M/s. Vijay Construction, Nashik V. Commissioner of Income-tax (Central),

ITA 925/PUN/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7346 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-09-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 15-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Search and seizure; Opportunity of being heard; Deemed to accrue or arise in india; Difference of opinion; Assessment record; Change of opinion
• Section: 69C; 143(3); 133A; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.925 AND 926/PUN/2015 [ [ / ASSESSMENT YEARS : 2009-10 AND 2010-11 M/S. VIJAY CONSTRUCTION, 10, SHIVSAGAR SOCIETY, COLLEGE ROAD, THATTE NAGAR, NASHIK. PAN : AAGFV5234M. . / APPELLANT V/S COMMISSIONER OF INCOME TAX (CENTRAL), ROOM NO.116, AYAKAR BHAVAN, TELAGKHEDI ROAD, CIVIL LINES, NAGPUR 440 001. . / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI AVADESH KUMAR / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS FILED BY ASSESSEE ARE EMANATING OUT OF A CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TAX (CENTRAL), NAGPUR DT. 19.03.2015 FOR A.YS. 2009-10 AND 2010-11 PASSED U/S 263 OF THE ACT. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF CONSTRUCTION AND BUILDING DEVELOPMENT. ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME FOR AY 2009-10 ON 29.09.2009 DECLARING TOTAL / DATE OF HEARING : 19.09.2017 / DATE OF PRONOUNCEMENT: 24.10.2017 2 INCOME AT RS.5,69,048/-. A SURVEY ACTION U/S 133A WAS CONDUCTED ON 4.10.2010 AT THE OFFICE PREMISES OF THE ASSESSEE AT PLOT NO 263, MAHATMA NAGAR, NASIK. SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED AT OFFICE PREMISES OF M/S ANANT TECHNOCRATS PVT LTD, NASIK ON 17.9.2010. DURING THE COURSE OF SEARCH CERTAIN INCRIMINATING DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED FROM THE SEARCHED PREMISES AND ACCORDINGLY PROVISIONS OF S.153C OF THE ACT WERE INVOKED AND NOTICE U/S 153C OF THE ACT WAS ISSUED ON 30.07.2012 AND SERVED ON ASSESSEE ON 02.08.2012. ASSESSEE VIDE LETTER DT.06.03.2013 SUBMITTED THAT THE ORIGINAL RETURN OF INCOME FILED BE CONSIDERED AS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C OF THE ACT. THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 153C OF THE ACT VIDE ORDER DT.28.03.2013 AND THE TOTAL INCOME WAS DETERMINED AT RS 8,12,936/- BY MAKING ADDITION OF RS 2,43,888/- TO THE RETURNED INCOME ON ACCOUNT OF UNEXPLAINED EXPENDITURE. THEREAFTER LD.CIT (CENTRAL), NAGPUR CALLED FOR THE ASSESSMENT RECORDS AND ON ITS EXAMINATION, NOTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO HAD FAILED TO TAKE FULL COGNIZANCE OF THE INCRIMINATING MATERIAL RELATED TO THE ASSESSEE IMPOUNDED FROM THE PREMISES OF M/S. VIJAY CONSTRUCTION, NASHIK DURING SURVEY. HE WAS OF THE VIEW THAT FAILURE OF THE AO TO TAKE COGNIZANCE OF THE DOCUMENTS IMPOUNDED AT THE TIME OF SURVEY AND FAILURE TO MAKE NECESSARY INQUIRIES IN THE CIRCUMSTANCES OF THE CASE HAS MADE THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) RWS 153C AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE ACCORDINGLY ISSUED NOTICE ON 31.3.2015 U/S 263 FOR AY 2009-10 AND 2010-11 AND ASKED THE ASSESSEE TO SHOW CAUSE AS TO WHY ORDER SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153C NOT BE PASSED U/S 263 OF THE ACT. IN RESPONSE TO THE NOTICE, ASSESSEE MADE SUBMISSIONS ON MERITS AND AS WELL AS SUBMITTED THAT THE PROVISIONS OF 3 SEC.263 WERE NOT ATTRACTED IN THE PRESENT CASE. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO LD.CIT. LD.CIT VIDE ORDER DT.19.03.2015 HELD THAT THE ORDER PASSED BY AO ON 28.03.2013 FOR A.YS. 2009-10 AND 2010-11 TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND SET ASIDE AND DIRECTED THE AO TO FRAME FRESH ASSESSMENT AS PER HIS OBSERVATIONS MADE THEREIN. AGGRIEVED BY THE ORDER OF LD.CIT, ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS IN ITA NO.925/PUN/2015 FOR A.Y. 2009-10. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) 1, MUMBAI ERRED IN INVOKING PROVISIONS U/S 263 OF THE ACT, ON THE ISSUE WHICH WAS DECIDED BY THE ASSESSING OFFICER AND THEREFORE SUCH ACTION WHICH IS MERELY BASED ON CHANGE OF OPINION IS BAD IN LAW AND VOID AB INITIO. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) 1, MUMBAI ERRED IN HOLDING THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153C ON 28.03.2013 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. ON THE DATE OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE. THE CASE FILE REVEALS THAT THE APPEALS WERE LISTED ON VARIOUS OCCASIONS IN THE PAST BUT THE SAME WAS ADJOURNED AS NONE HAD APPEARED ON BEHALF OF ASSESSEE. THE CASE FILE FURTHER REVEALS THAT THE NOTICE INFORMING THE DATE OF HEARING OF THE APPEAL SENT TO THE ASSESSEE WERE ALSO RETURNED UNDELIVERED BY THE POSTAL AUTHORITIES WITH THE REMARKS LEFT AND THE ASSESSEE HAD ALSO NOT FILED THE CHANGED ADDRESS/CORRECT ADDRESS. WE THEREFORE PROCEED TO DISPOSE OF THE APPEALS EX-PARTE QUA THE ASSESSEE ON THE BASIS OF SUBMISSIONS OF LD DR AND MATERIAL ON RECORD. 4. BEFORE US, LD.D.R. SUBMITTED THAT THOUGH BOTH THE APPEALS OF THE ASSESSEE ARE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (CENTRAL), NAGPUR FOR DIFFERENT ASSESSMENT YEARS BUT SINCE THE ISSUES INVOLVED IN BOTH THE YEARS ARE INTER-CONNECTED, HIS ARGUMENTS WILL ALSO 4 BE COMMON AND THEREFORE BOTH THE APPEALS CAN BE HEARD AND DISPOSED OF TOGETHER. 5. BEFORE US LD DR TOOK US THROUGH THE ORDER OF LD.CIT AND SUBMITTED THAT LD.CIT IN THE ORDER PASSED U/S 263 OF THE ACT HAS NOTED THAT DURING THE COURSE OF SURVEY CONDUCTED ON 4.10.2010 AT THE PREMISES OF VIJAY CONSTRUCTION PAGE 12 OF ANNEXURE-A/1 PARTY G3 AND PAGE NO 16 OF ANNEXURE A/1 PARTY G-5 WERE IMPOUNDED. PAGE 13 OF ANNEXURE A/1 PARTY G3 REVEALED THAT A SUM OF RS. 1 CRORE 5 LAKHS WAS RECEIVED FROM RAM JADHAV IN CASH IN VARIOUS DATES AND INTEREST OF RS.5,85,000/- WAS PAID TO RAM JADHAV ON VARIOUS DATES AND BALANCE INTEREST WAS RS.18,68,460/-. HE ALSO NOTED THAT PAGE 16 OF ANNEXURE A/1 PARTY G/5 REVEALED THAT RS.1,05,00,000/- WAS RECEIVED FROM RAM KAKA. HE NOTED THAT THE AFORESAID DOCUMENTS INDICATE THAT THE ASSESSEE GROUP HAD RECEIVED A SUM OF RS.1.05 CRORES IN CASH FROM SHRI RAM DINKAR JADHAV ON VARIOUS DATES IN FINANCIAL YEAR 2008-09 AND HE WAS PAID A SUM OF RS.5.85 LAKHS IN CASH AS INTEREST ON VARIOUS DATES AND THAT A SUM OF RS.18,68,460/- WAS THE BALANCE INTEREST PAYABLE FOR THE REMAINING PERIOD IN FINANCIAL YEAR 2008-09 AND FOR THE FINANCIAL YEAR 2009-10. LD.CIT NOTED THAT IN THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) RWS 153C (ORDER DATED 28.03.2013), AO HAD ATTRIBUTED THE FINANCIAL TRANSACTION OF LOAN TO SRI PAVAN VIJAY JADAV AS HIS NAME WAS MENTIONED IN THE IMPOUNDED DOCUMENT AND HE ADDED A SUM OF RS.5,85,000/- TO THE TAXABLE INCOME OF PAVAN VIJAY JADHAV AS INTEREST INCOME RECEIVED BUT NOT DISCLOSED. LD.CIT WAS OF THE VIEW THAT SINCE THE MAIN BUSINESS OF THE ASSESSEE WAS CONSTRUCTION AND DEVELOPMENT WHICH REQUIRES FUNDS FROM TIME TO TIME, THE AO OUGHT TO HAVE ADDED A SUM OF RS.10,64,622/- (RS.5,85,000/- PAID AND RS.4,79,622/- PAYABLE) IN THE HANDS OF ASSESSEE TOWARDS INTEREST PAID AND PAYABLE FOR A.Y. 5 2009-10 AND A SUM OF RS.13,88,838/- IN A.Y. 2010-11 TOWARDS INTEREST PAYABLE. CIT HELD THAT FAILURE TO EXAMINE THE ISSUE OF TAXING THE SUM OF RS 5.85 LACS IN PROPER HANDS AND THE TAXABILITY OF THE BALANCE INTEREST OF RS.18,51,784/- WHILE COMPLETING THE ASSESSMENTS HAS RENDERED THE ASSESSMENT ORDERS PASSED FOR THE AY 2009-10 AND 2010-11 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HE ACCORDINGLY SET ASIDE THE ORDERS PASSED U/S 143(3) RWS 153C FOR AY 2009-10 AND AY 2010-11 DATED 28.3.2013 AND DIRECTED THE AO TO VERIFY AND FRAME FRESH ASSESSMENTS IN LINE WITH HIS OBSERVATIONS. HE SUBMITTED THAT IN VIEW OF THE PRESENT FACTS SINCE THE AO HAD NOT MADE THE REQUISITE INQUIRES WHILE PASSING THE ASSESSMENT ORDER. LD.CIT HAD RIGHTLY SET ASIDE THE ASSESSMENT ORDERS FRAMED U/S 143(3) RWS 153C FOR AY 2009-10 AND AY 2010-11. HE THUS SUPPORTED THE ORDER OF CIT. 6. WE HAVE HEARD THE LD.D.R. AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS ABOUT THE INVOKING OF PROVISIONS OF SECTION 263 BY COMMISSIONER OF INCOME TAX. SEC.263(1) OF THE ACT, THE POWERS UNDER WHICH CIT HAS ASSUMED POWER FOR REVISION READS AS UNDER: THE 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 ITO 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. THE READING OF THE ABOVE PROVISIONS MAKES IT VERY CLEAR THAT THE POWER OF SUO MOTU REVISION U/S 263(1) IS IN THE NATURE OF SUPERVISORY JURISDICTION AND THE SAME CAN BE EXERCISED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST. TWO CIRCUMSTANCES MUST EXIST TO ENABLE THE COMMISSIONER TO EXERCISE POWER OF REVISION U/S 263, NAMELY (I) THE 6 ORDER IS ERRONEOUS (II) BY VIRTUE OF BEING ERRONEOUS PREJUDICE HAS BEEN CAUSED TO THE INTERESTS OF THE REVENUE. HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO LTD (SUPRA) HAS HELD THAT CIT HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE ITO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUERECOURSE CANNOT BE HAD TO SEC. 263(1). IT WAS FURTHER HELD THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE AO; 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 CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. 7. IN THE CASE OF CIT VS. GABRIEL INDIA LTD (SUPRA) THE HONBLE BOMBAY HIGH COURT HAS HELD AS UNDER: AN ORDER CANNOT BE TERMED AS ERRONEOUS UNLESS IT IS NOT IN ACCORDANCE WITH LAW. IF AN ITO ACTING IN ACCORDANCE WITH LAW MAKES CERTAIN ASSESSMENT, THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE ACCORDING TO HIM THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. THIS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION OF JUDGMENT OF THE COMMISSIONER FOR THAT OF THE ITO, WHO PASSED THE ORDER, UNLESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALISED WHERE ITO WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME ESTIMATES HIMSELF. THE COMMISSIONER, ON PERUSAL OF THE RECORDS, MAY BE OF THE OPINION THAT THE ESTIMATE MADE BY THE OFFICER CONCERNED WAS ON THE LOWER SIDE AND, LEFT TO THE COMMISSIONER, HE WOULD HAVE ESTIMATED THE INCOME AT A HIGHER FIGURE THAN THE ONE DETERMINED BY THE ITO. THAT WOULD NOT VEST THE COMMISSIONER WITH POWER TO RE-EXAMINE THE ACCOUNTS AND DETERMINE THE INCOME HIMSELF AT A HIGHER FIGURE. IT IS BECAUSE THE ITO HAS EXERCISED THE QUASI-JUDICIAL POWER VESTED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. IT MAY BE SAID IN SUCH A CASE THAT IN THE OPINION OF THE COMMISSIONER THE ORDER IN QUESTION IS PREJUDICIAL TO THE INTEREST OF THE 7 REVENUE. BUT THAT BY ITSELF WILL NOT BE ENOUGH TO VEST THE COMMISSIONER WITH THE POWER OF SUO MOTU REVISION BECAUSE THE FIRST REQUIREMENT, NAMELY, THE ORDER IS ERRONEOUS, IS ABSENT. SIMILARLY IF AN ORDER IS ERRONEOUS BUT NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEN ALSO THE POWER OF SUO MOTU REVISION CANNOT BE EXERCISED. ANY AND EVERY ERRONEOUS ORDER CANNOT BE SUBJECT-MATTER OF REVISION BECAUSE THE SECOND REQUIREMENT ALSO MUST BE FULFILLED. 8. FURTHER, IT IS A SETTLED LAW THAT ERRONEOUS IN THE CONTEXT OF SEC.263 OF THE ACT MEANS WHAT IS CONTRARY TO LAW AND THAT THE POWER CANNOT BE EXERCISED UNLESS THE CIT IS ABLE TO ESTABLISH THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER REVISIONAL POWER CANNOT BE EXERCISED FOR DIRECTING A FULLER INQUIRY TO FIND OUT IF THE VIEW TAKEN IS ERRONEOUS WHEN A VIEW HAS ALREADY BEEN TAKEN AFTER INQUIRY. WE FURTHER FIND THAT HONBLE DELHI HIGH COURT IN THE CASE OF ITO VS. DG HOUSING PROJECTS LTD IN ITA NO.267 OF 2013 DT.09.07.2013 REPORTED IN (2012) 343 ITR 329 (DEL) HAS OBSERVED AS UNDER: 16. THUS, IN CASES OF WRONG OPINION OR FINDING ON MERITS, THE CIT HAS TO COME TO THE CONCLUSION AND HIMSELF DECIDE THAT THE ORDER IS ERRONEOUS, BY CONDUCTING NECESSARY ENQUIRY, IF REQUIRED AND NECESSARY, BEFORE THE ORDER UNDER SECTION 263 IS PASSED. IN SUCH CASES, THE ORDER OF THE ASSESSING OFFICER WILL BE ERRONEOUS BECAUSE THE ORDER PASSED IS NOT SUSTAINABLE IN LAW AND THE SAID FINDING MUST BE RECORDED. CIT CANNOT REMAND THE MATTER TO THE ASSESSING OFFICER TO DECIDE WHETHER THE FINDINGS RECORDED ARE ERRONEOUS. IN CASES WHERE THERE IS INADEQUATE ENQUIRY BUT NOT LACK OF ENQUIRY, AGAIN THE CIT MUST GIVE AND RECORD A FINDING THAT THE ORDER/INQUIRY MADE IS ERRONEOUS. THIS CAN HAPPEN IF AN ENQUIRY AND VERIFICATION IS CONDUCTED BY THE CIT AND HE IS ABLE TO ESTABLISH AND SHOW THE ERROR OR MISTAKE MADE BY THE ASSESSING OFFICER, MAKING THE ORDER UNSUSTAINABLE IN LAW. IN SOME CASES POSSIBLY THOUGH RARELY, THE CIT CAN ALSO SHOW AND ESTABLISH THAT THE FACTS ON RECORD OR INFERENCES DRAWN FROM FACTS ON RECORD PER SE JUSTIFIED AND MANDATED FURTHER ENQUIRY OR INVESTIGATION BUT THE ASSESSING OFFICER HAD ERRONEOUSLY NOT UNDERTAKEN THE SAME. HOWEVER, THE SAID FINDING MUST BE CLEAR, UNAMBIGUOUS AND NOT DEBATABLE. THE MATTER CANNOT BE REMITTED FOR A FRESH DECISION TO THE ASSESSING OFFICER TO CONDUCT FURTHER ENQUIRIES WITHOUT A FINDING THAT THE ORDER IS ERRONEOUS. FINDING THAT THE ORDER IS ERRONEOUS IS A CONDITION OR REQUIREMENT WHICH MUST BE SATISFIED FOR EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT. IN SUCH MATTERS, TO REMAND THE MATTER/ISSUE TO THE ASSESSING OFFICER WOULD IMPLY AND MEAN THE CIT HAS NOT EXAMINED AND DECIDED WHETHER OR NOT THE ORDER IS 8 ERRONEOUS BUT HAS DIRECTED THE ASSESSING OFFICER TO DECIDE THE ASPECT/QUESTION. 17. THIS DISTINCTION MUST BE KEPT IN MIND BY THE CIT WHILE EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXERCISE OF JURISDICTION UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGED INADEQUATE INVESTIGATION, IT WILL BE DIFFICULT TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDUCTING VERIFICATION/INQUIRY. THE ORDER OF THE ASSESSING OFFICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERATION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORDER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OFFICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECOME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORDING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONAL PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUSION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. IN THE PRESENT CASE, WE FIND THAT LD.CIT WHILE CONCLUDING THAT THE ASSESSMENT ORDER FRAMED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, IN PARA 5 HAS NOTED AS UNDER : 5. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE AO, WHILE MAKING ASSESSMENT IN THIS CASE, OUGHT TO HAVE ADDED A SUM OF RS.5,85,000/- EITHER ON SUBSTANTIVE BASIS OR ON PROTECTIVE BASIS TOWARDS DEEMED INCOME BEING INTEREST PAID BY THE ASSESSEE FOR THE A.Y. 2009-10. FURTHER, WITH REGARD TO THE ISSUE OF ADDITION ON ACCOUNT OF INTEREST PAYABLE OF RS.18,51,784/- (RS.4,79,622/- IN THE A.Y. 2009-10 AND RS.13,88,838/- IN A.Y. 2010-11), THE ISSUE NEEDS FURTHER VERIFICATION TO ASCERTAIN WHETHER THIS INTEREST WAS PAID LATER AND IF SO, WHEN THE SAME WAS PAID SO THAT THE SAME CAN BE BROUGHT TO TAX IN THAT YEAR AS DEEMED INCOME U/S 69C. FAILURE TO EXAMINE THE ISSUE OF TAXING THE SUM OF RS.5.85 LAKHS IN PROPER HANDS AND II) THE TAXABILITY OF THE BALANCE INTEREST OF RS.18,51,784/- WHILE COMPLETING ASSESSMENTS HAS RENDERED THE ASSESSMENT ORDERS PASSED FOR THE A.Y. 2009-10 AND 2010-11 ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 9. THE PERUSAL OF THE AFORESAID FINDING OF LD.CIT IN THE LIGHT OF THE DECISIONS CITED HEREINABOVE AND MORE SPECIFICALLY THE DECISION IN THE CASE OF DG HOUSING PROJECTS (SUPRA) REVEALS THAT LD.CIT HAS NOT GIVEN ANY CONCLUSIVE FINDING ABOUT THE ERROR COMMITTED BY AO AND THE UNCERTAINTY IN THE MIND OF LD.CIT IS REVEALED FROM HIS OBSERVATION WITH RESPECT TO THE ADDITION OF RS.5.85 LAKHS IN AY 2009-10 WHEREIN HE HAS 9 OBSERVED THAT THE AMOUNT OUGHT TO HAVE ADDED A SUM OF RS.5,85,000/- EITHER ON SUBSTANTIVE BASIS OR ON PROTECTIVE BASIS TOWARDS DEEMED INCOME BEING INTEREST PAID BY THE ASSESSEE FOR AY 2009-10. SIMILARLY, WITH RESPECT TO THE ADDITION ON ACCOUNT OF INTEREST PAYABLE OF RS.18,51,784/- FOR AY 2010-11, CIT HAS OBSERVED THAT THE ISSUE NEEDS FURTHER VERIFICATION TO ASCERTAIN WHETHER THIS INTEREST WAS PAID LATER AND IF SO, WHEN THE SAME WAS PAID SO THAT THE SAME CAN BE BROUGHT TO TAX IN THAT YEAR AS DEEMED INCOME U/S 69C. THE AFORESAID OBSERVATIONS OF THE CIT SHOWS THAT THE CIT HAS NOT REACHED A CLEAR AND CONCLUSIVE TO SHOW AS TO HOW THE ORDER OF AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS HE HAS STATED THAT THE AMOUNT OF INTEREST IN AY 2009-10 SHOULD HAVE BEEN ADDED EITHER ON SUBSTANTIVE BASIS OR ON PROTECTIVE BASIS. SIMILARLY FOR AY 2010-11 HE HAS DIRECTED THE AO TO VERIFY AS TO WHETHER THE INTEREST WAS PAID IN LATER YEARS AND IF PAID WHEN IT WAS PAID SO THAT THE SAME CAN BE BROUGHT TO TAX IN THAT YEAR U/S 69C OF THE ACT. WE ARE OF THE VIEW THAT TO INVOKE PROVISION U/S 263 OF THE ACT, LD.CIT HAS TO BE UNMISTAKABLY SHOW THAT THE ORDER OF THE AO IS UNSUSTAINABLE AND THAT LD.CIT CANNOT INITIATE REVISIONARY PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRIES AND FOR THIS PROPOSITION WE DRAW SUPPORT FROM THE DECISION OF HONBLE AP HIGH COURT IN THE CASE OF SPECTRA SHARES & SCRIPS PVT. LTD VS CIT REPORTED IN (2013) 354 ITR 35 WHEREIN THE HONBLE HIGH COURT HAS OBSERVED THAT THE COMMISSIONER CANNOT INITIATE PROCEEDINGS WITH A VIEW TO START FISHING AND ROVING INQUIRES IN MATTERS OR ORDERS WHICH ARE ALREADY CONCLUDED. THE DEPARTMENT CANNOT BE PERMITTED TO BEGIN A FRESH LITIGATION BECAUSE OF NEW VIEWS THEY ENTERTAIN ON THE FACTS OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE THE INFERENCE OR PROPER INFERENCE EITHER ON THE FACTS DISCLOSED OR THE WEIGHT OF THE CIRCUMSTANCE. 10 10. IN VIEW OF THE AFORESAID FACTS, SEEN IN THE LIGHT OF THE DECISIONS CITED HEREIN ABOVE, WE ARE OF THE VIEW THAT IN THE PRESENT CASE, LD.CIT WAS NOT JUSTIFIED IN INVOKING THE REVISIONARY POWERS U/S 263 OF THE ACT. WE THEREFORE SET ASIDE THE ORDERS PASSED BY CIT U/S 263 OF THE ACT FOR AY 2009-10 AND AY 2010-11. THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR AY 2009-10 AND AY 2010-11 ARE ALLOWED ORDER PRONOUNCED ON 24 TH DAY OF OCTOBER, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 24 TH OCTOBER, 2017. YAMINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT (CENTRAL), NAGPUR, 4. THE ACIT, CC-2, NASHIK. 5. , , / DR, ITAT, B PUNE; 6. [ / GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE