Appeal Details
Counselvise Citation
[2017] 127 COUNSELVISE.COM (IT) 6819 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 3 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-09-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Not Allotted
Next Hearing Date
27-02-2017
Assessment Year
2008-2009
Appeal Filed On
21-06-2016
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NO. 813/CHD/2016 ASSESSMENT YEAR : 2008-09 M/S MOTIA CONSTRUCTIONS LTD., VS. THE PR. CIT (CENTRAL), ROYAL ESTATE, LUDHIANA. CHANDIGARH AMBALA HIGHWAY, ZIRAKPUR, DISTT. SAS NAGAR, MOHALI (PUNJAB)PIN-140603. PAN NO. AADCM6576B & ITA 519/CHD/2013 ASSESSMENT YEA R : 2007-08 M/S MOTIA CONSTRUCTIONS LTD., VS. THE CIT , ROYAL ESTATE, CENTRAL, CHANDIGARH DELHI HIGHWAY, LUDHIANA. NEAR LIGHTS, ZIRAKPUR. PAN NO. AADCM6576B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL,ADVOCATE RESPONDENT BY : SHRI RAVI SARANGAL, CIT-DR DATE OF HEARING : 03.07.2017 DATE OF PRONOUNCEMENT : 28.09.2017 ORDER PER DIVA SINGH,JM THESE ARE TWO APPEALS FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 28.03.2013 AND 28.03.2016 P ASSED U/S 263 OF INCOME TAX ACT DATED FOR 2007-08 AND 2008-09 ASSESSMENT YE ARS. 2. IT WAS THE COMMON STAND OF THE PARTIES BEFORE THE B ENCH THAT FACTS, SUBMISSIONS AND ARGUMENTS IN THE TWO APPEALS ARE MORE O R LESS IDENTICAL. CONSEQUENTLY THE ARGUMENTS ADVANCED IN 2008-09 ASSES SMENT YEAR WOULD APPLY TO THE APPEAL FOR 2007-08 ASSESSMENT YEAR ALSO. ACCORDINGLY, THESE APPEALS ARE BEING DECIDED BY A COMMON ORDER. 3. THE LD. AR INVITING ATTENTION TO THE APPEALS SUBMITTED THAT HE WOULD FIRST ADDRESS ITA 813/CHD/2016 IN 2008-09 ASSESSMENT Y EAR AS THE ARGUMENTS ADVANCED HEREIN WOULD ADDRESS THE ENTIRE ISSU ES IN BOTH THE APPEALS, SYNOPSIS OF SUBMISSIONS IN THE RESPECTIVE APPEALS RUNNING INTO ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 2 OF 35 11 PAGES IN 2008-09 ASSESSMENT YEAR AND 3 PAGES IN 20 07-08 ASSESSMENT YEAR WERE RELIED UPON. 4. ACCORDINGLY, THE GROUNDS RAISED IN ITA 813/2016 ARE BEING REPRODUCED HEREUNDER : 1. THAT THE WORTHY PR. COMMISSIONER OF INCOME TAX (CENTRAL) HAS ERRED IN SETTING ASIDE THE EARLIER ORDER OF THE ASSESSING OFFICER PASSED U /S 143(3)/153A AND DIRECTING THE ASSESSING OFFICER TO ENHANCE THE INCOME ALREADY COM PLETED U/S 143(3)/153A BY AN AMOUNT OF RS.20.76 CRORES AS PER PARA 20 OF THE ORDER OF C IT(A). 2. THAT THE WORTHY CIT, HAS FAILED TO APPRECIATE T HE FACT THAT THE ASSESSMENT HAD BEEN FRAMED BY THE ASSESSING OFFICER AFTER EARLIER ORDER OF THE ASSESSING OFFICER HAS BEEN SET ASIDE U/S_L3, FOR WHICH, THE ASSESSING OFFICER HAS MADE THE DENOVO ASSESSMENT AND WHICH WAS AFTER DUE APPLICATION OF MIND AND, THUS, ENHANCEMENT OF INCOME ALREADY ASSESSED IS NOT PROPER. 3. THAT THE WORTHY CIT HAS FAILED TO APPRECIATE TH E FACT THAT THE ASSESSMENT HAVING BEEN MADE AFTER DUE APPLICATION OF MIND AND AFTER THE ASSESSING OFFICER HAD MADE THE NECESSARY ENQUIRY AND ENHANCEMENT OF INCOME BY THE PR. CIT IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. NOTWITHSTANDING THE ABOVE SAID GROUNDS OF APPEA L, IT IS SUBMITTED THAT THE ENHANCEMENT OF INCOME BY THE CIT IS AGAINST THE FAC TS AND CIRCUMSTANCES OF THE FACT. 4.1 ADDRESSING THE GROUNDS, THE LD. AR SUBMITTED THAT A S EARCH WAS CONDUCTED ON THE MOTIA GROUP OF CASES ON 25.02.2009 AND THE ASSESSEE M/S MOTIA CONSTRUCTION LTD. WAS ONE OF THE PERSONS COV ERED U/S 132 OF THE ACT. THE ASSESSEE, IT WAS SUBMITTED, IS ENGAGED IN TH E BUSINESS OF REAL ESTATE. IN RESPONSE TO NOTICE U/S 153A, RETURN OF IN COME DATED 16.10.2009 WAS FILED FOR THE YEAR UNDER CONSIDERATION WHERE IN AN INCOME OF RS. 4,93,420/- WAS DECLARED. THE INCOME OF THE ASSESSEE , IT WAS SUBMITTED, WAS ASSESSED AT RS. 2,98,14,313/- VIDE ORDER U /S 143(3)/153A DATED 22.10.2010. THE ADDITION OF RS. 2,45,10,000/- IT WAS S UBMITTED, HAD BEEN MADE ON THE BASIS OF THE SEIZED PAPER 62 OF A -4 WHICH WAS THE BASIS OF TWO 263 ORDER BY THE TAX DEPARTMENT OVER THE YEARS. THE LATEST 263 ORDER IN POINT OF TIME IS UNDER CHALLENGE IN THE PRESENT PROCEEDINGS . 4.2 IT WAS SUBMITTED, THAT NOTING OF THIS FACT IS NECESSARY AS THE CLAIM OF THE ASSESSEE IS THAT THE AO CONSIDERING THE SEIZED PAGE 62 OF A-4 IN THE SCRUTINY ASSESSMENT HAD MADE AN ADDITION OF RS. 2,45,10,000 /- AFTER A REASONED AND SPEAKING ORDER AND SINCE THERE IS NO NEW FACT, THE PRESENT 263 PROCEEDINGS UNDER CHALLENGE WERE NOT MAINTAINABLE. 4.3 REFERRING TO THE SCRUTINY ASSESSMENT ORDER, IT WAS SUBMITTED, THAT THE AO HAD ANALYZED EACH AND EVERY ENTRY OF THE SAID CHART AND ONLY THEN THE ADDITION HAD BEEN MADE. ACCORDINGLY RELYING UPON TH E ASSESSMENT ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 3 OF 35 ORDER DATED 22.10.2010, IT WAS HIS SUBMISSION THAT IT IS A C ASE OF FULL APPLICATION OF MIND BY THE AO, COPY OF THE ORIGINAL ASSESSME NT ORDER PASSED BY THE AO ( COPY OF THE SAME IS PLACED AT PAGE S 1 TO 30 OF THE PAPER BOOK). 4.4 THE SAID SCRUTINY ASSESSMENT ORDER, IT WAS SUBMITTE D WAS CHALLENGED BY THE ASSESSEE BEFORE THE CIT(A) AND AFTER CONSIDERING THE SAME SEIZED PAPER, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 20.03.2012. THUS, IT WAS SUBMITTED, THAT THE ASSESSMENT O RDER HAVING BEEN MERGED WITH THE ORDER OF THE CIT(A) COULD NOT HAVE BEEN REVISED BY THE PR. CIT AS PER SETTLED LEGAL POSITION. (COPY OF THIS ORDE R IS AT PAGES 31 TO 66 OF THE PAPER BOOK). 4.5 CONSIDERING THE VERY SAME SEIZED DOCUMENT, IT WAS S UBMITTED, THE CIT, SUBJECTED THIS VERY ASSESSMENT ORDER TO HIS REVISIO NARY POWERS U/S 263. THE SAID POWER THOUGH DID NOT VEST WITH HIM AND TH E EXERCISE OF POWER WAS CONTRARY TO LAW AND HAD BEEN CHALLENGED IN AP PEAL BEFORE THE ITAT, HOWEVER, THE CHALLENGE WAS WITHDRAWN AS BY THE TIME IT HAD COME UP FOR HEARING BEFORE THE ITAT, THE AO CARRYING OUT THE DIRECTIONS OF CIT, CENTRAL, LUDHIANA HAD ALREADY RE-CONSIDERED THE ENTRIES M ENTIONED AT SR.NOS. 7, 8, 10, 11 AND 21 BY HIS ASSESSMENT ORDER DATED 30.03.2014 U/S 143(3) READ WITH SECTION 263 AND AGAIN TOOK A CONSCIOUS V IEW THAT THEY DID NOT RELATE TO THE ASSESSEE. THUS, ONLY THE ORIGINAL ADDITION WHICH HAD BEEN MADE IN THE SCRUTINY ASSESSMENT WAS REPEATED. TH US, IN VIEW OF THIS FACT, IN ORDER TO AVOID REPETITIVE APPEALS, THE ASSESSEE HAD WITHDRAWN THE CHALLENGE TO THE 263 PROCEEDINGS. 4.6 THUS IT WAS SUBMITTED, THAT IN 2008-09 ASSESSMENT YEAR ADMITTEDLY ON FACTS THE AO IN THE SECOND ROUND ALSO PASSED THE O RDER DATED 30.03.2014 U/S 143(3) READ WITH SECTION 263 AFTER DUE APPLIC ATION OF MIND AND AFTER CONSIDERING THE ENTRIES INCLUDING THE ENTRIES AT SR.NO. 7, 8, 10, 11 AND 21 OF THE SEIZED PAGE NO. 62. 4.7. IN THE SAID BACKGROUND, IT WAS SUBMITTED, THAT THE EX ERCISE OF THE POWER VESTED IN THE CIT U/S 263 YET AGAIN CONSIDERING T HE VERY SAME SEIZED DOCUMENT IS AN ABUSE OF POWER AS THE PR. CIT HAS THIS TIME DIRECTED THAT ADDITIONS WERE REQUIRED TO BE MADE ON ACCOUNT OF E NTRIES AT SR.NO. 7, 8 AND 21. THEREBY IN EFFECT ADMITTING THAT CIT, CENTRAL IN THE FIRST ROUND HAD WRONGLY INCLUDED THE PROJECTS MENTIONED AT SL.NO. 1 0 AND 11. IT WAS HIS SUBMISSION THAT THERE IS A VESTED RIGHT OF THE ASSES SEE WHICH IF IT HAS ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 4 OF 35 TO BE DISTURBED, HAS TO BE DISTURBED BY FOLLOWING THE DUE PROCEDURES OF LAW AND NOT ON ARBITRARY WHIMS OF DIFFERENT OFFICERS OF THE DE PARTMENT. THE PR. CIT IN THIS ROUND NOT ONLY ON ACCOUNT OF ALL THE OTHE R REASONS ADDRESSED EARLIER EVEN OTHERWISE EXCEEDS HIS JURISDICTION BY STEPPING IN THE SHOES OF THE AO BY DIRECTING HIM TO MAKE ADDITIONS. 4.8 INVITING ATTENTION TO THE COPY OF THE SHOW CAUSE NO TICE DATED 16.02.2016 (PLACED AT PAGES 83 TO 85 OF THE PAPER BOOK) ISSUED BY THE PR. CIT (C) LUDHIANA FOR INITIATING THE PROCEEDINGS U/S 263, IT WA S SUBMITTED, THAT IT WOULD SHOW THAT REFERENCE IS BEING MADE TO THE V ERY SAME ENTRIES OF THE SEIZED PAPER NO. 62 I.E. SR.NO. 7, 8, 10, 11 & 21. 4.9 IT WAS SUBMITTED THAT IF COPY OF THE SAID SHOW C AUSE NOTICE IS COMPARED TO THE EARLIER SHOW CAUSE NOTICE ISSUED DURING THE EARLIER NOTICE U/S 263, IT WOULD SHOW THAT THEY ARE MORE OR LESS IDENTICAL. 4.10 RELYING UPON THE CHART IN THE SYNOPSIS FILED, WHICH A DDRESSES THE SEQUENCE OF EVENTS, THE FACTS AND SUBMISSIONS WERE REITE RATED. RELYING ON THE SAME, IT WAS SUBMITTED THAT THE CASE OF THE ASSESSE E CONSISTENTLY HAS BEEN THAT THE AO IN THE ORIGINAL ASSESSMENT ORDER DATED 22.10.2010 U/S 143(3)/153A HAS CONSIDERED THE VERY SAME SEIZED DOCUMEN T; AFTER REQUIRING THE ASSESSEE TO EXPLAIN ALL THE ENTRIES OF THE SA ID DOCUMENT AFTER CONSIDERING THE RECORD AND THE ARGUMENTS WITH DUE APPLIC ATION OF MIND CONCLUDED THAT FOR PROJECTS AT SR.NO. 7, 8, 10, 11 AND 21 , ADDITION WAS NOT REQUIRED TO BE MADE IN THE HANDS OF THE ASSESSEE AND P ROCEEDED TO MAKE ADDITION OF RS. 2.45 CRORES ODD WHICH AS WAS CHALLENGED IN APPEAL BEFORE THE CIT(A). THE ORDER HAVING BEEN MERGED WITH THE ORDER OF THE CIT(A) DATED 20.03.2012 WAS NOT OPEN TO THE CIT, CENTRAL FOR EX ERCISING HIS REVISIONARY POWER QUA THE ASSESSMENT ORDER DATED 22.10 .2010. HOWEVER, SINCE THE APPEAL CHALLENGING THE ORDER WAS WITHDRAWN AS T HE AO VIDE HIS CONSEQUENT ORDER DATED 30.03.2014 U/S 143(3) READ WITH SECT ION 263 AFTER CONSIDERING THE SPEAKING DIRECTION, AGAIN CAME TO THE CONC LUSION THAT ADDITIONS FOR THESE SPECIFIC CONCERNS WERE NOT WARRANTED ACCORDINGLY , IN THE SAID BACKGROUND, THE ACTION OF THE PR. CIT TO AGAIN R EVISIT THE SAME ASSESSEE ON THE BASIS OF THE SAME SEIZED DOCUMENT, IT WA S SUBMITTED, WAS BAD IN LAW AS THE ASSESSMENT IN THE CASE OF THE ASSESSE E HAS BEEN FINALIZED U/S 143(3) READ WITH SECTION 153A AND THEREAFTER A DETAILED AND THOROUGH INVESTIGATION HAD BEEN DONE BY THE AO PURSUAN T TO THE FIRST 263 ORDER. THE SAID DOCUMENT I.E. THE SEIZED PAPER 62 OF ANNE XURE A-4 HAS ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 5 OF 35 BEEN DISCUSSED IN DETAIL BY THE AO IN THE ORIGINAL ORDER FRO M PAGE 7 TO 30 OF HIS ORDER. THE SHOW CAUSE NOTICE ISSUED IN REGARD TO T HE ISSUE IN THE ORIGINAL ROUND HAS BEEN DISCUSSED BY THE AO AND ADDRESS ED BY THE ASSESSEE AND IS PLACED AT PAGE 7, 11 AND PAGES 11 TO 2 4 OF THE SAID ORDER. THE CONCLUSION OF THE AO PARTLY AGREEING WITH ASSESSEE HAS BEEN SET OUT THEREIN AFTER THE 30 PAGED ORIGINAL ASSESSMENT ORDER. 4.11 REFERRING TO THE ORIGINAL ASSESSMENT ORDER, IT WAS S UBMITTED, THAT ONLY AFTER CONSIDERING THESE FACTS AND THE SUBMISSIONS O F THE ASSESSEE, THE AO NOT FULLY ACCEPTING THE SAME, PROCEEDED TO MAKE ADD ITION OF RS. 2.45 CRORES AFTER DUE APPLICATION OF MIND EXCLUDING THE ENTRIES 7, 8, 10, 11 AND 21. THE ADDITION WAS CHALLENGED BEFORE THE CIT(A). IT WAS HIS SUBMISSION THAT THE ASSESSEE, APART FROM RELYING UPON THE SUBMISSIO NS BEFORE THE AO IN THE ORIGINAL PROCEEDINGS WOULD ALSO LIKE TO BRING OUT THE FACT THAT THE SAID DOCUMENT WAS LOOKED AT AND CONSIDERED EVEN BY TH E CIT(A) IN APPEAL. ATTENTION WAS INVITED TO THE REPLY DATED 09.12.2010 WHICH IS PART OF THE ASSESSMENT ORDER AND DISCUSSED AT PAGES 11 AND 12 OF THE ORDER AND HAD ALSO BEEN DISCUSSED BY THE CIT(A) IN HIS ORDER DATED 20.03 .2012 ( COPY AT PAGES 31 TO 66 OF THE PAPER BOOK) AS WOULD BE EVIDENT FR OM PAGE 62 OF THE PAPER BOOK. THUS, IT WAS ARGUED, THE ISSUE HAS BEEN MUCH EXAMINED AND CONSIDERED. IT HAS ALSO BEEN CONSIDERED BY THE CIT CEN TRAL IN THE FIRST ROUND OF THE ORDER U/S 263 DATED 28.03.2013. (COPY PLACE D AT PAGES 67 TO 80 OF THE PAPER BOOK). THIS FACT IS EVIDENT FROM THE RELEVA NT DISCUSSION AT PAGE 69 OF THE PAPER BOOK. THE ASSESSEE, IT WAS SUBMITT ED, HAS GIVEN THE FOLLOWING REPLY WHICH HAS BEEN EXTRACTED BY THE CIT(A) AN D AT INTERNAL PAGE 3 OF HIS ORDER : 'AS REGARDS PAGE NO -62 OF ANNEXURE-A-4 SEIZED DURI NG THE COURSE OF SEARCH, WE HAVE ALREADY STATED THAT THIS PAGE IS AN ESTIMATION MADE BY DIRECTORS BEFORE SEARCH IN THE NORMAL COURSE OF BUSINESS. THIS ESTIMATION WAS MADE TO KNOW TOTAL ESTIMATED COST, ESTIMATED SALE AND ESTIMATED PROFITS OF THE PROJECT S RELATING TO MOTIA CONSTRUCTIONS LTD. AS WELL AS OTHER PROJECTS RELATING TO ONE OF T HE DIRECTOR HAVING INTEREST IN OTHER CONCERNS IN ADDITION TO MOTIA CONSTRUCTIONS L TD. AS MENTIONED AT PAGE NO. 62 AT SERIAL NO. 7,8,10,11 AND 21.'