M/s Shree R.C.Enterprises, Motihari V. Pr. CIT, Muzaffarpur

ITA 89/PAT/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4679 (ITAT-PATNA)
• Duration Of Justice: 2 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 05-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SANJEEV KUMAR ANWAR
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Revision of order; Opportunity of being heard; Corroborative evidences; Assessment record; TDS; Set aside
• Section: 50C; 263

Judgement Text

P A G E 1 | 9 IN THE INCOME TAX APPELLATE TRIBUNAL, PATNA BENCH, PATNA BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO .89 /PAT /2017 ASSESSMENT YEAR : 2013 - 14 M/S. SHREE R.C.ENTERPRISES, NH - 28A, BARIYARPUR, MOTIHARI, EAST CHAMPARAN. VS. ACIT, CIRCLE - 1, MUZAFARPUR PAN/GIR NO. AAGFM 6740 D (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SANJEEV KUMAR ANWAR , AR REVENUE BY : SHRI AJAY KUMAR , DR DATE OF HEARING : 1 8 /06/ 2019 DATE OF PRONOUNCEMENT : 2 6 /0 7 / 2019 O R D E R PER BENCH THIS I S AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PR. CIT, MUZAFFARPUR DATED 24.3.2017 FOR THE ASSESSMENT YEAR 2 013 - 14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. FOR THAT THE ORDER PASSED U/S 263 BY THE PR. CIT IS BAD IN LAW AND FACT. 2) FOR THAT THE LEARNED PR. CIT HAS PASSED THE ORDER IGNORING THE FACT THAT THE POINTS RAISED IN THE NOTICE HAVE DULY BEEN EXAMINED BY THE LEARNED ASSESSING OFFICER. 3) FOR THAT THE LEARNED PR. CIT HAS ERRED IN CONSIDERING THE ASSESSMENT ORDER AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, IN SPITE OF THE FACT THAT THE ASSESSMENT ORDER WAS PASSED AFTER PROPER INQUIRY AND EXAMINATION OF BOOKS OF ACCOUNTS. 4) FOR THAT THE LEARNED PR. CIT IS WHOLLY UNJUSTIFIED IN OBSERVING THAT THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE GENUINENESS AND VERACITY OF ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 2 | 9 ADVANCES FROM PARTIES. MEAGRE AMOUNTS OF RS. 1000/ - TO RS. 5000/ - ARE RECEIVED FOR BOOKING OF VEHICLES AND VEHICLES W ERE EITHER SOLD TO THESE CUSTOMERS OR THE AMOUNTS WERE REFUNDED TO THEM. THIS FACT WAS DULY EXAMINED BY THE LEARNED ASSESSING OFFICER. 5) FOR THAT THE LEARNED PR. CIT IS NOT CORRECT IN STATING THAT NO ATTEMPT HAS BEEN MADE TO RELATE THESE ADVANCES TO SUBS EQUENT SALES, WHEN IT HAS BEEN OBSERVED IN THE ASSESSMENT ORDER THAT THEY WERE EXAMINED ON TEST - CHECK BASIS. 6) FOR THAT THE APPELLANT BEING AN AUTHORISED DEALER OF 'MAHINDRA' VEHICLES AND THE CREDITORS ARE MOSTLY RELATED TO THIS GROUP OF COMPANIES. THE AS SESSING OFFICER RELIED UPON THE STATEMENT OF ACCOUNT OF THESE CREDITORS AS PER THEIR BOOKS OF ACCOUNTS AND ACCEPTED THE BALANCE AFTER EXAMINING THE SAME FROM BOOKS OF ACCOUNTS, OF THE APPELLANT WHICH CANNOT BE SAID TO THE ERRONEOUS. 7) FOR THAT THE MAJOR HEADS OF EXPENSES WERE DULY EXAMINED BY THE LEARNED ASSESSING OFFICER AND CONSIDERING THE GENUINENESS AND VERACITY OF THE EXPENSES, RESORTED TO CERTAIN DISALLOWANCES. UNDER NO CIRCUMSTANCES, IT CAN BE CONSIDERED AS NOT IN ACCORDANCE WITH LAW. 8) FOR THAT PETTY AMOUNTS PAID AS COMMISSION TO CERTAIN PERSONS, WHICH WAS DULY VERIFIED AND TDS WAS ALSO MADE ON THE AMOUNT OF COMMISSION AND DEPOSITED IN THESE CASES. AFTER PROPER SATISFACTION, THE COMMISSION WAS ALLOWED. 9) FOR THAT CONSIDERING THE TOTALITY OF FAC TS AND CIRCUMSTANCES OF THE CASE, THE INITIATION OF PROCEEDING U/S 263 IS WHOLLY UNJUSTIFIED AND LIABLE TO BE SET ASIDE. 10) FOR THAT THE RELIANCE ON DECISION OF HON'BLE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD., CASE IS TOTALLY MISPLACED, SINCE IT WAS A CASE OF CERTAIN RECEIPTS, WHICH THE LEARNED ASSESSING OFFICER HAD FAILED TO ASSESS. 11) FOR THAT THE FACT OF THE CASES OF THE DECISION OF GUWAHATI HIGH COURT AND DELHI TRIBUNAL ARE DIFFERENT AND ALSO WRONGLY RELIED UPON. 12) FOR THAT THE SPECIFIC AND JURISDICTIONAL HIGH COURT CASES RELIED UPON BY THE APPELLANT WERE TOTALLY BRUSHED ASIDE, WITHOUT EXAMINING THE FACTS OF THE CASE AND THE RATIO DECIDED. 13) FOR THAT THE ORDER U/S 263 HAS BEEN, THEREFORE, PASSED IN HASTE AND WITHOUT PROPERLY EXAMINING THE RECORDS AND SUBMISSIONS OF THE APPELLANT, HENCE THE ORDER IS NOT SUSTAINABLE. 3. THE FACTS IN BRIEF ARE THAT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) OF THE I.T.ACT, ON 31.3.2015 DETERMINING THE TOTAL I NCOME AT RS.93,52,410/ - , INTER A LIA , DISALLOWING RS.4,00,000/ - . ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 3 | 9 4. LATER ON, THE COMMISSIONER OF INCOME TAX FOUND THAT THE ASSESSING OFFICER HAS NOT PROPERLY EXAMINED THE ASSESSMENT RECORDS AND PROPER ENQUIRIES WERE NOT MADE BEFORE FINALIZING THE ASSESSMENT. THEREFORE, THE PR. CIT ISSUED NOTICE U/S.263 OF THE ACT TO THE ASSESSEE ON THE FOLLOWING GROUNDS: 1) FROM THE PERUSAL OF RECORDS IT IS SEEN THAT DURING THE ASSESSMENT PROCEEDINGS A LIST OF ADVANCE FROM CUSTOMERS HAD BEEN FILED WHICH SHOWS THAT AN AMOUNT OF RS. 2,21,73,453/ - WAS CLAIMED TO HAVE BEEN RECEIVED AS CUSTOMER ADVANCE FROM 445 PERSONS. IT IS ALSO SEEN THAT THE ASSESSING OFFICER (A.O.) HAS NOT PROPERLY EXAMINED THE GENUINENESS OF THESE ADVANCES AND HAS SIMPLY RELIED UPON THE DOCUMENTS PRODUCED DURING THE SCRUTINY PROCEEDI NGS. NO THIRD PARTY ENQUIRY OR ANY FIELD ENQUIRY HAS BEEN CONDUCTED TO VERIFY THE HUGE LIABILITY OF RS. 2,21,73,453/ - UNDER THE HEAD ADVANCE FROM CUSTOMERS. 2) IT IS FURTHER FOUND THAT AS PER SCHEDULE IV OF AUDIT REPORT, SUNDRY CREDITORS AS ON 31ST MARCH 2013 IS SHOWN AT RS. 44,10,584.35 AGAINST 21 PARTIES. FROM THE PERUSAL OF RECORDS IT IS SEEN THAT THE A.O. HAS NOT MADE ANY THIRD PARTY VERIFICATION IN ANY OF THE 21 PARTIES EVEN ON TEST CHECK BASIS AND SIMPLY RELIED UPON THE DOCUMENTS AND ACCOUNTS FURNIS HED DURING ASSESSMENT. ALTHOUGH, IT IS FOUND THAT COPIES OF ASSESSEE'S ACCOUNT AS PER THE BOOKS OF ACCOUNT OF THE SUNDRY CREDITORS ARE PLACED ON RECORD THE A.O. SHOULD HAVE RESORTED TO INDEPENDENT ENQUIRIES BEFORE COMPLETION OF ASSESSMENT. THE A.O. HAS NOT CONDUCTED ANY ENQUIRY TO VERIFY THE GENUINENESS OF SUNDRY CREDITORS. 3) IT IS ALSO SEEN FROM P & L ACCOUNT THAT AN AMOUNT OF RS. 42,49,288/ - HAS BEEN CLAIMED AS EXPENSES TOWARDS ' SALES PROMOTION EXPENSES', RS. 16,21,889/ - TOWARDS ' INCENTIVE EXPENSES' A ND RS. 19,14,794.82/ - TOWARDS ' DISCOUNT TO CUSTOMERS'. HOWEVER, A.O. FAILED TO ENQUIRE THE VERY NATURE & JUSTIFICATION OF THESE EXPENSES LET ALONE THE GENUINENESS & VERACITY OF THE SAME. A.O. HAS STATED IN ASSESSMENT ORDER ' ON EXAMINATION OF BOOKS OF AC COUNT AND VOUCHERS, IT WAS FOUND THAT THE EXPENSES UNDER THE HEADS 'DISCOUNT TO CUSTOMERS INCENTIVE EXPENSES AND SALES PROMOTION EXPENSES AS DEBITED TO THE P & L ACCOUNT EITHER LACK SUPPORTING EVIDENCE WHICH MAY SHOW THAT THESE EXPENSES HAVE BEEN INCURR ED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF ASSESSEE'S BUSINESS OR VOUCHERS PRODUCED ARE SELF MADE DEBIT VOUCHERS WITHOUT COMPLETE AND VERIFIABLE IDENTITY OF THE RECIPIENTS. ON THESE ACCOUNTS THE EXPENSES UNDER THESE HEADS ARE NOT FOUND TO BE FULLY VERIFI ABLE AND INCURRED WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSES. IN SPITE OF DOUBTFUL AND UNVERIFIABLE NATURE OF THESE EXPENSES THE A.O. ALLOWED SUBSTANTIAL PORTION OF THESE EXPENSES AND MADE A NOMINAL ADHOC DISALLOWANCE OF RS. 1,00,000/ - , RS.1,50,000/ - , AND RS.1,50,000/ - ON ACCOUNT OF `DISCOUNT TO CUSTOMERS', 'INCENTIVE EXPENSES' AND ' SALES PROMOTION EXPENSES' RESPECTIVELY. IT IS NOT CLEAR AS TO HOW A.O. HAS ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 4 | 9 QUANTIFIED THE ADHOC DISALLOWANCE FROM THESE EXPENSES CLAIMED. AS IN THE CASE OF ADVANCE FROM CUSTOMERS AND SUNDRY CREDITORS AS MENTIONED ABOVE, A.O. HAS ALSO FAILED TO CONDUCT ANY ENQUIRY TO ASCERTAIN THE VERACITY OF EXPENSES CLAIMED UNDER 'DISCOUNT TO CUSTOMERS', 'INCENTIVE EXPENSES' AND ' SALES PROMOTION EXPENSES'. I AM OF THE VIEW THAT THE A.O. SHOULD HAVE TAKEN EFFORTS TO VERIFY THESE EXPENSES BY RESORTING TO THIRD PARTY ENQUIRIES ON TEST CHECK BASIS AND BY RECORDING THE STATEMENT OF SUCH PERSONS TO WHOM THESE PAYMENTS ARE CLAIMED TO HAVE BEEN MADE. HOWEVER, AS ALREADY POINTED ABOVE, NO SUCH EF FORT AND ENQUIRY WAS MADE BY THE A.O. THE A.O. FAILED TO ACT TO PROTECT & SAFEGUARD THE INTEREST OF REVENUE. 4. AMOUNT OF RS.6,70,938/ - AND RS. 14,40,550/ - TOWARDS CUSTOMER EXPENSES' AND VEHICLE COMMISSION' RESPECTIVELY HAVE BEEN CLAIMED BY YOU. HOWEVER, FROM THE RECORDS IT IS SEEN THAT NO ENQUIRY WITH REGARD TO NATURE AND JUSTIFICATION OF THESE EXPENSES HAVE BEEN RAISED BY THE A.O. AND THEREFORE NO ENQUIRY WAS CONDUCTED TO VERIFY THE GENUINENESS OF SUCH EXPENSES. 5. IT WAS IN THIS BACKDROP THAT THE PR. CIT WAS OF THE OPINION THAT THE ASSESSING OFFICER HAS FAILED TO CONDUCT PROPER ENQUIRY AND PASSED THE ASSESSMENT ORDER WITHOUT APPLICATION OF MIND, HENCE, THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AFT ER CONSIDERING THE REPLY OF THE ASSESSEE IN RESPONSE TO NOTICE U/S.263, THE PR. CIT SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO MAKE IN - DEPTH EXAMINATION OF ACCOUNTS OF THE ASSESSEE AND ASCERTAIN THE TRUE FACTS ON THE BASIS OF PROP ER ENQUIRY AND PASS A SPEAKING ORDER. 6. AT THE TIME OF HEARING, LEARNED A.R. OF THE ASSESSEE SUBMITTED THAT THE PR. CIT HAS ASSUMED JURISDICTION U/S.263 WITHOUT ANY BASIS. HE SUBMITTED THAT THE ASSESSING OFFICER HAS CALLED FOR ALL THE RECORDS VIZ; B OOKS OF ACCOUNT AND BILLS AND VOUCHERS, COPIES OF BANK STATEMENT, ADDRESS OF DEBTORS, ETC FROM THE ASSESSEE, WHICH WAS COMPLIED WITH AND AFTER EXAMINING THE SAME, PASSED THE ASSESSMENT ORDER. HE SUBMITTED THAT THE ADVANCE FROM CUSTOMERS OF RS.2,21,73,453/ - AND SUNDRY CREDITORS OF RS.44,10,584.35 WERE EXAMINED ON TEST CHECK BASIS FROM THE COPIES OF ACCOUNTS AND COPY OF PURCHASE VOUCHERS AND LEDGER ACCOUNT. SIMILARLY, AS ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 5 | 9 REGARDS TO SALES PROMOTION EXPENSES, INCENTIVES EXPENSES AND DISCOUNT TO CUSTOMERS, THE A SSESSING OFFICER OPINED THAT SOME BILLS AND VOUCHERS ARE SELF MADE AND, THEREFORE, MADE ADHOC DISALLOWANCE OF RS.4,00,000/ - . HE, THEREFORE, SUBMITTED THAT THE ASSESSING OFFICER HAS PASSED ORDER AFTER THOROUGH EXAMINATION OF THE ASSESSMENT RECORD AND AFTER MAKING ENQUIRY FOR SUCH EXPENSES. 7. ON THE OTHER HAND, ID D.R. SUPPORTED THE ORDER OF THE PR. CIT. HE SUBMITTED THAT THE ASSESSING OFFICER HAS FAILED TO PROPER ENQUIRY ON THE MATTER AND PASSED THE ORDER WITHOUT APPLICATION OF MIND. THEREFORE, ID PR. CIT HAD AN OCCASION TO EXAMINE THE ASSESSMENT RECORDS AND WAS OF THE VIEW THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. IN THIS CASE, THE ASSESSMENT IN QUESTION WAS SET ASIDE BY THE LEARNED PR. C.I.T. BY THE ORDER DATED 24 TH MARCH, 2017 ON FOUR GROUNDS I.E. (I) PROPER ENQUIRY AGAINST ADVANCE AMOUNT OF RS.2,21,73,453/ - RECEIVED AS CUSTOMER ADVANCE (II) THIRD PARTY VERIFICATION IN ANY OF 21 PARTIES TOWARDS SUNDRY CREDITORS OF RS.44,10,584.35, (III) NATURE AND JUSTIFICATION OF EXPENSES OF RS.42,49,288/ - AND (IV) EXPENSES OF RS.6,70,938/ - AND RS. 14,40,550/ - TOWARDS CUSTOMERS EXPENSE AND VEHICLE EXPENSES, WHEREIN, REQUISITE AND DUE ENQUIRIES WERE NOT MADE BY THE ASSESSING OFFICER PRIOR TO FINALIZATION OF THE ASSESSMENT BY ORDER DATED 27 TH MARCH, 2015. ON THE SAID BASIS THE PR. LEARNED C.I.T. CAME TO THE CONCLUSION THAT THE ASSESSMENT ORDER IN QUESTION WAS ERRONEOUS AND PREJUDICIAL TO THE INTER ESTS OF THE REVENUE WARRANTING EXERCISE OF POWER UNDER SECTION 263 OF THE ACT. CONSEQUENTLY, THE ASSESSMENT FOR THE YEAR 2013 - 14 WAS SET ASIDE AND A FRESH ASSESSMENT WAS ORDERED. 9 . AT THIS STAGE, IT MAY BE APPROPRIATE TO REPRODUCE HERE UNDER THE PROVIS IONS OF SECTION 263 OF THE ACT TO APPRECIATE THE ARGUMENTS ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 6 | 9 ADVANCED AND TO UNDERSTAND THE CONTOURS OF THE SUO MOTU REVISIONAL POWER VESTED IN THE LEARNED PR.C.I.T. BY THE AFORESAID PROVISION OF THE ACT. '263 - REVISION OF ORDERS PREJUDICIAL TO REVENUE. - (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. ' 10 . IN THE IMPUGNED ASSESSMENT ORDER, THE AO HAS ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND NO FURTHER ENQUIRY HAS BEEN MADE BY HIM. THEREFORE, IT IS A COMPLET E LACK OF ENQUIRY AT THE STAGE OF ASSESSING OFFICER. THE ASSESSING OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. WE FIND THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO RAISED QUESTION NO.5 VIDE NOTICE DATED 17.11.2014 REQUIRING THE ASSESSEE TO PROVE THE GENUINENESS OF VARIOUS LIABILITIES AS APPEARING IN THE BALANCE - SHEET. SIMILARLY, THE AO RAISED QUESTION NO.1 VIDE NOTICE DATED 15.01.2015 ASKING THE ASSESSEE TO PROVE THE GENUINENESS OF SUNDRY CREDITORS OF THE AMOUNT SHOWN IN THE BAL ANCE SHEET AS ON 31.03.2013 AND TO PROVE THEIR BUSINESS RELATIONSHIP. HOWEVER, THE ASSESSEE HAS ONLY PRODUCED LEDGER ACCOUNT OF THE SUNDRY CREDITORS INSTEAD OF PROVING THE GENUINENESS OF THE TRANSACTIONS , WHICH ITSELF SHOWS THAT THE AO HAS OVERLOOKED THIS FACT WHILE FRAMING THE ASSESSMENT ORDER. WE ALSO FIND THAT WITH REGARD TO CUSTOMER EXPENSES AND VEHICLE COMMISSION CLAIMED BY THE ASSESSEE NO ENQUIRY IN RESPECT OF NATURE AND GENUINENESS OF THESE EXPENSES WAS CONDUCTED BY THE AO . THEREFORE, THE PR. CIT HAS RIGHTLY OBSERVED THAT THE ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE BECAUSE THERE IS COMPLETE LACK OF ENQUIRY ON THE PART OF THE AO. THIS VIEW IS ALSO SUPPORTED BY THE ORDER OF COOR DINATE BENCH OF THE TRIBUNAL IN CASE OF BABULAL S. ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 7 | 9 SOLANKI VS. ITO, [2019] 104 TAXMANN.COM 155 (AHMEDABAD - TRIB), WHEREIN THE OBSERVATION S OF THE TRIBUNAL READ AS UNDER : - 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 6. WE FIND THAT THE ASSESSING OFFICER, VIDE LETTER DATED 9TH DECEMBER 2013, DID STATE, IN RATHER GENERAL TERMS, THAT WHERE THE STAMP DUTY VALUATION (I.E. JANTRI VALUE) IS DIFFERENT FRO M SALE CONSIDERATION, THE ASSESSEE HAS TO STATE WHETHER THE STAMP DUTY VALUATION WAS ADOPTED AS SALE CONSIDERATION. THERE WAS NEITHER A SPECIFIC REFERENCE TO THE FACTS OF THIS CASE OR THE APPLICATION OF SECTION 50. IN REPLY TO THIS LETTER, THE ASSESSEE STA TED THAT 'THE LAND SOLD IS AGRICULTURAL LAND AS CLEARLY MENTIONED IN THE SALE DEED', THAT 'INDEX COPY DATED 3RD JUNE 2011 (I.E. AFTER THE DATE OF SALE DEED) CLEARLY SHOWS THE SAID LAND AS AN AGRICULTURAL LAND' AND THAT 'JANTRI VALUE OF SAID AGRICULTURAL LA ND IS RS 4,900 PER SQ MTR WHICH WAS CLEARLY MENTIONED AS PER LETTER OF SUPERINTENDENT OF STAMPS, GANDHINAGAR, GUJARAT'. IT WAS FURTHER CLARIFIED THAT 'THE VALUE OF RS 11,750 PER SQUARE METER ON WHICH STAMP DUTY IS PAID BY THE PURCHASER IS FOR NON AGRICULTU RAL LAND'. THE ASSESSEE THUS EXPLAINED THAT THE SALE CONSIDERATION IS LESS THAN THE STAMP DUTY VALUATION FOR THE LAND SOLD, AND THEN HE POINTED OUT THE COMPUTATION OF CONVERSION PREMIUM PAID BY THE ASSESSEE WAS ON THE BASIS OF VALUATION OF AGRICULTURAL LAN D. THIS PLEA, HOWEVER, PROCEEDS ON THE ASSUMPTION THAT THE PROVISIONS OF SECTION 50C COME INTO PLAY ON A FAIR STAMP DUTY VALUATION OF THE LAND OR BUILDING OR BOTH, RATHER THAN THE ACTUAL VALUATION ADOPTED BY THE STAMP VALUATION AUTHORITY. SECTION 50 C COME S INTO PLAY, FOR SUBSTITUTION OF ACTUAL SALE CONSIDERATION BY THE VALUE ADOPTED FOR STAMP DUTY VALUATION PURPOSES, 'WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSEDBY ANY AUTHORITY'. WHAT IS THUS CLEAR IS THAT, ON THE FACE OF IT, THE ACTUAL STAMP DUTY VALUATION ADOPTED BY THE ASSESSING AUTHORITY RATHER THAN WHAT WOULD BE THE RIGHT, EVEN IF THAT BE DIFFERENT FROM ACTUAL, STAM P DUTY VALUATION WHICH OUGHT TO HAVE BEEN ADOPTED BY THE STAMP DUTY VALUATION AUTHORITY. IF THE REGISTRATION DOES NOT TAKE PLACE IN THE YEAR OF TRANSFER AND NO STAMP DUTY IS ACTUALLY ASSESSED AS SUCH, THEN, OF COURSE, VALUE ASSESSABLE COULD COME INTO PLAY BUT THAT'S NOT THE CASE HERE. THE REPLY OF THE ASSESSEE WAS THUS LESS THAN ACCEPTABLE IN LAW AND ON THE BASIS OF THIS EXPLANATION. THE CORRECTNESS OF CLAIM, ON THIS BASIS OF THIS CLAIM BY THE ASSESSEE, CANNOT BE ESTABLISHED. OF COURSE, THERE CAN BE OTHER A SPECTS ON WHICH THE JANTRI VALUE MAY, OR MAY NOT, BE APPLICABLE BUT THAT IS A DIFFERENT ISSUE. THE CLAIM MADE BY THE ASSESSEE WAS THUS CLEARLY SOMETHING WHICH SHOULD HAVE PROVOKED FURTHER EXAMINATION OR AT LEAST BEING DEALT BY WAY OF A SPEAKING ORDER, BUT THE ASSESSING OFFICER CHOSE TO REMAIN SILENT ON THE ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 8 | 9 SAME. AS OBSERVED BY HON'BLE DELHI HIGH COURT, IN THE CASE OF GEE VEE ENTERPRISES V. ADDL. CIT [1975] 99 ITR 375 (DELH I) , ' THE POSITION AND FUNCTION OF THE INCOME - TAX OFFICER IS VERY DIFFERENT FROM THAT OF A CIVIL COURT. THE STATEMENTS MADE IN A PLEADING PROVED BY THE MINIMUM AMOUNT OF EVIDENCE MAY BE ACCEPTED BY A CIVIL COURT IN THE ABSENCE OF ANY REBUTTAL. THE CIVIL COU RT IS NEUTRAL. IT SIMPLY GIVES DECISION ON THE BASIS OF THE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. THE INCOME - TAX OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FACE OF A RETURN WHICH IS APPARENTLY IN ORD ER BUT CALLS FOR FURTHER INQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. THE MEANING TO BE GIVEN TO THE WORD 'ERRONEOUS' IN SECTION 263 EMERGES OUT OF TH IS CONTEXT. IT IS BECAUSE IT IS INCUMBENT ON THE INCOME - TAX OFFICER TO FURTHER INVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES WOULD MAKE SUCH AN INQUIRY PRUDENT THAT THE WORD 'ERRONEOUS' IN SECTION 263 INCLUDES THE FAILURE TO MAKE SUCH AN IN QUIRY. THE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN INQUIRY HAS NOT BEEN MADE AND NOT BECAUSE THERE IS ANYTHING WRONG WITH THE ORDER IF ALL THE FACTS STATED THEREIN ARE ASSUMED TO BE CORRECT .' OF COURSE, IF THE EXPLANATION GIVEN BY THE ASSESSEE WAS OF THE N ATURE AS COULD POSSIBLY SATISFY ANY REASONABLE PERSON, EVEN IF OTHER VIEW WAS POSSIBLE, THE SITUATION WOULD HAVE BEEN DIFFERENT. THE EXPLANATION GIVEN BY THE ASSESSEE IN THIS CASE, HOWEVER, WAS SIMPLY NOT A LEGALLY POSSIBLE VIEW OF THE MATTER. EVEN IN THE OFT QUOTED CASE OF MALABAR INDUSTRIAL CO. LTD V. CIT [2000] 109 TAXMAN 66/243 ITR 83 (SC) , HON'BLE SUPREME COURT HAS OBSERVED THAT ' WHEN AN ITO ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHERE TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UN LESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW ' ( EMPHASIS SUPPLIED BY US NOW ) . THE VIEW CANVASSED BY THE ASSESSEE, IN OUR CONSIDERED VIEW, WAS UNSUSTAINABLE IN LAW. THEREFORE, EVEN IF THE MATTER WAS EXAMINED BY THE ASSESSING OFFICER AND IT WAS A CO NSCIOUS CALL OF THE ASSESSING OFFICER TO ACCEPT THE PLEA OF THE ASSESSEE, SUCH A SITUATION WOULD NOT TAKE THE MATTER OUTSIDE THE AMBIT OF SECTION 263 AS THE VIEW ADOPTED BY THE ASSESSING OFFICER WAS CLEARLY UNSUSTAINABLE IN LAW. HAVING SAID THAT, WE MUST A DD THAT THERE CAN BE OTHER LEGAL REASONS FOR GRANT OF RELIEF ON MERITS, AND THAT AREA IS NOT YET EXPLORED BY, OR BEFORE, US. IN ANY CASE, ALL THAT THE LEARNED COMMISSIONER HAS DIRECTED IS EXAMINATION OF THE CLAIM ON MERITS AND, FOR THE ABOVE REASON, WE SEE NO INFIRMITY IN THAT DIRECTION. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN MIND ENTIRETY OF THE CASE, WE UPHOLD THE IMPUGNED REVISION ORDER AND DECLINE TO INTERFERE IN THE MATTER. AS WE DO SO, WE MAKE IT CLEAR THAT OUR EXPRESSION OF VIEW ITA NO.89/PAT/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 9 | 9 ON MERITS O F THE CASE IS ONLY A PRIMA FACIE IMPRESSION, AND IT MUST NOT, THEREFORE, INFLUENCE THE DECISION OF THE ASSESSING OFFICER ON MERITS. UNINFLUENCED WITH THESE OBSERVATIONS, THE ASSESSING OFFICER WILL TAKE A CALL ON MERITS OF THE MATTER. 11 . FROM THE ABOVE DISCUSSION, WE FIND THAT THE AO BEFORE PASSING THE ORDER OF ASSESSMENT HAS NEITHER MADE ANY ENQUIRY NOR APPLIED HIS MIND AS TO WHETHER THE ASSESSEE HAS PROVED ITS GENUINENESS OF THE AMOUNT OF COMMISSION PAID. THEREFORE, WHEN THE ASSESSMENT F RAMED BY THE ASSESSING OFFICER WITHOUT CONDUCTING PROPER ENQUIRIES OR INVESTIGATION OR WITHOUT APPLICATION OF MIND, THE SAME IS FIT FOR REVIEW UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. HENCE, RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF BABULAL S. SOLANKI (SUPRA), WE DO NOT SEE ANY GOOD REASON TO INTERFERE IN THE IMPUGNED ORDER PASSED BY THE PR. CIT U/S.263 OF THE ACT AND ACCORDINGLY THE SAME IS UPHELD. THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 12 . I N THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN PURSUANCE WITH RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 ON 26 / 07 /2019 AT PATNA SD/ - SD/ - ( CHANDRA MOHAN GARG) (LAXMI PRASAD SAHU) JUDICIALMEMBER ACCOUNTANT MEMBER PATNA; DATED 26 /0 7 /209 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER PVT.SECRETARY ITAT, PATNA 1. THE APPELLANT : M/S. SHREE R.C.ENTERPRISES, NH - 28A, BARIYARPUR, MOTIHARI, EAST CHAMPARAN. 2. THE RESPONDENT. ACIT, CIRCLE - 1, MUZAFARPUR 3. THE CIT(A) - , MUZAFFARPUR 4. PR.CIT - MUZAFFARPUR 5. DR, ITAT, PATNA 6. GUARD FILE. //TRUE COPY//