M/s Alcon Devlopers, Panaji V. The Principal Commissioner of Income Tax, Panaji., Panaji

ITA 92/PAN/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2073 (ITAT-PANAJI)
• Duration Of Justice: 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-08-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 19-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANAND SHANKAR MARATHE
• Assessee Lawyers: SHRINIVAS NAYAK
• Keywords: Unexplained cash credit; Gift; Business income; Depreciation; Opportunity of being heard; Unabsorbed depreciation
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N . S . SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO 92/PAN/2016 : (ASST. YEAR : 2011 - 12 ) M/S ALCON DEVELOPERS, VS PRINCIPAL COMMISSIONER OF INCOME TAX, SUKERKAR MANSION, FIRST FLOOR, PANAJI, GOA. M. G. ROAD, PANAJI GOA 403 001 PAN : AACFA6290L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHRINIVAS NAYAK - CA RESPONDENT BY : SHRI ANAND SHANKAR MARATHE - DR DATE OF HEARING : 01/09/2016 DATE OF ORDER : 15 /09/2016 O R D E R PER N. S. SAINI: AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, PANAJI DATED 23/03/2016. 2. THE ASSESSEE HAS FILED THE PETITION DATED 24/08/2016 FOR ADMISSION OF ADDITIONAL GROUND S OF APPEAL WHICH READ AS UNDER: - 1. THE ORDER OF THE LEARNED CIT IS BAD IN LAW AND IS VOID - AB - INITIO. 2. THE CIT HAS EXCEEDED HIS POWERS UNDER SECTION 263 OF THE INCOME TAX AT, 1961 , WHILE PASSING THE ORDER. 3. THE CIT HAS ERRED IN PASSING THE ORDER UNDER SECTION 263 OF THE INCOME TAX AT, 1961 WITHOUT CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE. 4. THE CIT HAS ERRED IN PASSING THE ORDER UNDER SECTION 263 OF THE INCOME TAX AT, 1961 BY WRONGLY CONCLUDING TH AT THE AO HAS NOT APPLIED HIS MIND ON THE ISSUE OF CAPITAL GAIN. 5. THE CIT ERRED IN CONCLUDING THAT THE ASSESSEE CASE IS OF CAPITAL GAIN ON SALE OF BUSINESS ASSETS. 6. THE CIT HAS TOTALLY IGNORED THAT THE GAIN EARNED BY THE ASSESSEE IS FROM THE SALE OF BUSINESS AND NOT FROM THE SALE OF BUSINESS ASSETS. - 2 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 7. THE APPELLANT PRAYS TO BE ALLOWED TO ADD, VARY AND AMEND THE GROUNDS OF APPEAL AT OR BEFORE THE DATE OF HEARING. 3. THE DEPARTMENTAL REPRESENTATIVE HAD NO OBJECTION TO THE ADMISSION OF THE ABOVE ADDIT IONAL GROUND S OF APPEAL OF THE ASSESSEE. THEREFORE, THE ADDITIONAL GROUND S OF APPEAL RAISED BY THE ASSESSEE WERE ADMITTED AND THE PARTIES WERE ALLOWED TO MAKE THEIR SUBMISSIONS THEREON. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE IN ITS RETURN OF INCOME DISCLOSED TOTAL INCOME AT RS.23,28,175/ - . ON AN ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT ON 31/03/2014, THE ASSESSING OFFICER AFTER DISA LLOWING CERTAIN DEDUCTIONS CLAIMED BY THE ASSESSEE DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 88,47,561/ - . 5. VIDE THE IMPUGNED ORDER, WHICH HAS BEEN PASSED UNDER SECTION 263, THE LEARNED PR. C OMMISSIONER OF INCOME TAX CONSIDERED THE SAID ORDER OF ASSESSMENT DATED 31/03/2014 PASSED BY THE ASSESSING OFFICER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LEARNED PR. COMMISSIONER OF INCOME TAX CONSIDER E D THE SAID ASSESSMENT ORDER AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE IN HIS OPINION, THE ASSESSING OFFICER HAS ALLOWED SET OFF OF BROUGHT FORWARD BUSINESS LOSS AGAINST CAPITAL GAINS OF THE YEAR UNDER CONSIDERATION WHICH IS AG A I N S T THE PROVISIONS OF SECTION 72 OF THE ACT. 6. WE FIND FROM PAGE NO.98 OF THE PAPER BOOK, WHICH IS COMPUTATION OF TOTAL INCOME OF THE IMMEDIATELY PRECEDING ASSESSMENT YEAR I.E. 2010 - 11 AND PAGE NO.46 OF THE PAPER BOOK THAT THE UNABSORBED DEPRECIATION IN THAT YEAR WAS RS.2, 71 ,96,279/ - AND BUSINESS LOSS WAS RS.1,78,87,785/ - BOTH AGGREGATING TO RS.4,50,84,064/ - . - 3 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 7. IN THE RELEVANT ASSESSMENT ORDER, THE ASSESSING OFFICER HAS ALLOWED SET OFF OF THE ABOVE RS. 4,50,84,064/ - IS NOT IN DISPUTE . FROM THE COMPUTATION SHEET OF THE YEAR UNDER CONSIDERATION, WHICH IS PLACED AT PAGE NO. 45 OF THE PAPER BOOK READ WITH ORDER OF ASSESSMENT , THE TOTAL INCOME ASSESSED BY THE ASSESSING OFFICER IS SUMMARISED AS UNDER: - COMPUTATION OF TOTAL INCOME PARTICULARS AMOUNT RS. AMOUNT RS. BUSINESS INCOME: 1. BUSINESS INCOME FROM REAL ESTATE BUSINESS AS SHOWN IN THE RETURN ADD: DISALLOWANCE OF THE EXPENSES RELATING TO THIS BUSINESS MADE BY THE ASSESSING OFFICER 2. BUSINESS LOSS OF GRANULATED BLAST FURNACE SLAG (GGBS) AS DISCLOSED IN THE RETURN AND ACCEPTED ON ASSESSMENT 82,52,124/ - 61 ,66,512/ - 1, 44,18,636/ - ( - ) 79,03,167/ - CAPITAL GAINS: AS DISCLOSED IN THE RETURN AND ACCEPTED ON ASSESSMENT 4,74,16,156/ - TOTAL INCOME 5,39,31,62 5 / - LESS: BROUGHT FORWARD DEPRECIATION AND LOSS AS CLAIMED IN THE RETURN AND ALLOWED BY THE ASSESSING OFFICER UNABSORBED DEPRECIATION BUSINESS LOSS BROUGHT FORWARD 2,71,96,279/ - 1,78,87,785/ - 4,50,84,064/ - TOTAL INCOME AS ASSESSED BY THE ASSESSING OFFICER 88,47,5 61 / - - 4 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 8. IN THE INSTANT CASE THE ASSESSEE HAS SOLD ONE OF ITS BUSINESS UNDERTAKING NAMELY UNDERTAKING REL A TING TO GRANULATED BLAST FURNACE SLAG (GGBS) BUSINESS FOR RS. 8 CRORES . AFTER DEDUCTING NETWOR TH OF THE SAID UNDERTAKING AT RS.3,25,83,844 / - , THE PROFIT ON SALE OF UNDERTAKING WAS DETERMINED AT RS. 4,74,16,156/ - . THE ASSESSEE PLACED BEFORE US COPY OF YEAR - WISE DEPRECIATION CHART AS CLAIMED UNDER INCOME TAX ACT RELATING TO THE SAID UNDERTAKING , WHICH WAS TAKEN INTO CONSIDERATION FOR DETERMIN ING NETWOR TH OF THE SAID UNDERTAKING AS UNDER: - ON THE BASIS OF THE ABOVE , THE ASSESSEE CL A IMED BEFORE US THAT OUT OF RS.4,74,16,156/ - AT LEAST RS.2,84,31,062/ - WAS RECOUPMENT OF DEPRECIATION CHARGED IN RESPECT OF THAT BUSINESS AND THE SAME BEING RECOUPMENT OF BUSINESS INCOME WAS OF THE NATURE OF BUSINESS INCOME. THE ASSESSEE FOR THE ABOVE SUBMISSIONS PLACED RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. EXPRESS NEWSPAPER LTD. REPORTED IN 53 ITR 250 (SC) . WE FIND TH AT THE HON'BLE SUPREME COURT IN THE AFORESAID DECISION HAS HELD AS UNDER: - IF THE SALE PRICE EXCEEDS THE WRITTEN DOWN VALUE, BUT DOES NOT EXCEED THE ORIGINAL COST PRICE, THE DIFFERENCE BETWEEN THE ORIGINAL COST AND THE WRITTEN DOWN VALUE SHALL BE DEEMED T O BE THE PROFITS OF THE PREVIOUS YEAR TO THAT IN WHICH THE SALE TAKES PLACE; THAT IS TO SAY THE DIFFERENCE BETWEEN THE PRICE FETCHED AT THE SALE AND THE WRITTEN DOWN VALUE IS DEEMED TO BE THE ESCAPED PROFITS FOR WHICH THE ASSESSEE IS MADE LIABLE TO TAX. AS THE SALE PRICE IS HIGHER THAN THE WRITTEN DOWN VALUE, THE DIFFERENCE REPRESENTS THE EXCESS DEPRECIATION MISTAKENLY ASSESSMENT YEAR AMOUNT OF DEPRECIATION (RS.) 2010 - 11 2,64,53,052/ - 2011 - 12 19,78,010/ - TOTAL 2,84,31,062/ - - 5 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 GRANTED TO THE ASSESSEE . TO ILLUST R AT E : ASSUME THAT THE ORIGINAL C OST OF A MACHINERY OR PLANT IS R S 100/ - AND DEPRECIATION ALLOWED IS R S 25/ - , THE WRITTEN DOWN VALUE IS RS. 75/ - . IF THE MACHINERY IS SOLD FOR RS. 100/ - , IT IS OBVIOUS THAT DEPRECIATION OF RS. 25/ - WAS WRONGLY ALLOWED. IF IT HAD NOT BEEN ALLOWED THAT AMOUNT WOULD HAVE SWELLED THE PROFITS TO THAT EXTENT. WHEN IT IS FO UND T HAT IT WAS WRONGLY ALLOWED THAT PROFIT IS BROUGHT TO CHARGE. THEREFORE, IN SUBSTANCE, BRINGS TO CHARGE AN ESCAPED PROFIT OR GAIN OF THE BUSINESS CARRIED ON BY THE ASSESSEE. THUS WE FIND FORCE IN THE ARGUMENT OF THE ASSESSEE THAT OUT OF RS. 4,74,16,156 / - PROFIT DERIVED ON SALE OF UNDERTAKING AT LEAST RS.2,84,31,062/ - WAS RECOUPMENT OF DEPRECIATION WHICH WAS ALLOWED AS BUSINESS DEDUCTION AND THEREFORE IS IN THE NATURE OF BUSINESS INCOME EVEN WHEN THE SAME IS ASSESSABLE UNDER THE HEAD CAPITAL GAINS FOR COMPUTING TOTAL INCO ME AS PER THE PROVISIONS OF THE ACT. 9. WE FIND THAT AS PER PROVISIONS OF SECTION 72 OF THE ACT, THE BROUGHT FORWARD BUSINESS LOSS IS TO BE SET OFF AGAINST PROFITS AND GAINS OF BUSINESS EVEN WHEN SUCH PROFITS AND GAINS OF BUSINESS IS AS SESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES OR UNDER ANY OTHER HEAD INCLUDING CAPITAL GAINS. THE ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. COCANADA RADHASWAMI BANK LTD. REPORTED IN 57 ITR 306 (SC), THEREFORE IT IS OBSERVED THAT THE BUSINESS INCOME OF THE ASSESSEE OF THE YEAR UNDER CONSIDERATION AS ASSESSED BY THE ASSESSING OFFICER WAS AS UNDER: - 1) BUSINESS INCOME FROM REAL ESTATE BUSINESS ASSESSABLE UNDER THE HEAD BUSINESS INCOME RS. 1,44,18,636/ - 2) BUSINESS INCOME BEING RECOUPMENT OF DEPRECIATION CHARGE IN RESPECT OF GRANULATED BLAST FURNACE SLAG (GGBS) BUSINESS AS ASSESSABLE UNDER THE HEAD CAPITAL GAINS RS. 2,84,31,062/ - TOTAL RS. 4,28,49,698/ - - 6 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 10. THUS, AGAINST ABOVE BUSINESS INCOME OF RS.4,28,49,698/ - , THE ASSESSING OFFICER ALLOWED SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS.4,50,84,064/ - . THUS, IT IS OBSERVED THAT THE ASSESSING OFFICER IF AT ALL HAS ALLOWED EXCESS SET OFF OF RS.22,34,366/ - . THUS, T HIS GROUN D OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 11. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING GROUND OF APPEAL CHALLENGING JURISDICTION OF THE LEARNED PR. COMMISSIONER OF INCOME TAX FOR PASSING ORDER UNDER SECTION 263 OF THE ACT : THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS ERRED ON FACTS AND IN LAW IN PASSING THE ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER ON 31/03/2014 UNDER SECTION 143(3) FOR THE A.Y. 2011 - 12 IS ERRONEOUS AND PREJ UDICIAL TO THE INTEREST OF THE REVENUE . 12. IN RESPECT OF THE ISSUE OF JURISDICTION, A PERUSAL OF THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 WOULD SHOW THAT HE HAS ONLY RELIED UPON A DECISION OF THE SPECIAL BENCH WITHOUT SPEC I F YING AS TO HOW AND WHY AS ALSO THE PORTION OF THE INCOME/LOSS TO WHICH THE SAID SPECIAL BENCH WOULD APPLY. IN SHORT, THE ORD E R OF THE PRINCIPAL COMMISSIONER OF INCOME TAX DOES NOT SPECIFY WHAT IS THE INCOME/LOSS THAT HE IS PROPOSING T O DISALLOW WHICH HAS NOT BEEN DONE IN THE ORIGINAL ASSESSMENT ORDER AND WHICH HAS CAUSED THE SAID ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNDER SIMILAR CIRCUMSTANCE , THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SMT. SUNITA AJIT PATIL IN ITA NO. 190/PAN/2016 DATED 28/06/2016 HAS HELD AS FOLLOWS: - 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH SIDES. A PERUSAL OF THE ORDER PASSED UNDER SECTION 263 BY THE COMM ISSIONER OF INCOME TAX, BELGAUM, DATED 23/03/2010 CLEARLY SHOWS THAT IN PARA 5.7 AT PAGE NO. 10 OF THE SAID ORDER, THE COMMISSIONER OF INCOME TAX HAS - 7 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 DIRECTED THE ASSESSING OFFICER TO BRING TO TAX THE AMOUNTS OF 3 LAC AND 2,50,000/ - , BEING GIFTS RECEIVE D BY THE ASSESSEE FROM HER FATHER AND SISTER, AS UNEXPLAINED CASH CREDITS BY MODIFYING THE ORIGINAL ASSESSMENT. IN PARA 6.3 AT PAGE NO. 12, COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORIGINAL ASSESSMENT AFTER OBTAINING THE SOURCE OF ADDITION TO FIXED ASSETS ETC. AND IF NO EVIDENCE IS FURNISHED, THE ENTIRE INVESTMENT IS TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF LAW. THIS REPRESENTING THE ADDITION MADE UNDER SECTION 69, REPRESENTING THE INVESTMENT IN THREAD DIES. IN PARA 7.2 AT PAGE NO. 13, COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORIGINAL ASSESSMENT BY BRING TO TAX THE BANK INTEREST, NOT OFFERED TO TAX BY THE ASSESSEE. IN PARA 4.5 AT PAGE NO.6, T HE COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORIGINAL ASSESSMENT MADE BY DISALLOWING THE ENTIRE JOB WORK CHARGES PAID TO THE TWO SISTER CONCERNS UNDER SECTION 40(A)(IA) OF THE ACT AND IN PARA 8, THE COMMISSIONER OF INCOME TAX HAS SPECIFICALLY HELD THAT THE ORIGINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO MODIFY THE ORIGINAL ASSESSMENT IN THE LIGHT OF THE ABOVE DISCUSSIONS. THUS, THESE ARE CLEAR DIRECTIONS GIVEN BY THE COMMISSIONER OF INCOME TAX TO THE ASSESSING OFFICER. IN SHORT, THE COMMISSIONER OF INCOME TAX AFTER INVOKING THE POWERS UNDER SECTION 263, HAS DONE THE INVESTIGATION AND HAS COMPLETED T HE ASSESSMENT, IN THE ORDER PASSED UNDER SECTION 263 AS IS EXPECTED TO BE DONE WHILE PASSING THE ORDER UNDER SECTION 263. THE ASSESSING OFFICER IN HIS ORDER DATED 15/12/2012 HAS ONLY GIVEN EFFECT TO THE ORDER PASSED UNDER SECTION 263. HERE, IT WOULD BE W ORTHWHILE TO EXTRACT THE PROVISIONS OF SECTION 263(1), WHICH READS AS UNDER: - 263. (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 INTERESTS 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 . 7. A PERUSAL OF THE SAID PROVISIONS CLEARLY SHOWS THAT THE PRINCIPAL COMMISSIONER ( OR) COMMISSIONER....... PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR - 8 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. THE WORDS PASS SUCH ORDER THEREON AS THE CIR CUMSTANCES OF THE CASE JUSTIFY SHOWS THAT IT IS THE ORDER UNDER SECTION 263 WHICH HAS TO BE LOOKED INTO TO FIND OUT AS TO WHAT IS THE INTENTION OF THE COMMISSIONER. IN THE PRESENT CASE, CLEARLY THERE IS NO INTENTION ON THE PART OF THE COMMISSIONER TO CAN CEL THE ASSESSMENT AND DIRECT A FRESH ASSESSMENT, BUT IT IS CLEAR ONE WHERE THE ORIGINAL ASSESSMENT HAS BEEN MODIFIED BY HIM. ONCE THE PRINCIPAL COMMISSIONER/COMMISSIONER PASSES AN ORDER UNDER SECTION 263 CANCELLING THE AMENDMENT AND DIRECTING A FRESH ASSE SSMENT, THEN THE ASSESSING OFFICER GIVES EFFECT TO SUCH ORDER UNDER SECTION 153(2A) WHICH ALSO PRESCRIBES THE TIME LIMIT, IN CASE THE PRINCIPAL COMMISSIONER/ COMMISSIONER HAS DIRECTED A FRESH ASSESSMENT. THIS IS BECAUSE THE WORDS USED IN SECTION 153(2A) I S AN ORDER OF FRESH ASSESSMENT IN PURSUANCE TO AN ORDER UNDER SECTION 250 OR SECTION 254 OR SECTION 263 OR SECTION 264, SETTING ASIDE OR CANCELLING AN ASSESSMENT. THUS, IF THERE IS A CANCELLATION OF AN ASSESSMENT UNDER SECTION 263 AND DIRECTION FOR FRES H ASSESSMENT, THEN IN VIEW OF THE PROVISIONS OF SECTION 153(1) READ WITH SECTION 153(2A), THE ASSESSING OFFICER HAS TO DO A FRESH ASSESSMENT AS PER THE DIRECTIONS GIVEN IN THE ORDER UNDER SECTION 263. IF THERE IS NO CANCELLATION OF AN ASSESSMENT, BUT IT I S ONLY A MODIFICATION OF THE ASSESSMENT, THEN THE ASSESSING OFFICER ONLY GIVES EFFECT TO THE ORDER OF THE COMMISSIONER UNDER SECTION 263 AND SUCH ORDER GIVING EFFECT TO THE ORDER UNDER SECTION 263 DOES NOT TAKE COLOUR OF AN ORDER UNDER SECTION 143(3) OR 14 4 AND IT REMAINS AN ORDER UNDER SECTION 263 AND IT IS ONLY FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME AND RAISING OF THE DEMAND THAT THE ASSESSING OFFICER DOES IN THE ORDER GIVING EFFECT TO THE ORDER UNDER SECTION 263. APPEALABLE ORDERS BEFORE THE COMM ISSIONER OF INCOME TAX (APPEALS) IS VERY SPECIFIC INSOFAR AS IT IS AN ORDER OF ASSESSMENT UNDER SECTION 143(3) OR 144 WHERE THE ASSESSEE OBJECTS TO THE AMOUNT OF INCOME ASSESSED OR TO THE AMOUNT OF TAX DETERMINED, WHICH IS APPEALABLE BEFORE THE COMMISSIONE R OF INCOME TAX (APPEALS). A PERUSAL OF THE PROVISIONS OF SECTION 253 PROVIDES FOR THE APPEAL AGAINST THE ORDER UNDER SECTION 263 TO THE APPELLATE TRIBUNAL. THUS, IT CAN BE NOTICED THAT AN ORDER UNDER SECTION 263 CAN BE ONE WHERE THERE IS AN ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT AND ONE WHERE THERE IS CANCELLING OF THE ASSESSMENT AND DIRECTING OF THE FRESH ASSESSMENT. WHEN IT IS AN ISSUE OF ENHANCING OR MODIFYING THE ASSESSMENT ORDER, THEN THE ASSESSING OFFICER ONLY GIVES EFFECT TO THE ORDER UNDE R SECTION 263 BY RE - COMPUTING THE TOTAL INCOME / TOTAL TAX LIABILITY AND SUCH ORDERS WHERE ASSESSING OFFICER HAS GIVEN EFFECT BY ONLY RE - COMPUTING AS PER ORDER OF THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 IS - 9 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 NOT APPEALABLE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). IN A CASE WHERE THE COMMISSIONER OF INCOME TAX HAS BY INVOKING HIS POWERS UNDER SECTION 263 HAS CANCELLED THE ASSESSMENT AND HAS DIRECTED A FRESH ASSESSMENT, HE WOULD HAVE TO GIVE SPECIFIC DIRECTIONS IN REGARD TO THE METHODOLOGY OF T HE FRESH ASSESSMENT. A FAILURE ON THIS PART BY THE COMMISSIONER OF INCOME TAX WOULD RENDER THE ORDER UNDER SECTION 263 UNSUSTAINABLE. THIS VIEW GETS SUPPORT FROM THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GABRIEL INDIA LTD. (203 ITR 108 ) (BOM.) IF THE ENTIRE ASSESSMENT HAS NOT BEEN CANCELLED AND ONLY A PART OF THE ASSESSMENT ORDER IS TINKERED WITH BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263, IT FALLS UNDER THE CATEGORY OF ENHANCING OR MODIFYING THE ASSESSMENT. THE ENHANCING OR MODIFYING THE ASSESSMENT HAVING BEEN BY THE COMMISSIONER OF INCOME TAX, THE ASSESSING OFFICER IS PRECLUDED FROM APPLYING HIS OPINION TO SUCH ENHANCEMENT OR MODIFICATION AND CONSEQUENTLY THE ORDER GIVING EFFECT BY THE ASSESSING OFFICER IN RESPECT OF SUCH EN HANCEMENT OR MODIFICATION CANNOT BE CHALLENGED IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), INSOFAR AS IT WOULD IN EFFECT BE A CHALLENGE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN RESPECT OF ORDER PASSED UNDER SECTION 263 BY THE COMMI SSIONER OF INCOME TAX. 8. IN SHORT, SHORN OF ALL THE FRILLS AN ORDER GIVING EFFECT TO AN ORDER PASSED UNDER SECTION 263 BY THE COMMISSIONER OF INCOME TAX IS NOT AN APPEALABLE ORDER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) OR THE APPELLATE TRIBUN AL INSOFAR AS WHEN THE COMMISSIONER OF INCOME TAX INVOKES HIS POWERS UNDER SECTION 263 HE IS INVOKING HIS COTERMINOUS POWERS OF THE ASSESSING OFFICER AND IS DOING THE ASSESSMENT IN THE SHOES OF THE ASSESSING OFFICER AFTER EXAMINING OR CAUSING INQUIRY TO B E CONDUCTED AS PROVIDED IN THE PROVISIONS OF SECTION 263. 9. IN THE PRESENT CASE, ADMITTEDLY, THE ORDER UNDER SECTION 263 HAS ONLY MODIFIED THE ASSESSMENT. THE ASSESSMENT ORDER HAS NOT BEEN CANCELLED NOR ANY FRESH ASSESSMENT DIRECTED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263. THIS BEING SO, THE ENTERTAINMENT OF THE APPEAL BY THE COMMISSIONER OF INCOME TAX (APPEALS) ITSELF IS ERRONEOUS AND WITHOUT JURISDICTION. BE THAT AS IT MAY, NO APPEAL AGAINST THE ORDER GIVING EFFECT TO THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 BY THE ASSESSING OFFICER IS MAINTAINABLE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) NOR BEFORE THE APPELLATE TRIBUNAL ALSO AS THIS APPEAL IS NOT AGAINST THE ORDER PASSED UNDER SECTION 263 BY THE COMMIS SIONER OF - 10 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 INCOME TAX. IN THESE CIRCUMSTANCES, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED AS NOT MAINTAINABLE. AS IT IS NOTICED THAT THE IMPUGNED ORDER UNDER APPEAL PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX SUFFERS FROM THE LATCHES AS MENTIONED EARLIER , WE ARE OF THE VIEW THAT, RESPECTFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SMT. SUNITA AJIT PATIL (SUPRA) THE ORDER PASSED UNDER SECTION 263 BY THE PRINCIPAL COMMISSIONER OF INCOME TAX IS UNSUSTAINABLE AND CONSEQUENTLY QUASH THE SAME. 13. WE HAVE DONE THE QUANTIFICATION IN EARLIER PART OF THE ORDER ONLY FOR THE PURPOSE OF PROVIDING AN EXAMPLE AS TO HOW THE ORDER UNDER SECTION 263 WOULD HAVE QUANTIFIED THE DISALLOWANCE OR ENHANCEME NTS OR MODIFICATIONS IF ANY THAT IS REQUIRED TO BE DONE AS PER PROCEDURE PRESCRIBED UNDER SECTION 263 OF THE ACT. THE ORDER UNDER SECTION 263 CANNOT BE VAGUE AND OPEN ENDED AND UN - QUANTIFIED . IT HAS TO BE SPECIFIC AND IT MUST QUANTIFY THE DISALLOWANCES OR THE MODIFICATIONS MORE SPECIFICALLY THE ERROR WHICH HAS CAUSED PREJUDI C E AND THE PROVISIONS UNDER WHICH IT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 14 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING IN THE P RESENCE OF THE PARTIES ON THURSDAY, THE 1 ST DAY OF SEPTEMBER , 2016 AT GOA. SD/ - (GEORGE MATHAN) JUDICIAL MEMBER SD/ - (N. S. SAINI) ACCOUNTANT MEMBER PLACE : PANAJI - GOA DATED : 15 /0 9 /2016 VR/ - - 11 - ITA 9 2 /PAN/2016 A.Y. 2011 - 12 COPY TO : ( 1 ) APPELLANT M/S ALCON DEVELOPERS, SUKERKAR MANSION, FIRST FLOOR, M. G. ROAD, PANAJI GOA ( 2 ) RESPONDENT PRINCIPAL COMMISSIONER OF INCOME TAX , PANAJI, GOA ( 3 ) CIT CONCERNED ( 4 ) CIT(A) CONCERNED ( 5 ) D.R ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, PANAJI BENCH, PANAJI