. 4.12 IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD ALS O GIVEN REPLY DATED 27.10.2010 DURING THE ORIGINAL ASSESSMENT PROCEEDING S WITH REGARD TO THESE VERY ENTRIES WHICH HAD BEEN REFERRED TO BY T HE PR. CIT(C) IN THE ORIGINAL 263 ORDER DATED 28.03.2013 AND HAS BEEN DISCUSSE D AT PAGE 69 TO 73 OF THE PAPER BOOK. IT WAS HIS SUBMISSION THAT THE S AID REPLY HAS EVEN BEEN REPRODUCED BY THE AO IN HIS ORDER PASSED IN CONSE QUENCE TO THE FIRST 263 DIRECTION OF CIT, CENTRAL IN ORDER DATED 30.03.2014 U/S 143(3) R.W. ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 6 OF 35 SECTION 263. THUS, IN VIEW OF THIS FACTUAL BACKGROUND, IT W AS HIS SUBMISSION THAT THE AO HAS DULY APPLIED HIS MIND AND ONLY AFTER COMPLETE SATISFACTION, HE HAS COME TO THE CONSCIOUS DECISION YET AG AIN NOT TO MAKE ANY ADDITION ON ACCOUNT OF SR.NO. 7, 8, 10, 11 AND 21. THIS FACT, IT WAS SUBMITTED, IS FURTHER PROVED FROM THE FACT THAT THE ENT IRE PAGE HAS BEEN REPRODUCED BY THE AO AT PAGE 8 & 9 OF THE PAPER BOOK AND THE AO HIMSELF AT PAGE 10 AND 11 OF THE PAPER BOOK HAS CALCULATED THE DIFFERENCE IN THE COSTS AND AT THAT TIME HAS CONSCIOUSLY TAKEN A CALL AC CEPTING THE FACT THAT ADDITION FOR ENTRIES AT PAGE 7, 8, 10, 11 AND 21 WERE NOT TO BE MADE IN THE HANDS OF THE ASSESSEE. THE AO, IT WAS SUBMITTED, HAS DO NE SO ONLY ON ACCOUNT OF THE FACT THAT THE SAID ENTRIES DID NOT RELATE TO THE ASSESSEE. THUS, ONLY AFTER CONSIDERATION OF THE ENTRIES IN THE SEIZED PAPER, THE AO HAS COME TO THE FOLLOWING CONCLUSION AT PAGE 25 OF HIS ORDER : BARRING PROJECTS STATED IN ROW 7,8,10,11 AND 21, A LL THE PROJECTS BELONG TO M/S MOTIA CONSTRUCTIONS LIMITED. ALSO THE PROJECTS MENTIONED IN 7,8,10,11 AND 21 RELATE TO THE ERSTWHILE DIRECTOR OF M/S MOTIA CONSTRUCTIONS LIMIT ED SH. PAWAN BANSAL AND THE FUND USED COLUMN REFLECT THE INVESTMENT OF THE ASSESSEE COMPANY M/S MOTIA CONSTRUCTIONS LIMITED IN THE PROJECTS OF THE SISTER CONCERNS THEN . (THE SAID FINDING OF THE ASSESSEE WAS EVEN REFERRED BY THE CIT(A) AT PAGE 28 OF HIS ORDER (PG 58 OF THE PB) 4.13 IT WAS HIS SUBMISSION THAT THERE IS NOTHING ON REC ORD TO SHOW THAT OUT OF THE TOTAL 22 ENTRIES, IT CAN BE SAID THAT THE AO SELECTIVELY A PPLIED HIS MIND ONLY TO 17 ENTRIES. WHEN A DOCUMENT IS BEFORE THE A O THEN NECESSARILY IT IS THE ENTIRE DOCUMENT WHICH HAS BEEN CON SIDERED. THE DOCUMENT HAS BEEN CONSIDERED BY THE CIT(A) ALSO IN HIS OR DER DATED 28.03.2012 EVIDENT FROM PAGE 35 OF HIS ORDER, ALTHOUGH THE FINDING STARTS FROM PAGE 63 OF THE ORDER. 4.14 IN ORDER TO DEMONSTRATE THAT THERE WAS A DETA ILED DISCUSSION DURING THE FIRST CONSEQUENTIAL ORDER PASSED U/S 143(3) READ WITH 263 DATED 30.03.2014 THE LD. AR SUBMITTED THAT INFACT, IT TOO IS A SEC OND DETAILED ASSESSMENT ORDER ON THE SAME ISSUE. THE ENTIRE CHART O F ALL THE PROJECTS/CONCERNS MENTIONED IN THE SEIZED DOCUMENT PAG E NO. 62 OF ANNEXURE A-4 HAS BEEN REPRODUCED AT PAGE 2 OF THE OR DER. REFERRING TO POINT NO. 4, IT WAS SUBMITTED, IT WOULD SHOW THAT THE ASSES SEE WAS ASKED TO FURNISH THE EXPLANATION WITH REGARD TO ALL THE ENTRIES/ DETAILS ON THE SAID DOCUMENT AND SPECIFICALLY ENTRIES AT SR.NO. 7, 8, 10, 11 AND 21. IT WAS SUBMITTED THAT THE ISSUE WAS AGAIN CONSIDERED AND ADDR ESSED SPECIFICALLY FOR THESE PROJECTS/CONCERNS. ATTENTION WAS INVITED TO TH E FINDING OF THE AO, THEREAFTER IN PARA 8 OF THE ORDER THAT ENTRIES AT SR.NO. 7, 8, 10, 11 AND 21 RELATE TO MARBLE HOME APARTMENTS, MARBLE HOME CONSTRUCT IONS PVT. LTD., ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 7 OF 35 MOTIA TOWNSHIP PVT. LTD., PRABHAT 40S, MOTIA DEVELOPERS P VT. LTD. (BADDI LAND & MOTIA HEIGHTS) AND MOTIA PROJECTS PVT. LTD.(SCHOOLS ) RESPECTIVELY. ATTENTION WAS ALSO INVITED TO THE REPLY FILED BEFORE THE AO DURING THE SAID PROCEEDINGS, COPY OF WHICH IS PLACED AT PB-II PAGE 135-13 6. REFERRING TO THE SAME, IT WAS REITERATED THAT IT WAS CONCLUDED THAT FOR CERTAIN ENTRIES RELATING TO INDEPENDENT ASSESSEES, NO ADDITION COULD BE MADE IN THE HANDS OF THE ASSESSEE. THE VIEW ON CONSIDERING THE RECORD HAS CONSISTENTLY BEEN TAKEN IN THE ORIGINAL ASSESSMENT PROCEEDINGS AS WELL AS TH E PROCEEDINGS PURSUANT TO THE FIRST 263 ORDER. 4.15 REFERRING TO THE RECORD, IT WAS SUBMITTED, THAT THE AO IN THE ASSESSMENT ORDER U/S 143(3) R.W.S. 263 HAS HIMSELF GIVEN TH E ENTIRE HISTORY IN THE CASE OF THE ASSESSEE AND THUS, TO CONCLUD E THAT HE HAS MISSED LOOKING AT THE ENTRIES PERTAINING TO THESE PROJECT S IS A FACT BASED ON SUSPICIONS AS IT IS NOT COMING OUT FROM THE RECORD. T HE AO, IT WAS SUBMITTED, HAS REPRODUCED THE REPLIES OF THE ASSESSEE R ELATING TO THE ENTRIES AT SR. NO. 7, 8, 10, 11 AND 21 AND AGREED THAT ON FACTS THAT PROJECTS/CONCERNS RELATE TO DIFFERENT ASSESSEES AND HAS TAKEN NOTE OF THE FACT IN POINT 8 OF HIS ORDER. IN POINT NO. 9, THE AO HAS HE LD THAT THE SAID FIVE ENTRIES HAVE DULY BEEN COVERED FOR THE PURPOSES OF ASSESSMENT IN THE CASE OF THOSE RESPECTIVE ASSESSEES. THUS, IT WAS HIS SUB MISSION THAT THE AO WAS CAREFUL TO CONSIDER THE ASPECT FROM ALL SIDES AND HELD THAT THE ASSESSMENT ORDERS INFACT HAVE DULY BEEN PASSED IN THE CASE OF ENTRIES AT SR.NO. 10 AND 11 NAMELY M/S MOTIA TOWNSHIP PVT. LTD. AND MOTIA DEVELOPERS PVT. LTD. ACCORDINGLY, IT WAS HIS SUBMISSION THA T THE VIEW TAKEN HAS BEEN CONSCIOUSLY TAKEN AFTER APPLYING HIS MIND TO THE SEIZED PAGE 62 AND NOT CASUALLY ARRIVED AT. THE ORDER OF THE AO EVEN IN THE SET ASIDE CONSEQUENTIAL ORDER DATED 30.03.2014 THAT ADDITION S FOR THOSE PROJECTS WAS NOT REQUIRED IS AGAIN BEING SUBJECTED TO T HE REVISIONARY POWERS. THUS, IT WAS HIS SUBMISSION THAT IN THE FACTS OF T HE PRESENT CASE, TWO DIFFERENT AOS AND THE CIT(A) HAVE ALREADY APPLIED THEIR MIND TO THE FACTS OF THE CASE AND SPECIFICALLY PAGE 62 OF A-4. THUS, HO W MANY TIMES IS THE DEPARTMENT GOING TO INSIST THAT THE SPECIFIC PAPER BE CONSIDERED . 4.16 IN ORDER TO ASSUME JURISDICTION, IT WAS SUBMITTED, TWIN CONDITIONS ARE REQUIRED TO BE FULFILLED; (I) THAT THE ORDER IS ERRONEOUS, A ND (II) ALONGWITH BEING ERRONEOUS, IT ALSO PREJUDICIAL TO THE INTERES T OF THE REVENUE. IN THE FACTS WHERE TWO AOS HAVE FORMED A VIEW AFTER DUE AND RELEVANT ENQUIRY, THE EXERCISE OF POWER U/S 263 YET AGAIN ON THE VERY SAME ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 8 OF 35 ISSUE WAS ASSAILED ON THE GROUNDS OF BEING ARBITRARY. TH E ASSESSEE, IT WAS SUBMITTED, BEFORE THE PR.CIT, CENTRAL, LUDHIANA FOR THE SEC OND TIME HAD FILED A DETAILED REPLY DATED 29.02.2016 AVAILABLE AT PAGE 137 TO 139 OF THE PAPER BOOK. THE FINDINGS OF THE PR. CIT WERE ASSAILED ON T HE FOLLOWING GROUNDS AS PER CHART PLACED AT PARA 19 PAGES 7 TO 9 OF THE SYNOPSIS FILE D : THE AO HAS NOT MADE ANY ADDITION FOR THE PROJECTS MENTIONED AT S.NO 7,8 AND 21 THOUGH THE ASSESSEE COMPANY HAD SOME BUSINESS INTEREST/SHARE OF PROFIT IN THE ENTITIES MENTIONED IN THE DOCUMENTS AT 7,8 AND 21. A) IT IS SUBMITTED THAT THE AO HAS DULY APPLIED HIS MI ND ON THE PROJECT; S.NO 7,8 AND 21 AND ONLY AFTER DUE SAT ISFACTION (TWICE) NO ADDITION MADE BY THE AO. B) THAT THE ASSESSEE DID NOT HAVE ANY SHARE OF PROFIT/ INTEREST IN CONCERN NAMELY MARBLE HOME APARTMENT, MARBLE HOME CONSTRUCTION PVT. LTD. AND MOTIA PROJECTS PVT LTD. EXCEPT THAT FOR FEW MONTHS CERTAIN AMOUNT WAS ADVANCED TO THOSE CON CERNS. THUS, THE FINDING OF THE PR CIT IS MISCONCEIVED. C) THE PR. CIT HAS USED HIS POWERS U/SEC 263 OF THE AC T TO DIRECT THE AO MAKE THE ADDITION IN THE CASE OF THE ASSESSE E ON ACCOUNT OF THREE ENTRIES AT S.NO 7,8 AND 21. D) THE PR. CIT HAS STEPPED INTO THE SHOES OF THE A O BY DIRECTING THE AO THE END OF THE ORDER TO INCLUDE THE PROFIT O F RS. 20.76 CR AND PASS THE ASSESSMENT ORDER. THE PR. CIT COULD HA VE HIMSELF MADE THE ENHANCEMENT. THE PR. CIT IN POINT C(I) AT PAGE 9 OF THE ORDER HAS HELD THAT THE ASSESSEE HAD NOT FILED ANY DOCUMENTARY EVIDENCE IN THE FORM OF ASSESSMENT ORDER IN THE CASE OF MARVEL HOME CONSTRUCTION. A) THE ASSESSEE CANNOT OBTAIN A COPY OF THE ASSESSMENT ORDER OF A THIRD PERSON. HOWEVER, THE PR. CIT COULD HAVE ENQ UIRED INTO THE MATTER SINCE THE ASSESSEE HAD INTIMATED THE JURISDI CTION OF THOSE PARTIES THAT THE SAME ARE WITH CIT-III. B) EVEN OTHERWISE, THE PR. CIT IS HAS DIRECTED THE AO TO MAKE THE ADDITION IN THOSE CASES I.E 7,8 AND 21, WHEREIN HE WAS NOT SURE AS TO WHETHER THE ASSESSMENT HAS BEEN FRAMED IN THOSE CASES OR NOT. C) FOR THE PROJECTS AT S.NO 10 AND 11, THE ASSESSING O FFICER HAS HIMSELF STATED THAT THE ASSESSMENT HAS BEEN FRAMED BY HIM, THOSE CASES WERE IGNORED IN THE CASE OF THE ASSESSE E. D) THE FINDING OF THE PR CIT THAT IN OTHER CASES IF NO ADDITION HAD BEEN MADE, THEN THE ADDITION WOULD BE MADE IN THE CASE OF THE ASSESSEE IS ILL-FOUNDED. E) THE DEPARTMENT HAS NOT MADE THE ADDITION IN THE CAS E OF THE ASSESSEE ON ACCOUNT OF 2 ENTITIES I.E MOTIA TOW NSHIP PVT LTD AND MOTIA DEVELOPERS PVT LTD AS SEPARATE ASSESS MENTS HAD BEEN MADE IN THEIR CASES. WE HAVE BEEN ABLE TO GET THE ORDER OF ANOTHER ENTITY I.E MARBLE HOME CONSTRUCTIO N PVT LTD. (S.NO 8) WHEREIN ADDITION HAS BEEN MADE BY THE AO, SO ON THE SAME PRINCIPLE NO ADDITION IS CALLED FOR IN THE CASE OF THE ASSESSEE. F) SO, IT IS VERY MUCH CLEAR THAT THE PR. CIT HAS EXCEEDED HIS JURISDICTION AND HAS MADE THE ADDITION WRONGLY THE PR. CIT IN POINT NO C(II) AT PAGE-9 WITH REGARD TO MARBLE HOME APARTMENT HAS HELD THAT THE ASSESSEE HAS GIVEN A VAGUE, AMBIGUOUS REPLY WITHOUT TOUCHING THE MERITS. A) THE CIT HAS NOT STATED AS TO HOW THE REPLY AS GI VEN BY THE ASSESSEE IS VAGUE. IT IS VERY MUCH CLEAR FROM THE O RDER ITSELF THAT ADDITION FOR ONLY THOSE CASES HAVE BEEN MADE IN THE CASE OF THE ASSESSEE FOR WHICH THE DEPARTMENT WAS NOT CLEAR THAT THE ASSESSMENT HAS BE EN FRAMED IN THE RESPECTIVE CASES OR NOT. B) EVEN OTHERWISE, THE FACT THAT THE SAID ENTRY DOE S NOT ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 9 OF 35 RELATE TO THE ASSESSEE HAS BEEN EXAMINED BY TWO ASS ESSING OFFICERS AT DIFFERENT POINT OF TIME. C) THE AO AS WELL AS THE PR. CIT HAD NOT MADE ANY E NQUIRY WITH REGARD TO THE ASSESSMENTS OF THE RESPECTIVE AS SESSEE'S. (WITH REGARD TO 3 PERSONS I.E AT S.NO 7,8 AND 21) C) THE CIT IS NOT THE ASSESSING AUTHORITY AND BY DO ING SO, HE HAS EXCEEDED HIS JURISDICTION WHICH IS AGAINST THE LAW. THE PR. CIT IN POINT NO C(III) AT PAGE 9-10 WITH REGARD TO M/S MOTIA TOWNSHIP HAS HELD THAT THE ASSESSEE HAS GIVEN A VAGUE, AMBIGUOUS REPLY WITHOUT TOUCHING THE MERITS. A) THE PR. CIT HAS NOT STATED AS TO HOW THE REPLY AS G IVEN BY THE ASSESSEE IS VAGUE. IT IS VERY MUCH CLEAR FROM T HE ORDER ITSELF THAT ADDITION FOR ONLY THOSE CASES HAVE BEEN MADE IN THE CASE OF THE ASSESSEE FOR WHICH THE DEPARTMENT W AS NOT CLEAR THAT THE ASSESSMENT HAS BEEN FRAMED IN TH E RESPECTIVE CASES OR NOT. B) EVEN OTHERWISE, THE FACT THAT THE SAID ENTRY DOES N OT RELATE TO THE ASSESSEE HAS BEEN EXAMINED BY TWO ASS ESSING OFFICERS AT DIFFERENT POINT OF TIME. C)THE PR. CIT IS NOT THE ASSESSING AUTHORITY AND BY DOING SO, ,HE HAS EXCEEDED HIS JURISDICTION WHICH IS AGAI NST THE LAW. THE PR. CIT ON POINT D AT PAGE-10 HAS HELD THAT THE AO HAS MADE THE ADDITION OF RS. 2.45 CR ON ACCOUNT OF UNDISCLOSED PROFITS WITH REGARD TO DIFFERENT PROJECTS AS PER PAGE-62. SO, THE ADDITION FOR PROJECTS AT S.NO 7,8 AND 21 WAS ALSO REQUIRED TO BE MADE A) THE PR. CIT HAS DULY AGREED THAT THE ADDITION OF RS. 2.45CR HAD BEEN MADE EARLIER BY THE AO ON ACCOUNT O F SAME PAGE. SO, IT IS QUITE OBVIOUS THAT THE AO HAS DULY APPLIE D HIS MIND ON THE SAID SEIZED PAGE ON EACH AND EVERY SING LE ENTRY. B ) FURTHER, THE PR. CIT HIMSELF IGNORED THE PROJE CTS AT S.NO 10 AND 11 AFTER IT CAME TO HIS KNOWLEDGE THAT THE ASSESSMENT HAS BEEN SEPARATELY MADE IN THEIR CASE. IF THE PR. CIT HAS IGNORED PROJECTS AT S.NO 10 AND 11, ON THE SAME STRENGTH, THE OTHER PROJECTS NOT RELATING TO THE AS SESSEE SHOULD HAVE BEEN IGNORED AND AS SUCH THE FINDING OF THE PR. CIT IS CONTRADICTORY. 