9911796707
TMI Blog2023 (3) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuming the jurisdiction u/s 263 of the Income Tax Act, 1961 and, thereby, holding that the assessment as framed by the Assessing Officer is erroneous and prejudicial to the interest of revenue and further erred in setting aside the order, dated 20.12.2019 as passed by the Assessing Officer. 2. That the Ld.PCIT has failed to appreciate the fact that during the course of assessment proceedings by way of specific questionnaire, dated 11.12.2019 fixed for 13.12.2019, specific query was made by the Assessing Officer with regard to application of provisions of section 115BBE on the Income offered during survey to the tune of Rs. 1 crore, which was replied in detail and after considering that reply, the Assessing Officer has taken a possible view and, therefore, the order of Ld. PCIT for setting aside the already completed assessment u/s 143(3), dated 20.12.2019 by the Assessing Officer is void abinitio. 3. That the Ld. PCIT has failed to appreciate the fact that there was due application of mind by the Ld. Assessing Officer and, thus, no valid jurisdiction could have been assumed by the Ld. PCIT. 4. Notwithstanding the above said ground of appeal, the Ld. PCIT has, having assumed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he specific queries raised by the AO in the course of the hearing and the replies of the assessee submitted that the AO has passed an order after due enquiries and with full application of mind. Specific attention was invited to Paper Book pages 39 to 40 wherein the AO vide notice dated 11.12.2019 required the assessee to address why the higher rate as per the amendment in the Statute should not be applicable to the surrendered income. Referring to the reply filed also available on record at pages 41 to 46 it was submitted it would show that the assessee had offered the same justification relying on facts and law as applicable on the date of surrender. That it was argued that only after duly enquiring from the assessee and considering the reply, the AO has taken a possible view. Accordingly, the order passed, it was argued is passed after full enquiry and due application of mind and hence is a valid order wherein there was no error. Thus, it was his submission that the order cannot be set aside merely on the ground that according to the ld. PCIT, the rate of tax ought to have been higher. Once a plausible view, it was argued has been taken by the AO, then the Revisionary powers u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was his submission that the copy of the Taxation Law, Second Amendment Bill, 2016 has been filed by the assessee in its Paper Book-III at pages 117 and 122 at Sr.No. 12 and copy of the Statement of Objects and reasons of the Second Amendment at pages 123-129 at Sr.No. 3 has also been filed for the re-consideration of the Bench. 4.3 In the said factual background, at the outset, the ld. AR taking the Bench directly to page 123 and 124 of the Paper Book it was submitted that the Taxation Laws, Second Amendment Bill, 2016 passed by the Parliament received the Presidential assent on 15th December 2016. It was highlighted that the survey took place in August,2016 and the amendment proposing a higher tax rate admittedly was not available on the Statute. Thus, it was submitted that a surrender made on a day as per the law prevalent well considered by the AO by raising due enquiries cannot in the Revisionary order be re-visited on the ground that subsequently the provision was amended with a higher tax rate. It was submitted that this issue had itself been fully considered by the AO as queries were raised specifically on it. Reverting back to the background, it was submitted that at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, 2016' (PMGKY) is proposed to be provided in the Bill. The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income and penalty @ 10% of the undisclosed income. Further, a surcharge to be called 'Pradhan Mantri Garib Kalyan Cess'@33% of tax is also proposed to be levied. In addition to tax surcharge and penalty, the declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the Central Government in consultation with the Reserve Bank of India under the 'Pradhan Mantri Garib Kalyan Deposit Scheme, 2016'. This amount is .proposed to be utilised for the programmes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc.; so that there is justice and equality. 5. The Bill seeks to achieve the above objectives. New Delhi ARUN JAITELY The 26thNovember,2016 4.4 Addressing the facts available on record, attention of the Bench was invited to the copy of the surrender letter dated 05.08.2016 of the assessee filed pursuant to the survey on 04.08.2016 which is available at page 22. For ready reference, it is reproduced hereunder : To The Joint Commissioner of Income ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addressing the facts available in the Paper Book (running upto 65 pages) it was submitted that pages 1 to 4 of the same is a copy of the acknowledgement of return and computation of income for the year under consideration. Pursuant to the filing of the return, the AO, it was submitted, issued notice u/s 142(1) on 20.08.2019 which is available at pages 23 to 27. For the purposes of present proceedings, attention was invited to Paper Book page 24 which would show the nature of the queries raised by the AO : 1. Nature of your business activities & exact location of all your business premises/sister concerns including space taken on rent. 2. Please furnish details of your income tax assessments for the previous 3 years. If any assessment has been made u/s 143(3) in the earlier 3 years, a copy of the same may be furnished. 3. Please furnish a copy of Computation of your Income for the A.Y. 201718. 4. Please furnish month-wise details of purchases and sales with quantity and value. Also furnish details of cash sales and credit sales 5. Please furnish complete details of opening stock and closing stock itemwise alongwith basis of valuation of opening and closing stock. 6. Plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration alongwith documentary evidence. 19. Please furnish copy of ledger account alongwith narration of the following expenses:- i) Freight Expenses ii) Power & Fuel Expenses iii) Repair to Building Expenses iv) Repair to Machinery Expenses v) Insurances Expenses vi) Workmen and Staff Welfare Expenses vii) Entertainment Expenses viii) Telephone Expenses ix) Festival Celebration Expenses x) Loading & unloading Expenses xi) Interest Expenses 4.6 Referring to the same, specific attention was invited to the queries raised at Question No. 1, 11 and 18. It was submitted that the detailed comprehensive enquiries have been made by the AO and only after considering the replies of the assessee, he has formed a view. 4.7 Referring to page 28 of this Paper Book, it was submitted that the assessee has replied thereto and provided complete details as required were filed. These specific issues highlighted in the reply of the assessee is extracted hereunder: (1) The assessee since the inception of partnership and during the year under consideration remained engaged in hatchery business at self owned premised at VIEE JANDHERA -LADWA KURL KSHL I HA. .The sister concern of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding' facility through your account in 'e-filing website of Income Tax Department. Now, your case is fixed for 13.12.2019 at 11:00 AM. (Emphasis supplied) 4.10 It was submitted that this query also was replied to by the assessee. This fact, it was submitted, is evident from Paper Book pages 41 to 46. Specific attention was invited to paras 1 and 2 of the assessee made available to the AO which read as under : From : RAM KUMAR Partner : M/s Neelkanth Breeding Farm, Village-Jandhera, P.O. Ban, Tehsil- Ladwa, Kurukshetra PAN-AAJFN0024C To The Deputy Commissioner of Income Tax, Circle, Kurukshetra, Sub :Reply to notice issued U/S 142(1) dt. 13/12/2019 for Asst. Yr. 2017-18 Respected Madam, Respectfully submits that in response to your notice issued U/S 142(1) of the Income tax Act dt. 13/12/2019 vide notice no- ITBA/AST/F/142(1)/2019-20/1022138277(1), that in view of the query raised by your good self regarding levying tax separately at the maximum tax rate in view of the provisions of section 115BBE of the Income Tax Act. the reply is submitted as under:- That during, the survey operation earned out on 04/08/2016 at our business premises and we had surrendered a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressed by the professionals that the rate of 30% as it stood before the last amendment would possibly be not appropriate the enhanced tax was introduced. The amendment was brought to prevent such disclosures to overcome the views expressed. The ld. AR submitted that for consideration of the AO, the assessee had also highlighted the other important amendments which were carried out. In the said backdrop, the total tax in these cases covered u/s 115BBE @ 60% with surcharge of 25% on the tax and where the income was not included in the return u/s 139, it was submitted, that the penalty u/s 271AAC as per the amendment @ 10% of such tax was to be levied. Drawing attention to page 45 of the Paper Book, it was, hence, submitted that before the AO, it had also been argued that, “it was debatable and continues to be a debatable question as to whether deductions under Chapter VI-A are allowable against such income”. 4.12 Addressing the other issues canvassed before the AO, it was submitted that the Second Amendment Act, 2016 received the assent of the President on 15.12.2016 and was published vide Gazette dated 15.12.2016. It has been argued that; “The last amendment to section 115BBE was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition as argued and considered the impugned order has been passed. 4.14 Addressing the legal position on the issue, attention was invited to the order of the Amritsar Bench of the Tribunal in the case of Dev Raj Hi-tech Machines Ltd. Vs DCIT Ferozepur 174 TTJ 9 it was submitted, that the facts in the said case are exclusively identical as herein also, there was a surrender and after due enquiries, the return filed was accepted by the AO which order was sought to be set aside by the ld. PCIT and considering the record where admittedly due enquiries had already been made, the order passed by the ld. PCIT was quashed. Attention was also invited to the decision of the Hon'ble Andhra Pradesh High Court in the case of PCIT Vs Deccan Jewellers (P) Ltd. (2021) 132 taxmann.com 73 (S.No. 2). In the facts of the said case it was his submission that the factual and the legal position fully supports the case of the assessee. Attention was also invited to CIT Vs Anil Kumar Sharma 335 ITR 83 Delhi-HC and CIT Vs Hindustan Marketing & Advertising Co. Ltd. 341 ITR 180 (Delhi-High Court) in support of the legal argument advanced that the AO has applied his mind and it is not a case of lack of enqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invited to Paper Book pages (page 129-130 in CIT Vs Nirav Modi 77 taxmann.com 15 (S.C.). Reliance was also placed upon the decision of the Apex Court in the case of Pr. CIT Vs Shreeji Prints Pvt. Ltd. 130 Taxmann.com 294 wherein the Court categorically held that where detailed enquiries have been made by the AO, the Revisionary Powers exercised by the Commissioner invoking Explanation-2 to Section 263 cannot be upheld. Attention was also invited to Paper Book filed on 14.06.2022 to show that the assessee has obtained copies of documents at the assessment stage from the tax authorities which have been filed. Copy of application available at pages 66-67 and certified copy of the ordersheet available at pages 68 to 70. Specific attention was invited to the queries raised. Reliance was also placed upon the decision of the Chandigarh Bench in the case of Gandhi Ram Vs PCIT, order dated 04.08.2022 in ITA 121/CHD/2021 and specific attention was invited to para 8 of the aforesaid decision. It was submitted that in the facts of the said case, the tax authorities have failed to point out qua the surrender as to whether Section 68, 69, 69A, 69B or 69C was applicable ? Even on merits, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the survey proceedings. 7. Then the case of the case was selected for compulsory scrutiny under CASS and various notices u/s 142(1) of the Act were issued to the Assessee. 8. The AO, during of the course of assessment proceedings, vide point no. 18 of the questionnaire dated 20.08.2019 (Pg 25 of PB), asked the assessee to furnish details of Rs. 1,15,00,000 shown in Computation of income. The copy of he said questionnaire is forming part of paper book at 23-27. 9. In response to the said notice, the assessee filed a reply wherein vide point no. 18 (Pg 36 of PB), it was explained before the AO, that Rs. 1,15,00,000/- includes Rs. 1,00,00,000/- as surrendered during the course of survey proceedings and Rs. 15,00,000/- was surrendered in Voluntary disclosure of income scheme (VDIS) introduced in 2016 by Govt, of India. The copy of the said reply is forming part of paper book at Pg 28-38. 10. Thereafter, during the course of assessment proceedings itself, the AO issued a specific notice dated 11.12.2019 addressing the issue of charging tax Q/s 115BBE of the Act @ 60% on surrendered income. The copy of the said notice is forming part of paper book at Pg 39-40. 11. In res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO on the issue of chargeability of tax @ 60% on income surrendered by the assessee. 17. Now, against the order passed by the Worthy PCIT, the assessee is in appeal before your goodself and our brief synopsis are as under: OUR SUBMISSION: 1.1 At the outset, it is submitted that the assessee had surrendered a sum of Rs. 1,00,00,000/- which includes 75,50,000/- on account of excess stock, Rs. 9,50,000/- on account of excess cash and Rs. 15,00,000/- to cover misc. discrepancies and all these discrepancies were related to the one and only hatchery business of the assessee. Since the assessee is not carrying on any other business, therefore, whether has been surrendered by him is related to the business carried on by the assessee. 1.2 Even at the time of surrendering the said sum of Rs. 1,00,00,000/-, it was specifically mentioned by the assessee that the surrender has been as additional income which is over and above the regular business of the assessee. Moreover, the surrender has been made just to buy peace of mind and to avoid litigations and commitment to pay on the said surrender amount at normal tax rates was also made by the assessee at that time and the department ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorrect as the case of the assessee does not fall in any of the limb of explanation 2 to section 263. The AO has made in depth enquiries on the issues concerned and there is no lack of enquiry as specific enquiry was asked by the AO on the concerned issue and in depth reply was also filed on the same. Therefore, even after the thorough application of mind by the AO, merely because it seems to the CIT that issue had remain unattended by the AO or the, he cannot call for application of section 263 of the Act by treating the order passed by the AO as erroneous and prejudicial to the interest of the revenue. 4.17.3 In the context of the queries raised by the AO and the replies available, the application of mind of the AO, it has been submitted, was evident from para 1 of the assessment order itself : "The assessee filed its ITR pertaining to the assessment year 2017-18 on 22.01.2018 showing total income at Rs. 1,17,06,270 Survey u/s 133A Act, 1961 was carried out at the premises of the assesses on 04.08.2016. During survey operation, certain discrepancies were noticed which could not be explained of the IT by the assessee and as a result of it, it voluntarily offered to disclose ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxmann.com 306 (Chd-Trib.); DCIT vs. Marshal Machines Pvt. Ltd. of ITAT, Chandigarh Bench in ITA No. 57/Chd/2017; Sh. Harish Sharma vs. ITO of ITAT, Chandigarh Bench in ITA No. 327/Chd/2020; M/s. Gaurish Steels Pvt. Ltd. vs. ACIT, reported in 43 ITR 414 (Chd-Trib.); M/s. Renny Strips Pvt. Ltd. vs. ACIT of ITAT, Chandigarh Bench in ITA No. 1018/Chd/2014; DCIT vs. M/s. Khurana Rolling Mills Pvt. Ltd. in ITA No. 745/Chd/2016 vide order dated 01.07.2019. 4.18.1 The legal position for consideration of the ITAT as highlighted in the synopsis filed is also reproduced hereunder for completeness: 2. During the course of last hearing, the Hon'ble Bench had asked for copy of the Taxation Laws (Second Amendment Bill, 2016) and copy of that Bill have been, placed at pages 117 to 122 of the 'paper book' and this, 'Second Amendment Bill’ was passed by the Hon'ble Lok Sabha of India on 29th November, 2016 for the demonetization of legal tender of Rs. 500/- and Rs. 1000/- notes and received the assent of the President on 15th December, 2016 and by way of this amendment, the amount of tax was enhanced from 30% to 60% and the copy of the statement of object & reasons, of the 'Second Amendment' h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax was leviable at 30% on the income covered u/s 68, 69, 69A, 69B, 69C or 69D of the Act. Subsequently the tax was charged at 60%. Every year, the Finance Bill is introduced in the budget session and is tabled before the Lokh Sabha on 1st February (Earlier last day of February) for the coming financial year relevant to the assessment year commencing on the next year 1st April. Thus, beforehand, the public knows the provisions which are to be introduced for the coming financial year starting from the 1st April of the same year in which the bill is tabled before the Parliament. 7. In the case of Section 115BBE, there was no amendment proposed by the Finance Bill, 2016 which was presented before the Lokh Sabha on 29th February 2016 for the Asst. Year 2017-18 for increase in tax rate. It was only as per the Second Amendment Act, the tax rate was increased from 30% to 60%. In the Statement of Objects and Reasons accompanying the Taxation Laws (Second Amendment) Bill, 2016, it was stated that, Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date from which the said section would be applicable. Even though it has been mentioned that the section would be applicable w.e.f. 1st April 2017 i.e. w.e.f the Asst. Year 2017-18, the question is whether the legislation has the right to make a retrospective amendment in a case which modifies the rights of the assessee, imposes additional liability or create new liability. 10. Coming to the facts of the case, it is very clear that the survey was conducted on the business premises of the assessee on 04.08.2016 and the assessee had surrendered a sum of Rs. 1 crore on account of cash 6t excess stock and at that time, the assessee on anybody else, was not expected to know that there would be 'demonetization' and such kind of amendment will be brought. Further, as is evident from the object of the Second Amendment, it is very clear that, the said amendment was only for the purposes of bringing to tax the demonetization currency and which are not the facts relevant to the case of the assessee and, thus, the said amendment is not applicable to the assessee at all, due to the following reasons…” 4.18.2 Reliance was placed upon DCIT Vs M/s Khurana Rolling Mills Pvt.Ltd. ITA 745/CHD/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of recording of satisfaction by the Assessing Officer of the searched person; or the date of recording of satisfaction by the Assessing Officer of the other person; or the date of issuance of notice under section 153C." and held that "the amendment brings into its fold persons who are otherwise not covered by the said provisions and therefore, affects the substantive rights of such person." 4.18.4 It was his submission that before the new provision came into operation, vested right had already accrued to the assessee as surrender was made considering the legal provision as available on the Statute at the relevant point of time. Hence the decision of the Apex Court in CIT Vs Hindustan Electro Graphites Ltd. (2000) 109 Taxman 342/243 ITR 48 (S. C.)…(page 11 para 18)and CIT Vs Vatika Township (P.) Ltd. (2014) 49 taxmann.com 249/227 Taxman 121/367 ITR 466 (S.C) (page 12) fully supports the case of the assessee. 4.19.5 It has further been argued that, “In a case where there was an omission in a former legislation, the retrospective amendment can be made. In the instant case, the tax rate as was applicable till 14th December, 2016 u/s 115BBE was 30% which was as specifically given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Niharika Jain Vs. Union of India [2019] 107 taxmann.com 272 (Rajasthan) (Dated 12.07.2019). For ready reference, the relevant extract from the synopsis is extracted hereunder : “By now, it is well settled law that unless a contrary intention is reflected, legislation is presumed and intended to be prospective. For in the normal course of human behaviour, one is entitled to arrange his affairs keeping in view the laws for the time being in force and such arrangement of affairs should not be dislodged by retrospective application of law. The principle of law known as lex prospicit non prospect (law looks forward not backward), is a well-known and accepted principle. The retrospective legislation is contrary to general principle for legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried out in the faith of the then existing law. Thus, the principle against retrospectivity is the principle of fairplay' and unless there is a clear and unambiguous intendment for retrospective effect to the legislation which affects accrued rights or imposes obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scrutiny of the law made by the Parliament or legislature, if the Court finds that the law which is under challenge as ultra vires infringes the rights or interests of the petitioner, the Court can strike down the enactment. [Para 37.4] When a tax law or amendment made therein is impugned under article 14, the Court is to decide whether the amendment in tax law is palpably so arbitrary or unreasonable that it must be struck down. The word 'arbitrary' is used in the sense of being discriminatory. An act which is discriminatory is liable to be labelledas arbitrary. [Para 37.9] After the foreign investors entered India and apart from other sectors, they also participated in exploration, discovery and commercial production of mineral oil and gases, the Finance Minister in his speech under the pretext of clarification, added an Explanation by laying down an absolutely new proposition that all blocks under a single contract would be treated as a single undertaking. The investors have carried out commercial production of mineral oil under a bona fide belief that each well/cluster of wells is an undertaking and he enjoys the benefit of 100 per cent tax deduction for a period of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the AO has not even given a specific finding as to whether it is from the same business or some other business. The AO has merely accepted the returned income. It was further submitted that the order of the AO is a very brief order and does not throw any light on how he has formed a view. Accordingly, it was his submission that on facts, the AO has failed to decide the issues which were to be considered. Considering the surrender made, it was submitted that the ld. PCIT was fully justified to revise the order. Specific reliance was placed upon para 2.4 and 2.5 of the impugned order which reads as under : 2.4 Thus, the assessee clearly mis-lnterpreted the observation of the Hon'ble Supreme Court in the above mentioned case-laws. The amended section115BBE vide Taxation Laws (Second Amendment) Act, 2016 is having effect from 01-04-2017 i.e. commencing date of assessment year 2017-18. As the amendment in Finance Act, 2016 was brought before 01-04-2017, it is very clear that the same is applicable on the A.Y. 2017-18 in full spirit. Therefore, the reply submitted by the assessee was devoid of merits. However, the AO failed to acknowledge the same and take proper cogniz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interests of the Revenue. For considering the same, it need be evidenced from the record whether the order has been passed without considering the relevant facts and provisions. It need be seen from the record of the AO whether any queries have been raised by the AO on the issues and whether on facts considering the replies of the assessee, the view formed by the AO can be said to be a plausible view or not. It is only after considering the same, the Revisionary Authority can come to the conclusion whether the order passed was a carelessly passed order by the AO thus constituting an error by sheer lack of enquiry or absence of relevant enquiry by the AO which causes not only an error but also a prejudice to the interests of the Revenue. It is only after such an enquiry is made that the Revisionary Authority can be held to be justified in setting aside the order. On a consideration of the entire factual matrix of the present case, we find ourselves unable to subscribe to the view taken by the Revisionary Authority. We have taken into consideration the arguments advanced on behalf of the assessee that the amount surrendered in the course of the survey on 04.08.2016 was honored by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO is shown to be an incorrect view, the said action cannot be supported. In the facts of the present case, we find ourselves unable to hold that the assessment order has been passed without a proper enquiry. We have seen that the AO was duly conscious of the issues which he was required to consider. Replies have been taken on record. They are seen to be having a legal support. Though various decisions have been cited for our consideration, we deem it necessary to refer to a recent decision of Co-ordinate Delhi Bench of the ITAT wherein in order dated 24.08.2022 in ITA 570/Del/2022 in the case of Shri Balvinder Singh V PCIT wherein considering a near similar issue, the following view was held: 13. There is, therefore nothing stated in the pre-amended or post amended provisions of section 115BBE of the Act that where the assessee surrenders undisclosed income during search action for the relevant year, the tax rate has to be charged as per provisions of section 115BBE of the Act. Therefore, the applicability of the amended provisions which prompted the PCIT to assume jurisdiction under section 263 of the Act is highly debatable issue, and therefore, in our understanding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actice of court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles". 12. From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the court it would be open to the courts to examine whether the relevant objective factors were available from the records called for and examined by such authority. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such decision of the Income-tax Officer cannot be held to be "erroneous" simply because in his order he did not make an elaborate discussion in that regard. Moreover, in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the assessee was erroneous and that the expenditure was not revenue expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction in the Assessment Order passed thereon. Thus, this objection on the part of the Revenue cannot be accepted.” 29. We find that the Hon'ble Delhi High Court in the case of CIT Vs Sunbeam Auto reported in 332 ITR 167 has held as held as under: “ 12. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the CIT under s. 263 of the IT Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the AO did not consider this aspect specifically whether the expenditure in question was revenue or 14 capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the AO had not applied his mind on the issue. There are judgments galore laying down the principle that the AO in the assessing order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see ..... X X X X Extracts X X X X X X X X Extracts X X X X
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