M/S. THE INDIA CEMENTS LTD., CHENNAI V. DCIT, CORPORATE CIRCLE - 2 (1), CHENNAI

ITA 833/CHNY/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8414 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 12-10-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATHCIT
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Revision of order; Depreciation; Principle of natural justice; Period of limitation; Valuation report; Unabsorbed depreciation; Revenue expenditure; Set aside
• Section: 143(3); 115JB; 13; 22; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , . , % BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.833/CHNY/2020 ( / ASSESSMENT YEAR:2007-08) M/S. INDIA CEMENTS LIMITED 93, COROMANDEL TOWERS SANTHOME HIGH ROAD, R.A.PURAM,CHENNAI-600 028. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-2(1) CHENNAI PAN: AAACT 1728P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR.R.VIJAYARAGHAVAN, ADVOCATE /RESPONDENT BY : MR. S.BHARATH,CIT /DATE OF HEARING : 13.07.2021 /DATE OF PRONOUNCEMENT : 18.08.2021 / O R D E R PER G.MANJUNATHA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF THE LEARNED PRINCIPAL CIT, CHENNAI-2 DATE D 26.03.2015 U/S.263 OF THE INCOME TAX ACT, 1961 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THE ORDER PASSED BY THE LEARNED PRINCIPAL COMMIS SIONER OF INCOME TAX U/S.263 OF THE ACT DATED 26.03.2015 I S CONTRARY TO LAW FACTS AND CIRCUMSTANCES OF THE CASE. JURISDICTION 2. THE COMMISSIONER OF INCOME-TAX ERRED IN ASSUMING JURISDICTION U/S.263 IN RESPECT OF THE GIVING EFFEC T ORDER U/S.143(3) R.W.S.263 DT 30.03.2013 WHICH WAS PASSED 2 ITA NO.833/CHNY/2020 PURSUANT TO THE DIRECTIONS OF THE CIT VIDE ORDER U/ S. 263 DT. DT.30.03.2012. 2.1 THE COMMISSIONER OF INCOME-TAX ERRED IN HOLDING THAT ASSESSMENT ORDER U/S.143(3) R.W.S.263 DT 30.03.2013 WAS MADE WITHOUT PROPER ENQUIRY/VERIFICATION WITHOUT AP PRECIATING THAT THE ORDER WAS MADE AFTER DETAILED ENQUIRIES AN D HENCE CANNOT BE REVISED MERELY TO SUPERIMPOSE THE DECISIO N OF THE CIT OVER THAT OF THE AO. 2.2 THE COMMISSIONER OF INCOME-TAX FAILED TO APPREC IATE THAT TWIN CONDITIONSFOR INVOKING JURISDICTION U/S.263 IS ABSENT IN THE PRESENT CASE AS HELD BY THE HONBLE SUPREME COURT I N THE CASE OF MALABAR INDUSTRIAL CO LTD V CIT 243 ITR 83( SC). 2.3 THE COMMISSIONER OF INCOME TAX OUGHT TO HAVE APPRECIATED THAT WHERE TWO VIEWS ARE POSSIBLE AND T HE ASSESSING OFFICER HAD TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORD ER PREJUDICIAL TO THE INTEREST OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE IN LAW. [CIT V MAX INDIA 295 ITR 282]. 2.4 THE COMMISSIONER OF INCOME TAX OUGHT TO HAVE APPRECIATED THAT IN THE PRESENT CASE THE ORDER U/S. 143(3) R.W.S.263 DT 30.03.2013 WAS PASSED PURSUANT TO THE DIRECTIONS OF THE CIT VIDE HIS ORDER U/S. 263 DT.DT.30.03.2012 AND HENCE CANNOT BE TREATED AS ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE. MERITS 3. SETOFF OF UNABSORBED LOSS U/S.II5JB: 3.1 THE COMMISSIONER OF INCOME-TAX ERRED IN HOLDING THAT ASSESSING OFFICER IN THE ORDER U/S. 143(3) R.W. S. 263 DATED 30. 03.2013 HAD ALLOWED SET OFF OF UNABSORBED LOSS OF RS.198.43 CRORES AS AGAINST RS.120.46 CRORES WITHOU T PROPER VERIFICATION. 3 ITA NO.833/CHNY/2020 3.2 THE COMMISSIONER OF INCOME-TAX ERRED IN HOLDING THAT THE ISSUE PERTAINING TO SET OFF OF CARRIED FORWARD UNAB SORBED LOSS WAS SUBJECT MATTER OF EARLIER REVISION ORDER DATED 30.03.2012 AND HENCE THE SAME IS NOT BARRED BY LIMITATION. 3.3 THE COMMISSIONER OF INCOME-TAX FAILED TO APPREC IATE THAT IN THE EARLIER REVISION ORDER DATED 30.03.2012 THER E WAS A SPECIFIC DIRECTION TO DISALLOW LOSS OF AMALGAMATED COMPANY OF RS.40 CRORES FROM THE UNABSORBED LOSS OF RS.153.16 CRORES WHILE COMPUTING BOOK PROFIT U/S.115JB. 3.4 THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE APPRECIATED THAT OTHER THAN THE PROCEEDINGS U/S.143 (3), THIS PARTICULAR ASPECT OF SET OFF OF BROUGHT FORWARD LOS SES U/S.II5JB IS NOT SUBJECT MATTER OF ANY OTHER PROCEEDINGS AND HENCE THE PERIOD OF LIMITATION SHALL RUN FROM THE ORIGINAL AS SESSMENT U/S.143(3). HENCE THE ACTION OF CIT TO INVOKE HIS J URISDICTION IN THIS RESPECT IS CLEARLY BARRED BY LIMITATION AND HA S TO BE SET ASIDE. [CIT VS. ALAGENDRAN FINANCE 293 ITR 1 (SC) ; CIT VS ICICI BANK 343 ITR 74 (BOM); CIT VS. SHRIRAM INVEST MENTS (MAD)] 3.5 THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE APPRECIATED THAT THE AMOUNT OF BROUGHT FORWARD LOSS ES AS PER BOOKS TO BE SET OFF AGAINST THE BOOK PROFITS FOR TH IS YEAR, AS CLAIMED BY ASSESSEE IN THE RETURN IS RS.275.75 CROR ES. THE AC HAS SET OFF THE LOSS TO THE EXTENT OF THE BOOK P ROFITS ASSESSED IN EACH OF THE ORDERS AND HENCE THERE IS N O ERROR IN HIS ORDER. 3.6 WITHOUT PREJUDICE, THE ORDER GIVING EFFECT TO T HE EARLIER ORDER OF THE CIT WAS SUBJECT MATTER OF APPEAL BEFOR E THE CIT(A). IF THE ORDER OF THE CIT(A) IS GIVEN EFFECT THE BOOK PROFITS AND HENCE THE BROUGHT FORWARD LOSSES TO BE SET OFF AGAINST THE BOOK PROFITS SHALL BE AT THE ORIGINAL F IGURE OF RS. 153.16 CRORES AND HENCE THERE IS NO ERROR IN THE OR DER OF AO GIVING EFFECT TO THE ORDER OF CIT. 4 ITA NO.833/CHNY/2020 4. PREMIUM ON REDEMPTION OF DEBENTURES: 4.1 THE COMMISSIONER OF INCOME-TAX ERRED IN HOLDING THAT IN THE ASSESSMENT ORDER U/S.143(3) R.W.S.263 DT 30.03. 2012 THE AO HAS OMITTED TO EXAMINE AND VERIFY THE ISSUE OF A LLOWABILITY OF EXPENDITURE INCURRED TOWARDS PREMIUM ON REDEMPTI ON OF DEBENTURES. 4.2 THE COMMISSIONER OF INCOME-TAX FAILED TO APPREC IATE THAT THE AO IN THE ORDER U/S.143(3) R.W.S. 263 HAS DISAL LOWED THE CLAIM OF RS.59.01 CRORES AS DEDUCTION FROM BOOK PRO FITS AND ADDED BACK THE SAME TO BOOK PROFITS. 4.3 THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE APPRECIATED THAT THE ABOVE DISALLOWANCE WAS SUBJEC T MATTER OF APPEAL BEFORE CIT(APPEALS) AND THE CIT(APPEALS) VIDE HIS ORDER IN ITA NO.726/2013-14 DT 27.10.2014 HELD THAT ASSESSEE IS ELIGIBLE FOR REDUCING THE AMOUNT OF RS.59.01 CRO RES FROM THE NET PROFIT SHOWN IN THE P&L ACCOUNT FOR THE PURPOSE OF COMPUTING BOOK PROFIT U/S.115JB. 4.4 THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE APPRECIATED THAT HE HAS NO JURISDICTION IN RESPECT OF THIS ISSUE WHICH WAS SUBJECT MATTER OF APPEAL BEFORE CIT(APPEA LS) UNDER CLAUSE (C ) TO EXPLANATION 1 TO SEC 263 AND HENCE T HE REVISION ORDER DT 26.03.2015 IS INVALID. 5. INVESTMENTS 5.1 THE COMMISSIONER OF INCOME-TAX AFTER ERRED IN D IRECTING THE ASSESSING OFFICER TO VERIFY THE INVESTMENTS MAD E IN M/S JANANI INFRASTRUCTURE PVT LTD WITHOUT CONSIDERING T HE EXPLANATION GIVEN BY ASSESSEE THAT NO SUCH INVESTME NTS WERE MADE BY ASSESSEE. 5.2 THE COMMISSIONER OF INCOME-TAX FAILED TO APPREC IATE THAT THIS ISSUE WAS NOT SUBJECT OF REVISION IN THE FIRST REVISION ORDER DT 30.03.2012 HENCE, THERE IS NO ERROR IN THE ASSES SMENT ORDER U/S.143(3) R.W.S 263 DT 30.03.2013 SO AS TO INVOKE JURISDICTION U/S.263 OF THE ACT. 5 ITA NO.833/CHNY/2020 5.3 THE COMMISSIONER OF INCOME TAX ERRED IN ASSUMIN G JURISDICTION U/S.263 BASED ON THE INFORMATION WHICH WAS RECEIVED BY THE ASSESSING OFFICER WHICH IS SUBSEQUE NT TO THE GIVING EFFECT ORDER PASSED U/S.143(3) R.W.S 263 OF THE ACT. 5.4 THE COMMISSIONER OF INCOME-TAX OUGHT TO HAVE APPRECIATED THAT OTHER THAN THE PROCEEDINGS U/S.143 (3), THIS PARTICULAR ASPECT OF INVESTMENT IN JANANI INFRASTRU CTURE PVT LTD IS NOT SUBJECT MATTER OF ANY OTHER PROCEEDINGS AND HENCE THE PERIOD OF LIMITATION SHALT RUN FROM THE ORIGINAL AS SESSMENT U/S.143(3). HENCE THE ACTION OF CIT TO INVOKE HIS J URISDICTION IN THIS RESPECT IS CLEARLY BARRED BY LIMITATION AND HA S TO BE SET ASIDE. [ CIT VS. ALAGENDRAN FINANCE 293 ITR I (SC) CIT VS ICICI BANK 343 ITR 74 (BOM); CIT VS SHRIRAM INVESTM ENTS (MAD)] 5.5 THE RELIANCE PLACED BY THE CIT IN THE CASE OF S HREE MANJUNATHESWARA PACKING PRODUCTS AND CAMPHOR WORKS 231 ITR 53 IS MISPLACED AND NOT APPLICABLE TO THE FACTS OF THE CASE. IN THAT DECISION IT WAS HELD THAT COMMISSIONE R CAN TAKE INTO CONSIDERATION THE VALUATION REPORT CALLED FOR BY THE AO BEFORE MAKING THEASSESSMENT BUT SUBMITTED BY THE VALUER AFTER THE ASSESSMENT. 6. THE COMMISSIONER OF INCOME-TAX ERRED IN NOT CONS IDERING THE SUBMISSIONS MADE BY THE APPELLANT IN PROPER PER SPECTIVE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE COM PANY IS ENGAGED IN THE BUSINESS OF CEMENT MANUFACTURING F ILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 31. 10.2017 ADMITTING NIL TOTAL INCOME. THE ASSESSMENT FOR IMPU GNED ASSESSMENT YEAR HAS BEEN COMPLETED U/S.143(3) OF THE ACT, ON 22.12.2019 AND ASSESSED TOTAL INCOME OF 6 ITA NO.833/CHNY/2020 RS.229,64,16,622/- U/S. 115JB OF THE INCOME TAXACT , 1961. THE ASSESSEE HAS FILED AN APPEAL BEFORE LEARNED CI T(A) AND CHALLENGED VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER INCLUDING REVERSAL OF INCOME ARISING ON CANCELLATI ON OF SALES TAX ASSIGNMENTS. THE LEARNED CIT(A) VIDE HIS ORDER DAT ED 28.05.2010 PARTLY ALLOWED APPEAL FILED BY THE ASSE SSEE AND DELETED ADDITIONS MADE TOWARDS REVERSAL OF INCOME A RISING ON CANCELLATION OF SALES-TAX ASSIGNMENTS. THE ASSESSIN G OFFICER HAS PASSED ORDER GIVING EFFECT TO THE LEARNED CIT(A ) ORDER ON 13.07.2010 AND DETERMINED TOTAL INCOME U/S.115JB O F THE ACT AT RS. NIL, AFTER ALLOWING SET OFF OF BROUGHT FORW ARD BUSINESS LOSS. THE CASE HAS BEEN SUBSEQUENTLY TAKEN UP FOR R EVISION PROCEEDINGS U/S.263 OF THE INCOME TAX ACT, 1961 BY THE PRINCIPAL CIT, CHENNAI-1, ON THE GROUND THAT ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS, INSO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE ON CERTAIN ISSUES. THE LEARNED CIT, CHENNAI VIDE ORDER U/S. 263 OF THE ACT DATED 30.03.2012 SET ASIDE ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER DATED 22.12.2009 AND DIRECT HIM TO EXAMINE ALL THE ISSUES AND PASS A FRESH ORDER IN ACCORDANC E WITH LAW. IN 7 ITA NO.833/CHNY/2020 THE SAID 263 ORDER, THE LEARNED CIT, CHENNAI HAS TAKEN UP THREE ISSUES FOR EXAMINATION, AS PER WHICH, THE A SSESSING OFFICER HAS NOT EXAMINED ISSUE OF DEDUCTION ALLOW ED TOWARDS PREMIUM PAID ON CONVERSION OF OCDS/WARRANTS, DEDUC TION OF EMPLOYEES BENEFIT FROM BOOK PROFIT U/S.115JB TRE ATING IT AS RELEASE OF RESERVES, SET OFF OF UNABSORBED LOSS AS PER BOOKS WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE ACT, I NCLUDING BOOK LOSS OF M/S. VISAKA CEMENT INDUSTRIES LTD., CLAI M OF DEPRECIATION ON ASSETS OF AMALGAMATED COMPANY AND CLAIM OF EXPENDITURE ON ACCOUNT OF DEBENTURES AND BONDS ISSU E AND REDEMPTION OF EXPENDITURE ETC. THE ASSESSING OFFI CER HAS TAKEN UP THE CASE FOR FRESH EXAMINATION IN PURSUA NT TO DIRECTIONS OF LEARNED CIT UNDER SECTION 263 OF THE ACT AND COMPLETED ASSESSMENT U/S. 143(3) READ WITH SECTION 263 OF THE INCOME TAX ACT, 1961, ON 30.03.2013 AND EXAMINED AL L THE ISSUES TAKEN UP BY THE LEARNED CIT IN HIS 263 PROC EEDINGS AND DETERMINED TOTAL INCOME AT RS. NIL UNDER NORMAL PRO VISIONS OF THE ACT AS WELL AS BOOK PROFIT U/S.115JB OF THE ACT , AFTER MAKING ADDITIONS TOWARDS RELEASE OF RESERVES ON ACCOUNT O F PREMIUM PAYABLE ON OCDS/WARRANTS INTO SHARES, RELEASE OF RESERVES 8 ITA NO.833/CHNY/2020 ON ACCOUNT OF EMPLOYEES BENEFITS AND FURTHER DISAL LOWED CLAIM OF UNABSORBED BROUGHT FORWARD LOSS OF AMALGAMATED COMPANY M/S.VISAKA CEMENT INDUSTRIES LTD. THE ASSESSEE HAS CHALLENGED ASSESSMENT ORDER PASSED BY THE ASSESSIN G OFFICER U/S. 143(3) R.W.S 263 OF THE ACT DATED 30.03.2013 BEFORE THE FIRST APPELLATE AUTHORITY AND CHALLENGED ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS RELEASE OF RESERVES ON ACCOUNT OF PREMIUM PAYABLE ON OCDS/WARRANTS, ADDITION TOWARDS RELEASE OF RESERVES OF EMPLOYEES BENEFITS AND DISALLOWANCE OF BROUGHT FORWARD LOSS OF AMALGAMATING COMPANY. THE LEARNED CIT(A) VIDE ORDER DATED 22.10.2014 HAS DELETED ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS DISALLOWANCE OF RELEA SE OF RESERVES OF PREMIUM ON OCDS ETC, OF RS.59.01 CRORES AND ALSO DELETED ADDITIONS MADE TOWARDS RELEASE OF RESERVES OF EMPLOYEES BENEFIT OF RS.50.66 CRORES. THE LEARNED C IT(A) HAS ALSO DIRECTED THE ASSESSING OFFICER TO ALLOW SET OFF OF UNABSORBED LOSS OF AMALGAMATING COMPANY M/S.VISAKA CEMENT INDUSTRIES LTD., WHILE COMPUTING PROFITS U/S. 115JB OF THE ACT FOR RS.40.55 CRORES. 9 ITA NO.833/CHNY/2020 4. THE CASE HAS BEEN, ONCE AGAIN TAKEN UP FOR REVIS ION PROCEEDINGS BY THE PRINCIPAL CIT, CHENNAI-2, AND I SSUED SHOW- CAUSE NOTICE U/S. 263 OF THE INCOME TAX ACT, 1961 A ND CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY ASSESSMENT O RDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R.W.S 263 DATED 30.03.2013 SHALL NOT BE REVISED FOR THE REASONS ST ATED IN HIS SHOW-CAUSE NOTICE. THE LEARNED PRINCIPAL CIT IN THE SAID SHOW- CAUSE NOTICE HAS ALLEGED THAT THE ASSESSMENT ORDE R PASSED BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE, BECAUSE THE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE OF SET OFF OF BROUGHT FORWAR D LOSSES AGAINST BOOK PROFIT COMPUTED U/S.115JB OF THE ACT, WITHOUT APPRECIATING FACTS IN RIGHT PERSPECTIVE OF LAW, W HICH RENDERED ASSESSMENT ORDER ERRONEOUS INSOFAR AS IT IS PREJU DICIAL TO THE INTERESTS OF REVENUE. ACCORDING TO THE PRINCIPAL C IT, AS PER PROVISIONS OF CLAUSE (III) OF EXPLANATION 1 TO SECT ION 115JB(1) OF THE ACT, ONLY LEAST OF BROUGHT FORWARD LOSSES OR UNABSORBED DEPRECIATION, AS PER BOOKS IS TO BE SET OFF AGAIN ST BOOK PROFITS. IN THIS CASE, AS PER BOOKS BROUGHT FORWARD BUSINES SLOSS WAS AT RS.206.72 CRORES AND UNABSORBED DEPRECIATION WAS RS.118.71 10 ITA NO.833/CHNY/2020 CRORES. IN THE ASSESSMENT ORDER, THE ASSESSING OFF ICER HAS ALLOWED SET OFF OF RS.198.43 CRORES AS AGAINST RS. 118.71 CRORES, WHICH RENDERS THE ASSESSMENT ORDER AS ERRON EOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. THE PRINCI PAL CIT HAS ALSO TAKEN UP ISSUE OF PREMIUM PAID ON REDEMPTION O F FCCB /DEBENTURES OF RS.59.01 CRORES AND OBSERVED THAT DURING THE YEAR, THE ASSESSEE HAS CLAIMED RS.59.01 CRORES TOW ARDS PREMIUM OF FCCB/DEBENTURES. OUT OF THIS, RS.33.53 C RORES REPRESENTS PREMIUM ON DEBENTURES, WHICH OUGHT TO HAVE BEEN RESTRICTED TO THE ACTUAL AMOUNT OF DEBENTURES REDEE MED DURING THE YEAR. THE FACTUAL ASPECTS RELATING TO THIS ISS UE WAS OMITTED TO BE EXAMINED BY THE ASSESSING OFFICER BEFORE AL LOWING DEDUCTION. SIMILARLY, THE PRINCIPAL CIT HAS QUEST IONED THE ISSUE OF INVESTMENTS MADE TOWARDS PURCHASE OF 1,90, 839 SHARES IN M/S. JANANI INFRASTRUCTURE LTD. AND NOTIC ED THAT THE ASSESSING OFFICER HAS NOT EXAMINED ALLOWABILITY O F EXPENSES RELATING TO INVESTMENTS. THEREFORE, HE OPINED THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS , INSOFARAS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE AND HENCE, CALLED UPON THE ASSESSEE EXPLAIN AS TO WHY THE ASSESSMEN T ORDER 11 ITA NO.833/CHNY/2020 PASSED BY THE ASSESSING OFFICER SHALL NOT BE REVI SED U/S.263 OF THE ACT. 5. IN RESPONSE TO SHOW-CAUSE NOTICE, THE ASSESSEE V IDE ITS LETTER DATED 03.03.2015, SUBMITTED THAT THE ASSESSM ENT ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R.W.S 263 DATED 30.03.2013 IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF REVENUE, BECAUSE ISSUES TAKEN UP BY THE PRINCIPA L CIT IN REVISION PROCEEDINGS HAS BEEN EXAMINED BY THE ASSE SSING OFFICER IN ASSESSMENT PROCEEDINGS AND AFTER BEING SATISFIED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER HAS MADE ADDITIONS TOWARDS EXPENDITURE INCU RRED FOR PREMIUM PAID ON FCCB/DEBENTURES AND THE SAME HAS B EEN CHALLENGED BY THE ASSESSEE BEFORE FIRST APPELLATE A UTHORITY. THE ASSESSEE FURTHER SUBMITTED THAT CARRY FORWARD A ND SET OFF OF BROUGHT FORWARD LOSSES IN TERMS OF SECTION 115JB OF THE ACT WAS ALREADY EXAMINED BY THE ASSESSING OFFICER IN TH E ORIGINAL ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT AND H AD INDEED CONSIDERED THE ASSESSEES ENTITLEMENT OF CARRY FORW ARD OF UNABSORBED DEPRECIATION OR BUSINESS LOSS AND ALLOWE D THE 12 ITA NO.833/CHNY/2020 SAME TO BE SET OFF. IT WAS FURTHER SUBMITTED THAT O THER THAN IN ORIGINAL ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE ISSUE WAS NOT A SUBJECT MATTER OF ANY PROCEEDINGS, INCLUDING REVISION PROCEEDINGS U/S.263 AND HENCE, ISSUE OF EX AMINATION OF CARRY FORWARD AND SET OFF OF LOSS U/S.115JB OF T HE ACT IS CLEARLY BARRED BY LIMITATION AND ON THIS ACCOUNT P ROPOSED PROCEEDINGS U/S. 263 SHALL FAIL. IN THIS REGARD, AS SESSEE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN T HE CASE OF CIT VS.ALAGENDRAN FINANCE LTD, REPORTED IN 62 TAXMA NN 465 AND THE DECISION OF HONBLE BOMBAY HIGH COURT IN T HE CASE OF CIT VS. ICICI BANK REPORTED IN 343 ITR 74. AS RE GARDS THE THIRD ISSUE QUESTIONED BY THE PRINCIPAL CIT REGAR DING INVESTMENTS MADE IN M/S. JANANI INFRASTRUCTURE LTD ., THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS NEVER A SUB JECT MATTER OF APPEAL OR REVISION PROCEEDINGS OR ANY OTHER PROC EEDINGS AFTER ORIGINAL ASSESSMENT PROCEEDINGS AND HENCE, TH IS ISSUE CANNOT BE TAKEN UP FOR REVISION PROCEEDINGS U/S.263 OF THE ACT, BECAUSE TIME LIMIT FOR TAKING UP 263 PROCEEDINGS IS LAPSED. 13 ITA NO.833/CHNY/2020 6. THE PRINCIPAL CIT, AFTER CONSIDERING RELEVANT S UBMISSIONS OF THE ASSESSEE AND ALSO RELIED UPON CERTAIN JUDICI AL PRECEDENTS, INCLUDING THE DECISION OF THE HON'BLE S UPREME COURT IN THE CASE OF CIT VS. MALABAR INDUSTRIAL CO MPANY LTD. REPORTED IN 243 ITR 83 HELD THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS, INSOFAR AS IT I S PREJUDICIAL TO THE INTERESTS OF REVENUE. SINCE THE ASSESSING OFFI CER HAS NOT EXAMINED THE ISSUES QUESTIONED IN SHOW CAUSE NOTICE ISSUED U/S.263 OF THE ACT IN RIGHT PERSPECTIVE OF LAW WITH NECESSARY EVIDENCE ON RECORD, WHICH RENDERED ASSESSMENT ORDER AS ERRONEOUS, INSOFAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF REVENUE. THE LEARNED PRINCIPAL CIT HAS REJECTED C ASE LAWS RELIED UPON BY THE ASSESSEE, INCLUDING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ALAGENDRAN FI NANCE LTD. (SUPRA) AND HELD THAT ISSUE OF SET OFF OF BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION WAS SUBJE CT MATTER OF 263 PROCEEDINGS U/S.263 DATED 30.03.2012, WHERE THE CIT QUESTIONED THE ALLOWABILITY OF BROUGHT FORWARD BUSI NESS LOSS AGAINST BOOK PROFIT COMPUTED U/S.115JB OF THE ACT. THEREFORE, THERE IS NO MERIT IN THE