4.17 THE REASONING TAKEN BY THE PR. CIT, IT WAS SUBMITTED, APPEARS TO BE THAT IN CASES WHEREIN IT WAS NOT CLEAR TO HIM ALSO, WHETH ER THE ADDITION HAS BEEN MADE IN THE RESPECTIVE YEARS IN THOSE ASSESSE E CASES OR NOT, IS NOT CLEAR. THE DIRECTION HAS BEEN THAT IN CASE ADDITION IS NOT MADE IN THE HANDS OF THE OTHER PARTY, THEN THE PROFIT SHOULD BE ASSE SSED IN THE HANDS OF THE ASSESSEE. IT WAS SUBMITTED, THAT DESPITE COPIOUSL Y LOOKING INTO THE ISSUE, THE PR. CIT HAS NOT CROSSED THE THRESHOLD OF POINT ING OUT THE ERROR AND HAS PROCEEDED TO GIVE DIRECTIONS BASED ON IFS AND BU TS. NOWHERE HAS THE PR. CIT DEMONSTRATED THAT THE ORDER WAS PASSED W ITHOUT DUE APPLICATION OF MIND. NOTHING NEW HAS BEEN NOTICED BY HIM WA RRANTING THE EXERCISE OF HIS REVISIONARY POWER YET AGAIN. ACCORDINGLY, IT WAS HIS SUBMISSION THAT IN TERMS OF THE VARIOUS DECISIONS AND ORDE RS RELIED UPON SPECIFICALLY SHRI SATYA PRAKASH GUPTA V ITO, DELHI IN ITA NO . 2730/DEL/2013 ORDER DATED 07.03.2014, M/S VED PARKASH CONTRACTORS VS CIT IN ITA 573/CHD/2015,M/S KUMAR ENTERPRISES VS DCIT IN ITA NO. ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 10 OF 35 525/CHD/2014, VENUS WOOLEN MILLS AS REPORTED IN 36 ITR (TRIB) 388, HARI TRADING CO. V CIT 263 ITR 437, AND ORDER DATED 28.08.2017 OF CHANDIGARH BENCH IN ITA NO. 1252/CHD/2016 ASSESSMENT YEAR 2007-08 AND 7 OTHER APPEALS IN ACIT VS NIKKAMAL JEWELLERS, LUDHIAN A, THE IMPUGNED ORDER BE QUASHED. 4.18 REFERRING SPECIFICALLY TO ORDER DATED 03.11.2015 O F THE CHANDIGARH BENCH IN THE CASE OF M/S VED PARKASH CONTRACTORS VS C IT IN ITA 573/CHD/2015,IT WAS HIS SUBMISSION THAT THE ORDER OF THE PR. CIT CENTRAL MAY BE QUASHED AS HE HAS EXCEEDED HIS JURISDICT ION. FOLLOWING EXTRACT OF THE SAID DECISION WAS HEAVILY RELIED UPON : '17. FROM THE ABOVE, IT IS ABUNDANTLY CLEAR THAT CI T HAS EXCEEDED ITS JURISDICTION IN VIRTUALLY REASSESSING THE CASE. IT IS TRUE THAT THE REVISIONAL AUTHORITY ITSELF HAS WIDE POWER TO EXAMINE THE CASE WHETHER THE DECISION HAS BEEN ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND IN EXERCISE OF THESE PO WER MODIFICATIONS ARE PERMISSIBLE, AND FURTHERMORE THAT IF THE COMMISSION ER COMES TO THIS CONCLUSION THAT THE ASSESSMENT IS REQUIRED TO BE REDONE, THAT SUCH DIRECTION CAN STILL BE ISSUED TO THE ASSESSING OFFICER . HOWEVER, IT IS TRITE LAW TH AT IT IS NOT PERMISSIBLE FOR THE CIT BEING A REVISIONAL AUTHORITY TO STEP INTO THE SHOES OF TH E ASSESSING OFFICER AND TO REDO THE ASSESSMENT AND PASS FRESH ASSESSMENT ORDER.' 4.19 IN THE FACTS OF THE PRESENT CASE, IT WAS SUBMIT TED, THAT ON THE BASIS OF VERY SAME DOCUMENT, ADDITION OF RS. 2.45 CRORES ODD STO OD MADE IN THE HANDS OF THE ASSESSEE. IN THE CIRCUMSTANCES, THE DIRECT ION THAT CERTAIN ENTRIES IN THE DOCUMENT HAVE NOT BEEN FULLY CONSIDERED A S A BASIS FOR INVOKING THE REVISIONARY POWER WAS NOT MAINTAINABLE UNDER LAW. 4.20 APART FROM PLACING RELIANCE UPON THE ORDER DATED 13.04.2016 OF CHANDIGARH BENCH IN M/S KUMAR ENTERPRISES VS DCIT IN ITA NO. 525/CHD/2014 (PG-54-67 OF JUDGMENT SET) AND VENUS WOOL EN MILLS AS REPORTED IN 36 ITR (TRIB) 388 (PG-68-70 OF JUDGMENT SE T), SPECIFIC ATTENTION WAS INVITED TO DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF HARI TRADING CO. V CIT 263 ITR 437 FOR THE FOLLOWING PROP OSITION : 'AO HAVING MADE FULL INQUIRIES BEFORE ACCEPTING THE CLAIM OF THE ASSESSEE QUA THE AMOUNT SURRENDERED AT THE TIME OF SURVEY ON ACCOUNT OF DIS CREPANCY IN STOCK AND ACCORDINGLY PASSED THE ORDER WITHOUT MAKING THE ADDITION, THE O RDER OF CIT UNDER S. 263 COULD NOT BE SUSTAINED ON THE GROUND THAT THE ASSESSMENT WAS MAD E WITHOUT PROPER ENQUIRY, MORESO WHEN THE ASSESSEE'S CASE WAS BEING MONITORED BY THE CIT FROM TIME TO TIME AND THE ASSESSMENT ORDER HAS BEEN PASSED AFTER A DRAFT ORDE R HAD BEEN FORWARDED TO THE THEN CIT FOR HIS APPROVAL. ' 4.20.1 IN THE FACTS OF THE SAID CASE ALSO, IT WAS SUBMITTED, A SURRENDE R IN THE COURSE OF THE SURVEY HAD BEEN MADE WHICH HAD BEEN THOROUGHLY ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 11 OF 35 INVESTIGATED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS BY THE AO. THEREAFTER, 263 PROCEEDINGS INITIATED BY THE COMMISSIONER W ERE HELD TO BE BAD IN LAW. THE FACTS WERE STATED TO BE IDENTICAL. 4.21 RELIANCE WAS ALSO PLACED UPON ORDER DATED 29.02.2012 OF THE ITAT IN THE CASE OF M/S GUPTA SPINNING MILLS VS CIT IN ITA NO. 3398/D EL/2010 (COPY PLACED AT PAGE 71-87 OF JUDGMENT SET) FOR THE FOLLOWING PROPOSITION : THE ID. CIT TOTALLY IGNORED THE AFORESAID REPLY DA TED 16.10.2008 FILED BY THE ASSESSEE BEFORE THE AO. MERE CHANGE OF OPINION OR VIEW WOULD NOT EN ABLE THE CIT TO EXERCISE JURISDICTION U/S 263 OF THE ACT MORE SO, WHEN THE AO HAD CONSIDERED THE DETAILS AND THE EXPLANATION OFFERED BY THE ASSESSEE. CHANGE OF OPINION BY REAPPRAISING THE EVIDENCE IS NOT WITHIN THE PARAMETERS OF REVISIONAL JURISDICTION OF THE COMMIS SIONER UNDER SECTION 263 OF THE ACT. IN VIEW THEREOF, WE SET ASIDE THE IMPUGNED ORDER U/S 2 63 OF THE ACT AND QUASH THE SAME. 4.22 ATTENTION WAS ALSO INVITED TO ORDER DATED 24.02.2017 IN THE CASE OF SMALL WONDER INDUSTRIES VS CIT IN ITA 2464/MUM/2013 (COP Y PLACED AT PAGES 88-99 OF THE JUDGEMENT SET) FOR THE FOLLOWING PROPOSITION : THERE IS A DISTINCTION BETWEEN 'LACK OF ENQUIRY' A ND 'INADEQUATE ENQUIRY'. IF THE AO HAS CALLED FOR THE NECESSARY DETAILS AND THE ASSESSEE H AS FURNISHED THE SAME, THE FACT THAT THE AO IS SILENT IN THE ASSESSMENT ORDER DOES NOT MEAN THA T HE HAS NOT APPLIED HIS MIND SO AS TO JUSTIFY EXERCISE OF REVISIONAL POWERS BY THE CIT U/S 263' 4.23 RELIANCE WAS ALSO PLACED UPON ORDER DATED 28.08.2017 OF CHANDIGARH BENCH IN ITA NO. 1252/CHD/2016 ASSESSMENT YEAR 2007-08 AND 7 OTHER APPEALS IN ACIT VS NIKKAMAL JEWELLERS, LUDHIA NA FOR THE PROPOSITION THAT THE CASE HAVING BEEN CONSIDERED AND EXAMINED U/S 143(3) AND WHERE NO NEW FACT CAME UP FOR CONSIDERATION . THE PROCEEDINGS OF RE-ASSESSMENT DESERVE TO BE QUASHED. 4.24 IT WAS ALSO HIS SUBMISSION THAT THE ACTION IS BAD IN LA W IN VIEW OF THE FACT THAT THE ASSESSMENT ORDER ON THE ISSUE HAD A LREADY MERGED WITH THE ORDER OF THE CIT(A) WHICH IS THE SPECIFIC ARGUMENT IN T HE APPEAL FOR 2007-08 ASSESSMENT YEAR. EXPLANATION-I(C) TO SECTION 263 OF THE ACT, IT WAS SUBMITTED, MAKES THIS LEGAL POSITION VERY CLEAR AS ONL Y THE MATER, WHICH WAS NOT THE SUBJECT MATTER OF THE ORIGINAL APPEAL, CAN ONLY BE INVOKED BY APPLYING THE PROVISIONS OF SECTION 263. THE RE LEVANT PROVISION IS EXTRACTED HEREUNDER: 'WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION AN D PASSED BY THE ASSESSING OFFICER HAD BEEN SUBJECT MATTER OF ANY APPEAL, THE POWERS OF TH E PRINCIPAL COMMISSIONER UNDER THIS SUB SECTION SHALL EXTEND TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. (EMPHASIS PROVIDED) 4.25 IT WAS HIS SUBMISSION THAT IN THE FACE OF THE OVERWH ELMING DISCUSSIONS ON THE SAID DOCUMENT IN THE RESPECTIVE YEARS AND THE VARIOUS ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 12 OF 35 AUTHORITIES OF THE TAX DEPARTMENT, NO CASE HAS BEEN MAD E OUT BY THE PR. CIT OR THE CIT, CENTRAL THAT THE SAID DOCUMENT OR THE SPECIFIC PROJECT/CONCERNS HAD NOT BEEN CONSIDERED. FOR QUASHIN G THE PROCEEDINGS IN THE RESPECTIVE YEARS, RELIANCE WAS PLACED UPON THE FOLLO WING DECISIONS; A) K. SERA PRODUCTIONS VS CIT IN ITA NO. 3024/MUM/2 012 ORDER DATED 14.09.2012; B) ITAT MUMBAI BENCH IN THE CASE OF SON AL GARMENTS V. JT. CIT [2005] 95 ITD 363 (PG-100- 103 OF JUDGMENT SET); C) ITAT MUMBAI BENCH IN THE CASE OF MARICO INDUSTRIES LTD. V. ASSTT . CIT [2009] 27 SOT 73 (URO), (PG-104-106 OF JUDGMENT SET); D) HON'BLE GUJ ARAT HIGH COURT IN THE CASE OF CIT V. NIRMA CHEMICALS WORKS (P.) LTD. [200 9] 309 ITR 67 (PG-107- 110 OF JUDGMENT SET); E) HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. SARAF BANDHU (P.) LTD. [1995] 216 ITR 833. (PG-LLL-112YOF JUDG MENT SET); F) MAHIPAT RAICHAND SHAREBROKING VS DCIT IN ITA NO. 323/AH D/2010 ORDER DATED 06.08.2010. 4.26 ADDRESSING THE FACTUAL POSITION FOR 2007-08 ASSESSME NT YEAR, THE LD. AR SUBMITTED THAT THE ASSESSEE, PURSUANT TO THE NOT ICE U/S 153A DECLARED AN INCOME OF RS. 1,88,25,010/- AND THE ASSESSMENT WAS CONCLUDED AT AN INCOME OF RS. 3,08,08,741/- BY AN ORDER U/S 143(3)/15 3A DATED 22.12.2010. SPECIFIC ADDITION OF RS. 81,50,000/- WAS MAD E BY THE AO AFTER MAKING DUE ENQUIRIES ON THE BASIS OF THE VERY SA ME SEIZED PAGE NO.62 OF ANNEXURE-A-4, THE CORRECTNESS OF THE SAID ORDER WAS CHALLENGED IN APPEAL BEFORE THE CIT(A) WHO ALSO DISMISSED APPEAL OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS OF THE PRESENT CASE ALSO, THE IS SUES, IT WAS SUBMITTED, HAVE BEEN ENQUIRED INTO, REPLIED TO, CONSIDERED A ND ORDERS AFTER DUE APPLICATION OF MIND WERE PASSED BY THE AO AND T HE CIT(A). IN THE FACTS OF THE PRESENT CASE ALSO, IT WAS SUBMITTED THAT ONLY AFTER THE PASSING OF THE ORDER OF THE CIT(A) DATED 20.03.2013, THE CIT, CENTRAL, LUDHIANA INITIATED PROCEEDINGS ON THE BASIS OF SHOW CAUSE NOTICE DATED 21.03.2013 AND PASSED THE ORDER UNDER CHALLENGE ON 28.03 .2013 DIRECTING THAT IN THE ORDER DATED 22.12.2010 , THE AO HAS PASSED AN ORDER ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENU E. THE ARGUMENTS ADVANCED IN THE APPEAL FOR 2008-09 ASSESSMENT YEAR, IT W AS SUBMITTED, REMAIN THE SAME AS APPLICABLE TO THE CASE NAMELY THAT HEREIN THE ORDER WHICH WAS SOUGHT TO BE REVISED STOOD MERGED BY THE ORDER OF THE CIT(A) DATED 20.03.2012 AND THUS FIRSTLY THERE IS NO ERROR POINTED OUT BY CIT, CENTRAL IN THE ORIGINAL ASSESSMENT ORDER U/S 143(3)/153A DATED 22.1 2.2010 LET ALONE SUCH AN ERROR WHICH IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 13 OF 35 FURTHER, THE AOS ORDER DATED 22.12.2010 STOOD MERGED WITH THE ORDER DATED 20.03.2012, ACCORDINGLY IT COULD NOT HAVE BEEN REVIS ED BY PR. CIT AS IT WAS BARRED BY STATUTE. THUS, IN THE FACTS OF THE PRES ENT CASE, THE POWER WHICH THE PR.CIT CENTRAL EXERCISES, DOES NOT VEST WITH T HE SAID AUTHORITY AS THERE IS NOTHING ON RECORD TO EVEN AROUSE A SUSPIC ION THAT THE ISSUE HAD NOT BEEN CONSIDERED BY THE CIT(A) AS ADMITTEDLY IT H AD BEEN CONSIDERED. MOREOVER, EVEN THEN IT WAS SUBMITTED, IT HAS BEEN EXERCISED ARBITRARILY ON THE BASIS OF SUSPICIONS AS NOTHING IN THE SH OW CAUSE NOTICE OR IN THE IMPUGNED ORDER BRINGS OUT THE ERROR. IT IS ON LY BASED ON THE ARBITRARY OPINION OF THE PR. CIT, CENTRAL/CIT CENTRAL AND IS SECONDLY BASED ON NO FACTS. 4.27 INVITING ATTENTION TO THE ORIGINAL ASSESSMENT PROCEED INGS WHEREIN THE ASSESSEE HAD REPLIED VIDE LETTER DATED 09.12.2010 WHIC H IS A PART OF ORDER ITSELF EXPLAINING THE SPECIFIC DOCUMENT AND THE CALCULAT IONS THEREIN AS HAVING BEEN ESTIMATED COST, ESTIMATED SALE AND ESTIMA TED PROFITS OF THE PROJECTS RELATING TO THE MOTIA CONSTRUCTIONS WHICH INCLUDE D THE PROJECTS RELATING TO AN ERSTWHILE DIRECTOR WHO HAD INTERESTS IN OTH ER MOTIA CONSTRUCTIONS LTD. AND WHICH FOUND MENTION IN SR.NO. 7, 8, 1 0, 11 AND 21 AT PAGE NO. 62. THIS FACT, IT WAS SUBMITTED, HAS BEEN RE FERRED TO BY THE CIT CENTRAL IN HIS ORDER ALSO DATED 28.03.2013. THE AO HA D ALREADY CONSIDERED THE VERY SAME ARGUMENTS, FACTS AND EVIDENCE SEGREGATED THE INVESTMENTS OF THE THEN DIRECTOR SHRI PAWAN BANSAL IN TH E ORIGINAL PROCEEDINGS. FOR READY REFERENCE, THE RELEVANT EXTRACT O F THE SYNOPSIS HIGHLIGHTING THE RECORD FILED AT PAGE 2 AND 3 PARA 4, 5 AND 6 IS REPRODUCED HEREUNDER : 4. THE ASSESSEE DURING THE ORIGINAL ASSESSMENT PROC EEDINGS HAD FILED A REPLY DATED 09.12.2010 (PART OF ORDER AT PAGE-10 OF THE O RDER) WHEREIN THE ASSESSEE HAS DULY STATED AS FOLLOWS: 'AS REGARDS PAGE NO -62 OF ANNEXURE-A-4 SEIZED DURI NG THE COURSE OF SEARCH, WE HAVE ALREADY STATED THAT THIS PAGE IS AN ESTIMATION MADE BY DIRECTORS BEFORE SEARCH IN THE NORMAL COURSE OF BUSINESS. THIS ESTIMATION WAS MADE TO KNOW TOTAL ESTIMATED COST, ESTIMATED SALE AND ESTIMATED PROFITS OF THE PROJECT S RELATING TO MOTIA CONSTRUCTIONS LTD. AS WELL AS OTHER PROJECTS RELATING TO ONE OF THE DI RECTOR HAVING INTEREST IN OTHER CONCERNS IN ADDITION TO MOTIA CONSTRUCTIONS LTD. AS MENTIONED AT PAGE NO. 62 AT SERIAL NO. 7,8,10,11 AND 21.' THE WORTHY CIT(A) IN HIS ORD ER DATED 20.03.2012 AS PASSED AGAINST THE ORIGINAL ASSESSMENT ORDER HAS REFERRED TO THE SAID N-PLY- (RELEVANT PG-10 OF THE PB)._EVEN THE CIT IN THE 263 ORDER DATED 28.03.2013 HAS REFERRED TO THE SAME. (PG-4 OF ORDER). 5. FURTHER THE ASSESSEE HAS EVEN A GIVEN A DETAILE D REPLY DATED 27.10.2010 WITH REGARD TO THESE ENTRIES. THE SAID REPLY IS REPRODUC ED BY THE CIT IN THE 263 ORDER DATED 28.03.2013 (RELEVANT PAGE-4-7 OF THE ORDER). ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 14 OF 35 6. THE ASSESSING OFFICER HAS DULY CONSIDERED THE REPLIES OF THE ASSESSEE AND HAS GIVEN HIS FINDINGS AT PAGE-23-24 OF THE ORDER WHERE IN THE RELEVANT PORTION IS AS UNDER POINT A(IX): 'BARRING PROJECTS STATED IN ROW 7,8,10,11 AND 21 OF PG 62, ALL THE PROJECTS BELONG TO M/S MOTIA CONSTRUCTIONS LIMITED. ALSO THE PROJEC TS MENTIONED IN 7,8, 10,11 & 21 RELATE TO THE ERSTWHILE DIRECTOR OF M/S MOTIA CONST RUCTIONS LIMITED SH. PAWAN BANSAL AND THE FUND USED COLUMN REFLECT THE INVESTMENT OF THE ASSESSEE COMPANY M/S MOTIA CONSTRUCTIONS LIMITED IN THE PROJECTS OF ITS SISTER CONCERNS THEN.' 4.28 ACCORDINGLY, ON THE BASIS OF THESE FACTS, SUBMISSIONS AND MATERIAL ON RECORD, IT WAS SUBMITTED, THAT THE AO HAD DULY APPLIED HIS MIND ON THE VERY SAME DOCUMENT AND THE FACT THAT THE DOCUMENTS W ERE CONSIDERED HAS BEEN NOTED BY THE CIT, CENTRAL AS WELL AS THE PR. CIT CENTRAL, THE ORDER OF THE AO ACCORDINGLY ON THIS ISSUE STOOD MERGED WITH THE ORDER OF THE HIGHER AUTHORITY I.E. THE CIT(A) ARE ADMITTED FACTS AND MERE ARGU MENTS TO THE CONTRARY WITHOUT EVIDENCE HAVE NO VALUE. THE RESPECTIV E ORDERS UNDER CHALLENGE IN THE RESPECTIVE YEARS, IT WAS SUBMITTED, ARE BA D IN LAW. ALL THE OTHER ARGUMENTS REMAINING THAT THERE WAS NO BASIS TO S HOW THAT THE AO APPLIED HIS MIND ONLY TO 17 ENTRIES OUT OF 22 ENTRIES AND THAT THE SAID MATTER OF CONSIDERATION I.E. THE ISSUE ON THE CASES OF THE SAME SEIZED DOCUMENT ALREADY STOOD CONSIDERED, DECIDED AND MERGED W ITH THE ORDER OF THE CIT(A) REMAIN THE SAME. ACCORDINGLY, THE APPEALS OF T HE ASSESSEE DESERVE TO BE ALLOWED. 5. THE LD. CIT-DR INVITING ATTENTION TO THE IMPUGNED ORDERS SUBMITTED THAT THE IMPUGNED ORDERS DESERVES TO BE UPHELD. THE DIFFE RENCE THAT IN 2008-09 ASSESSMENT YEAR THE SAID SEIZED DOCUMENT HAD ALREADY BEEN A SUBJECT MATTER FOR CONSIDERATION U/S 263 PROCEEDINGS WA S A FACT ON RECORD AND IT IS THE SECOND 263 PROCEEDINGS UNDER CHALLENGE AND THAT IN 2007-08 ASSESSMENT YEAR, IT IS THE FIRST 263 PROCEEDINGS WAS NOT DISPUTED. 5.1 CARRYING US THROUGH THE ORDER FOR 2008-09 ASSESS MENT YEAR PASSED BY THE PR. CIT, CENTRAL, ATTENTION WAS INVITED TO THE SH OW CAUSE NOTICE ISSUED BY THE COMMISSIONER WHICH HAS BEEN REPRODUCED IN THE ORDER ITSELF FOR THE SAKE OF COMPLETENESS OF THE RECORD. REFERRING TO THE SAME, COPY OF WHICH IS ALSO AVAILABLE AT PAGES 67 TO 80 OF THE PAPER BO OK, IT WAS SUBMITTED, THAT THE PR. CIT (CENTRAL) LUDHIANA CONSIDERING THE RECORD HELD THAT THE ASSESSMENT ORDER DATED 22.12.2010 PASSED U/S 143(3)/153A OF THE INCOME TAX ACT ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE ASSESSMENT ORDER PASSED CONSEQUE NTIAL TO THE EARLIER 263 DIRECTIONS, IT WAS SUBMITTED, NO DOUBT WAS ON RECORD. IT WAS ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 15 OF 35 SUBMITTED, WHERE DESPITE THE CLEAR DIRECTIONS OF CIT CENTR AL U/S 263, THE AO STILL REFUSED TO LOOK INTO WHAT WAS DIRECTED TO BE SEE N AND MAINTAINS THE SAME ADDITION, AS IN THE ORIGINAL PROCEEDINGS, IN SUCH A SITUATION, THE ONLY POWER AVAILABLE TO THE TAX AUTHORITIES TO SET RIGH T AND ADDRESS THE POSITION IS THE POWER U/S 263 WHICH HAS BEEN EXERCISED A GAIN. THE ARGUMENTS OF THE ASSESSEE THAT THE AO HAS MADE PROP ER ENQUIRIES, IT WAS SUBMITTED, CANNOT BE ACCEPTED. IF THE AO DOES NOT VERIF Y THE POSITION WHETHER THE ADDITIONS HAVE BEEN MADE IN THE HANDS OF TH E CORRESPONDING ASSESSEES OR FAILS TO MAKE FULL AND PROPER ENQUIRIES, THEN IN SUCH A SITUATION, THE DEPARTMENT IS VERY MUCH WITHIN ITS RIGHTS TO ISSUE A STATUTORY DIRECTION U/S 263. IT WAS HIS SUBMISSION THAT IN THE FACTS OF THE PRESENT CASE, THE AO HAS NOT APPLIED HIS MIND AND THE P R. CIT ACCORDINGLY, HAD NO ALTERNATIVE BUT TO DIRECT THAT THE ADDITIONS IN THE HANDS OF THOSE ASSESSEES HAVE ESCAPED AND SINCE THESE WERE INVESTMENTS OF THE ASSESSEE, THEY SHOULD BE ADDED IN THE HANDS OF THE ASSESSEE. 5.2 INVITING ATTENTION TO PAGE 9 OF THE IMPUGNED ORDER, IT WAS SUBMITTED THAT THE CIT(A) HAS POINTEDLY DIRECTED THE AO TO EXAMIN E THE ADDITION IN THE CASE OF M/S MARBLE HOME APARTMENTS AND MARBLE HOME CONSTRUCTION LTD. AND MOTIA PROJECTS, AS IT APPEARED THAT THE DOCUM ENTARY EVIDENCE IN SUPPORT OF ASSESSEE'S CLAIM WAS NOT PRODUCED. FOR READ Y REFERENCE, THE SPECIFIC PARA RELIED UPON IS REPRODUCED HEREUNDER: (C)(I) THE ASSESSEE IN MS REPLY DATED 21 ST MARCH, 2016 HAS STATED THAT IN THE CASE OF MARVEL HOME CONSTRUCTION PVT. LTD., THE ADD ITION HAVE BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF THIS PIECE OF PAPER AND THE CONCERNED ASSESSING OFFICER IS INCOME TAX OFFICER, WARD-7(L), LUDHIANA HAD FRAMED THE ASSESSMENT BY ADDING THE AMOUNT IN THE HANDS OF M/S MARVEL HOME CONSTRUCTION PVT. LTD. AND, THEREFORE, NO ACTION IS CALLED FOR IN THE CASE OF ASSESSEE. HOWEVER, NO DOCUMENTARY EVIDENCE BY WAY O F ASSESSMENT ORDER ETC., IN THIS REGARD HAS BEEN PRODUCED DURING THE PRESENT 263 PROCEEDINGS. 5.3 IN THE FACTS OF SUCH CASES, WHERE THE AO HOLDING ANOT HER AO RESPONSIBLE FOR THE ADDITION RESULTING IN NO ADDITION ANYWHER E IN THE CIRCUMSTANCES THERE IS NOTHING WRONG IN HIS FINDING THAT T HE ADDITION BE MADE IN THE HANDS OF THE ASSESSEE. ON ACCOUNT OF THIS CA SUAL APPROACH OF THE AO, THE REVENUE SUFFERS ON ACCOUNT OF NON APPLICATION OF MIND BY THE AO. IT WAS HIS PAINED SUBMISSION THAT IN FACT THERE IS RAM PANT IN- SUBORDINATION IN THE DEPARTMENT AS IS EVIDENT FROM RECORD WHERE DESPITE A DIRECTION, THE AO HAS RELIED UPON THE ASSESSEE'S SUBMISSIONS. 5.4 INVITING ATTENTION TO PAGE 2 OF THE IMPUGNED ORDER , IT WAS SUBMITTED, THAT THE PR. CIT HAS TAKEN NOTE OF THE FACT THAT IN TH E ORDER PASSED ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 16 OF 35 CONSEQUENT TO SECTION 143(3)/263 ORDER DATED 30.03.2014 , IT WAS NOTICED THAT REFERENCE WAS SENT TO THE CONCERNED AO IN THE CA SE OF M/S MOTIA PROJECTS PVT. LTD. (SCHOOLS) PANCHKULA. IT WAS SUBMITTED, T HAT THERE WAS NOTHING ON RECORD TO SHOW WHETHER ANY DOCUMENT HAD B EEN TAKEN IN THE MATTER OR NOT. IT WAS SUBMITTED, THAT THE DOCUMENTS PE RTAINING TO THE ISSUES RELIED UPON BY THE ASSESSEE WERE EITHER INCOMPLETE OR WRONG. REFERRING TO THE REFERENCE MADE BY THE AO IN THE SAID 14 3(3)/263 PROCEEDINGS IN THE CASE OF M/S MOTIA HOME APARTMENTS AN D M/S MOTIA HOMES CONSTRUCTIONS PVT. LTD. SENT TO THE CONCERNED AO AT LUDHIANA THAT AS PER INFORMATION, THEY WERE LIABLE FOR ASSESSMENT, HOWEVER , THE DOCUMENTS RELIED UPON AND CONSIDERED WERE NOT VERIFIED AN D THE INFORMATION RELIED UPON BY THE ASSESSEE WAS EITHER INCOMPL ETE OR WRONG. IT WAS HIS SUBMISSION THAT ONLY NAME SAKE ENQUIRIES HAD BEEN CARRIE D OUT, THE INVESTIGATION BY THE AO HAVE BEEN INCOMPLETE. THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF S.P.GUPTA RELIED UPON B Y THE ASSESSEE, IT WAS SUBMITTED, IS NOT APPLICABLE. INFACT ALL THE DECISIONS ARE FACT SPECIFIC, IT WAS SUBMITTED, AND HAVE NO APPLICABILITY AS TH E FACTS OF THE PRESENT CASE ARE SELF SPEAKING. ACCORDINGLY, IT WAS HIS SU BMISSION THAT THE ARGUMENTS AND SUBMISSIONS OF THE ASSESSEE MAY BE R EJECTED AS IT IS A FIT CASE FOR PROCEEDINGS U/S 263 OF THE ACT. 6. THE LD. AR IN REPLY SUBMITTED THAT THE PARAMETERS OF SECTION 263 AS PER SETTLED LEGAL POSITIONS RELIED UPON BY HIM IN THE VAR IOUS CASE LAWS NECESSITATE THAT THE ASSESSMENT ORDERS SOUGHT TO BE VISITED BY THE PR. CIT CENTRAL OR CIT, CENTRAL BY INVOKING THE REVISIONARY POWER VESTED IN THE SAID AUTHORITY U/S 263 NECESSITATE THAT IN THE ASSESSM ENT ORDER, THERE IS SUCH AN ERROR WHICH IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE POWERS CANNOT BE EXERCISED ARBITRARILY OR ON WHIMS TO MAKE GOOD SOME LAPSE IN SOME OTHER UNCONNECTED CASE OR SOME OTH ER UNCONNECTED ASSESSMENT ORDER. REFERRING TO THE ORDER UNDER CHALLENGE FOR 2008-09 ASSESSMENT YEAR, IT WAS SUBMITTED, THAT THERE ARE CONSIS TENTLY CONTRADICTORY FINDINGS OF PR. CIT IN THE EXERCISE OF THE POW ER AND AS PER RECORD, IT HAS BEEN DONE PURELY ON THE BASIS OF SUSPICIO NS AND WHIMS. THERE IS NOTHING ON RECORD TO SHOW THAT INCOME HAS ESC APED ASSESSMENT OR THERE IS AN ERROR IN THE ORDERS WHICH IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT WAS HIS SUBMISSION THAT HE HAS IGNORED THE FACT THAT T HE AO IN THE ORDER PASSED U/S 143(3)/153A WHICH IS THE ORDER SOU GHT TO BE REVISED, YET AGAIN HAS MADE AN ADDITION OF RS. 2.45 CRORE ODD CO NSIDERING THE VERY ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 17 OF 35 SAME SEIZED DOCUMENT ( PAGE 62) OF ANNEXURE A-4 WHICH A DDITION IS AGAIN REPEATED PURSUANT TO THE FIRST 263 ORDER IN 2008-09 AS SESSMENT YEAR SPECIFICALLY CONSIDERING THE ENTRIES MENTIONED AT SR. NOS. 7, 8, 10, 11 AND 21. THE ARGUMENT THAT THEY HAVE NOT BEEN CONSIDERED BY THE AO IN HIS ORDER IS A MERE ALLEGATION WHICH IS NOT DEMONSTRATED BY ANY FACT OR EVIDENCE. 6.1 IT WAS ALSO HIS SUBMISSION THAT THE ARGUMENT REMA INS UNADDRESSED THAT THE SAID ORDER HAD ALREADY BEEN SUBJECTED ON THE VERY SA ME REASONING BY THE CHIEF COMMISSIONER OF INCOME TAX U/S 263 WHICH FACT IS NOTED BY THE PR. CHIEF COMMISSIONER AND HE ALSO NOTES THAT THE AO HAS PASSED AN ORDER IN PURSUANCE THERETO I.E. ORDER DATED 30.03.2014, HO WEVER, THE PR. CHIEF COMMISSIONER STILL PROCEEDS TO ARBITRARILY NOTE THAT T HE INFORMATION CONSIDERED BY THE AO IS EITHER INCOMPLETE OR WRONG. IT WAS HIS SUBMISSION THAT THE PR. CHIEF COMMISSIONER NEEDS TO FORM A VIEW BASED ON FACT AND EVIDENCE WHETHER THE INFORMATION, EVIDENCE IS IN COMPLETE OR IT IS WRONG. IT CANNOT BE BOTH. THUS, THE VIEW TAKEN BY THE COMMISSION ER IN PARA 5 THAT THE ASSESSMENT ORDER DATED 30.03.2014 WAS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE IN REGARD TO THE ENTRIES AT SR. NOS. 7, 8 AND 21 AND NOT 7, 8, 10, 11 AND 21 AS EARLIER HE LD AND THUS IN EFFECT ACCEPTS THAT THE ARBITRARY EXERCISE OF 263 PROCEE DINGS IN THE FIRST ROUND TO WHICH THE ASSESSEE WAS SUBJECTED TO DEMONST RATES THE CONTINUING ARBITRARY ACTION OF THE REVENUE. IT WAS SUBMIT TED, THAT THERE HAS TO BE AN END SOMETIME. WITHOUT PREJUDICE TO THE A RGUMENTS RAISED EARLIER NAMELY STATUTORY BAR TO THE ORDER HAVING BEEN MERGED WITH THE CIT(A)S ORDER SPECIFICALLY IN 2007-08 ASSESSMENT YEAR, IT W AS SUBMITTED, THAT IF FOR A MOMENT, IT IS TO BE CONSIDERED THAT A PARTIC ULAR DOCUMENT WAS OPEN TO DIFFERENT INTERPRETATIONS, THEN AN INTERPRETATION G IVEN BY THE AO IN THE FIRST ROUND REPEATED IN THE SECOND ROUND CANNOT BE THE BASIS FOR ANOTHER 263 PROCEEDINGS AS HOW MANY TIMES CAN THE DEP ARTMENT JUSTIFY THE ISSUING OF NOTICE FOR 263 ON THE BASIS OF SAME MATTER , THE SAME SEIZED DOCUMENT. IT WAS QUESTIONED THAT CAN THIS POWER BE INV OKED SO CARELESSLY AND CASUALLY RIGHT TILL THE TIME THAT THE ADDITIONS PROPOSE D BY THE SUPERIORS ARE ADHERED TO BY THE AO. WITHOUT BEING REQU IRED TO MEET THE TWIN REQUIREMENTS I.E. THE ORDER SOUGHT TO BE REVISED, S HOULD BE SHOWN TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 6.2 IT WAS HIS SUBMISSION THAT THERE SHOULD BE LIMIT TO HOW MANY TIMES THE VERY SAME DOCUMENT CAN BE CONSIDERED BY THE DIFFERE NT TAX AUTHORITIES ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 18 OF 35 TO SUIT THEIR PERSONAL WHIMS. IT WAS ARGUED THAT HOW CA N THE ASSESSEE BE MADE ANSWERABLE FOR THE LAPSE IF ANY OF SOME AO ANYWHER E IN THE CASE OF SOME OTHER ASSESSEE. IF SOMETHING HAS NOT BEEN TAXED S OMEWHERE BY SOME AO, HOW AND WHY SHOULD THE ASSESSEE BE MADE TO REPEAT EDLY SUFFER. ACCORDING TO THE DEPARTMENT, IT IS REQUIRED TO BE TAXED IN SOME CASE, THEN WHAT STOPS THEM FROM TAXING IT WHERE IT IS TO BE TAXED. TO PICK ON THE ASSESSEE AGAIN AND AGAIN ON THE BASIS OF VERY SAME DOCU MENT, IT WAS SUBMITTED, IS AN ARBITRARY WHIMSICAL EXERCISE OF POWER AND S HOULD NOT BE ALLOWED TO BE CARRIED ON. IT WAS HIS SUBMISSION THAT THIS MANNER OF FUNCTIONING SHOULD BE PUT A STOP TO. ADMITTEDLY THE AO H AS CONSIDERED THE DOCUMENTS AND TAKEN A VIEW NOT TO TAX THE ASSESSEE G IVING A REASONING WHICH IS AVAILABLE ON RECORD. THUS, IT WAS HIS EARNEST PRAY ER THAT THE ASSESSEE CANNOT BE HARASSED PERPETUALLY. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. BEFORE WE PROCEED TO ADDRESS THE ARGUMENTS OF THE RESPECTIVE PARTIES, IT IS NECESSARY TO ADDRESS THE FACTUA L BACKGROUND TO THE EXTENT THE FACTS ARE ADMITTED NAMELY THAT A CERTAIN DO CUMENT DESCRIBED AS PAGE 62 OF ANNEXURE A-4 WAS FOUND FROM THE RESIDENCE O F SHRI KRISHAN GOYAL IN HIS CAPACITY OF DIRECTOR, MOTIA CONSTRUCTIONS DURING THE COURSE OF SEARCH CONDUCTED UPON THE MOTIA GROUP ON 25.02.2009. T HE ASSESSEE IN RESPONSE TO NOTICE U/S 153A DECLARED AN INCOME OF RS. 4,9 3,420/- IN 2008-09 ASSESSMENT YEAR. THE ASSESSMENT WAS CONCLUDE D VIDE ORDER DATED 22.12.2010 U/S 143(3)/153A AT AN INCOME OF RS. 2,98,14 ,313/-. COPY OF THE SAID ORDER IS AVAILABLE AT PAGES 1 TO 30 OF THE PAPER BOOK. 7.1 THE SAID ORDER WAS CHALLENGED IN APPEAL BEFORE THE CIT (A) BY THE ASSESSEE IN APPEAL INSTITUTED ON 19.01.2011 BEFORE THE CIT (A)-I LUDHIANA WHO VIDE HIS ORDER DATED 20.03.2012 PROCEEDED TO CONFIR M THE SAID ADDITION. 7.2 A PERUSAL OF THE ASSESSMENT ORDER AS WELL AS TH E ORDER OF THE CIT(A) DATED 20.03.2012, IT IS SEEN TAKES NOTE OF THE FACT THAT T HE SAID DOCUMENT WAS CONSIDERED AND ENQUIRED INTO BY THE SAID AUTHORITIES AS WOULD BE EVIDENT FROM PARA 12 OF THE CIT(A)S ORDER DATED 20.03.201 2. THE SAID PARA 12 OF THE SAID ORDER IS REPRODUCED HEREUNDER : 12. THE GROUND OF APPEAL AT SR. NO. 9 PERTAIN TO TH E CLAIM OF THE APPELLANT THAT THE AO HAS WRONGLY MADE AN ADDITION OF RS. 2,4 5,10,000/- ON ACCOUNT OF UNEXPLAINED PROFITS WITH REGARD TO SALE OF LANDS. THE AO IN THIS REGARD HAS OBSERVED IN PARA 7 OF HER ORDER THAT DURING THE COURSE OF SE ARCH AT THE RESIDENCE OF THE ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 19 OF 35 DIRECTOR OF THE ASSESSEE COMPANY SH. KRISHAN GOYAL ONE COMPUTERIZED SHEET OF PAPER WAS SEIZED AS PG NO. 62 OF ANNEXURE A-4, WHIC H CONTAINED DETAILS OF THE PROJECTS OF THE ASSESSEE COMPANY . THE AO CONFRONTED THIS DOCUMENT AND ON THE BASIS OF ASSESSEE'S REPLY AND ANALYSIS OF THE SEIZE D DOCUMENT CONFRONTED THE FOLLOWING PROPOSED ADDITION :- 'VIDE QUESTIONNAIRE DATED 01/09/10 YOU WERE REQUIRE D TO EXPLAIN THE CONTENTS OF PAGE 62 OF ANNEXURE-A-4 SEIZED FROM THE RESIDENCE O F THE DIRECTOR SH. KRISHAN GOYAL DURING THE COURSE OF SEARCH ACTION ON 25/02/2009. T HE CONTENTS OF THE DOCUMENT ARE REPRODUCED AS UNDER:- S.NO. NAME OF COMPANY TOTAL COST FUNDS USED SALE TOTAL PROFIT/MARKET CONSIDERATION AMOUNT OF SHARE OF PROFIT FOR FUNDS USED DURATION OF FUNDS USED 1 ADV. AGST.LAND & LAND AT BHANKARPUR 7.85 6.90 21.90 14.05 12.35 22.09.05 TO 31.12.07 2 MOTIA HIGHWAY KHARAR 1.02 0.51 3.40 2.38 1.19 06.02.06 TO 16.11.07 3 MOTIA HOMES AT SIRAKPUR ( 30 FLATS 2.10 2.10 5.60 3.50 3.50 14.10.05 TO 31.12.05 4 MAHESH NAGAR PROJECT BARNALA, SAMANA COLONY 3.60 3.60 13.60 10.00 10.00 25.02.06 TO 31.12.07 5 MOTIA ROYAL ESTATE, NABHA 1.38 1.38 3.38 2.00 2.00 06.06.05 TO 31.12.07 6 LAND AT DERABASSI (MEHENDRU LAND) 2.10 1.11 4.20 2.10 1.11 20.12.05 TO 31.12.07 7 MARBLE HOME APARTMENT 6.48 6.48 12.96 6.48 6.48 27.02.06 TO 31.12.07 8 MARBLE HOME CONSTRUCTION PVT. LTD. 1.95 0.70 3.30 1.35 0.48 16.11.05 TO 13.11.07 9 LAND AT PHABAT (1.75 ACRES) 1.05 0.90 1.60 0.55 0.47 08.11.05 TO 31.03.06 10 MOTIA TOWNSHIP PVT. LTD. PABHAT 40S 55% 22.00 8.61 48.00 26.00 10.18 01.04.07 TO 31.12.07 11 MOTIA DEVELOPERS P.LTD. (BADDI LAND & MOTIA HEIGHTS) 13.00 1.95 18.00 5.00 0.75 24.01.06 TO 31.12.07 12 LAND AT KHARAR TIKKA (11 ACRES 51% SHARE) 5.61 3.27 13.77 8.16 4.76 14.11.05 TO 31.03.06 13 LAND AT GHOLUMAJRA 0.78 0.78 1.58 0.80 0.80 26.08.05 TO 31.03.06 14 LAND AT KHARARR (13 KANAL 4 MARLAS) 0.80 0.52 1.60 0.80 0.52 09.09.05 TO ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 20 OF 35 31.03.06 15 GREEN VALLY FLATS DHAKOLI 0.08 0.08 0.28 0.20 0.20 13.08.05 TO 26.11.05 16 COMM. PLOT SCO 393, SECTOR 8 PANCHKULA 0.84 0.34 10.00 9.16 3.71 11.01.06 TO 31.12.07 17 MOTIA DIAMOND AT KHARAR (QUILA COMPLEX) 1.28 0.60 3.00 1.72 0.81 16.10.05 TO 31.12.07 18 ADV. AGAINST LAND AT SINGHPURA (SINHA) 0.15 0.15 0.55 0.40 0.40 22.01.07 TO 27.12.07 19 LAND AT MADOPUR 0.80 0.80 2.80 2.00 2.00 01.06.0 5 TO 31.12.07 20 LAND DERABASSI (SAMGOLI LAND) 1.51 1.51 7.00 5.49 5.49 05.05.06 TO 31.12.07 21 MOTIA PROJECTS PVT.LTD.(SCHOOLS) 6.72 6.72 20.52 13.80 13.80 20.04.06 TO 31.12.07 22 ADV. AGAINST LAND AT KHARAR (SIGMA CITY LAND 15S 51% SHARE) 7.65 2.94 11.12 11.12 1.33 02.09.05 TO 26.03.07 TOTAL 88.75 51.95 208.16 119.41 82.33 7.3 THE FACT THAT THE SAID DOCUMENT WAS SEEN AND CONS IDERED BY THE AO IS EVIDENT FROM INTERNAL PAGES 7 TO 28 OF THE ORDER AND SPECIFIC DISCUSSION AT INTERNAL PAGE 25 SUB-PARA (IX). THE RELEVANT EXTRACT IS REPRODUCED HEREUNDER : FROM THE ABOVE SHOW CAUSE AND REPLY OF THE ASSESSE E IT GOES BEYOND DOUBT THAT PG NO. 62 OF ANNEXURE-A-4 OF PRERNISE-A-3 IS A DOCUMEN T BASED ON THE ACTUAL FACTS WITH REGARD TO (HOSE TRANSACTIONS WHICH HAVE MATERIALIZE D BEFORE THE DATE OF PREPARATION OF THIS DOCUMENT AND THE SANCTITY OF THIS DOCUMENT IS ESTABLISHED ON ACCOUNT OF FOLLOWING FACTS:- (I) .. (II) --------- (III) .. (IV) . (V) . (VI) . (VII) . (VIII) (IX) BARRING PROJECTS STATED IN ROW-7, 8, 10, 11 & 21 OF PG 62, ALL THE PROJECTS BELONG TO M/S MOTIA CONSTRUCTIONS LIMITED. ALSO THE PROJECTS MENTIONED IN 7, 8, 10, 11 A 21 RELATE TO THE ERSTWHILE DIRECTOR OF M/S MOTLA CONSTRUCTIONS LIMITED SH. PAWAN BANSAL AND THE FUND USED COLUMN REFLECT THE INVESTMENT ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 21 OF 35 OF IHE ASSESSES COMPANY M/S MOTIA CONSTRUCTIONS LIM ITED IN THE PROJECTS OF ITS SISTER CONCERNS THEN. THUS IN THE LIGHT OF THE ABOVE FACTS, THE VERACITY OF PAGE 62 OF ANNEXURE A-4 OF PREMISE A-3 IS ESTABLISHED BEYOND DOUBT. , 7.4 A FURTHER READING OF INTERNAL PAGES 10 TO 31 AND AGAIN 3 1 TO 35 OF THE CIT(A)S ORDER DATED 20.03.2012 SHOW THAT THE DISCUS SION ENTIRELY TAKES PLACE ON THE SAID PAGE 62 A-4 I.E. THE SEIZED DOCU MENT. THE FOLLOWING RELEVANT EXTRACT FROM PAGE 35 OF THIS ORDER ALSO H IGHLIGHTS THE SAME AS UNDER : .. THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH AND RELIED UPON BY THE AO IS CLEARLY MEANT TO HAVE AN OVER VIEW OF VARIOUS FINAN CIAL ASPECTS OF DIFFERENT PROJECT UNDER TAKEN BY THE ASSESSEE COMPANY AND ITS PROMOTE RS SO AS TO SETTLE SOME ISSUES AMONGST THEMSELVES AND THAT IS WHY EVEN PROJECTS NOT BELONGING TO M/S MOTIA CONSTRUCTION LIMITED FIND MENTION THEREIN. . (EMPHASIS SUPPLIED) AS SUCH THE ADDITIONS MADE BY THE AO ON ACCOUNT OF PAGE NO. 62 OF ANNEXURE A-4 SEIZED FROM THE RESIDENCE OF SH. KRISHAN GOYAL ARE CONFIR MED.' (EMPHASIS SUPPLIED) 7.5 IT IS SEEN THAT THOUGH THE ORDER OF THE AO STO OD MERGED WITH THE ORDER OF CIT(A)-I LUDHIANA, IT WAS SUBJECTED TO THE REV ISIONARY POWERS OF THE CIT, CENTRAL, LUDHIANA BY ORDER DATED 28.03.2013 U/S 263 WHERE THE SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE WAS AFTER THE PASSING OF THE APPELLATE ORDER. COPY OF THE 263 ORDER IS PLACED AT PAGE 67 TO 80. ADMITTEDLY THE ASSESSEE HAD FILED AN APPEAL AGAINST THIS O RDER OF THE CIT, CENTRAL, LUDHIANA. HOWEVER, THE SAID APPEAL WAS WITHDRAWN AS IS EVIDENCED BY PAPER BOOK PAGE 81-82. IN THE FACE OF TH ESE ADMITTED FACTS, THE QUESTION OF VALIDITY OF THE 263 ORDER IN THE FIRST ROUND NEVER CAME UP FOR CONSIDERATION. CONSEQUENTIAL ORDER PASSED IN PURSUANC E TO THE 263 ORDER DATED 28.03.2013 IS A VALID ASSESSMENT IN THESE PECULIAR FACTS. 7.6 IT IS THE ASSESSMENT ORDER DATED 30.03.2014 PASSED U/S 143(3) R.W.S. 263 WHICH WAS AGAIN SOUGHT TO BE REVISED BY PR. CIT, CEN TRAL. COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE PR. CIT DATED 16.02.201 6 IN THE ORDER UNDER CHALLENGE IS AVAILABLE AT PAGES 83 TO 85 WHICH HAS B EEN EXTRACTED IN THE ORDER ITSELF ALSO. A PERUSAL OF PAGE 83, INTERNAL PAGE 1 OF THE SHOW CAUSE NOTICE SHOWS THAT IN PARA 2, THE FACTS ARE REFERR ED TO. IT IS FURTHER NOTICED IN AFORESAID PARA AND IN PARA 4 THAT THE ORDER U /S 143/263 DATED ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 22 OF 35 30.03.2014 HAD CONCLUDED THAT ALL THE FIVE ENTRIES AT SR. N O. 7, 8, 10, 11 AND 21 HAD BEEN COVERED IN THE CASE OF THE RESPECTIVE ASSESSEES. THE PR. CIT HAS CONCLUDED THAT THIS CONCLUSION HAS BEEN WITHOUT PROPER VERIFICATION SUPPORTED BY THE REASONING GIVEN IN SUB-PARA (A) (B) AND (C) OF PARA 4 OF THE SHOW CAUSE NOTICE. ON THE BASIS OF THIS RE ASONING, THE ORDER IS CONSIDERED TO BE ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE ON THE FOLLOWING THREE COUNTS. FOR READY REFEREN CE, THE RELEVANT EXTRACT OF THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT PROCEEDINGS BY THE PR. CIT IS EXTRACTED HEREUNDER : 03. ON PERUSAL OF THE ASSESSMENT RECORDS, IT WAS OB SERVED BY CIT(C). LUDHIANA THAT THE ADDITION OF RS. 2,45,10,000/- MAD E ON ACCOUNT OF UNDISCLOSED PROFITS WAS EARNED BY THE ASSESSEE COMPANY WITH REGARD TO THE P ROJECTS/COMPANIES MENTIONED AT SR. NO. 1 TO 6, 9, 12 TO 20 AND 22 BUT NO ADDITION WAS MADE IN RESPECT OF PROJECTS AT SR. NO, 7, 8, 10, IF & 21, THOUGH THE ASSESSEE COMPANY HAD SOME B USINESS INTEREST/SHARE IN THE ENTITIES MENTIONED IN THE DOCUMENT AT SR.NO.7, 8, 10, 11 & 2 1. THE ORDER U/S !43(3)/153A DATED 22.12.2010 WAS, THEREFORE, CONSIDERED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ASSESSMENT ORDER WAS SET ASIDE FOR LIMI TED PURPOSE FOR MAKING PROPER ADDITIONS AFTER PROPERLY EXAMINING THE ISSUES AND C ONDUCTING PROPER INQUIRY AFTER ACCORDING AN OPPORTUNITY TO THE ASSESSEE IN RESPECT OF PROJECTS AT SR. NO. 7. 8, 10. 11 & 21 OF PAGE 62 OF ANNEXURE A 4 SEIZED FROM THE RESIDENC E OF SH. KRISHAN GOYAL. 04. IN PURSUANCE OF THE DIRECTIONS OF THE CIT, AGAI N AN ORDER U/S 143(3)/ 263 OF THE I. T, ACT, WAS PASSED ON 30 TH MARCH. 2014, AS PER WHICH IT WAS HELD THAT ALL THE FIVE ENTRIES/PROJECTS AT SR. NO. 7, 8, 10, 1! & 21 NAMEL Y MARBLE HOME APARTMENTS, MARBLE HOME CONSTRUCTION, (P) LTD., MOTIA TOWNSHIP (P) LTD , PABHAT 40S, MOTIA DEVELOPERS (P) LTD. PABHAT 40S(BADDI LAND & MOTIA HEIGHTS) AN D MOTIA PROJECTS (P) LTD., (SCHOOLS) HAVE DULY BEEN COVERED FOR THE ASSESSMENT IN CASES OF RESPECTIVE ASSESSEES WITHOUT PROPER VERIFICATION OF FACTS VIZ., A) THOUGH, A REFERENCE IN THE EASE OF M/S MOTIA P ROJECTS PVT. LTD. (SCHOOLS). PANCHKULA (SR. NO. 21)HAVE BEEN SENT TO THE ASSESSING OFFICER CONCERNED HUT THERE IS NOTHING ON RECORD TO SUGGEST AS TO WHETHER ANY ACTION HAD BEEN TAKEN IN THE MATTER OR NOT. AS PER THE FACTS ON RECORD, IT IS EVIDENT THAT THE REQUISITE D OCUMENTS PERTAINING TO THE ASSESSEE CONCERNED SUCH AS A COPY OF THE RETURN OF INCOME SU PPORTED WITH COMPUTATION, OF INCOME, AUDIT REPORT ETC., NEITHER OBTAINED NOR VERIFIED, B EFORE MAKING SUCH REFERENCE TO THE CONCERNED ASSESSING OFFICER. THUS, THE INFORMATION SUPPLIED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS IS EITHER INCOMPLE TE OR WRONG. B) A REFERENCE IN THE EASES OF M/S MARBLE HOME APAR TMENTS AND M/S MARBLE HOME CONSTRUCTIONS PVT. LTD. SENT TO THE CONCERNED ASSES SING OFFICER AT HOWEVER, THE WORTHY CIT-III, LUDHIANA, UNDER WHOSE TERRITORIA L JURISDICTION THE REMAINING TWO CASES NAMELY M/S MARBLE HOME APARTMENTS AND M/S MAR BLE HOME CONSTRUCTIONS PVT. LTD. WERE REPORTEDLY LIABLE FOR ASSESSMENT HAS INFORMED AS PER ITS LETTER NO. CLT- III/LDH/JB/CIT(A)/73/14-L 5/2055 DATED 21.11.2014 T HAT IN THE CASE OF M/S MARBLE HOME APARTMENTS, WHEREIN THE TOTAL PROFIT IS WORKED OUT RS, 6,48 CRORES, NO ACTION COULD BE TAKEN AS THE SAME IS NOT ASSESSED IN ITS CHARGE AND THE WHEREABOUTS OF THIS CONCERN ARE NOT AVAILABLE. THE REQUISITE DOCUMENTS PERTAINING T O THE ASSESSES CONCERNED SUCH AS A COPY OF THE RETURN OF INCOME SUPPORTED WITH COMPUTA TION OF INCOME, AUDIT COPY OF .RETURN OF INCOME SUPPORTED WITH COMPUTATION OF INCOME, AUD IT REPORT ETC., NEITHER OBTAINED NOR VERIFIED, BEFORE MAKING SUCH REFERENCE TO THE C ONCERNED ASSESSING OFFICER. THUS, THE INFORMATION SUPPLIED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS IS EITHER INCOMPLETE OR WRONG. C) IN THE CASE OF M/S MARBLE HOME CONSTRUCTIONS (P) LTD., IT IS REPORTED BY THE WORTHY CIT-III, LUDHIANA THAT THE ASSESSMENT, IN TH IS CASE, HAS BEEN MADE U/S 143(3) BY THE ITO, WARD VT(4), LUDHIANA, VIDE ORDER DATED 24. 03.2014, WHEREIN IT WAS HELD THAT A ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 23 OF 35 SUM OF RS. 48 LACS IS THE SHARE OF M/S MOTIA CONSTR UCTIONS LTD, AND THE SAME IS LIABLE FOR TAXATION IN THE HANDS OF THE ASSESSEE UNDER REF ERENCE. 06. IN ABSENCE OF CONDUCING PROPER INQUIRIES AND VE RIFICATION, THE ASSESSMENT ORDER PASSED ON 30 TH MARCH. 2014 U/S 143{3)/263 IS THEREFORE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE: THAT THE LIT ASSESSING OFFICER HAS OMITTED TO ASSES S IN THE HANDS OF THE ASSESSEE COMPANY, UNDER REFERENCE, THE INCOME OF RS. 48 LACS , BEING THE SHARE OF PROFIT OUT OF INVESTMENT OF RS. 70 LACS WITH M/S MARBLE HOME CONS TRUCTION (?) LTD., LUDHLANA (SR. NO. 06), (II) THAT THE LD. ASSESSING OFFICER HAS OMITTED TO COGNIZANCE OF THE PROFIT OF RS, 6.48 CRORES. AS APPEARING AGAINST SR. NO. 7 OF THE SEIZED DOCUMENTS, SIMPLY BY ACCEPTING THE CLAIM OF THE ASSESSEE COMPANY TO THE EFFECT THA T IT BELONGS TO M/S MARABLE HOME APARTMENTS, EVEN WITHOUT MAKING PROPER VERIFICATION AND OBTAINING THE REQUISITE DOCUMENTS, SUCH AS, A COPY OF THE RETURN OF INCOME SUPPORTED WITH COMPUTATION OF INCOME, AUDIT REPORT ETC. PERTAINING TO THE ASSESSE E CONCERNED. (III.) THAT THE LD, ASSESSING OFFICER HAS OMITTED T O TAKE COGNIZANCE OF THE ENTRIES APPEARING AT SR. NO. 21 OF THE SEIZED DOCUMENTS, SI MPLY BY ACCEPTING THE CLAIM OF THE ASSESSEE COMPANY TO THE EFFECT THAT IT BELONGS TO M /S MOTIA PROJECTS PVT. LTD. (SCHOOLS), PANCHKULA AND EVEN WITHOUT MAKING PROPER VERIFICATI ON AND OBTAINING THE REQUISITE DOCUMENTS, SUCH AS, A COPY OF THE RETURN OF INCOME SUPPORTED WITH COMPUTATION OF INCOME, AUDIT REPORT ETC., PERTAINING TO THE ASSESSEE CONCE RNED, 07. IN VIEW OF THE FACTS STATED ABOVE, THE ASSESSME NT MADE U/S 143(3) OF THE LT. ACT BY THE A.O. IS ERRONEOUS IN SO FAR IT IS PR EJUDICIAL TO THE INTEREST OF REVENUE AND IT IS PROPOSED TO BE REVISED U/S 263 OF THE LT. ACT, 1 961. YOU ARE, THEREFORE, GIVEN AN OPPORTUNITY TO FILE YOUR OBJECTIONS AGAINST THE PRO POSED ACTION U/S 263 OF THE IT. ACT EITHER PERSONALLY OR THROUGH AN. AUTHORIZED REPRESE NTATIVE ON 22.02.2016 AT 1 1.00 AM IN MY OFFICE AT ABOVE MENTIONED ADDRESS. 7.7 IT MAY NOT BE OUT OF PLACE TO REFER TO THE ORIGINA L ASSESSMENT ORDER PASSED U/S 143(3)/153A DATED 22.12.2010 SO AS TO CONSID ER THE CORRECTNESS OF THE LD. ARS ARGUMENTS THAT THE VERY SA ME SEIZED DOCUMENT HAD BY THIS TIME BEEN CONSIDERED BY TO DIFFERENT AOS. IT IS SEEN FROM THE ORIGINAL ASSESSMENT ORDER THAT THE AO HAS REQUIRED THE ASSESSEE TO EXPLAIN THE CONTENTS OF THE DOCUMENTS DESCRIBED AS PAGE 62 OF ANNEXURE A-4 . THE RELEVANT EXTRACT OF THE SAID PARA IS REPRODUCED HEREUND ER : 7. ISSUE REGARDING PAGE 62 OF ANNEXURE A4 OF PREMIS E A3 DURING THE COURSE OF SEARCH AT THE RESIDENCE OF THE DIRECTOR OF THE ASSESSEE COMPANY SHRI KRISHAN GOYAL ONE COMPUTERIZED SHEET OF PAPER WAS S EIZED AS PAGE NO. 62 OF ANNEXURE-A4, WHICH CONTAINED DETAILS OF THE PROJECTS OF THE ASSESSEE C OMPANY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CE OF THE ASSESSEE FOR THE A.Y. 2006-07, THE ISSUE OF PAGE NO. 62 OF ANNEXURE A4 SEIZED FROM THE RESIDENCE OF DIRECTOR SHRI KRISHAN GOYAL HAS BEEN TAKEN UP IN DETAIL. THE EXTRACTS OF THE DELIBERATION AND FINDINGS ON THE ISSUE ARE R EPRODUCED BELOW (ON PAGE 7-28). THE ASSESSEE WAS REQUIRED TO FURNISH EXPLANATIO N WITH REGARD TO THE CONTENTS OF THE SAID DOCUMENT VIDE QUESTIONNAIRE DATED 01.09 .10. THE ASSESSEE IN RESPONSE SOUGHT ADJOURNMENTS ON 15-09-10,06-10-10 AND 21-10- 10. ON 27-10-10 AND ON 22-11-10, THE ASSESSEE FILED REPLIES EXPLAINING THE CONTENTS OF THE SAID DOCUMENT. BASED ON THESE REPLIES AND CONTENTS OF THE DOCUMENT PG 62 OF ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 24 OF 35 ANNEXURE A-4 SEIZED FROM THE RESIDENCE OF DIRECTOR SHRI. KRISHAN GOYAL (PREMISE A- 3) A DETAIL SHOW CAUSE NOTICE WAS ISSUED AND SERVED ON THE ASSESSEE ON 29.11.10. THE RELEVANT PART OF THE SHOW CAUSE IS REPRODUCED AS UN DER : VIDE QUESTIONNAIRE DATED 01.09.2010 YOU WERE REQUI RED TO EXPLAIN THE CONTENTS OF PAGE 62 OF ANNEXURE-A-4 SEIZED FROM THE RESIDENCE OF THE DIRECTOR SHRI KRISHAN GOYAL DURING THE COURSE OF SEARCH ACTION ON 25.02.2009. THE CONTENTS OF THE DOCUMENT ARE REPRODUCED AS UNDER : S.NO. NAME OF COMPANY TOTAL COST FUNDS USED SALE TOTAL PROFIT/MARKET CONSIDERATION AMOUNT OF SHARE OF PROFIT FOR FUNDS USED DURATION OF FUNDS USED 1 ADV. AGST.LAND & LAND AT BHANKARPUR 7.85 6.90 21.90 14.05 12.35 22.09.05 TO 31.12.07 2 MOTIA HIGHWAY KHARAR 1.02 0.51 3.40 2.38 1.19 06.02.06 TO 16.11.07 3 MOTIA HOMES AT SIRAKPUR ( 30 FLATS 2.10 2.10 5.60 3.50 3.50 14.10.05 TO 31.12.05 4 MAHESH NAGAR PROJECT BARNALA, SAMANA COLONY 3.60 3.60 13.60 10.00 10.00 25.02.06 TO 31.12.07 5 MOTIA ROYAL ESTATE, NABHA 1.38 1.38 3.38 2.00 2.00 06.06.05 TO 31.12.07 6 LAND AT DERABASSI (MEHENDRU LAND) 2.10 1.11 4.20 2.10 1.11 20.12.05 TO 31.12.07 7 MARBLE HOME APARTMENT 6.48 6.48 12.96 6.48 6.48 27.02.06 TO 31.12.07 8 MARBLE HOME CONSTRUCTION PVT. LTD. 1.95 0.70 3.30 1.35 0.48 16.11.05 TO 13.11.07 9 LAND AT PHABAT (1.75 ACRES) 1.05 0.90 1.60 0.55 0.47 08.11.05 TO 31.03.06 10 MOTIA TOWNSHIP PVT. LTD. PABHAT 40S 55% 22.00 8.61 48.00 26.00 10.18 01.04.07 TO 31.12.07 11 MOTIA DEVELOPERS P.LTD. (BADDI LAND & MOTIA HEIGHTS) 13.00 1.95 18.00 5.00 0.75 24.01.06 TO 31.12.07 12 LAND AT KHARAR TIKKA (11 ACRES 51% SHARE) 5.61 3.27 13.77 8.16 4.76 14.11.05 TO 31.03.06 13 LAND AT GHOLUMAJRA 0.78 0.78 1.58 0.80 0.80 26.08.05 TO 31.03.06 14 LAND AT KHARARR (13 KANAL 4 MARLAS) 0.80 0.52 1.60 0.80 0.52 09.09.05 TO 31.03.06 15 GREEN VALLY FLATS DHAKOLI 0.08 0.08 0.28 0.20 0.20 13.08.05 TO 26.11.05 ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 25 OF 35 16 COMM. PLOT SCO 393, SECTOR 8 PANCHKULA 0.84 0.34 10.00 9.16 3.71 11.01.06 TO 31.12.07 17 MOTIA DIAMOND AT KHARAR (QUILA COMPLEX) 1.28 0.60 3.00 1.72 0.81 16.10.05 TO 31.12.07 18 ADV. AGAINST LAND AT SINGHPURA (SINHA) 0.15 0.15 0.55 0.40 0.40 22.01.07 TO 27.12.07 19 LAND AT MADOPUR 0.80 0.80 2.80 2.00 2.00 01.06.0 5 TO 31.12.07 20 LAND DERABASSI (SAMGOLI LAND) 1.51 1.51 7.00 5.49 5.49 05.05.06 TO 31.12.07 21 MOTIA PROJECTS PVT.LTD.(SCHOOLS) 6.72 6.72 20.52 13.80 13.80 20.04.06 TO 31.12.07 22 ADV. AGAINST LAND AT KHARAR (SIGMA CITY LAND 15S 51% SHARE) 7.65 2.94 11.12 11.12 1.33 02.09.05 TO 26.03.07 TOTAL 88.75 51.95 208.16 119.41 82.33 VIDE REPLY DATED 27.10.2010 YOU HAVE STATED THAT TH E ENTRIES APPEARING IN THIS SHEET OF PAPER IS ESTIMATION MADE BY DIRECTORS BEFORE SEARCH IN THE NORMAL COURSE OF BUSINESS. IT WAS MADE TO KNOW TOTAL ESTIMATED COST, ESTIMATED SALE & ESTIMATED PROFITS OF THE PROJECTS RELATING TO M/S MOTIA CONSTRUCTION LTD. AS WELL AS OTHER PROJEC TS RELATING TO ONE OF THE DIRECTOR HAVING INTEREST IN OTHER CONCERNS IN ADDITION TO M/S MOTIA CONSTRUCTION LTD. AS MENTIONED AT PAGE NO. 62 AT SERIAL NO. 7, 8, 10, 11 & 21. (EMPHASIS SUPPLIED) 7.7.1 IT IS SEEN THAT THE AO DID NOT COMPLETELY AGREE WITH THE ENTIRE SUBMISSIONS AND FURTHER REQUIRED THE ASSESSEE TO JUSTIFY THE CLAIM. A PERUSAL OF INTERIM PAGES 11-12 OF THE ASSESSMENT ORDER S HOWS THAT FROM THE REPLY OF THE ASSESSEE DATED 09.12.2010, FOLLOWING HAS B EEN EXTRACTED BY THE AO : AS REGARDS PAGE NO. 62 OF ANNEXURE A-4 SEIZED DURIN G THE COURSE OF SEARCH, WE HAVE ALREADY 'STATED THAT TINS PAGE IS AN ESTIMATION MADE BY DIRECTORS BEFORE SEARCH IN THE NORMAL COURSE OF BUSINESS. THIS ESTIMATION WAS MADE TO KNO W TOTAL ESTIMATED COST, ESTIMATED SALE AND ESTIMATED PI (JUTS OL THE PI EJECTS RELATING TO MOTIA CONSTRUCTIONS LTD. AS WELL AS OTHER PROJECTS RELATING TO ONE OF SHE DNECTOR HAVING INTE REST IN OTHER CONCERNS IN ADD-ON TO MOTIA CONSTRUCTIONS LTD. AS MENTIONED OT PAGE NO: 6 2 AT SERIAL NO: 7, 8, 10, 11 & 21. AS REGARDS YOUR SHOW CAUSE REGARDING WHY THE DIFFER ENCE IN COLUMN 3 & COLUMN 4 I.E. TOTAL COST FUNDS USED IN RESPECT OF PROJECTS OF THE COMPA NY APPEARING AT SR. NO. 1, 2, 3, 4, 5, 6, 9, 12 TO 20 & 22 BE CONSIDERED AS UNDISCLOSED INVESTME NT OF THE COMPANY IN ITS PROJECT, WE HAVE TO STATE AS UNDER- 7.7.2 IT IS SEEN THAT THEREAFTER PROCEEDING TO CONSIDER THE OTHER EXPLANATIONS, THE AO AT INTERNAL PAGES 24-25 CONSIDERS THE REPLY OF THE ASSESSEE AND FORMS THE FOLLOWING VIEW THEREON : ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 26 OF 35 THE REPLY OF THE ASSESSEE AND THE CONTENTS OF THE D OCUMENT HAVE BEEN CONSIDERED AND DEALT WITH AS UNDER : FROM THE ABOVE SHOW CAUSE AND REPLY OF THE ASSESSEE IT GOES BEYOND DOUBT THAT PG NO. 62 OF ANNEXURE-A-4 OF PREMISE-A-3 IS A DOCUMENT BASED ON THE ACTUAL FACTS WITH REGARD TO THOSE TRANSACTIONS WHICH HAVE MATERIALIZE D BEFORE THE DATE OF PREPARATION OF THIS DOCUMENT AND THE SANCTITY OF THIS DOCUMENT IS ESTABLISHED ON ACCOUNT OF FOLLOWING FACTS:-. (I) AS PER THE REPLY OF THE ASSESSEE THE DOC UMENT WAS PREPARED BY THE DIRECTORS OF THE COMPANY. II) THE DOCUMENT WAS PREPARED SOMEWHERE IN FIRST WE EK OF JANUARY, 2008 AS PER THE REPLY OF THE ASSESSEE. WHICH IS VERIFIABLE FROM THE COLUMN DURATION OF FUNDS USED IN PG 62. III) FUNDS USED COLUMN OF PG 62 HAS BEEN RECONCILED IN TOTO WITH THE REGULAR BOOKS OF THE ASSESSEE BY THE ASSESSEE ITSELF, (IV) RATIO OF COL.4: COL.3 I.E FUNDS USED: TO TAL COST IS EXACTLY SAME WITH RATIO OF COL.7: COL.6 I.E. AMOUNT OF SHARE OF PROFIT FOR FUNDS USED : TOTAL PROFIT. V) COL. 5 (-) COL.3 = COL.6 I.E SALE (-) TOTAL COST = TOTAL PROFIT. VI) THE PROJECTS WHICH HAVE BEEN SOLD OFF BEFOR E 31/12/2007, IN THOSE CASES THE DURATION OF FUNDS USED EXACTLY TALLIES, VII) THE NARRATION 40'S 55% APPEARING IN ROW 10 IS 22 WHICH TALLIES WITH THE FIGURE MENTIONED IN THE COLUMN; OF TOTAL COST. VIII) SIMILARLY, THE NARRATION 11 ACRE'S 51% SHARE APPEARING IN ROW 12 (LAND AT KHARAR TIKKA). TOTAL COST IS 5.61 OUT OF WHICH THE COMPANY'S SHARE IS 51% WHICH COMES TO 3.27 IN THE FUNDS USED COLUMN. IX) BARRING PROJECTS STATED IN ROW-7, 8,10,11 & 21 OF PG 62, ALL THE PROJECTS BELONG TO M/S MOTIA CONSTRUCTIONS LIMITED. ALSO THE PROJECTS MENTIONED IN 7, 8, 10, 11 & 21 RELATE TO THE ERSTWHILE DIRECTOR OF M/S MOTIA CO NSTRUCTIONS LIMITED SH. PAWAN BANSAL AND THE FUND USED COLUMN REFLECT THE INVESTMENT OF SHE ASSESSEE COMPANY M/S MOTIA CONSTRUCTIONS LIMITED IN THE PROJECTS OF ITS SISTER CONCERNS THEN. THUS, IN LIGHT OF THE ABOVE FACTS, THE VERACITY OF PG 62 OF ANNEXURE A4 OF PREMISE A-3 IS ESTABLISHED BEYOND DOUBT. ( EMPHASIS SUPPLIED) 7.7.3 AFTER CONSIDERING THE ARGUMENT VIS--VIS THE PROJEC TS/CONCERNS MENTIONED ON SERIAL NUMBERS 1 TO 22, THE ADDITION OF RS. 2.45 LACS ODD WAS MADE EXCLUDING THE PROJECTS/CONCERNS MENTIONED AT SR.NO. 7, 8, 10, 11 AND 21. 