Sh. Suresh Kumar Kapoor, Agra V. C.I.T.-I, Agra

ITA 85/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0671 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 1 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-04-2013
• Assessment Year: misc
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N AGARWAL
• Keywords: Fair market value; Corroborative evidences; Set aside
• Section: 40A(3); 143(3); 142(1); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 85/AGRA/2013 ASSTT. YEAR : 2008-09 SURESH KUMAR KAPOOR, VS. COMMISSIONER OF PROP. SHIVA LEATHER CORPORATION, INCOME-TAX-1, A GRA. 5/138, HING KI MANDI, AGRA. (PAN : ABVPK 6868 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.N. AGARWAL, ADVOCATE RESPONDENT BY : SHRI WASEEM ARSHAD, SR. DR DATE OF HEARING : 30.04.2013 DATE OF PRONOUNCEMENT OF ORDER : 03.05.2013 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT-I, AGRA DATED 15.03.2013 FOR THE ASSESSMENT YEAR 2008-09, C HALLENGING THE ORDER U/S. 263 OF THE IT ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME DECLARING INCOME OF RS.5,66,150/- FOR THE ASSESSMEN T YEAR 2008-09 UNDER APPEAL. THE ASSESSMENT U/S. 143(3) OF THE IT ACT WAS COMPLE TED ON 18.11.2010 ACCEPTING THE RETURNED INCOME. SUBSEQUENTLY, SHOW CAUSE NOTIC E U/S. 263 OF THE IT ACT WAS ISSUED TO THE ASSESSEE ASKING HIM AS TO WHY ASSESSM ENT SO FRAMED SHOULD NOT BE ITA NO.85/AGRA/2013 2 CANCELLED/MODIFIED, AS THE ASSESSMENT HAS BEEN COMP LETED BY THE AO WITHOUT MAKING SUFFICIENT PROPER ENQUIRIES AND THE ASSESSME NT ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE. THE LD. CIT ISSUED NOTICE U/S. 263 ON TWO POINTS. HOWEVER, ON ONE POIN T, THE LD. CIT DID NOT PROCEED U/S. 263 RELEVANT TO PROVISIONS OF SECTION 40A(3) O F THE IT ACT. THEREFORE, IT IS NOT RELEVANT TO THE MATTER IN ISSUE. THE SOLE POINT, ON WHICH THE LD. CIT SET ASIDE THE ASSESSMENT ORDER WAS WITH REGARD TO THE PAYMENT OF INTEREST MADE AGAINST THE PROVISIONS OF SECTION 40A(2)(B) OF THE IT ACT. THE DETAILS OF INTEREST PAID TO VARIOUS PERSONS ARE AS FOLLOWS : SR. NO. NAME AMOUNT OF INTEREST RATE OF INTERES T 1. RAJINDER LAL KAPOOR 27,495/- 18% 2. SANJEEV KAPOOR 2,17,846/- 18% 3. SMT. SANGEETA KAPOOR 2,80,485/- 18% 4. SMT. REENA KAPOOR 2,12,343/- 18% 5. KARAN KUMAR KAPOOR 1,09,312/- 18% 6. SURESH KAPOOR HUF 3,04,400/- 18% 7. SANJEEV KAPOOR HUF 3,07,350/- 18% -------------- 14,59,231/- ------------- WHEREAS THE ASSESSEE WAS HAVING FDRS WITH THE FOLLO WING BANKS AND THE INTEREST RECEIVED FROM THESE BANKS AS ON 31.03.2008 IS GIVEN AS UNDER : SL. NO. NAME AMOUNT OF FDR 1. FDR-2-CENTRAL BANK OF INDIA 15,79,997/- 2. FDR-2- STATE BANK OF INDIA 15,57,146/- 3. FDR-1- CENTRAL BANK OF INDIA 15,44,984/- 4. FDR-1- STATE BANK OF INDIA 16,60,956/- TOTAL 63,43,083/- ITA NO.85/AGRA/2013 3 2.1 THE LD. CIT, THEREFORE, OBSERVED THAT THE ASSES SEE HAS RECEIVED INTEREST ON FDRS @ 8% PER ANNUM. THEREFORE, SHOW CAUSE NOTICE W AS ISSUED AS TO WHY THE INTEREST AT THE RATE OF 10% BE NOT ADDED, WHICH IS EXCESSIVE BY 10% OVER THE INTEREST RATE OF 8% RECEIVED ON FDRS. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT THAT THE AO RAISED ALL THE QUERIES ON THIS POINT. T HE QUERY WAS REPLIED AND ALL NECESSARY SUPPORTING EVIDENCES WERE FILED BEFORE TH E AO. THE AO IN THE ASSESSMENT ORDER SPECIFICALLY MENTIONED THAT IN COM PLIANCE TO VARIOUS NOTICES, THE ASSESSEES REPRESENTATIVE PRESENTED FROM TIME TO TI ME. ALL THE DETAILS ARE FILED. THE BOOKS OF ACCOUNT WERE PRODUCED AND CASE IS DISCUSSE D. THUS, THE AO FRAMED THE ASSESSMENT AFTER RAISING RELEVANT QUERIES WITH PROP ER APPLICATION OF MIND. IT WAS SUBMITTED THAT IN PAST ALSO INTEREST AT THE RATE OF 18% PER ANNUM WAS PAID AND THE SAME WAS ACCEPTED. IT WAS FURTHER CONTENDED THAT DU RING THE YEAR ONLY A SUM OF RS.4,30,000/- AS FRESH LOANS HAVE BEEN RECEIVED FRO M OLD CREDITORS. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE RAISED LOANS FROM RELAT IONS WITHOUT FURNISHING ANY GUARANTEE AND IN CASE LOANS WERE TO BE OBTAINED FRO M OUTSIDERS, THE ASSESSEE HAS TO NECESSARILY FURNISH SECURITY OR THE GUARANTEE. THE LOANS ARE GENERALLY RAISED ON HUNDIES OF 3 TO 4 MONTHS AND INTEREST IS PAID IN AD VANCE BESIDES DALALI TO BROKER, BUT IN CASE OF LOANS FROM RELATIVES, NO SECURITY HA S TO BE FURNISHED AND NO TIME LIMIT FOR REPAYMENT IS PROVIDED. NO ADVANCE INTEREST OR D ALALI IS PAID. THE ASSESSEE HAS RAISED ALL THE LOANS FOR THE PURPOSE OF BUSINESS AN D ARE WHOLLY AND EXCLUSIVELY USED FOR THE PURPOSE OF BUSINESS. ITA NO.85/AGRA/2013 4 2.2. THE LD. CIT, HOWEVER, DID NOT ACCEPT THE CONTE NTION OF THE ASSESSEE AND COMPARED THE INTEREST WITH INTEREST RECEIVED FROM F DRS. IT WAS FOUND THAT THE PROVISIONS OF SECTION 40A(2)(B) ARE CLEARLY ATTRACT ED IN THE CASE OF ASSESSEE. IT WAS OBSERVED THAT HAD THE ASSESSEE NOT LOCKED UP HIS FU NDS IN FDRS, NECESSITY FOR BORROWING OF FUNDS WOULD NOT HAVE ARISEN. THUS, THE ASSESSEE HAS FAILED TO ESTABLISH ANY BUSINESS CONSIDERATION OR EXPEDIENCY FOR KEEPING THE FUNDS LOCKED UP AT THE LOWER RATE OF INTEREST IN FDRS AND GIVING HI GHER RATE OF INTEREST TO THE PERSONS COVERED BY THE PROVISIONS OF SECTION 40A(2) (B) OF THE IT ACT. IT WAS HELD THAT THE AO ACCEPTED THE CONTENTION OF THE ASSESSEE WITHOUT MAKING PROPER ENQUIRIES. THEREFORE, THE ASSESSMENT ORDER ON THIS POINT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. SAME WAS SE T ASIDE AND THE AO WAS DIRECTED TO ALLOW PAYMENT OF INTEREST TO THE PERSONS SPECIFI ED U/S. 40A(2)(B) OF THE ACT TO THE EXTENT OF 10% PER ANNUM AND DISALLOW EXCESS PAY MENT MADE ON ACCOUNT OF INTEREST. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SAME SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS REFERRED TO PB-26, WH ICH IS THE QUERY RAISED BY THE AO VIDE NOTICE DATED 16.07.2010 U/S. 142(1) OF THE IT ACT ON 35 POINTS. THE EXPLANATION OF THE ASSESSEE WAS CALLED FOR, WHICH I NCLUDES THE DETAILS OF UNSECURED LOANS/DEPOSITS TAKEN DURING THE YEAR, GIVING OF LOA NS AND ADVANCES AND THE DETAILS ITA NO.85/AGRA/2013 5 OF PAYMENT MADE TO PERSONS COVERED U/S. 40A(2)(B) O F THE IT ACT AND TO SUBMIT NECESSARY EVIDENCE TO PROVE REASONABLENESS OF THE P AYMENTS. HE HAS SUBMITTED THAT THE ASSESSEE FILED DETAILED REPLY BEFORE THE AO ON ALL THE 35 QUERIES VIDE REPLY DATED 23.08.2010 AND COMPLETE DETAILS ON ABOVE ISSU ES WERE FILED OF GIVING AND TAKING LOANS AND PAYMENTS MADE TO PERSONS SPECIFIED U/S. 40A(2)(B) OF THE IT ACT. THE COPIES OF THE SAME ARE FILED AT PAGES 26 AND 33 OF THE PAPER BOOK. THE ANNEXURE OF UNSECURED LOANS AS ON 31.03.2008 IS FIL ED AT PAGE 44 OF THE PAPER BOOK, IN WHICH THE ASSESSEE HAS EXPLAINED THAT TO THE PER SONS SPECIFIED U/S. 40A(2)(B) OF THE IT ACT, THERE WERE SUBSTANTIAL OPENING BALANCES AND IN THE YEAR UNDER CONSIDERATION ONLY RS.4,30,000/- WAS OBTAINED AS FR ESH LOANS. HE HAS ALSO REFERRED TO PB-10, WHICH IS THE DETAILED REPLY FILED BEFORE THE LD. CIT, IN WHICH SAME FACTS WERE EXPLAINED THAT SUBSTANTIAL LOANS WERE COMING U P FROM THE EARLIER YEARS AND WERE OPENING BALANCES IN THE YEAR UNDER CONSIDERATI ON AND THERE IS ONLY ADDITION OF RS.4,30,000/- IN THE YEAR UNDER APPEAL. HE HAS SUBM ITTED THAT SINCE IN THE EARLIER YEAR ALSO, INTEREST WAS PAID @ 18%, WHICH HAS BEEN ACCEPTED. THEREFORE, THE ORDER U/S. 263 IS HIGHLY UNJUSTIFIED AND THERE COULD NOT BE ANY COMPARISON OF INTEREST PAID ON UNSECURED LOANS AS WELL AS THE INTEREST RECEIVED ON FDRS. HE HAS SUBMITTED THAT THE AO HAS MADE DETAILED ENQUIRY ON THE ISSUE AND H AS TAKEN ONE OF THE POSSIBLE VIEW ON THE FACTS. THEREFORE, THE LD. CIT SHOULD NO T HAVE SUBSTITUTED THE OPINION OF THE AO AND RELIED UPON THE DECISION OF THE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 AND CIT VS. MAX INDIA LTD., 204 TAXATION ITA NO.85/AGRA/2013 6 1. HE HAS SUBMITTED THAT MERELY BECAUSE THE ASSESSM ENT ORDER OF THE AO IS CRYPTIC IS NO GROUND TO TREAT THE SAME AS ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF REVENUE. HE HAS SUBMITTED THAT THE LD. CIT DID NOT EXAMINE THE REPLY OF ASSESSEE PROPERLY. THEREFORE, THE ASSESSMENT ORDER SHOULD NO T HAVE BEEN SET ASIDE. ON THE OTHER HAND, THE LD. DR RELIED UPON THE IMPUGNED ORD ER AND SUBMITTED THAT THE AO PASSED CRYPTIC ASSESSMENT ORDER AND DID NOT MAKE AN Y DETAILED ENQUIRY ON THE ISSUE AND THE ASSESSEE PAID EXCESSIVE AND UNREASONABLE IN TEREST TO THE PERSONS SPECIFIED BEING THE RELATIVES, THEREFORE, THE LD. CIT(A) RIGH TLY EXERCISED JURISDICTION U/S. 263 OF