Sri Sudarshan Prasad Bagaria, Kolkata V. CIT, -XV, KOLKATA, Kolkata

ITA 927/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91929 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 14-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR SINGH
• Assessee Lawyers: R N BAJORIA; MIRAJ D. SHAH
• Keywords: Revision of order; Principle of natural justice; Initiation of penalty proceedings; Difference of opinion; Capital receipt; Reason to believe; Revenue expenditure; Capital expenditure
• Section: 147; 148; 263; 143(3); 142(1)

Judgement Text

I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 1 OF 33 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 922 / KOL / 20 14 ASSESSMENT YEAR : 2009 - 2010 DHANRAJ BAGARIA,............................... ................ ..... .APP ELL ANT 165, CHITTARANJAN AVENUE, KOLKATA - 700 007 [PAN : ADXPB 5377 K] - VS. - COMMISSIONER OF INCOME TAX,......................... . RESPONDENT KOLKATA - XV, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 069 & I. T.A. NO. 923 / KOL / 20 14 ASSESSMENT YEAR : 2009 - 2010 KRISHNA PRASAD BAGARIA,......................................... ..... .APP ELL ANT 165, CHITTARANJAN AVENUE, KOLKATA - 700 007 [PAN : ADZPB 4942 N] - VS. - COMMISSIONER OF INCOME TAX,............... .......... .... . RESPONDENT KOLKATA - XV, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 069 & I.T.A. NO. 927 / KOL / 20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 SRI SUDERSHAN PRASAD BAGARIA,.. ...... .... ... ........... .. .. ... .. .APP ELL ANT 3A, HARE STREET, ROOM NO. 303, KOLKATA - 700 001 [PAN : ADFBA 4376 A] - VS. - COMMISSIONER OF INCOME TAX, ........ ................. ... . RESPONDENT KOLKATA - XV, KOLKATA , 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 069 I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 2 OF 33 & I .T.A. NO. 928 / KOL / 20 14 ASSESSMENT YEAR : 2009 - 2010 RANGLAL BAGARIA, HUF, ................... .......................... .... ..... .APP ELL ANT 3A, HARE STREET, ROOM NO. 303, KOLKATA - 700 001 [PAN : AADHR 8942 M] - VS. - COMMISSIONER OF INCOME TAX,......................... . ..... .. . RESPOND ENT KOLKATA - XV, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 069 APPEARANCES BY: SHRI R.N. BAJORIA , A.R. AND SHRI MIRAJ D. SHAH , A.R., FOR THE ASSESSEE SHRI AJAY KUMAR SINGH, CIT, D.R. , FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MAY 1 2 , 2 0 1 5 DATE OF PRONOUNCING THE ORDER : MAY 28 , 201 5 O R D E R PER P.K. BANSAL : ALL THESE APPEALS INVOLVED COMMON ISSUES CHALLENGING THE VALIDITY OF THE PROCEEDINGS INITIATED UNDER SECTION 263 THEREFORE, ALL THESE APPEALS ARE DECIDED BY THIS COMMON OR DER. 2. BOTH THE PARTIES AGREED THAT ALL THESE APPEALS BE DISPOSED OF ON THE BASIS OF THE FACTS INVOLVED IN THE CASE OF SUDERSHAN PRASAD BAGARIA IN ITA NO. 927/KOL/2014 AS THE ISSUES INVOLVED IN ALL THESE APPEALS ARE COMMON, EVEN THE GROUNDS NO. 1 TO 7 IN ALL THE APPEALS ARE COMMON EXCEPT JURISDICTION UNDER SECTION 263 HAS BEEN EXERCISED BY THE CIT IN RESPECT OF THE ASSESSMENT COMPLETED UNDER SECTION 143(3) NOT UNDER SECTION 147 READ WITH SECTION 143(3) IN ALL THE OTHER CASES EXCEPT IN THE CASE OF SUDERSHA N PRASAD BAGARIA , WHICH READ AS UNDER: - (1) FOR THAT IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, INITIATION OF PROCEEDINGS U/S 263 OF THE INCOME TAX ACT, 1961 WAS WITHOUT JURISDICTION AND THE CIT ERRED IN HOLDING THAT THE ASSESSMENT ORDER WAS ERRONE OUS AN PREJUDICIAL TO THE INTEREST OF REVENUE AND IN SETTING IT ASIDE FOR FRESH ASSESSMENT . I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 3 OF 33 2. FOR THAT NONE OF THE REASONS STATED BY THE CIT FOR TREATING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IS VALID OR LEGAL AND NO NE OF THE DECISIONS RELIED UPON BY HIM IS APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. 3. FOR THAT THE ASSESSMENT UNDER SECTIONS 1471143(3) WAS MADE AFTER DUE ENQUIRY AND EXAMINATION OF THE FACTS AS WELL AS THE LAW AND THE CIT WAS NOT JUSTIFIED IN HOLDING TO THE CONTRARY. 4. FOR THAT FURTHER AND IN ANY EVENT AND WITHOUT PREJUDICE TO THE AFORESAID THE PROCEEDINGS U/S 263 OF THE INCOME TAX ACT 1961 ARE VITIATED FOR WANT OF PROPER NOTICE AND ADEQUATE OPPORTUNITY AND THE ORDER PASSED ON THE BASIS OF SUCH NOTICE IS BAD IN LAW. 5. FOR THAT FURTHER AND IN ANY EVENT AND WITHOUT PREJUDICE TO THE AFORESAID THE PURPORTED FINDINGS OF THE CIT AS REGARDS THE EXTENT AND NATURE OF OWNERSHIP OF THE APPELLANT IN THE DELHI PROPERTY ARE ARBITRARY, ER RONEOUS, UNREASONABLE AND PERVERSE AND HE ERRED IN DIRECTING ENQUIRY IN THAT BEHALF. 6. FOR THAT THE CIT ERRED IN HOLDING THAT THE A O HAD NOT EXAMINED THE TAXABILITY OF THE CORRECT AMOUNT RECEIVED FROM DELHI ADMINISTRATION. 7. FOR THAT THE CIT ERRED I N HOLDING THAT THE AMOUNT RECEIVED FROM DELHI ADMINISTRATION WAS FAIR RENT OR REVENUE RECEIPT TAXABLE AS INCOME FROM OTHER SOURCES OR WAS NOT DAMAGES/MESNE PROFITS OR THAT THE A O HAD NOT MADE THE REQUISITE ENQUIRY/EXAMINATION. 3. BRIEF FACTS OF THE CASE A RE THAT IN THE CASE OF SUDERSHAN PRASAD BAGARIA THE ASSESSEE SUBMITTED HIS RETURN OF INCOME ON 26.03.2010 ALONG WITH THE COVERING LETTER DATED 22.03.2010 AT AN INCOME OF RS.40,34,911/ - . IN THE RETURN AS WELL AS IN THE COVERING LETTER THE ASSESSEE HAD SHOWN A SUM OF RS.6,09,00,000/ - RECEIVED AS DAMAGES FROM DELHI ADMINISTRATION AS CAPITAL RECEIPT BEING 1/4 TH SHARE OF THE TOTAL DAMAGES AWARDED BY THE LD. ARBITRATOR MS. LEILA SETH, RETIRED CHIEF JUSTICE, APPOINTED BY THE HON BLE DELHI HIGH COURT. THE ASSESSME NT WAS COMPLETED UNDER SECTION 143(1) ON 20.03.2011. WHILE IN THE CASE OF RANGLAL BAGARIA, HUF, DHANRAJ BAGARIA , THE ASSESSMENT HAS BEEN COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 28.12.2011. IN THE CASE OF KRISHNA I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 4 OF 33 PRADSAD BAGARIA, ASSESSMENT UNDER SE CTION 143(3) CO MPLET ED VIDE ORDER DATED 27.12.2011. SUBSEQUENTLY A NOTICE UNDER SECTION 148 DATED 07.04.2011 WAS ISSUED INITIATING PROCEEDINGS UNDER SECTION 147 IN THE CASE OF SUDERSHAN PRASAD BAGARIA ON THE BASIS OF THE FOLLOWING REASONS RECORDED: - 'REAS ON FOR ISSUE O F NOTICE U / S 148 OF THE I . T . ACT. 1961 IT APPEARS FROM THE RECORD THAT DELHI ADMINISTRATION INITIATED AN ACQUISITION PROCEEDINGS IN RESPECT OF HOUSE PROPERTY AT 3, TILAK MARG, NEW DELHI, IN WHICH THE ASSESSEE HAD 1/4 TH SHARE. THE SAID ACQUI SITION PROCEEDING WAS QUASHED BY THE DELHI HIGH COURT. APPEAL WAS FILED BEFORE THE DIVISIONAL BENCH, DELHI HIGH COURT. BY AN INTERIM ORDER, THE HON BLE HIGH COURT (DIVISIONAL BENCH) ORDERED DELHI ADMINISTRATION TO PAY RS. 4, 00, 00, 0001 - (RS . FOUR CRORES) WHICH THE CO - OWNERS WERE ALLOWED TO WITHDRAW. FINALLY THE DIVISIONAL BENCH OF THE HON'BLE DELHI HIGH COURT ALSO QUASHED THE ACQUISITION PROCEEDINGS, AND AN ARBITRATOR WAS APPOINTED TO FINALISE THE MATTER REGARDING DAMAGES. THE MATTER ULTIMATELY WENT TO TH E SUPREME COURT WHO, IN THE F Y 2004 - 05 (ASST. YR.2005 - 06) UPHELD THE DECISION OF THE HON'BLE DELHI HIGH COURT. THE ARBITRATOR FINALIZED THE DAMAGES AT RS.24.36 CRORES IN WHICH ASSESSEE'S SHARES IS RS.6.09 CRORES. ASSESSEE GOT THE DAMAGES IN THE FY 2008 - 0 9 RELEVANT TO THE A.Y2009 - 10. A SUM OF RS. 1 CRORE OUT OF DAMAGES HAS ALREADY BEEN TAXED IN THE ASST. YR. 2005 - 06. THE BALANCE AMOUNT I.E. R S. 5. 09 CRORES IS TO B E TAXED IN THE - A. Y 2009 - 1 O. ON PERUSAL OF THE RETURN FILED FOR THE ASST. YR. 2009 - 00, IT A PPEARS THAT THE ASSESSEE DID NOT SHOW THIS INCOME. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY RS.5.09 CRORES WITHIN THE MEANING IN SECTION 147 OF THE I . T . ACT 1961 . ' 4. IN RESPONSE TO THE NOTICE U / S.148 SHRI SUDERSHAN PRASAD BAGARIA FILED HIS REPLY DTD.12.04.2011 ON 13.04.2011 AND REQUESTED TO TREAT THE RETURN ALREADY FILED AS A RETURN U / S.14 7 ALSO. NOTICES U / S. 143(2) & 142(1) D ATED 13.06.2011 WERE RECEIVED FROM THE ACIT, CIRCLE - 43, KOLKATA, IN RESPONSE TO WHICH REPLY DTD.14.07.2011 WAS FILED BY THE A SSESSEE ON 15.07.2011. THEREAFTER A NOTICE U / S. 142(1) D ATED 25.08.2011 WAS ISSUED BY THE ACIT, CIRCLE - 43, KOLKATA, REQUIRING SEVERAL DETAILS AND DOCUMENTS WHICH WAS COMPLIED WITH BY TH E ASSESSEE BY HIS LETTER D ATED 15.1 0.2011 FILED ON 17.10.2011. THEREAFTER FRESH NOTICE U / S.142(1) DTD.24.10.2011 WAS RECEIVED FROM THE JCIT, RANGE - 43, KOLKATA, REQUIRING FURTHER DETAILS AND EVIDENCES WHICH WERE ALSO COMPLIED WITH BY THE A SSESSEE BY HIS LETTER D ATED 08.11.20 11 FILED ON 09.11.2011 AND LETTERS D ATED 22.11.2011 & D ATED 23.11.2011 FILED ON 24.11.2011. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 5 OF 33 5. IN THE COURSE OF HEARING , ONE OF THE QUERIES RAISED WAS WITH REFERENCE TO THE DAMAGES RECEIVED BY THE ASSESSEE AMOUNTING TO RS.6.09 CRORES AND SHARE OF THE ASSESSEE, IN RESPONSE TO WHICH DETAILED SUBMISSIONS WERE MADE BY THE A SSESSEE BY HIS LETTER DATED 09.12.2011 IN WHICH IT WAS SUBMITTED THAT THE DAMAGES RECEIVED FROM THE DELHI ADMINISTRATION WERE RS.23,79,52,734/ - AS PER PARAGRAPH 40 OF ARBITRATOR'S AW ARD AND BALANCE RS.56,47,265 . 76 WAS TOWARDS INTEREST ETC. IT WAS REITERATED THAT THE APPELLANT'S 1 /4 TH SHARE OF DAMAGES OF RS.5.94 CRORES WAS CAPITAL RECEIPT AND BALANCE RS.14.12 LACS WAS OFFERED FOR TAXATION BY LETTER DTD.21.12.2011 WITHOUT PREJUDICE TO T HE CONTENTION THAT THE SAID AMOUNT WAS ALSO PART OF DAMAGES AND NOT TAXABLE. COPIES OF ARBITRATOR'S ORDER AND ORDERS OF DELHI HIGH COURT AND SUPREME COURT WERE ALSO FILED. AFTER CONSIDERING THE EXPLANATION AND SEVERAL JUDICIAL DECISIONS, THE JCIT ACCEPTED THE CONTENTION OF THE A SSESSEE WITH REGARD TO RS.5.94 CRORES BUT TREATED RS.14,11,816/ - AS REVENUE RECEIPT THOUGH NO PENALTY PROCEEDING WAS INITIATED BY THE JCIT AS DISCUSSED IN PARA - 16 (6) & (7) OF THE ASSESSMENT ORDER. THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 WAS COMPLETED AFTER SEVERAL HEARINGS AND AFTER DISCUSSING THE POINTS INVOLVED AT LENGTH . SIMILAR TYPES OF ENQUIRIES WERE MADE FOR SHARE IN COMPENSATION IN THE CASE OF OTHER ASSESSES WHILE MAKING ASSESSMENT UNDER SECTION 143. IN THOSE CASE ALSO, ASSESSING OFFICER ACCEPTED THE SAID AMOUNT AS CAPITAL RECEIPT WHILE COMPLETING ASSESSMENT UNDER SECTION 143(3). 6. SUBSEQUENTLY CIT INVOKED JURISDICTION UNDER SECTION 263 AND ISSUED SHOW - CAUSE NOTICE TO THE ASSESSEE DATED 13.03.2014 WHICH STATE S AS UNDER: - 'YOU HAVE SHOWN YOUR 1/4 TH SHARE AS CO - OWNER OF PROPERTY AT 3, TILAK MARG, NEW DELHI. HOWEVER, AS PER COPY OF AWARD DATED 30.09.2006 PASSED BY HON 'BLE JUSTICE LEILA SETH (RETD.), THE ARBITRATOR, THERE ARE THREE CLAIMANTS NAMELY SHRI DHANRAJ B AGARIA, SHRI KRISHNA PARSHAD BAGARIA AND SHRI SUDHARSHAN PARSHAD BAGARIA. THUS YOU SHOULD HAVE SHOWN YOUR SHARE AS 1/3RD INSTEAD OF 1/4 TH . THE ASSESSING OFFICER NEITHER RAISED ANY QUERY NOR TOOK ANY COGNIZANCE OF THIS FACT DETERMINING YOUR SHARE OF INCOME AND RECEIPT OF MONEY AS AWARD. THE ASSESSING OFFICER HAS ACCEPTED YOUR SHARE AS 1/4 TH INSTEAD OF 1 /3 RD WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE . (II) YOU HAVE CLAIMED YOUR SHARE OF FAIR RENT AS EXEMPTED BEING THE MESNE PROFITS. H OWEVER, THE PERUSAL OF AWARD DATED 30.09.2006 (SUPRA) CLEARLY REVEALS THAT THE SAID PAYMENTS ARE NOT MESNE PROFITS BUT FAIR RENT (REFER PARA 22 OF THE SAID AWARD). THE SAID AWARD HAS BEEN ACCEPTED BY YOU. EVEN IN PARA 40 OF THE SAID AWARD, IT HAS BEEN CLEA RLY MENTIONED THAT THE RESPONDENTS SHALL PAY TO THE CLAIMANTS AN AMOUNT FOR USE AND OCCUPATION OF THE PREMISES. THE ASSESSING OFFICER I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 6 OF 33 HAS TAKEN THE VIEW WHICH IS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. (III) YOU OWN TWO R ESIDENTIAL PROPERTIES NAMELY 18G, ALIPORE ROAD AND 8/4B ALIPORE PARK ROAD, KOLKATA. YOU ARE RESIDING AT 165, CHITTARANJAN AVENUE, KOLKATA. THEREFORE, THE RENTAL INCOME U/S 23(1) OF INCOME TAX ACT, 1961 SHOULD HAVE BEEN ASSESSED IN RESPECT OF THESE PROPERTI ES WHICH HAVE NOT BEEN DONE BY THE ASSESSING OFFICER. (IV) THE PERUSAL OF PROFIT & LOSS ACCOUNT OF COUNTRY AGENCIES (YOUR PROPRIETORSHIP CONCERN) SHOWS THAT YOUR TURNOVER EXCEEDED R S .40,00, 000 / - DURING THE YEAR UNDER CONSIDERATION AS UNDER - SALES ........ .....................................................RS.39,86,725.08 B ILL DISCOUNTING CHARGES ....................RS. 1,66,575.00 FURTHER AS PER T HE COPY OF SALES TAX RETURNS AVAILABLE ON RECORD, THE NET SALES (EXCLUSIVE OF TAXES) COMES TO RS. 40,86, 416/ - THOUGH THE TAXES ARE ALWAYS PART OF TURNOVER FOR THE PURPOSE OF DETERMINING THE QUANTUM OF TURNOVER. THUS, THERE IS CONCEALMENT OF SALES AND VIOLATION OF PROVISION OF SECTION 44AB OF 1NCOME TAX ACT, 1961. THEREFORE, YOU WERE UNDER OBLIGATION TO GET YOUR A CCOUNTS AUDITED WHICH YOU HAVE NOT GOT IT DONE. THE ASSESSING OFFICER NEITHER RAISED ANY QUERY NOR TOOK ANY COGNIZANCE. THE ASSESSING OFFICER HAS ACCEPTED YOUR SALES AT LESSER AMOUNT & ACCEPTED UN - AUDITED ACCOUNTS AND DID NOT INITIATE PENALTY PROCEEDINGS U /S 271 B THEREBY MAKING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. (V) YOU HAVE MADE WITHIN - STATE SALES TO M / S RANGDEV HOLDINGS PVT. LTD. 1N WHICH YOU ARE AN INTERESTED PERSON AND THE TRANSACTIONS FALL IN THE PROVISI ONS OF SECTION 40A(2)(B) OF INCOME TAX ACT, 1961. THE TRANSACTIONS HAVE NOT BEEN EVALUATED AS PER PROVISION OF SECTION 40A(2)(B) OF INCOME TAX A C T, 1961 BY THE ASSESSING OFFICER. THE ASSESSING OFFICER NEITHER RAISED ANY QUERY AND NOR TOOK ANY COGNIZANCE OF THIS FACT DURING ASSESSMENT PROCEEDINGS. (VI) YOU ARE MAINTAINING HUGE BANK BALANCES IN THE INDIVIDUAL BANK ACCOUNT AND MAKING HUGE PAYMENTS AND RECEIPTS FROM THIS ACCOUNT. YOU HAVE NOT MAINTAINED ANY BOOKS OF ACCOUNTS IN RESPECT OF THESE BANK DEPOSITS. THE PERUSAL OF BANK STATEMENT REVEALS THAT THERE IS NO NARRATION TO EACH DEBIT AND CREDIT ENTRY IN THE SAID BANK ACCOUNTS STATEMENTS. THUS IT CAN SAFELY BE HELD THAT THE ASSESSING OFFICER HAS MERELY PLACED THESE STATEMENTS ON RECORD RATHER THAN HAVE A CLOS E AND DEEP LOOK IN TO THE NATURE OF TRANSACTIONS IN THESE BANK STATEMENTS. FOR EXAMPLE, FROM THE BANK ACCOUNT NO. 336 - 1 - 011828 - 7, HE HAS TRANSFERRED FUNDS OF RS. 3,12, 50, 000/ - 10 MODY SEVA TRUST BY DD. THIS AMOUNT HAS NOT BEEN RECEIVED BACK IN THE SAID AC COUNT DURING THE YEAR AND IT DOES NOT APPEAR AS INVESTMENT/DEBTORS IN THE BALANCE SHEET OF THE ASSESSEE. THE ACCEPTANCE OF THE ACCOUNTS WITHOUT PROPER EXAMINATION AND OBSERVATIONS SHOW THAT THE ASSESSING OFFICER PASSED THE ORDER WITHOUT MAKING DUE ENQUIRIE S AND INVESTIGATION OF THE HUGE AMOUNTS INVOLVED MAKING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. (VII) THE SHARES TRANSACTIONS BY THE ASSESSEE HAS BEEN ALLOWED WITHOUT ANY THIRD PARTY VERIFICATION WITHOUT MAKING DU E ENQUIRIES AND INVESTIGATION OF THE HUGE I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 7 OF 33 AMOUNTS INVOLVED MAKING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. (VIII) YOU HAVE TRANSFERRED AN AMOUNT OF RS.11, 00, 000/ - TO YOUR WIFE AT A VERY NOMINAL INTEREST. THE ASSE SSING OFFICER HAS NOT EXAMINED THE APPLICATION OF SECTION 64 OF INCOME TAX ACT, 1961 MAKING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. (IX) THE ASSE S SING OFFICER DID NOT INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271 (1 )(C) OF INCOME TAX ACT DESPITE THE FACT THAT YOU HAVE NOT DECLARED INTEREST INCOME OF RS. 14,11,816/ - FROM DELHI ADMINISTRATION. THE A SSESSING O FFICER ALLOWED THE SAME WITHOUT VERIFYING THE GENUINENESS OF THE TRANSACTION. 7. IN REPLY THERETO, THE A SSESSEE SUBMITTED VIDE HIS LETTER DATED 24.03.2014 AS UNDER: - IN RESPONSE TO THE SHOW - CAUSE NOTICE I STATE THAT THE ASSESSMENT WAS COMPLETED BY THE A. O . AFTER DETAILED SCRUTINY AND AFTER EXAMINATION OF THE NECESSARY DETAILS, BANK STATEMENTS AND OTHER E VIDENCES, DOCUMENTS & CONSIDERING JUDICIAL DECISIONS. THEREFORE ASSESSMENT SO MADE IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THE PROVISIONS OF SEC. 263 ARE NOT ATTRACTED IN RESPECT OF THIS ASSESSMENT. IN THIS CONNECTION I WOULD LIKE T O INVITE YOUR KIND ATTENTION THAT THE POWER ULS.263 CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE COMMITTED BY THE A. A. EVERY ERRONEOUS ORDER CANNOT BE DISTURBED ULS.263. THE POWER OF SUO- MOTU REVISION U / S. 263( 1 ) OF THE I. T. ACT, 1961 IS IN THE NATURE OF SUPERVISORY JURISDICTION AND CAN BE EXERCISED ONLY IF CIRCUMSTANCES SPECIFIED THEREIN EXIST - VIDE OBSERVATIONS OF THE BOMBAY HIGH COURT - 203 - ITR - I08 (BOM) IN THE CASE OF GABRIEL INDIA LTD. YOUR PETITIONER STATES THAT IT IS WELL SETTLED I N LAW THAT THE POWERS U/S 263 OF THE INCOME TAX ACT 1961 CAN BE EXERCISED ONLY WHEN THE ASSESSMENT ORDER IS 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE' AS WELL AS ERRONEOUS ORDER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICE R CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, 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 UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. THIS VIEW HAS BEEN WELL SETTLED BY THE APEX COURT IN THE CASES O F MALABAR INDUSTR IAL CO. LTD. VS - . COMMISSIONER OF INCOME TAX 243 - ITR - 83, COMMISSIONER OF INCOME TAX (CENTRAL), LUDHIANA - VS - MAX INDIA LTD 295 - ITR - 282, COMMISSIONER OF INCOME TAX', SHIMLA - VS - GREENWORLD CORPORATION 314 - ITR - 81.THE LEARNED COMMISSIONER OF INCOME TAX EXE RCISED HIS POWERS U / S 263 OF THE IT ACT 1961 MERELY TO SUBSTITUTE HIS VIEW WITH THAT OF THE ASSESSING OFFICER WHICH IS BEYOND THE SCOPE OF HIS POWERS U / S 263 OF THE I.T. ACT 1961. IN THE CASE OF C I T - VS - MAX INDIA LTD. 295 - I TR - 282 (SC) THE HON'BLE SUPREME COURT HAS HELD THAT THE PHRASE' PREJUDICIAL TO THE INTEREST OF THE REVENUE' IN SEC.263 OF THE INCOME TAX ACT, 1961 HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION 'ERRONEOUS' ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE O F AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE'. IT HAS A/SO BEEN HELD THAT THE REVISION ULS.263 CANNOT BE MADE MERELY BECAUSE THE C I T IS NOT SATISFIED WITH THE ORDER PASSED BY THE ASSESSING OFFICER. IN THE CASE REFERRED ABOVE THE HON'BLE COURT HELD THAT WHERE THE VIEW EXPRESSED BY THE A. O . IS A I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 8 OF 33 POSSIBLE VIEW, THE CIT CANNOT HOLD THE ASST. ORDER AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER IT IS WELL SETTLED IN LAW THAT THERE IS A DISTINCTION BETWEEN 'LACK OF INQUIRY' AND 'INADEQUATE INQUIRY'. IF THERE WAS ANY INQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF GIVE OCCASION TO THE COMMISSIONER TO PASS ORDERS UNDER SECTION 263 OF THE INCOME - TAX ACT, 1961, MERELY BECAUSE HE HAD A DIF FERENT OPINION HI THE MATTER RELIANCE IN THIS REGARDS IS MADE ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT V. AN IL KUMAR SHARMA (2011 ) 335 ITR 83 / [2010] 194 TAXMAN 504 (DELHI) . WITHOUT PREJUDICE TO THE CONTENTION THAT THE PROVISIONS OF SEC. 263 ARE NOT ATTRACTED IN THE FACTS OF MY CASE AND THE PROCEEDING DESERVES TO BE DROPPED, I STATE THAT I DO NOT AGREE WITH THE ISSUES RAISED IN PARAS - 1(I) TO 1 (IX) OF YOUR NOTICE AND SUBMIT AS UNDER IN RESPECT THEREOF . YOUR OBSERVATION THAT 'AS PER ARBIT RATOR AWARD DTD.30.09.2006 THERE ARE THREE CLAIMANTS NAMELY SRI DHANRAJ BAGARIA, SRI KRISHNA PRASAD BAGARIA AND SRI SUDARSHAN PRASAD BAGARIA AND THUS 1 SHOULD HAVE SHOWN MY SHARE AS 1I3RD INSTEAD OF 1/4 TH AND THE ASSESSING OFFICER HAS ACCEPTED MY SHARE AS 1/4 TH INSTEAD OF 1/3 RD WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE' IS WRONG AND MISCONCEIVED. THE PROPERTY AT 3, TILAK MARG, NEW DELHI WAS OWNED B Y FOUR C O - OWNERS AND MY SHARE WAS 1/4 TH IS MENTIONED IN PARA - I OF THE ASSESSMENT ORDER I TSELF. I HAVE RECEIVED 1 /4 TH OF THE TOTAL DAMAGES AND THE COMPENSATION AMOUNT OF RS. 5.09 CRORES RECEIVED DURING THE YEAR WAS DULY VERIFIED BY THE A. 0. FROM MY BANK STATEMENT FILED WITH HIM, A COPY OF THE SAID BANK STATEMENT IS ENCLOSED AS ANNEXURE - A FOR Y OUR KIND PERUSAL. THE F ACT IS THAT I AM OWNER OF 1/4 TH SHARE IS ALSO AVAILABLE ON RECORDS IN THE ASST. YR.2005 - 2006 WHEN ADHOC COMPENSATION OF RS. 1 CRORE WAS RECEIVED OUT OF THE TOTAL RS. .4 CRORES GRANTED BY THE DELHI HIGH COURT. YOUR INFERENCE OF 1/3 RD S HARE IS THEREFORE WRONG AND PRESUMPTIVE ONLY. THE 4 TH CO - OWNER IN THE SAID PROPERTY IS M / S. RANGLAL BAGARIA (HUF) REPRESENTED BY UNDERSIGNED AS KARTA. THIS FACT IS ALSO MENTIONED IN MY LETTER DTD.09.12.2011 FILED BEFORE THE LD. JCIT, RANGE - 43, KOLKATA, CO PY OF WHICH IS ENCLOSED FOR YOUR READY REFERENCE AS ANNEXURE - B . I) YOUR OBSERVATION THAT THE AWARD DTD. 30. 09. 2006 CLEARLY REVEALS THAT 'THE SAID PAYMENTS ARE NOT MESNE PROFITS BUT FAIR RENT' IS ALSO MISCONCEIVED. THIS POINT HAS BEEN THOROUGHLY CONSIDER ED BY THE ADD L. CIT IN HIS ASSESSMENT ORDER DTD.27.12.2011 AT PARA - 3 AND THEREFORE THE ORDER WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS FURTHER MENTIONED HERE THAT PROPERTY AT 3, TILAK MARG, NEW DELHI WAS ACQUIRED BY THE DELHI ADMINISTRATION (IN SHORT 'THE DA') IN THE YEAR 1987 UNDER THE LAND ACQUISITION ACT, 1894. THE ACQUISITION PROCEEDINGS WAS SUBJECT TO LITIGATION BETWEEN THE OWNERS OF THE PROPERTY AND THE DELHI ADMINISTRATION WHEREUPON THE HON. DELHI HIGH COURT BY THEIR ORD ER DTD. 2 7. 05.1994 HELD THAT THE ACQUISITION WAS WRONGFUL AND THE PROPERTY SHOULD BE RESTORED BACK TO THE OWNERS. THE APPEAL FILED BY THE DA AGAINST THIS ORDER OF THE SINGLE - JUDGE WAS ALSO DISMISSED BY THE DIVISION BENCH OF THE COURT BY THEIR ORDER DTD .22, 03,2002 AND UPHELD BY THE HON 'BLE SUPREME COURT'S ORDER DTD.28.04.2004. FOR CONTINUED WRONGFUL OCCUPATION OF THE SAID PROPERTY THE DELHI HIGH COURT DIRECTED PAYMENT OF DAMAGES /COMPENSATION BY THE DA TO THE OWNERS. IN THE PROCEEDINGS BEFORE THE HON' BLE DELHI HIGH COURT A SUM OF RS .4 CRORES WAS DEPOSITED BY THE DA DURING FINANCIAL YEAR 1995 - 96 TOWARD COMPENSATION ON AD - HOC BASIS OUT OF WHICH I WITHDREW RS. ONE CRORE BEING MY 1/4 TH SHARE. LATER, THE TOTAL COMPENSATION PAYABLE BY THE DA WAS DETERMINED A T RS. 24 . 36 CRORES. ACCORDINGLY THE DELHI ADMINISTRATION FURTHER DEPOSITED A SUM OF RS. 20.36 CRORES (TOTAL COMPENSATION AMOUNT RS. 24.36 CRORES - MINUS RS.4 CRORES PAID EARLIER I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 9 OF 33 DURING F Y. 1995 - 96) IN THE HIGH COURT ON MARCH 18, 2008. THE SAID AMOUNT WAS REC EIVED BY THE OWNERS ON APRIL 2, 2008, ACCORDINGLY THE ASSESSEE HAS RECEIVED HIS 1/4 TH SHARE OF RS. 6.09 CRORES IN THE TOTAL COMPENSATION PAID BY THE DELHI ADMINISTRATION. MY TOTAL SHARE ( 1 /4 TH SHARE) TOWARDS THE DAMAGES AMOUNTED TO RS. .5,94,88,18 4/ - AND RS. 14,11,816 / - TOWARDS INTEREST AND COST. THE RECEIPT OF RS. 5, 94, 88,188 / - TOWARDS DAMAGES WAS 'MESNE PROFITS' I.E. DAMAGES FOR WRONGFUL POSSESSION OF PROPERTY. IN MY CASE THE DAMAGES WERE PAID ON THE BASIS OF THE DE L HI HIGH COURT ORDER DTD.27.05.1994, THE RELEVANT PORTION OF THE DELHI HIGH COURT'S ORDER DTD. 27.05.1994 CONTAINED IN PAGES - 17 TO 19 OF THE ORDER IS REPRODUCED HEREUNDER FOR READY REFERENCE. 'THE DELHI ADMN . IS DIRECTED TO HANDOVER VACANT AND PEACEFUL POSSESSION OF THE PREMISES IN QUESTION ALON G WITH THE OPEN LAND TO THE PETITIONERS WITHIN ONE MONTH FROM TODAY AS THE NOTIFICATION IN QUESTION IS HELD TO BE ILLEGAL AND BAD IN LAW. THE POSSESSION OF THE PETITIONERS PROPERTY BY DELHI ADMN. THROUGH ITS OFFICE IS ILLEGAL AND IS IN THE NATURE OF TRESS PASS ON THE PROPERTY. PETITIONERS HAVE SUBMITTED THAT THE MARKET VALUE OF THE PROPERTY AS OF TODAY AS PER GOVERNMENT RATES WOULD BE RS .14,000 / - PER SQ.MTR. AND WOULD BE RS .14 CRORES. TO THIS AMOUNT IF SOLATIUM AT THE RATE OF 30% UNDER THE LAND ACQUISITION ACT AND INTEREST W. EJ 1987 ARE ADDED THE TOTAL AMOUNT PAYABLE UNDER THE ACT WOULD BE OVER RS .21 CRORES. IF THE CALCULATION ARE TO BE BASED ON THE MARKET VALUE AS OF TODAY THE AMOUNT WOULD BE IN EXCESS OF RS .45 CRORES. WITHOUT DEVELOPING THIS ANY FURTHER S UFFICE IT TO SAY THAT THE PETITIONERS ARE ENTITLED TO DAMAGES FROM 10 TH MARCH, 1987 TILL PAYMENT. WHAT WOULD BE THE DAMAGES WILL BE DETERMINED BY THE ARBITRATOR. IN SIMILAR CIRCUMSTANCES IN BANWARI LAL'S CASE (SUPR A ) ALSO THIS COURT APPOINTED ARBITRATOR TO DETERMINE THE DAMAGED PAYABLE BY THE DELHI ADMINISTRATION INSTEAD OF MAKING THE PETITIONERS RUN TO THE CIVIL COURT FOR THAT PURPOSE. I ACCORDINGLY APPOINT MS. LEILA SETH, RETIRED CHIE F JUSTICE OF HIMACHAL PRADESH HIGH COURT AS THE ARBITRATOR WHO WILL ENTE R UPON THE RE F ERENCE WITHIN FOUR WEEKS OF THE COMMUNICATION O F THIS ORDER TO HER SHE MAY MAKE THE AWARD WITHIN F OUR MONTHS THEREAFTER. THE ARBITRATOR WILL NOT BE OBLIGED TO GIVE REASONS FO R HIS CONCLUSIONS '. IT IS RELEVANT TO SUBMIT THAT THE DELHI HIGH C OURT IN THE ABOVE DECISION HAS EXPRESSLY STATED THAT THE POSSESSION OF THE DELHI ADMINISTRATION WAS IN THE NATURE OF A TRESS - PASSER W. E.F. 10.03.1987. AND THE COURT THUS DIRECTED THE APPOINTMENT O F AN ARBITRATOR TO DETERMINE THE DAMAGES PAYABLE BY THE DEL HI ADMINISTRATION INSTEAD O F MAKING THE ASSESSEE RUN TO THE CIVIL COURT. THE LEGAL BASIS FOR GRANT O F SUCH DAMAGES BY THE COURT FOR WRONGFUL POSSESSION IS ENSHRINED IN THE PROVISIONS OF THE CIVIL PROCEDURE CODE ORDER 20 RULE 12. THE DAMAGES FOR WRONGFUL P OSSESSION OF PROPERTY ARE CALLED 'MESNE PROFIT' AND DEFINED IN SECTION 2(12) OF THE CPC AS FOLLOWS: 'MESNE PROFITS' OF PROPERTY MEANS THOSE PROFITS WHICH THE PERSON IN WRONGFUL POSSESSION OF SUCH PROPERTY ACTUALLY RECEIVED OR MIGHT WITH ORDINARY DILIGENCE HAVE RECEIVED THERE FROM, TOGETHER WITH INTEREST ON SUCH PROFITS, BUT SHALL NOT INCLUDE PROFITS DUE TO IMPROVEMENTS MADE BY THE PERSON IN WRONGFUL POSSESSION' THE ORDER OF THE DELHI HIGH COURT WAS VERY PRECISE AS TO THE FACT THAT THE DAMAGES WERE TO BE C OMPUTED BY THE ARBITRATOR. EVEN THE ARBITRATOR IN HER ORDER AT PARAS - 13 , 14 & 19 HAS MENTIONED AS UNDER. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 10 OF 33 13. MS. JUSTICE USHA MEHRA IN HER JUDGEMENT AND ORDER OF 2 7 TH MAY, 1994 HAS OBSERVED 'I HAVE NO HESITATION TO HOLD THAT THE NOTIFICATION UNDER SECTION S 4 & 17(1) DOES NOT EXPRESSLY OR OTHERWISE INDICATE ANY URGENCY. ACCORDINGLY THE IMPUGNED NOTIFICATION UNDER SECTION 4 AND 17(1) STAND VITIATED, AND THEREFORE, QUASHED. THE DELHI ADMN. IS DIRECTED TO HAND OVER VACANT AND PEACEFUL POSSESSION OF THE PREMISE S IN QUESTION ALONG - WITH OPEN LAND TO THE PETITIONERS WITHIN ONE MONTH FROM TODAY AS THE NOTIFICATION IN QUESTION IS HELD TO BE ILLEGAL AND BAD IN LAW. THE POSSESSION OF THE PETITIONER'S PROPERTY BY DELHI ADMN. THROUGH ITS OFFICE IS ILLEGAL AND IS IN THE N ATURE OF TRESPASS ON THE PROPERTY'. 14. THE LEARNED JUDGE ALSO HOLDS THAT THE CLAIMANTS ARE ENTITLED TO DAMAGES FROM 10 TH MARCH 1987 TILL PAYMENT. AS TO WHAT SHOULD BE THE AMOUNT OF DAMAGES WOULD BE DETERMINED BY THE ARBITRATOR AND THE ARBITRATOR WAS APP OINTED ONLY TO ASCERTAIN THE DAMAGES. 1 5 . IT IS THUS CLEAR THAT THE NOTIFICATION HAD BEEN QUASHED AS ILLEGAL AS THERE WAS NO URGENCY AND THE RESPONDENTS CONTINUED IN THE PREMISES WITHOUT AUTHORITY. SO IT WOULD APPEAR THAT THEY WERE LIABLE TO PAY DAMAGES / MESNE PROFITS. ON THE BASIS OF THE ABOVE MENTIONED ORDER OF DELHI HIGH COURT THE LD. ARBITRATOR TOOK - UP THE ARBITRATION PROCEEDINGS AND PUBLISHED THE AWARD ON 30.09.2006 DETERMINING THE DAMAGES PAYABLE BY THE DELHI ADMINISTRATION FOR WRONGFUL OCCUPATION OF THE PROPERTY. THE BASIS OF FAIR RENTAL ADOPTED BY THE LD. ARBITRATOR WAS ONLY TO ARRIVE AT THE AMOUNT OF DAMAGES TO BE AWARDED WHICH IS CLEARLY STATED IN THE LAST PART OF PARA - 22 READING AS UNDER. 'CONSEQUENTLY DAMAGES WILL BE CLAIMABLE NOT ON THE BASI S OF MESNE PROFITS BUT ON THE BASIS OF FAIR RENT. SO, THE FAIR RENT WILL HAVE TO BE ASCERTAINED '. IT IS THUS CLEAR THAT THE DETERMINATION OF THE DAMAGES MADE ON THE BASIS OF FAIR RENT WAS ONLY A METHOD FOR DETERMINING THE DAMAGES, AND IT CANNOT BE SAID T HAT AS THE DAMAGES WERE CALCULATED ON THE BASIS OF FAIR RENT METHOD, THE RECEIPT WAS NOT THE DAMAGES / MESNE PROFIT. THERE WAS NO CONTRACT OR AGREEMENT BETWEEN THE ASSESSEE AND THE DELHI ADMINISTRATION SO AS TO CLAIM THE DELHI ADMINISTRATION WAS A TENANT / LESSEE IN THIS CASE. IT WAS A CLEAR CASE OF ILLEGAL OCCUPATION AND TRESPASS AS HELD BY THE DELHI HIGH COURT BY THEIR ORDER DTD. 27.05.1994, A COPY OF WHICH IS ENCLOSED IN PAPER BOOK FILED HEREWITH. IN FACT THE ARBITRATOR HAS TRAVELLED BEYOND THE DIRECTION OF THE COURT AND HAS ACTED IN EXCESS OF JURISDICTION THE ROLE OF THE ARBITRATOR IS TO ARBITRATE WITHIN THE TERMS OF THE CONTRACT. IT IS A CASE OF ERROR IN EXCESS OF JURISDICTION THE ASSIGNMENT TO ARBITRATOR WAS 10 DETERMINE THE AMOUNT OF DAMAGES AND NOT T O GIVE REASONS FOR THE SAME OR COMMENT ON ITS NATURE. THE NATURE OF THE RECEIPT HAS BEEN CLEARLY MENTIONED AS DAMAGES BY THE HON 'BLE DELHI HIGH COURT IN THEIR ORDER DTD.2 7. 05.1994 WHICH IS THE RELEVANT ORDER IN THE MATTER AND UPHELD BY THE DIVISION BENC H OF DELHI HIGH COURT AND ALSO BY THE HON'BLE SUPREME COURT'S ORDER DTD. 28. 04.2004. YOUR OBSERVATION THAT 'EVEN IN PARA - 40 OF THE SAID AWARD, IT HAS BEEN CLEARLY MENTIONED THAT THE RESPONDENTS SHALL PAY TO THE CLAIMANTS AN AMOUNT FOR USE AND OCCUPATION O F THE PREMISES' IS WRONGLY MISUNDERSTOOD. NOWHERE IT HAS BEEN HELD THAT OCCUPATION WAS LEGAL. THE ORDER OF THE DIVISION BENCH GIVING PERMISSION TO RETAIN POSSESSION OF THE PROPERTY TILL THE AMOUNTS ARE RECOVERED BACK, CANNOT CHANGE THE CHARACTER OF THE PAY MENTS AS DAMAGES. THE DIVISION BENCH HAS CLEARLY SPOKEN ABOUT DAMAGES WHICH ARE QUOTED AS UNDER. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 11 OF 33 'THE WITHDRAWAL BY THE RESPONDENTS OF THESE AMOUNTS SHALL BE TOWARDS SUCH DAMAGES PAYABLE AS PER THE AWARD THAT MAY BE PASSED BY THE ARBITRATOR FOR OCCUPATION OF THE PROPERTY FOR 10.03.1987'. AFTER THE AWARD IS MADE BY THE ARBITRATOR, IN ANY CASE PART OF THIS AMOUNT NOW RECEIVED BY RESPONDENTS BECOMES RECOVERABLE BY THE APPELLANTS FROM THE RESPONDENTS, THE APPELLANT CAN, IF NEED BE, RETAIN POSSESSION OF THE PRO PERTY TILL SUCH DATE THE AMOUNT IS RECOVERED BACK.. IN CASE, ANY EXCESS AMOUNT IS PAYABLE BY THE APPELLANTS, AS PER THE AWARD OF THE ARBITRATOR, IT WILL BE FOR THE PARTIES TO OBTAIN FURTHER ORDERS FROM THIS COURT'. THE ABOVE ORDER / OBSERVATION OF THE DIV ISION BENCH WAS CONDITIONAL AND NO SUCH EVENT EVER TOOK PLACE. IN OUR CASE DAMAGES WERE PAID IN WHATSOEVER NAME FOR ILLEGAL OCCUPATION AND BECAUSE THE OWNERS WERE DEPRIVED OF THE USE AND OCCUPATION OF THE CAPITA L ASSETS. FURTHER PART OF THE DAMAGES WAS RE CEIVED IN THE ASST. YR.2005 - 2006 WERE ALSO ACCEPTED AS CAPITAL RECEIPT BY THE CIT(APPEALS) (COPY ENCLOSED AS ANNEXURE - C). AFTER CONSIDERING ALL THESE FACTS, COURT ORDERS & DECISIONS THE RECEIPT OF RS. .5,94,88,184 / - WAS RIGHTLY TREATED BY THE ADDL. C. I. T . A S CAPITAL RECEIPT AND NOT LIABLE TO TAX AND THE ORDER WAS NEITHER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. WITH REGARDS TO YOUR QUERY NOS. ( II I) TO (VIII) I STATE THAT THESE ISSUES ARE NOT THE PART OF REASONS RECORDED FOR INITIATING THE PROC EEDINGS U/S. 147 AND THEREFORE CONSIDERATIONS OF THESE POINTS NOW IN PROCEEDINGS ULS.263 IS WRONG, ILLEGAL, WITHOUT JURISDICTION AND IN ANY CASE BARRED BY LIMITATION. I OBJECT TO RAISING THESE ISSUES NOW. WITHOUT PREJUDICE TO MY OBJECTION I SUBMIT MY EXPL ANATION ON THESE POINTS AS UNDER. II ) YOUR OBSERVATION THAT I AM RESIDING AT 165, CHITTARANJAN AVENUE, KOLKATA AND THEREFORE RENTAL INCOME U / S.23( 1 ) OF THE L T. ACT, 1961 SHOULD HAVE BEEN ASSESSED IN RESPECT OF THE TWO RESIDENTIAL PROPERTIES NAMELY 18G, ALIPORE ROAD AND 814B, ALIPORE PARK ROAD IS WRONG, INCORRECT AND MISCONCEIVED. A SPECIFIC QUERY WAS RAISED BY THE JCIT IN HIS NOTICE U / S.142( 1 ) DTD.24.10.2011 AT SI. NO.9 WITH REGARD TO THESE PROPERTIES AND IN RESPONSE TO THE SAID QUERY AN EXPLANATION WAS GIVEN IN MY REPLY DTD.22.11.2011 FILED WITH AND CONSIDERED BY THE JCIT. A COPY OF THE SAID NOTICE DTD.24.10.2011 & REPLY DTD.22.1 1 .2011 ARE ENCLOSED HEREWITH FOR YOUR KIND PERUSAL AS ANNEXURES - D & E. THEREFORE YOUR ALLEGATION THAT 'THE RENTAL INCOME ULS.23 ( 1 ) OF INCOME TAX ACT, 1961 SHOULD HAVE BEEN ASSESSED IN RESPECT OF THESE PROPERTIES WHICH HAVE NOT BEEN DONE BY THE ASSESSING OFFICER' IS FACTUALLY INCORRECT AND DOES NOT HOLD GOOD. IT APPEARS TO BE A CASE OF DIFFERENCE OF OPINION AT YOUR END FOR WHICH RE VISIONS PROCEEDINGS U / S.263 CANNOT BE ATTRACTED. I MAY FURTHER MENTION HERE THAT I HAD PURCHASED THE RESIDENTIAL PROPERTY AT 18G, ALIPORE ROAD, KOLKATA ON 19.06.2008 AND STARTED TO RESIDES THERE W.E.F. 26.10.2008. HOWEVER, MY MOTHER CONTINUED TO RESIDE AT 165, CHITTARANJAN AVENUE, KOLKATA BEING OUR ANCESTRAL HOUSE. III) YOUR OBSERVATION THAT THE TURNOVER OF MY PROPRIETORSHIP CONCERN EXCEEDED RS .40 LACS AND THE ASSESSING OFFICER HAS ACCEPTED UN - AUDITED ACCOUNTS AND DID NOT INITIATE PENALTY PROCEEDINGS ULS.2 71B IS NOT CORRECT. IV) MY TURNOVER OF THE BUSINESS WAS RS. .39,86,725/ - ONLY. THE BILL DISCOUNTING CHARGES AND THE SALES TAX / VAT CANNOT BE TREATED AS PART OF TURNOVER . MOREOVER THIS POINT WAS NOT PAR T OF THE REASONS RECORDED AND THEREFORE THE ASSESSMENT ORDER IS NOT ERRONEOUS AND PREJUDICIAL T O THE INTEREST OF REVENUE. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 12 OF 33 V) DETAILS OF SALES WERE REQUIRED BY THE A.O AND ACCORDINGLY SUBMITTED BEFORE HIM WHICH INCLUDED THE SALES TO M / S. RANGDEV HOLDINGS PVT. LTD. ALSO. HE RIGHTLY DID NOT RAISE ANY QUERY REGA RDING THE PROVISIONS OF SEC. 40A (2) (B) BECAUSE THE PROVISIONS OF SEC.40A(2) CAN BE APPLIED ONLY IN RESPECT OF ANY EXPENDITURE THE PAYMENTS OF WHICH HAVE BEEN MADE TO ANY PERSON AS REFERRED IN SUB - CLAUSE - ( B). IN MY CASE NO PAYMENT WAS MADE IN RESPECT OF A NY EXPENDITURE TO M / S. RANGDEV HOLDINGS PVT. LTD RATHER I HAVE RECEIVED PAYMENT ON ACCOUNT OF SALES MADE TO THEM. THEREFORE, THE PROVISIONS OF SEC.40A(2) ARE NOT ATTRACTED IN MY CASE. VI) YOUR OBSERVATIONS THAT I AM MAINTAINING HUGE BANK BALANCES AND NOT MAINTAINED ANY BOOKS OF ACCOUNTS IN RESPECT OF THESE BANK DEPOSITS IS NOT CORRECT. THE BANK BOOK IS MAINTAINED BY ME FOR ALL THE BANK ACCOUNTS AND THE DEPOSITS THEREIN ARE DULY REFLECTED THERE WITH NARRATION. ALL THE BANK ACCOUNTS AND THE STATEMENTS AS REQ UIRED BY THE A. 0 WERE FILED 1 PRODUCED BEFORE HIM AND WAS DULY EXAMINED. COPIES OF BANK STATEMENTS AND BANK BOOK ARE ENCLOSED IN THE PAPER BOOK FILED HEREWITH. THE PAYMENT OF RS. .3,12,50,000 / - TO MODY SEVA TRUST WAS TOWARDS PURCHASE OF A PROPERTY AT 814B, ALIPORE PARK ROAD, KOLKATA, COPY OF CONVEYANCE DEED WAS ALSO FILED BEFORE THE A.O THE ALLEGATION THAT THE A.O PASSED THE ORDER WITHOUT MAKING ANY ENQUIRY AND INVESTIGATION OF THE HUGE AMOUNTS INVOLVED IS WRONG AND MISCONCEIVED AND ON THIS COUNT THE ASSESS MENT ORDER IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. VII) THE VARIOUS ENQUIRIES WERE RAISED BY THE JCIT WITH REGARD TO SHARE TRANSACTIONS AS PER ANNEXURE TO NOTICE U/S.142( 1 ) DTD.24.10.2011. ALL THE DETAILS AND PARTICULARS WITH REGARD TO SHARE TRANSACTIONS WERE ACCORDINGLY FILED AND EXAMINED BY THE A. O . THE TRANSACTIONS WER E FULLY SUPPORTED BY THE BILLS, CONTRACT NOTES AND PAYMENT BY ACCOUNT PAYEE CHEQUES. THE ALLEGATION OF THIRD PARTY VERIFICATION IS WHOLLY ILL - CONCEIVED AND THE ASSESSME NT ORDER ON THIS COUNT CANNOT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. VIII) THE PAYMENT OF RS. 11,00,000 / - WAS MADE TO MY MOTHER SMT. MANJU DEVI BAGARIA AND NOT TO MY WIFE AS STATED IN YOUR SHOW - CAUSE NOTICE. A COPY OF LOAN CONFI RMATION IS ENCLOSED AS ANNEXURE - F. THIS FACT IS AVAILABLE IN DETAILS OF LOAN GIVEN FILED WITH THE A. O . ON 17.10.2011 ALONG WITH VIDE LETTER DTD.15.1O.2011. SINCE THE PAYMENT OF RS .11,00,000 / - WAS NOT MADE TO WIFE, THE QUESTION OF ANY APPLICATION OF SEC. 64 OF THE I.T. ACT, 1961 DOES NOT ARISE AND THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE ON THIS COUNT ALSO. IX) THE ASSESSING OFFICER WAS RIGHT IN NOT INITIATING THE PENALTY PROCEEDING U/S.271(1)(C) BECAUSE THE ADDIT ION OF RS .14,11,816 / - WAS AGREED BY ME ON THE CONDITION THAT NO PENALTY PROCEEDINGS WILL BE INITIATED AGAINST ME IN RESPECT OF THE SAID AMOUNT. THIS FACT HAS BEEN CLEARLY MENTIONED IN THE ASSESSMENT ORDER ITSELF BY THE LD. JCIT IN PARA - 6 OF HIS ORDER. THER EFORE THE ASSESSMENT ORDER OF THE LD. JCIT CANNOT BE TERMED ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON ACCOUNT OF THIS ISSUE. IN VIEW OF THE FACTS AND SUBMISSION IT CANNOT BE HELD THAT THE ORDER PASSED BY THE A.O. WAS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE. 1, THEREFORE, HUMBLY REQUEST YOUR GOODSELF TO KINDLY CONSIDER THE MATTER JUDICIALLY AND SYMPATHETICALLY AND DROP THE PROPOSED REVISION PROCEEDINGS U/S.263 UNDER INTIMATION TO ME AND OBLIGE. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 13 OF 33 8. THE CIT DURING THE COURSE OF HEARING RAISED QUERIES ALSO, AND THE ASSESSEE POINTED OUT THAT IN THE IMPUGNED PROPERTY ULTIMATELY THE SHARES OF EACH OWNER REMAIN AS UNDER: - DHANRAJ BAGARIA..........................................1/4 TH SHARE KRISHNA PRASAD BAGARIA..................... ......1/4 TH SHARE SUDERSHAN PRASAD BAGARIA....................1/4 TH SHARE RANGLAL BAGARIA, HUF...............................1/4 TH SHARE (REPRESENTED BY KARTA SUDERSHAN PRASAD BAGARIA) 9. CIT DISCUSSED EACH OF THE ISSUES IN RESPECT OF WHICH THE SHOW - CAU SE NOTICE WAS ISSUED ALONG WITH THE REPLY OF THE ASSESSEE AND ULTIMATELY TOOK THE VIEW AS UNDER: - 26. THEREFORE LOOKING IN TO THE FACTS OF THE CASE AND THE JUDGEMENTS OF THE VARIOUS APPELLATE AUTHORITIES IT IS OBSERVED THAT THE RENT RECEIPT DURING THE PER IOD OF OCCUPATION BY THE DELHI ADLI'INISTRATION ALTHOUGH IS NAMED AS MESNE PROFITS BY THE ASSESSEE BUT THE SAME ARE TAXABLE AS REVENUE RECEIPT AND INCOME FROM OTHER SOURCE~NCOME TAX ACT, 1961. NO LAW PROHIBITS TAXATION OF RENT RECEIVED BY THE ASSESSEE. ONC E THE MONEY IS RECEIVED, THE PROVISIONS OF INCOME TAX ACT ARE APPLICABLE AND IT IS ONLY THE PROVISION OF INCOME TAX ACT, 1961 THAT DETERMINES WHETHER THE MONEY RECEIVED IS TAXABLE FOR INCOME TAX PURPOSES OR NOT. THE ASSESSING OFFICER IS DIRECTED TO EXAMINE THE ISSUE IN DETAIL REGARDING THE TAXABILITY OF RS.23.79 CRORES AFTER GIVING A DUE OPPORTUNITY TO THE ASSESSEE. 27. ISSUE N O. 3 - RENTAL INCOME FROM HOUSE PROPERTIES: - THE ASSESSEE HAS STATED IN HIS REPLY THAT THE REQUISITE INFORMATION WAS FURNISHED BY HIM VIDE HIS LETTER DATED 22.11.2011. THE LETTER HAS BEEN SEEN AND IT IS OBSERVED THAT THERE IS NO REFERENCE TO THE PROPERTY MENTIONED AS 165, CHITTRANJAN AVENUE, KOLKATA FOR WHICH IT HAS BEEN CONTENDED THAT THE ASSESSEE'S M - OTHER IS RESIDING IN THIS HOUSE . FURTHER, IT HAS BEEN NOTICED THAT THE ASSESSEE HAS NOT BROUGHT ANY DOCUMENT! EVIDENCE TO SHOW THAT THE PROPERTY AT 8/B, ALIPORE ROAD IS ACQUIRED FOR THE PURPOSE OF BUSINESS. THE ASSESSING OFFICER DID NOT ENQUIRE AT ALL WHAT STEPS WERE TAKEN BY HIM TO SHO W THAT IT IS MEANT FOR REAL ESTATE BUSINESS. BY DOING THIS THE ASSESSEE HAS NOT MERELY EVADED THE INCOME TAX BUT ALSO WEALTH TAX. SECTION 22 OF THE INCOME TAX ACT CHARGES THE ANNUAL VALUE OF THE OWNERSHIP OF THE PROPERTY IRRESPECTIVE OF THE FACT WHETHER OR NOT ANY INCOME WAS ACTUALLY RECEIVED OR ACCRUED TO THE ASSESSEE. FURTHER, SECTION 23(2) OF THE INCOME TAX ACT MAKES IT CLEAR THAT THE PROPERTY IN QUESTION MUST BE IN THE OCCUPATION OF THE ASSESSEE AND NOT BY HIS RELATIVE TO AVAIL THE BENEFIT OF THE SAID P ROVISION (SMT. JASHVIDYABEN C. MEHTA VS. CIT(1988) 172 ITR 680 (GUJ.). THE PROVISI O NS OF SECTION 23(4) OF THE INCOME TAX ACT 1961 MAKES IT CLEAR THAT THE BENEFIT UNDER SECTION 23(2) I.E. SELF OCCUPIED PROPERTY CANNOT BE AVAILED IN MORE THAN ONE HOUSE. IT I S SETTLED PROPOSITION OF THE LAW THAT AN INCORRECT ASSUMPTION OF THE FACT OR AN INCORRECT APPLICATION OF LAW WOULD SATISFY I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 14 OF 33 REQUIREMENT OF ORDER BEING ERRONEOUS UNDER SECTION 263 OF THE INCOME TAX ACT 1961. 28. ISSUE NO. 4: - ON THE ISSUE OF NON AUDIT OF T HE BOOKS OF ACCOUNTS, IT HAS BEEN STATED THAT THE BILL DISCOUNTING CHARGES AND SALES TAX / V AT CANNOT BE PART OF TURNOVER. THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE. THE BILL DISCOUNT CHARGES HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS AND IT IS SETTLED PROPOSITION OF LAW THAT THE SALES TAX AND VAT ARE PART OF TURNOVER AS HELD IN VARIOUS CASE LAWS. THEREFORE, NON INITIATION / FAILURE TO INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271 B OF THE INCOME TAX ACT, 1961 FOR FAILURE TO GET THE AUDIT DO NE UNDER SECTION 44AB OF THE INCOME TAX ACT, 1961 HAS MADE THE ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 29. ISSUE NO 5: - O N THE ISSUE OF APPLICABILITY OF SECTION 40A(2) OF THE INCOME TAX ACT, DURING THE COURSE OF DISCUSSION, IT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE THAT THE ASSESSEE HAS EARNED A LOSS OF RS.5,90,645/ - FROM THE PROPRIETORSHIP FIRM BY SELLING THE PRODUCTS TO THE RELATED PARTY. THE ASSESSING OFFICER NEITHER MADE ANY ENQUIRY NOR TOOK ANY VIEW ON THIS ISSUE. THE ASSESS EE COULD NOT GIVE ANY SATISFACTORY REPLY EXCEPT THAT IT IS NOT COVERED UNDER SECTION 40A (2)(B) OF THE INCOME TAX ACT. BY NOT GETTING THE TAX AUDIT, THE ASSESSEE HAS AVOIDED THIS FACT FROM THE ASSESSING OFFICER. HAS THE TAX AUDIT BEING DONE, THIS TRANSACTI ON WOULD HAVE BEEN SHOWN AS SALES TO RELATED PARTY. THUS THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE IS ALSO ERRONEOUS AND PREJUD I CIAL TO THE INTEREST OF REVENUE ALSO BECAUSE OF NOT DISCLOSING TRUE AND FULL INFORMATION TO THE ASSESSING OFFICER. 30. ISSUE NO. 6: - ON THE ISSUE OF NON - VERIFICATION OF BANK ACCOUNTS, IT HAS BEEN CONTENDED THAT THE ASSESSING OFFICER DULY VERIFIED ALL THE BANK ACCOUNTS. THE SUBMISSIONS OF THE ASSESSEE DO NOT MATCH WITH THE DOCUMENTS AVAILABLE ON THE RECORD. IT IS ONLY DURIN G THE COURSE OF PROCEEDINGS UNDER SECTION 263 OF THE INCOME TAX ACT 1961, THAT THE ASSESSEE HAS GIVEN EXPLANATION TO CERTAIN ENTRIES AS ONE NARRATED IN THE SHOW CAUSE. THEREFORE, IT CAN BE HELD THAT THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE IS ALSO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS HE H AS NOT CONDUCTED ANY ENQUIRIES ON THE ENTRIES AND VERIFIED ITS GENUINENESS IN THE BOOKS OF ACCOUNTS. 31. ISSUE NO. 7: - ON THE ISSUE OF NON - VERIFICATION OF SHARE TRANSACTIONS, THE ASSESSEE SUBMIT TED THAT ALL THE DOCUMENTS WERE PROVIDED TO THE ASSESSING OFFICER AND IT WAS VERIFIED. THE QUERY WAS WITH REFERENCE TO THIRD PARTY VERIFICATION. THE ASSESSING OFFICER SHOULD HAVE VERIFIED FROM THE THIRD WHICH HE HAD NOT DONE. SINCE, NO SPECIFIC REPLY HAS B EEN GIVEN TO THIS QUERY, IT IS HELD THAT THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE IS ALSO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 32. ISSUE NO. 8: - PAYMENT OF RS.11,OO,OOOI - TO SMT. MANJU DEVI B AGARIA: - IN VIEW OF SUBMISSION OF THE ASSESSEE, NO ADVERSE VIEW IS CALLED FOR. 33. ISSUE NO. 9: - ON THE NON - INITIATION OF PENALTY UNDER SECTION 271 (1)(C) OF THE INCOME TAX ACT 1961, IT HAS BEEN STATED THAT THE INTEREST INCOME TAXED WAS RESULT OF VOLUNTARILY SURRENDER BY THE ASSESSEE SUBJECT TO NO PENAL ACTION. IT IS APPARENT FROM THE AWARD THAT THERE WAS AN ELEMENT OF INTEREST FOR DELAY IN THE PAYMENTS DETERMINED AS A RESULT OF ARBITRATION AWARD AND THE ASSESSEE HAS NEITHER SHOWN THE INTEREST ON THE ACCRUED BASIS AND NOR ON RECEIPT BASIS. IT IS ONLY DURING THE COURSE OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 WHEN SPECIFIC ENQUIRIES WERE MADE, THE ASSESSEE DISCLOSED THAT THE PART OF THE RECEIPTS INCLUDE I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 15 OF 33 INTEREST ALSO. THEREFORE, IT CANNOT BE HELD THAT THE SURRENDER WAS VOLU NTARILY. IT IS HELD THAT THE ORDER OF THE ASSESSING OFFICER ON THIS ISSUE IS ALSO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE . 10. THUS HE WAS OF THE OPINION THAT EXCEPT THE ISSUE NO. 8 RELATING TO THE PAYMENT OF RS.11,00,000/ - TO SMT. MANJU DEV I BAGARIA, THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THIS REGARD, HE RELIED ON THE FOLLOWING DECISIONS: - (1) CIT VS. - DEEPAK KUMAR GARG IN IT APPEAL NOS. 47, 52 & 64 OF 2006 ORDER DATED 11 .05.2007 REPORTED IN [2008] 299 ITR 435 (M.P.); (2) MAHESH G. SHETTY VS. - CIT, BANGALORE IN IT APPEAL NOS. 40 - 43 OF 2009 DATED 24.12.2010 REPORTED IN [2011] 198 TAXMAN 224 (KAR.); (3) CIT - 1, LUDHIANA VS. - M/S. ABHISHEK INDUSTRIES LIMITED IN ITA NO 312 OF 2011 DATED 20.12.2012 (PUNJAB & HARYANA HIGH COURT); (4) SUN MINERALS VS. - ADDL. CIT, RANGE - 6, HYD E RABAD IN IT APPEAL NO. 741 (HYD.) OF 2012 DATED 09.10.2012 [ITAT, A BENCH, HYDERABAD]; (5) CIT VS. - NEYVELI LIGNITE CORPORATION LTD. ORDER DATED 06.11.2 000 REPORTED IN (2001) 118 TAXMAN 230 (MADRAS)/ (2001) 248 ITR 611 (MAD.)/ (2001) 171 CTR 154 (MAD.); (6) CIT VS. - JAWAHAR BHATTACHARJEE IN IT APPEAL NO. 2 OF 2008 DATED 07.02.2012 REPORTED IN 209 TAXMAN 174 (GAUHATI); [2012] 341 ITR 434 (GAUHATI); (7)CIT VS. - DEEPAK KUMAR GARG IN IT APPEAL NOS. 47, 52 & 64 OF 2006 DATED 11.05.2007 REPORTED IN [2008] 299 ITR 435 (MP); (8) CIT VS. - ASSAM TEA HOUSE REPORTED IN 344 ITR 507 (P&H); (9) CIT VS. - EXPORT HOUSE (2002) 175 CTR (P&H) 137; (2002) 256 ITR 603 (P&H); (10) B.S. BAJAJ & SONS VS. - CIT (1996) 135 CTR (P&H) 491; (1996) 222 ITR 418 (P&H); (11) PANCHAMAN TRADERS VS. - CIT & ANOTHER REPORTED I N 283 ITR 50 (KER.); (12) RAJENDRA KANTILAL SHAH VS. - CIT IN ITA NO. 2370/AHD./2009 DATED 06.09.2013 (ITAT, AHMEDABA D); (13) ACIT VS. - M/S. SRI ASL FINVEST LIMITED IN ITA NO. 1001/HYD./12 DATED 17.12.2013 (ITAT, HYDERABAD); I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 16 OF 33 (14) RAMPYARI DEVI SARAOGI VS. - CIT (1968) 67 ITR 84 (SC); (15) SMT. TARA DEVI AGARWAL VS. - CIT (1973) 88 ITR 323 (SC); (16) GEE VEE ENTERPRISE VS. - ADDL. CIT (1975) 99 ITR 375 (DEL.) AFTER DISCUSSING ALL THE DECISIONS , ULTIMATELY THE CIT SET ASIDE THE ASSESSMENT AND DIRECTED THE ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AND RE - COMPUTE THE ASSESSEE S INCOME AFTER MAKING FURTHER ENQUIRIES AND GIVING DUE OPPORTUNITY TO THE ASSESSEE BY OBSERVING AS UNDER: - 49. THE ASSESSING OFFICER HAS TAKEN AN ERRONEOUS VIEW AND ACCEPTING THAT VIEW AND NOT SETTING ASIDE THE SAME WILL CAUSE LOSS TO THE REVENUE, ALL THE MORE WHEN THE SAME HAS BEEN MADE ON WR ONG ASSUMPTION OF FACTS AND RELYING ON NON - APPLICABLE CASE LAWS. IF THIS KIND OF ORDER IS NOT SUBJECT TO REVIEW, IT MAY HAMPER THE IMPLEMENTATION OF THE PROVISIONS OF INCOME TAX ACT IN TRUE AND CORRECT MANNER. THE COMMISSIONER U/S. 263 HAS BEEN ASSIGNED TH E DUTY IN THE INTEREST OF JUSTICE TO REVIEW SUCH KINDS OF ORDER. THE ORDER OF THE COMMISSIONER OF INCOME TAX ITSELF IS SUBJECT TO JUDICIAL SCRUTINY AND ORDER OF THE ASSESSING OFFICER MADE U/S 143(3) IN FURTHERANCE TO THE ORDER U/S 263 IS FURTHER SUBJECT TO JUDICIAL SCRUTINY, THEREBY GIVING THE FULL OPPORTUNITY TO THE ASSESSEE TO EXPRESS ITS VIEWS BEFORE THE APPROPRIATE AUTHORITIES. THE DEPARTMENT WILL NOT HAVE AN OPPORTUNITY IF THIS WRONG ORDER HAS TO BE ACCEPTED ALTHOUGH ERRONEOUS AND PREJUDICIAL TO THE I NTEREST OF REVENUE BECAUSE THE ASSESSING OFFICER HAS EXPRESSED HIS OPINION ALTHOUGH IT MAY BE ON WRONG ASSUMPTION OF FACTS AND APPLICATION OF LAW. 50. THE ASSESSEE HAS ALSO STATED THAT THESE ISSUES ARE NOT THE PART OF REASONS RECORDED FOR INITIATING THE PROCEEDINGS U/S.147 AND THEREFORE CONSIDERATIONS OF THESE POINTS NOW IN PROCEEDINGS U/S.263 IS WRONG, ILLEGAL, WITHOUT JURISDICTION AND IN ANY CASE BARRED BY LIMITATION A ND HAS OBJECTED TO RAISING THESE ISSUES. THE 2ND PROVISO OF SECTION 14B PROVIDES THAT THE ASSESSING OFFICER IS AUTHORISED TO ASSESS ANY INCOME WHICH HAS THE ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 14B. THEREFORE, THE ASSESSING OFFICER WAS UNDER AN OBLIGATION TO LOOK INTO A LL ISSUES INVOLVED IN THE ASSESSMENT OF THIS YEAR. THE ASSESSING OFFICER HAS NOT LOOKED INTO VARIOUS ISSUES MAKING THEREBY THE ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 51. THE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE OF TAXABI LITY OF RS.23.79 CRORES AND HAS MERELY ACCEPTED THE VIEW OF THE ASSESSEE AND BASED HIS ASSESSMENT ORDER ON THE SAME. THE SIMILAR ORDERS ARE ALSO BEING PASSED IN THE CASES OF OTHER THREE JOINT OWNERS WHO HAVE DECLARED THE SHARE IN RECEIPT OF RS.23.79 CRORES AND HAS CLAIMED IT AS NON TAXABLE BEING CAPITAL RECEIPT. IT IS NOT OUT OF PLACE TO MENTION THAT THE RECEIPT OF RS.23.79 CRORES HAS NOT BEEN TAKEN INTO CONSIDERATION IN THE SALE PRICE OF THE PROPERTY SOLD AT I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 17 OF 33 RS.86.25 CRORES. THIS HAS NOT BEEN GIVEN DEDUCTI ON FROM THE COST OF ACCUSATION OR INCREASE THE SALE PRICE WHILE DETERMINING THE CAPITAL GAIN ON THE SALE OF THE PROPERTY DURING THE ASSESSMENT YEAR 2007 - OB. THIS RECEIPT OF MONEY IS AFTER THE SALE. IT MAY ALSO BE MENTIONED THAT THE PROPERTY IS A LEASEHOLD PROPERTY BUT STILL THE COST PRICE OF THE PROPERTY AS OWNER HAS BEEN TAKEN AS ON 01.04.1981 WHILE DETERMINING CAPITAL GAIN. THE ASSESSING OFFICER IN THE ASSESSMENT YEAR 2 007 - 08 HAS EVEN ACCEPTED THE COST AS ON 01.04.1981 AT RS.11,91,26,763/ - AGAINST THE V ALUE OF LAND OF RS.1,69,96,660 / - AS PER THE NOTIFICATION ISSUED VIDE LETTER NO. J/22011/3180 - L D/(DOI) DATED 21.10.1981 BY THE MINISTRY OF WORKS AND HOUSING, GOVT. OF INDIA. THE ASSESSEE HAS CLAIMED IT TO BE A SALE OF HOUSE PROPERTY WHILE AS PER SALE DEED I T IS ACTUALLY SALE OF LEASEHOLD RIGHTS. THE ASSESSING OFFICER HAS NOT LOOKED INTO THESE ASPECTS WHILE FRAMING ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007 - 0 8 . 52. THEREFORE, IT IS HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDIC IAL TO THE INTEREST OF REVENUE. HOWEVER, THE ASSESS ING OFFICER IS DIRECTED TO EXAMINE AND/OR RE - EXAMINE, THE ISSUE OF SHARE OF THE ASSESSEE IN THE PROPERTY; DETERMINE THE NATURE OF RECEIPTS OF INCOME FROM THE AWARD OF THE ARBITRATOR; THE ISSUE OF RENTAL IN COME FROM PROPERTIES; TAX AUDIT UNDER SECTION 44AB OF INCOME TAX ACT 1961 AND THE VIOLATION OF THE SAME, IF ANY AND THE RESULTANT PENALTY PROC EEDIN G S UNDER SECTION 271 B OF THE INCOME TAX ACT 1961; ISSUE OF SALES TO THE RELATED PARTIES; VERIFICATION OF DEBI TS AND CREDITS IN THE BANK STATEMENTS; VERIFICATION OF SHARES TRANSACTIONS FROM THE THIRD PARTY AND INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF INCOME TAX ACT 1961, 53. IN VIEW OF FACTS AND LEGAL POSITION STATED ABOVE, IT IS HEREBY HELD THAT ASSESSMENT ORDER U/S. 143(3) OF INCOME TAX ACT, 1961 DATED 27.12.11 PASSED IN THIS CASE FOR ASSESSMENT YEAR 2009 - 10 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. CONSEQUENTLY, IN EXERCISE OF THE POWER CONFERRED IN THE SEC, 26 3 OF THE INCOME TAX ACT, 1961, THE SAID ASSESSMENT ORDER DATED 27.12.2011 IS SET ASIDE, BUT ONLY TO THE EXTENT INDICATED IN THE FOREGOING PARAGRAPHS. THE ASSESSING OFFICER IS DIRECTED TO PASS A FRESH ASSESSMENT ORDER AND RE - COMPUTE THE ASSESSEE'S INCOME AF TER MAKING FURTHER ENQUIRIES AS DIRECTED IN THE FOREGOING PARAGRAPHS AND AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE & PERUSING THE NECESSARY EVIDENCE. IN THE SAME MANNER, THE NOTICES UNDER SECTION 263 WERE ISSUED IN OTHER CASES. IN ALL THE CASES ISSUE NO . 1 AND 2 OF SHOW - CAUSE NOTICES WERE THE SAME AND ULTIMATELY THE CIT IN ALL OTHER CASES ALSO SET ASIDE THE ASSESSMENT AND DIRECTED ASSESSING OFFICER TO PASS A FRESH ASSESSMENT. 11. LD. A.R. BEFORE US REITERATED THE SUBMISSIONS MADE BEFORE THE CIT AND CONTE NDED THAT IN THE CASE OF THE ASSESSEE THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 147 DATED 27.12.2011 WAS PASSED IN RESPECT OF WHICH CIT INVOKED JURISDICTION UNDER I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 18 OF 33 SECTION 263. W HILE RE - OPENING THE ASSESSMENT , T HE ASSESSING OFFICER RECORDED TH E FOLLOWING REASONS UNDER SECTION 148 OF THE INCOME TAX ACT : - IT APPEARS FROM THE RECORD THAT DELHI ADMINISTRATION INITIATED AN ACQUISITION PROCEEDING IN RESPECT OF HOUSE PROPERTY AT 3, TILAK MARG, NEW DELHI, IN WHICH THE ASSESSEE HAD 1/4 TH SHARE. THE SA ID ACQUISITION PROCEEDING WAS QUASHED BY THE DELHI HIGH COURT. APPEAL WAS FILED BEFORE THE DIVISIONAL BENCH, DELHI HIGH COURT. BY AN INTERIM ORDER, THE HON BLE HIGH COURT (DIVISIONAL BENCH) ORDERED DELHI ADMINISTRATION TO PAY RS.4,00,00,000/ - (RS. FOUR CRO RES) WHICH THE CO - OWNERS WERE ALLOWED TO WITHDRAW. FINALLY THE DIVISIONAL BENCH OF THE HON BLE DELHI HIGH COURT ALSO QUASHED THE ACQUISITION PROCEEDINGS, AND AN ARBITRATOR WAS APPOINTED TO FINALISE THE MATTER REGARDING DAMAGES. THE MATTER ULTIMATELY WENT T O THE SUPREME COURT, WHO, IN THE FY 2004 - 05 (ASST. YR. 2005 - 06 UPHELD THE DECISION OF THE HON BLE DELHI HIGH COURT. THE ARBITRATOR FINALIZED THE DAMAGES AT RS.24.36 CRORES IN WHICH ASSESSEE S SHARES IS RS.6.09 CRORES. ASSESSEE GOT THE DAMAGES IN THE FY 20 08 - 09 RELEVANT TO THE AY 2009 - 10. A SUM OF RS.1 CRORE OUT OF DAMAGES HAS ALREADY BEEN TAXED IN THE ASSESSMENT YEAR 2005 - 06. THE BALANCE AMOUNT I.E. RS.5.09 CRORES IS TO BE TAXED IN THE AY 2009 - 10. ON PERUSAL OF THE RETURN FILED FOR THE ASST. YR. 2009 - 10, I T APPEARS THAT THE ASSESSEE DID NOT SHOW THIS INCOME. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY RS.5.09 CRORES WITHIN THE MEANING IN SECTION 147 OF THE I.T. ACT, 1961. ISSUED NOTICE U/S 148 OF THE I.T. ACT, 1961 ACCORDINGLY . 12. THE REASONS RECORDED BY THE ASSESSING OFFICER RELATE TO THE ESCAPEMENT OF THE INCOME OF RS.5.09 CRORES AFTER THE DAMAGES FINALIZED BY THE ARBITRATOR AT RS.24.36 CRORES, TO WHICH THE ASSESSEE S SHARE COME TO RS.6.09 CROR ES. 13. FROM THE REASONS RECORDED IT IS APPARENT THAT EXCEPT THE ESCAPEMENT OF INCOME OF RS.5.09 CRORES, NO OTHER REASON TO BELIEVE HAD BEEN RECORDED BY THE ASSESSING OFFICER IN RESPECT OF ANY OTHER INCOME. THE ASSESSEE IN REPLY TO THE NOTICE UNDER SECTION 147 REQUESTED TO TREAT THE RETURN ALREADY FILED AS IT FILED IN COMPLIANCE WITH UNDER SECTION 148. HE SUBMITTED THAT ULTIMATELY THE ASSESSING OFFICER TREATED THE SAME INCOME AS CAPITAL RECEIPT EXCEPT THE SUM OF RS.14,11,816/ - , WHICH REPRESENTS THE INTEREST . THE ASSESSING OFFICER IN THIS REGARD ISSUED VARIOUS NOTICES TO THE ASSESSEE UNDER SECTION 142(1) AND IN REPLY THERETO THE ASSESSEE MADE THE SUBMISSIONS VIDE HIS REPLY DATED 08.11.2011, 22.11.2011, 23.11.2011, 09.12.2011 AND 21.12.2011, THE COPIES OF WHIC H I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 19 OF 33 ARE AVAILABLE IN THE PAPER BOOK FROM PAGES 74 TO 116. AFTER CONSIDERING AND DULY EXAMINING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON 27.12.2011 TREATING THE SAID INCOME IN RESPECT OF WHICH THE REASONS WERE RECORDE D TO BE THE CAPITAL RECEIPT EXCEPT A SUM OF RS.14,11,816/ - TO WHICH THE ASSESSEE AGREED FOR PURCHASE OF PEACE , EVEN THOUGH THE VIEW OF THE ASSESSEE WAS ENTIRELY DIFFERENT. THUS IT WAS POINTED OUT THAT NO ADDITION WAS MADE BY THE ASSESSING OFFICER . SINCE NO ADDITION WAS MADE ON THE BASIS OF THE REASONS RECORDED BY THE ASSESSING OFFICER, THE ASSESSING OFFICER COULD HAVE NOT ADDED ANY OTHER INCOME. ON THIS BASIS ITSELF, THE NOTICE ISSUED UNDER SECTION 263 SHOULD HAVE BEEN QUASHED AS THE ORDER PASSED BY THE ASS ESSING OFFICER CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 14. IN RESPECT TO THE MERIT SO FAR THE SHARE OF THE ASSESSEE AND THE TAXABILITY OF THE COMPENSATION RECEIVED BY THE ASSESSEE AS PER THE ORDER OF THE COURT, IT WAS POINTED OUT THAT THE SAID INCOME HAS BEEN TREATED BY THE ASSESSING OFFICER TO BE THE CAPITAL RECEIPT AFTER EXAMINING AND VERIFYING THE ISSUE IN DETAIL. IT IS NOT A CASE THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY OR NOT APPLIED HIS MIND. THE ASSES SING OFFICER HAD ENQUIRED OF ABOUT THE SHARE OF THE OWNERSHIP OF ASSESSEE AND THE NATURE OF THE INCOME WHETHER IT IS CAPITAL RECEIPT OR REVENUE RECEIPT. AFTER MAKING VARIOUS QUERIES, GOING THROUGH THE FACTS, DECISION OF DELHI HIGH COURT, SUPREME COURT AND AWARD, THE ASSESSING OFFICER HAS TAKEN A CONSCIOUS DECISION. OUR ATTENTION WAS ALSO DRAWN TOWARDS THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005 - 06, IN WHICH THE ASSESSEE HAS RECEIVED RS.1,00,00,000/ - OUT OF RS.4,00,00,000/ - ALLOWED AS COMPENSATION . TH E ASSESSING OFFICER TREATED THE SAID RECEIPT AS REVENUE RECEIPT IN THAT ASSESSMENT YEAR BUT WHEN THE MATTER WENT BEFORE THE CIT (APPEALS) , CIT (APPEALS) DELETED THE ADDITION. IN THIS REGARD, OUR ATTENTION WAS DRAWN TOWARDS THE ASSESSMENT ORDER FOR THE ASSESS MENT YEAR AS WELL AS THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2 005 - 06, THE COPY OF WHICH ARE AVAILABLE AT PAGE 144 OF THE PAPER BOOK. IT WAS FURTHER POINTED OUT THAT NO APPEAL HAS BEEN FILED BY THE REVENUE BEFORE THE TRIBUNAL AGAINST THE SAID ORDER OF T HE CIT(APPEALS) . THUS THE VIEW TAKEN BY THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2009 - 10 IN RESPECT OF THE BALANCE SUM OF RS.5,09,00,000/ - IS DULY ACCEPTED BY THE REVENUE IN ASSESSMENT YEAR 2005 - 06. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 20 OF 33 15. IT WAS ALSO CONTENDED THAT ALL THE FOUR CO - OWNERS C LAIM ED THE RECEIPT TO BE THE CAPITAL RECEIPT AND THE CIT REOPENED THE ASSESSMENT IN THE CASE OF ALL THE FOUR CO - OWNE RS, NAMELY THE ASSESSEE, KRISHNA PRASAD BAGARIA, DHANRAJ BAGARIA AND RANGLAL BAGARIA, HUF. IN THE CONSEQUENTIAL ORDER PASSED BY THE ASSESSIN G OFFICER UNDER SECTION 143(3) READ WITH SECTION 263, THE ASSESSING OFFICER IN THE CASE OF KRISHNA PRASAD BAGARIA AS WELL AS RANGLAL BAGARIA, HUF ACCEPTED THE CONTENTION OF THE ASSESSEE AND TREATED THE SAID SUM AS CAPITAL RECEIPT NOT CHARGEABLE TO INCOME - T AX. THIS IS A SETTLED LAW THAT IF THE ASSESSING OFFICER HAS TAKEN ONE OF THE P OSSIBL E VIEW UNLESS AND UNTIL THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF REVENUE . FOR INVOKING THE PROVISIONS OF SECTION 263 , BOTH THE CONDITIONS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE MUST BE SATISFIED . 1 6 . LD. D.R., ON THE OTHER HAND, VEHEMENTLY RELIED ON THE ORDER OF THE CIT AND CONTENDED THAT IF THE ORDER PASSED UNDER SECTION 263 HAD BEEN REVISED ON VARIOUS ISSUES AND IF IT IS UPHELD O N ONE OF THE ISSUES, IT HAS TO BE UPHELD. 1 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CA REFULLY CONSIDERED THE SAME ALONG WITH THE ORDERS OF THE TAX AUTHORITIES BELOW AS WELL AS THE RELEVANT DOCUMENTS RELIED BEFORE US. WE ARE DECIDING THESE APPEALS ON THE BASIS OF FACTS IN THE CASE OF SUDERSHAN PRASAD BAGARIA AS AGREED BY BOTH THE PARTIES. WE NOTED THAT IN TH E CASE OF SUDERSHAN PRASAD BAGARIA , THE CIT HAS INVOKED THE JURISDICTION UNDER SECTION 263 BY ISSUING SHOW - CAUSE NOTICE TO THE ASSESSEE DATED 13 .03.2014. IN THE SHOW - CAUSE NOTICE, THE CIT HAS TAKEN AS MANY AS NINE ISSUES TO WHICH THE ASSES SEE SUBMITTED HIS SUBMISSIONS VIDE LETTER DATED 24.03.2014, AND ULTIMATELY THE CIT AGREED IN RESPECT OF THE ISSUE NO. 8 WHICH RELATES TO THE TRANSFER OF AN AMOUNT OF RS.11,00,000/ - BY THE ASSESSEE TO HIS WIFE AT A NOMINAL INTEREST. THAT ON THIS ISSUE THE A SSESSMENT ORDER IS NOT ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE FIRST TWO ISSUES IN THE SHOW - CAUSE NOTICE ARE COMMON IN ALL CASES RELATE TO THE SHARE OF THE ASSESSEE IN THE PROPERTY AT 3, TILAK MARG, NEW DELHI AND ALSO ABOUT THE NATURE OF THE DAMAGES RECEIVED BY THE ASSESSEE TOWARDS THE WRONGFUL COMPENSATION. TH E S E ISSUE S ARISE OUT OF THE ORDER PASSED BY THE A SSESSING OFFICER UNDER SECTION 143(3)/147, IN RESPECT OF WHICH CIT EXERCISED JURISDICTION UNDER SECTION 263. THIS IS AN UN DISPUTED FACT AS AGREED BY LD. D.R. DURING THE COURSE OF HEARING THAT TH E S E ISSUE S HA VE DULY BEEN EXAMINED BY THE ASSESSING OFFICER BY I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 21 OF 33 RAISING VARIOUS QUERIES AND INVITING THE REPLY OF THE ASSESSEE, NOTICES UNDER SECTION 142 DATED 13.06.2011, 25.08.2011, 2 4.10.2011 WERE ISSUED AND THE INFORMATION WERE SOUGHT FOR WHICH WERE DULY COMPLIED WITH BY THE ASSESSEE. IT IS NOT DENIED BY THE REVENUE THAT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT WITHOUT MAKING ANY ENQUIRY. WE ALSO NOTED THAT THE REVENUE EVEN ON MERIT IN THE CASE OF TWO CO - OWNERS NAMELY KRISHNA PRASAD BAGARIA AND RANGLAL BAGARIA, HUF HAS ACCEPTED THE PLEA THAT THE AMOUNT SO RECEIVED IS A CAPITAL RECEIPT EVEN IN THE ORDER PASSED UNDER SECTION 143(3) IN CONSEQUENCE OF ORDER OF CIT UNDER SECTION 263. ON THIS BASIS ITSELF, IT CAN BE HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THESE ISSUES . WE ALSO NOTED THAT SIMILAR ISSUE S HA VE ARISEN IN THE CASE OF THE ASSESSEE DURING ASSESSMENT YE AR 2005 - 06 WHEN THE CO - OWNERS HAS RECEIVED RS.4 CRORES, THE ASSESSEE CLAIMED HIS SHARE I.E. RS.1 CRORE TO BE CAPITAL RECEIPT. THE ASSESSING OFFICER DID NOT AGREE WITH THE ASSESSEE, BUT WHEN THE MATTER TRAVELLED TO CIT(APPEALS), THE CIT(APPEALS) DECIDED IN FAVOUR OF THE ASSESSEE AND TOOK THE VIEW THAT THE PART OF AMOUNT RECEIVED UNDER THE AWARD IS A CAPITAL RECEIPT. AGAINST THIS ORDER OF THE CIT(APPEALS) , WHICH WAS PASSED PRIOR TO THE INVOKING THE PROVISION OF SECTION 263 BY CIT, THE REVENUE HAS NOT COME IN APPEAL BEFORE TRIBUNAL. THIS FACT HAS DULY BEEN CONFIRMED BY LD. D.R. WHEN A QUERY WAS MADE BY THE BENCH. THIS IS ALSO A FACT THAT THERE IS NO CHANGE OF FACTS IN THE IMPUGNED ASSESSMENT YEAR AS COMPARED TO ASSESSMENT YEAR 2005 - 06 EXCEPT THE QUANTUM OF THE AMOUNT. UNDER THESE FACTS, NOW QUESTION ARISE WHETHER THE ORDER PASSED BY ASSESSING OFFICER CAN BE SAID TO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON THE ISSUE OF SHARE IN THE COMPENSATION AS WELL AS AMOUNT OF COMPENSATION RECEIVED BY THE ASS ESSEE AS PER THE AWARD DATED 30.09.2006 IN PURSUANCE OF THE ORDER OF HON BLE DELHI HIGH COURT APPROVED BY HON BLE SUPREME COURT. 18. BEFORE DECIDING ISSUE WHETHER THE PROVISION OF SECTION 263 HAS RIGHTLY BEEN INVOKED OR NOT ON THESE ISSUES . IT IS NECESSA RY TO LOOK INTO THE PROVISION OF SECTION 263 OF THE INCOME TAX ACT, 1961. FROM THE READING OF SECTION 263, IT IS CLEAR THAT THE JURISDICTION UNDER SECTION 263 CAN BE INVOKED BY CIT ONLY IF BOTH THE CONDITIONS THAT THE ORDER PASSED BY ASSESSING OFFICER IS E RRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE ARE FULFILLED. IF ONE OF THE CONDITIONS IS ABSENT, THE ORDER PASSED I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 22 OF 33 BY THE CIT BY INVOKING THE PROVISIONS OF SECTION 263 WILL NOT BE LEGAL. THE TERM ERRONEOUS HAS NOT BEEN DEFINED UNDER THE INCOM E TAX ACT BUT IT IS WELL SETTLED THAT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER CANNOT BE SAID TO BE AN ERROR. AN ORDER CAN BE SAID TO BE ERRONEOUS IF THERE IS AN INCORRECT ASSUMPTION OF FACT OR INCORRECT APPLICATION OF LAW IN THE ORDER PASSED BY THE ASSESSING OFFICER. IF THE ASSESSING OFFICER AFTER MAKING THE ENQUIRIES AND EXAMINING THE RECORDS, TAKEN ONE OF THE POSSIBLE VIEWS, IT CANNOT BE SAID THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS UNTIL AND UNLESS VI EW TAKEN BY ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. IT IS ALSO APPARENTLY CLEAR THAT THE POWERS OF THE CIT ARE THREE - FOLD. ONE IS PRIOR TO THE INITIATION OF THE PROCEEDINGS UNDER SECTION 263, SECOND AT THE TIME OF INITIATION OF THE PROCEEDINGS, THIRD T HE FINAL OUTCOME AFTER THE INITIATION OF THE PROCEEDING. POWER OF THE CIT PRIOR TO THE INITIATION INCLUDES CALL FOR AND EXAMINE THE RECORDS OF ANY PROCEEDINGS UNDER THIS ACT. THE WORD RECORD IS VERY IMPORTANT, BECAUSE ON THE BASIS OF THE RECORD OF THE PROCEEDINGS THE CIT WILL FORM AN OPINION THAT THE ORDER PASSED IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ONCE HE FORMS AN OPINION, HE HAS TO GIVE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND AFTER MAKING OR CAUSING THE ENQ UIRY HE CAN PASS AN ORDER. MOREOVER THE INQUIRY IS CONDUCTED ONCE THE CIT FORMS AN OPINION ON THE BASIS OF RECORD THAT THE ORDER PASSED IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE WORD RECORD HAS BEEN DEFINED UNDER EXPLANATION (B) OF SEC TION 263 TO MEAN THAT THE RECORD SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER. THE EXAMINATION OF THE RECORD IS TO BE CARRIED BY T HE COMMISSIONER PRIOR TO THE FORMING AN OPINION THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ONCE THE RECORD IS EXAMINED AND THE CIT ON THE BASIS OF EXAMINATION OF THE RECORD FORMS AN OPINION THAT THE ORDER IS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE, HE IS EMPOWERED AFTER GIVING THE OPPORTUNITY TO THE ASSESSEE, TO MAKE SUCH ENQUIRY AS HE MAY DEEM NECESSARY. THEREFORE, THE ENQUIRY TO I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 23 OF 33 BE CONDUCTED BY THE CIT IS AN ACT ONCE THE CIT ARRIVES AT A CONCLUSION THAT TH E ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AFTER EXAMINING THE RECORD. THUS ENQUIRY PRECEDES THE RECORD AND THE MATERIAL COLLECTED DURING THE COURSE OF THE ENQUIRY CANNOT BE THE PART OF THE RECORD OF THE PROCEEDINGS WHEN THE CIT FORMS AN OPINION THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 19. WE NOTED THAT THE PROCEEDING UNDER SECTION 263 HAS BEEN INVOKED AGAINST THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 READ WITH SECTION 143(3). THE PROCEEDINGS UNDE R SECTION 147 WERE INITIATED ON THE BASIS OF THE FOLLOWING REASONS RECORDED: - 'REASON FOR ISSUE OF NOTICE U/S 148 OF THE I. T. ACT. 1961 IT APPEARS FROM THE RECORD THAT DELH I ADMINISTRATION INITIATED AN ACQUISITION PROCEEDINGS IN RESPECT OF HOUSE PROPERTY AT 3, TILAK MARG, NEW DELHI, IN WHICH THE ASSESSEE HAD 1/4 TH SHARE. THE SAID ACQUISITION PROCEEDING WAS QUASHED BY THE DELHI HIGH COURT. APPEAL WAS FILED BEFORE THE DIVISION AL BENCH, DELHI HIGH COURT. BY AN INTERIM ORDER, THE HON BLE HIGH COURT (DIVISIONAL BENCH) ORDERED DELHI ADMINISTRATION TO PAY RS. 4, 00, 00, 0001 - (RS . FOUR CRORES) WHICH THE CO - OWNERS WERE ALLOWED TO WITHDRAW. FINALLY THE DIVISIONAL BENCH OF THE HON'BLE DELHI HIGH COURT ALSO QUASHED THE ACQUISITION PROCEEDINGS, AND AN ARBITRATOR WAS APPOINTED TO FINALISE THE MATTER REGARDING DAMAGES. THE MATTER ULTIMATELY WENT TO THE SUPREME COURT WHO, IN THE F Y 2004 - 05 (ASST. YR.2005 - 06) UPHELD THE DECISION OF THE HON'B LE DELHI HIGH COURT. THE ARBITRATOR FINALIZED THE DAMAGES AT RS.24.36 CRORES IN WHICH ASSESSEE'S SHARES IS RS.6.09 CRORES. ASSESSEE GOT THE DAMAGES IN THE FY 2008 - 09 RELEVANT TO THE A.Y2009 - 10. A SUM OF RS. 1 CRORE OUT OF DAMAGES HAS ALREADY BEEN TAXED IN THE ASST. YR. 2005 - 06. THE BALANCE AMOUNT I.E. R S. 5. 09 CRORES IS TO BE TAXED IN THE - A. Y 2009 - 1 O. ON PERUSAL OF THE RETURN FILED FOR THE ASST. YR. 2009 - 00, IT APPEARS THAT THE ASSESSEE DID NOT SHOW THIS INCOME. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY RS.5.09 CRORES WITHIN THE MEANING IN SECTION 147 OF THE I.T. ACT 1961' . 20. THE REASONS RECORDED CLEARLY STATE THAT DELHI ADMINISTRATION INITIATED THE ACQUISITION PROCEEDING IN RESPECT OF THE HOUSE PROPERTY BEING 3, TILAK MARG, NEW DELHI IN WHICH THE ASSESSEE HAD 1/4 TH SHARE AND I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 24 OF 33 THE SAID ACQUISITION PROCEEDING WAS QUASHED BY THE HON BLE DELHI HIGH COURT AND BY AN INTERIM ORDER HON BLE DELHI HIGH COURT HAS ORDERED DELHI ADMINISTRATION TO PAY RS .4,00,00,000/ - TO THE CO - OWNERS. THE CO - OWNERS WITHDREW THE SAID AMOUNT. ULTIMATELY DIVISIONAL BENCH OF HON BLE HIGH COURT ALSO QUASHED THE ACQUISITION PROCEEDINGS AND AN ARBITRATOR WAS APPOINTED TO FINALISE THE MATTER REGARDING THE PAYMENT OF DAMAGES FOR WRONGFUL POSSESSION OF THE SAID PROPERTY. WHEN THE MATTER TRAVELLED TO THE HON BLE SUPREME COURT, HON BLE SUPREME COURT UPHELD THE ORDER OF THE DECISION OF THE DELHI HIGH COURT. THE ARBITRATOR FINALIZED THE DAMAGES TO BE PAID TO THE CO - OWNERS AT RS.24.36 C RORES IN WHICH THE ASSESSEE S SHARE AS PER THE REASONS RECORDED WAS DETERMINED AT RS.6.09 CRORES. SINCE RS.1 CRORE WAS ASSESSED DURING THE ASSESSMENT YEAR 2005 - 06, THEREFORE, THE BALANCE SUM OF RS.5.09 CRORES IS TO BE ASSESSED IN THE ASSESSMENT YEAR 2009 - 1 0 AND ON THAT BASIS THE PROCEEDINGS UNDER SECTION 147 WERE INITIATED. SUBSEQUENTLY THE NOTICES WERE ISSUED TO THE ASSESSEE UNDER SECTIONS 143(2), 142(1). THE NOTICES UNDER SECTION 142(1 ) WERE ISSUED ON 13.06.2011, 25.08.2011 AND 24.10.2011. THE ASSESSEE IN RESPONSE TO THE NOTICES AND THE VARIOUS QUERIES RAISED BY THE ASSESSING OFFICER FILED THE REPLY ON VARIOUS DATES AND ULTIMATELY WE NOTED THAT THE ASSESSING OFFICER TOOK A CONSCIOUS DECISION THAT THE AMOUNT RECEIVED BY THE ASSESSEE EXCEPT THE INTEREST PORT ION IS A CAPITAL RECEIPT IN THE FOLLOWING MANNER: - (I) AT THE OUTSET IT IS TO BE NOTED THAT THE SUBJECT MATTER OF APPAL IN THE CASE SHRI SUDARSHAN PRASAD BAGARIA FOR THE AY 2005 - 06 WAS ADDITION OF 1 CRORE (THE ASSESSEE S SHARE OUT OF RS.4 CRORE) RECEIVED FROM DELHI AUTHORITY ON AD - HOC BASIS. IN THAT CASE, IN ADDITION TO THE NATURE OF RECEIPT I.E. WHETHER ON CAPITAL ACCOUNT OR OTHERWISE, THE YEAR OF TAXABILITY WAS ALSO IN DISPUTE. LD. CIT(A) NOTED THE FOLLOWING FACTS: ...THE APPELLANT ALONG WITH OTHERS OWNE D A HOUSE PROPERTY BEING PREMISES NO. 3, TILAK MARG, NEW DELHI, THE APPELLANT HAVIN G 1/4 TH UNDIVIDED SHARE THEREON. THE PROPERTY WAS ACQUIRED BY THE DELHI ADMINISTRATION IN THE YEAR 1987 UNDER THE LAND ACQUISITION ACT, 1984. HIG H COURT BY THEIR ORDER DATED 27.05.1994 QUASHED THE ACQUISITION PROCEEDINGS AND HELD THAT THE ACQUISITION AS WRONGLY AND THE PROPERTY WAS TO BE RESTORED BACK TO THE OWNERS. THE HON BLE COURT FURTHER HELD THAT THE OWNERS OF THE PROPERTY WERE ENTITLED TO DAM AGES FOR WRONGFUL I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 25 OF 33 OCCUPATION OF THE PROPERTY SINCE 1987. THE HON BLE COURT APPOINTED ARBITRATOR TO DETERMINE THE COMPENSATION FOR THE WRONGFUL OCCUPATION OF THE PROPERTY SINCE 1987. THE DELHI ADMINISTRATION FILED APPEAL BEFORE THE DIVISION BENCH OF THE DEL HI HIGH COURT AGAINST THE JUDGMENT OF THE SINGLE JUDGE AND ALSO PRAYED FOR STAY OF OPERATION OF THE QUASHING ORDER WHEREUPON THE DIVISION BENCH OF THE COURT PASSED AN INTERIM ORDER DIRECTING THE DELHI ADMINISTRATION TO DEPOSIT RS. 4 CRORES ON AD HOC BAS IS TOWARDS COMPENSATION FOR WRONGFUL OCCUPATION AND HOLDING OVER THE PROPERTY. THE DELHI ADMINISTRATION DEPOSITED RS. 4 CRORE IN PURSUANCE OF THE COURT S ORDER, OUT OF WHICH THE APPELLANT WITHDREW RS. 1 CRORE BEING HIS 1/4 TH SHARE DURING FY 1995 - 96. LATER, THE TOTAL COMPENSATION PAYABVLE AS PER ARBITRATOR S AWARD WAS DETERMINED AT RS.24.36 CRORE. ACCORDINGLY, THE DELHI ADMINISTRATION DEPOSITED A FURTHER SUM OF RS.20.36 CRORE (TOTAL COMPENSATION AMOUNT RS.24.36 CRORE RS. 4 CRORE PAID EARLIER DURING 1995 - 96 ) IN THE COURT WHICH WAS RECEIVED BY THE OWNERS ON APRIL 2, 2008. THE APPELLANT S SHARE IN THE TOTAL DAMAGES/ COMPENSATION OF RS.24.36 CRORES OF WHICH RS. 4 CRORE WAS RECEIVED DURING FY 1995 - 96 FORMED A PART) AMOUNTED TO RS.6.09 CRORE. THE MATTER WAS BEING AGITATED BY THE DELHI ADMINISTRATIVE WITH ITS SLP BEING FINALLY DISMISSED BY THE HON BLE SUPREME COURT ON 22.04.2004, I.E. THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2005 - 06. IT IS ON THE BASIS OF THE SUPREME COURT ORDER THAT THE AO HAS TAXED THIS AMOUNT OF RS. 1 CRORE, I.E. 1/4 TH SHARE OF THE APPELLANT AGAINST RS. 4 CRORE DEPOSITED BY THE DELHI ADMINISTRATION. VIDE PARA 6 OF THE ORDER, LD. CIT(A) OBSERVED THAT THE AD HOC COMPENSATION/ DAMAGE RECEIVED BY THE OWNER HAS NO RELEVANCE TO THE ASSESSMEN T YEAR IN QUESTION (I.E. AY 2005 - 06) AS NEITHER FINAL AWARD WAS MADE IN THIS YEAR NOR WAS THE ORDER OF HIGH COURT TERMING THE ACQUISITION AS ILLEGAL, OR DIRECTION BY THE DELHI HIGH COURT FOR THE AD HOC DEPOSIT WERE ISSUED IN THIS YEAR . AGAIN, IN THE ASSES SMENT RECEIPT OF 1 CRORE WAS MADE THE SUBJECT MATTER OF ASSESSMENT TO ITS ENTIRETY BY THE AO THERE HAVING NO SCOPE FOR DISCRIMINATING VARIOUS COMPONENTS OF SUCH RECEIPT VIZ. COMPENSATION/ SOLATIUM/ INTEREST, THE RECEIPT BEING AD HOC IN NATURE. AND THE QUES TION OF TAXATION WAS ACCORDINGLY ADDRESSED BY THE LD. CIT(A) AND ON THIS COUNT THE PRESENT CASE IS DIFFERING. (2) INCIDENTALLY, IT IS NOTED THAT IN PARA 3 OF THE LD. CIT(A) S ABOVE ORDER HE HAD COVERED THE AO S REFERRING IN THAT CASE IN QUESTION TO THE OR DER OF HON BLE CALCUTTA HIGH COURT IN THE CASE OF KRISHNA PRASAD BAGARIA (I.E. IN THE DEPARTMENTAL APPEAL IN THE ASSESSEE S CASE) IN C.A. NO. 398 OF 2004 FOR THE AY 1996 - 97. THE AO MENTIONED THAT IN THAT CASE THE H ON BL E COURT HAD HELD THAT THE DAMAGES OF RS. ONE CRORE IS NOT TAXABLE AND IT WILL BE TAXABLE IN THE YEA R OF FINALISATION OF DAMAGE WHICH WAS I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 26 OF 33 PENDING AT THAT TIME AND THEREFORE, THE HIGH COURT WAS ALSO OF THE OPINION THAT DAMAGES IS TAXABLE AS REVENUE RECEIPT ONLY IN THE YEAR THE DAM A GE IS FINALL Y QUANTIFIED . THE LD. CIT(A) NOTED THE ASSESSEE S SUBMISSION THAT THERE IS NO SUCH OBSERVATION OR FINDING BY THE HIGH COURT AND THAT THE PURPORTED FINDING OF THE CALCUTTA HIGH COURT AS QUOTED BY THE AO IS WRONG AND INCORRECT. AND CIT(A) OBSERVED THAT THE OBSERVATION WAS IN FAVOUR OF THE ASSESSEE. IN FACT, HON BLE COURT NOT AT ALL ADDRESSED THE ISSUE OF NATURE OF RECEIPT BUT ADDRESSED THE YEAR OF CAUSE OF ACTION AND IDENTIFIED THE YEAR OF FINALISATION OF DAMAGE FOR SUCH CAUSE OF ACTION. AND, THE ASSESSEE I S SEEN TO HAVE ACCOUNTED FOR THE RECEIPT IN THE PREVIOUS YEAR 2008 - 09 (AY 2009 - 10) ON RECEIPT BASIS ONLY AFTER THE D ELHI ADMINISTRATION DEPOSITED A FURTHER SUM OF RS.20.36 CRORE (TOTAL COMPENSATION AMOUNT RS. 24.36 CRORE MINUS RS. 4 CRORE PAID EARLIER DURIN G 1995 - 96) IN THE COURT WHICH WAS RECEIVED BY THE OWNERS ON APRIL 2, 2008. (3) A COPY OF THE ORDER OF ARBITRATION HAS BEEN MADE AVAILABLE. AFTER RECEIVING THE ABOVE ORDER, THE NATURE OF THE AMOUNT DETERMINED AS PAYABLE BY THE DA AS COMMENTED BY THE ARBITR ATOR WAS TAKEN UP FOR DISCUSSION IN COURSE OF HEARING. THERE THE ARBITRATOR AWARD MADE RUNS AS THE RESPONDENT SHALL PAY TO THE CLAIMANTS AN AMOUNT FOR USE AND OCCUPATION OF THE PREMISES.... AND FURTHER THE RESPONDENT SHALL PAY THE AMOUNTS AS INDICATED A BOVE, WITHIN TWO MONTHS FAILING WHICH THE RESPONDENT SHALL PAY INTEREST BY 12% PER ANNUM FROM THE DATE OF THE AWARD TILL PAYMENT . THE ASSESSEE NOW IN HIS PRESENT SUBMISSION CLARIFIES THAT IT IS AGAIN STATED THAT THE ARBITRATOR HAS MERELY DEVISED A FORMUL A ON FAIR RENT BASIS FOR DETERMINING THE DAMAGES. THERE WAS NO SUCH DIRECTION BY THE COURT RATHER THE COURT S DIRECTION WAS EXPLICIT THAT THE ARBITRATOR WILL NOT BE OBLIGED TO GIVE REASONS FOR HIS CONCLUSIONS. THUS, OBSERVATIONS MADE BY THE ARBITRATOR IN P ARA 22 OF THE AWARD ABOUT MANNER OF DETERMINING THE DAMAGES OR THE NATURE OF DAMAGES IS REDUNDANT AND OF NO EFFECT, BEING OUTSIDE THE SCOPE OF THE HIGH COURT S ORDER AND CANNOT CHANGE THE CHARACTER OF THE RECEIPT AS RENT. THE DELHI ADMINISTRATION WAS NEITH ER A LESSEE NOR LICENSEE OF THE SAID PROPERTY AND WAS IN THE ILLEGAL AND UNAUTHORIZED POSSESSION THEREOF AS A TRESPASSER SINCE 10.03.1987. AS PER ORDER OF THE COURT THE CHARACTER OF THE AMOUNT AWARDED BY THE ARBITRATOR CONTINUED TO BE DAMAGES OF THE PROPER TY AND DEPRIVATION OF THE RIGHT OF ENJOYMENT OF THE PROPERTY BY THE OWNER DUE TO WRONGFUL OCCUPATION BY THE DELHI ADMINISTRATION AND THEREFORE A CAPITAL RECEIPT NOT LIABLE TO TAX UNDER THE I.T. ACT. I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 27 OF 33 (4) REGARDING THE NATURE OF THE PAYMENT WE MAY REFER TO THE OBSERVATION OF THE HON BLE HIGH COURT OF DELHI IN CIVIL WRIT NO. 825/87. THE OPERATIVE PART OF THE ORDER IS NOTED AS UNDER: - THE DELHI ADMINISTRATION IS DIRECTED TO HANDOVER VACANT AND PEACEFUL POSSESSION OF THE PREMISES IN QUESTION ALONG WITH THE OPEN LAND TO THE PETITIONERS WITHIN ONE MONTH FROM TODAY AS THE NOTIFICATION IN QUESTION IS HELD TO BE ILLEGAL AND BAD IN LAW. THE POSSESSION OF THE PETITIONER S PROPERTY IS BY DELHI ADMN. THROUGH ITS OFFICE IS ILLEGAL AND IS IN THE NATURE OF TRESPASS ON THE PROPERTY. PETITIONERS HAVE SUBMITTED THAT THE MARKET VALUE OF THE PROPERTY AS OF TODAY AS PER GOVERNMENT RATES WOULD BE RS.14,000/ - PER SQ.MTR. AND WOULD BE RS.14 CRORE. TO THIS AMOUNT IF SOLATIUM OF THE RATE OF 30% UNDER THE LAND ACQUISITION ACT AND I NTEREST W.E.F. 1987 ARE ADDED THE TOTAL AMOUNT PAYABLE UNDER THE ACT WOULD BE OVER RS. 21 CRORES. WHAT WOULD BE THE DAMAGES WILL BE DETERMINED BY THE ARBITRATOR . (5) NOW, WHILE THE ARBITRATOR IDENTIF IED THE DAMAGE PAYABLE AS FOR USE AND OCCUPATION, THE A SSESSEE PLACES HIS CASE AS DAMAGES FOR DEPRIVATION OF OCCUPATION. IT IS TRUE THAT, WHILE HIGH COURT IS THE AUTHORITY TO DETERMINE THE NATURE OF PAYMENT, THE ARBITRATOR IS CONCERNED WITH THE METHODOLOGY TO BE ADOPTED WITHIN THE FRAME WORK OF RELEVANT LAW NA MELY THE PROVISIONS OF THE LAND ACQUISITION ACT AND MENTIONING OF NATURE IS INCIDENTAL TO THE METHODOLOGY. BUT THERE IS NO DENIAL O THE FACT THAT THE HON BLE HIGH COURT AND THE ARBITRATOR BOTH THE CONCERNED AUTHORITY IS RAISING THE MATTER OF PAYMENT OF INT EREST WHICH IS DIFFICULT AND IN FACT CANNOT BE ACCEPTED AS A PAYMENT ON ACCOUNT OF DEPRIVATION OF POSSESSION OR ANY SOLATIUM RATHER AN AMOUNT PAYABLE ON ACCOUNT OF LATE PAYMENT OF COMPENSATION THOUGH SOMETIME DESCRIBED IN THEIR CONTEXT AS DAMAGE. AND IT IS NOT NECESSARY THAT IN THE I.T. ACT THAT HAS TO BE ACCEPTED AS SUCH WITHOUT PROBING INTO THE TRUE NATURE OF THE RECEIPT ALTHOUGH IT IS EQUALLY ADMITTED THAT IT IS NOT ALWAYS BEYOND ANY CONTROVERSY. TO MY OPINION, WITH ALL THE DUE RESPECT TO THE VARIOUS AUT HORITIES COVERED BY THE ASSESSEE IN HIS WRITTEN SUBMISSION, THE INTEREST COMPONENT HAS ESSENTIALLY THE NATURE OF REVENUE RECEIPT. (6) INCIDENTALLY, IT MAY BE MENTIONED THAT, CONSIDERING THE NATURE OF HIS CASE AND THE COMPLEXITY INVOLVED THE ASSESSEE HAS VOLUNTEERED TO OFFER THE SAID INCOME FOR PURCHASE OF PEACE WHILE HE MAINTAINS HIS EARLIER CLAIM OF THE SAID INTEREST ALONG WITH THE OTHER AMOUNT AS REPRESENTING CAPITAL RECEIPT. THE I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 28 OF 33 SUBMISSION OF THE ASSESSEE IS AS UNDER, VIDE HIS LETTER DATED 21.12.2011: - PLEASE REFER TO THE DISCUSSION MY AUTHORIZED REPRESENTATIVE HAD WITH YOU, I STILL MAINTAIN THAT THE AMOUNT OF RS.14.12 LAC RECEIVED BY ME IN EXCESS OF CALCULATION AS PER PARA 40 OF THE ARBITRATION AWARD IS PART OF THE DAMAGES AND NOT LIABLE TO TAX AS DIS CUSSED IN MY SUBMISSION DATED 09.12.2011. HOWEVER, TO BUY PEACE AND AVOID MULTIPLICITY OF LITIGATION I HEREBY OFFER THE EXCESS AMOUNT OF RS.14.12 LAC RECEIVED TOWARDS INTEREST AND COST FROM DELHI ADMINISTRATION AS MY INCOME AND AGREE TO PAY TAX THEREON. I AM MAKING THIS OFFER ON THE ASSURANCE THAT NO PENALTY PROCEEDINGS WILL BE INITIATED AGAINST ME IN RESPECT OF THE SAID INCOME . (7) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AMOUNT OF INTEREST AND THE ADDITIONAL AMOUNT AS MENTIONED BY THE ASSE SSEE, I.E. RS.1/4 TH OF RS.56,47,265/ - I.E. RS.14,11,816/ - IS CHARGED TO TAX IN THE HANDS OF THE ASSESSEE AS HIS INCOME FROM OTHER SOURCES. INCIDENTALLY IT MAY BE MENTIONED HERE THAT THERE IS NO SUPPRESSION OF PRIMARY FACT IN THIS CASE AND THE ADDITION IS ONLY DUE TO DIFFERENCE OF OPINION AND THEREFORE THE ASSESSEE S REQUEST FOR NOT INITIATING PENALTY PROCEEDINGS IS IN CONFORMITY WITH THE POSITION OF LAW . 21. FROM THE SAID FINDING OF THE ASSESSING OFFICER, IT IS APPARENTLY CLEAR THAT THE ASSESSING OFFICER HAD DULY EXAMINED THE ISSUE S RELATING TO THE DAMAGES RECEIVED BY THE ASSESSEE ON THE ORDER OF THE HON BLE HIGH COURT AND THE ASSESSING OFFICER CONSCIOUSLY TOOK THE VIEW THAT THE AMOUNT SO RECEIVED BY THE ASSESSEE IS A CAPITAL RECEIPT EXCEPT A SUM OF RS.14 ,18,816/ - TO WHICH THE ASSESSEE HAS AGREED TO BE A REVENUE RECEIPT ON THE CONDITION TO BUY PEACE. 22 . THUS IT IS A CASE WHERE ASSESSING OFFICER HAS EXAMINED THE ISSUE BY MAKING INQUIRIES. ON THE BASIS OF WHICH CIT INVOKED JURISDICTION UNDER SECTION 263. IT IS NOT THE CASE OF LACK OF INQUIRY ON THE PART OF THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER MAKING ENQUIRIES ALLOWED THE CLAIM OF THE ASSESSEE ON THAT ISSUE. IT IS NOT NECESSARY THAT THE ASSESSING OFFICER SHOULD DISCUSS IN DETAIL THE FINDING IN HIS ORDER , ALTHOUGH THE ASSESSING OFFICER HAS GIVEN CLEAR - CUT FINDING . I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 29 OF 33 2 3 . IF THE ASSESSING OFFICER HAS NOT DISCUSSED THE INQUIRY MADE BY HIM IN THE CASE OF ASSESSEE IN RESPECT OF WHICH, HE ISSUED SHOW - CAUSE TO ASSESSEE, WE CANNOT SAY THAT ORDER IS ERR ONEOUS AS THE ASSESSING OFFICER HAS NOT MADE ANY INQUIRY INTO THE MATTER. THE ASSESSEE CANNOT DICTATE THE ASSESSING OFFICER WHAT SHOULD HE INCORPORATE IN THE ASSESSMENT ORDER AND HOW HE SHOULD DRAFT THE ASSESSMENT ORDER. WE FIND THAT THE HON BLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. - GABRIEL INDIA LIMITED REPORTED IN 203 ITR 108 HAS HELD IN THIS REGARD AS UNDER: - HELD, THAT THE INCOME TAX OFFICER IN THIS CASE HAD MADE ENQUIRIES IN REGARD TO THE NATURE OF THE EXPENDITURE INCURRED BY THE ASSESSEE. THE AS SESSEE HAD GIVEN A DETAILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING. ALL THESE WERE PART OF THE RECORD OF THE CASE. EVIDENTLY, THE CLAIM WAS ALLOWED BY THE INCOME TAX OFFICER ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. THIS DECISION OF THE INCOME TAX OFFICER COULD NOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. MOREOVER, IN THE INSTANT CASE, THE COMMISSIONER HIMSELF, EVEN AFTER INITIATING PROCEEDINGS FOR REVISION AND HE ARING THE ASSESSEE, COULD NOT SAY THAT THE DISALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS ERRONEOUS AND THAT THE EXPENDITURE WAS NOT REVENUE EXPENDITURE BUT AN EXPENDITURE OF CAPITAL NATURE. HE SIMPLY ASKED THE INCOME TAX OFFICER TO RE - EXAMINE THE MATTER. T HAT WAS NOT PERMISSIBLE. THE TRIBUNAL WAS JUSTIFIED IN SETTING ASIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 . 2 4 . SIMILAR VIEW HAS BEEN TAKEN BY THE HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. - MAHENDER KUMAR BANSAL, 297 ITR 099 IN WHICH RESPECTFULLY FOLLOWING THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. - GOYAL PRIVATE FAMILY SPECIFIC TRUST, 171 ITR 698 (ALLD.) HAS HELD UNDER PARA NO. 12 AS UNDER: - AS HELD BY THIS COURT IN THE CASE OF GOYAL PRIVATE FA MILY SPECIFIC TRUST (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT MERELY BECAUSE THE ITO HAD NOT WRITTEN LENGTHY ORDER, IT WOULD NOT ESTABLISH THAT THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3)/148 OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTERES T OF THE REVENUE WITHOUT BRINGING I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 30 OF 33 ON RECORD SPECIFIC INSTANCES, WHICH IN THE PRESENT CASE, THE CIT HAS FAILED TO DO . NO CONTRARY DECISION WAS BROUGHT TO OUR KNOWLEDGE BY EITHER OF THE SIDES. 2 5 . WE NOTED THAT HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. - LEISURE WEAR EXPORTS LTD., 341 ITR 166 (DEL.) HAS CLEARLY HELD AS UNDER: - THE POWER OF REVISION IS NOT MEANT TO BE EXERCISED FOR THE PURPOSE OF DIRECTION THE AO TO HOLD ANOTHER INVESTIGATION WITHOUT DESCRIBING AS TO HOW THE ORDER OF THE AO IS ERRONE OUS. FROM THIS IT ALSO FOLLOWS THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED BY THE AO AFTER TAKING INTO ACCOUNT THE ASSESSEE S SUBMISSIONS AND DOCUMENTS FURNISHED BY HIM AND NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE CIT WHICH SHOWED THAT THERE WAS ANY DISCREPANCY OR FALSITY IN EVIDENCES FURNISHED BY THE ASSESSEE, THE ORDER OF THE AO CANNOT BE SET ASIDE FOR MAKING DEEP INQUIRY ONLY ON THE PRESUMPTION AND ASSUMPTION THAT SOMETHING NEW MAY COME OUT. FOR MAKING A VALID ORDER UNDER SECTION 263 IT IS ESSENTIAL THAT THE CIT HAS TO RECORD AN EXPRESS FINDING TO THE EFFECT THAT ORDER PASSED BY THE AO IS ERRONEOUS WHICH HAS CAUSE LOSS TO THE REVENUE. FURTHERMORE, WHERE ACTING IN ACCORDANCE WITH LAW THE AO FRAMES CERTAIN ASSESSMENT ORDER, SAME CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE ACCORDING TO THE CIT, THE ORDER SHOULD BE WRITTEN MORE ELABORATELY . 2 6 . IN THE CASE OF DIT VS. - JYOTI FOUNDATION, 357 ITR 388 (DEL.), THE HON BLE DELHI HIGH COURT HAS HELD AS UNDER: - REVISIONARY POWER UNDER SECTI ON 263 IS CONFERRED BY THE ACT ON THE COMMISSIONER/DIRECTOR OF INCOME TAX WHEN AN ORDER PASSED BY THE LOWER AUTHORITY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT ORDERS WHICH ARE PASSED AFTER INQUIRY/INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE OR NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE REVISIONARY AUTHOR ITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUIRED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN . 2 7 . THUS IN VIEW OF SETTLED LAW AS DISCUSSED ABOVE, WE ARE OF THE FIRM VIEW THAT IT IS A CASE WHERE DUE INQUIRY WAS CONDUCTED BY THE ASSESSING I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 31 OF 33 OFFICER AS IS APPARENT FROM ASSESSMENT ORDER ON THE SE TWO ISSUE S ON WHICH CIT INVOKED JURISDICTION UNDER SECTION 263. IT IS NOT THE CASE OF LD. D.R. THAT THE VIEW S TAKEN BY ASSESSING OFFICER ARE UNSUSTAINABLE IN LAW. 28 . IT IS A SETTLED LAW THAT IF THE AO HAS TAKEN ONE OF THE POSSIBLE VIEWS, IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORDER PASSED UNLESS AND UNTIL THE VIEW TAKEN BY THE AO IS UNSUSTAINABLE IN LAW. THE SAID VIEW HAS BEEN TAKEN BY THE HON'BLE SUPREME COURT IN THE CASE OF MALA BAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC) WHEREIN THEIR LORDSHIPS HAS HELD AS UNDER : - 'THE PRE - REQUISITE TO THE EXERCISE OF JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 IS THAT THE ORDER OF THE AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED OF TWIN CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT - IF THE ORDER OF THE ASSESSING OFFICE IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE - RECOURSE CANNOT BE HAD TO SECTION 263(1). THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL OR DERS PASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND. THE PHRASE 'PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF R EVENUE AS A CONSEQUENCE OF THE ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENU E, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER 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, UNLESS THE VIEW TAKEN BY THE ASSESSING OF FICER IS UNSUSTAINABLE IN LAW. WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING THE ORDER PASSED BY THE ASSESSING OFFICER ACCEPTING THE SAME WITHOUT APPLICATION OF MIND AS SUCH WILL BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE 1 29. A PERUSAL OF T HE ORDER OF THE CIT INDICATES THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 READ WITH SECTION 143(3) WAS SET ASIDE ON VARIOUS GROUNDS AND ITEM S NO. 1 & 2 RELATING TO THE SHARE OF ASSESS EE IN THE PROPERTY AS WELL AS THE NATURE OF THE RECEIPT OF THE COMPENSATION. AS HAS BEEN DISCUSSED BY US IN THE PRECEDING I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 32 OF 33 PARAGRAPH S , THESE ISSUES HAVE DULY BEEN EXAMINED AND CONSIDERED BY THE ASSESSING OFFICER IN FRAMING THE ASSESSMENT UNDER SEC TION 147 READ WITH SECTION 143(3). THUS, IN OUR CONSIDERED OPINION, THESE ISSUES CANNOT BE SUFFICIENT GROUND FOR SETTING ASIDE ASSESSMENT . WHILE MAKING ASSESSMENT ORDER, IT IS THE SATISFACTION OF THE ASSESSING OFFICER WHO MADE THE ENQUIRY AND IT SHOULD BE A TOUCHSTONE OF THE ASSESSMENT ORDER PASSED BY HIM, THE CIT CANNOT SUBSTITUTE HIS VIEW IN PLACE OF FINDING OF THE ASSESSING OFFICER UNTIL AND UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT TO OUR KNOWLEDGE BY THE LD. D.R., WHICH MAY PROVE THAT THE DECISION TAKEN BY THE ASSESSING OFFICER IS NOT SUSTAINABLE IN LAW ON THESE TWO ISSUES. THE ORDER PASSED BY CIT IS ILLEGAL WITHOUT JURISDICTION ON THESE ISSUES . SO FAR AS THESE ISSUES ARE CONCERNED , T HE ORDER PASSED BY THE CIT CANNOT BE SUSTAINED IF SUCH TYPE OF ORDER IS SUSTAINED THEN THIS WILL PERMIT THE ILLEGALITY TO CONTINUE AND THE SUBSEQUENT ACTIONS CARRIED OUT ON THE ILLEGAL ORDER ARE ALSO ILLEGAL. WE, THEREFORE, SET ASIDE THE ORDER OF CIT TO THE EXTENT IT RELATES TO THESE TWO ISSUES. IN OTHER APPEALS ALSO, WE SET ASIDE THE ORDERS OF CIT TO THE EXTENT IT RELATE TO THESE TWO ISSUES AS THE FACTS INVOLVED IN THOSE CASES ARE SIMILAR EXCEPT THAT THESE ISSUES HAVE BEEN DULY EXAMINED AND CONSIDERED BY ASSESSING OFFICER IN MAKING ASSESSMENTS UNDER SECTION 143(3). 30. NOW COMING TO THE OTHER ISSUES TAKEN IN SHOW - CAUSE NOTICE ON THE BASIS OF WHICH THE CIT HAS INVOKED THE JURISDICTION UNDER SECTION 263, LD. A.R. DID NOT ADVANCE ANY ARGUMENT IN ALL THE SE ISSU ES. WE ALSO NOTED THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY WHATSOEVER IN RESPECT OF THE OTHER ISSUES AS HAS BEEN TAKEN BY THE CIT IN THE SHOW - CAUSE NOTICE AND IN RESPECT OF WHICH ORDER UNDER SECTION 263 HAS BEEN PASSED. EVEN NO QUERY HAS BE EN RAISED IN THE NOTICE ISSUED UNDER SECTION 142. LD. A.R. HAS ALSO NOT POINTED OUT TO US WHETHER ANY ENQUIRY HAS BEEN RAISED BY THE ASSESSING OFFICER WHILE FRAMING ASSESSMENT IN ALL THESE CASES. IN VIEW OF THESE FACTS, WE CONFIRM THE ORDER OF CIT UNDER S ECTION 263 IN RESPECT OF THE OTHER ISSUES TAKEN BY THE ASSESSEE IN THE APPEAL I.T.A. NO S . 922, 923, 927 & 928 / KOL ./20 1 4 ASSESSMENT YEAR : 200 9 - 20 10 PAGE 33 OF 33 EXCEPT GROUNDS NO. 5, 6 & 7 IN ALL THE APPEALS. WE, THEREFORE, SUSTAIN THE ORDER OF CIT TO THE EXTENT IT DOES NOT RELATE TO GROUNDS NO. 5, 6 & 7. IN RESPECT OF GROUNDS NO. 5, 6 & 7, IN ALL THE CASES WE SET ASIDE THE ORDER OF THE CIT. ACCORDINGLY, THESE APPEALS FILED BY RESPECTIVE ASSESSEES IN ALL THE CASES ARE PARTLY ALLOWED. 31. IN THE RESULT, ALL THE APPEALS FILED BY THE RESPECTIVE ASSESSE E S ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH MAY , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 28 TH D AY OF MAY , 201 5 COPIES TO : (1) SHRI DHANRAJ BAGARIA, C/O. D.J. SHAH & CO ., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA - 700 020 (2) SHRI KRISHNA PRASAD BAGARIA, C/O. D.J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA - 700 020 (3) SHRI SUDERSHAN PRASAD BAGARIA, C/O. D.J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA - 7 00 020 (4) RANGLAL BAGARIA (HUF), C/O. D.J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA - 700 020 (5) COMMISSIONER OF INCOME TAX, KOLKATA - XV, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA - 700 069 ( 6 ) COMMISSIONER OF INCOME TAX (APPEALS) ( 7 ) THE DEPARTMENTAL REPRESENTATIVE ( 8 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .