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2010 (1) TMI 967 - ITAT DELHIRevision u/s 263 - Allowability of advertisement and publicity expenses - lack of enquiry - as per CIT business of the assessee did not commence and, therefore, the expenses claimed by the assessee with regard to advertisement and publicity could not be claimed in the year under consideration and AO while framing the assessment did not examine this aspect or he has allowed the claim of the assessee in hasty manner, therefore, the assessment order is erroneous as well as prejudicial to the interests of the revenue HELD THAT:- The law regarding applicability or otherwise of section 263 is well settled. In order to invoke the provisions of section 263 the order passed by the AO should not only be erroneous but should also be prejudicial to the interests of the Revenue. Thus, both the conditions should be fulfilled simultaneously. If any one of them is absent, it will be held that the provisions of section 263 were not lawfully invoked. An incorrect assumption of facts, or an incorrect application of law can only satisfy the requirement of the order being “erroneous”. Thus, there should be an incorrect assumption of facts by the AO or there should be an incorrect application of law to bring the order of the AO within the category of its being “erroneous”. In the present case it is clear that the business of the assessee was set up with the acquisition of land which even according to lease deed was acquired with effect from 22-12-2003. The genuineness of the lease deed cannot be doubted as the same is executed between the assessee and the President of India through Administration Office of the Delhi Development Authority. A question was raised by the assessing officer and reply was given by the assessee to contend that the advertisement and publicity expenses are allowable in view of the decision of Sarabhai Management Corporation Ltd. 1975 (8) TMI 39 - GUJARAT HIGH COURT] and such proposition of law was accepted by the assessing officer. Thus, the view taken by the assessing officer cannot be said to be erroneous which will render the assessment order as erroneous. Squared up credit in the name of M/s. DLF Universal Ltd - When the creditor is known and its existence is established by furnishing permanent account number and other details with confirmation then unless any material is brought on record to doubt such particulars, the credit has to be accepted and this is what was done by the assessing officer. CIT even could not bring any material on record to say that such squared up credit in the name of group concern of the assessee was not genuine. When particulars were furnished to the assessing officer and he has applied his mind then the legal proposition and the decision taken by us with regard to allowability or otherwise of advertisement and publicity expenses will also equally apply to this aspect. Therefore, on this aspect also the learned Commissioner of Income-tax was wrong in invoking his power under Section 263. Whether it is a clear case where no enquiry at all has been done by the assessing officer? - Probably on account of short period involving commencement of assessment proceeding and completion of assessment proceeding bears in the mind of the Commissioner of Income-tax to hold that the assessing officer has done the assessment in hasty manner without making proper enquiry but that assumption of the learned Commissioner (Appeals) is not correct as when an issue has been raised and a proper reply of the same is given then it cannot be presumed that either the issue has been dealt in haste and without making enquiry unless it is demonstrated that after raising the query and after replies and details being placed on record the decision taken was incorrect. In any case the present case it is not a case where no enquiry was made by the assessing officer and at best, it can be the case of the department that it is a case of inadequate enquiry. As decided in SUNBEAM AUTO LTD. [2009 (9) TMI 633 - DELHI HIGH COURT] if there was any enquiry, even inadequate, that would not by itself give an occasion to the Commissioner of Income-tax to pass orders under Section 263 of the Act merely because he has different opinion in the matter. Thus the order of the Commissioner of Income-tax under Section 263 cannot be held valid as present case is not a case of "lack of enquiry - Assessee appeal allowed.
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