ARGUMENTS OF THE ASSESSEE THAT TIME LIMIT 14 ITA NO.833/CHNY/2020 LAPSED TO TAKE UP THE ISSUE IN REVISION PROCEEDINGS IN LIGHT OF DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CITVS ALAGENDRAN FINANCE LTD. (SUPRA). AS REGARDS, ALLOW ABILITY OF BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECI ATION, AS PER PROVISIONS OF CLAUSE (III) OF EXPLANATION 1 TO SECTION 115JB(1) OF THE ACT, IT IS VERY CLEAR FROM THE PROV ISIONS OF THE ACT THAT ONLY LEAST OF BROUGHT FORWARD LOSSES OR UNABSORBED DEPRECIATION, AS PER BOOKS, IS ELIGIBLE FOR SET O FF AGAINST BOOK PROFITS. EVEN THOUGH LAW IS VERY CLEAR, THE ASSESSI NG OFFICER HAS ALLOWED EXCESS BROUGHT FORWARD UNABSORBED DEPR ECIATION, OVER AND ABOVE BROUGHT FORWARD UNABSORBED DEPRECI ATION AS PER BOOKS. HE FURTHER OBSERVED THAT AS PER RECORDS , AS ON 31.03.2007 THE CUMULATIVE LOSS OR CUMULATIVE UNABSO RBED DEPRECIATION IS ONLY AT RS,1,20,46,86,776/-. AS AG AINST THIS, THE ASSESSING OFFICER HAS ALLOWED SET OFF OF UNABSORBED DEPRECIATION AT RS.198.43 CRORES. 7. AS REGARDS EXPENDITURE INCURRED TOWARDS PREMIUM ON REDEMPTION OF DEBENTURES DURING THE YEAR ENDED 31 .03.2007, A SUM OF RS.59.01 CRORES WAS CLAIMED TOWARDS FCCB/ PREMIUM 15 ITA NO.833/CHNY/2020 ON DEBENTURES. OUT OF THIS, RS.33.53 CRORES REPRES ENTS PREMIUM ON DEBENTURES. IN THE ORDER U/S.263 DATED 3 0.03.2012 IN PARA 7.2 SPECIFIC DIRECTION WAS GIVEN TO ASSESSI NG OFFICER TO EXAMINE CLAIM AS TO WHETHER EXPENDITURE INCURRED IS CAPITAL OR REVENUE IN NATURE BEFORE ALLOWING THE CLAIM. ALTHO UGH, THERE IS A DIRECTION FROM CIT, IN THE ASSESSMENT ORDER U/S.1 43(3) R.W.S.263 DATED 30.03.2013, THE ASSESSING OFFICER HAS OMITTED TO VERIFY THESE ASPECTS AND TO THIS EXTENT , THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. SIMIL ARLY, AS REGARDS ISSUE OF INVESTMENTS IN M/S. JANANI INFRASTRUCTURE LTD. AMOUNTING TO RS.499,99,818/-THE PRINCIPAL CIT OBSER VED THAT INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER F ROM DCIT, CIRCLE-2(3), HYDERABAD, WHICH IS SUBSEQUENT TO COMP LETION OF ORDER U/S.143(3) R.W.S 263 OF THE ACT, AS PER WHIC H, THE ASSESSEE HAS MADE INVESTMENTS IN SHARES OF M/S. JAN ANI INFRASTRUCTURE PVT. LTD. THE INFORMATION RELATING TO INVESTMENTS MADE BY THE ASSESSEE IN M/S. JANANI INFRASTRUCTURE LTD. REQUIRES TO BE VERIFIED AND EXAMINED BY THE ASSESSI NG OFFICER FOR APPROPRIATE NECESSARY ACTION AND ORDERS. THE IN FORMATION 16 ITA NO.833/CHNY/2020 AVAILABLE ON RECORD SHOULD ALSO BE CONSIDERED IN TH E REVISION PROCEEDINGS U/S.263. THE TERM REFERENCE INCLUDES ALL RECORDS AVAILABLE AT THE TIME OF EXAMINATION BY THE CIT A S HELD BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS. MANJUNATHEEASWARA PACKING PRODUCTS & CAMPHOR WORKS, REPORTED IN 253 ITR 53. THEREFORE, HE OPINED THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R. W.S 263 OF THE ACT DATED 30.03.2013 ON THESE ISSUES IS ERRONEO US, INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. H ENCE, SET ASIDE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AN D DIRECTED HIM TO MODIFY THE ASSESSMENT ORDER AND PASS NECESSA RY ORDERS IN ACCORDANCE WITH LAW, IN ACCORDANCE WITH DISCUSSI ONS AND DIRECTIONS GIVEN BY THE PRINCIPAL CIT. AGGRIEVED BY PR.CIT ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 8. THE LEARNED A.R FOR THE ASSESSEE SUBMITTED THAT THE PRINCIPAL CIT HAS ERRED IN ASSUMING JURISDICTION U/ S.263 OF THE ACT IN RESPECT OF GIVING EFFECT ORDER U/S.143(3) R .W.S 263 DATED 30.03.2013, WITHOUT APPRECIATING FACT THAT ASSESSME NT ORDER PASSED BY THE ASSESSING OFFICER IS NEITHER ERRONEOU S NOR 17 ITA NO.833/CHNY/2020 PREJUDICIAL TO THE INTERESTS OF REVENUE. THE AR FUR THER SUBMITTED THAT TWIN CONDITIONS FOR INVOKING JURISDICTION UN DER SECTION 263 OF THE ACT IS NOT SATISFIED. UNLESS, PCIT DEMONSTRA TES THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS EITHER ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF REVENU E, HE CANNOT INVOKE HIS REVISIONAL POWERS U/S.263 OF THE ACT. TH E AR FURTHER SUBMITTED THAT ASSESSING OFFICER HAS EXAMINED TWO I SSUES QUESTIONED BY PCIT IN HIS REVISION PROCEEDINGS IN RESPECT OF ALLOWABILITY OF BROUGHT FORWARD BUSINESS LOSS OR UN ABSORBED DEPRECIATION, AS PER BOOKS UNDER PROVISIONS OF CLA USE (III) OF EXPLANATION (1) TO SECTION 115JB(1) OF THE ACT AND ALSO ALLOWABILITY OF EXPENDITURE CLAIMED UNDER HEAD PREM IUM PAID ON FCCB/DEBENTURES, WHICH IS EVIDENT FROM THE FACT THA T THE ASSESSING OFFICER HAS CONSIDERED BOTH ISSUES AS DIR ECTED BY THE PCIT IN FIRST 263 PROCEEDINGS AND HAS MADE ADD ITIONS ON BOTH THE ISSUES. THE AR FURTHER SUBMITTED THAT AS REGARDS SET OFF OF LOSS U/S.115JB IN EARLIER ROUND OF 263 PROCE EDINGS, THE ISSUE WAS WHETHER UNABSORBED LOSSES OF AMALGAMATED COMPANY IS AVAILABLE FOR SET OFF, WHILE COMPUTING BOOK PROFIT U/S.115JB OR NOT. THE CIT HAS DIRECTED THE ASSESSI NG OFFICER TO 18 ITA NO.833/CHNY/2020 EXAMINE THE ISSUE AND ACCORDINGLY, THE ASSESSING OF FICER HAS MADE ADDITIONS TOWARDS BROUGHT FORWARD LOSS OF AMAL GAMATED COMPANY, WHILE COMPUTING BOOK PROFIT U/S.115JB OF T HE ACT. EXCEPT THIS, ISSUE OF SET OFF OF BROUGHT FORWARD BU SINESS LOSS OR UNABSORBED DEPRECIATION WAS NOT A SUBJECT MATTER O F APPEAL IN ANY OTHER PROCEEDINGS AFTER ORIGINAL ASSESSMENT PRO CEEDINGS U/S.143(3) AND HENCE, PERIOD OF LIMITATION SHALL RU N FROM ORIGINAL ASSESSMENT ORDER PASSED U/S.143(3) AND IF THAT DAT E IS CONSIDERED, TIME LIMIT PROVIDED FOR INVOKING JURISD ICTION U/S.263 HAS EXPIRED. THE AR FOR THE ASSESSEE, WITHOUT PREJU DICE TO THE ABOVE ARGUMENTS, SUBMITTED THAT THE ISSUE OF DISALL OWANCE OF BROUGHT FORWARD LOSS OF AMALGAMATED COMPANY WAS SU BJECT MATTER OF APPEAL BEFORE THE LEARNED CIT(A) AND THE CIT(A) HAS ALLOWED CLAIM OF THE ASSESSEE . IF YOU CONSIDER ORD ER GIVING EFFECT DATE OF THE CIT(A) ORDER, THEN BROUGHT FORWA RD LOSS TO BE SET OFF AGAINST BOOK PROFIT SHALL BE AT ORIGINAL FI GURE OF RS.153.16 CRORES AND HENCE, IF YOU CONSIDER SAID AMOUNT OF B ROUGHT FORWARD LOSS, WHICH IS IN EXCESS OF AMOUNT CONSIDE RED BY PCIT AT RS.118.71 CRORES AND HENCE, THERE IS NO