9911796707
TMI Blog2004 (12) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... and a set aside of the assessment, the entire order of the CIT stands vitiated or whether only a part of such order will stand vitiated. We hold that the entire order will stand vitiated for it will not be possible to hold that only a part of the order will be vitiated; if we were to hold so it will not be possible for us to bifurcate and conclude as to whether the enhancement/modification is valid or the set aside is valid. The only possible conclusion in these circumstances is to hold that the entire order would be invalid. There is no provision for setting aside an issue without setting aside the assessment. As we see it, an order passed u/s 143(3) which was otherwise final is sought to be modified by the CIT through the medium of Section 263. Once the said order is disturbed, either it is modified as desired by the CIT or set aside to be redone according to law and on the basis of directions contained in the order u/s 263. Section 263 itself, contains enough clues to this effect. In our considered view, the order as passed u/s 263 is unworkable, because once an assessment is set aside it has to be redone according to law, if it is not set aside, the assessment has to be modifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and setting aside of assessment simultaneously vitiated the order of CIT entirely. Income Tax Act, 1961 s.263 Revision under section 263--SCOPEAllowability of depreciationAssessee-company acquired an American-firm AOC, and in the process, the assessee came to process valuable intellectual property rights (IPRs). The assessee put to use the said IPR and claimed depreciation which was granted by the AO. The CIT invoked section 263 and merely pointed out that the manner of acquisition of AOC required to be investigated and no other findings were given. Held: A proceeding under section 263 has a very limited scope and can be invoked only under special circumstance and not for the purpose of launching a roving enquiry. Error in assessment resulting being prejudicial to revenue has to be demonstrated while invoking section 263, which is conspicuous by its absence in the order passed by the CIT under section 263. Income Tax Act, 1961 s.263 Revision under section 263--ERRONEOUS AND PREJUDICIAL ORDERSurplus arising on exchange fluctuationFor computing deduction under section 80HHE, the AO treated surplus arising as a result of exchange fluctuation on account of retention of GDR proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 39,97,82,760. This return was processed under Section 143(1)(a) and the income returned was accepted. Thereafter, a notice under Section 143(2) was served on the appellant and an assessment was completed on 21st April, 2003 under Section 143(3) determining the total income at ₹ 42,13,94,253. The CIT, Chennai-III, by notice dt. 22nd Dec., 2003 called upon the appellant to show cause as to why the said assessment should not be revised under Section 263 of the IT Act, 1961, for the following reasons on the ground that the said order was erroneous and prejudicial to the interests of Revenue directing the assessee to file objections on 5th Jan., 2004 : '(i) You are a leading computer training provider and shares are quoted in the stock exchanges. The AO has erred in not getting a published annual report of the company. Instead of this, the assessment has been completed on a company of only the financial accounts, a portion of the annual report, without obtaining directors' reports and other non-financial statements which are important parts of the published accounts of a company and are crucial from income-tax point of view. (ii) Secondly, in the statement of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind on an important issue on the part of the AO is erroneous and prejudicial to the interest of Revenue. (v) Fifthly, as per notes to the balance sheet, you have accounted the discounted value of the options granted as employee stock options outstanding and deferred employee compensation expenses and amortised the expenses over a period of three years and claimed it as an expenditure under the head 'staff welfare expenses' amounting to ₹ 66.82 lakhs. The AO has allowed this claim without any application of mind inasmuch as no details have been called for. What was the basis of arriving at the difference has also not been examined. The difference between the market value of the shares and the discounted value at which these were allotted to the employees cannot be a revenue expenditure. (vi) Sixthly, on the perusal of the working of the deduction under Section 80HHE, it is seen that the AO has reduced from the profits and gains of business other receipts amounting to ₹ 20,91,12,000.50. This figure has been arrived at after reducing a sum of ₹ 16,35,77,977 pertaining to additional income derived on account of exchange fluctuation from the total of other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 80HHE earlier allowed in the proceedings under Section 143(3), as a result of treating the exchange fluctuation as a revenue receipt; and (b) disallow the claim under Section 35D amounting to ₹ 4,80,72,799; and (c) disallow the ESOP expenditure of ₹ 66.82 lakhs under staff welfare; (d) disallow the claim of 100 per cent depreciation on wooden structures of ₹ 94.81 lakhs and allow 1/5th of the expenditure for 5 years from asst. yr. 2001-02; and (e) consider afresh by setting aside the claim of depreciation on Intellectual Property Rights. 5. The first issue that arises for our consideration relates to the direction by the CIT to the AO to treat the sum of ₹ 16,35,77,977 due to exchange fluctuation as a revenue receipt with a further direction to examine whether the deduction under Section 80HHE needs to be recomputed for this reason. In this regard the submission of the learned counsel for the assessee is that the assessee had made a GDR issue of shares and raised US $ 100 million outside India in March, 2000. The GDR issue is nothing but an issue of shares made outside India. The proceeds of the GDR issue had to some extent been utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he grounds raised about assumption of jurisdiction under Section 263 by the CIT being invalid. The learned counsel for assessee submitted that the CIT could not go beyond the initial show-cause notice through a letter, which was subsequently sent to the assessee and that the letter of the CIT, could not be construed as a show-cause notice as envisaged in Section 263. The learned counsel referred to the decisions of the Punjab & Haryana High Court in Vipan Khanna v. CIT (2002) 255 ITR 220 (P&H) and CIT v. M.P. Iron Traders (2004) 136 Taxman 520 (P&H) rendered in the context of a reassessment where it had been held that the proceedings of reassessment had to be confined only to the issues for which the proceedings were initiated and could not be extended to issues not recorded at the time of launching of proceedings of reassessment. The learned counsel also placed reliance on the decisions of the Supreme Court in CIT v. Shri Arbuda Mills Ltd. (1998) 231 ITR 50 (SC) and CIT v. Shree Manjunathesware Packing Products & Camphor Works (1998) 231 ITR 53 (SC) as to the meaning of the term 'record' as defined in Section 263 in support of his claim that what is not contained in the sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,80,907 is reduced from the exchange fluctuation of ₹ 16,35,77,977, the result would be a loss and total income of the appellant would thus be lesser than what was assessed by the AO under Section 143(3) and that, therefore, even assuming that there was an error, no prejudice is caused to the Revenue and so would fall outside the scope of Section 263. 9. The learned Departmental Representative, on the other hand, has filed detailed written submissions and submitted that the exchange fluctuation receipt had been taken to the P&L a/c as the appellant had done with regard to exchange fluctuation from receipts of the assessee from its business of providing services for which payments were received in foreign currency. The learned Departmental Representative, further submitted that the accounting policy of the assessee was to make adjustments in foreign currency on the invoices raised for sale made to clients outside India. Similarly, the assessee in respect of expenses in foreign currency accounted the same at the rate of exchange debited by the bankers at the time of expenditure or average exchange rate during the period in other cases. Current assets and liabilities denominate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee without examination is an error committed by the AO and, therefore, the direction of the CIT in treating it as a revenue receipt is correct on the facts and circumstances of the case, He also submitted that the first show cause brought out the issue as a part of computation under Section 80HHE, whereas in the second letter issued on 21st Jan., 2004 to the assessee asked for reasons as to why the same should not be treated as revenue receipt and that, therefore, the additional ground raised in this regard was not valid. 11. It is an admitted position that in the show-cause notice issued, the increase caused by exchange fluctuation figured in the context of the proposal to hold that the computation of relief under Section 80HHE was incorrect and the ground that said receipt was revenue in nature does not find mention. Only when the assessee explained that the increase due to exchange fluctuation was not considered for the purposes of Section 80HHE and found support in the decision of the Hon'ble Madras High Court in EID Parry (supra), the CIT took the view that the receipt was of a revenue nature and issued a letter to the assessee as to why the said sum should not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and this mistake is not a curable one as enumerated in Section 292B of IT Act. 14. In this connection, useful reference may be made to the decision of the Hon'ble Karnataka High Court in the case of CIT v. L.F. D'Silva (1991) 192 ITR 547 (Kar), wherein the Department sought to expand the scope of the Section 263 proceeding before the Tribunal raising certain issues not contained in the show-cause notice. After holding in para 14 that "the scope of the proceeding has to be ascertained with reference to the purpose and the basis of the initiation of proceedings", the Hon'ble High Court found that while initiating the proceeding the issue that was sought to be raised was nowhere to be seen in the notice and held that it was not seen in the notice and held that it was not permissible for the Tribunal to grant a second innings to the Department to enter upon fishing expedition. Respectfully following the principles laid down therein, we are of the view that the question as to whether the increase due to the exchange fluctuation was revenue in nature was not even in the mind of the CIT when he bad issued the notice and this opinion came formed by him only after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellers on which SLP was dismissed by the Supreme Court [(2004) 266 ITR (St) 101]. 17. The learned Departmental Representative supports the order of the CIT on the ground that the decision of the Madras High Court in (1988) 174 ITR 11 (Mad) (supra) related to shares issued abroad by a foreign company and not by an Indian company as in this case and further that in that case, the amount could not be brought into India due to the then prevailing stringent regulations of the RBI and so contended that this case is distinguishable and also the purpose of raising the share issue in that case was for acquiring plant and machinery and in the present case in appeal, for working capital also. In our considered opinion, the point that the assessee is an Indian company and that the amount in the other case was kept abroad due to RBI regulations does not in any way affect the nature of the receipt. These factors have no bearing on the determination of the question as to whether the increase in the value of a sum due to exchange fluctuation is capital or revenue in nature for the simple reason that such receipts from share issue are always capital in nature. There cannot be any change of gene. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The learned counsel for the assessee also submitted that an expenditure once held as revenue has to be allowed in full unless it were prohibited from being claimed under the Act. The learned counsel for the assessee also submitted that the expenditure was incurred wholly and exclusively for the purpose of the business of the assessee and was, therefore, allowable in full under Section 37(1) in the year in appeal. For this proposition, the learned counsel for the assessee places reliance on the decision of the Rajasthan High Court reported in CIT v. Rajasthan Spg. & Wvg. Mills Ltd. (2004) 137 Taxman 249 (Raj). The learned counsel for the appellant also sought to distinguish the decision of the Supreme Court in Madras Industrial Investment Corporation Ltd. v. CIT (1997) 225 ITR 802 (SC), where the Supreme Court had held that discount on issue of debentures has to be spread over the period for which the debenture was issued and to be allowed as a deduction accordingly. This was sought to be distinguished on the basis that the Supreme Court in that case had only concluded that the discount accrues only over the period for which the debenture was issued and that was the reason for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame principle will also apply in distinguishing the judgment of the Rajasthan High Court in CIT, v. Rajasthan Spinning & Weaving Mills (supra) relied by the assessee as the appellant has not made any claim under Section 37(1) and now is trying to justify the wrong claim made in the return of income by making an alternate claim. He concluded that after considering the facts of the case, the CIT is correct in allowing 1/5th of the expenditure on the deferred revenue concept, which is an accepted accounting principle and also upheld by the Supreme Court in the case of Madras Industrial Investment Corporation Ltd v. CIT (supra). 21. The learned Departmental Representative also pointed out that the agreements referred to the assessee as the contractor and ELCOT: as the lessee-cum-service recipient. The learned Departmental Representative also pointed out to Clause 30 of the agreement with ELCOT which provided that after the primary lease period covered by the contract, the hardware, software, furniture, UPS, airconditioner and other equipments installed under the contract are to be retained in the school for a lease payment of ₹ 100 per annum per school for a period of 10 years w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In the Section 263 proceedings, the CIT held that since the contract is for a period of 5 years the entire expenses ought not to be allowed in full by the AO and hence directed 1/5th of the expenditure be allowed. 24. In deciding this issue, certain crucial facts have to be borne in mind. The contract provided for the assessee to impart computer education is not in his premises but in public places like schools with access provided to all kinds of students in such premises. The structure provided there comprises, partition and other wooden accessories. All these were to be retained in these premises all the time. As per Clause 7, the words during/after the contract period and shall not be taken away from the training center premises are very significant. Further, Clause 30 provides for secondary lease for a period of 10 years for a nominal sum of ₹ 100 per annum. This would indicate that from the date of contract the entire infrastructure provided by the assessee in the public schools, liable for misuse and disuse, remained virtually the property of these schools and so in our view the terms of the contract indicated in unmistakable terms that the structure provided by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow the claim under Section 35D of ₹ 4,80,72,799. The learned counsel for the assessee submitted that the assessee had incurred expenses of the Global Depositary Shares issue amounting to Rs, 16,71,80,907.80 and the expenses relating to acquisition of partnership interest in the firm Albion Orion Corporation LLC for the appellant amounting to ₹ 7,31,83,086.52 totalling to ₹ 24,03,63,994 out of which 1/5th was claimed for the asst. yr. 2001-02. He further submitted that the claim of the assessee under Section 35D in respect of expenses relating to Global Depositary Shares (GDS) and acquisition of Albion Orion Corporation LLC, these expenses were mainly incurred on account of feasibility studies, projections of business prospects and technical and other data which are covered by Sub-section (2) of Section 35D. He also submitted that software development is recognized as an industry and its extension or setting up of a new unit will lead to the allowability of expenditure incurred therefor as a deduction under Section 35D. Further it was submitted that the expenses can be allowed under Section 35D beginning from the year in which the extension of the industrial unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire public issue expenses of ₹ 16.73 crores would be allowable as a deduction against the interest income. This would mean that the net of the public issue expenses and interest receipts would have been a negative figure. It was also submitted that the claim made under Section 35D was only to the extent of ₹ 4.80 crores which was 1/5 of the total expense of ₹ 24,03,63,994 of the public issue, while Tribunal in (2004) 83 TTJ (Jd) 236 (supra) has held that the entire expense is allowable. The assessee's counsel submitted that this clearly establishes that, there is no error much less a prejudice since going by the decision of the Tribunal in (2004) 83 TTJ (Jd) 236 (supra), the assessee has in fact, overstated its income and this cannot lead to a prejudice to the. Revenue. The learned counsel for the assessee also placed reliance on the decision of the Supreme Court in Rajendra Prasad Moody's case (supra) and Bokaro Steel Ltd. (supra) 33. The learned Departmental Representative, on the other hand, submitted that the AO allowed the claim under Section 35D without any discussion or without any proper verification. During the proceeding under Section 263 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking nor does it result in the setting up of new industrial unit The assessee's submissions have been that software development has been recognised as an industry and so the expansion achieved by the outlay is covered by Section 35D. The further contention of the assessee is that the expenses incurred related to preparation of feasibility studies, etc. and that these expenses are allowable under Section 35D beginning the year in which the extension of the industrial undertaking is completed which in this case was in the asst. yr. 2001-02. The further submission of the assessee is that even otherwise the expense incurred have to be set off against the interest income earned and strong reliance is placed on Neha Proteins (supra). In this case the Jodhpur Bench of the Tribunal has held that public issue expense in connection with expansion of an existing business should be allowed, as a deduction in full against interest earned on the share application money. In the submission of the appellant the interest income earned being ₹ 16.75 crores, was offered without any claim for deduction as upheld in the said decision but on the other hand the claim under Section 35D was limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is applicable to the facts of the case and the assessee in the original assessment has preferred a lesser claim and hence the grant of deduction under Section 35D was not prejudicial to the interest of Revenue. Even otherwise, the CIT is of the view that in the process the assessee came to acquire IPR in which event the assessee was entitled to claim depreciation which was far higher than the claim under Section 35D. Looked at from any angle, we do not find any error in the order passed by the AO in granting a deduction under Section 35D. On the other hand, in terms of the decision in Neha Proteins Ltd. (supra), the claim should have been much more. Hence, on this ground also we do not find any justification to the CIT to invoke jurisdiction under Section 263 and the direction to disallow the expenditure of ₹ 4.80 crores is not warranted. 36. The fourth issue relates to the direction to disallow ESOP expenditure of ₹ 66.82 lakhs. The learned counsel for the assessee submitted that the assessee has issued shares in the company to its employees under employees stock option plan. This is done in the interest of the business of the assessee to enthuse the employees to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res, which were unsubscribed The Supreme Court, he submitted, had held that it would be proper for the assessee to take the net investment, that is the purchase price as reduced by the underwriting commission, as investment as against treating the gross amount that is the purchase price as the investment and the underwriting commission as income. He went on to submit that this view was taken by the Supreme Court on the basis of the accepted principles of commercial accounting and observed that the principles of commercial accounting should ordinarily be applied in ascertaining the profits and gains. In fact, in this case, he submitted that the Tribunal had referred to various books on accountancy and had found that accounting for the net of the purchase price and the underwriting commission as investments was a permissible accounting treatment and held that the accounting of the net of investments was in order. He further submitted that it was this view of the Tribunal that was affirmed by the Supreme Court The appellant's counsel also drew our attention to the decision of the Supreme Court in CIT v. Bokaro Steel Ltd. (supra). He submitted that in this case the Supreme Court on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee compensation expense is to be taken to the P&L a/c. He further stated these amounts are to be written off against the share premium account and therefore, the claim of notional expenditure under Section 37(1) is correctly disallowed by the CIT. 38. In reply, the learned counsel for the assessee submitted that the accounting mandatorily required to be passed by the SEBI had been reproduced by the CIT in his order that is under appeal. This entry required to be passed by SEBI is as under : Dr. Cash a/c (amount received from employee) Dr. Employee Compensation Expenses a/c (amount of discount to six month average market price) Cr. Paid up Equity Capital (face value of shares) Cr. Share Premium (Six month average MV - face value) 39. The learned counsel for the assessee pointed out it is not correct to say that the employee compensation expense is to be written off to share premium account. The learned counsel for the assessee drew our attention to Section 78 of the Companies Act, which restricts a company from making such write offs. 40. ESOP was the order in those times. That was the medium through which the talent was attracted and castled. In a highly competitive field o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,38,32,06,340 were transferred from AOC LLC, a limited partnership, in the US, after it had become a branch of the appellant. The procedure for acquisition, he explained, was as follows : 08/09/2000 6 per cent of partnership interest in AOC was acquired for $4 million for cash. 11/12/2000 24 per cent of partnership interest was acquired for $ 16 million--For cash. 69.9 per cent of partnership interest was acquired for $ 43.65 million against shares. 09/03/2001 The remaining 0.1 per cent of partnership was acquired for cash. 43. The learned counsel for the assessee submitted that the investments in AOC were made with the sole purpose of acquiring the know-how and it was the ultimate goal and destination of the assessee. He further submitted that with the ultimate object of acquiring the know-how, a gradual acquisition of interest took place over a period of time. The learned counsel for the appellant submitted that since the appellant had acquired 100 per cent of the partnership interest on 9th March, 2001, AOC LLC became a branch of the appellant company. On 29th March, 2001, the branch transferred the IPRs worth ₹ 2,38,32,06,340 to the assessee in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its own shares and that it was not within the powers of the CIT to conclude that the price paid was very high particularly even without knowing the nature of the IPR. He also submitted that the CIT failed to appreciate that the value of the IPR was determined by independent consultants and was not made without basis. He also submitted that the CIT failed to appreciate that the entire transaction and issue of shares was approved by the RBI, which is the apex authority for foreign exchange transactions in the country. 47. The learned counsel for the assessee also submitted that the CIT need not have rushed to pass his orders when the same was not getting barred by time and when there was further time available to him upto 31st March, 2006. The learned counsel for the assessee submitted that the CIT erred in setting aside the issue to the AO on the basis that it needs an indepth study and it was difficult to understand the accounting ingenuities. He further submitted that the CIT ought to have realised that if such senior authority could not understand the so-called ingenuities, it is unlikely that a lower authority would understand it as well. Considering the submissions made, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . At the outset, we notice that in the proposal dt. 22nd Dec., 2003, the CIT has taken the view that the AO had not examined the manner in which the US entity AOC became 100 per cent owned property of the appellant and that the AO had not gone into the question whether these transactions resulted in capital gains or a revenue receipt and that the failure to apply his mind on an important issue resulted in the said order being erroneous and prejudicial to the interest of Revenue. We also notice that after several rounds of hearing, the CIT concludes at p. 12 of his order that the company AOC had been acquired through a series of premeditated transaction preceding the ultimate acquisition of the firm involving complex and creative accounting requiring considerable expertise to understand the accounting ingenuities, that all facts and legal aspects have to be properly studied before coming to any judicious conclusion as to what these IPRs are, what is there nature, whether they have been valued correctly, whether they are books entries or not, that documents impounded at the time of survey needed to be investigated and, therefore, the issue has to be set aside to be examined from all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the way in which the US entity was acquired has no relevance. It is not as if the IPRs are not the property of the appellant or that they were not put to use during the assessment year in question or that it is the colourable device. There is no such finding in the order under Section 263. In a very recent decision the apex Court in the case of Azadi Bachao Andolan (supra) has held that once a transaction has been put through and acted upon as a commercial proposition, the question whether such transactions has resulted in reduction in tax is not relevant. In our view the undoubted factual position being that the IPRs were acquired during the year and put to use, leaves no doubt in our mind that the appellant is entitled to claim depreciation on these IPRs and so invoking Section 263 merely for the purpose of ordering a fishing enquiry on mere surmise and suspicion is not justified. 52. The assessee's counsel has also raised various grounds regarding the validity of the invocation of Section 263 in the grounds of appeal. One issue that needs to be considered is whether the CIT in exercise of his powers under Section 263 can direct both an enhancement and a set aside through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that the CIT should not utilize the information found on the basis of survey under Section 133A which was much after the examination of the record is not correct. He further submitted that the CIT has not utilized the information that was collected in the survey under Section 133A but the same was always furnished by the assessee before the CIT in the course of the proceedings. In support of his submissions, the learned Departmental Representative relied on the decisions of Supreme Court in the case of CIT v. Sri Manjunathesware Packing Products and Camphor Works (supra), K.A. Ramaswamy Chettiar v. CIT (1996) 220 ITR 657 (Mad). The learned Department Representative also submitted that the AO has not made proper inquiries before accepting the statements made by the appellant in the return of income and the CIT can regard such an order as erroneous and prejudicial to the interests of the Revenue and in support of which had relied on the following decisions : (i) Malabar Industrial Co. Ltd v. CIT (2000) 243 ITR 83 (SC). (ii) Gee Vee Enterprisees v. Addl. CIT (1975) 99 ITR 375 (Del). (iii) Addl. CIT v. Mukur Corporation (1978) 111 ITR 312 (Guj) (iv) Duggal & Co v. CIT (1996) 220 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sunil Kumar Shamsunder Chaudari AIR 1988 SC 1841. The Supreme Court in these cases has interpreted the statutes with the aid of the comma that was used in the construction of the statutes and held that where the context so requires, punctuation, cannot be disregarded as an aid to interpretation. In the context of Section 263 in the present appeal, the clear use of the disjunction 'or' after the comma explicitly brings out the legislative intent that it is either one of the acts viz., enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment which can be done. We are of the view that the use of the words 'pass such orders as the circumstances of the case justify' cannot give the power to do both the acts in one order not only for the reason that it will render the latter part of the section nugatory but also because once an assessment is set aside, such assessment is a nullity in law until a fresh assessment is made. In such a case it is not possible to direct an enhancement on an assessment, which is already cancelled. We, therefore, hold that the CIT in exercise of the powers under Section 263 can either enhance/modify or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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