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TMI Blog2012 (5) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... directing to conduct a fresh inquiry – no error in the order of Learned Commissioner – against assessee. - ITA No.1684/Del/2011 - - - Dated:- 30-3-2012 - Rajpal Yadav, K G Bansal, JJ. For Appellant: Shri Satish Aggarwal, CA For Respondent : Shri Raj Tandon, CIT(DR) ORDER Per: Rajpal Yadav: The assessee is in appeal before us against the order of Learned Commissioner of Income-tax dated 28.02.2011 passed under section 263 of the Income-tax Act, 1961 for assessment year 2006-07. The grievance of the assessee is that Learned Commissioner has erred in taking cognizance under section 263 of the Income-tax Act, 1961 and thereby setting aside the assessment order on the following issues with a direction to frame the assessment order afresh: (a) To examine the source of investment creditworthiness and genuineness of transaction for receipt of share application money amounting to ₹ 14.95 crores; (b) To examine the purpose and nature of loans and advances amounting to ₹ 20.48 crores given to various parties; (c) To examine the allowability of claim of depreciation amounting to ₹ 3,04,76,827 on Wind Power Plant and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ec. 143(3) read with section 263 of the Act. In this assessment order, Assessing Officer has disallowed only the depreciation claimed by the assessee on wind mill, therefore, assessee does not want to press all other issues except sub-ground No. (c) of ground No.5 extracted supra. In other words, he is only pressing this appeal for judging the action of the Learned Commissioner under sec. 263 of the Act on the issues whether action under sec. 263 can be taken for treating the assessment order as erroneous as well as prejudicial to the interest of the revenue in respect of allowability of claim of depreciation amounting to ₹ 3,04,76,827 on wind power plant. 4. The learned counsel for the assessee submitted that Assessing Officer during the course of original assessment proceedings dully issued a showcause notice on this issue and investigated it. He took us through questionnaire dated 20.3.2008 available on pages 164 to 165 of the paper book, at Sr. No. 10, Assessing Officer called for following information: It is seen that a wind turbine plant of ₹ 6.09 crore has been installed. Please explain the purpose of installation its relation with your business . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of Indian Overseas reported in 244 CTR 380 . 7. On the other hand, Learned DR pointed out that the details were submitted to the learned Assessing Officer on 15.4.2008. He passed the assessment order on the next date. It is not discernible whether he applied his mind objectively on such details. Thus, Learned Commissioner has rightly taken cognizance under sec. 263 of the Act for accepting the accounting entry of the assessee without conducting any proper inquiry. He pointed out that the Hon'ble Delhi High Court in the case of Sunbeam Auto has observed that inadequacy of inquiry may not be a criteria for taking action under sec. 263 but in the subsequent decision Hon'ble Delhi High Court has observed that not only inquiry but it should be a proper inquiry. He made reference to the decision of CIT vs. Ashok Logani [2011] 11 Taxmann.com (Delhi) , CIT Vs. Nalwa Investments Ltd. [2011] 311 ITR 522 (Delhi) , PME POWER SOLUTIONS V. CIT ., CHOKKAIYAN KARTHIKEYAN CO. Vs. ACIT , Dalmia Pvt. Ltd. Vs. CIT [2011] 202 Taxman 372 (Delhi), CIT Vs. DLF Power Ltd , CIT vs. Regency Park Property Management Ser. Pvt. Ltd. dated 15.1.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot permitted to substitute his estimate of income in place of the income estimated by the A.O. (vii) The A.O exercises quasi-judicial power vested in his and if he exercises such power in accordance with law and arrives at a conclusion, such conclusion cannot be termed to be erroneous simply because the CIT does not feel satisfied with the conclusion. (viii) The CIT, before exercising his jurisdiction under s. 263 must have material on record to arrive at a satisfaction. (IX) If the A.O has made enquiries during the course of assessment proceedings on the relevant issues and the assessee has given detailed explanation by a letter in writing and the A.O allows the claim on being satisfied with the explanation of the assessee, the decision of the A.O cannot be held to be erroneous simply because in his order he does not make an elaborate discussion in that regard. 9. Apart from the above, we deem it appropriate to make a reference of the observations of the Hon'ble Delhi High Court in the case of Vee Gee Enterprises reported in 99 ITR 373 wherein Hon'ble High Court has expounded the approach of the Assessing Officer while passing assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te difficult to ascertain whether Assessing Officer has applied his mind or not. The assessment order passed subsequent to passing of 263 order by the Learned Commissioner is not an information which can be used for judging the action of Assessing Officer while passing the original assessment order but certain facts noticed in this subsequent orders goad us to say that Assessing Officer has not applied his mind analytically in the original assessment proceedings. The much emphasis was supplied by the learned counsel for the assessee on the power purchase agreement with Bangalore Electricity Supply Co. dated 28.3.2006 and on the strength of this agreement, it was contended that the assessee had sold the electricity which suggests that power plant was installed. In the second assessment order, learned Assessing Officer has observed that approval from Karnataka Regulatory Commission for entering into this agreement was accorded on 24.5.2006. It indicates that these documents though were on the record but they were not looked into by the Assessing Officer. No discussion is available in the assessment order also. In our opinion, from the record, it cannot be inferred that Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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