ERROR I N THE ORDER OF THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF THE CIT. 19 ITA NO.833/CHNY/2020 9. THE LEARNED A.R FURTHER SUBMITTED THAT AS REGARD S PREMIUM ON REDEMPTION OF DEBENTURES, THE LEARNED PC IT FAILED TO APPRECIATE THAT THE ASSESSING OFFICER IN THE ORD ER PASSED U/S.143(3) R.W.S 263 HAS DISALLOWED CLAIM OF RS.59 .01 CRORES AS DEDUCTION FROM BOOK PROFIT AND THE ASSESSEE HAS CHA LLENGED THE ORDER BEFORE CIT(A). THE LEARNED CIT(A) VIDE HI S ORDER DATED 27.10.2014 HAS HELD THAT THE ASSESSEE IS EL IGIBLE FOR REDUCING THE AMOUNT OF RS.59.01 CRORES FROM NET PR OFIT SHOWN IN PROFIT & LOSS ACCOUNT FOR THE PURPOSE OF COMPUTI NG BOOK PROFIT U/S.115JB OF THE ACT. SINCE THE ISSUE WAS SUBJECT MATTER OF APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, AS PER PROVISIONS OF CLAUSE (C) TO EXPLANATION 1 TO SECTION 263 OF THE A CT, THE ADMINISTRATIVE COMMISSIONER DOES NOT HAVE ANY JURIS DICTION TO EXAMINE THE ISSUES, WHICH WAS SUBJECT MATTER OF APP EAL BEFORE THE LEARNED CIT(A). THE AR FURTHER REFERRING TO THI RD ISSUE, TAKEN UP BY PR.CIT IN 263 PROCEEDINGS IN RESPECT OF INVE STMENTS MADE IN M/S. JANANI INFRASTRUCTURE LTD. SUBMITTED THAT THE PRINCIPAL CIT HAS FAILED TO APPRECIATE THAT THIS IS SUE WAS NOT SUBJECT MATTER OF REVISION IN THE FIRST REVISION OR DER DATED 30.03.2012 AND HENCE, THERE IS NO ERROR IN THE ASS ESSMENT 20 ITA NO.833/CHNY/2020 ORDER PASSED U/S.143(3) R.W.S 263 DATED 30.03.201 3 SO AS TO INVOKE JURISDICTION U/S.263 OF THE ACT. HE FURTHER SUBMITTED THAT THE PRINCIPAL CIT HAS ERRED IN ASSUMING JURISDICTI ON U/S.263 BASED ON THE INFORMATION WHICH WAS RECEIVED BY THE ASSESSING OFFICER SUBSEQUENT TO GIVING EFFECT ORDER PASSED U/S.143(3) R.W.S. 263 OF THE ACT. THE AR FURTHER SUBMITTED TH AT WITHOUT PREJUDICE TO THE ABOVE ARGUMENTS, THE ISSUE IS OUTS IDE SCOPE OF 263 PROCEEDINGS, BECAUSE TIME LIMIT PROVIDED FOR I NVOKING JURISDICTION U/S.263 IS RUN FROM ORIGINAL ASSESSME NT ORDER U/S.143 AND IF SAID DATE IS CONSIDERED, THEN ORDER PASSED BY PR.CIT IS BEYOND LIMITATION AND HENCE, SAME IS L IABLE TO BE SET ASIDE. IN THIS REGARD, HE RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ALAGENDRAN FI NANCE LTD. 293 ITR 1(SC) AND THE DECISION OF HON'BLE JURISDIC TIONAL HIGH COURT OF MADRAS IN THE CASE OF CIT VS. SRIRAM INVE STMENTS. 10. THE LEARNED DR, ON THE OTHER HAND, STRONGLY SUP PORTING ORDER OF THE PRINCIPAL CIT SUBMITTED THAT ASSESSMEN T ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS, INSOF AR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE IN RESPECT OF THREE ISSUES 21 ITA NO.833/CHNY/2020 CONSIDERED BY THE PRINCIPAL CIT IN HIS SHOW CAUSE NOTICE, WHICH IS EVIDENT FROM THE FACT, EVEN THOUGH THERE I S CLEAR DIRECTION FROM THE PRINCIPAL CIT IN THE ORIGINAL 26 3 PROCEEDINGS ON THE ISSUE OF DEDUCTABILITY OF EXPENDITURE INCUR RED FOR PREMIUM PAID ON FCCI/DEBENTURES, THE ASSESSING OFFI CER HAS FAILED TO EXAMINE THE ISSUE IN LIGHT OF RELEVANT FA CTS AND PROVISIONS OF THE ACT, WHICH RENDERED ASSESSMENT OR DER ERRONEOUS. SIMILARLY, THE ASSESSING OFFICER HAS FA ILED TO EXAMINE ISSUE OF ALLOWABILITY OF BROUGHT FORWARD BU SINESS LOSS OR UNABSORBED DEPRECIATION, AS PER BOOKS IN TERMS O F CLAUSE (III) OF EXPLANATION 1 TO SECTION 115JB(1) OF THE ACT, AN D WITHOUT APPRECIATING FACTS HAS ALLOWED SET OFF OF EXCESS UN ABSORBED DEPRECIATION, WHICH CAUSED PREJUDICE TO THE INTERES TS OF REVENUE. LIKEWISE, THE ISSUE OF INVESTMENTS MADE I N M/S. JANANI INFRASTRUCTURE LTD., THE ASSESSING OFFICER HAS NOT EXAMINED ISSUE IN LIGHT OF ALLOWABILITY OF EXPENDIT URE, EVEN THOUGH THE ASSESSEE HAS MADE INVESTMENTS IN SHARES OF M/S. JANANI INFRASTRUCTURE LTD., WHICH RENDERS ASSESSME NT ORDER ERRONEOUS, INSOFAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF REVENUE. IT IS WELL SETTLED PRINCIPLE OF LAW THAT W HEN THE 22 ITA NO.833/CHNY/2020 ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER I S ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE, THE PRINCIPAL CIT HAS POWER TO ASSUME HIS JURISDICTION TO REVISE ASSESSMENT ORDER AND HENCE, THERE IS NO ERROR IN TH E ORDER PASSED BY THE PRINCIPAL CIT U/S.263 OF THE ACT. 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERI ALS AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. THE PROVISIONS OF SECTION 263 OF THE ACT, EM POWERS THE PRINCIPAL CIT TO REVISE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, IF HE SATISIFIED THAT ASSESSMEN T ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS, INSOFAR AS I T IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FROM A PLAIN READ ING OF SECTION 263 OF THE ACT, IT IS VERY CLEAR THAT BEFORE EXERCI SING HIS JURISDICTION POWER U/S.263 OF THE ACT, THE PRINCIP AL CIT SHOULD SATISFY HIMSELF THAT THE ASSESSING OFFICER HAS P ASSED ORDER WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST S OF REVENUE. UNLESS THE PRINCIPAL CIT PROVES THAT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS OR WHICH IS NOT PA SSED IN ACCORDANCE WITH LAW IN RIGHT PERSPECTIVE OF FACTS, HE / SHE CANNOT REVISE ASSESSMENT ORDER PASSED BY THE ASSES SING 23 ITA NO.833/CHNY/2020 OFFICER. FURTHER, TO INVOKE JURISDICTION U/S.263 OF THE ACT, TWIN CONDITIONS EMBEDDED U/S.263 OF THE ACT MUST CO-EXI ST. IN OTHER WORDS, IF THE ASSESSMENT ORDER PASSED BY THE ASSES SING OFFICER IS ERRONEOUS, BUT IT IS NOT PREJUDICIAL TO THE INTERESTS OF REVENUE, OR VICE-VERSA, THEN THE PRINCIPAL CIT DOE S NOT HAVE ANY POWER TO REVISE THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. THIS LEGAL PROPOSITION IS SUPPO RTED BY PLETHORA OF JUDICIAL DECISIONS INCLUDING THE DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF M/S.MALABAR INDUSTRIES CO.LTD. VS. CIT (2000) 243 ITR 83(SC). 