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TMI Blog2015 (12) TMI 1902X X X X Extracts X X X X X X X X Extracts X X X X ..... ere not sufficient. In our considered opinion this approach of the learned CIT in invoking the jurisdiction u/s. 263 of the I.T. Act is not sustainable. AO has made the enquiry which he deemed fit. Now the learned CIT is directing to make further enquiry. This, in our considered opinion, is not the mandate of section 263 - CIT has also drawn adverse inference on the issue that capital introduced by the partners were not looked into by the AO in the assessment stage. We find that this alone cannot be a ground for invoking jurisdiction u/s. 263. CIT has noted that the assessee has submitted necessary details before him. Learned CIT has not found any thing adverse in these details. Moreover there are case laws for the proposition that capital introduced by the partners has to be examined in the hands of partners in their individual account. Hence the AO having adopted one of the possible views, it cannot be said that the learned CIT was justified in invoking jurisdiction u/s. 263 of the I.T. Act. Hon'ble Apex Court in the case of Max India Ltd [ 2007 (11) TMI 12 - SUPREME COURT] as expounded that where two views are possible and the ITO has taken one view with which the CIT does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uired to file three different audit certificates in respect of three projects for which the deduction u/s.80IB(10) is claimed along with the separate P L A/c and balance sheet of the each project. Thus the express condition laid down u/s. 18BBB(2) is not fulfilled by the assessee. 3. From the above discussion learned CIT found that the AO has allowed the deduction u/s.80IB(10) without proper verification and without making necessary enquiries. In support of his order u/s. 263, learned CIT made the further observations: (g) Work in progress and other direct/indirect expenses. Assessee has stated that these details were filed and examined by the AO. I have verified the records. The assessee has merely filed a summary of work in progress which is appended to this order as Annexure-4. This summary does not indicate as to how the closing work in progress is valued. The AO had neither called for any details about the purchases of Rs. 129.07 lacs, direct expenses of Rs. 42.82 lacs and other indirect expenses of Rs. 43.78 lacs nor the same is filed by the assessee during the course of the assessment proceedings pursuant to the notice issued u/s. 143(2). Ledger copies thereof are first time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e records. Learned counsel of the assessee submitted that learned CIT has totally erred in holding that the AO has not made necessary enquiries and examination while allowing the assessee's claim of deduction u/s. 80IB(10). For this proposition learned counsel referred to the observations of the AO in para 2 and 3 of assessment order as under: 2. The assessee firm engaged in the business of developing and constructing of housing projects and sale of plots. During the course of assessment proceedings, the counsel of assessee has produced the books of account bank account, sale bills, purchase bills and vouchers of expenses etc. which were test checked. The counsel has also filed details of capital introduced by the partners and other details called for which have been verified and placed on record. 3. During the year the assessee has claimed deduction u/s. 80IB(10) of the I.T. Act 1961 and details of the same have been filed. Since the assessee has fulfilled all the conditions laid down u/s. 80IB(10) of the I.T. Act, the deduction u/s. 80IB(10) is allowed as per the revised computation of income. In this regard the counsel of the assessee has filed separate trading account of sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se inference on the issue that capital introduced by the partners were not looked into by the AO in the assessment stage. We find that this alone cannot be a ground for invoking jurisdiction u/s. 263 of the I.T. Act. Learned CIT has noted that the assessee has submitted necessary details before him. Learned CIT has not found any thing adverse in these details. Moreover there are case laws for the proposition that capital introduced by the partners has to be examined in the hands of partners in their individual account. Hence the AO having adopted one of the possible views, it cannot be said that the learned CIT was justified in invoking jurisdiction u/s. 263 of the I.T. Act. 12. In this regard we draw support from the decision of Hon'ble Apex Court in the case of Max India Ltd. 295 ITR 282. In this case it was expounded that where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as erroneous order prejudicial to the interest of the Revenue unless the view taken by the ITO is unsustainable in law. 13. From the adjudication on merits of this case as mentioned in para 10 above, the view adopted by the AO was quite sustai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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