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TMI Blog2019 (12) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by the higher courts we are of the view that in the present case the AO had made enquiry and assessee has also placed on record all the documents as were required by the AO in respect of both the issues as now raised by the Pr.CIT. Thus, the order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. Merely just because the view taken by the AO was not found acceptable does not mean that the AO has failed to make requisite enquiries. AO was plausible view, which cannot be disturbed by the Ld. Pr.CIT. Therefore, Pr.CIT was not correct in exercise the jurisdiction u/s 263 - We quash the assessment proceedings initiated by the Pr.CIT in the impugned order passed under section 263 and allow the appeal of the assessee. - Appeal of the assessee is allowed. - I.T.A No.289/SRT/2018 - - - Dated:- 13-12-2019 - Shri Sandeep Gosain, Judicial Member And Shri O.P. Meena, Accountant Member For the Assessee : Shri Rasesh Shah CA And Shri P.M.Jagasheth - CA For the Revenue : Shri Sreenivas T.Bidari CIT(DR) ORDER PER SANDEEP GOSAIN, JM: 1. This appeal by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as law on the subject, the entire proceedings are bad-in-law and invalid as assessment order u/s. 143(3) r.w.s.147 of the Act for the same year were framed, wherein due inquiry was made. 8. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax has grievously erred in setting aside the assessment order framed u/s. 143 r.w.s.147 of the Act without pointing out as to how the order is erroneous and prejudicial to interest of revenue. 9. It is therefore prayed that the above proposed proceedings may please be revoked as learned members of the tribunal may deem it proper. 10. Appellant craves liberty to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal. 3. As per facts of the present case the assessment u/s.143(3) r.w.s. 153A of the I.T.Act for the year under consideration was finalized on 28.03.2016 determining total income of the assessee. The assessee is in the business of business of builders and developers and developed the project in the name and stile of Rushikesh , Vaishnodevi Township and Ideal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u are also required to furnish the source of land of ₹ 18,23,19,011/- arranged by your firm and how it was reflected in books of accounts of the firm. Details of persons from whom these funds were arranged by firm also required to furnish by you with complete names, addresses and PAN. If you failed to furnish such details please show cause why amount of ₹ 18,23,19,011/- should not be treated as unexplained expenditure of the firm. 6. In the above show cause notice, assessing officer also questioned the source of the receipt of ₹ 2,44,85,900/- vide point no. 6 of the notice. Assessing officer also asked the assesse to furnish the details of the persons from whom assesse received the cash for purchasing and removing of unauthorized occupant of land situated at Vakala B. No. 49A, Surat at point no. 7 of the show cause notice. The assesse filed the detailed reply in the course of assessment proceedings through various letters explaining the point no. 1, 5 to 7 of Show Cause Notice. In regard to the point no. 5 of Show Cause Notice which is subject matter of proceedings u/s. 263, assesse filed the detailed reply vide letter dated 09.06.2016 stating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The Assessing officer after considering the explanation of the assesse passed the assessment order accepting the disclosure. Accordingly, assessing officer assessed the income of ₹ 2,01,80,624/- as against returned income u/s. 153A of ₹ 1,21,06,200/- disallowing deduction u/s. 80IB claimed against the other disclosure of project Rishikesh of ₹ 80,74,428/-. It is to be noted that assesse has not claimed the deduction u/s. 80IB on ₹ 7 crores declared from project Township which includes ₹ 21,00,000/- for this year. After completion of the assessment, the PCIT took action u/s. 263 by issuing show cause notice on 05.12.2017. Assessee filed detailed reply vide letter dated 09.01.2018. The Id. PCIT was not satisfied with the reply of the assesse and he held that the assessment order respect of ₹ 18,79,58,511/- as held by him at para no. 5 to 5.2.2 of his order u/s.263 of the Act. 10. The ld.AR further submitted that it is well settled that both the conditions viz order of the assessing officer should be erroneous and assessment order should be prejudicial to the interest of revenue should be cumulatively sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or lack of inquiry by the assessing officer. Even this is not the case of inadequate inquiry as the assessing officer made the due inquiry by considering the seized materials and explanation of the assessee. Even the Pr. Commissioner of Income Tax has reproduced the explanation filed by the assessee on 01.03.2016 to explain the source of the payment of ₹ 18,00,00,000/- in his order passed u/s. 263 but he has not rebutted the explanation in his order. The Pr. Commissioner of Income Tax has accepted the source of the receipts being from the Projects, although he doubted the source of the expenditure. The source of expenditure is apparently the business receipts from the projects. The reliance is placed on the following decisions: i. CIT v/s. Amit Corporation - 81 CCH 0069 (Guj.) ii. PCIT vs. Harmony Yarns Pvt Ltd.[Tax Appeal No. 282 of 2016 (Guj.)] iii. CIT vs. Fine Jewellery Ltd. [372 ITR 303] (Bom.) iv. CIT vs. Ganpat Ram Bishnoi [296 ITR 0292] (Raj.) v. PCIT vs. Shree Gayatri Associates [(2019)] 106 taxmann.com 31 (SC)] vi. Indus Best Hospitality Realtors Pvt Ltd. vs. PCIT [ITA No. 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry. Further it was held that Even if this view, in the opinion of the CIT is not correct, it would not permit him to exercise power under section 263 of the Act. In fact, the Apex Court in CIT v/s. Amitabh Bachchan - 384 ITR 200 has observed that there can be no doubt that where the view taken by the assessing officer is a possible view, interference under section 263 of the Act, is not permissible. Further the reliance is placed on the decision of Bombay High Court in case of CIT vs. Fine Jewellery Ltd. [372 ITR 303] (Bombay HC) and Lakme Lever Pvt Ltd. vs. CIT [ITA No. 2613/Mum/2015 (Mum Trib)]. 14. During the course of scrutiny by the assessing officer, which was answered to the satisfaction of the assessing officer, but neither the query nor the answer was reflected in the assessment order, this would not by itself lead to the conclusion that the order of the assessing officer called for interference and revision. The reliance is placed on the decision of Delhi High Court in case of CIT vs. Vikas Polymers [341 ITR 537] (Delhi HC). 15. The ld.Pr.CIT has not invoked Explanation 2 to S. 263 either in the show cause notice or in the order passed u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d before us, as well as the judgments cited by both the parties of higher courts, we find that it is a settled law that both conditions i.e. the order of the ld.AO should be erroneous and assessment order should be prejudicial to the interest of the Revenue should be cumulatively satisfied by the ld.Pr.CIT. In this respect, we rely upon the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Minalben S. Parikh 215 ITR 0081 (Guj) and even from the facts we also noticed that it is a clear case where the AO had passed orders after enquiry and so the assessment order cannot be termed as erroneous. Thus, order passed by the ld.AO could not be prejudicial to the interest of the Revenue as the deduction for the investment of the land is clearly allowable on the basis of same seized paper on the basis of which disclosure of ₹ 7 crore was made. We are also of the view that Revenue cannot be allowed to a probate and reprobate in the same breath. All the figures mentioned in the Profit and Loss Account found and seized in the course of search should be considered to be true as per presumption contained u/s.132(4A) and 292C of the Act. The presumption contained u/s. 132(4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ality Realtors Pvt Ltd. vs. PCIT [ITA No. 3125/mum/2017 (Mum Trib)] 21. The assessing officer has made the proper inquiry which was adequate. If there was any inquiry even inadequate that by itself would give no occasion to the CIT to pass orders u/s.263 of the Act, merely because he has a different opinion in the matter. Even the PCIT has started in his order that inquiry was inadequate. In support, the reliance is placed on the following decisions: i. CIT v/s. Sunbeam Auto Ltd. - 332 ITR 0167 (Del.) ii. CIT v/s. Anilkumar Sharma - 335 ITR 0083 (Del.) iii. CIT v/s. Jain Construction Co. - 257 CTR 0336 (Raj.) iv. CIT Vs. Vodafone Essar South Ltd. [(2013) 212 Taxman 0184] (Del.) The PCIT has not made any inquiry on the issues raised by him. Recently, the Delhi High Court in the case of PCIT v. Delhi Airport Metro Express Pvt. Ltd. [ITA No. 705/2017] has categorically held that for the purpose of exercising jurisdiction u/s 263 and reaching a conclusion that the order is erroneous and prejudicial to the interest of revenue, the Id. PCIT has to undertake some minimal inquiry and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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