12. IN THIS LEGAL BACK GROUND, IF YOU EXAMINE FACTS OF THE PRESENT CASE, ONE HAS TO UNDERSTAND WHETHER ASSESSM ENT ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) READ W ITH SECTION 263 DATED 30.03.2013 IS ERRONEOUS, INSOFAR AS IT I S PREJUDICIAL TO THE INTERESTS OF REVENUE OR NOT. IN ORDER TO CON SIDER ANY ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE, SUCH ORDER PASSED BY THE ASSE SSING OFFICER SHOULD BE PASSED WITHOUT APPRECIATING FACT S IN LIGHT OF APPLICABLE PROVISIONS OF THE ACT AND FURTHER, THE A SSESSING OFFICER HAS PASSED ORDER WITHOUT EXAMINING THE ISSU E IN LIGHT OF 24 ITA NO.833/CHNY/2020 RELEVANT PROVISIONS OF THE ACT, ON THE BASIS OF FAC TS BROUGHT ON RECORD BY THE ASSESSEE. ADMITTEDLY, IN THIS CASE, F IRST ROUND OF 263 PROCEEDINGS WAS COMPLETED, WHERE THE LEARNED C IT HAS TAKEN UP CERTAIN ISSUES AND DIRECTED THE ASSESSING OFFICER TO REDO ASSESSMENT IN ACCORDANCE WITH LAW, IN TERMS OF HIS OBSERVATIONS GIVEN ON VARIOUS ISSUES QUESTIONED IN SHOW CAUSE NOTICE. THE ASSESSING OFFICER HAS TAKEN UP PROCEEDI NGS IN PURSUANT TO DIRECTION OF LEARNED CIT AND HAS MADE CERTAIN ADDITIONS, AS PER DIRECTIONS OF THE CIT IN 263 PRO CEEDINGS. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS CHALL ENGED CONSEQUENTIAL ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R.W.S 263 BEFORE THE FIRST APPELLATE AUT HORITY AND CHALLENGED ADDITIONS MADE BY THE ASSESSING OFFICER TOWARDS DISALLOWANCE OF BROUGHT FORWARD LOSS OF AMALGAMATED COMPANY AND WITHDRAWAL AMOUNT FROM RESERVES ACCOUNT AND SET OFF OF EXPENDITURE INCURRED TOWARDS PREMIUM PAID ON FCCB/DEBENTURES. THEREFORE, IN ORDER TO CONSIDER PR ESENT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE, IT IS NECESSARY TO KEEP IN MIND THE EARLIER ASSESSMENT P ROCEEDINGS 25 ITA NO.833/CHNY/2020 OF ORIGINAL ASSESSMENT ORDER PASSED BY THE ASSESSI NG OFFICER U/S.143(3), 263 ORDER PASSED BY THE LEARNED CIT AND FURTHER CONSEQUENTIAL ASSESSMENT ORDER PASSED BY THE ASSESS ING OFFICER U/S.143(3) R.W.S. 263 OF THE INCOME TAX ACT, 1961. 13. IN THE PRESENT PROCEEDINGS, FIRST AND FOREMOST ISSUE QUESTIONED BY THE PRINCIPAL CIT IS CARRY FORWARD AN D SET OFF OF LOSS IN TERMS OF SECTION 115JB(1) OF THE ACT. ACCOR DING TO THE PRINCIPAL CIT, THE ASSESSING OFFICER HAS ALLOWED SE T OFF OF EXCESS LOSS OVER AND ABOVE LOSS ALLOWABLE, AS PER BOOKS, IN TERMS OF PROVISIONS OF CLAUSE (III) OF EXPLANATION (1) TO SECTION 115JB(1) OF THE ACT. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE REASONS GIVEN BY THE PRINCIPAL CIT IN LIGHT OF ARGUMENTS ADVANCED BY THE LEARNED A.R FOR THE AS SESSEE AND WE OURSELVES DO NOT SUBSCRIBE TO THE REASONS GI VEN BY THE PRINCIPAL CIT TO HOLD ASSESSMENT ORDER TO BE ERRON EOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE FOR THE SIM PLE REASON THAT THE ASSESSING OFFICER HAS CONSIDERED ISSUE OF ALLOW ABILITY OF SET OFF OF CARRIED FORWARD LOSSES OR UNABSORBED DEPRECI ATION, WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE ACT IN THE O RIGINAL PROCEEDINGS U/S.143(3), AS WELL AS REASSESSMENT PR OCEEDINGS, 26 ITA NO.833/CHNY/2020 IN CONSEQUENCE TO REVISION PROCEEDINGS U/S.263 OF T HE INCOME TAX ACT, 1961. WE FURTHER NOTED THAT IN ORIGINAL AS SESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS MADE CERTAIN ADDITIONS UNDER NORMAL PROVISIONS OF THE ACT, AS WELL AS BO OK PROFIT COMPUTED U/S.115JB OF THE INCOME TAX ACT, 1961 AND DETERMINED BOOK PROFIT OF RS.229.64 CRORES, AFTER A LLOWING SET OFF OF BROUGHT FORWARD BOOK LOSS OF RS.153.16 CRORE S. THE SAID ASSESSMENT ORDER WAS CHALLENGED BEFORE THE LEARNED CIT(A). THE CIT(A) HAS DELETED ADDITIONS MADE BY THE ASSES SING OFFICER TO BOOK PROFIT TOWARDS REVERSAL OF INCOME ARISING ON CANCELLATION OF SALES-TAX ASSIGNMENTS AMOUNTING TO RS.294.05 CRORES VIDE HIS APPELLATE ORDER DATED 28.05.2010. T HE ASSESSING OFFICER HAS PASSED ORDER GIVING EFFECT TO CIT(A) ORDER ON 13.07.2010 AND DETERMINED REVISED BOOK PROFIT OF RS.88.75 CRORES AND AGAINST THIS, HAS ALLOWED SET OFF OF B ROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECIATION OF RS.88.7 5 CRORES. FURTHER, THE CASE WAS SUBJECTED TO 263 PROCEEDINGS AND THE CIT, CHENNAI VIDE HIS ORDER DATED 30.03.2012 HAS S ET ASIDE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER AND D IRECT HIM TO PASS A FRESH ORDER IN LIGHT OF VARIOUS ISSUES DISCUSSED IN HIS 27 ITA NO.833/CHNY/2020 263 ORDER. THE ASSESSING OFFICER VIDE HIS ORDER DAT ED 30.03.2013 U/S.143(3) R.W.S 263 OF THE ACT, HAS DI SCUSSED THE ISSUE OF CLAIM OF UNABSORBED LOSS AS PER BOOKS, WHI LE COMPUTING BOOK PROFIT INCLUDING BOOK LOSS OF AMAL GAMATED COMPANY M/S. VISAKA CEMENT INDUSTRIES LTD., AND HA S DISALLOWED CLAIM OF ASSESSEE ON THE GROUND THAT EXC EPT AS PROVIDED UNDER EXPLANATION (1) TO SECTION 115JB(1) OF THE ACT, NO ADJUSTMENTS CAN BE MADE TO BOOK PROFIT . THE AS SESSEE HAS CHALLENGED ORDER OF THE ASSESSING OFFICER PASSED U /S.143(3) R.W.S. 263 BEFORE THE CIT(A) AND LEARNED CIT(A) V IDE HIS ORDER DATED 27.10.2014 HAS ALLOWED CLAIM OF THE ASSESSEE TOWARDS BROUGHT FORWARD LOSS OF AMALGAMATED COMPANY OF M/S. VISAKA CEMENT INDUSTRIES LTD. FROM THE ABOVE, IT IS CLEAR THAT BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECI ATION, AS PER BOOKS OF ACCOUNT REMAINED AT THE ORIGINAL FIGUR E AT 153.16 CRORES. IN THE PRESENT PROCEEDINGS, ALLEGATIONS OF THE PRINCIPAL CIT IS THAT THE ASSESSING OFFICER HAS ALLOWED S ET OFF OF BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRE CIATION AT RS. 198.43 CRORES AS AGAINST AVAILABLE BROUGHT FOR WARD UNABSORBED DEPRECIATION OF RS.120.46 CRORES. THE S AID 28 ITA NO.833/CHNY/2020 FINDINGS OF THE LD. PR. CIT IS NOT CORRECT, BECAUSE , FINAL BROUGHT FORWARD LOSS OR UNABSORBED DEPRECIATION SET OFF AGA INST BOOK PROFIT, AFTER GIVING EFFECT ORDER PASSED BY THE LD. AO DATED 27- 10-2014, IS ONLY AT RS. 88.75 CRORES. THIS IS BECAU SE, AS PER ASSESSMENT ORDER DATED 30/03/2013 PASSED U/S 143(3) RWS 263, THE AO HAD DETERMINED BOOK PROFIT U/S 115JB OF THE ACT, AT RS. 198.43 CRORES BY MAKING ADDITIONS TOWARDS RELEA SE OF RESERVES ON PREMIUM FOR FCCB/DEBENTURES AND RELEASE OF RESERVES ON ACCOUNT OF EMPLOYEES BENEFITS, AS PER T HE DIRECTIONS OF THE CIT U/S 263 OF THE ACT. THE ASSE SSEE HAS CHALLENGED SAID ORDER BEFORE LD. CIT(A). THE CIT(A) , VIDE HIS ORDER DATED 27-10-2014, HAS DELETED ADDITIONS MADE BY THE AO TOWARDS RELEASE OF RESERVES ON PREMIUM FOR FCCB/DEB ENTURES OF RS. 59.01 CRORES AND FURTHER DELETED ADDITION MA DE TOWARDS RELEASE OF RESERVES ON ACCOUNT OF EMPLOYEES BENEFIT S OF RS. 50.66 CRORES. BECAUSE OF THIS, BOOK PROFIT COMPUTED U/S 115JB, ONCE GAIN BECOMES RS. 88.75, WHICH IS EQUAL TO BOOK PROFIT COMPUTED AS PER ASSESSMENT ORDER U/S 143(3) RWS 263 DATED 30/03/2013. FURTHER, THE LD. PCIT DID NOT DISPUTE F ACT THAT BROUGHT FORWARD BUSINESS LOSS OR UNABSORBED DEPRECI ATION AS 29 ITA NO.833/CHNY/2020 PER BOOKS IS AT RS. 120.46 CRORES. FURTHER, BROUGHT FORWARD BOOK LOSS, HAS BEEN INCREASED TO RS. 153.16 CRORES, AFTER GIVING EFFECT ORDER TO CIT(A) ORDER DATED 27-10-2014, BECA USE OF DELETION OF ADDITION MADE BY THE AO TOWARDS BROUGHT FORWARD LOSS OF AMALGAMATED COMPANY M/S VISAKHA CEMENT INDU STRIES LIMITED. THEREFORE, IF RECOMPUTED BOOK PROFIT OF RS . 88.75 CRORES IS TAKEN IN TO ACCOUNT, THEN THE ASSESSEE CA N COMPLETELY SET OFF ITS BOOK PROFIT OF RS.88.75 CRORES, OUT OF UNABSORBED DEPRECIATION OF ASSESSMENT YEAR 2006-07 OF RS.153.1 6 CRORES AND THUS, THERE IS NO EXCESS ALLOWANCE OF UNABSORBE D DEPRECIATION, WHILE COMPUTING BOOK PROFIT U/S. 115J B OF THE INCOME TAX ACT, 1961 FOR THE IMPUGNED ASSESSMENT YE AR, AS ALLEGED BY THE LD. PCIT. THEREFORE, WE ARE OF THE C ONSIDERED VIEW THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON THIS ISSUE IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF REVENUE. 14. COMING BACK TO SECOND ISSUE TAKEN UP BY THE LEA RNED PRINCIPAL CIT IN 263 PROCEEDINGS TOWARDS EXPENDIT URE INCURRED FOR PREMIUM ON REDEMPTION OF DEBENTURES. ACCORDIN G TO THE PRINCIPAL CIT, OUT OF A SUM OF RS.59.01 CRORES, EXP ENDITURE 30 ITA NO.833/CHNY/2020 INCURRED TOWARDS FCCB/ PREMIUM ON DEBENTURES, A SUM OF RS.33.53 CRORES REPRESENTS PREMIUM ON DEBENTURES. T HE ASSESSING OFFICER HAS FAILED TO EXAMINE WHETHER PR EMIUM ON DEBENTURES IS CAPITAL OR REVENUE IN NATURE BEFORE ALLOWING DEDUCTION, EVEN THOUGH THERE IS SPECIFIC DIRECTION FROM THE CIT IN HIS ORDER U/S.263 DATED 30.03.2012. WE HAVE CAR EFULLY CONSIDERED REASONS GIVEN BY THE PRINCIPAL CIT AND W E DO NOT OURSELVES SUBSCRIBE TO THE REASONS GIVEN BY THE PR INCIPAL CIT FOR SIMPLE REASON THAT DETAILS OF EXPENDITURE INCUR RED TOWARDS PREMIUM ON FCCB AND DISCOUNT ON REDEMPTION OF DEBEN TURES HAS BEEN FURNISHED TO THE ASSESSING OFFICER AT TH E TIME OF ORIGINAL ASSESSMENT PROCEEDINGS ALONG WITH SUPPORT ING DOCUMENTS. THE ASSESSING OFFICER HAVING PERUSED TH E DETAILS, SATISFIED HIMSELF ON THE CLAIM AND DEDUCTIBILITY OF EXPENDITURE AND THUS, NOT MADE ANY ADDITION IN THE ASSESSMENT O RDER PASSED U/S.143(3) OF THE ACT. FURTHER, THE SAME IS SUE HAS BEEN TAKEN UP IN 263 PROCEEDINGS BY THE CIT IN HIS ORDER DATED 30.03.2012 AND DIRECTED THE ASSESSING OFFICER TO E XAMINE WHETHER EXPENDITURE IS CAPITAL OR REVENUE IN NATURE AND CORRECTNESS OF DEDUCTION CLAIMED FOR RELEVANT ASSES SMENT YEAR. 31 ITA NO.833/CHNY/2020 THE ASSESSING OFFICER IN THE CONSEQUENTIAL ASSESSM ENT ORDER PASSED IN PURSUANT TO DIRECTIONS OF THE CIT U/S.26 3 OF THE ACT, HAS ONCE AGAIN EXAMINED THE ISSUE AND HAS CONCLUDE D THAT NO DISALLOWANCE IS CALLED FOR TOWARDS EXPENDITURE INCU RRED FOR PREMIUM ON REDEMPTION OF DEBENTURES/FCCB. IN OTHER WORDS, THERE HAS BEEN APPLICATION OF MIND NOT ONCE, BUT TW ICE BY THE ASSESSING OFFICER ON THE ISSUE IN RIGHT PERSPECTIV E OF LAW AND HENCE, TAKING UP VERY SAME MATTER ONCE AGAIN BY THE PRINCIPAL CIT U/S.263 OF THE INCOME TAX ACT, 1961, CLEARLY INDICATES THAT THIS IS AN ABUSE OF POWER, INASMUCH AS POWER U/S.263 IS NOT MEANT TO BE A SUBSTITUTE FOR THE POWER OF ASSES SING OFFICER TO MAKE ASSESSMENT . THE POWER U/S.263 CAN ONLY BE EXERCISED, WHEN ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.GABRIEL INDIA LTD. REPORTED IN 203 ITR 108, HAS CATEGORICALLY HELD THAT CONDITIONS PRECEDENT FOR INVOKING PROVISIONS OF SECTION 263 IS TO ORDER OF THE ASSESSING OFFICER MUST BE ERRONEOUS AND FURTHER B Y VIRTUE OF THE ORDER BEING ERRONEOUS IS PREJUDICIAL TO THE INT ERESTS OF REVENUE. IF THE ASSESSING OFFICER IS ACTING IN ACC ORDANCE WITH 32 ITA NO.833/CHNY/2020 LAW AND MAKES AN ASSESSMENT, IT CANNOT BE TERMED AS ERRONEOUS BY THE PR.CIT, SIMPLY BECAUSE THE PR.CIT DOES NOT AGREE WITH THE ORDER OF THE ASSESSING OFFICER. IN OTHER WORDS, SECTION 263 DOES NOT VISUALIZE A CASE OF SUBSTITUTI ON OF JUDGEMENT BY PR.CIT FOR THAT OF THE ASSESSING OFFI CER, WHO PASSED THE ORDER, UNLESS IT IS DEMONSTRATED THAT OR DER OF THE ASSESSING OFFICER IS HELD TO BE ERRONEOUS. IN THIS CASE, LEARNED PR.CIT HAS NOT BROUGHT OUT ELEMENT OF ERRONEOUS AC T COMMITTED BY THE ASSESSING OFFICER, BUT HAS MENTIONED THERE IS A OMISSION BY THE ASSESSING OFFICER IN THE ASSESSME NT ORDER, BUT OMISSION CANNOT BE A BASIS FOR INVOKING POWERS U/S.263 OF THE ACT. THE HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS. JAWAHAR BHATTACHARJEE, REPORTED IN 67 DTR 217, AFT ER EXTENSIVELY CONSIDERING LEGAL DECISIONS AND PRECED ENTS ON THE SUBJECT, EXPLAINED THE EXPRESSION ERRONEOUS ASSESS MENT IN THE CONTEXT OF SECTION 263 AND HELD THAT ASSESSMENT MADE ON WRONG ASSUMPTION OF FACTS OR INCORRECT APPLICATION OF LAW OR WITHOUT DUE APPLICATION OF MIND OR WITHOUT FOLLOWIN G PRINCIPLES OF NATURAL JUSTICE IS CONSIDERED TO BE AN ERRONEOUS OR DER. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. 33 ITA NO.833/CHNY/2020 DEVELOPMENT CREDIT BANK LTD. (323 ITR 206) (BOM) H AS HELD THAT MERELY BECAUSE THE ASSESSING OFFICER SHOULD H AVE GONE DEEPER INTO THE MATTER OR SHOULD HAVE MADE ELA BORATE DISCUSSION COULD NOT BE A GROUND FOR EXERCISING PO WER U/S.263 OF THE ACT. MOREOVER, THE ISSUE WHETHER EXPENDITURE INCURRED TOWARDS PREMIUM ON REDEMPTION OF DEBENTURES IS CAP ITAL OR REVENUE IN NATURE AND FURTHER IS IT DEDUCTIBLE OR NOT ARISES ONLY WHEN THE ASSESSEE CLAIMS DEDUCTION FOR EXPENDITURE BY DEBITING INTO PROFIT & LOSS ACCOUNT . IN THIS CASE, THE ASSESSEE HAS PAID RS.59.01 CRORES ON REDEMPTION OF OCDS AND SAME WAS DEBITED INTO PROFIT & LOSS ACCOUNT, BUT IN THE PROFIT & LOSS ACCOUNT THE ASSESSEE HAS ALSO CREDITED EQUAL AMOUN T OF RS.59.01 CRORES BY WITHDRAWING FROM SHARE PREMIUM A CCOUNT. THIS AMOUNT OF RS.59.01 CRORES FROM SHARE PREMIUM A CCOUNT IS ACTUALLY REDUCED FROM OCDS REDEMPTION EXPENDITURE O F RS.59.01 CRORES DEBITED INTO PROFIT & LOSS ACCOUNT AND THUS, THERE IS NO EXPENSES DEBITED INTO PROFIT & LOSS ACC OUNT . FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS NOT CL AIMED ANY DEDUCTION FOR EXPENDITURE INCURRED ON REDEMPTION OF FCCB/DEBENTURES. THEREFORE, ONCE NO DEDUCTION WAS C LAIMED 34 ITA NO.833/CHNY/2020 FOR ANY EXPENDITURE BY DEBITING INTO PROFIT & LOSS ACCOUNT, THE QUESTION WHETHER IT IS CAPITAL OR REVENUE IN NATURE DOES NOT ARISE. 15. AS REGARDS ARGUMENTS OF THE PRINCIPAL CIT THAT WHETHER TOTAL AMOUNT INCURRED FOR PREMIUM PAID ON REDEMPTIO N OF DEBENTURES IS DEDUCTIBLE OR NOT, THE HON'BLE SUPREM E COURT HAS CONSIDERED AN IDENTICAL ISSUE IN THE CASE OF M/ S. TAPARIA TOOLS LTD. VS. JCIT REPORTED IN 372 ITR 605 (SC) , WHERE IT IS CLEARLY HELD THAT THERE IS NO ESTOPPEL AGAINST THE STATUTE. THE INCOME TAX ACT, ENABLES AND ENTITLES THE ASSESSEE T O CLAIM THE ENTIRE EXPENDITURE IN THE MANNER IT IS CLAIMED. IN OTHER WORDS, THE HON'BLE SUPREME COURT CLEARLY HELD THAT WHETHE R EXPENDITURE HAS BEEN CLAIMED WHEN IT WAS PAID AT ON CE OR HAS BEEN SPREAD OVER PERIOD OF DEBENTURES IS NOT RELEVA NT AND FURTHER, THE ASSESSEE CAN CLAIM DEDUCTION FOR ANY E XPENDITURE WHEN IT WAS ACTUALLY PAID, IRRESPECTIVE OF THE FAC T THAT SAME HAS BEEN SPREAD OVER PERIOD OF DEBENTURES IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. A SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE SUPREME COURT IN THE CASE OF MADRAS INDUSTRIAL INV ESTMENT CORPORATION LTD. VS. CIT REPORTED IN 139 CTR 555, A ND HELD 35 ITA NO.833/CHNY/2020 THAT DISCOUNT ON DEBENTURES IS REVENUE EXPENDITUR E ALLOWABLE PROPORTIONATELY OVER THE LIFE OF DEBENTURES. THE HO NBLE HIGH COURT OF RAJASTHAN IN THE CASE OF CIT VS. SECURE ME TERS REPORTED IN 321 ITR 611 (RAJ) HAS CONSIDERED AN ID ENTICAL ISSUE AND HELD THAT EXPENDITURE INCURRED ON ISSUE OF DEB ENTURES WHETHER CONVERTIBLE OR NON-CONVERTIBLE IS ALLOWABL E AS REVENUE EXPENDITURE. 16. IN THIS CASE, THE ISSUE OF EXPENDITURE INCURRED ON PREMIUM PAID FOR REDEMPTION OF DEBENTURES WAS THOROUGHLY E XAMINED BY THE ASSESSING OFFICER NOT ONCE, BUT TWICE, AND AF TER APPLICATION OF NECESSARY FACTS TO THE RELEVANT LAW HAS ALLOWED CLAIM OF THE ASSESSEE. FURTHER, THE ISSUE OF EXPENDITURE INCURRE D FOR PREMIUM PAID ON REDEMPTION OF DEBENTURES / FCCB IS A SUBJECT MATTER OF APPEAL BEFORE LEARNED CIT(A) AND THE CIT (A) VIDE HIS ORDER DATED 27.10.2014 HAS HELD THAT ASSESSEE IS EL IGIBLE FOR REDUCING THE AMOUNT OF 59.01 CRORES FROM THE NET P ROFIT SHOWN IN PROFIT & LOSS ACCOUNT. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT ONCE THE ISSUE WHICH WAS SUBJECT MATTER OF PROCEEDINGS U/S.263 WAS SUBJECT MATTER OF APPEAL B EFORE LEARNED CIT(A), THEN THERE IS NO POWER TO THE PR.C IT TO TAKE UP 36 ITA NO.833/CHNY/2020 SAID ISSUE IN REVISION PROCEEDINGS, AS PER CLAUSE (C) TO EXPLANATION (1) TO SECTION 263 OF THE INCOME TAX AC T, 1961. IN THIS VIEW OF THE MATTER AND CONSIDERING FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER O N THIS ISSUE IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE I NTERESTS OF REVENUE AND HENCE, ASSUMPTION OF JURISDICTION BY T HE PRINCIPAL CIT U/S.263 OF THE ACT FAILS. 17. COMING BACK TO THIRD ISSUE TAKEN UP BY THE PRIN CIPAL CIT TOWARDS INVESTMENTS IN SHARES OF M/S. JANANI INFRA STRUCTURE LTD. ADMITTEDLY, FOR THE FIRST TIME THIS ISSUE HAS BEEN TAKEN UP BY THE PRINCIPAL CIT IN THE PROCEEDINGS U/S.263 OF THE A CT, ON THE BASIS OF INFORMATION RECEIVED BY THE ASSESSING OF FICER FROM ANOTHER ASSESSING OFFICER, AFTER THE ASSESSING OF FICER HAS PASSED ASSESSMENT ORDER U/S.143(3) R.W.S.263 OF T HE ACT DATED 30.03.2013. THIS ISSUE WAS NOT A SUBJECT MAT TER OF DISCUSSION EITHER IN THE ORIGINAL ASSESSMENT PROCEE DINGS U/S.143(3) OR REVISION PROCEEDINGS U/S.263 OF THE ACT, IN FIRST ROUND OF 263 PROCEEDINGS. THEREFORE, WHEN A ISSUE WHICH IS NOT SUBJECT MATTER OF ANY OTHER PROCEEDINGS, THE PE RIOD OF 37 ITA NO.833/CHNY/2020 LIMITATION SHALL RUN FROM ORIGINAL ASSESSMENT ORDE R PASSED U/S.143(3) OF THE ACT FOR THE PURPOSE OF INVOKING J URISDICTION U/S.263 OF THE ACT. IF YOU CONSIDER ORIGINAL ASSESS MENT ORDER U/S.143(3) DATED 22.12.2009, THE PRINCIPAL CIT CAN REVISE THE ASSESSMENT ORDER WITHIN TWO YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PA SSED. IN THIS CASE, IF YOU TAKE ORIGINAL ASSESSMENT ORDER D ATED 22.12.2009, THE PRINCIPAL CIT CAN ISSUE SHOW-CAUSE NOTICE ON OR BEFORE 31.03.2012. SINCE THE PRINCIPAL CIT HAS ISSUED SHOW-CAUSE NOTICE ON 09.02.2015, WHICH IS CLEARLY BEYOND THE PERIOD OF TWO YEARS PROVIDED UNDER THE ACT. THEREFO RE, WE ARE OF THE CONSIDERED VIEW THAT ASSUMPTION OF JURISDICT ION BY THE PRINCIPAL CIT ON THIS ISSUE FOR REVISION OF ASSESSM ENT ORDER U/S.263 OF THE ACT IS BAD IN LAW AND LIABLE TO BE Q UASHED. THIS PRINCIPLE IS SUPPORTED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS.ALAGENDRAN FINANCE LTD .(SUPRA). THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO BY FOLLOWING THE DECISION OF HON'BLE SUPRE ME COURT IN THE CASE OF CIT VS.ALAGENDRAN FINANCE LTD.(SUPRA), WE ARE OF THE CONSIDERED VIEW THAT ASSUMPTION OF JURISDICTION BY THE 38 ITA NO.833/CHNY/2020 PRINCIPAL CIT IN THE PRESENT CASE IS CLEARLY BARRED BY LIMITATION, ACCORDINGLY, WE SET ASIDE THE DIRECTIONS OF THE PRI NCIPAL CIT ON THIS ISSUE. 18. IN THIS VIEW OF THE MATTER AND CONSIDERING FAC TS AND CIRCUMSTANCES OF THIS CASE, WE ARE OF THE CONSIDER ED VIEW THAT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U /S.143(3) R.W.S 263 DATED 30.03.2013 IS NEITHER ERRONEOUS NO R PREJUDICIAL TO THE INTERESTS OF REVENUE. THEREFORE, WE QUASH OR DER PASSED BY THE PR.CIT U/S.263 OF THE ACT DATED 26.03.2015. 19. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2021 SD/- SD/- ( . ) ( . ) (V.DURGA RAO) (G.MANJUNATHA) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( / DATED 18 TH AUGUST, 2021 DS *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .