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TMI Blog2014 (10) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessing officer to that extent got merged with the order of the CIT(A) and therefore the CIT in view the explanation (c) to section 263 does not have any jurisdiction to revise the assessment on this issue. Failure of the assessing officer to make the addition on the basis of the statement 20.8.2008 - HELD THAT:- The assessing officer after examining the statement of the assessee did not prefer to make the addition. The income has been surrendered by the assessee on the basis of the documents found and seized during the course of the search as is apparent from the computation statement of income on the basis of which the returns have been filed by the assessee in response to notices issued u/s 153A, the copy of which we pursued and placed before us in the paper book filed before us. On this basis it cannot be said that additions of ₹ 4 crores were not surrendered by the assessee. In fact, the assessee made the disclosure in all these years much more than ₹ 4 crores. Therefore on this issue also in our opinion the order passed by the assessing officer cannot be regarded to be erroneous and prejudicial to the interest of the revenue. Surrender of income - non ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly the queries raised by the A.O. and the submissions made by the assessee will speak of whether the A.O. has applied his mind or not. It is not the case of the revenue that the statement recorded during the course of the search were not looked into by the assessing officer during the course of the assessment proceedings. The assessing officer has duly examined the statements given by the assessee as is apparent from the assessment order in the case of the assessee while completing the assessment. In view of various decisions as discuss by us in the preceeding paragraphs and finding given by us, we are of the view that the CIT was not correct in law in exercising the jurisdiction u/s 263, and cancelling the assessment and accordingly we quash the order passed u/s 263. - Decided in favour of assessee. - ITA NOS. 366 TO 372/ IND/2013 - - - Dated:- 31-10-2014 - SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MUKUL SHRAWAT, JUDICIAL MEMBER For the Appellant : Ms. S. S. Deshpande Shri Ashok Vijayvargee, C.A. s For the Respondent : Shri M. S. Powar, CIT / D.R. ORDER PER P.K. BANSAL These appeals have been filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut LPS 1/1 page 71 to 75 dealing with the agreement dated 24.05.2008 between Shri Vinod Vaish and his family and you and your friends. You had paid 50 lacs in this regard, further it was found that the said land had been sold through registered deed. You were enquired in the statement regarding the sources of the payment made for the above land. 2.1 In your answer to question no. 2 of the statement recorded on 20.08.2008 you had deposed on oath that out of ₹ 5 crores you had paid ₹ 50 lacs out of your account, the balance ₹ 4.50 crores was also invested by you in various names in the purchase of property. This 4.50 crores was admitted by you as your undisclosed income. Further, you had also stated that whatever the tax liability was due on this amount, you were ready to pay the same. 2.2 Your admission made under oath warranted an addition of ₹ 4.50 crores however, the Assessing Officer has erroneously made an addition of ₹ 87,46,000/- only against the self admitted disclosure of ₹ 4.50 crores. This has resulted in under assessment of your income by ₹ 3,62,54,000/-. This shows that the assessment under is erroneous in so f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of loans. This shows that the assessment order is erroneous is so far as it is prejudicial to the interests of Revenue. 5. In your statement on oath recorded on 21.07.2008, vide question no. 8 you were enquired about page 130 of LPS 1/1 in which the M/s Shikhar Builders had given a loan of ₹ 10,00,000/- to you on 2.7.2008. 5.1 In your reply to question no. 8 of the statement recorded on 21.7.2008, you had deposed that you had shown this transaction as a loan to provide entry‟ of ₹ 10,00,000/-. This was actually your own money which had been shown as a loan entry. You had admitted this bogus entry of ₹ 10,00,000/- as your undisclosed income for the relevant year. 5.2 However, the Assessing Officer erroneously failed to make an addition of ₹ 10,00,000/-, inspite of your self admitted disclosure even in the absence of any reasonable evidence to support genuineness of loan. This shows that the assessment order is erroneous in so far as it is prejudicial to the interests of Revenue. 6. In your statement recorded on 21.07.2008, vide question no. 17, you were asked regarding page 81 of LPS 1/7 which pertained to agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that you have nothing to say in the matter and a decision will be taken on the basis of material available on records. 3. In reply thereto, the assessee filed his objections before the CIT challenging the action to be taken by the assessing officer by taking the following contentions:- Sir, our point by point submission on all the above issues as raised in your show cause notice u/s 263 of the Act are as under:- 1. Sir, this issue was elaborately discussed by the Assessing Officer in paragraph 6 page number 45 to 59 of the assessment order wherein a detailed discussion was made regarding LPS 1/1 page 71 to 75. In these paragraph the scanned copy of LPS 1/1 page 71 to 75 was also printed. It is submitted that, on page number 46 of the assessment order the Assessing Officer has specifically discussed the issue of surrender as under: When Shri Mukesh Sharma was confronted with these documents at the time of search action, he had stated in his statement recorded u/s 132 of the Income Tax Act that these pertain to land deal with Shri V Vaish and others and that he along with the other purchaser had paid ₹ 5 Crore only plus registry charges. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest of the revenue on this issue. 2. Sir, you have mentioned that during the course of search various spiral dairies and several loose papers were found and seized during the course of search in which certain financial transactions, transaction relating to consultancy, money lending transaction and certain real estate transaction of the assessee and his family members and friends were recorded. In this reference, it is submitted that all the transactions recorded in the diaries and loose papers were elaborately discussed in the assessment order on various pages. In your notice, no specific document was mentioned which is not discussed by the Assessing Officer in the assessment order which itself proves that all the documents are well considered in the assessment order and nothing was left to be considered from which it could be ascertain that the order is erroneous or prejudicial to the interest of the revenue on this issue. Regarding, the admission of ₹ 4 Crores as additional undisclosed income on account of various transaction stated as above, it is submitted that in the return filed for A. Y. 2009-10 the assessee has shown the income for consulta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return filed for A. Y. 2009-10 and hence no separate addition was made by the Assessing Officer in the assessment order. Hence, it cannot be said that the order is erroneous and prejudicial to the interest of revenue on this issue. 7. Regarding the addition of ₹ 1 Crore as undisclosed income in A. Y. 2009-10, it is submitted that the assessee has filed the Balance Sheet and Profit and Loss account along with the return and surrendered ₹ 4,13,05,005/- as his income from undisclosed sources which includes the income of ₹ 1 Crore also which is admitted to be surrendered in A. Y. 2009-10. Sir, the assessee himself declared ₹ 4,13,05,005/- in the return filed for A. Y. 2009-10 which is much above the amount of ₹ 1 Crore which is agreed to be surrendered in the A. Y. 2009-10. Sir, in the light of above, it is respectfully submitted that all the issues raised in your show cause notice u/s 263 are well considered by the Assessing Officer at the time of assessment proceedings and the assessment order passed after considering all the issues and the additions were also made wherever applicable when the explanation offered by the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e material that would justify the revision [State of Karnataka v. Marico Industries Ltd., (2001) 124 STC 196, 200 (Karn)]. Sir, the revisional power under section 263 is a quasi-judicial power hedged in with limitation and has to be exercised subject to the same and within its scope and ambit. So far as calling for the records and examining the same is concerned, undoubtedly, it is an administrative act, but on examination to consider‟ or in other words, to form an opinion that the particulars order is erroneous in so far as it is prejudicial to the interests of the Revenue, is a quasi-judicial act because on this consideration or opinion the whole machinery of re-examination and reconsideration of an order of assessment, which has already been concluded and controversy which has been set at rest, is set again in motion. It is an important decision and the same cannot be based upon the whims or caprice of the revising authority. There must be materials available from the records called for by the Commissioner. This is so because it is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded. Such action will be against the well accepted policy of law that there must be a point of finality in all legal proceedings, that state issues should not be reactivated beyond a particular stage and that lapse of time must induce response in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity (CIT v. Gabrial India Ltd. (1993) 203 ITR 108 (Bom.). Sir, the factual matrix stares in the face of the record in the light of the legal requirement of a satisfaction that involving of the power u/s 263 necessarily. Sir, in our case against the order passed u/s 153A, the assessee has filed an appeal before the Hon‟ble CIT (Appeals) 1, Bhopal and Vide order dated 30.01.2013 passed by the CIT (Appeals), Raipur camp Bhopal has granted substantial relief on most of the issues which are added in the assessment. By passing the order u/s 263 on the same issues which were deleted by the Hon ble CIT (Appeals) is not justified. Sir, it is held by various courts that after passing the order by CIT (Appeals), the revisional powers of Commissioner comes to an end because the entire order of the Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er is erroneous in so far as it is prejudicial to the interests of revenue. 11.2 Another main argument of the assessee is that after passing the order by CIT (Appeals), the revisional powers of the Commissioner comes to an end because the entire order of the Assessing Officer merges into the order of first appellate authority. This argument is not plausible for the reason that the additions which were subject matter of appeal before the CIT(Appeals) are not subject matter of the present order under section 263. The Ld. CIT(Appeals) has considered only those additions which were made in the assessment order, while in the present proceedings, the additions which were not made in the original assessment are being considered. It clearly shows that the issues involved in the assessment order and appellate order are different from the issues involved in the instant proceedings under section 263. In the case of CIT vs. K C Rajput (1987) 32 TAXMAN 326 (MP) (FB), the Hon‟ble High Court of Madhya Pradesh (Full Bench), held that in a case where assessment order is subject matter of appeal, the Commissioner can make revision under section 263 only of that part which was not subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It is well settled law that an admission prejudicial to the interests of person making the deposition is more reliable than an admission made by same person in his own interest. A self damaging statement is more reliable than a self serving statement. In fact, the assessee has not made any deposition on oath within reasonable time of making the admission on oath in which he had admitted unaccounted income and had stated to pay tax payable on such unaccounted income. These facts clearly show that the admissions made by the assessee in the statement recorded on oath were reliable evidences which the Assessing Officer has wrongly ignored. 14. In view of the above, I Consider that the assessment orders u/s 143(3) passed on 30/12/2011 is erroneous in so far as it is prejudicial to the interests of revenue and is therefore cancelled u/s 263 of the I.T. Act 1961. The Assessing Officer is directed to reframe the assessments after examining the above issues and affording sufficient opportunities of being heard to the assessee. 5. Before us the Ld. A R submitted that the assessee is an individual deriving the income from the business of property brokerage and consultanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the AO has erroneously failed to make the additions of these amounts on the basis of the statement recorded u/s. 132(4). The CIT did not take any cognizance about the affidavit and the various replies on each query filed during the course of the assessment. It was submitted that all these additions have been discussed in detail by the AO and after taking into consideration the various documents seized and the enquiries made during the course of the assessment proceedings, the additions have been made in the assessment. This is not the case of no enquiry. It was further submitted that on all the points, the CIT(A) has considered the submissions made by the assessee and has given appropriate relief on various issues. 7. It was further submitted that it is apparent from the order of the CIT that all the points referred to pertain to the A.Y. 2009-10. The reopening of the assessment on the points referred to the A.Y. 2009-10 cannot be the ground for revising the assessment of the earlier years. Thus, the order passed to the extend relate to the earlier year is bad in law and deserves to be cancelled. 8. Regarding point no. 3 about the agreement dated 24.05.2008 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Regarding the addition of loan in para 6, the point has been discussed by the AO in para 8 page 61 to 69 and has specifically came to the conclusion that in the case of Shikhar Builders, no addition is required to be made . In this regard, attention was invited to the order of the assessing officer at page 67. 12. Regarding the addition mentioned in para no. 7 about the advances to Sukhram and the cash in hand, the Ld. AO has considered all the papers and it is submitted that the same is already covered under the disclosure made of additional income and has been shown in the Balance Sheet as on 31.03.2008 under the head Kala Paani Land. It is pertinent to note that the assessee has offered an additional income of ₹ 18,00,000/- for the A.Y. 2008-09 for which attention is drawn to page 44 of the paper book. 13. Ultimately, it was submitted that the order of the Ld. CIT is bad in law due to the following reasons:- i. All the additions have been duly considered and discussed by the AO and as such the CIT has no power u/s. 263 to take a contrary view. The points have been considered very much in detail and after discussing the same in number of pages, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the paper book as well as copy of the statements recorded. Thus it was vehemently contended that the order passed by CIT u/s 263 be quashed. 14. The ld. D.R on the other hand vehemently relied on the order of the CIT. The assessing officer has not conducted due inquiry. The assessee has made surrender in the statement recorded u/s 132(4) on 21.7.2008 and 20.8.2008 before the DDIT, Investigation but did not return the income as has been surrendered. The assessing officer has not made the proper inquiry how the assessee has retracted the statement. It is not a case for merger of the order of CIT(A) with the assessment order. The assessing officer had not made any addition in respect of point no.5 relating to the loan of ₹ 10,00,000/- given to M/s Sikhar Builders, point no.6 relating to ₹ 3,00,000/- paid to Sukram in cash, point no.7 relating to ₹ 3,00,000/- in cash in possession of the assessee and ₹ 4,00,000/- cash given by the assessee to his mother. In the absence of any addition being made by the assessing officer on these issues, these issues were not before the CIT(A) and to that extent it cannot be said that the assessment order got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the power or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If one of them is absent, the provisions of section 263 cannot be invoked. 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 A.O. cannot be said to be an error. The expressions erroneous‟, erroneous assessment‟ and erroneous judgment have been defined in Black‟s Law Dictionary, Sixth Edition, page 542. According to the definition, erroneous‟ means involving error, deviating from the law‟. Erroneous assessment‟ refers to an assessment that deviates from the law and is therefore invalid, and is defect that is jurisdictional in its nature, and does not refer to the judgment of the Assessing Officer in fixing the amount of valuation of the property. Similarly, erroneous judgement‟ means one rendered according to course and practice of court, but contrary to law, upon mistaken view of law, or upon erroneous application of legal principles‟. Thus, an order can be said to be erroneous if there is incorrect assumption of facts or incorrect application of law by the A.O. If the A.O. after making the enquiries and examining the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these income are duly covered by the disclosure made by the assessee in the return filed in response to the notice issued u/s 153A. The Ld. AR relied in this regard on certain decisions also and submitted that inadequacy of enquiry according to the whims and caprice of CIT does not give jurisdiction to the CIT to invoke section 263 and set aside the assessment. Now, the question before us is whether the assessing officer has examined each and every issue relating to the question which has been raised by the CIT in the show cause notice and after examining the same he has taken a conscious decision to make the addition to the extent, he found it to be justified or he did not make the addition as he is satisfied with the disclosure made by the assessee in the returns filed by him. Whether the income in respect of which the AO has not made any addition are duly supported by the disclosure made by the assessee in the return filed in pursuance to the notice issued u/s 153A. 18. The first issue raised by the CIT deals with the agreement dated 24.5.2008 entered into between with Shri Vinod Vaish and his family and assessee and his friends. The assessee in the statement recorded o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see, the assessing officer made the addition on this account and on the basis of the various documents seized relating to land dealing and after examining the bank accounts of the other buyers also for ₹ 87,46,000/- in the hands of the assessee relating to the assessee‟s share in the land deal. He took this money has been incurred out side the books of account in land dealing on the basis of the documents seized. The finding of the assessing officer is very exhaustive appearing at page 49 to 1st para of page 59. We have gone through the finding of the assessing officer after going through the finding, it cannot be said that the assessing officer has not examined the issue relating to the addition of ₹ 4.5 crores as well as the documents and papers seized relating to land dealing income. The assessing officer we noted has applied his mind and examined all the seized papers pages 71 to 75 of LPS1/1. It is not a case where it can be said that the assessing officer has not examined the issue relating to the addition of ₹ 4.5 crores as well as land dealing. If the assessing officer has taken a concious view after appreciating the evidences, documents, papers foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s order merges with the appellate order of the AAC, only to the extent it was considered and decided by the AAC but the matters which are not covered by the appellate order of the AAC are left untouched and to that extent, the ITO‟s assessment order survives permitting exercise of revisional jurisdiction by the CIT under s. 263.- CIT vs. R.S. Banwarilal (1982) 28 CTR (MP) (FB) 49: (1983) 140 ITR 3 (MP) : TC57R.415 approved on this point) 19. The second issue relates to the failure of the assessing officer to make the addition of ₹ 4 crores on the basis of the statement 20.8.2008. This surrender was made in the statement dated 20.8.2008 on the basis on loose papers found relating to consultancy, money lending, real estate transaction as well as deposit made in the bank. We noted from the assessment order that the assessing officer has examined all the documents seized from the premises of the assessee and also found that in respect of the land deal on money of ₹ 8,75,42,265/- was paid outside the books of the accounts but ultimately he came to the conclusion that the share of the assessee was upto 1/10th and therefore 1/10th of the amount was sustained du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details given and produced by the assessing officer in the assessment order. This is not a case where assessing officer has sustained only ₹ 70,00,000/- addition out of this sum of ₹ 1.1 crore this is apparently clear from the finding at page 69 of the order which are reproduced as under :- An addition of RS.70,00,000/- is being made in the hands of the assessee being non genuine unsecured loans appearing in the balance sheet of Shri Mukesh Sharma and Mrs Neena Sharma. Whereas an addition of ₹ 25,00,000/- will be made to the total income of Smt Neena Sharma on protective basis being non genuine unsecured loans appearing in her balance sheet as a part of the undisclosed income admitted by Shri Mukesh Sharma during the course of his statement recorded on 21.07.2008 u/s.132(4) of the I.T.Act has been shown as unsecured loan obtained by her. This itself prove that there is proper application of mind on the part of the assessing officer but CIT did not appreciated the fact properly and correctly and remained under the incorrect assumption as if addition of ₹ 25,00,000/- was not made. On this basis the order passed by the assessing officer can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xable income of the assessee in accordance with the provisions of law. The powers under section 263, as has been pointed out by us earlier, can be invoked by the CIT if there is an error in the order of the A.O. and the order so passed is prejudicial to the interest of the Revenue. If the A.O. has duly considered the issue and has taken the view which may be in favour of the assessee that will not empower the CIT to invoke the provisions of section 263 of the Act until and unless that view is unsustainable in law or illegal? Coming to the contention of the ld. A.R. that it is not necessary by the A.O. to discuss in the order all the contentions by the assessee, we do agree with the ld. A.R. that there is no provisions in the Income-tax Act which provides that the A.O. should pass the Assessment Order in the manner so that all the queries raised by him as well as the submissions made by the assessee should be incorporated in the Assessment Order. In our opinion, where the A.O. do not agree with the Assessee, he should discuss the same in the Assessment Order so that the assessee should know the reasons thereof and file the appeal. In this case the A.O. after examining the issues, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order framed by CIT indicates that the Assessment Order passed by the A.O. was cancelled on the ground that the A.O. has not made the additions while making the assessment in respect of each and every income which has been surrendered by the assessee in the statement dated 21.7.2008 and 20.8.2008. This, in our considered opinion, cannot be sufficient ground for cancelling the assessment. While making Assessment Order, it is the satisfaction of the A.O. who made the enquiry and it should be a touchstone of the assessment order passed by him, the CIT cannot substitute his view in place of finding of the A.O. until and unless the view taken by the A.O. is unsustainable 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 A.O. in the case of the assessee was unsustainable in law. The order passed by CIT is illegal without jurisdiction. The order passed by the CIT cannot be sustained if the order is sustained then this will permit the illegality to continue and the subsequent action carried out on the illegal order is also illegal per se. We have gone through the case laws cited by the ld. A.R. We find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held as under:- The details of sub-contractors examined by the AO as per the directions of CIT in revision proceedings, inter alia, include the names of these sub-contractors, their permanent account numbers, their permanent addresses, amount given to them, name of work entrusted to them, nature of such work and statements recorded by the AO, etc. These details reveal that during the course of examination under s. 131, no question was put to many of these sub-contractors as to the variation in their signatures. Similarly, no question was put to them for the reasons of discounting with the Shroff. It is the stand of the assessee right from the beginning that all these sub-contractors were mainly working for the assessee and they did not have any office set up and since they were working for the assessee, they have used assessee‟s address for correspondence, especially with the Government for timely communication. These persons are eligible under s. 44AD to file their returns under presumptive scheme of taxation. All these persons were produced before the AO in revision proceedings and no question was put to them though their statements on oath were recorded. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Guj) and Malabar Industrial Co. Ltd. vs. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC) relied on). The impugned case is duly covered by this decision also in our opinion. 27. Hon‟ble Supreme Court in the case of CIT vs. Max India Limited, 295 ITR 282 (SC) has held as under :- The phrase prejudicial to the interests of the Revenue in section 263 of the Income-tax Act, 1961, has to be read in conjunction with the expression erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when the Assessing Officer adopts one of two courses permissible in law and it has resulted in loss of revenue, or where two views are possible 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 Revenue, unless the view taken by the Assessing Officer is unsustainable in law. 28. We noted that similar issue has arisen before the jurisdictional High court in CIT vs. Ratlam Coal Ash Co., 171 ITR 141 (MP), in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clothe the Commissioner with jurisdiction u/s 263 merely because he can form another opinion. At the most the case of the assessee can be regarded to be the lack of inquiry in accordance with CIT if he has different opinion how to proceed with the assessment of the assessee. 31. Similar view has been taken by Hon‟ble Delhi High court in the case of CIT Vs Software Consultants 341 ITR 240 (Del.) in which it has held as under :- The assessee-company did not file its return of income for the assessment year 1993-94. During the course of assessment proceedings for the assessment year 1997-98, it was noticed that the central Bureau of Investigation had conducted search in the premises in which fixed deposit receipts worth ₹ 20 lakhs relating to assessment year 1993-94 were found in the possession of P, a director of the company. However, P claimed that the fixed deposits though in her name, actually belonged to the assessee. This stand was accepted by the Commissioner (Appeals) in the appeal filed by P. Thereafter, the Assessing Officer in the case of the assessee issued notice under section 148 of the income-tax Act, 1961. In response to this notice, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice under section 148 of the Act. This position was not disputed or disturbed by the Commissioner in his order under section 263 of the Act. The assessment order was not erroneous. Thus, the Commissioner could not have exercised jurisdiction under section 263 of the Act. 32. In the case of CIT Vs Sunbeam Auto Ltd, 332 ITR 167 (Del.) High court has held that inadequacy of enquiry will not give the jurisdiction to CIT u/s 263. In this Hon‟ble High court has held as under :- The Assessing Officer in the assessment order is not required to give a detailed reason in respect of each and every item of deduction, etc. Whether there was application of mind before allowing the expenditure in question has to be seen. 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 has a different opinion in the matter. It is only in cases of lack of inquiry that such a course of action would be open. An order cannot be termed erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e accounting practice followed for a number of years had the approval of the income-tax authorities. Even for future assessment years, the very same accounting practice was accepted. (ii) That the dyes were components of the machines. They needed constant replacement, as their life was not more than a year. The assessee also explained that since the parts were manufactures for the automobile industry, which had to work on complete accuracy at high speed for a longer period, replacement of the parts at short intervals become imperative to retain the accuracy. Neither with the replacement of tools and dyes to new asset comes into existence nor was their benefit of enduring nature. They did not even enhance the life of the existing machine of which the tools and dyes were only parts. Therefore, the view taken by the Assessing Officer was one of the possible views and the assessment order passed by him could not be held to be prejudicial to the interests of the revenue. The opinion of the Assessing Officer in treating the expenditure as revenue expenditure was plausible and thus there was no material before the Commissioner to vary that opinion and ask for fresh inquiry. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Officer had allowed exemption under section 11 of the Act to the assessee without examining in detail the applicability of the provisions of section 13(1)(c)(ii) of the Act. Therefore, the Commissioner of Income Tax set aside the assessment orders and directed the Income Tax Officer to assess afresh. On appeal, the Tribunal set aside the order of the Commissioner. On a reference under section 256(2), the revenue contended that the assessment order did not disclose that the Income Tax Officer had examined the applicability of section 13(1)(c )(ii) : Held, that the Tribunal, after examining the record, found that to the audit objections that the assessee was not entitled to the benefit of exemption, by virtue of the provisions of section 13(1) of the Act, the Income Tax Officer had given detailed replied showing that the Income Tax Officer was alive to the relevant provisions of law and the facts before passing the orders of assessment. Since from the entire record, the Tribunal found that the Income Tax Officer was alive to the relevant facts and provisions of law before proceeding to frame the assessment, the Tribunal was right in setting aside the order of the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwarded to the Commissioner for his approval. Both the appellate authorities had failed to take the trouble of even referring to the assessment record. Once the assessment order had been passed with the approval of the Commissioner, the successor Commissioner could not possibly say that the matter had been decided without application of mind by the Assessing Officer. Thus, the findings of the Tribunal were liable to be reversed and the order of the Commissioner was liable to be set aside. 37. We noted under the similar facts, in the case of CIT Vs Hari Singh Associates, 267 CTR 442(Raj.) Hon‟ble Rajasthan High court has also taken a view in favour of the assessee when it has held as under :- Assessee having disclosed the impugned amount as advance towards sale of agriculture land, and the AO having treated the same to be part of business income, the order of AO could neither be treated as erroneous nor prejudicial to the interest of the revenue and, therefore, CIT was not justified in invoking his jurisdiction under s. 263 simply because he held as different opinion that addition ought to have been towards undisclosed income. 38. In the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncumbent upon him to show that he had made a mistake in making that admission and that the said admission was incorrect. He had access to all the documents which had been seized in as much as the copies had been supplied to him. However, he did not produce anything to establish that the admission was incorrect in any way. That being the position, the assessee could not revile from his earlier statement. (Para 11) It was held that the statements recorded u/s 132(4) were clearly relevant and admissible and they could be used as evidence. In fact, once there was a clear admission, voluntarily made, on the part of the assessee, that would constitute a good piece of evidence at the hands of the revenue. Although, the assessee had submitted that the retraction letter was not an afterthought it was not agreed with, the reason being that there was no mention of any documents in the retraction letter. In our view, this decision will also not applicable to the facts of the cases before us. This decision firstly relate to the merit. Secondly, it is not the case of the revenue that the statement recorded during the course of the search were not looked into by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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