Shalby Limited, Ahmedabad V. The Dy. CIT, Circle-4(1)(1), Ahmedabad

ITA 793/AHD/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 6585 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 03-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revision of order; Depreciation; Prejudicial to interest; Block assessment; Unabsorbed depreciation; Rule 8D; Set aside
• Section: 142(1); 43; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (CONDUCTED THROUGH VIRTUAL COURT) BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.793/AHD/2019 ( / ASSESSMENT YEAR : 2014-15) SHALBY LIMITED OPP.KARNAVATI CLUB SG HIGHWAY AHMEDABAD-380 054 / VS. THE DY.CIT CIRCLE-4(1)(1) AHMEDABAD ./ ./ PAN/GIR NO. : AAICS 5593 B ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ASEEM THAKKAR, AR / RESPONDENT BY : SHRI MOHD. USMAN, CIT-DR / DATE OF HEARING 25/03/2021 !'# / DATE OF PRONOUNCEMENT 07/04/2021 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-4, AHMEDABAD [PR.CIT IN SHORT] DATED 08/03/2019 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED TO AS 'THE ACT') DATED 29/12/2016 RELEVANT TO ASSESSMENT YEAR (AY) 2014-15. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE R EAD AS UNDER:- ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -2- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED PR.CIT U/S.263 OF THE IT ACT IS AB INITIO V OID BEING BAD IN LAW. 2. WITHOUT PREJUDICE TO THE GENERALITY OF GROUND NO.1 , THE ORDER PASSED BY THE LEARNED PR.CIT U/S.263 OF THE IT ACT, IS BAD IN LAW FOR THE REASON THAT HE DIRECTED THE ASSESSING OFFICER ON SUCH ISSUES WHICH WERE NOT PART OF THE SHOW CAUSE NOTICES ISSUED BY HIM U/S.263 OF THE I.T .ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED PR.CIT ERRED IN SETTING ASIDE THE ASSESSMENT ORDER DATED 29 TH DECEMBER, 2016 AND DIRECTING THE ASSESSING OFFICER TO PASS A FRESH ASS ESSMENT ORDER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY IS ENGAGED IN THE BUSINESS OF MULTI-SPECIALTY HOSPITAL AND ITS CASE WAS KEPT UNDER REVISION BY THE PR.CIT AND NOTICE WAS SERVED TO THE ASSESSEE TH AT ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERE STS OF THE REVENUE FOR THE FOLLOWING REASONS: (I) WHILE COMPUTING THE TOTAL INCOME, THE ASSESSEE-COMP ANY MADE A DISALLOWANCE OF RS.7,200 U/S.14A READ WITH RULE 8D WHEREAS ACCORDING TO THE LEARNED PRINCIPAL CIT THE DISALLOW ANCE WORKS OUT TO RS.14,28,901. (II) DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2013-14 THE ASSESSEE-COMPANY ENTERED INTO A COMPOSITE SCHEM E OF ARRANGEMENT IN THE NATURE OF DEMERGER AND RESTRUCTU RING OF SHARE CAPITAL UNDER SECTIONS 391 TO 394 READ WITH SECTION S 100 TO 103 OF THE COMPANIES ACT, BETWEEN THE ASSESSEE-COMPANY AND YOGESHWAR