THE IT ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, IMPUGN ED ORDER AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER IN THE A SSESSMENT ORDER U/S. 143(3) DATED 18.11.2010 SPECIFICALLY MENTIONED THAT THE QU ERY WAS RAISED AT ASSESSMENT STAGE U/S. 142(1) VIDE LETTER DATED 16.07.2010 AND THE REPRESENTATIVE OF THE ASSESSEE APPEARED TIME TO TIME BEFORE HIM AND FILED ALL THE DETAILS AND REPLY ON EACH QUERY. THE BOOKS OF ACCOUNT WERE ALSO PRODUCED AND CASE DI SCUSSED. THE AO ISSUED DETAILED QUESTIONNAIRE TO THE ASSESSEE ON 16.07.201 0, COPY OF WHICH IS FILED AT PAGE 26 OF THE PAPER BOOK IN WHICH THE AO CALLED FOR THE EXPLANATION OF THE ASSESSEE ON 35 ITEMS. ON THOSE QUERIES, THE AO ALSO CALLED FOR EXPLANATION OF THE ASSESSEE AND DETAILS OF UNSECURED LOANS/DEPOSITS TAKEN AND GIVEN IN ASSESSMENT YEAR UNDER APPEAL AND ALSO CALLED FOR THE DETAILS OF VARIOUS P AYMENTS MADE TO PERSONS COVERED ITA NO.85/AGRA/2013 7 U/S. 40A(2)(B) OF THE IT ACT AND SUBMITTED NECESSAR Y EVIDENCE TO PROVE THE REASONABLENESS OF THE PAYMENTS. THE ASSESSEE FILED DETAILED REPLY BEFORE THE AO ON EACH AND EVERY QUERY RAISED ABOVE VIDE REPLY DATED 23.08.2010, COPY OF WHICH IS FILED AT PAGE 33 OF THE PAPER BOOK, INCLUDING THE Q UERY RAISED ON PAYMENTS MADE TO PERSONS COVERED U/S. 40A(2)(B) OF THE IT ACT. THE A NNEXURE WAS ATTACHED TO THE SAME REPLY AND ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, COPY OF THE SAME IS FILED AT PAGE 44 OF THE PAPER BOOK, IN WHICH THE AS SESSEE SPECIFICALLY EXPLAINED BEFORE THE AO THAT IN RESPECT OF SPECIFIED PERSONS, THERE WERE OPENING BALANCE OF UNSECURED LOANS COMING UP FROM EARLIER YEARS AND IN THE ASSESSMENT YEAR UNDER APPEAL, ONLY FRESH LOANS WERE MADE OF RS.4,04,000/- (AS PER ASSESSEE RS.4,30,000/-). THE AO AFTER EXAMINING THE REPLY OF ASSESSEE AND THE MATERIAL ON RECORD ACCEPTED THE CONTENTION OF THE ASSESSEE THAT PAYMENTS OF INTEREST MADE TO SPECIFIED PERSONS WERE REASONABLE. HONBLE ALLAHABA D HIGH COURT IN THE CASE OF CIT VS. GOYAL PRIVATE FAMILY SPECIFIC TRUST, 171 IT R 698 OBSERVED THAT THE ORDER OF THE ITO MAY BE BRIEF AND CRYPTIC, BUT THAT BY IT SELF IS NOT SUFFICIENT REASON TO BRAND THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. SINCE ON THE ISSUE OF PAYMENT OF INTEREST TO SPECIF IED PERSONS U/S. 40A(2)(B) QUERY WAS RAISED SPECIFICALLY AT THE ASSESSMENT STAGE AND THE ASSESSEE FILED DETAILED REPLY TO SHOW THAT THERE WERE SUBSTANTIAL CLOSING BALANCE S COMING UP FROM EARLIER YEARS AND INTEREST @ 18% WAS ALSO PAID IN EARLIER YEARS, WHICH POINT HAS NOT BEEN ADVERSELY COMMENTED UPON BY THE LD. CIT IN THE IMPU GNED ORDER, WOULD CLEARLY ITA NO.85/AGRA/2013 8 SHOW THAT THE REVENUE ACCEPTED THE PLEA OF THE ASSE SSEE OF PAYMENT OF INTEREST IN PAST AT THE RATE OF 18% AGAINST THE SAME PERSONS AN D THERE WAS ONLY SMALL ADDITION TO THE FRESH LOANS IN A SUM OF RS.4,30,000/- IN THE ASSESSMENT YEAR UNDER APPEAL. DURING THE COURSE OF ARGUMENTS, THE LD. COUNSEL FOR THE ASSESSEE WAS DIRECTED TO FILE DETAILS OF ANNEXURE-I REGARDING PARTICULARS OF PAYM ENT MADE TO PERSONS SPECIFIED IN SECTION 40A(2)(B) OF THE IT ACT IN ASSESSMENT YE AR UNDER APPEAL, I.E., 2008-09, WHICH IS PLACED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE ALSO PLACED ON RECORD THE AUDITED BALANCE SHEET OF THE ASSESSEE FOR PRECE DING ASSESSMENT YEAR 2007-08 ALONGWITH THE DETAILS OF UNSECURED LOANS AS ON 31.0 3.2007 AND THE PAYMENT OF INTEREST MADE TO THESE SPECIFIED PERSONS. THE SAME WOULD DISCLOSE THAT IN PRECEDING ASSESSMENT YEARS, THE ASSESSEE HAS PAID INTEREST TO THESE SPECIFIED PERSONS RANGES FROM 16% TO 18% ON THESE UNSECURED LOANS. COPY OF F ILING OF RETURN IS ALSO FILED ON RECORD. THEREFORE, IT IS DIFFICULT TO BELIEVE THAT THE ASSESSEE HAS PAID EXCESSIVE OR UNREASONABLE INTEREST TO THE SPECIFIED PERSONS. COM PARISON OF INTEREST PAID TO SPECIFIED PERSONS AND INTEREST RECEIVED ON FDRS FRO M BANK IS HIGHLY ILLOGICAL AND WOULD NOT STAND TO REASON . THE INTEREST PAID AND I NTEREST RECEIVED BOTH ARE DIFFERENT ITEMS AND PARTICULARLY WHEN THE INTEREST IS PAID ON UNSECURED LOANS, BUT INTEREST ON FDRS IS RECEIVED FROM NATIONALIZED BANKS. THE ASSES SEE, THEREFORE, RIGHTLY CONTENDED THAT IN CASE OF UNSECURED LOANS, NO SECUR ITY OR GUARANTEE IS NECESSARY AND IN CASE OF LOAN TAKEN FROM OUTSIDERS, IT HAS TO BE TAKEN AGAINST SECURITY AND SUBJECT TO ADVANCE PAYMENT OF INTEREST AND DALALI T O BROKER, WHICH IS NOT NECESSARY ITA NO.85/AGRA/2013 9 IN THE CASE OF UNSECURED LOANS TAKEN FROM RELATIVES AND CLOSE FRIENDS. THERE IS NO DENIAL FACT THAT THE ASSESSEE TOOK LOAN FOR THE PUR POSE OF BUSINESS AND USED THE SAME FOR THAT PURPOSE, THAT IS WHY THE LD. CIT ALSO ALLOWED THE DEDUCTION OF INTEREST PAYMENT @ 10%. THUS, THE COMPARISON OF INTEREST PAY MENT IN THE FACTS AND CIRCUMSTANCES OF THE CASE WITH THE INTEREST RECEIVE D FROM FDRS IS WHOLLY ILLOGICAL AND UNJUSTIFIED. IN FACT, IT IS THE PREROGATIVE OF ASSESSEE TO DECIDE AS TO HOW THE BUSINESS IS TO BE RUN BY THE ASSESSEE. HONBLE SUPR EME COURT IN THE CASE OF UPPER INDIA PUBLISHING HOUSE PVT. LTD. 117 ITR 569 HELD T HAT BEFORE PROVISIONS OF SECTION 40A(2) IS APPLIED, THE AO SHOULD HAVE PROVE D THAT THE EXPENDITURE IS EXCESSIVE OR UNREASONABLE. IN THIS CASE, EVEN FOR A PPLYING THE PROVISIONS OF SECTION 40A(2)(B), IT IS FOR THE REVENUE DEPARTMENT TO MAKE OUT A CASE THAT EXPENDITURE INCURRED IS EXCESSIVE OR UNREASONABLE HAVING REGARD TO THE FAIR MARKET VALUE OF SUCH SERVICES. HOWEVER, NO EFFORTS IN THIS REGARD H AVE BEEN MADE BY THE LD. CIT FOR INVOKING THE PROVISIONS OF SECTION 263 OF THE IT AC T. WE MAY ALSO ADD HERE THAT WHEN THE ASSESSEE FILED DETAILED REPLY BEFORE THE L D. CIT EXPLAINING THE SAME FACTS THAT THERE WERE SUBSTANTIAL CLOSING BALANCES OF LOA NS COMING UP FROM EARLIER YEARS AGAINST THE NAMES OF SPECIFIED PERSONS AND THESE WE RE THE OPENING BALANCE ONLY IN THE YEAR UNDER CONSIDERATION AND THERE WAS ADDITION OF RS.4,30,000/- ONLY IN THE LOANS AND ADVANCES IN THIS YEAR, THE LD. CIT INSTEA D OF SETTING ASIDE THE ASSESSMENT ORDER SHOULD HAVE CONSIDERED THE REPLY OF ASSESSEE IN PROPER PERSPECTIVE AND SHOULD HAVE INVESTIGATE THE MATTER THOROUGHLY. IT, THEREFORE, APPEARS THAT THE LD. ITA NO.85/AGRA/2013 10 COMMISSIONER HAS NOT CONSIDERED THE REPLIES OF THE ASSESSEE IN PROPER PERSPECTIVE. THEREFORE, ON THIS REASON ALONE, THE IMPUGNED ORDER IS LIABLE TO BE SET ASIDE. HONBLE GAUHATI HIGH COURT IN THE CASE OF SMT. LILA CHOUDHURY VS. CIT, 289 ITR 226 HELD THAT EXPLANATION OF THE ASSESSEE IN RESPON SE TO NOTICE U/S. 263 MUST BE CONSIDERED. THE ORDER OF REVISION WITHOUT CONSIDERI NG THE EXPLANATION IS NOT VALID. HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIK AS POLYMERS, 341 ITR 537 HELD THAT EXPLANATION OF THE ASSESSEE NOT CONSIDERE D BY THE COMMISSIONER ORDER OF REVISION NOT VALID. SINCE ON THE ISSUE OF PAYMEN TS MADE TO SPECIFIED PERSONS U/S. 40A(2)(B), THE DETAILED QUERIES HAVE BEEN RAIS ED BY THE AO AND EXPLANATION OF THE ASSESSEE HAVE BEEN CONSIDERED FAVOURABLY BY THE AO, WHICH IN OUR VIEW WAS JUST AND PROPER IN THE MATTER, THEREFORE, THE LD. C IT SHOULD NOT HAVE DIRECTED THE AO TO REFRAME THE ASSESSMENT ON THIS MATTER AND TO DISALLOW EXCESS PAYMENT OF INTEREST. THE LD. COUNSEL FOR THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE BEFORE US THAT SUBSTANTIAL QUERIES ON THE SAME ISSUE WERE DUL Y REPLIED WITH EVIDENCES, COPIES OF WHICH ARE FILED IN THE PAPER BOOK, WOULD SHOW TH AT THE AO APPLIED HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND CONSIDE RED THE ISSUE AFTER MAKING PROPER ENQUIRIES AND INVESTIGATION INTO THE MATTER. THE AO TOOK ONE OF THE POSSIBLE VIEWS IN THE MATTER. THEREFORE, THE LD. CIT CANNOT SUBSTITUTE THE VIEW OF THE AO IN THE GARB OF PROCEEDINGS U/S. 263 OF THE IT ACT. WE RELY UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIAL CO. LTD. VS. CIT (SUPRA) AND CIT VS. MAX INDIA LTD. (SUPRA). THEREFORE, THE ORDER OF THE ASSESSING OFFICER ITA NO.85/AGRA/2013 11 CANNOT BE SAID TO BE ERRONEOUS IN SO FAR AS PREJUDI CIAL TO THE INTEREST OF REVENUE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW TH AT THE LD. CIT WAS NOT JUSTIFIED IN REVISING THE ASSESSMENT ORDER IN THE PROCEEDINGS U/S. 263 OF THE IT ACT. WE, ACCORDINGLY, SET ASIDE THE IMPUGNED ORDER U/S. 263 OF THE IT ACT AND QUASH THE SAME. RESULTANTLY, THE ASSESSMENT ORDER U/S. 143(3) DATED 18.11.2010 IS RESTORED. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY