PATIALA PATIALA PAN NO. ADVPG4335J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TEJ MOHAN SINGH REVENUE BY : DR. GULSHAN RAJ DATE OF HEARING : 09/01/2018 DATE OF PRONOUNCEMENT : 09/04/2018 ORDER PER DIVA SINGH, J.M. THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 29/03/2017 OF PR.CIT, PATIALA PERTA INING TO 2012 13 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT HAS WRONGLY ASSUMED JURISDICTION U NDER SECTION 263 OF THE ACT TO SET ASIDE THE ASSESSMENT ORDER DATED 27/03/2015 PASSED BY THE ASSESSING OFFICER IN AS MUCH AS THE ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO T HE INTEREST OF REVENUE AND AS SUCH THE ASSUMPTION OF JURISDICTION UNDER SECTION 263 OF THE ACT IS BEYOND HIS COMPETENCE. 2. THAT THE ASSESSMENT ORDER HAVING BEEN PASSED BY THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND AND TAKING INTO CONSIDERATION T HE VARIOUS REPLIES, MATERIAL ON RECORD AND BOOKS OF ACCOUNT, THE ACTION RESTORED TO BY THE CIT IS UNWARRANTED AND UNCALLED FOR. 2. THE LD. AR INVITING ATTENTION TO THE IMPUGNED OR DER SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE THE SAID ORDER IS BAD IN LAW IN VIEW OF THE FACT THAT ON EACH OF THE ISSUES ADDRESSED BY THE PR.CIT THE ASSE SSING OFFICER ADMITTEDLY AS PER FACTS AS RECORDED IN THE IMPUGNED ORDER ITSELF HAS CARRIED OUT COMPLETE ENQUIRIES. IT WAS HIS SUBMISSION THAT QUERIES ON TH E ISSUES HAVE BEEN RAISED BY THE AO IN THE 143(3) PROCEEDINGS AND THEY HAVE BEEN REP LIED TO. CONSIDERING THE SUBMISSIONS AND THE REPLY THE ASSESSMENT ORDER WHER EIN A GP ADDITION BASED ON ESTIMATES IS MADE IS SOUGHT TO BE REVISED. REFERRIN G TO THE RECORD IT WAS SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 2 SUBMITTED THAT WHEN THE SHOW CAUSE NOTICE ISSUED BY THE PR.CIT IS CONSIDERED IN TOTO WOULD BE EVIDENT THAT SIMILAR REPLY HAD BEEN G IVEN TO THE PR.CIT NAMELY THAT THE ISSUES HAVE BEEN COMPLETELY ENQUIRED INTO AND CONSIDERED. IN THE SAID CIRCUMSTANCES IT WAS SUBMITTED THE PR.CIT OUGHT TO HAVE POINTED OUT THE ERROR WHICH WAS NOTED BY HIM WHICH WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE WHICH HAS NOT BEEN DONE. ACCORDINGLY THE DECISION O F THE PR.CIT IN REVISING THE ASSESSMENT ORDER PASSED IT WAS SUBMITTED IS CONTRAR Y TO LAW AND FACTS. CARRYING US THROUGH THE DETAILED SHOW CAUSE NOTICE WHICH HAS BEEN REPRODUCED IN THE IMPUGNED ORDER ITSELF IT WAS SUBMITTED THAT A PERUS AL OF THE SAME WOULD SHOW THAT THE PR.CIT IS AWARE THAT THE ISSUES HAVE BEEN ENQUIRED INTO. THE REPLY OF THE ASSESSEE IS ALSO REPRODUCED IN THE IMPUGNED ORDER I TSELF WHICH AGAIN WOULD DEMONSTRATE THAT THE ASSESSEE HAS VEHEMENTLY SUBMIT TED THAT ALL THESE ISSUES WHICH HAVE BEEN REFERRED TO HAVE ALREADY BEEN ENQUI RED INTO BY THE AO. CARRYING US THE DETAILED REPLY BEFORE THE ASSESSING OFFICER AND THE PR.CIT IT WAS HIS SUBMISSION THAT IN THE FACTS AS AVAILABLE ON RE CORD THE IMPUGNED ORDER MAY BE QUASHED. RELIANCE WAS PLACED UPON THE DECISION O F THE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES CO. LTD. VS. CIT [24 3 ITR 831. RELIANCE WAS ALSO PLACED UPON THE DECISION OF HONBLE BOMBAY HIGH COU RT IN CASE OF CIT VS. FINE JEWELLERY (INDIA) LTD. [372 ITR 303]. ATTENTION WAS ALSO INVITED TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DIT VS. JYOTI FOUNDATION 357 ITR 388 FOR THE PROPOSITION THAT IN CASE THE REVIEWING AUTH ORITY IS OF THE VIEW THAT THERE IS INADEQUATE ENQUIRY THEN THE REVIEWING AUTHORITY MUS T MAKE ENQUIRY AND SHOW THAT THE ASSESSMENT ORDER IS ERRONEOUS. REVIEWING A UTHORITY IT WAS SUBMITTED HAS NO AUTHORITY TO REMAND. THE SCOPE OF REVISION IT WA S SUBMITTED WAS SUBJECT TO THE PR.CIT DEMONSTRATING THAT THE ENQUIRY WAS INADE QUATE. THE PR.CIT IT WAS SUBMITTED WAS BOUND TO GIVE HIS OWN FINDING WHICH H AS NOT BEEN DONE. SIMILAR PROPOSITION OF LAW IT WAS SUBMITTED HAS BEEN LAID D OWN BY THE DELHI HIGH COURT IN YET ANOTHER CASE I.E; IN THE CASE OF CIT VS. SU NBEAM AUTO LTD. 332 ITR 167. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ASSESSME NT ORDER PASSED IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. 2.1 INVITING ATTENTION TO THE PAPER BOOK FILED ON F ACTS IT WAS SUBMITTED THAT THE REPLY OF THE ASSESSEE BEFORE THE ASSESSING OFFI CER DATED 31/10/2014 IS PLACED AT PAGES 1 TO 2. THE SUBMISSIONS WERE SUPPORTED BY THE COPIES OF CONFIRMED SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 3 ACCOUNTS OF SUNDRY CREDITORS WHICH ARE ALSO PLACED AT PAGES 3 TO 66 OF THE PAPER BOOK AND WERE MADE AVAILABLE TO THE AO. INVIT ING ATTENTION TO THE PAPER BOOK PAGES 67,68 IT WAS SUBMITTED THAT THIS IS THE COPY OF THE REPLY DATED 16/03/2015 FILED BY THE ASSESSEE ALSO BEFORE THE AS SESSING OFFICER WHICH WAS ALONGWITH THE FOLLOWING ANNEXURE: A. DETAILS OF IMMOVABLE PROPERTY ACQUIRED DURING THE Y EAR. B. DETAILS OF STOCK PURCHASE & CONSUMED DURING THE YEA R. C. CALCULATION OF CAPITAL GAIN ON SALE OF SHARE . 2.2 INVITING ATTENTION TO PAGES 69 TO 79, 80 TO 87 AND 82 TO 122 OF THE PAPER BOOK IT WAS SUBMITTED THAT THESE DETAILS OF IMMOVAB LE PROPERTY ACQUIRED DURING THE YEAR; INCLUDING DETAILS OF STOCK PURCHASED AND CONSUMED DURING THE YEAR; CALCULATION OF CAPITAL GAIN ARISING ON ACCOUNT OF S ALE WERE ALL MADE AVAILABLE. ATTENTION WAS INVITED TO THE SPECIFIC DOCUMENTS TO DEMONSTRATE THAT THESE DOCUMENTS WHICH ARE AVAILABLE ON RECORD HAVE BEEN B EFORE THE ASSESSING OFFICER. AS AN ILLUSTRATION IT WAS SUBMITTED THAT T HE DOCUMENTS AT PAGE 88 IS THE CALCULATION OF CAPITAL GAIN ON SALE OF SHARES PAPER BOOK PAGE NUMBER HUNDRED IT WAS SUBMITTED IS FORM NO. 23 WHICH IS FILED BEFO RE THE ROC AND IS A COPY OF REGISTRATION OF RESOLUTIONS PASSED INDICATING BUY BACK OF SHARES. INVITING ATTENTION TO PAPER BOOK PAGE 109 IT WAS SUBMITTED T HAT THE CALCULATION OF THE CAPITAL GAIN ON SALE OF THAT IS MADE AVAILABLE TO T HE ASSESSING OFFICER SUPPORTED BY THE SALE DEED AND THE RECEIPTS ETC. ALL THESE DO CUMENTS IT WAS SUBMITTED HAVE BEEN MADE AVAILABLE TO THE PR.CIT ALSO. INVITI NG ATTENTION TO PAGES 123 TO 124 OF THE SAID PAPER BOOK IT WAS SUBMITTED THAT TH IS CONTAINS THE COPY OF THE REPLY DATED 16/03/2015 ALSO FILED BEFORE THE ASSESS ING OFFICER IN THE 143(3) PROCEEDINGS AND PAPER BOOK PAGES 125 TO 147 WHICH A RE ALSO THE SUPPORTING EVIDENCES ARE THE DETAILS OF STOCK; INVITING ATTENT ION TO PAGES 148 OF THE PAPER BOOK AND ITS REPLY AT PAGES 151 TO 159 DT, 27/03/20 17 WHICH HAS BEEN REJECTED BY THE PR. CIT WITHOUT ADDRESSING THE REPLY RESULTE D IN THE PASSING OF THE IMPUGNED ORDER. IT WAS SUBMITTED THAT ALL THESE WER E AVAILABLE BEFORE THE PR.CIT WHO HAS NOT FAULTED THE DOCUMENTS OR THE EVIDENCES IN ANY MANNER AND HAS PROCEEDED TO RECONSIDER THE SAME FACTS WITHOUT POIN TING TO ANY ERROR. IT WAS SUBMITTED THAT APART FROM THE RELIANCE PLACED UPON THE DECISIONS CITED EARLIER AND THE FACTS ARGUED RELIANCE WOULD ALSO BEING PLAC ED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. DELHI AIRPORT METRO EXPRESS SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 4 PVT. LTD. COPY OF THIS DECISION DATED 05/09/2017 IN ITA 705/2017(DEL) IT WAS SUBMITTED IS PLACED IN CASE LAW PAPER BOOK PAGES 1 TO 5. RELIANCE WAS ALSO BEEN PLACED UPON THE DECISION OF THE DELHI BENCH OF THE ITAT IN THE CASE OF M/S AMIRA PURE FOODS PVT. LTD. VS. PR. CIT DT. 29/11/20 17 COPY PLACED AT PAPER BOOK PAGES 6 TO 42 OF THE PAPER BOOK. RELIANCE WAS ALSO PLACED IN PARA 11 & 12 OF THE SAID DECISIONS IN THE BACKGROUND OF THE CLAIM T HAT FACTS WERE IDENTICAL. PARAGRAPH 10 OF THE SAID DECISIONS WAS SPECIFICALLY REFERRED TO. ATTENTION WAS ALSO INVITED TO THE SPECIFIC FINDING IN PARA 28 SO AS TO HIGHLIGHT THAT IT IS NOT THE CASE OF THE PR.CIT THAT THE RELEVANT BOOKS OF ACCOU NTS ALONGWITH SUPPORTING FACTS AND EVIDENCES WERE NOT PERUSED BY THE ASSESSI NG OFFICER THUS IN THE CIRCUMSTANCES IT COULD NOT BE HELD BY HIM THAT IT W AS A CASE OF NO ENQUIRY. RELIANCE WAS ALSO PLACED ON THE DECISION RELIED UPO N IN THE CASE OF MUMBAI BENCH OF THE ITAT DATED 6/5/2016 IN THE CASE OF NAR AYAN TATU RANE VS. CIT (2016) 70 TAXMAN.COM 2 2 7 (MUMBAI TRIBUNAL) WAS RELIED UPON COPY OF THE SAID DECISION IT WAS SUBMITTED IS PLACED AT PAGES 4 3 TO 53 OF THE PAPER BOOK ON THE BASIS OF THESE FACTS AND DECISIONS IT WAS HIS S UBMISSION THAT THE IMPUGNED ORDER DESERVES TO BE QUASHED. 3. THE LD. CIT, DR INVITING ATTENTION TO THE IMPUGN ED ORDER SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE HE WOULD PLACE RELIAN CE UPON THE SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE WHICH SUFFICIENTLY ES TABLISHES THE LACK OF ENQUIRY BY THE AO. THE REPLY OF THE ASSESSEE HAS BEEN CONSIDER ED. IT WAS HIS SUBMISSION THAT A SPEAKING ORDER HAS BEEN PASSED WHERE THE ISSUES A RE FULLY DISCUSSED IN PARAGRAPH 4 BY THE SAID AUTHORITY ON WHICH HEAVY RE LIANCE IS BEING PLACED. CARRYING US THROUGH THE SPECIFIC FINDING OF THE PR. CIT IT WAS HIS SUBMISSION THAT IT HAS BEEN SUFFICIENTLY DEMONSTRATED THAT THE ORDER S OUGHT TO BE REVISED WAS NOT AN ORDER IN ACCORDANCE WITH LAW. SPECIFIC ATTENTION WAS INVITED TO EXPLANATION TO SECTION 263 WHICH HAS BEEN INTO INSERTED W.E.F. 01/06/2015 WHICH HAS SPECIFICALLY BEEN REFERRED TO BY THE PR. CIT ALSO. ACCORDINGLY IT WAS HIS SUBMISSION THAT THE ARGUMENTS ADVANCED ON BEHALF THE ASSESSEE IN THE FACTS OF THE PRESENT CASE HAVE NO RELEVANCE 4. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MA TERIAL AVAILABLE ON RECORD SINCE ADMITTEDLY IN THE FACTS OF THE PRESENT CASE THE ENTIRE ISSUE REVOLVES SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 5 AROUND THE SPECIFIC SHOW CAUSE NOTICE ISSUED BY THE PR. CIT FOR READY REFERENCE THE SAME IS EXTRACTED FROM THE IMPUGNED ORDER: WHILE EXAMINING YOUR ASSESSMENT RECORD FOR THE ASS ESSMENT YEAR 2012-13, IT HAS BEEN NOTICED THAT THE ORDER U/S 143(3) OF IT ACT, 1 961 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE ON THE FOLLOWING GROUNDS :- (I) FROM THE PERUSAL OF THE ASSESSMENT RECORD, IT H AS BEEN NOTICED THAT THE AO HAS CALLED FOR INFORMATION U/S 133(6) IN RESPECT OF THE SUNDRY CREDITORS. THE AO HAS NOTICED THAT INFOR MATION IN RESPECT OF SOME OF THE SUNDRY CREDITORS HAS NOT BEEN RECEIVED AND THE ENVELOPES RECEIVED UNDELIVERED BECAUSE OF LACK OF SUFFICIENT ADDRESSES . INSTEAD OF GOING FURTHER INTO THE MATTER, THE AO MADE THE ADDITION BY INCREASING GP RATE FROM 4.66% TO 5%. IT HAS BEEN NOTICED THAT THE AO HAS NOT GONE ON THE BA SIC REASON I.E. TO EXAMINE/VERIFY THE LARGE SUNDRY CREDITORS. THE AO HAS NOT PROPERLY VERIFIED AND NO INDEPENDENT ENQUIRY HAS BEEN MADE. FROM THE PERU SAL OF THE ASSESSMENT RECORD, IT APPEARS THAT IN MOST OF THE CASES, COPIE S OF ACCOUNTS HAVE BEEN FURNISHED BY YOU YOURSELF. THE AO MADE THE ADDITION BY INCREASING THE GP RATE THAT TOO WITHOUT REJECTING THE BOOKS OF ACCOUNTS. (II) FROM THE PERUSAL OF THE ASSESSMENT RECORD, IT HAS BEEN NOTICED THAT THE YOU SOLD TWO PROPERTIES AMOUNTING TO RS. 1 8 LACS AND RS.74.50 LACS AND PURCHASED A HOUSE FOR RS.1.84 CRO RES, HOWEVER, NO INDEPENDENT ENQUIRY APPEARS TO HAVE BEEN MADE ABOUT THESE TRANSACTIONS.. (III) FROM THE PERUSAL OF THE ASSESSMENT RECORD, IT HAS BEEN NOTICED THAT THE YOU SOLD 57050 UNLISTED SHARES AMOUNTING TO RS. 22,82,0 00/- SHOWING LONG TERM CAPITAL GAIN OF RS. 13,97,948/- IN A BUY BACK S CHEME OF COMPANY NAMELY M/S SHIVAM TELECOM. THE GENUINENESS OF THIS TRANSACTION WAS REQUIRED TO BE VERIFIED BECAUSE YOU HAD SUBSTANTIAL INTEREST IN THE SAID CO MPANY AND WHICH IS A NON LISTED COMPANY. SUBSEQUENTLY YOU CLAIMED EXEMPTION U/S 54F(1) ON PURCHASE OF RESIDENTIAL PROPERTY AMOUNTING TO RS. 1,84,68,500/- . THE AO HAS NOT VERIFIED THE EXEMPTION CLAIMED U/S 54F AS TO WHETHER ALL THE FOR MALITIES WERE COMPLETED ON TRANSFER OF CAPITAL ASSETS I.E. SHARES WHICH NOT TO BE CHARGED TO TAX IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. (IV) FROM THE PERUSAL OF THE INFORMATION ON RECORD WITH REGARD TO THE HOUSEHOLD EXPENSES, IT HAS BEEN NOTICED THAT YOU HAVE NOT DEB ITED ANY EXPENSES FROM YOUR ACCOUNT. ALL THE EXPENSES OF THE FAMILY CONSISTING OF 5 MEMBERS HAVE BEEN MET BY YOUR FATHER AND YOUR WIFE. THE AO HAS NOT VERIFI ED THE COPY OF BANK STATEMENT OF YOUR FATHER AND ALSO HAS NOT VERIFIED THE GENUIN ENESS OF INCOME OF YOUR WIFE. IT HAD TO BE EXAMINED WHETHER YOUR WIFE IS ACTUALLY WO RKING AS BAMS DOCTOR OR NOT. (V) FROM THE PERUSAL OF THE ACCOUNT OF MUKESH SHARM A HUF IT HAS BEEN NOTICED THAT YOU HAVE PAID IN CASH TO MUKESH SHARMA HUF ON 20.11.2012 EXCEEDING RS.20,000/- (17000 + 11750). FURTHER PERUSAL OF THE A/C OF RAJ KUMAR RAM, IT HAS BEEN NOTICED THAT YOU HAVE PAID IN CASH TO HIM EXCE EDING RS.20,000/- ON 29.12.2011 (15000 + 20000 + 1200). 2. FROM THE AFORESAID FACTS AND CIRCUMSTANCES OF TH E CASE, IT IS NOTICED THAT THE AO HAS FAILED TO VERIFY/ENQUIRE THE AFORESAID FACTS AND MADE ANY ENQUIRY IN THIS REGARD. THE HON 'BLE DELHI HIGH COURT HAVE HELD IN THE CASE OF GEE VEE ENTERPRISES VS. ADDL. CIT & ORS 99 ITR 375 (DEL) THAT NOT MAKIN G AN INQUIRY WARRANTED ON THE FACTS OF A CASE WILL MAKE THE ASSESSMENT ORDER ERRO NEOUS. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF K.A. RAMSWAMY CHETTIAR & ANR VS. CIT 220 ITR 657 (MAD.). THEREFORE, THE AS SESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE ACT FOR THE A.Y. 2012-13 IN YO UR CASE IS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . ' SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 6 4.1 THE CASE OF THE ASSESSEE HAS BEEN THAT THE SUBM ISSIONS ADVANCED BEFORE THE PR. CIT DEMONSTRATES THAT IT WAS ARGUED THAT TH ESE ISSUES HAD BEEN ENQUIRED INTO BY THE ASSESSING OFFICER. ACCORDINGLY FOR READ Y REFERENCE THE RELEVANT SUBMISSIONS ARE EXTRACTED FROM THE IMPUGNED ORDER H EREUNDER: 3. IN RESPONSE TO THE AFORESAID NOTICE, THE ASSESSE E FILED HIS REPLY DATED 27.03.2017 WHICH IS PLACED ON RECORD. THE RELEVANT PORTION OF THE REPLY IS REPRODUCED AS UNDER: 'VIDE NOTICE U/S 263(1) DT. 21.03.2017, YOUR GOOD S ELF HAS CALLED UPON THE ASSESSEE TO SUBMIT HIS OBJECTION IF ANY AGAINST YOU R PROPOSAL TO REVISE THE ASSESSMENT ORDER DT. 27.03.2015 PASSED B Y ACIT, CIRCLE, PATIALA IN THE CASE OF ASSESSEE. THE REASONS FOR PR OPOSED ACTION ARE ALSO GIVEN IN THE AFORESAID NOTICE. AT THE OUTSET, WE RESPECTFULLY SUBMIT THAT ALL THE OBSERVATIONS IN THE NOTICE ARE INCORRECT, NOT SUPPORTED BY ANY MATERIAL ON RECORD, WHOLLY CONJECTURAL AND RESULT OF FAILURE TO CORRECTLY APPRECIATE THE THINGS IN TH EIR PROPER PERSPECTIVE. HOWEVER, WE ARE EXTREMELY THANKFUL FOR THE RESPECT SHOWN TO THE PRINCIPLES OF NATURAL JUSTICE AND GRANTING US THIS OPPORTUNITY TO EXPLAIN. THE UN DERSIGNED HAS BEEN AUTHORIZED TO SUBMIT AS UNDER:- 1.1 THE ASSESSEE IS RUNNING BUSINESS OF CIVIL CONTR ACTOR IN PROPRIETOR CAPACITY UNDER THE TRADE NAME OF M/S A.S. ENTERPRISES SINCE 2007. THE MAIN AREA OF BUSINESS IS CONSTRUCTION OF COMMERCIAL BUILDINGS AN D TRADING IN FIREWOOD. 1.2 IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESS EE PRODUCED HIS BOOKS OF ACCOUNT AND ALL OTHER INFORMATIONS /DOCUMENTS A S CALLED FOR BY THE ASSESSING OFFICER FROM TIME TO TIME. THE ASSESSEE HAS NOT ONL Y EXPLAINED QUERIES RAISED BY THE ASSESSING OFFICER, BUT HAS ALSO SUBSTANTIATED T HEM WITH NECESSARY DOCUMENTARY EVIDENCE. 1.3 AFTER VERIFYING THE INFORMATIONS SUBMITTED BY THE A SSESSEE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143( 3) OF THE ACT VIDE ORDER DATED MARCH 27, 2015 1.4 FURTHER SUBMITTED THAT THE QUERIES RAISED IN YO UR SHOW CAUSE NOTICE HAD BEEN LOOKED INTO BY THE ASSESSING OFFICE R WHILE FRAMING THE ASSESSMENT ORDER AND THE ASSESSING OFFICER WAS FULL Y SATISFIED WITH THE RECORD PRODUCED BEFORE HIM AND CONTENTION PUT FORTH BEFORE HIM BY THE ASSESSEE WITH REGARD TO THESE SPECIFIC ISSUES. 2. WITH REGARD TO VARIOUS ISSUES RAISED BY YOU R GOOD SELF WE SUBMIT OUR EXPLANATION AS UNDER:- I) AS REGARDS THE ISSUE OF VERIFICATION OF SUNDRY C REDITORS, YOUR KIND ATTENTION IS INVITED TO THE FACT THAT THE ASSESSING OFFICER VIDE HIS NOTICE DT. 14.07.2014 U/S 142(1) SPECIFICALLY ASKED THE ASSESSEE TO FILE CONF IRMED COPY OF ACCOUNTS OF CREDITORS WITH BALANCE EXCEEDING RS. 50,000/- THE A SSESSEE OBTAINED CONFIRMED COPY OF ACCOUNTS FROM FIVE CREDITORS CONTAINING THE IR NAMES AND ADDRESSES AND PAN NOS. AND FILED THE SAME WITH A.O. VIDE LETTER D T. 31.10.2014 UNDER PAGE 1-64 ANNEXED THEREIN. VIDE REPLY, DT. 24.03.2015 IN RESPONSE TO ORDER SHE ET ENTRY DT. 23/03/2015, THE ASSESSEE FURTHER SUBMITTED AS UNDER :- KINDLY NOTE THAT ASSESSEE SUBMITTED CONFIRMATIONS OF MAJORITY OF SUNDRY CREDITORS CONSTITUTING SUBSTANTIAL PART OF TOTAL OU TSTANDING SUNDRY CREDITORS AS ON SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 7 31.03.2012. THE CONFIRMATIONS OF SELECTED FEW COULD NOT BE FILED AS THE ASSESSEE HAS NO BUSINESS DEALING WITH THEM DURING THE CURREN T YEAR I.E. F.Y. 2014-15 AND THEIR ACCOUNTS ARE SQUARED UP. HOWEVER, ASSESSEE HA S DULY FILED THEIR COPY OF ACCOUNTS FOR THE SUBJECT YEAR AND NEXT A.Y. I.E. 20 13-14 AS PER HIS BOOKS OF ACCOUNT. IT NEEDS TO BE APPRECIATED THAT ALMOST ALL THE PAYMENTS ARE THROUGH BANKING CHANNEL. THE ASSESSEE ALSO PROVIDED ADDRESS ES OF THESE PARTIES TO YOUR GOOD SELF FOR NECESSARY ACTION IF REQUIRED. AS REGARD NO COMPLIANCE OF NOTICE U/S 133(6) OF THE IT ACT 1961 BY FEW PARTIES, IT IS SUBMITTED THAT ASSESSEE CAN NOT BE PENALIZED FOR TH E CONDUCT OF THIRD PARTY OVER WHICH IT HAS NO CONTROL. ' KINDLY PERMIT US TO SUBMIT THAT AS PER RECORDS NOTI CES ISSUED U/S 133(6) WERE DULY COMPLIED WITH EXCEPT ONE RELATING TO SH. SAURABH BA SSI NAWANSHAHAR. WE ARE FILING HEREWITH CONFIRMED COPY OF ACCOUNT OF SAID S H. SAURABH BASSI AS PER PAGE 1 ENCLOSED. IN CASE YOU DESIRE, THE CONCERNED PERSON CAN BE PRODUCED BEFORE YOUR GOODSELF FOR VERIFICATION. AS REGARD YOUR OBSERVATION REGARDING INVOKING OF SE C 145(3), IT IS HUMBLY SUBMITTED THAT THERE IS NO CASE FOR INVOKING SEC 14 5(3)AS A.O. HAS CATEGORICALLY STATED IN HIS ORDER THAT REQUISITE INFORMATION/DETA ILS AS CALLED FOR FROM TIME TO TIME HAVE BEEN FURNISHED WHICH HAVE BEEN EXAMINED AND PL ACED ON RECORD. IT IS UNDISPUTED THAT THE ASSESSEE IS SUBJECT TO TAX AUDI T U/S 44A B OF THE INCOME TAX ACT, 1961. VIDE ORDER SHEET ENTRY DT. 31.10.2014, A.O ASKED AS SESSEE TO JUSTIFY VALUATION OF CLOSING STOCK AND WIP WITH DOCUMENTARY EVIDENCE. TH E ASSESSEE DULY FURNISHED LIST OF CLOSING STOCK (QTY. & AMOUNT) AS ON 1 31.03.2012 ALONG WITH DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE VALUE OF CLOSING STOCK VIDE LETTER DT. 16.03.2015 UNDER PAGE 11-20. THE ASSESSEE ALSO FURNISHED STOCK RECORDS IN RESPECT OF MATERIALS PURCHASED AND CONSUMED VIDE LETTER DT. 16 .03.2015 UNDER PAGE 1-12 ANNEXED THEREIN. WAS ALSO PLACED ON RECORD VIDE LET TER OF EVEN DATE. NO DEFECT HAS BEEN POINTED OUT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE BY ASSESSING OFFICER. WE ARE ENCLOSING HEREWITH RELEVANT DETAILS/ INFORMA TION FOR YOUR KIND REFERENCE AS PER PAGE NO 2-35. II) & III) AS REGARDS SALE AND PURCHASE OF PROPERTIES AND CLAIM O F DEDUCTION U/S 54F, VIDE ORDER SHEET ENTRY DT. 10.10.2014, A.O ASKED THE ASSESSEE TO JUSTIFY CLAIM U/S 54F WITH DOCUMENTARY EVIDENCE. IN RESPONS E TO THE SAME ASSESSEE VIDE LETTER DT. 24.03.20 1 5 SUBMITTED AS UNDER :- ' THE ASSESSEE HAD CAPITAL GAINS FROM SALE OF PROPE RTY AS WELL AS ON ACCOUNT OF BUYBACK OF UNLISTED EQUITY SHARES DURING THE YEAR. THE SAME HAS DULY REFLECTED IN THE COMPUTATION OF INCOME. FURTHER DOC UMENTARY EVIDENCE IN SUPPORT OF SALE/PURCHASE OF PROPERTY AND BUY BACK O F SHARES IS FURNISHED AS PER PAGE 23-58. ' FOR YOUR READY REFERENCE WE ARE ENCLOSING HEREWITH CALCULATION SHEETS OF CAPITAL GAINS AND ALLOWABLE DEDUCTION U/S 54F. DETAIL OF PU RCHASE OF UNLISTED EQUITY SHARES IN THE PAST AND BUYBACK OF SHARES IN THE SUB JECT YEAR BY COMPANY IS ENCLOSED. ALSO RETURNS FILED WITH REGISTRAR OF COMP ANIES, CHANDIGARH EVIDENCING TRANSFER OF UNLISTED SHARES IS ENCLOSED. WE ARE ENC LOSING HEREWITH RELEVANT DETAILS/INFORMATION FOR YOUR KIND REFERENCE AS PER PAGE NO. 36-80. IV) THE HOUSE HOLD EXPENSES ARE SELF EXPLANATORY AS THE ASSESSEE AS WELL HIS FAMILY MEMBERS ARE HAVING FAIRLY LARGE INCOME. THE ITRS OF THE FAMILY MEMBERS ARE AVAILABLE IN ASSESSMENT FILE. EVEN OTHERWISE ESTIMA TED ADDITION OF RS.878990/- IN CP COVERS THE INADEQUACY OF HOUSE HOLD EXP. IF ANY DETAIL OF FAMILY AND H.H. EXP. ENCLOSED AS PER PAGE NO. 80A. V) THE CASE OF MUKESH SHARMA HUF POINTED BY YOUR GO ODSELF DOES NOT BELONG TO SUBJECT YEAR AS THE DATE OF PAYMENT MENTIONED IN YO UR NOTICE IS 20.11.2012 WHICH SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 8 RELATES TO A.Y. 2013-14. AS REGARDS PAYMENTS MADE T O SH. RAJ KUMAR EXCEEDING RS.20000/- IN CASH ON 29.12.2011, IT IS SUBMITTED T HAT PAYMENTS WERE MADE ON FAR AWAY SIGHT ON DIFFERENT DATES BUT THE VOUCHERS WERE ENTERED IN CASH BOOK ON DATE \ INADVERTENTLY. COPY OF LEDGER A/CS AND PAYME NT VOUCHERS ARE ENCLOSED AS PER PAGE NO. 81-87. 3. IT IS VEHEMENTLY ARGUED THE ASSESSING OFFICER HA S COMPLETED ASSESSMENT BY CONDUCTING APPROPRIATE ENQUIRIES AND APPLYING HIS M IND. HENCE THE ASSESSMENT ORDER CANNOT BE HELD ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF REVENUE. ' '4.4 RELIANCE IS PLACED ON THE DECISIONS:- A) HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF HA RI IRON AND TRADING CO. V CIT(2003) 131 TAXMAN 535 (P & H). B) MJS VEDPARKASH CONTRACTORS, VS. THE CIT, PATIALA IT AT CHD. ITA NO. 573/CHD/2015 ITA NO. 573/CHD/2015 ASSESSMENT YEAR: 2010-11. C) CIT V. VALLIAMMAL [1998] 230 ITR 695 (MAD.). AN ORDER CANNOT BE SAID TO BE ERRONEOUS ON THE GROU ND THAT VERIFICATION OF ACCOUNTS WAS NEEDED. D) NARAIN SINGLA V.PR CIT 62 TAXMANN.COM 255(CHD T RIB). E) CITV. SUNBEAM AUTO LTD [2011] 332 ITR 167 (DEL). F) CIT V. MEHROTRA BROTHERS 270ITR 157(MP). ' 4.2 THE RELEVANT FINDING ARRIVED AT BY THE SENSIBLE CIT ON WHICH HEAVY RELIANCE WAS PLACED UPON BY THE CITDR WHICH IS ASSAILED BY T HE ASSESSEE IN THE PRESENT PROCEEDINGS BY THE LD. AR IS ALSO EXTRACTED HEREUND ER FOR THE SAKE OF COMPLETENESS: 4. I HAVE CAREFULLY CONSIDERED ASSESSEE'S SUBMISSIO NS WHICH ARE NOT ACCEPTABLE ON THE ISSUE THAT AO HAS FAILED TO INDEP ENDENTLY VERIFY THE GENUINENESS OF SUNDRY CREDITORS AS IN MOST OF THE C ASES, COPIES OF ACCOUNTS HAVE BEEN FURNISHED BY THE ASSESSEE HIMSELF AND AO MADE THE ADDITION BY INCREASING THE GP RATE WITHOUT REJECTING THE BOOKS OF ACCOUNTS . THE AO ACCEPTED THE IDENTITY AND GENUINENESS OF THE SUNDRY CREDITORS WI THOUT ANY APPLICATION OF MIND. IT IS CLEAR FROM THE ABOVE THAT THE AO HAS ALSO FAI LED TO VERIFY/ENQUIRE ABOUT THE TRANSACTIONS MADE WITH REGARD TO THE SALE OF TWO PR OPERTIES AMOUNTING TO RS.18 LAKHS AND RS.74.50 LAKHS AND PURCHASE OF HOUSE FOR RS.1.84 CRORES. AO HAS ALSO NOT VERIFIED THE EXEMPTION CLAIMED U/S 54F OF THE ACT A S TO WHETHER ALL THE FORMALITIES WERE COMPLETED ON TRANSFER OF SHARES WHICH NOT BE C HARGED TO TAX IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. AO ALSO FAILED TO VERIFY THE COPY OF BANK STATEMENT OF FATHER OF THE ASSESSEE AND HAS ALSO NO T VERIFIED THE GENUINENESS OF INCOME OF ASSESSEE'S WIFE WITH REGARD TO THE ISSUE OF HOUSEHOLD EXPENSES. AO ALSO FAILED TO MAKE INVESTIGATION WITH REGARD TO THE PAY MENTS EXCEEDING RS.20,000/- MADE IN CASH BY THE ASSESSEE. THEREFORE, THE ORDER WAS PASSED WITHOUT ANY APPLICATION OF MIND. UNDER THE AFORESAID CIRCUMSTANCES, THE ORDER OF THE AO WAS ERRONEOUS, AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE MALAB AR INDUSTRIAL COMPANY LTD. VS. CIT REPORTED AT 243 ITR 83 (SC). FURTHER IN THE CASE OF GEE VEE ENTERPRISE VS. ADDL. CIT & ORS 99 ITR 375 (DEL), THE HON'BLE DELHI HIGH COURT HAVE HELD IN THAT NOT MAKING AN INQUIRY WARRANTED ON THE FACTS OF A CASE WILL MAKE THE ASSESSMENT ORDER ERRONEOUS. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF K.A. RAMSWAMY CHETTIAR & ANR VS. CIT 22 0 ITR 657 (MAD.). MOREOVER, THE FACTS OF THE CASE ARE SQUARELY COVERED BY EXPLA NATION 2 OF SEC.263, WHICH IS INSERTED W.E.F. 01.06.2015. IT READS AS UNDER:- SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 9 'FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DEC LARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEO US IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER,- A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VER IFICATION WHICH SHOULD HAVE BEEN MADE; B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQ UIRING INTO THE CLAIM; C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119;O R D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISD ICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF ASSESSEE OR ANY OTHER PERSON.' IN VIEW OF THE AFORESAID FACTS, THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS WELL. 5. I, THEREFORE, HOLD THE ASSESSMENT ORDER DATED 27 .03.2015 FOR THE A.Y. 2012-L3 IN THE CASE OF THE ASSESSEE IS ERRONEOUS IN AS MUCH AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND SET ASIDE THE ORDER TO THE FILE OF THE AO FOR PASSING A FRESH ORDER IN ACCORDANCE WITH LAW IN RESPECT OF THE ISSUE DISC USSED ABOVE REGARDING VERIFICATION OF GENUINENESS OF SUNDRY CREDITORS AND ALSO RAISED IN SHOW CAUSE NOTICE U/S 263(1) OF THE ACT, AFTER GIVING SUFFICIE NT OPPORTUNITY OF HEARING TO THE ASSESSEE. 4.3 ACCORDINGLY IN THE LIGHT OF THESE FACTS AND SUB MISSIONS WE FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CAS E THE PR. CIT HAS FAILED TO MEET THE STATUTORY REQUIREMENTS OF EITHER POINTING OUT THE ERROR OR HOW IN THE ABSENCE OF ERROR BEING POINTED OUT THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE SAID TO BE PREJUDICIAL TO THE INTERESTS OF T HE REVENUE. WE HAVE ALREADY EXTRACTED FROM THE RECORD THE SHOW CAUSE NOTICE ISS UED BY THE PR. CIT IN THE EARLIER PART OF THIS ORDER. ON A READING THEREFROM IT IS SEEN THAT FIVE SPECIFIC REASONS WERE SET OUT BY PR. CIT WHICH WERE CONFRON TED TO THE ASSESSEE TO JUSTIFY WHY ON THE SPECIFIC GROUNDS ADDRESSED THE ASSESSMEN T ORDER UNDER SECTION 143(3) SHOULD NOT BE CONSIDERED TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WE HAVE GONE THROUGH THE EXPLANATION OF THE ASSESSEE OFFERED BEFORE THE PR. CIT VIDE ITS REPLY DATED 27/ 03/2017. A PERUSAL OF WHICH SHOWS THAT THE ASSESSEE VEHEMENTLY TOOK THE STAND T HAT EACH AND EVERY ASPECT HAD BEEN ENQUIRED INTO BY THE ASSESSING OFFICER BEF ORE THE PASSING OF THE ORDER. IT IS SEEN THAT VARIOUS ORDER SHEET ENTRIES WERE RE FERRED TO SHOW THAT QUERIES WERE RAISED. NONE OF THIS HAS BEEN UPSET BY THE PR. CIT IN THE ORDER PASSED. THE ASSESSEE AS PER ITS REPLY ADDRESSED TO THE PR. CIT HAS ALSO REFERRED TO REPLIES MADE BEFORE THE ASSESSING OFFICER IN RESPONSE TO TH ESE QUERIES TO SHOW THAT THE QUERIES RAISED IN THE ASSESSMENT PROCEEDINGS WERE R ESPONDED TO BY MAKING BOOKS OF ACCOUNTS AVAILABLE AND PROVIDING ALL INFOR MATION/DOCUMENTS AS CALLED SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 10 FOR BY THE ASSESSING OFFICER FROM TIME TO TIME WERE MADE AVAILABLE AND ONLY AFTER VERIFYING THE SAME THE ASSESSMENT ORDER WAS P ASSED. WE NOTE THAT THE IMPUGNED ORDER FAILS TO ADDRESS THESE DETAILED SUBM ISSIONS WHICH HAVE BEEN EXTRACTED IN THE IMPUGNED ORDER ITSELF. IT IS SEEN THAT IN THE REPLY OF THE ASSESSEE BEFORE THE PR. CIT IT HAS BEEN ARGUED THAT ON THE S PECIFIC QUERIES RAISED IN THE SHOW CAUSE NOTICE THE ASSESSING OFFICER IN THE COUR SE OF THE ASSESSMENT PROCEEDINGS VIDE NOTICE DATED 14/07/2014 REQUIRED T HE ASSESSEE TO FILE CONFIRMED COPY OF ACCOUNTS OF CREDITORS WITH BALANC E SHEETS EXCEEDING RS. 50,000. THE ASSESSEE AS PER THE REPLY EXTRACTED IN THE IMPUGNED ORDER ITSELF IS FOUND TO HAVE STATED THAT THE ASSESSEE OBTAINED THE CONFIRMED COPY OF ACCOUNTS FROM THE CREDITORS CONTAINING THEIR NAMES, FULL ADDRESSES, PAN NUMBERS ETC AND THE SPECIFIC INFORMATION WAS MADE A VAILABLE TO THE ASSESSING OFFICER BY LETTER DATED 31/10/2014. COPY OF THE SAM E WAS PLACED BEFORE THE PR. CIT ALONGWITH ANNEXURE RUNNING INTO 64 PAGES. WE FU RTHER NOTE THAT VIDE REPLY DATED 24/03/2015 IN RESPONSE TO ORDER SHEET DATED 2 3/03/2015 OF THE AO THE ASSESSEE HAS STATED BEFORE THE PR. CIT THAT CONFIRM ED COPIES OF MAJORITY OF SUNDRY CREDITORS WERE MADE AVAILABLE AND ONLY IN FE W INSTANCES THE ASSESSEE COULD NOT MAKE THOSE AVAILABLE AS THE ASSESSEE IN T HE YEAR UNDER CONSIDERATION HAD NO BUSINESS DEALINGS WITH THEM AS THE ACCOUNTS HAD BEEN SQUARED UP. IN SUPPORT OF THE SAID ASSERTION THE COPY OF THE ACCOU NTS FOR THE FINANCIAL YEAR HAD BEEN FILED. IT WAS FURTHER SUBMITTED THAT BECAUSE F EW OF THE PARTIES DID NOT RESPOND TO NOTICES ISSUED UNDER SECTION 133 (6) THE ASSESSEE MAY NOT BE PENALISED FOR THE CONDUCT OF THE PARTIES. WE FURTHE R NOTE THAT THE ASSESSEE RELIED UPON THE REPLY TO ORDER SHEET ENTRY DATED 31/10/201 4 TO JUSTIFY THE VALUATION OF CLOSING STOCK AND WIP WITH DOCUMENTARY EVIDENCE AND SUBMITTED THAT CONSEQUENTLY NO DEFECTS IN ASSESSEES BOOKS OF ACC OUNTS WERE FOUND BY THE ASSESSING OFFICER. IT IS FURTHER SEEN THAT QUA THE ISSUES RAISED IN THE SHOW CAUSE NOTICE IN (II) AND (III) THE ASSESSEE RELIED UPON T HE REPLIES TO THE QUERIES RAISED BY THE ASSESSING OFFICER VIDE ORDER SHEET ENTRY DATED 10/10/2014 STATING THAT THE ASSESSEE HAD CAPITAL GAINS FROM SALE OF PROPERTIES AS WELL AS ON ACCOUNT OF BUYBACK OF UNLISTED EQUITY SHARES REFLECTED IN THE COMPUTATION OF INCOME SUPPORTED BY DOCUMENTARY EVIDENCE MADE AVAILABLE TO THE AO WHICH WAS ALSO FILED BEFORE THE PR. CIT AT PAGES 23 TO 58 CALCULAT ION SHEETS OF CAPITAL GAINS AND ALLOWABLE CLAIM OF DEDUCTION UNDER SECTION 54F MADE BEFORE THE ASSESSING SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 11 OFFICER WAS ALSO FILED BEFORE THE PCI T ALONGWITH E VIDENCE IN THE FORM OF RETURNS ETC. FILED WITH THE REGISTRAR OF COMPANIES EVIDENC ING TRANSFER OF UNLISTED SHARES IN THE SPECIFIC FIRM. WE NOTE THAT THE EVIDENCES FI LED HAVE NOT BEEN UPSET NOR ANY FURTHER ENQUIRY TO UPSET THEM WAS CARRIED OUT B Y THE PCI T. ADDRESSING THE ISSUE RAISED IN (IV) BY THE PR. CIT IT IS SEEN AS PER SUBMISSIONS EXTRACTED IN THE ORDER ITSELF THAT THE ITRS OF THE FAMILY MEMBERS AV AILABLE IN THE ASSESSMENT FILE WAS RELIED UPON. THE ESTIMATED ADDITION OF RS. 8,78 ,990/- IN THE ASSESSMENT ORDER IT WAS SUBMITTED WOULD MORE THAN ADEQUATELY TAKE CA RE OF INADEQUACY IF ANY OF THE HOUSEHOLD EXPENSES. QUA THE PAYMENTS OF RS. 20,000/- ALLEGEDLY MADE FOR PAYMENT TO MUKESH SHARMA IT WAS SUBMITTED THAT IT PERTAINS TO 2013-14 ASSESSMENT YEAR AND THE PAYMENTS MADE TO RAJKUMAR T OTALLING RS. 20,000/- IT WAS SUBMITTED WAS MADE ON DIFFERENT DATES AT A FARA WAY SITE. THE ASSESSEE IT IS SEEN IS IN THE CONSTRUCTION BUSINESS. ON GOING THRO UGH THE IMPUGNED ORDER WE FIND THAT THE LD. PR. CI T HAS FAILED TO UPSET THE SUBMISSIONS EXTRACTED IN THE ORDER ITSELF AND HAS MECHANICALLY DRAWN THE CONCLUSIONS W HICH ARE UNDER CHALLENGE IN THE PRESENT PROCEEDINGS. ALTHOUGH THE RELEVANT EXTR ACT HAS ALREADY BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER IT WOUL D STILL NOT BE OUT OF PLACE TO EXTRACT THE CONCLUSIONS DRAWN ON FACTS BY THE THE L D. COMMISSIONER WHO IT IS SEEN HAS MADE THE FOLLOWING MECHANICAL DISCUSSION O N FACTS: 4. I HAVE CAREFULLY CONSIDERED ASSESSEE'S SUBMISSIO NS WHICH ARE NOT ACCEPTABLE ON THE ISSUE THAT AO HAS FAILED TO INDEP ENDENTLY VERIFY THE GENUINENESS OF SUNDRY CREDITORS AS IN MOST OF THE C ASES, COPIES OF ACCOUNTS HAVE BEEN FURNISHED BY THE ASSESSEE HIMSELF AND AO MADE THE ADDITION BY INCREASING THE GP RATE WITHOUT REJECTING THE BOOKS OF ACCOUNTS . THE AO ACCEPTED THE IDENTITY AND GENUINENESS OF THE SUNDRY CREDITORS WI THOUT ANY APPLICATION OF MIND. IT IS CLEAR FROM THE ABOVE THAT THE AO HAS ALSO FAI LED TO VERIFY/ENQUIRE ABOUT THE TRANSACTIONS MADE WITH REGARD TO THE SALE OF TWO PR OPERTIES AMOUNTING TO RS.18 LAKHS AND RS.74.50 LAKHS AND PURCHASE OF HOUSE FOR RS.1.84 CRORES. AO HAS ALSO NOT VERIFIED THE EXEMPTION CLAIMED U/S 54F OF THE ACT A S TO WHETHER ALL THE FORMALITIES WERE COMPLETED ON TRANSFER OF SHARES WHICH NOT BE C HARGED TO TAX IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE. AO ALSO FAILED TO VERIFY THE COPY OF BANK STATEMENT OF FATHER OF THE ASSESSEE AND HAS ALSO NO T VERIFIED THE GENUINENESS OF INCOME OF ASSESSEE'S WIFE WITH REGARD TO THE ISSUE OF HOUSEHOLD EXPENSES. AO ALSO FAILED TO MAKE INVESTIGATION WITH REGARD TO THE PAY MENTS EXCEEDING RS.20,000/- MADE IN CASH BY THE ASSESSEE. THEREFORE, THE ORDER WAS PASSED WITHOUT ANY APPLICATION OF MIND. 4.4 IN THE FACTS OF THE PRESENT CASE WE FIND THAT T HE PR. CIT HAS FAILED TO POINT OUT THE ERROR COMMITTED BY THE ASSESSING OFFICER LE T ALONE SUCH AN ERROR WHICH CAN BE CONSIDERED TO BE PREJUDICIAL TO THE INTEREST S OF THE REVENUE. THE LAW DOES NOT PERMIT THE AUTHORITY THE EXERCISE OF REVIS IONARY POWERS TO INITIATE FISHING SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 12 AND ROVING ENQUIRIES. THE ASSESSING OFFICER IN THE FACTS OF THE PRESENT CASE WE NOTE HAS PASSED AN ORDER AFTER CONDUCTING DETAILED ENQUIRIES ON ALL THE ISSUES THE PR. CIT HAS FLAGGED VARIOUS ISSUES AND ON GOING THROUGH THE RECORD WE NOTE THAT HE HAS FAILED TO GIVE ANY FINDING AS TO HOW AN D IN WHAT MANNER THE ORDER OF THE ASSESSING OFFICER ON THE VARIOUS ISSUES NOTED B Y HIM CAN BE SAID TO BE ERRONEOUS LET ALONE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WE NOTE THAT NO ENQUIRY HAS BEEN MADE BY THE PR. CIT AT HIS OWN INS TANCE AND HE HAS MERELY DIRECTED THE ASSESSING OFFICER TO PASS AN ORDER IN ACCORDANCE WITH LAW. THE LAW ENVISAGES THAT FIRST THE LD. PR.CIT IS TO POINT OUT HOW THE ORDER CAN BE SAID TO BE ERRONEOUS WITHOUT SUCH AN EXERCISE THE DIRECTION TO PASS THE ORDER IN ACCORDANCE WITH LAW BECOMES MEANINGLESS. THE RESPON SIBILITY TO DO SO CANNOT BE SHUNNED OR ABROGATED BY THE SAID AUTHORITY WHIMS ICALLY. THE LAW REQUIRES THAT THE ORDER PASSED BY THE PR. CIT SHOULD BE A SP EAKING ORDER POINTING OUT THE ERROR AS IN THE ABSENCE OF THE SAME IT IS AN ARBITR ARY EXERCISE WHICH CANNOT BE COUNTENANCED. WE FIND SUPPORT FROM THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF DCIT VERSUS DELHI AIRPORT METR O EXPRESS PRIVATE APART FROM VARIOUS OTHER DECISIONS CITED BY THE PARTIES. THE C OURT IN CATEGORIC TERMS HAS HELD THAT THE LAW ENVISAGES BEFORE THE REVISIONARY AUTHORITY EXERCISES JURISDICTION UNDER SECTION 263 THAT THE PR. CIT SHOULD PROCEED B Y CARRYING OUT SOME MINIMUM ENQUIRIES TO SHOW THAT THE CONCLUSION OF TH E ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. EVEN IN THE CIRCUMSTANCES WHERE THE PR. CIT IS OF THE VIEW THAT THE ASSESSING OFFICER DID NOT UNDERTAKE ANY ENQUIRY EVEN THEN IT BECOMES INCUMBEN T UPON THE PR. CIT TO CONDUCT SUCH AN INQUIRY AND IN CASES ENQUIRY HAS BE EN DONE THEN IT IS NECESSARY TO DEMONSTRATE THAT THE ERROR WHICH THE AUTHORITY S EEKS TO ADDRESS IS SET OUT IN THE ORDER TO SHOW HOW THE ERROR CAN BE SAID TO BE P REJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THE FACTS OF THE PRESENT CASE WE FI ND THAT THE LD. PR. CIT HAS FAILED TO ADDRESS THE REPLIES OF THE ASSESSEE EVEN AFTER EXTRACTING THEM IN THE ORDER AND HAS PASSED A BALD ORDER WITHOUT BRINGING OUT ANY ERROR WHATSOEVER LET ALONE AN ERROR WHICH CAN BE SAID TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ON GOING THROUGH THE EXPLANATION 2 TO SECT ION 263 OF THE ACT WHICH HAS BEEN INSERTED W.E.F. 01/06/2015 WE CONCUR WITH THE CONCLUSIONS DRAWN BY THE COORDINATE BENCH IN THE CASE OF NARYAN TATU RAN E CITED SUPRA WHEREIN IT HAS BEEN HELD THAT EXPLANATION CANNOT BE SAID TO HA VE OVERRIDDEN THE LAW AS SHRI ABHIMANYU GUPTA ITA NO. 771/CHD/2017 ASSESSMENT YEAR: 2012-13 13 INTERPRETED BY VARIOUS HIGH COURTS AND THE HIGH COU RTS HAVE CONSISTENTLY HELD THAT BEFORE REACHING THE CONCLUSION THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE THE COM MISSIONER HIMSELF HAS TO UNDERTAKE SOME ENQUIRY TO ESTABLISH THAT THE ASSESS MENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THE FACTS OF THE PRESENT CASE WE FIND THAT NO SUCH EXERCISE HAS BEEN DONE. 5. ACCORDINGLY ON ACCOUNT OF THE DETAILED REASONS G IVEN HEREINABOVE ON FACTS AND LAW IN THE PECULIAR FACTS AND CIRCUMSTANC ES OF THE PRESENT CASE WE FIND THE APPEAL OF THE ASSESSEE HAS TO BE ALLOWED. THE IMPUGNED ORDER ACCORDINGLY IS DIRECTED TO BE QUASHED. ORDERED ACCO RDINGLY 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (DI VA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09/04/2018 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR