Sri Ashoke Surana, Kolkata V. DCIT, Cen. Cir-XVIII, Kolkata, Kolkata

ITSSA 79/KOL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3410 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 30-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Search and seizure; Document seized; Wrong claim; Assessment record; Documents seized; Revenue expenditure; Capital expenditure
• Section: 143(3); 142(1); 14A; 263; 63; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.(SS).A NO. 79/KOL /2014 ASSESSMENT YEAR : 2010-1 1 SHRI ASHOKE SURANA -VS- DCIT, CC-XVIII, KOLKATA [PAN: AKOPS 6722 K] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI S.M. SURANA, ADVOCATE FOR THE RESPONDENT : SH. ANAND R. BALWAR, CI T DR DATE OF HEARING : 07.08.2017 DATE OF PRONOUNCEMENT : 11.08.2017 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL ARISES OUT OF THE ORDER OF THE LD. C OMMISSIONER OF INCOME TAX, CENTRAL- II, KOLKATA IN PROCEEDINGS NO. F. NO.-CIT(CENTRAL)- II/KOL/263/2013-14/5426-5428 DATED 28.03.2014 SETTING ASIDE THE ORDER OF THE LD. AO PASSED U/S 143(3) OF THE ACT DATED 30.12.2011 FOR THE ASSESSMENT YEAR 2010-11 TR EATING THE SAME AS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT WAS JUSTIFIED IN INVOKING REVISIONARY JURISDICTION U/S 263 OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSESS EE IS AN INDIVIDUAL AND THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED U/S 132 OF THE ACT IN THE CASE OF AJIT KUMAR SURANA AND OTHERS ON 23.12.2010. THIS INCLUDED A SEARCH AT THE RESIDENCE OF SURANA FAMILY AT 29, SHAKESPEARE SARANI, FLAT NO. 1 B, KOLKATA-17 AND AL SO AT THE OFFICE PREMISES AT 126A, 2 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 2 SARAT BOSE ROAD, KOLKATA-26. THE SEARCH WARRANT WAS EXECUTED IN THE NAME OF THE ASSESSEE, SHRI AJIT KUMAR SURANA AND PANCHANAMA WER E DRAWN ON 24.02.2010 AND 19.04.2010 AT THE OFFICE ADDRESS AT 126A, SARAT BOS E ROAD, 2 ND FLOOR, KOLKATA. THIS APART, PANCHANAMA WAS ALSO DRAWN IN THE ASSESSEES NAME AT HIS RESIDENTIAL ADDRESS AT FLAT NO. 1B, 29, SHAKESPEARE SARANI, KOLKATA-17 ON 24.02.2010. DURING THE COURSE OF SEARCH, SEVERAL SEIZED DOCUMENTS WERE FOUND AND SEI ZED. THE ASSESSMENT YEAR 2010-11, BEING THE YEAR OF SEARCH, WAS TAKEN UP FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT AND ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT DATED 30.12.2011 DETERMINING TAXABLE INCOME AT RS. 34,58,607/- AFTER MAKING DISA LLOWANCE U/S 14A OF THE ACT TO THE TUNE OF RS. 11,328/-. THE SAID ASSESSMENT WAS COMPL ETED AFTER TAKING INTO ACCOUNT THE SEIZED DOCUMENTS PERTAINING TO THE ASSESSEE, PAYMEN TS MADE IN RESPECT OF M/S CHANNEL EIGHT AMONG OTHERS. 4. LATER, THE LD. CIT SOUGHT TO REVISE THE SAID ASS ESSMENT BY INVOKING REVISIONARY JURISDICTION U/S 263 OF THE ACT ON THE FOLLOWING PO INTS: I) THE ASSESSEE HAD DEBITED A SUM OF RS. 4 LACS AS LOSS OF VIDEO RIGHTS IN HIS PROPRIETORSHIP CONCERN M/S CHANNEL EIGHT AND CLAIME D THE SAME AS REVENUE EXPENDITURE. THE LD. CIT OBSERVED THAT THE LD.AO HA D NOT EXAMINED THIS CLAIM AND ALSO OBSERVED THAT THIS AS CAPITAL IN NATURE. II) THE ASSESSEE HAD CLAIMED CREDIT OF TDS OF RS. 5 5,10,251/- CORRESPONDING TO INCOME AS PER THE FORM 26AS AT RS. 5,63,73,348/-, WHEREAS THE ASSESSEE HAD SHOWN INCOME OF RS. 5,59,07,775/- IN HIS PROFIT AND LOSS ACCOUNT FO R THE YEAR ENDED ON 31.03.2010 WHICH RESULTED IN UNDER ASSESSMENT OF RS. 4,65,573/- ( 5, 63,73,348 5,59,07,775). 5. THE LD. CIT POINTED OUT THE AFORESAID TWO DEFECT S IN THE ASSESSMENT ORDER AND TREATED THE SAME AS ERRONEOUS AND ACCORDINGLY ISSUED THE SH OW CAUSE NOTICE DATED 31.10.2013 TO THE ASSESSEE. THE ASSESSEE REPLIED THAT IN RESPECT OF CLAIM OF RS. 4 LACS TOWARDS LOSS OF VIDEO RIGHTS, THE SAME WAS CLAIMED AS REVENUE LOSS BY THE ASSESSEE IN THE RETURN OF 3 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 3 INCOME AND IT WAS DULY DISCLOSED IN THE PROFIT AND LOSS ACCOUNT OF M/S CHANNEL EIGHT FILED ALONG WITH RETURN OF INCOME. IT WAS ALSO STAT ED THAT THE ASSESSEE DERIVED RECEIPTS FROM FILM/TELEFILM RIGHTS TO THE TUNE OF RS. 4,49,2 8,129/-. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD INCURRED EXPENDITURE TOWARDS FILMS / T ELEFILMS TO THE TUNE OF RS. 4,48,92,533/-. MOREOVER, IT WAS SUBMITTED THAT THE ASSESSEE HAD SHOWN THE STOCK OF TELEFILMS TO THE TUNE OF RS. 1,17,800/- AND BENGAL I FILM RIGHTS TO THE TUNE OF RS. 2,99,38,658/- UNDER THE HEAD CURRENT ASSETS IN HIS BALANCE SHEET OF HIS PROPRIETARY CONCERN M/S CHANNEL EIGHT. HENCE, THE LOSS ARISING OUT OF THE SAID VIDEO RIGHTS WOULD CLEARLY TANTAMOUNT TO REVENUE LOSS ARISING OUT OF C IRCULATING CAPITAL OF THE ASSESSEE/ STOCK IN TRADE. THERE WAS NO ERROR COMMITTED BY THE LD.AO BY GRANTING THE SAID RELIEF IN THIS REGARD. 6. MOREOVER, IT WAS ARGUED THAT THE LD.AO HAD DULY VERIFIED THE SAID CLAIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND WAS CONVINCED ABOUT ITS ALLOWABILITY BASED ON THE SUBMISSIONS MADE BY THE ASSESSEE. AND ACCORDINGLY, THE SAME WOULD NOT FALL UNDER THE AMBIT OF LACK OF ENQUIRY BY THE LD.AO. HENCE, THE SAID ISSUE COULD NOT BE REVISED U/S 263 OF THE ACT BY THE LD. CIT. 7. WITH REGARD TO THE DIFFERENCE IN GROSS RECEIPTS TO THE TUNE OF RS. 4,65,573/- IN FORM 26AS VIS--VIS THE INCOME SHOWN IN THE PROFIT AND LOSS ACCOUNT, IT WAS EXPLAINED THAT THE GROSS RECEIPTS REFLECTED IN FORM 26AS WAS INCLU SIVE OF SERVICE TAX COMPONENT, WHEREAS THE GROSS RECEIPTS SHOWN IN THE PROFIT AND LOSS ACCOUNT IS EXCLUSIVE OF SERVICE TAX COMPONENT. IT WAS ALSO SUBMITTED THAT THE ELEME NT OF SERVICE TAX WAS NOT ROUTED THROUGH PROFIT AND LOSS ACCOUNT BY THE ASSESSEE AS IT WAS ONLY COLLECTED FROM THE CUSTOMERS AND PAID TO THE ACCOUNT OF THE CENTRAL GO VERNMENT AND THE ASSESSEE COULD NOT MAKE ANY PROFIT OUT OF THE SAME. HENCE, IT WAS ARGU ED THAT THE ASSESSEE WAS JUSTIFIED IN SHOWING THE GROSS RECEIPTS NET OF SERVICE TAX IN HI S PROFIT AND LOSS ACCOUNT. ACCORDINGLY, IT WAS POINTED OUT THAT THERE WAS NO ERROR EITHER C OMMITTED BY THE ASSESSEE OR BY THE LD. 4 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 4 AO IN ACCEPTING THE GROSS RECEIPTS AS SHOWN IN THE PROFIT AND LOSS ACCOUNT AND THE CORRESPONDING TDS CLAIMED IN THE SUM OF RS. 55,10,2 51/-. 8. HOWEVER, THE LD AO IGNORED THESE CONTENTIONS OF THE ASSESSEE AND PASSED AN ORDER OF REVISION U/S 263 OF THE ACT TREATING THE ORDER PASS ED BY THE LD.AO U/S 143(3) OF THE ACT AS ERRONEOUS IN AS MUCH AS IT IS PREJUDICIAL TO TH E INTEREST OF THE REVENUE BY MAKING THE FOLLOWING OBSERVATIONS: I HAVE CONSIDERED THE MATTER. THE LD.AR HAS NOT G IVEN ANY EXPLANATION REGARDING THE WRONG CLAIM OF DEDUCTION OF RS. 4 LACS ON ACCOUNT O F LOSS ON SALE OF VIDEO RIGHTS. THIS WAS CLEARLY A CAPITAL LOSS AND WAS WRONGLY CLAIMED AND WRONGLY ALLOWED IN THE ASSESSMENT ORDER. THUS, IT WOULD BE EVIDENT THAT TH E ASSESSMENT IS ERRONEOUS TO THIS EXTENT. ALLOWING THE CLAIM HAS CAUSED PREJUDICE TO THE INTEREST OF REVENUE. I, THEREFORE, SET ASIDE THE ASSESSMENT AND DIRECT THE AO TO PASS A FRESH ASSESSMENT ORDER DENOVO AND DISALLOW THE CLAIM OF LOSS ON SALE VIDEO RIGHTS. FU RTHER, THE AO IS DIRECTED TO EXAMINE THE ISSUE OF RECEIPTS SHOWN IN THE PROFIT AND LOSS ACCOUNT AND RECONCILIATION WITH THE RECEIPTS REFLECTED IN FORM 26AS. THIS VERIFICATION SHOULD BE DONE IN THE LIGHT OF ASSESSEES EXPLANATION AS DISCUSSED IN PARAGRAPH 3 OF THIS ORDER. THE ORDER SHOULD BE PASSED AFTER GIVING THE ASSESSEE OPPORTUNITY OF BEI NG HEARD AND GIVING ITS EXPLANATION IN THE MATTER. 9. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS: 1. FOR THAT THE ORDER OF THE LD. CIT IS ARBITRARY, ILL EGAL AND BAD IN LAW. 2. FOR THAT THE LD. C.I.T ERRED IN INITIATING THE PROC EEDINGS UNDER SEC. 263 WHEN THE AO EXAMINED THE TWO ISSUES, APPLIED HIS MIND WHICH WAS SUBJECT MATTER OF THE ORDER U/ S. 263 AND THEREFORE THE ORDER PASSED BY THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. 3. FOR THAT THE LD. CIT ERRED IN HOLDING THE VIEW THAT LOSS IN VIDEO RIGHTS WAS CAPITAL EXPENDITURE IGNORING THE NATURE OF BUSINESS OF THE ASSESSEE WHICH WAS DULY LOOKED INTO BY THE AO AND IN ANY CASE THE AO TOOK A POSSIB LE VIEW WHICH WAS NOT AN IMPOSSIBLE VIEW. 4. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT WAS WRONG IN HOLDING THE VIEW THAT THE ORDER WAS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF REVENUE BY ALLOWING THE LOSS IN SHARE OF VIDEO RIGH TS AS BUSINESS LOSS. 5. FOR THAT THE LD. CIT ERRED IN DIRECTING THE AO TO R E-EXAMINE THE ISSUE WITH REGARD TO THE TDS VIS-A-VIS THE GROSS INCOME DECLARED WHIC H WAS DULY EXAMINED BY THE AO, THE RECEIPTS SHOWN BY THE ASSESSEE WAS MORE THAN TH AT REFLECTED IN THE TDS 5 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 5 CERTIFICATE AND THE LD. CIT ALSO DID NOT FIND ANY E RROR IN THE SUBMISSIONS MADE BY THE ASSESSEE. 6. FOR THAT THE LD. CIT ERRED IN SETTING ASIDE THE ASS ESSMENT DE-NOVO WHEN THE PROCEEDINGS WERE INITIATED UNDER SEC. 263 ON SPECIF IC ISSUES AND FURTHER THERE WAS NOTHING IN THE SHOW CAUSE NOTICE THAT THE ASSESSMEN T IS REQUIRED TO BE SET ASIDE DE- NOVO, THE ORDER PASSED U / S. 263 IS, THEREFORE, BA D IN LAW. 7. .FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E THE ORDER OF THE CIT BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PRAYED FOR. 8. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER O R AMEND ANY GROUND BEFORE OR AT THE TIME OF HEARING. 10. THE LD. CIT DR ARGUED THAT NO FINDING HAS BEEN GIVEN BY THE LD. AO WITH REGARD TO EXAMINATION OF THE SAID LOSS ON SALE OF VIDEO RIGHT S AMOUNTING TO RS. 4 LACS AS EITHER REVENUE OR CAPITAL IN NATURE. HIS EXAMINATION WAS R ESTRICTED TO VERIFY WHETHER THE SAID PAYMENT OF RS. 4 LACS WAS DISCLOSED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE NATURE OF PAYMENT WAS NEVER EXAMINED BY THE LD.AO AND HENC E, THE LD. CIT WAS RIGHT IN INVOKING THE REVISIONARY JURISDICTION U/S 263 OF TH E ACT BY STATING THAT NO ENQUIRY HAS BEEN MADE IN THIS REGARD. WITH REGARD TO DISCREPANC Y IN GROSS RECEIPTS AMOUNTING TO RS. 4,65,573/-, HE ARGUED THAT ABSOLUTELY NO WHISPER WA S MADE IN THE ASSESSMENT RECORD BY THE LD.AO REGARDING THE SAME. HENCE, THE LD. CIT WA S RIGHT IN INVOKING THE REVISIONARY JURISDICTION U/S 263 OF THE ACT FOR THE SAME. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND WI TH REGARD TO THE ISSUE TO THE LOSS ON SALE OF VIDEO RIGHTS, AMOUNTING TO RS. 4 LACS, THE LD. DR FURNISHED THE ASSESSMENT FOLDER BEFORE US. FROM THE PERUSAL OF THE ASSESSME NT FOLDER, WE FIND THAT THE LD.AO HAD INDEED ISSUED A QUESTIONNAIRE TOGETHER WITH NOTICE U/S 142(1) DATED 25.11.2011 WHEREIN THE SPECIFIC QUERY WAS RAISED BY HIM CALLING FOR THE DETAILS OF LOSS OF VIDEO RIGHTS OF RS. 4 LACS IN RESPECT OF M/S CHANNEL EIGHT. THE ASS ESSEE HAD REPLIED FOR THE SAME, AMONG OTHERS, ON 5.12.2011 AND 09.12.2011 WHICH IS EVIDENT FROM THE ORDER SHEET NOTING OF THE LD.AO. WE ALSO FIND FROM THE PAGE NO. 2 OF THE ASSESSMENT ORDER THAT ONE 6 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 6 OF THE REASONS FOR SELECTING THIS CASE FOR SCRUTINY WAS TO EXAMINE THIS PARTICULAR PAYMENT OF RS. 4 LACS MADE BY M/S CHANNEL EIGHT TO A.K. MOV IE MAKER. HENCE, WE ARE CONVINCED THAT THIS ISSUE HAS BEEN INDEED EXAMINED BY THE LD. AO DURING THE COURSE OF ASSESSMENT PROCEEDING AND ASSESSMENT WAS COMPLETED AFTER GOING THROUGH THE SUBMISSION OF THE ASSESSEE FILED IN THAT REGARD. HE NCE, IT DOES NOT FALL UNDER THE AMBIT OF LACK OF ENQUIRY, WARRANTING INVOKING OF REVISIONA RY JURISDICTION U/S 263 OF THE ACT BY THE LD. CIT. WE ALSO FIND FROM THE BALANCE SHEET OF M/S CHANNEL EIGHT THAT THE ASSESSEE HAD SHOWN THE STOCK OF TELEFILMS AND BENGALI FILM R IGHTS UNDER THE HEAD CURRENT ASSETS WHICH GOES TO PROVE THAT THE SAME REPRESENTS STOCK IN TRADE OF THE ASSESSEE. WE ALSO FIND THAT THE ASSESSEE HAD DISCLOSED RECEIPTS FROM FILMS / TELEFILMS AND INCURRED EXPENDITURE TOWARDS FILMS/ TELEFILMS. ANY LOSS INCURRED ON LOSS ON SALE OF SUCH VIDEO RIGHTS ARISING OUT OF STOCK IN TRADE OF THE ASSESSEE WOULD CLEARLY TANTAMOUNT TO REVENUE LOSS ONLY. HENCE, EVEN ON MERITS THE CONCLUSION DRAWN BY THE L D. CIT, WITHOUT ANY REASONS, THAT THE SAID LOSS WOULD BE CAPITAL IN NATURE, DOES NOT HOLD WATER. HENCE, NO REVISIONARY JURISDICTION U/S 263 OF THE ACT COULD BE INVOKED FO R THE SAME. 12. WITH REGARD TO OTHER ISSUE OF DIFFERENCE IN GRO SS RECEIPTS OF THE ASSESSEE AMOUNTING TO RS. 4,65,573/- WE FIND THAT THE ASSESSEE HAD GIV EN PROPER EXPLANATION BEFORE THE LD. CIT CLEARLY EXPLAINING THE DIFFERENCE ARISING DUE T O INCLUSION OF SERVICE TAX COMPONENT IN THE GROSS RECEIPTS REFLECTED IN FORM 26AS, WHILE THE SAID SERVICE TAX COMPONENT HAS BEEN EXCLUDED FROM THE GROSS RECEIPTS REFLECTED IN THE PROFIT AND LOSS ACCOUNT. WE HAVE ALSO SEEN THAT THE PROFIT AND LOSS ACCOUNT OF THE A SSESSEE WHEREIN WE FIND THAT THE SERVICE TAX COMPONENT IS NOT ROUTED THROUGH PROFIT AND LOSS ACCOUNT AT ALL. HENCE, WE ARE IN AGREEMENT WITH THE SUBMISSION MADE BY THE ASSESSEE BEFORE THE LD. CIT. WE FIND THAT THE LD. CIT INSTEAD OF VERIFYING THE DETAILS FILED BEFORE HIM BY THE ASSESSEE, MERELY DIRECTED THE LD.AO TO EXAMINE THE SAID DETAILS PURP ORTEDLY TO FIND OUT ANY ERROR THAT COULD HAVE BEEN POSSIBLY CAUSED IN THE EARLIER ORDE R OF THE LD.AO FRAMED U/S 143(3) OF THE ACT. IT IS WELL SETTLED THAT IT IS THE DUTY OF THE LD. CIT TO BRING ON RECORD THE ERROR 7 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 7 THAT HAS BEEN COMMITTED BY THE LD. AO IN HIS ORDER SO AS TO MAKE IT ERRONEOUS. HE CANNOT SIMPLY DIRECT THE LD.AO TO FIND OUT WHETHER ANY ERROR HAS BEEN COMMITTED IN THE EARLIER ORDER. IN THE ABSENCE OF SUCH SPECIFIC FIND ING BY THE LD. CIT, IN OUR CONSIDERED OPINION, THE ACTION OF THE LD. CIT IN INVOKING REVI SIONARY JURISDICTION IS SQUARELY UNWARRANTED. 13. THE LD. AR PLACED RELIANCE ON THE FOLLOWING DEC ISIONS IN SUPPORT OF HIS CONTENTIONS: I) RAYON SILK MILLS VS. CIT 221 ITR 155 (GUJ) WHERE IN IT WAS HELD THAT : IT IS AN ESSENTIAL CONDITION OF EXERCISE OF THE PO WER U/S 263 THAT THE COMMISSIONER OF INCOME TAX MUST FIND THAT THE ERROR WHICH IS FOUND IN THE ORDER OF THE INCOME TAX OFFICER IS PREJUDICIAL TO THE INTERESTS OF THE REVE NUE. THE PREJUDICE WHICH HAS BEEN HELD TO BE CONTRARY TO THE INTERESTS OF THE REVENUE IS S TATED TO BE THE ONLY ONE, NAMELY, IN NOT HOLDING ENQUIRY INTO THE GOODWILL ACCOUNT BY THE IN COME TAX OFFICER AND NOT ON ANY OTHER GROUNDS. THE CONCLUSION OF THE COMMISSIONER O F INCOME TAX THAT THE ORDER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE IS NOT A MATTER OF SUBJECTIVE SATISFACTION OF THE COMMISSIONER. THAT IS TO BE FOUNDED ON THE OBJECTIV E MATERIAL AFTER ASSESSING THE CONTENTIONS RAISED BY THE ASSESSEE ON OPPORTUNITY OF HEARING BEING AFFORDED TO HIM BEFORE PASSING THE ORDER. II) CIT VS. SHANTILAL AGARWALLA 142 ITR 778 (PATNA) WHEREIN IT WAS HELD THAT: THE PRIMARY OBJECT OF THE SECTION IS TO VEST A SUP ERVISORY POWER IN THE COMMISSIONER TO MODIFY, OR CANCEL ANY ORDER, INCLUDING AN ASSESS MENT ORDER MADE BY AN ITO, IF HE IS THE OPINION THAT SUCH AN ORDER IS ERRONEOUS IN SO F AR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THIS PREJUDICE TO THE INTERESTS OF THE REVENUE MAY BE EITHER AN IMMEDIATE ONE OR IN FUTURE. AS SUCH, BEFORE THE POW ER UNDER SUB-S. (1) OF SECTION 263 IS EXERCISED, THE COMMISSIONER MUST BE SATISFIED ON TH E MATERIALS ON RECORD THAT THE ORDER HAS CAUSED PREJUDICE TO THE INTERESTS OF THE REVENU E OR WAS LIKELY TO CAUSE SUCH A PREJUDICE . IT IS TRUE THAT SUB-S. (1) OF SECTION 2 63 VESTS POWER IN THE COMMISSIONER IN SUBJECTIVE TERMS, BUT IT HAS BEEN POINTED OUT BY TH E SUPREME COURT IN A SERIES OF JUDGMENTS THAT EVEN WHEN AN ENACTMENT VESTS DISCRET ION IN ANY AUTHORITY SAYING IF IT APPEARS, IF HE IS SATISFIED, IF HE CONSIDERS NE CESSARY, THAT DOES NOT MEAN THAT IT IS A MATTER OF ONLY A SUBJECTIVE SATISFACTION AND SUCH AUTHORITY HAS NOT TO JUDGE THE CIRCUMSTANCES IN AN OBJECTIVE MANNER. III) CIT VS. LATE SUNDER LAL (THROUGH BANKEY BEHARI LAL 96 ITR 310 (ALLAHABAD) WHEREIN IT WAS HELD THAT : SECTION 33B OF THE INDIAN INCOME TAX ACT, 1922, EM POWERS THE COMMISSIONER TO CALL FOR AN EXAMINE THE RECORD OF ANY PROCEEDINGS AND TO PASS ANY ORDER WHICH HE THINKS FIT 8 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 8 IN CASE HE IS SATISFIED THAT THE INCOME TAX OFFICER HAS PASSED AN ORDER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE REV ISIONAL POWER CONFERRED ON THE COMMISSIONER BY SECTION 33B IS A QUASI-JUDICIAL POW ER. THIS BEING SO, THE COMMISSIONER MUST GIVE HIS OWN REASONS FOR BEING SA TISFIED THAT THE ORDER PASSED BY THE INCOME TAX OFFICER IS PREJUDICIAL TO THE INTEREST O F THE REVENUE. MOREOVER, THE WORDS IF HE CONSIDERS USED IN THE SECTION POSTULATES A SCRU TINY BY THE COMMISSIONER OF ALL THE RELEVANT FACTS FOR HOLDING THAT THE ORDER IS PREJUD ICIAL TO THE INTEREST OF THE REVENUE. AN ORDER PASSED BY THE COMMISSIONER U/S 33B WITHOUT GI VING ANY REASONS FOR IT IS, THEREFORE, VITIATED IN LAW. THE RATIO DECIDENDI OF THE AFORESAID DECISIONS WOUL D SQUARELY SUPPORT THE CASE OF THE ASSESSEE. 14. MOREOVER, WE FIND THAT THE HONBLE BOMBAY HIGH COURT IN ITS RECENT DECISION RENDERED IN THE CASE OF CIT VS NIRAV MODI REPORTED IN (2016) 71 TAXMANN.COM 272 (BOMBAY) DATED 16.6.2016 HAD HELD AS UNDER:- 7. FIRSTLY, THE REVENUE CONTENDS THAT THE EXERCISE OF POWERS UNDER SECTION 263 OF THE ACT IS JUSTIFIED AS IN THIS CASE, AS NO INQUIRY IN RESPECT OF THE GIFTS RECEIVED DURING THE SUBJECT YEARS WAS DONE BY THE ASSESSING OFFICER FOR THE ASSESSMENT ORDERS FOR ASSESSMENT YEARS 2007-08 AND 2008-09. THIS ACCORDIN G TO THE REVENUE IS EVIDENT FROM THE ASSESSMENT ORDERS DATED 31ST DECEMBER, 2009 AND 30TH DECEMBER, 2010 WHICH DOES NOT EVEN MAKE A MENTION OF THE GIFTS RECEIVED MUCH LESS DISCUSS AND/OR DEAL WITH THE SAME. THIS ISSUE IS NO LONGER RES INTEGRA AS TH IS COURT IN IDEA CELLULAR LTD. V. DY. CIT [2008] 301 ITR 407 (BOM.) HAS HELD THAT IF DUR ING ASSESSMENT PROCEEDINGS QUERIES WERE RAISED AND THE ASSESSEE RESPONDED TO THE SAME, THEN EVEN IF AN ASSESSMENT ORDER DOES NOT MENTION THE SAME, IT DOES NOT MEAN THAT TH E ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE ISSUES. IT WOULD BE WELL-NIGH IMPOS SIBLE FOR AN ASSESSING OFFICER TO COMPLETE ALL ASSESSMENTS ASSIGNED TO HIM UNDER SECT ION 143(3) OF THE ACT IF HE IS REQUIRED TO DEAL WITH ALL ISSUES WHICH AROSE DURING THE ASSESSMENT PROCEEDINGS. THUS, THE ASSESSMENT ORDER PRIMARILY DEAL WITH ONLY THOSE ISSUES IN RESPECT OF WHICH THE ASSESSEE HAS NOT BEEN ABLE TO SATISFY HIM AND GIVE REASONS FOR HIS CONCLUSION. THIS WOULD ENABLE THE ASSESSEE TO CHALLENGE THE SAME, IF AGGRIEVED. IN FACT THE GUJARAT HIGH COURT IN CIT V. NIRMA CHEMICAL WORKS LTD. [2009] 30 9 ITR 67 / 182 TAXMAN 183 HAS OBSERVED THAT IF AN ASSESSMENT ORDER WERE TO INCORP ORATE THE REASONS FOR UPHOLDING THE CLAIM MADE BY AN ASSESSEE, THE RESULT WOULD BE AN E PITOME AND NOT AN ASSESSMENT ORDER. IN THIS CASE, DURING THE ASSESSMENT PROCEEDI NGS FOR BOTH THE ASSESSMENT YEARS, THE ASSESSING OFFICER ISSUED A QUERY MEMOS TO THE A SSESSEE, CALLING UPON HIM TO JUSTIFY THE GENUINENESS OF THE GIFTS. THE RESPONDENT-ASSESS EE RESPONDED TO THE SAME BY GIVING EVIDENCE OF THE COMMUNICATIONS RECEIVED FROM HIS FA THER AND HIS SISTER I.E. THE DONORS OF THE GIFTS ALONG WITH THE STATEMENT OF THEIR BANK AC COUNTS. ON PERUSAL, THE ASSESSING OFFICER WAS SATISFIED ABOUT THE IDENTITIES OF THE D ONORS, THE SOURCE FROM WHERE THESE FUNDS HAVE COME AND ALSO THE CREDITWORTHINESS/CAPAC ITY OF THE DONOR. ONCE THE 9 ITA NO.79/KOL/2014 SHRI ASHOKE SURANA A.YR.2010-11 9 ASSESSING OFFICER WAS SATISFIED WITH REGARD TO THE SAME, THERE WAS NO FURTHER REQUIREMENT ON THE PART OF THE ASSESSING OFFICER TO DISCLOSE HIS SATISFACTION IN THE ASSESSMENT ORDER PASSED THEREON. THUS, THIS OBJECTI ON ON THE PART OF THE REVENUE, CANNOT BE ACCEPTED. 8. IT IS NEXT SUBMITTED THAT THE DONOR HAD NOT BEEN EX AMINED BY THE ASSESSING OFFICER. IT IS NOT IN EVERY CASE THAT EVERY EVIDENCE PRODUCED H AS TO BE TESTED BY CROSS EXAMINATION OF THE PERSON GIVING THE EVIDENCE. IT IS ONLY IN CA SES WHERE THE EVIDENCE PRODUCED GIVES RISE TO SUSPICION ABOUT ITS VERACITY THAT FURTHER S CRUTINY IS CALLED FOR. IF THERE IS NOTHING ON RECORD TO INDICATE THAT THE EVIDENCE PRODUCED IS NOT RELIABLE AND THE ASSESSING OFFICER WAS SATISFIED WITH THE SAME, THEN IT IS NOT OPEN TO THE CIT TO EXERCISE HIS POWERS OF REVISION WITHOUT THE CIT RECORDING HOW AND WHY T HE ORDER IS ERRONEOUS DUE TO NOT EXAMINING THE DONORS. THUS, THIS OBJECTION TO THE IMPUGNED ORDER BY THE REVENUE IS ALSO NOT SUSTAINABLE. 15. IN VIEW OF THE AFORESAID FACTS AND FINDINGS AND RESPECTFULLY FOLLOWING AFORESAID JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HAV E NO HESITATION IN QUASHING THE REVISION ORDER PASSED BY THE LD. CIT U/S 263 OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 11.08.2017 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 11.08.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. M/S ASHOKE SURANA, 126A, SARAT BOSE ROAD, LANSDO WNE, KOLKATA-700029 2. DCIT, CENTRAL CIRCLE-XVIII, KOLKATA, SHANTIPALLY , 110, E.M. BY E PASS, KOLKATA, 3..C.I.T, CENTRAL- II, KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S