M/s. R.S. Components & Controls (India) Ltd., New Delhi V. CIT, New Delhi

ITA 972/DEL/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58975 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 20-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 08-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F : NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.972/DEL./2010 (ASSESSMENT YEAR : 2005-06) M/S. R.S. COMPONENTS & CONTROLS (INDIA) LTD., VS. A DDL. CIT, 222, OKHLA INDUSTRIAL ESTATE, RANGE 15, NEW DELHI 110 020. NEW DELHI. (PAN : AAACR0194D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL BHALLA, CA REVENUE BY : SHRI PRADEEP KUMAR, CIT DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM THE ORDER OF CIT, DELHI V DATED 21.01.2010 FOR THE ASSESSMENT YEAR 2005-0 6. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED CIT-DELHI, HAS ERRED BOTH ON FACTS AND IN LAW IN PASSING AN ORDER U/S 263 WITHOUT JURISDICTION AN D THEREFORE THE ORDER U/S 263 IS BAD IN LAW. 2. THE LEARNED CIT-DELHI, WAS UNDER MISTAKEN BELIEF THAT THE ORDER PASSED U/S 143(3) WAS ERRONEOUS AND PREJUDICI AL TO THE REVENUE IN AS MUCH AS THE ISSUES RAISED WERE DULY C ONSIDERED BY THE LEARNED ASSESSING OFFICER WHILE FRAMING THE ASS ESSMENT U/S 143(3) OF THE ACT. ITA NO.972/DEL./2010 2 3. THE LEARNED CIT-DELHI, HAS ERRED IN LAW IN TRYIN G TO SUBSTANTIATE THE OPINION OF THE AO WITH HIS OPINION WHICH ACT IS BAD IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D THE GROUND OF APPEAL AT A LATER STAGE. 2. IN THIS CASE, THE RETURN WAS FILED ON 30.10.2005 DECLARING INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES WERE ISSUED U/S 143(2) ON 25.10.2006. THE COMPANY IS ENGAGED IN THE BUSINESS OF MAIL ORDER SUPPLY OF INDUSTRIAL COMPONENTS, SPARE PARTS IN THE NATURE OF CABLES AND CONNECTORS, CONTROL AND AUTOMATION COMPONENTS, ELECTRONIC AND E LECTRICAL CONSUMABLES, SEMI CONDUCTORS, TESTS AND MEASUREMENT INSTRUMENTS, MAINTENANCE SAFETY AND SECURITY EQUIPMENT AND COMPONENTS, MECHANICAL PRODU CTS AND TOOLS AND TECHNICAL BOOKS, ETC. ETC. THE ASSESSMENT U/S 143( 3) WAS COMPLETED ON 17.11.2008 AT AN INCOME OF RS.1,01,29,688/-. 3. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LE ARNED AR SUBMITTED THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCO ME-TAX ACT, 1961. IN THE SHOW CAUSE NOTICE ISSUED BY THE CIT U/S 263 OF THE INCOME-TAX ACT (PLACED AT PAGES 26 & 27 OF THE PAPER BOOK, THE CIT HAS RAISED THREE ISSUES. FIRSTLY, THE ASSESSEE HAS CLAIMED DEDUCTION FOR RS.71,09,456/- O N ACCOUNT OF COMMISSION PAID @ 5% TO M/S. CONTROL & SWITCHGEAR. AS PER CIT , THE ASSESSING OFFICER HAS NOT EXAMINED THIS CLAIM AS TO HOW M/S. CONTROL & SWITCHGEAR HELPED IN THE SALES. IT IS RELATED CONCERN. THE REASONABLEN ESS OF THE COMMISSION PAID ITA NO.972/DEL./2010 3 WAS ALSO REQUIRED TO BE EXAMINED. THE ASSESSING OF FICER HAS NOT EXAMINED THESE ASPECTS OF THE DEDUCTION CLAIMED BY THE ASSES SEE. FOR THIS, LD. AR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS, T HIS QUERY WAS RAISED AND DURING THE PROCEEDINGS, ASSESSEE HAS SUBMITTED ON T HIS ISSUE AS UNDER :- (B) REGARDING YOUR QUERY OF COMMISSION PAID, WE SU BMIT THAT THE SAME HAS BEEN PAID TO M/S. CONTROLS & SWITCHGEA R CO. LTD. (DETAILS ENCLOSED AT PAGE 1) IN VIEW OF THE EXPERTI SE AND THE REQUISITE INFRASTRUCTURE OF COUNTRY WIDE MARKETING NETWORK WITH M/S. CONTROLS & SWITCHGEAR COMPANY LIMITED IT WAS D ECIDED BY THE BOARD OF DIRECTORS OF THE ASSESSEE COMPANY T O PAY COMMISSION @ 5% ON SALES EFFECTED THROUGH M/S. CONT ROLS & SWITCHGEAR COMPANY LIMITED. THE ASSESSING OFFICER SATISFIED WITH THE EXPLANATIO N OF ASSESSEE AND ACCEPTED THE SAME. FURTHER, LD. AR SUBMITTED THAT IN THE JU ST PRECEDING YEAR, SUCH CLAIM WAS ALLOWED. THE ORDER OF THE ASSESSING OFFI CER PASSED U/S 143(3) FOR THE ASSESSMENT YEAR 2003-04 (PLACED AT PAGES 4 & 5 OF THE PAPER BOOK). LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS TAKEN A PLAUSIBLE VIEW AND THERE WAS NO LACK OF PROPER ENQUIRY. WHEREVER TWO VIEWS ARE POSSIBLE THE ASSESSING OFFICER CAN ADOPT ONE PLAUSIBLE VIEW. IN THAT SITUATION, CIT CANNOT HAVE JURISDICTION U/S 263 OF INCOME-TAX ACT. FOR T HIS PROPOSITION, LD. AR RELIED ON THE DECISION OF CIT VS. SUNBEAM AUTO LIMI TED REPORTED IN 227 CTR (DEL) 133 WHEREIN THE HON'BLE DELHI HIGH COURT HELD THAT WHEN THERE WAS AN ENQUIRY AND EVEN IF IT WAS INADEQUATE THAT WOULD NO T BY ITSELF GIVE OCCASIONS TO CIT TO MAKE ORDER U/S 263, MERELY BECAUSE THE CI T HAS DIFFERENT OPINION IN THE MATTER. CIT CAN INVOKE THE PROVISIONS OF SECTI ON 263 ONLY IN THE CASE OF ITA NO.972/DEL./2010 4 LACK OF ENQUIRY. THE DECISION OF HON'BLE MADRAS HI GH COURT IN THE CASE OF CIT VS. MEPCO INDUSTRIES LTD. 294 ITR 121 (MAD) F OR THE PROPOSITION THAT WHEREVER TWO VIEWS ARE PLAUSIBLE AND ASSESSING OFFI CER HAS ADOPTED ONE PLAUSIBLE VIEW THEN THE CIT CANNOT INVOKE THE JURIS DICTION U/S 263 OF THE INCOME-TAX ACT. LD. AR FURTHER RELIED ON THE DECIS ION OF HON'BLE MUMBAI HIGH COURT IN THE CASE OF CIT VS. GABRIAL INDIA LTD . 203 ITR 108 (MUM.) FOR THE PROPOSITION THAT CIT CANNOT REVISE MERELY B ECAUSE HE DISAGREES WITH THE VIEW OF ASSESSING OFFICER. QUERIES MADE AND EX PLAINED BUT NOT MENTIONED IN THE ORDER OF ASSESSING OFFICER THEN AL SO THE ORDER OF ASSESSING OFFICER CANNOT BE SAID TO BE ERRONEOUS. FURTHER LD . AR RELIED ON THE DECISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. MANGILAL DIDWANIA 286 ITR 126 (RAJ.) FOR THE PROPOSITION THAT ONCE QU ERY MADE AND EXPLAINED AND NOTHING IS MENTIONED IN THE ORDER BY THE ASSESS ING OFFICER, IT CANNOT MAKE AN ORDER TO BE ERRONEOUS. LEARNED AR ALSO REL IED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. OF CIT VS. HINDUSTAN COCA COLA BEVERAGES PVT. LTD. 2011-TIOL-33-HC-DEL-IT (ITA NOS.1391/ 2010, 1394/2010 & 1396/2010) FOR THE PROPOSITION TH AT WHEN FULL DETAILS HAVE BEEN GIVEN IN THE NOTES TO THE ACCOUNTS, BALANCE SH EET AND TAX AUDIT REPORT WITH REGARD TO CLAIM OF DEPRECIATION ON GOODWILL, T HEN THE PROCEEDINGS U/S 263 CANNOT BE SUSTAINED. LD. AR FURTHER RELIED ON THE DECISION OF ITAT, BENCH C, CHENNAI IN THE CASE OF SICAL LOGISTICS LTD. VS . ACIT REPORTED IN 127 ITD ITA NO.972/DEL./2010 5 187 (CHENNAI)(TM) WHERE IT HAS BEEN HELD THAT ENTIR E ANNUAL ACCOUNTS WERE BEFORE THE ASSESSING OFFICER AND THE ANNUAL ACCOUNT S CAN BE THE BASIS TO MAKE ENQUIRIES INTO VARIOUS ASPECTS WHEREVER THE ASSESSI NG OFFICER FEELS NECESSARY TO DO SO. THE ASSESSING OFFICER HAS ALSO NOT MADE SUMMARY ASSESSMENTS AND HAD ENQUIRED INTO VARIOUS DETAILS. THE ASSESSING O FFICER DID NOT FEEL IT NECESSARY TO CALL FOR DETAILS IN RESPECT OF MATTERS THE COMMISSIONER OF INCOME TAX DEEMED NECESSARY TO CALL. THE THIRD MEMBER NOT ED THAT IT IS A MATTER OF PERCEPTION WHICH VARIES FROM PERSON TO PERSON AND I T IS WHO IS THE ASSESSING OFFICER THE ADJUDICATOR AS WELL AS INVESTIGATOR AND THEREFORE IT IS HIS PERCEPTION WHICH COUNTS AND NOT THAT OF COMMISSIONE R OF INCOME TAX. LD. AR FURTHER RELIED ON THE CASE OF THE INSTITUTE OF C HARTERED ACCOUNTANTS OF INDIA VS. DIT (EXEMPTIONS) 2011-TIOL-69-ITAT-DEL WHERE THE PROCEEDINGS U/S 263 WERE HELD TO BE INVALID. LEARN ED AR ALSO RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASES O F CIT VS. VIKAS POLYMERS 2010-TIOL-595-HIGH COURT-DEL-IT, CIT VS. VIKRAM A DITYA & ASSOCIATES (P) LTD. 287 ITR 268 (DEL.) AND HON'BLE GUJARAT H IGH COURT IN THE CASE CIT VS. ARVIND JEWELLERS 259 ITR 502 (GUJ.). LD. AR FURTHER RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CI T VS. MAX INDIA LIMITED 295 ITR 282 (SC) FOR THE PROPOSITION THAT TO ASSU ME JURISDICTION, BOTH THE CONDITIONS HAVE TO BE IN EXISTENCE, FOR EXAMPLE, TH E ORDER HAS TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVEN UE. EXISTENCE OF ONE WILL NOT ITA NO.972/DEL./2010 6 ENTITLE THE CIT TO ASSUME JURISDICTION. HE FURTHER RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF MALABAR INDUST RIAL CO. LTD. VS. CIT REPORTED IN 243 ITR 83 (SC). FURTHER RELIANCE WAS ALSO PLACED ON THE DECISION OF ITAT, JODHPUR BENCH IN THE CASE OF METALLIZING E QUIPMENT VS. JCIT (2005) 96 TTJ (JD.) 827, ITAT, PUNE BENCH IN THE CA SE OF BAGARIA VEGETABLE PRODUCTS LTD. VS. JCIT REPORTED IN 106 ITD 105 (PUN )(TM), ITAT, DELHI BENCH IN THE CASE OF BHARTI AQUANET LTD. ITA NO.1 950/DEL/2008 AND HON'BLE DELHI HIGH COURT IN THE CASE OF ITO VS. DG HOUSING PROJECTS LTD. ITA NO.179/2011. THE SECOND ISSUE IN THE SHOW CAUS E NOTICE WAS REGARDING THE DEPRECIATION ON THE VEHICLES. LD. AR PLEADED T HAT THE CIT HAS HIMSELF ACCEPTED IN THE ORDER THAT THERE WAS NO ERROR IN TH E ORDER ON THIS ACCOUNT. FURTHER, THE THIRD ISSUE IN THE SHOW CAUSE NOTICE W AS REGARDING THE APPLICABILITY OF TDS PROVISIONS AND EXAMINATION THE REOF. LD. AR SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ALL THE RELEVANT DE TAILS AND THE SAME WERE AVAILABLE IN THE RETURN OF INCOME WITH THE ASSESSIN G OFFICER. THE DETAILS OF TDS, SECTION WISE AND DATE-WISE, WERE ALSO ANNEXED AS ANNEXURE H TO THE BALANCE SHEET (PAGE 12). EVEN SECTIONS UNDER WHICH TDS WERE DEDUCTED HAVE BEEN CLEARLY MENTIONED. THE RELEVANT CHALLANS WERE ALSO ENCLOSED. ASSESSING OFFICER HAD SATISFIED HIMSELF ABOUT THE RELEVANT PR OVISIONS OF ACT UNDER WHICH TDS WAS DETECTED. THE RELEVANT CHALLANS FILED CLEA RLY SHOW THE DATE ON WHICH ITA NO.972/DEL./2010 7 TDS WAS DEPOSITED. EVEN DATES WERE ALSO MENTIONED IN ANNEXURE H. THEREFORE, ON THIS COUNT ALSO, THE ORDER OF THE CIT IS NOT JUSTIFIED. 4. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDER OF THE CIT. 5. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. WE F IND THAT ASSESSING OFFICER INQUIRED INTO THE ISSUE OF PAYMENT OF COMMI SSION AND THE ASSESSEE SUBMITTED THE EXPLANATION IN THIS REGARD. ASSESSEE ALSO SUBMITTED DETAILS OF COMMISSION PAID ALONG WITH THE ORDER OF PRECEDING Y EAR IN WHICH SUCH COMMISSION WAS ALLOWED. THESE FACTS SHOW THAT ASSE SSING OFFICER HAS MADE THE RELEVANT ENQUIRY AND HAS ACCEPTED THE SUBMISSIO NS OF ASSESSEE IN THIS REGARD. THE SECOND ALLEGATION MADE BY THE CIT IN T HE SHOW CAUSE NOTICE HAS BEEN DROPPED BY CIT HIMSELF ALSO SHOWS THAT THERE W AS NO LACK OF ENQUIRY ON THAT ISSUE. REGARDING ENQUIRY IN RESPECT OF TDS, W E NOTE THAT THE DETAILS OF TDS, SECTION-WISE AND DATE-WISE, WERE FILED BEFORE THE ASSESSING OFFICER ALONG WITH THE RELEVANT CHALLANS, COPY OF WHICH ARE PLACED AT PAGES 10 TO 25 OF THE PAPER BOOK SHOWS THAT THERE WAS NO LACK OF E NQUIRY ON THIS COUNT ALSO. CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTANCES , WE FIND THAT THERE WERE ENQUIRIES BY ASSESSING OFFICER ON THE ISSUES RAISED BY THE CIT IN THE SHOW CAUSE NOTICE PRIOR TO PASSING THE ORDER U/S 143(3) OF THE INCOME-TAX ACT. ASSESSING OFFICER HAS TAKEN ONE OF THE PLAUSIBLE VI EWS, THEREFORE, THE CIT CANNOT INVOKE THE JURISDICTION U/S 263 TO REPLACE T HE VIEW TAKEN BY THE ASSESSING OFFICER. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE LATEST CASE OF ITA NO.972/DEL./2010 8 ITO VS. DG HOUSING PROJECTS LTD. ITA NO.179 / 201 1 DATED 1 ST MARCH, 2012 HAS HELD AS UNDER :- 17. THIS DISTINCTION MUST BE KEPT IN MIND BY THE C IT WHILE EXERCISING JURISDICTION UNDER SECTION 263 OF THE AC T AND IN THE ABSENCE OF THE FINDING THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, EXERCISE OF JURISDICTIO N UNDER THE SAID SECTION IS NOT SUSTAINABLE. IN MOST CASES OF ALLEGE D INADEQUATE INVESTIGATION, IT WILL BE DIFFICULT TO HOLD THAT T HE ORDER OF THE ASSESSING OFFICER, WHO HAD CONDUCTED ENQUIRIES AND HAD ACTED AS AN INVESTIGATOR, IS ERRONEOUS, WITHOUT CIT CONDU CTING VERIFICATION/INQUIRY. THE ORDER OF THE ASSESSING OF FICER MAY BE OR MAY NOT BE WRONG. CIT CANNOT DIRECT RECONSIDERAT ION ON THIS GROUND BUT ONLY WHEN THE ORDER IS ERRONEOUS. AN ORD ER OF REMIT CANNOT BE PASSED BY THE CIT TO ASK THE ASSESSING OF FICER TO DECIDE WHETHER THE ORDER WAS ERRONEOUS. THIS IS NOT PERMISSIBLE. AN ORDER IS NOT ERRONEOUS, UNLESS THE CIT HOLD AND RECORDS REASONS WHY IT IS ERRONEOUS. AN ORDER WILL NOT BECO ME ERRONEOUS BECAUSE ON REMIT, THE ASSESSING OFFICER MAY DECIDE THAT THE ORDER IS ERRONEOUS. THEREFORE CIT MUST AFTER RECORD ING REASONS HOLD THAT THE ORDER IS ERRONEOUS. THE JURISDICTIONA L PRECONDITION STIPULATED IS THAT THE CIT MUST COME TO THE CONCLUS ION THAT THE ORDER IS ERRONEOUS AND IS UNSUSTAINABLE IN LAW. WE MAY NOTICE THAT THE MATERIAL WHICH THE CIT CAN RELY INCLUDES N OT ONLY THE RECORD AS IT STANDS AT THE TIME WHEN THE ORDER IN Q UESTION WAS PASSED BY THE ASSESSING OFFICER BUT ALSO THE RECORD AS IT STANDS AT THE TIME OF EXAMINATION BY THE CIT [SEE CIT VS. SHREE MANJUNATHESWARE PACKING PRODUCTS , 231 ITR 53 (SC)]. NOTHING BARS/PROHIBITS THE CIT FROM COLLECTING AND RELYING UPON NEW/ADDITIONAL MATERIAL/EVIDENCE TO SHOW AND STATE THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. 18. IT IS IN THIS CONTEXT THAT THE SUPREME COURT IN MALABAR INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME TAX , (2000) 243 ITR 83 (SC), HAD OBSERVED THAT THE PHRASE PREJ UDICIAL TO THE INTEREST OF REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EV ERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSI NG OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE. THUS, WHEN THE ASSESSING OFFICER HAD ADOPTED ONE OF THE C OURSES PERMISSIBLE AND AVAILABLE TO HIM, AND THIS HAS RESU LTED IN LOSS TO ITA NO.972/DEL./2010 9 REVENUE; OR TWO VIEWS WERE POSSIBLE AND THE ASSESSI NG OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT MAY NOT AGREE ; THE SAID ORDERS CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJ UDICIAL TO THE INTEREST OF REVENUE UNLESS THE VIEW TAKEN BY THE AS SESSING OFFICER IS UNSUSTAINABLE IN LAW. IN SUCH MATTERS, T HE CIT MUST GIVE A FINDING THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW AND, THEREFORE, THE ORDER IS E RRONEOUS. HE MUST ALSO SHOW THAT PREJUDICE IS CAUSED TO THE INTE REST OF THE REVENUE. 19. IN THE PRESENT CASE, THE FINDINGS RECORDED BY T HE TRIBUNAL ARE CORRECT AS THE CIT HAS NOT GONE INTO AND HAS NO T GIVEN ANY REASON FOR OBSERVING THAT THE ORDER PASSED BY THE A SSESSING OFFICER WAS ERRONEOUS. THE FINDING RECORDED BY THE CIT IS THAT ORDER PASSED BY THE ASSESSING OFFICER MAY BE ERRON EOUS. THE CIT HAD DOUBTS ABOUT THE VALUATION AND SALE CONSIDE RATION RECEIVED BUT THE CIT SHOULD HAVE EXAMINED THE SAID ASPECT HIMSELF AND GIVEN A FINDING THAT THE ORDER PASSED B Y THE ASSESSING OFFICER WAS ERRONEOUS. HE CAME TO THE CON CLUSION AND FINDING THAT THE ASSESSING OFFICER HAD EXAMINED THE SAID ASPECT AND ACCEPTED THE RESPONDENT S COMPUTATION FIGURES BUT HE HAD RESERVATIONS. THE CIT IN THE ORDER HAS RECORDED THA T THE CONSIDERATION RECEIVABLE WAS EXAMINED BY THE ASSESS ING OFFICER BUT WAS NOT PROPERLY EXAMINED AND THEREFORE THE ASS ESSMENT ORDER IS ERRONEOUS. THE SAID FINDING WILL BE CORR ECT, IF THE CIT HAD EXAMINED AND VERIFIED THE SAID TRANSACTION HIMS ELF AND GIVEN A FINDING ON MERITS. AS HELD ABOVE, A DISTINCTION M UST BE DRAWN IN THE CASES WHERE THE ASSESSING OFFICER DOES NOT C ONDUCT AN ENQUIRY; AS LACK OF ENQUIRY BY ITSELF RENDERS THE O RDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND CASES WHERE THE ASSESSING OFFICER CONDUCTS ENQUIRY BUT FINDING RECORDED IS ERRONEOUS AND WHICH IS ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN LATTER CASES, THE CIT HAS TO EXA MINE THE ORDER OF THE ASSESSING OFFICER ON MERITS OR THE DECISION TAKEN BY THE ASSESSING OFFICER ON MERITS AND THEN HOLD AND FORM AN OPINION ON MERITS THAT THE ORDER PASSED BY THE ASSESSING OF FICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IN THE SECOND SET OF CASES, CIT CANNOT DIRECT THE ASSESSIN G OFFICER TO CONDUCT FURTHER ENQUIRY TO VERIFY AND FIND OUT WHET HER THE ORDER PASSED IS ERRONEOUS OR NOT. ITA NO.972/DEL./2010 10 KEEPING THESE FACTS IN VIEW AND VARIOUS DECISIONS R ELIED UPON BY THE LEARNED AR AND IN VIEW OF THE LATEST DECISION OF HON'BLE JU RISDICTIONAL HIGH COURT, WE HOLD THAT THE CIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263. THE ORDER PASSED BY THE ASSESSING OFFICER WAS NEITH ER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESS ING OFFICER HAS ADOPTED ONE OF THE COURSES AVAILABLE TO HIM. THE ASSESSING OFF ICER HAS TAKEN ONE VIEW WITH WHICH CIT MAY NOT AGREE, HOWEVER, THE ORDER CA NNOT BE TREATED AS ERRONEOUS ORDER WHICH IS PREJUDICIAL TO THE INTERES T OF REVENUE. THE VIEW TAKEN BY THE ASSESSING OFFICER WAS NOT A VIEW WHICH IS NOT UNSUSTAINABLE IN THE LAW. KEEPING THESE FACTS IN VIEW, WE ALLOW THE ASSESSEES APPEAL AND SET ASIDE THE ORDER OF THE CIT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 23 RD DAY OF MARCH, 2012. SD/- SD/- (U.B.S. BEDI) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 23 RD DAY OF MARCH, 2012 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT-V, NEW DELHI. 5.CIT(ITAT), NEW DELHI AR, ITAT NEW DELHI.