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TMI Blog2015 (7) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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, the 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 assessment s under section 143(3). As 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 these issues. We also noted that the Assessing Officer has not made any enquiry whatsoever in respect of the other issues as has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, erroneous, unreasonable and perverse and he erred in directing enquiry in that behalf. 6. For that the CIT erred in holding that the AO had not examined the taxability of the correct amount received from Delhi Administration. 7. For that the CIT erred in 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 AO had not made the requisite enquiry/examination. 3. Brief facts of the case are 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin 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.147 also. Notices u/s. 143(2) 142(1) dated 13.06.2011 were received from the ACIT, Circle-43, Kolkata, in response to which reply dtd.14.07.2011 was filed by the assessee on 15.07.2011. Thereafter a notice u/s. 142(1) dated 25.08.2011 was issued by the ACIT, Circle-43, Kolkata, requiring several details and documents which was complied with by the assessee by his letter dated 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 assessee by his letter dated 08.11.20 11 filed on 09.11.2011 and letters dated 22.11.2011 dated 23.11.2011 filed on 24.11.2011. 5. In the course of hearing, one of the queries raised was with reference to the damages received by the assessee amounting to ₹ 6.09 crores and share of the assessee, in response to which detailed submissions were made by the assessee by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 clearly mentioned that the respondents shall pay to the claimants an amount for use and occupation of the premises. The Assessing Officer has taken the view which is not only erroneous but also prejudicial to the interest of the revenue. (iii) You own two residential 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 properties 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 ₹ 40,00,000/- during the year under consideration as under- Sales.............................................................Rs.39,86,725.08 Bill Discounting Charges ....................Rs. 1,66,575.00 Further as per the copy of Sales Tax Returns available on record, the net sales (exclusive of taxes) comes to ₹ 40,86, 416/- though the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prejudicial to the interest of the revenue. (viii) You have transferred an amount of ₹ 11, 00, 000/- to your wife at a very nominal interest. The Assessing 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 Assessing 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 ₹ 14,11,816/- from Delhi Administration. The Assessing Officer allowed the same without verifying the genuineness of the transaction. 7. In reply thereto, the assessee 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 evidences, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expressed by the A.O. is a 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 different opinion hi the matter reliance in this regards is made on the decision of the Delhi High Court in the case of CIT v. Anil 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 Arbitrator 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 1/4th and the Assessing Officer has acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deposited by the DA during financial year 1995-96 toward compensation on adhoc basis out of which I withdrew Rs. One Crore being my 1/4th Share. Later, the total compensation payable by the DA was determined at ₹ 24.36 crores. Accordingly the Delhi Administration further deposited a sum of ₹ 20.36 crores (total compensation amount ₹ 24.36 crores - minus ₹ 4 crores paid earlier during F Y. 1995-96) in the High Court on March 18, 2008. The said amount was received by the owners on April 2, 2008, Accordingly the assessee has received his 1/4th share of ₹ 6.09 crores in the total compensation paid by the Delhi Administration. My total share (1/4th share) towards the damages amounted to Rs..5,94,88,184/- and ₹ 14,11,816/- towards interest and cost. The receipt of ₹ 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 Delhi 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 Del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 computed by the Arbitrator. Even the Arbitrator in her order at Paras- 13, 14 19 has mentioned as under. 13. Ms. Justice Usha Mehra In her judgement and order of 27th May, 1994 has observed I have no hesitation to hold that the notification under sections 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 premises 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 nature of trespass on the property . 14. The learned judge also holds that the claimants a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, it has been clearly mentioned that the respondents shall pay to the claimants an amount for use and occupation of 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 payments as damages. The Division Bench has clearly spoken about damages which are quoted as under. 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 property 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 Division Bench was conditional and no such event ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed ₹ 40 lacs and the Assessing Officer has accepted un-audited accounts and did not initiate penalty proceedings uls.271B 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 part of the reasons recorded and therefore the assessment order is not erroneous and prejudicial to the interest of revenue. 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 regarding 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 any 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 prejudicial 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. 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..........................................1/4th share Krishna Prasad Bagaria...........................1/4th share Sudershan Prasad Bagaria....................1/4th share Ranglal Bagaria, HUF...............................1/4th share (Represented by Karta Sudershan Prasad Bagaria) 9. CIT discussed each of the issues in respect of which the show-cause 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 period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discounting charges and sales tax/ VAT 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 done 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:-On 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 ₹ 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 assessee 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 offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that the surrender was voluntarily. 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 ₹ 11,00,000/- to Smt. Manju Devi 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, Hyderabad 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 06.11.2000 reported in (2001) 118 Taxman 230 (Madras)/ (2001) 248 ITR 611 (Mad.)/ (2001) 171 CTR 154 (Mad.); (6) CIT vs.- Jawahar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 and 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 all 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 taxability of ₹ 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 ₹ 23.79 Crores and has claimed it as non taxable being capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 after 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 contended 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 section 263. While re-opening the assessment, the Assessing Officer recorded the 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 1/4th sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 recorded to be the capital receipt except a sum of ₹ 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 Assessing 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 Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 on one of the issues, it has to be upheld. 17. We have heard the rival submissions and carefully 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 the case of Sudershan Prasad Bagaria, the CIT has invoked the jurisdiction under section 263 by issuing showcause 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 assessee 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 ₹ 11,00,000/- by the assessee to his wife at a nominal interest. That on this issue the assessment 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 sec tion 263 has rightly been invoked or not on these issues. It is necessary 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 erroneous as well as prejudicial to the interest of revenue are fulfilled. If one of the conditions is absent, the order passed by the CIT by invoking the provisions of section 263 will not be legal. The term erroneous has not been defined under the Income 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer under sect ion 147 read with sect ion 143(3). The proceedings under 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 Delhi Administration initiated an acquisition proceedings in respect of house property at 3, Tilak Marg, New Delhi, in which the assessee had 1/4th share. The said 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 ₹ 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'ble Delhi High Court. The arbitrator finalized the damages at ₹ 24.36 crores in which assessee's shares is ₹ 6.09 crores. Assessee got the damages in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crore (the assessee s share out of ₹ 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 y ear of taxability was also in dispute. Ld. CIT(A) noted the following facts: ...the appellant along with others owned a house property being premises No. 3, Tilak Marg, New Delhi, the appellant having 1/4t h undivided share thereon. The property was acquired by the Delhi Administration in the year 1987 under the Land Acquisition Act, 1984. High 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 damages for wrongful 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 Delhi high Court against the judgment of the single judge and also prayed for stay of operation of the quashing order whereupon the Division ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO mentioned that in that case the Hon ble Court had held that the damages of Rs. One crore is not taxabl e and it will be taxable in the year of finalisation of damage which was pending at that time and therefore, the high Court was also of the opinion that damages is taxable as revenue receipt only in the y ear the damage is finally 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 is seen to have accounted for the receipt in the previous year 2008-09 (AY 2009-10) on receipt basis only after the Delhi Administration deposited a further sum of ₹ 20.36 crore (total compensation amount ₹ 24.36 crore minus ₹ 4 crore paid earlier during 1995-96) in the Court which was received by the owners on April 2, 2008. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mtr. and would be ₹ 14 crore. To this amount if solatium of the rate of 30% under the Land Acquisition Act and interest w.e.f. 1987 are added the total amount payable under the Act would be over ₹ 21 crores. What would be the damages will be determined by the Arbitrator . (5) Now, while the arbitrator identified the damage payable as for use and occupation, the assessee 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 namely 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 interest 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sect ion 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. 23. 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 erroneous 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 High 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished 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 Rev enue. 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 . 26. 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 section 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 erroneous 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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 officer 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 the 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 Items No. 1 2 relating to the share of assessee in the property as well as the nature of the receipt of the compensation. As has been discussed by us in the preceding paragraphs, these issues have duly been examined and considered by the Assessing Officer in framing the assessment under section 147 read with sect ion 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 Of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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