7.8 THE ISSUE WAS EXAMINED BY THE CIT(A) ALSO. THE CI T(A) AS NOTICED EARLIER VIDE HIS ORDER DATED 20.03.2012 IN PARA 12 PROCEED ED TO CONSIDER THE SPECIFIC GROUND RAISED ASSAILING THE ADDITION MADE ON TH E BASIS OF SEIZED DOCUMENT PAGE 62 ANNEXURE A-4. IT IS SEEN THAT THE REASON AND RATIONALE FOR THE EXCLUSION OF THE PROJECTS MENTIONED AT SR.NO. 7, 8, 10, 11 AND 21 STATED TO BE RELATING TO THE ERSTWHILE DIRECTOR O F M/S MOTIA CONSTRUCTIONS LTD., SHRI PAWAN BANSAL AND HAVING BEEN REF LECTED IN THE PROJECTS OF THE SEIZED CONCERNS IS TAKEN NOTE OF AT INTE RNAL PAGE 28 ( PAPER BOOK PAGE 58) IN PARA 14. THE SUBMISSIONS ON BEHALF OF TH E ASSESSEE REITERATING THIS ASPECT AT INTERNAL PAGE 32 IS FOUND ADDRE SSED BY THE CIT(A), ON THE BASIS OF WHICH THE CIT(A) IN PARA 15 PROCEEDS TO CONSIDER ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 27 OF 35 THE ARGUMENTS AND FOR THE PURPOSE OF PRESENT PROCEEDIN GS, THE FOLLOWING EXTRACT BRINGS OUT THIS ASPECT : .. THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH AND RELIED UPON BY THE AO IS CLEARLY MEANT TO HAVE AN OVER VIEW OF VARIOUS FINAN CIAL ASPECTS OF DIFFERENT PROJECT UNDER TAKEN BY THE ASSESSEE COMPANY AND ITS PROMOTERS SO AS TO SET TLE SOME ISSUES AMONGST THEMSELVES AND THAT IS WHY EVEN PROJ ECTS NOT BELONGING TO M/S MOTIA CONSTRUCTION LIMITED FIND MENTION THEREIN. . (EMPHASIS SUPPLIED) AS SUCH THE ADDITIONS MADE BY THE AO ON ACCOUNT OF PAGE NO. 62 OF ANNEXURE A-4 SEIZED FROM THE RESIDENCE OF SH. KRISHAN GOYAL ARE CONFIR MED.' (EMPHASIS SUPPLIED) 7.9 IT IS FURTHER SEEN FROM THE ORDER U/S 263 DATED 28.0 3.2013 WHEREIN SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE ON 21.03.2 013, COGNIZANCE OF THIS FACT HAS BEEN TAKEN BY THE LD. COMMISSIONER OF INCO ME TAX ,CENTRAL LUDHIANA. ALTHOUGH THE EXTRACT OF THE SUBMISSIONS ADVANCED DURING THE ASSESSMENT PROCEEDINGS AND THE 263 PROCEED INGS HAS BEEN MADE WHEREIN THE NAME OF SHRI PAWAN BANSAL AS A DIRECTO R IN THE DIFFERENT CONCERNS ALONGWITH PARTNERS/ASSOCIATES SHRI RAJE NDER MOHAN SINGLA OR SMT. PINKI BANSAL AND SHRI KEWAL BANSAL ETC. FIND A M ENTION, HOWEVER THE SHOW CAUSE NOTICE IS ISSUED TO THE ASSESSE E ON THE FOLLOWING SPECIFIC REASONING : NO FURTHER ENQUIRY WITH RESPECT TO THE ASSESSEE'S S HARE IN (LIE CONCERNS MENTIONED AT SR. NO. 7, 8,10,11 & 21 ABOVE HAS BEEN MADE RESULTING IN NO ADDITION ON ACCOUNT OF ASSESSEE'S SHARE IN UNEXPLAI NED INVESTMENT AND UNDISCLOSED PROFITS ARISING FROM (HE ABOVE MENTIONE D PROJECTS, 7.10 THE REPLY OF THE ASSESSEE IS CONSIDERED AND VARIO USLY EXTRACTED IN PARAS 3 TO 5 AND RELYING UPON THE OBSERVATIONS MADE B Y THE AO IN PARAS 6 TO 9 AND REFERRING TO FACTS WHICH HAVE BEEN OWNED UP BY THE ASSESSEE IN PARAS 10 TO 19, THE CIT CENTRAL CONCLUDES THAT ASSESS MENT HAS BEEN MADE WITHOUT MAKING PROPER ADDITIONS; CONDUCTING PROPER E NQUIRIES AND ALSO WITH NON APPLICATION OF MIND. PARAS 16 AND 19 ARE RE PRODUCED HEREUNDER : 16. HOWEVER, AFORESAID ARGUMENTS OF THE LD. AR A RE NOT ACCEPTABLE IN VIEW OF THE DETAILED FACTS DISCUSSED ABOVE IN THIS ORDER. ADM ITTEDLY, ASSESSEE COMPANY HAS MADE HUGE INVESTMENTS IN THESE CONCERNS AT SI. NO, 7, 8, 10, 11 & 21 AND IT IS UNUSAL AND BEYOND COMPREHENSION MAT NO PROFITS ARE EARNED BY THE ASSESSEE COMPANY FROM ITS INVESTMENTS IN ABOVE CONCERN/PROJECTS UNLE SS OF COURSE SUPPORTED BY EVIDENCE WHICH IS NOT FORTHCOMING IN THIS CASE FROM THE ASSE SSEE. NOT ONLY ASSESSEE HAS NOT FILED ANY EVIDENCE OF NOT HAVING EARNED ANY INCOME IN ITS AFORESAID INVESTMENTS BUT FACT OF EARNING PROFITS IS QUITE EVIDENT FROM THE TRANSACTI ONS RECORDED ON PAGE 62 SUPRA WHICH CANNOT BE BRUSHED ASIDE MERELY ON THE BASIS OF UNCO RROBORATED SUBMISSIONS OF THE ASSESSEE SPECIALLY WHEN A.O. HAS RIGHTLY HELD THAT THESE ARE NOT MERE ESTIMATES. ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 28 OF 35 19 IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSM ENT ORDER IS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, AS ASSESSME NT ORDER HAS BEEN MADE APPROPRIATE ADDITIONS AND CONDUCTING PROPER INQUIRI ES AND ALSO WITH NON-APPLICATION OF MIND. IN VIEW OF ABOVE DISCUSSION, ASSESSMENT MADE BY THE A.O. FOR A.Y. 2008-09 VIDE ORDER DATED 22 12.2010 PASSED U/S 143(3)/153A OF THE I.T. ACT IS SET ASIDE FOR THE LIMITED PURPOSE OF MAKING PROPER ADDITIONS AFTER PR OPERLY EXAMINING THE ISSUES AND CONDUCTING PROPER ENQUIRY AND AFTER AFFORDING AN OP PORTUNITY OF BEING HEARD TO THE ASSESSEE IN RESPECT OF PROJECT NO. 7, 8, 9, 10, 1 1 & 21 OF PAGE NO. 62 AND THE OTHER PROJECTS IN RESPECT OF WHICH NO ADDITION HAS BEEN M ADE ON ACCOUNT OF UNDISCLOSED PROFITS. 7.11 IT IS A FACT THAT APPEAL WAS FILED ASSAILING THE CORREC TNESS OF THE SAID ORDER, HOWEVER, IT WAS WITHDRAWN BEFORE THE ITAT. LD . AR HAS ARGUED THAT SINCE THE CONSEQUENT ASSESSMENT ORDER HAD BEEN PASSED WHEREIN THE EARLIER ADDITIONS STOOD CONFIRMED, IN ORDER TO AVOID MULTIPLICIT Y, THE APPEAL WAS WITHDRAWN. IT IS A FACT THAT THE ASSESSMENT ORDER PURSUANT TO THE SAID ORDER WAS PASSED BY THE AO ON 30.03.2014. A PERU SAL OF THIS ORDER SHOWS THAT THE AO TOOK NOTE OF THIS SPECIFIC SEIZED DOCUMENT AS IS REFER RED BY HIM IN PARA 2 BEFORE EXTRACTING THE AFORESAID CHART. F OR READY REFERENCE, THE RELEVANT EXTRACT IS REPRODUCED HEREUNDER: 2.FROM THE PERUSAL OF THE ASSESSMENT RECORDS, IT H AS BEEN NOTICED THAT CERTAIN TRANSACTIONS REGARDING PURCHASE AND SALE OF PROPERT IES AT VARIOUS PLACES BY DIFFERENT COMPANIES INCLUDING THE ASSESSEE COMPANY WERE FOUND DEPICTED IN A DOCUMENT SEIZED AT PAGE NO. 62 OF ANNEXURE A-4 FROM THE RESI DENCE OF SH. KRISHAN GOYAL,DIRECTOR OF MOTIA CONSTRUCTIONS LTD. DURIN G THE COURSE OF SEARCH CONDUCTED ON 25.02.2009. IT WAS A CHART ON APPEARING ON THE SAID DOCUMENT WHICH IS AS UNDER: 7.12 IN PARAS 3 AND 4 OF THE SAID ORDER, COGNIZANCE IS T AKEN OF THE FACT THAT THE SAID DOCUMENT WAS CONSIDERED BY THE AO IN THE ORIGINAL PROCEEDINGS AND CONSIDERING THE DOCUMENTS AND THE FINDING OF THE AO, THE AO IN THE SECOND ROUND RE-CONFIRMED THAT IT WAS A DOCU MENT BASED ON ACTUAL FACTS. REFERRING TO TRANSACTIONS BEFORE THE DATE O F THE PREPARATION OF THE DOCUMENT AND CONSIDERING THE SAME, THE PROJECTS/ COMPANIES MENTIONED AT SR.NO. 1 TO 6, 9, 12 TO 20 AND 22 LED TO THE ADDITION OF RS. 2,45,10,000/- ODD AND CONSIDERING THE FACT THAT THE SPECI FIC ENTRIES AT SR.NO. 7, 8, 10, 11 AND 21 WERE LEFT TO BE CONSIDERED, IN VIEW OF WHICH NO ADDITION HAD BEEN MADE AND THE RE-OPENING U/S 263 WAS DIRECTED BY THE COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, LUDHIANA VIDE ORD ER DATED 25.02.2013, FACTS ARE NARRATED IN REGARD THERETO IN DETAIL. FOR READY REFERENCE, A PORTION OF THE SAME IS EXTRACTED HEREUNDER : 5. IT WAS NOTICED THAT ENTRIES AT SERIAL NO.7,8,10 ,11 AND 21 WERE LEFT TO BE CONSIDERED IN THE OF M/S MOTIA CONSTRUCTIONS PVT. L TD, A PERUSAL OF THE REPLY DATED 27,10.2010 FURTHER REVEALS THAT THE ASSESSEE COMPANY HAD SOME BUSINESS ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 29 OF 35 INTEREST/SHARE IN THE ENTITLES MENTIONED AT SERIAL NO. 7,8,10,11&21. RELEVANT PART OF THE REPLY IS REPRODUCED HEREUNDER; 6. AND NO FURTHER ENQUIRY WITH RESPECT TO THE A SSESSEE'S SHARE IN THE CONCERNS MENTIONED AT SR, NO, 7, -8,10,11 & 21 ABOVE HAS BEE N MADE RESULTING IN NO ADDITION ON ACCOUNT OF ASSESSEE'S SHARE IN UNEXPLAINED INVES TMENT AND UNDISCLOSED PROFITS ARISING FROM THE ABOVE MENTIONED PROJECTS. AS SUCH THE ASSESSMENT WAS RE-OPENED U/S 263 VIDE O RDER- DATED 25.O3.2013 OF THE LD. COMMISSIONER OF INCOME TAX, C ENTRAL CIRCLE, LUDHIANA , 7.13 ACCORDINGLY, NOTICES WERE ISSUED TO THE ASSESSEE A ND CONSIDERING THE EXPLANATION, THE VIEW AFFIRMED IN THE ORIGINAL ASSESSMENT ORDER WAS RE-AFFIRMED IN PARAS 7 OF THE SAME. THE CONCLUSION WAS DRA WN KEEPING IN VIEW THE SPECIFIC 263 DIRECTION WHICH WAS QUOTED BY THE AO AS UNDER : 8. ON THE BASIS OF THE ABOVE DISCUSSION, I AM OF T HE FIRM OPINION THAT THE DOCUMENT PAGE NO. 62 ANNEXURE A-4 IMPOUNDED FROM THE RESIDEN CE OF SHRI KRISHAN KUMAR GOYAL ARE QUITE CORRECT AUTHENTIC AND RELIABLE IN T HE CASE OF THE ASSESSEE COMPANY ALSO. DURING THE COURSE OF ASSESSMENT PROCE EDINGS U/S 263 ALL THE ABOVE MENTIONED ENTRIES RELATED TO PROJECTS MENTIONED FRO M SR. NO, 1 TO 6, 9,12 TO 20 AND 22 ON SEIZED DOCUMENTS PAGE NO. 62 ANNEXURE A-4 IMP OUNDED FROM THE RESIDENCE OF SH.KRISHAN KUMAR GOYAL HAVE BEEN REEXAMINED AND IT IS FOUND THAT THEY HAVE DUTY BEEN CONSIDERED DURING THE ASSESSMENT PROCEEDI NGS U/S 153A/143(2) EARLIER. THE ENTRIES AT SR. NO, 7,8,10,11 AND 21 RELATE TO MARBLE HOME APARTMENTS/MARBLE HOME CONSTRUCTIONS PVT. L TD., MOTIA TOWNSHIP PVT LTD, PABHAT 40'S, MOTIA DEVELOPERS PVT LTD. (BADDI LAND & MOTIA HEIGHTS) AND MOTIA PROJECTS PVT. LTD-(SCHOOLS) RESPECT IVELY. 9. THE ABOVE MENTIONED ALL THE FIVE ENTRIES AT SERI AL NO. 7,8,10,11 AND 21 HAVE DULY BEEN COVERED FOR THE ASSESSMENT IN THE CASES OF RESPECTIVE ASSESSEES NAMELY MARBLE HOME APARTMENTS, MARBLE HOME CONSTRUCTIONS P VT. LTD., MOTIA TOWNSHIP PVT LTD, PABHAT 40*S, MOTIA DEVELOPERS PVT LTD, (BADDI LAND & MOTIA HEIGHTS) AND MOTIA PROJECTS PVT. LTD,(SCHOOLS) RESPECTIVELY AS PER INI TIATED PROCEEDINGS U/S 263 OF THE LD. CIT. THE ISSUES RELATED TO ENTRIES LYING AT SERIAL NO. 1 0 & 11, IN THE NAME OF M/S MOTIA TOWNSHIP PVT LTD, PABHAT 40'S, MOTIA DEVELOPE RS PVT LTD, (BADDI LAND & MOTIA HEIGHTS) OF THE MENTIONED SEIZED DOCUMENT PAGE NO, 62 ANNEXURE A-4 IMPOUNDED FROM THE RESIDENCE OF SH.KRISHAN KUMAR GOYAL ARE AL READY BEEN ASSESSED IN THE CASES OF RESPECTIVE ASSESSEES NAMELY M/S MOTIA TOWN SHIP PVT LTD. PABHAT 40'S, MOTIA DEVELOPERS PVT LTD, (BADDI LAND & MOTIA HEIGHTS) FO R THE RESPECTIVE PERIODS AND THE ASSESSEES RELATING TO ENTRIES AT SERIAL NO. 5,6 AND 21( 7&8 ARE STATED AS A TYPOGRAPHICAL MISTAKE BY LD. AR AS 5&6) OF THE PAGE NO, 62 ANNEXURE A-4 IMPOUNDED FROM THE RESIDENCE OF SHRI KRISHAN KUMAR GOYAL ARE UNDER ASSESSMENT AT THEIR RESPECTIVE JURISDICTIONAL A.OS. AS SUCH ALL T HE ISSUES RELATED TO ASSESSEE COMPANY M/S MOTIA CONSTRUCTIONS PVT. LTD. RISING FROM DOCUM ENTS PAGE NO.62 ANNEXURE A-4 IMPOUNDED FROM THE RESIDENCE OF SHRI KRISHAN KUMAR GOYAL ARE DULY CONSIDERED AND THE INCOME OF THE ASSESSEE COMPANY M/S MOTIA CONSTR UCTIONS PVT. LTD. FOR A.Y. 2008- 09 IS ASSESSED AT RS. 2,98,18,313/- AS ASSESSED EAR LIER VIDE ORDER DATED 22.12.2010 U/S 143(3)/153A(1)(B) OF THE INCOME TAX ACT,1961. AS SUCH THE INCOME OF THE ASSESSEE COMPANY IS ASSES SED AT RS. 2,98,18,313/-. ( EMPHASIS SUPPLIED) 7.14 IT IS SEEN THAT THE LD. PR. CHIEF COMMISSIONER HAS TAKE N NOTE OF THESE ENTIRE FACTS IN HIS ORDER UNDER CHALLENGE I.E. DATED 28.03.2016 HOLDING THAT THE ARGUMENTS OF THE ASSESSEE HAVE NOT BE EN SUBSTANTIATED ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 30 OF 35 BY DOCUMENTARY EVIDENCE AND THE ADDITION OF RS. 2,45,10,00 0/- HAS BEEN MADE ON THE BASIS OF PROJECTS/CONCERNS MENTIONED AT SR .NO. 1 TO 6, 9, 12 TO 20 AND 22 AND CONCLUDES THAT WHEREAS THE AO SHOULD HAVE MAD3E THE ADDITION IN RESPECT OF PROJECTS MENTIONED AT SR.NO. 7, 8 AND 21. THE AO WAS HELD TO HAVE PASSED THE ORDER DATED 30.03.2014 WITH OUT CONDUCTING PROPER ENQUIRIES AND VERIFICATIONS AND WITHOUT REQUIRING THE ASSESSEE TO PROVE THE FACTS QUA THESE THREE PROJECTS. 7.15 WE HAVE GIVEN OUR UTMOST CONSIDERATION TO THE PECU LIAR FACTS. HOWEVER, ON A CONSIDERATION THEREOF IN THE LIGHT OF THE DEC ISIONS CITED BEFORE US AND THE ARGUMENTS ADVANCED, WE FIND THAT THE IMPUGNED ORDER IN THE FACTS OF THE PRESENT CASE, ARE NOT IN ACCORDANCE WITH LAW. THE EXERCISE OF THE SUPERVISORY POWERS IN THE PECULIAR FACTS O F THE PRESENT CASES CANNOT BE UPHELD. WHILE COMING TO THE SAID CONCLUSIO N, THE DECISIONS RELIED UPON BY THE PARTIES AND ALSO DISTINGUISHED BY THE PARTIES, HAVE BEEN TAKEN INTO CONSIDERATION. HOWEVER, THEY ARE NO T BEING SPECIFICALLY REFERRED TO AS EACH DECISION PROCEEDS ON FACTS PECULIAR TO ITS OWN. ADDRESSING THE CONCERNS EXPRESSED BY THE LD. CIT -DR JUSTIFYING THE SECOND 263 ORDER IN 2008-09 WHICH IS A SUBJECT MATTER FOR CONSIDERATION IN THE PRESENT PROCEEDINGS, WE NOTE THAT THE DIRECTION IS GIVEN, YET AGAIN IN THE CONTEXT OF THE VERY SAME SEIZED DOCUMENT JUSTIFY ING THE NEED AND NECESSITY TO RESORT TO THIS POWER ON ACCOUNT OF PECULIAR FACTS AND CIRCUMSTANCES WHERE IT IS STATED THERE IS RAMPANT INSUB ORDINATION IN THE DEPARTMENT. ADDRESSING THE SAID ISSUE FIRST AND GIVING DUE CONSIDERATION TO THIS SERIOUS MALAISE, WE DEEM IT APPROPRIATE TO OBSERV E THAT THE POWER U/S 263 WAS NEVER INTENDED BY THE LEGISLATURE TO ADDRE SS THE PROBLEMS OF INSUBORDINATION. THE LEGAL POSITION IS WELL SETTLED SO AS TO LE AVE NO SCOPE FOR DEBATE THAT THE PR. CIT OR CIT IS TO EXERCISE THE R EVISIONARY POWERS VESTED IN THE SAID AUTHORITY TO CALL FOR AND EXAMINE THE R ECORD OF ANY PROCEEDING OF THE AO AND ONLY IF HE CONSIDERS THAT THE ORDER PASSED IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS O F THE REVENUE, HE MAY PASS THE ORDER AS THE CIRCUMSTANCES JUSTIFY. THE E XISTENCE AND NECESSITY OF THE TWIN CONDITIONS OF ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE IS A SINE QUA NON. IT W AS NEVER THE LEGISLATIVE INTENT TO CONTROL RAMPANT INSUBORDINATION BY RES ORTING TO 263. FOR ADDRESSING RAMPANT INSUBORDINATION, IF THERE IS A WILL, T HERE ARE ADEQUATE REMEDIES AVAILABLE TO THE TAX ADMINISTRATION. IF THE SUBORDINATE OFFICERS DO NOT PERFORM AS PER LAW THEN T HERE IS NO ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 31 OF 35 JUSTIFICATION FOR HARASSING THE TAX PAYING CITIZENS OF INDIA. THE SOLUTION LIES IN CHECKING THE ERRANT OFFICER AND NOT HARASS THE TAX PAYING CITIZEN. IN THE FACTS OF THE PRESENT CASE, THE SPECIFIC DOCUMENT PAGE 62 A-4 IS AVAILABLE TO THE AO IN THE ORIGINAL PROCEEDINGS. ENQUIRIES AND EXPLANATIO N IN REGARD TO THE PROJECTS AND CONCERNS MENTIONED THER EIN ARE ENQUIRED INTO. WE HAVE SEEN THAT A CONSCIOUS VIEW HAS BEEN TAKEN TO HOLD THAT CERTAIN PROJECTS DID NOT BELONG TO THE ASSESSEE. IF TH E SAID VIEW IS INCORRECT ON FACTS, THE REVENUE MAY HAVE HAD A CASE J USTIFYING THE SETTING ASIDE OF THE RESPECTIVE ASSESSMENT ORDERS IN THE TWO YE ARS. HOWEVER, AS WE HAVE NOTED THAT IT IS NOT THE CASE OF THE PR. CIT C ENTRAL, LUDHIANA OR CIT, CENTRAL LUDHIANA IN 2008-09 AND 2007-08 ASSESSMENT YEARS. WE CANNOT AGREE TO THE USE OF THE SAID PROVISION ON THE GR OUNDS THAT INCOME HAS NOT BEEN TAXED IN SOME OTHER UNCONNECTED CASE. T HE RECORD SHOWS THAT THE CONSISTENT EXPLANATION OF THE ASSESSEE THAT IT IS A MERE ESTIMATE FOR INTERNAL PURPOSES IS CONSIDERED AND REJECTED. THE EX PLANATION THAT THE SPECIFIC PROJECTS IDENTIFIED AS SR. 7, 8, 10, 11 & 21 BELONG T O THE ERSTWHILE DIRECTOR SHRI PAWAN BANSAL AND DID NOT CONCERN THE ASS ESSEE IS ACCEPTED. THE SAID EXPLANATION IS A CONSISTENT CLAIM ON RECORD. THE SAID CLAIM, ADMITTEDLY AND EVIDENTLY WAS CONSIDERED BY THE AO IN TH E ORIGINAL PROCEEDINGS AS NOTED BY US AND THE AO AFTER DUE APPLICA TION OF MIND CONFINED HIS ADDITION TO THE PROJECTS AND CONCERNS MENT IONED AT SR.NO. 1 TO 6, 9, 12 TO 20 AND 22. THE ADDITION AS PER RECORD WAS CHALLENGED IN APPEAL BEFORE THE CIT(A) WHO TOO CONSIDERING THE SAID SEIZE D DOCUMENT AS HAS ALSO BEEN NOTICED BY US, PROCEEDED TO SUSTAIN THE A DDITION. THIS FACT NEEDS TO BE NOTED IN THE CONTEXT OF THE POWERS VEST ED BY THE STATUTE ON THE COMMISSIONER (APPEALS). SECTION 251(1) OF THE INCOME T AX ACT, 1961 EMPOWERS THE CIT(A) WHILE DISPOSING THE APPEALS TO CONFIRM, R EDUCE, ENHANCE OR ANNUL THE ASSESSMENT. THUS, WHERE ON FACTS T HE DOCUMENT SEIZED HAS BEEN CONSIDERED BY THE CIT(A) WHO DID NOT PRO POSE TO EXERCISE HIS POWER OF ENHANCEMENT AND CONSIDERED THE VIEW CANVAS SED BY THE ASSESSEE THAT THESE PROJECTS WERE NOT RELATABLE TO TH E ASSESSEE AS THEY PERTAINED TO THE ERSTWHILE DIRECTOR, IS A FACT WHICH COMES OUT FROM THE RECORD. THE CONTRA PRESUMPTION WHICH MAY BE PROPOSED T HAT THE CIT(A) WHILE PASSING THE ORDER HAS ALSO PROCEEDED CARELESSLY AN D DID NOT CONSIDER THE DOCUMENT AS A WHOLE WOULD REQUIRE THE DRAW ING OF PRESUMPTIONS AND ASSUMPTIONS IN THE ABSENCE OF ANY SUCH FACT ON RECORD. SINCE, THERE IS NOTHING AVAILABLE ON RECORD TO SUPPORT SU CH PRESUMPTION, ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 32 OF 35 THE NATURAL NORMAL PRESUMPTION THAT THE DOCUMENT HAVING BEEN CONSIDERED BY THE CIT(A) AS A WHOLE BY WAY OF RELEVANT DIS CUSSION THEREON WHEREIN WE HAVE NOTICED THAT THE ARGUMENTS RECORDED O F THE ASSESSEE HAVE ALSO BEEN BROUGHT OUT BY THE SAID AUTHORITY TO O UR MINDS AMPLY EVIDENCES THE FACT THAT A CONSCIOUS VIEW HAS BEEN FORMED WHILE PASSING THE ORDER. 7.16. WHILE SO HOLDING, WE ARE NOT COMMENTING UPON THE CORRECTNESS OF THE SAID ORDER AS IT IS NOT AN ISSUE IN THE PRESENT PRO CEEDINGS. SUFFICE IT TO SAY THAT A SPEAKING ORDER HAS BEEN PASSED. IN THE C IRCUMSTANCES IN 2008-09, THE DIRECTIONS TO SET ASIDE THE ORDER IN RESPEC T OF CONCERNS AT SR.NO. 7, 9 AND 21 IN 2008-09 ASSESSMENT YEAR AND SR.NO. 7, 8, 10, 11 AND 21 IN 2007-08 ASSESSMENT YEAR IS WHIMSICAL AND ARBIT RARY. THE EXCLUSION OF TWO PROJECTS IN THE SECOND ROUND IN 2008-09 ASSESSMENT YEAR FURTHER DEMONSTRATED THE CASUAL APPROACH AND ATTITUDE TO THE USE OF THIS POWER. 7.17 WE ALSO NOTE THAT THERE IS NOTHING IN THE ORDER T O SHOW THAT THE CONSISTENT CLAIM OF THE ASSESSEE MADE BEFORE THE TAX AU THORITIES WAS CASUALLY OR INCORRECTLY CONSIDERED BY DIFFERENT TAX AUTHO RITIES AT DIFFERENT POINTS OF TIME. THE RECORD SHOWS THAT THE; A) ORIGINAL ASSES SMENT ORDER WAS PASSED BY MS. EKTA JAIN, DY. COMMISSIONER OF INCOME TA X, CENTRAL CIRCLE, PATIALA; B) THE ORDER OF THE CIT(A) WHICH ALSO CONSIDER ED THE VERY SAME DOCUMENT AND THE VERY SAME CLAIM TO AGREE WITH THE CONCLU SION THAT THE PROJECTS DID NOT PERTAIN TO THE ASSESSEE, IS SEEN TO HAVE PAS SED BY SHRI HARINDER VEER SINGH GILL, CIT(A)-I LUDHIANA; C) THE FIRST 263 ORDER DATED 28.03.2013 HAS BEEN PASSED BY SHRI D.V.GOYAL, CIT CENTRAL, L UDHIANA; D) ACTING ON HIS DIRECTIONS, THE AO IN THE THIRD ROUND, SHRI R.R .N. SHUKLA, ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, PATIA LA HAS ALSO FORMED THE VERY SAME VIEW. THUS TO CONCUR WITH THE ARG UMENTS OF THE LD. CIT-DR THAT THE EXERCISE OF POWER BY THE PR. CHIEF COMMIS SIONER INCOME TAX AND THE CIT, CENTRAL IN THE RESPECTIVE YEAR IN THE P RESENT PROCEEDINGS IS AN EXERCISE OF POWER WHICH IS NECESSITATED, WARRANTED A ND JUSTIFIED WOULD BE A MOCKERY OF JUSTICE. 7.18 THERE IS NOTHING ON RECORD TO SHOW THAT THE SUSPIC IONS OR BELIEFS HARBOURED BY THE TAX AUTHORITIES IN THE EXERCISE OF 263 POWERS WAS BASED ON ACTUAL FACTS AND ERRORS, LET ALONE THOSE ERRORS WHICH WERE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE RECORD SHOWS THAT IN THE FIRST ROUND, ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 33 OF 35 263 POWER HAS BEEN EXERCISED DIRECTING THAT ADDITIONS BE MADE CONSIDERING THE PROJECTS MENTIONED AT SR.NO. 7, 8, 10, 11 AND 21 AND IN THE ORDER UNDER CHALLENGE, IT IS THEREAFTER DEEMED APPROPRIATE TO D IRECT THE ADDITION ON ACCOUNT OF PROJECTS /CONCERNS MENTIONED AT SR.NO. 7, 8 AND 21, THEREBY EXCLUDING THE PROJECTS AT SL.NO.S 10 AND 11 D EMONSTRATING THAT INCLUSION FOR PROJECTS MENTIONED AT SR.NO. 10 AND 11 WAS AN INCOR RECT DECISION BY AN AUTHORITY NO LESS THAN CIT, CENTRAL, LUDHIAN A IN THE FIRST ROUND, WHICH VIEW IS REPEATED IN 2007-08 A.YS. 7.19 IN THE FACTS OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE EXERCISE OF POWER IS NOT JUSTIFIED, NOT ONLY ON ACCOUNT OF THE FACT THAT THE SUBJECT MATTER OF CONSIDERATION STOOD MERGED WITH THE ORDER OF T HE CIT(A), BUT MORE IMPORTANTLY ON THE GROUND THAT THERE IS NOTHING O N RECORD TO SHOW THAT THE CONCLUSIONS DRAWN BY THE DIFFERENT AOS ON THE B ASIS OF SAME SEIZED DOCUMENT, SAME ARGUMENTS CONSISTENTLY WAS WITHOU T DUE APPLICATION OF MIND. THE SAID FINDING OF THE DIFFERENT AOS HAS NOT BEEN SHOWN OR HELD TO BE ERRONEOUS LET ALONE PREJUDICIAL TO TH E INTERESTS OF THE REVENUE. IF INCOME HAS NOT BEEN SUBJECTED TO TAX IN PR OJECTS UNCONNECTED TO ASSESSEE, THEN WE FAIL TO SEE WHY THE ASSESSEE SHOULD SUFFER. 7.20 IN 2007-08 ASSESSMENT YEAR, THE DISTINGUISHING FAC T BEING THAT THE COMMISSIONER INCOME TAX DID NOT INVOKE 263 PROCEEDINGS T WICE, HOWEVER THE FACT REMAINS THAT THE VERY SAME DOCUMENT HAS BEEN CONSIDERED BY THE AO TO MAKE AN ADDITION OF RS. 81,50,000/- IN THE FIRST ROUND AND THE SAID ORDER ALSO CAME UP IN APPEAL BEFORE THE CIT(A) WHO DISMISSE D THE ASSESSEE'S CLAIM AGAIN WHEREIN DESPITE HAVING THE POWERS U/S 251(1)(A) TO CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT, CHOSE T O CONFIRM THE ADDITION AND THERE IS NOTHING ON RECORD TO SHOW THAT T HE SAID AUTHORITY, ON CONSIDERING THE VERY SAME DOCUMENT ACCEPTING THE AS SESSEE'S PLEA THAT THESE PROJECTS WERE RELATABLE TO ITS ERSTWHILE DIRECTOR, W AS A VIEW TAKEN CASUALLY AND CARELESSLY. IF THE FACTS WARRANTED AN ENHA NCEMENT, THE CIT(A) WAS VESTED WITH THE SAID POWER. THE DECISION NOT TO CHOOSE TO DO SO IS A MATTER OF RECORD. THUS, THE ASSESSMENT ORDER STOOD MERGED WITH THE ORDER OF THE CIT(A) AS THE SAME SEIZED DOCUMENT STO OD CONSIDERED BY THE CIT(A) IN APPEAL IN 2007-08 ASSESSMENT YEAR, THUS, IT COULD NOT HAVE BEEN THE BASIS FOR ISSUANCE OF SHOW CAUSE NOTICE U/S 263 DATED 21.03.2013. ACCORDINGLY, THE ORDER DATED 28.03.2013 UNDER CHALL ENGE IN 2007-08 ASSESSMENT YEAR WAS AGAIN OUTSIDE THE SCOPE OF THE REVISIONARY POWERS OF CIT CENTRAL BY VIRTUE OF EXPLANATIO -1(C) OF SECTION 263 OF THE INCOME TAX ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 34 OF 35 ACT AS THE ASSESSMENT ORDER SOUGHT TO BE REVISED STO OD MERGED WITH THE ORDER OF THE CIT(A). 7.21. THE POWER TO REVISE THE ASSESSMENT ORDER U/S 263 IS SO VESTED WITH THE CIT OR PR. CIT IN HIS CAPACITY AS A SUPERVISORY JUR ISDICTION AND CAN BE EXERCISED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST. THE ERROR ENVISAGED BY SECTION 263 IS NOT ONE WHICH IS EXPECTED TO DEPEND ON POSSIBILITIES OR GUESS WORK. IT SHOULD ACTUALLY SPELL OUT A ND BE DEMONSTRATED AS AN ERROR EITHER ON FACT OR LAW AND THE ERROR SHOULD BE SUCH WHICH CAN BE CATEGORIZED TO BE PREJUDICIAL TO THE IN TERESTS OF THE REVENUE. 7.22 IT MAY NOT BE OUT OF PLACE TO REFER TO A SPEAKING JUDGEMENT OF THE APEX COURT IN THE CASE OF PARSHURAM POTTERY WORKS CO. LTD. VS ITO, CIRCLE 1, WARD-A, RAJKOT (1077) 106 ITR 1 (S.C) WHICH THOUGH ON THE ISSUE OF RE-ASSESSMENT IN THE CONTEXT OF THE INDIAN INCOME TA X, 1922. HOWEVER, THE PRINCIPLE OF LAW EXPOUNDED THEREIN CAN BE WELL EXPORTED AND APP LIED TO CASES WHERE THE TAX AUTHORITIES CONTEMPLATE DISTURBING T HE TAX PAYING CITIZENS ON ACCOUNT OF REMISSNESS OF THE TAX AUTHORITIES. A DDRESSING THE CHALLENGE POSED BY THE ASSESSEE TO THE JURISDICTIONAL ISSU E, THE HON'BLE APEX COURT WAS PLEASED TO REVERSE THE DECISION OF THE H ON'BLE GUJRAT HIGH COURT HOLDING THAT IF THE AO MAKES A MISTAKE IN RELYING UPON HIS OWN R ECORD FOR DETERMINING THE ISSUE, RESPONSIBILITY FOR THAT MISTAKE CANNOT BE ASCRIBED TO AN OMISSION OR FAILURE ON THE PART OF THE ASSESSEE. IN FACT, THEIR LORDSHIPS OF THE APEX COURT CONSIDERING THE CONTRA CLAIM OF THE PARTIES BEFORE THE BENCH MADE THE FOLLOWING OBSERVATION : IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE THAT WE PAY FOR CIVILIZATION. IF SO, IT IS ESSENTIAL THAT THOSE WHO ARE ENTRUSTED WITH THE TASK OF CALCULATIN G AND REALISING THAT PRICE SHOULD FAMILIARISE THEMSELVES WITH THE R ELEVANT PROVISIONS AND BECOME WELL-VERSED WITH THE LAW ON THE SUBJECT. ANY REMISS NESS ON THEIR PART CAN ONLY BE AT THE COST OF THE NATIONAL EXCHEQUER AND MUST NECE SSARILY RESULT IN LOSS OF REVENUE. AT THE SAME TIME, WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, TH AT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME M UST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROV ERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. (EMPHASIS SUPPLIED) 7.23 PERUSAL OF THE ABOVE SHOWS THAT THE HON'BLE COUR T HAS BEEN VERY CLEAR ON TWO BASIC PRINCIPLES (I) THAT THOSE ENTRUSTED WITH THE TASK OF ASSESSING ARE EXPECTED TO BE WELL VERSED WITH THE LAW ON THE SUBJECT AND HAVE GONE ON TO HOLD THAT ANY REMISSNESS I.E. CARELESSNE SS ON THEIR PART CAN ONLY BE AT THE COST OF NATIONAL EXCHEQUER AND MUST NECESSARILY RESULT IN LOSS TO THE REVENUE. THE HON'BLE COURT SIMULTANEOUSLY MAKES IT CLEAR ITA 813/CHD/2016 & ITA 519/CHD/2013 PAGE 35 OF 35 THAT THERE MUST BE A FINALITY IN ALL LEGAL PROCEEDINGS. WHILE M AKING THESE OBSERVATIONS, THEIR LORDSHIPS HAVE CONSIDERED THAT ALTHOU GH WHAT FACTS ARE MATERIAL AND NECESSARY FOR ASSESSMENT, WOULD DIFFER FRO M CASE TO CASE, HOWEVER THERE WAS DUTY ON THE PART OF THE ASSESSEE W HICH WAS REQUIRED TO BE CONSIDERED IN THE CONTEXT OF THE RE-OPENING OF ASSESS MENT WHICH THE STATUTE CASTS UPON THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. HOWEVER, THEREAFTER IT WAS THE DUTY OF THE AO TO ADDRESS THE FACTS FOR THE PURPOSE OF COMPUTIN G OR DETERMINING THE PROPER TAX DUE FROM AN ASSESSEE. IT HAS BEEN HELD THAT ANY REM ISSNESS ON THE PART OF THE AO CANNOT BE THE BASIS FOR TAKING RE COURSE TO RE- OPENING AN ASSESSMENT. THE SAID DICTUM WHEN APPLIED TO T HE FACTS OF THE PRESENT CASE, AMPLY ADDRESSES THE ARGUMENT THAT THE 263 CANNOT BE JUSTIFIABLY RESORTED TO FOR RAMPANT INSUBORDINATION IN THE TAX DEPAR TMENT. 8. ACCORDINGLY, IN VIEW OF THE DETAILED REASONS GIVEN HEREIN ABOVE, WHEREIN THE ARGUMENTS OF THE RESPECTIVE PARTIES HAVE B EEN CONSIDERED FROM ALL ANGLES AND THE DECISIONS RELIED UPON AND DISTINGUISHE D HAVE ALSO BEEN FULLY CONSIDERED, WE ARE OF THE VIEW THAT IN THE PECU LIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDERS DATED 28 .03.2016 IN ITA 813/CHD/2016 ASSESSMENT YEAR OF PR. CIT, CENTRAL DESERV ES TO BE PERTAINING TO 2007-08 ASSESSMENT YEAR OF CIT CENTRAL DE SERVES TO BE QUASHED. ORDERED ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH SEPT., 2017. SD/- SD/- ( DR.B.R.R.KUMAR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.
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