HEALTHCARE LTD. AS PER THIS COMPOSITE SCHEME, GHU MA DIVISION OF YOGESHWAR HEALTHCARE LTD. (DEMERGED COMPANY), AL ONG WITH ALL ASSETS AND LIABILITIES SHALL BE DEEMED TO BE TRANSF ERRED TO AND VESTED IN THE ASSESSEE-COMPANY WITH EFFECT FROM THE APPOIN TED DATE 1 ST APRIL, 2012 AT VALUES APPEARING IN THE BOOKS OF ACC OUNT OF THE DEMERGED COMPANY. THE LEARNED PRINCIPAL CIT OBSERV ED THAT THE ASSESSEE-COMPANY SET OFF AN AMOUNT OF RS.7.93 CRORE S BEING BROUGHT FORWARD LOSS/UNABSORBED DEPRECIATION BELONG ING TO THE TRANSFERRED SEGMENT OF THE DEMERGED COMPANY, AGAINS T ITS INCOME FOR THE ASSESSMENT YEAR 2014-15. THE LEARNED PRINC IPAL CIT FURTHER OBSERVED THAT SUCH SET OFF OF CARRY FORWARD LOSS/UNABSORBED ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -3- DEPRECIATION WAS NOT PERMISSIBLE AS PER THE PROVISI ONS OF SECTION 72A OF THE IT ACT. THE LEARNED PRINCIPAL CIT HAS O BSERVED THAT SUCH BUSINESS LOSS/UNABSORBED DEPRECIATION CAN BE S ET OFF AND CARRIED FORWARD ONLY IN THE CASE OF AN INDUSTRIAL U NDERTAKING OR A HOTEL OR A SHIP. FURTHER, THE EXPRESSION INDUSTRI AL UNDERTAKING: IS DEFINED IN CLAUSE (ASSESSEE) OF SUB-SECTION (7) OF SECTION 72A OF THE IT ACT. THE LEARNED PRINCIPAL CIT WAS OF THE VIEW THAT IN THE PRESENT CASE THERE WAS NO INDUSTRIAL UNDERTAKING AN D, THEREFORE, THE UNABSORBED LOSS OF YOGESHWAR HEALTHCARE LTD. CANNOT BE SET OFF/CARRIED FORWARD AGAINST THE BUSINESS INCOME OF THE ASSESSEE- COMPANY. (III) THE LEARNED PRINCIPAL CIT IN THE AFORESAID NOTICES ISSUED U/S.263 ASSUMED THAT THE ASSESSING OFFICER DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS DID NOT EXAMINE AND APPLY HI S MIND TO THE AFORESAID ISSUES AND HE FAILED TO MAKE ANY ADDITION S/DISALLOWANCES ON ACCOUNT OF AFORESAID FACTORS. THE LEARNED PRINC IPAL CIT, THEREFORE, OPINED THAT THE ASSESSMENT ORDER WAS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND CALL ED UPON THE ASSESSEE-COMPANY TO EXPLAIN AS TO WHY APPROPRIATE O RDER BE NOT PASSED U/S.263 OF THE IT ACT. 4. AT THE TIME OF HEARING, LD.AR SHRI ASEEM TH AKKAR MENTIONED THAT IN SIMILAR FACTS AND CIRCUMSTANCES IN ASSESSEES OWN C ASE IN ITA NO.1431/AHD/2018 FOR AY 2013-14 DATED 11/12/2020, M ATTER HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THE REL EVANT ABSTRACT OF THE TRIBUNAL ORDER DATED 11/12/2020 READS AS UNDER: 2. THE RELEVANT FACTS ARE THAT THE APPELLANT-COMPA NY IS ENGAGED IN THE BUSINESS OF MULTISPECIALTY HOSPITAL. THE ORIGINAL ASSESSMENT OR DER FOR THE ASSESSMENT YEAR 2013- 14 WAS PASSED BY THE DCIT, AHMEDABAD ON 11.3,2016 U /S.!43(3) OF THE I.T. ACT. IN THE OPENING PARA OF THE AFORESAID SCRUTINY ASSESSMENT O RDER THE ASSESSING OFFICER HAS MENTIONED THAT THE CASE WAS SELECTED FOR SCRUTINY A ND ACCORDINGLY NOTICE U/S.L43(2) OF THE I.T. ACT WAS ISSUED ON 8TH SEPTEMBER, 2014 AND THEREAFTER A NOTICE U/S, 142(1) OF THE I.T. ACT WAS ISSUED ON 9TH OCTOBER, 2015 ACCOMP ANIED BY A DETAILED QUESTIONNAIRE. AT PARA-2 OF THE ASSESSMENT ORDER TH E ASSESSING OFFICER HAS MENTIONED THAT IN RESPONSE TO THE AFORESAID NOTICES THE AUTHO RIZED REPRESENTATIVE OF THE APPELLANT-COMPANY ALONGWITH SHRI SUNIL BHAGAT, VICE PRESIDENT (ACCOUNTS) OF THE APPELLANT-COMPANY ATTENDED FROM TIME TO TIME AND SU BMITTED DETAILS AS CALLED FOR. ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -4- AFTER THIS INTRODUCTORY REMARK THE ASSESSING OFFICE R PROCEEDED TO FINALIZE THE ASSESSMENT. ULTIMATELY, THE ASSESSING OFFICER MADE AN ADDITION OF RS.13,95,600 BY DISALLOWING ADVERTISEMENT EXPENSES. ON VARIOUS OTHE R ISSUES WHICH WERE SPECIFIC, SUBJECT MATTER OF THE QUESTIONNAIRE ISSUED BY THE A SSESSING OFFICER, NO ADDITION/DISALLOWANCE WAS MADE. IT IS A REGULAR PRO CEDURE OF AN ASSESSING OFFICER THAT THE ASSESSMENT ORDER CONTAINS DISCUSSION ON ON LY SUCH ISSUES WHICH RESULT INTO ADDITION OR DISALLOWANCE. ON ALL OTHER ISSUES WHICH ARE DULY EXAMINED BY THE ASSESSING OFFICER VIS-AVIS THE FACTS AND SUBMISSION S MADE BEFORE HIM DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IF THE ASSESS ING OFFICER IS CONVINCED THAT NO ADDITION IS REQUIRED, SUCH ISSUES ARE NOT DISCUSSED OR REFERRED TO IN THE BODY OF THE ASSESSMENT ORDER. 3. THE LEARNED PRINCIPAL CIT-4, AHMEDABAD ISSUED TH REE NOTICES U/S.263 OF THE I.T. ACT WHICH ARE DATED 23.11.2017; 6.3.2018 AND 22.3.2 018. IN THESE NOTICES THE APPELLANT-COMPANY WAS INFORMED THAT THE IMPUGNED AS SESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE FOLLOWING REASONS:- (I) WHILE COMPUTING THE TOTAL INCOME, THE APP ELLANT-COMPANY MADE A DISALLOWANCE OF RS.6,53,822 U/S.!4A READ WITH RULE 8D WHEREAS ACCORDING TO THE LEARNED PRINCIPAL C1T THE DISALLOW ANCE WORKS OUT TO RS.9,42,801. (II) FURTHER, THE DISALLOWANCE MADE U/S,14A WH ILE COMPUTING THE INCOME SHOULD HAVE BEEN ADDED TO THE BOOK PROFIT U/ S.LL5JB BY VIRTUE OF EXPLANATION-1(F) U/S.115JB. THE ASSESSING OFFICER F AILED TO ADD THIS AMOUNT TO THE BOOK PROFIT. (III) DURING THE PREVIOUS YEAR RELEVANT TO THE A SSESSMENT YEAR 2013-14 THE APPELLANT-COMPANY ENTERED INTO A COMPOSITE SCHE ME OF ARRANGEMENT IN THE NATURE OF DEMERGER AND RESTRUCTU RING OF SHARE CAPITAL UNDER SECTIONS 391 TO 394 READ WITH SECTION S 100 TO 103 OF THE COMPANIES ACT, BETWEEN THE APPELLANT-COMPANY AND YO GESHWAR HEALTHCARE LTD. AS PER THIS COMPOSITE SCHEME, GHUMA DIVISION OF YOGESHWAR HEALTHCARE LTD. (DEMERGED COMPANY), ALONG WITH ALL ASSETS AND LIABILITIES SHALL BE DEEMED TO BE TRANSFERRED T O AND VESTED IN THE APPELLANT-COMPANY WITH EFFECT FROM THE APPOINTED DA TE 1ST APRIL, 2012 AT VALUES APPEARING IN THE BOOKS OF ACCOUNT OF THE DEMERGED COMPANY. THE LEARNED PRINCIPAL CIT OBSERVED THAT THE APPELLA NT-COMPANY SET OFF AN AMOUNT OF RS.36.02 CRORES BEING BROUGHT FORWARD LOSS/UNABSORBED DEPRECIATION BELONGING TO THE TRANSFERRED SEGMENT O F THE DEMERGED COMPANY, AGAINST ITS INCOME FOR THE ASSESSMENT YEAR 2013-14. THE LEARNED PRINCIPAL CIT FURTHER OBSERVED THAT SUCH SE T OFF OF CARRY FORWARD LOSS/UNABSORBED DEPRECIATION WAS NOT PERMIS SIBLE AS PER THE PROVISIONS OF SECTION 72A OF THE IT. ACT. THE LEARN ED PRINCIPAL CIT HAS OBSERVED THAT SUCH BUSINESS LOSS/UNABSORBED DEPRECI ATION CAN BE SET OFF ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -5- AND CARRIED FORWARD ONLY IN THE CASE OF AN INDUSTRI AL UNDERTAKING OR A HOTEL OR A SHIP. FURTHER, THE EXPRESSION 'INDUSTRIA L UNDERTAKING' IS DEFINED IN CLAUSE (AA) OF SUB-SECTION [7) OF SECTIO N 72A OF THE I.T. ACT THE LEARNED PRINCIPAL CIT WAS OF THE VIEW THAT IN T HE PRESENT CASE THERE WAS NO INDUSTRIAL UNDERTAKING AND, THEREFORE, THE U NABSORBED LOSS OF YOGESHWAR HEALTHCARE LTD. CANNOT BE SET OFF / CARRI ED FORWARD AGAINST THE BUSINESS INCOME OF THE APPELLANT-COMPANY. 4. THE LEARNED PRINCIPAL CIT IN THE AFORESAID NOTIC ES ISSUED U/S.263 ASSUMED THAT THE ASSESSING OFFICER DURING THE COURSE OF THE ASSESSME NT PROCEEDINGS DID NOT EXAMINE AND APPLY HIS MIND TO THE AFORESAID ISSUES AND HE F AILED TO MAKE ANY ADDITIONS/DISALLOWANCES ON ACCOUNT OF THE AFORESAID FACTORS, THE LEARNED PRINCIPAL CIT, THEREFORE, OPINED THAT THE ASSESSMENT ORDER WA S ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND CALLED UPON THE APPELLA NT-COMPANY TO EXPLAIN AS TO WHY APPROPRIATE ORDER BE NOT PASSED U/S.263 OF THE I.T. ACT. 5. IN RESPONSE TO THE AFORESAID NOTICES ISSUED BY T HE LEARNED PRINCIPAL CIT, THE APPELLANT-COMPANY FILED DETAILED REPLIES DATED 9* M ARCH, 2018 AND 26TH MARCH, 2018. IN THESE REPLIES IT WAS FORCEFULLY CONTENDED THAT ALL THE RELEVANT ISSUES WERE THOROUGHLY INQUIRED INTO AND EXAMINED BY THE ASSESS ING OFFICER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE APPELLANT-COMPANY F ILED DETAILED REPLIES SUPPORTED BY RELEVANT DOCUMENTS AND OTHER EVIDENCES AND AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES AND AFTER FULL AND PROPER APPLICATION OF MIND THE ASSESSING OFFICER ACCEPTED THE DISALLOWANCE SUO MOTU MADE BY THE APPE LLANT-COMPANY U/S.14A READ WITH RULE 8D AND ALSO THAT HAVING REGARD TO THE FAC TS AND THE PROVISIONS OF SECTION 72A OF THE I.T. ACT, THE APPELLANT-COMPANY WAS ENTI TLED TO SET OFF / CARRY FORWARD OF THE BUSINESS LOSS/UNABSORBED DEPRECIATION OF DEMERGED C OMPANY AS PER THE COMPOSITE SCHEME APPROVED BY THE HON'BLE GUJARAT HIGH COURT. IT WAS CONTENDED THAT THE ASSESSING OFFICER AFTER DUE APPLICATION OF MIND HAS TAKEN A PLAUSIBLE OR POSSIBLE VIEW AND IN SUCH A SITUATION THE LEARNED PRINCIPAL CIT H AS NO JURISDICTION TO INVOKE SECTION 263 OF THE I.T. ACT. THE AFORESAID WRITTEN REPLIES FILED BY THE APPELLANT-COMPANY BEFORE THE LEARNED PRINCIPAL CIT HAVE BEEN VERBATIM REPRODUCED AT PAGES 6 TO 34 OF THE LEARNED PRINCIPAL CIT'S ORDER PASSED U/S.263. T HE LEARNED PRINCIPAL CIT REJECTED THE WRITTEN SUBMISSIONS MADE BEFORE HIM. 6. NOW APPELLANT COMPANY HAS COME BEFORE US STATIN G THAT LD. PR. CIT OUGHT NOT TO HAVE INITIATED PROCEEDINGS U/S 263 AS ASSESSING OFF ICER HAS ALREADY MADE ENQUIRY WITH REGARD TO DISALLOWANCE OF RS. 6,53,882/-. WHER EIN IT IS SUBMITTED BY THE APPELLANT COMPANY HAS ALREADY MADE DISALLOWANCE OF RS. 6,53,8 82/- AND SAME CAN BE SEEN FROM STATEMENT OF COMPUTATION OF INCOME AND ANNEXURE-6 O F TAX AUDIT REPORT. AS WE CAN SEE THAT LD. A.O. HAS CONSIDERED ALL ASPECTS OF AFO RESAID INCOME AND AFTER THOROUGH APPLICATION OF MIND THE A.O. HAS ACCEPTED THE DISAL LOWANCE. THUS, WE ALLOW THIS GROUND OF APPEAL. ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -6- 7. THE ASSESSING OFFICER HAS ALSO MADE DETAILED ENQ UIRY WITH REGARD TO DEMERGER OF THE COMPANY AND SAME ORDER WAS PASSED BY THE HONBL E HIGH COURT AND ALL THE STAKE HOLDERS WERE INFORMED BY WAY OF NOTICE BY THE HONB LE HIGH COURT AND SAME IS PART OF PAPER BOOK AT PAGE NO. 88 WHEREIN IT IS MENTIONE D THAT ASSETS AND LIABILITY AS THE DEBIT BALANCE OF PROFIT AND LOSS ACCOUNT OF THE DEM ERGED COMPANY RELATING TO THE DEMERGED UNDERTAKING BEING TRANSFERRED TO THE RESUL TING COMPANY SHALL BE AT VALUES APPEARING ON THE DAY IMMEDIATELY PRECEDING THE DEME RGER APPOINTED DATE. FOR THIS PURPOSE ANY CHANGE IN VALUE OF ASSETS, CONSEQUENT T O THEIR RE-VALUATION, IF ANY, SHALL BE IGNORED. THE DIFFERENCE BETWEEN THE VALUE OF ASS ETS AND VALUE OF LIABILITY AS WELL AS DEBIT BALANCE OF PROFIT AND LOSS ACCOUNT ATTRIBUTAB LE TO THE DEMERGED UNDERTAKING TRANSFERRED PURSUANT TO THE SCHEME SHALL BE APPROPR IATED AGAINST THE PAID VALUE OF THE SHARE CAPITAL AS ENVISAGED UNDER CLAUSE 16.2 AND IT IS FURTHER MENTIONED THE DEMERGER SHALL COMPLY WITH THE PROVISIONS OF SECTIO N 2(19AA) OF THE INCOME TAX ACT AND ACCORDINGLY, ALL THE ACCUMULATED LOSSES AND ALL OWANCE FOR UNABSORBED DEPRECIATION OF THE DEMERGED COMPANY SHALL BE ALLOW ED TO BE CARRIED FORWARD AND SET OFF IN THE HANDS OF THE RESULTING COMPANY AS PER T HE PROVISIONS OF SECTION 72A(4) OF THE INCOME TAX ACT. IT IS SUBMITTED THAT THE TOTAL ACCUMULATED LOSS OF RS. 79,85,483/- AND ALLOWANCE FOR UNABSORBED DEPRECIATION OF RS. 43 ,95,97,098/- OF DEMERGED COMPANY PERTAINING TO DEMERGED UNDERTAKING SHALL BE ALLOWED TO BE CARRIED FORWARD AND SET OFF BY THE RESULTING COMPANY. 8. ON THE OTHER HAND, REVENUE CONTENTION IS THAT IT IS A CASE OF AMALGAMATION. AS CONTEMPLATED IN SECTION 72A(4) OF INCOME TAX ACT A ND SAME AS FOLLOWS: 72A(4) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OT HER PROVISIONS OF THIS ACT, IN THE CASE OF A DEMERGER, THE ACCUMULATED LOSS AND THE ALLOWANCE FOR UNABSORBED DEPRECIATION OF THE DEMERGED COMPANY SHA LL- (A) WHERE SUCH LOSS OR UNABSORBED DEPRECIATION IS DIREC TLY RELATABLE TO THE UNDERTAKINGS TRANSFERRED TO THE RESULTING COMPANY, BE ALLOWED TO BE CARRIED FORWARD AND SET OFF IN THE HANDS OF THE RES ULTING COMPANY; (B) WHERE SUCH LOSS OR UNABSORBED DEPRECIATION IS NOT D IRECTLY RELATABLE TO THE UNDERTAKINGS TRANSFERRED TO THE RESULTING COMPA NY, BE APPORTIONED BETWEEN THE DEMERGED COMPANY AND THE RESULTING COMP ANY IN THE SAME PROPORTION IN WHICH THE ASSETS OF THE UNDERTAKINGS HAVE BEEN RETAINED BY THE DEMERGED COMPANY AND TRANSFERRED TO THE RESULTI NG COMPANY, AND BE ALLOWED TO BE CARRIED FORWARD AND SET OFF IN THE HA NDS OF THE DEMERGED COMPANY OR THE RESULTING COMPANY, AS THE CASE MAY B E. 9. WE DRAW SUPPORT FROM A JUDGMENT OF ITAT MUMBAI 88 TAXMANN.COM 871 WHEREIN IT IS HELD THAT WHERE DEBIT OF REFERRAL CHARGES D URING YEAR IN P & L A/C WAS AND NOTHING BUT WRITING OFF OF INCOME WHICH WAS PREVIOU SLY RECEIVED AND OFFERED TO TAX AND ASSESSING OFFICER HAD EXAMINED THIS ISSUE BY MA KING A QUERY WHICH WAS REPLIED TO BY ASSESSEE, ASSESSMENT ORDER COULD NOT BE SAID TO BE ERRONEOUS SO AS TO BE PREJUDICIAL TO INTEREST OF REVENUE. ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -7- 10. IT IS WELL SETTLED PRINCIPLE OF LAW WHERE A.O . HAS EXERCISED QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE FOUND TO BE ERRONEOUS SIMPLY B ECAUSE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. 11. WE ALSO DRAW SUPPORT FROM A JUDGMENT OF JURIS DICTIONAL HIGH COURT IN THE MATTER OF KAMAL GALANI 95 TAXMANN.COM 261 (GUJ.) WHEREIN I T IS HELD AS UNDER: SECTION 69A, READ WITH SECTION 263. OF THE INCOME-T AX ACT, 1961 - UNEXPLAINED MONEY (REVISION) - BLOCK PERIOD 1-4-199 6 TO 25-7-2002 - ASSESSEE WAS SUBJECTED TO BLOCK ASSESSMENT PROCEEDI NGS - DURING SUCH PROCEEDINGS, ASSESSING OFFICER FOUND THAT THERE WAS INTRODUCTION OF AMOUNT IN CAPITAL ACCOUNT OF ASSESSEE - FURTHER, ASSESSEE HAD RECEIVED LOAN FROM HIS BROTHER - WITH RESPECT TO INTRODUCTION OF CAPITAL, ASSESSEE HAD POINTED OUT THAT HE WAS AN NRI FOR OVER TWO YEARS AND HE HAD MA DE FOREIGN REMITTANCES OVER A PERIOD OF TIME -AS REGARDS UNSECURED LOAN RE CEIVED FROM HIS BROTHER, ASSESSEE POINTED OUT THAT HE WAS RUNNING A SUCCESSF UL BUSINESS OF TRADING, WAS ENGAGED IN VARIOUS COMMERCIAL AND NONCOMMERCIAL ACTIVITIES AND HE WAS MAN OF STANDING AND MEANS - ASSESSING OFFICER ACCEP TED EXPLANATION OF ASSESSEE AND DID NOT MAKE ANY ADDITION IN RESPECT O F THOSE AMOUNTS -WHETHER ONCE ASSESSING OFFICER CARRIED OUT DETAILED INQUIRI ES, IT WAS NOT OPEN FOR COMMISSIONER TO REOPEN ISSUES ON MERE APPREHENSION AND SURMISES - HELD, YES - WHETHER, THEREFORE, TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE IMPUGNED REVISIONAL ORDER - HELD, YES [PARA 20] [IN FAVOUR O F ASSESSEE] 12. IN THE CASE OF CIT VS. ARVIND JEWELLERS (2003 ) 259 ITR 502 DIVISION BENCH OF GUJARAT HIGH COURT REFERRING TO THE JUDGMENT OF SUP REME COURT IN CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT [2000] 243 ITR 83 WHER EIN IT IS HELD AS UNDER: '6. FROM THE ABOVE OBSERVATIONS MADE BY THE SUPREME COURT, IT IS CLEAR THAT THE PROVISIONS OF SECTION 263 CANNOT BE INVOKE D TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASS ESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WI LL BE ATTRACTED AND INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLI CATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOU S. THE SUPREME COURT HAS ALSO MADE IT CLEAR THAT THE PHRASE 'PREJU DICIAL TO THE INTERESTS OF THE REVENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER AND THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CA NNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT WAS FURTHER EMPHATICALLY STATED THAT WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF R EVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS T AKEN ONE VIEW WITH ITA NO.793/AHD/2019 SHALBY LIMITED VS. DCIT ASST.YEAR: 2014-15 -8- WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINAB LE IN LAW.' 13. AFTER CONSIDERING THE ARGUMENTS ADVANCED BY BO TH THE PARTIES AND GOING THROUGH THE AFORESAID JUDGMENT, WE HOLD THAT LD. PR. CIT OU GHT NOT TO HAVE INITIATED PROCEEDINGS U/S 263 OF THE INCOME TAX ACT WHEN ALRE ADY ENQUIRY IS MADE BY THE ASSESSING OFFICER. THUS, IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF LD. PR. CIT. 5. SINCE THE TRIBUNAL HAS ALREADY GRANTED RELIEF TO THE ASSESSEE IN SIMILAR FACTS AND CIRCUMSTANCES IN PRECEDING YEAR, THEREFORE IN PARITY WITH THE AFORESAID ORDER, WE SET ASIDE THE ORDER OF THE LD.PR.CIT U/S.263 OF THE ACT. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 07 / 04/2021 SD/- SD/- ( PRADIP KUMAR KEDIA ) ( MAHAVIR PRA SAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 07/ 04 /2021 &.. , .'../ T.C. NAIR, SR. PS !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ()* + / CONCERNED CIT 4. + ( ) / THE CIT(A)- 5. ./0 '')* , )*# , ( / DR, ITAT, AHMEDABAD 6. 034 5 / GUARD FILE. / BY ORDER, . ' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD