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TMI Blog1998 (7) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ash 4% 3,488 2,000 5,000 5. BhopalSingh 43% 47,496 85,167 5,000 6. Shiv Kumar 43% 37,496 45,934 5,000 3. A scrutiny of the record show that capital investment made by Smt. Devki Devi, Indrawati and Om Prakash was only Rs. 2,000 each with 4 per cent share. All these three partners were also partners in about 10 other firms of this group of liquor contractors. It is seen that Smt. Devki Devi, Smt. Indrawati and Om Prakash earned a profit of Rs. 3,488 each they made gifts as under: Smt. Devki Devi (i) 50,000 Raj Kumar . (ii) 5,000 Mool Raj Singh Smt. Indrawati (i) 50,000 Raj Kumar . (ii) 5,000 Mool Raj Singh OmPrakash (i) 55,000 Raj Kumar . (ii) 5,000 Mool Raj Singh Shiv Kumar earned a profit of Rs. 37,496 and he made gift of Rs. 5,000 to Mool Raj Singh. Gopal Singh also made a gift of Rs. 5,000 to Mool Raj Singh. 4. Mool Raj Singh and his sons were liquor contractors during the year. Raj Kumar is his son. 5. The assessment records of the firms in which the donors were partners were looked into and it is found that Mool Raj Singh and his sons had taken the said donors as their partners in the country liquor contract firms constituted by them for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was filed in reply to this office requirements made vide letter dt. 19th Sept., 1986, and has further stated that the firm was genuinely constituted through a deed of partnership that regular books of accounts were maintained; and the profits of the firm had been divided amongst the partners as per stipulations in the deed. In the circumstances it has been requested that the firm be allowed registration as claimed. 4. The claim of the assessee has been examined in the light of the submissions made by the assessee in the petitions filed on21st Nov., 1986, and31st March, 1987. In view of the replies filed by the assessee and the fact that the deed of partnership drawn on 27th Feb., 1985 was filed within the time prescribed; that the profits have been divided amongst the partners in the share ratio stipulated in the deed and that the order of stipulation in the deed have also been acted upon, it appears that a genuine firm had come into existence. Therefore, the firm is allowed registration for the assessment year ending31st March, 1986(asst. yr. 1985-86)." 4. It is pointed out that similar orders were passed in all other cases, except two, wherein the AO mentioned that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e following decisions: (i) H.H. Maharaja Raja Pawar Dewas vs. CIT (1982) 138 ITR 518 (MP); (ii) CIT vs. Gabriel India Ltd. (1993) 114 CTR (Bom) 81 : (1993) 203 ITR 108 (Bom); (iii) V.G. Krishnamurthy vs. CIT (1985) 152 ITR 683 (Kar); (iv) Fatechand Rajmal Jain vs. IAC (1997) 60 ITD 47 (Pune); (v) Jagatjit Industries Ltd. vs. Asstt. CIT (1998) 60 TTJ (Del) 544 : (1997) 60 ITD 295 (Del); (vi) Bharat Dairy Farm vs. Dy. CIT (1997) 60 ITD 321 (Pune); (vii) Tajinder S. Makkar vs. Asstt. CIT (1997) 58 TTJ (Bom) (TM) 416 : (1997) 61 ITD 57 (Bom) (TM); (viii) Sanco Trans Ltd. vs. Asstt. CIT (1997) 58 TTJ (Mad) 619 : (1997) 61 ITD 317 (Mad); (ix) J.P. Srivastav & Sons (Kanpur) Ltd. vs. CIT (1978) 111 ITR 326 (All); (x) CIT vs. Kashi Nath & Co. (1987) 64 CTR (All) 17 : (1988) 170 ITR 28 (All); (xi) CIT vs. Jagadhri Electric Supply & Industrial Co. (1981) 25 CTR (P&H) 94 : (1981) 140 ITR 490 (P&H); and (xii) CIT vs. Smt. Minalben S. Parikh (1995) 127 CTR (Guj) 333 : (1995) 215 ITR 81 (Guj). 4.1 Basically he reiterated the arguments which are given in writing in Annexure-A. It is pointed out that the word "benamidar" means the name lender. But in the present case partners have inve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes certain assessment, the same cannot be branded as erroneous by CIT simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the CIT for that of the AO, who passed the order unless the decision is to be held erroneous. The second condition is that it must be prejudicial to the interest of Revenue. But that by itself would not be enough to vest the CIT with the power of suo motu revision because the first requirement, namely, that the order is erroneous is absent. Similarly, if an order is erroneous but not prejudicial to the interest of Revenue, then the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be subject-matter of revision because the second requirement must be fulfilled. There must be some prima facie material on record to show that tax, which was lawfully exigible, has not been imposed or that by the application of relevant statute, on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. 7. Similar view was expressed in the case of V.G. Krishnamurthy vs. CIT, where the Hon'ble Karnataka High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under s. 263 could not be the one which was dependant on the possibility or guesswork but it should be actual error either of fact or of law. The existence of any such specific error has not been pointed out by the CIT nor be had pointed out any mistake or discrepancy in the voluminous details. He had not even scrutinised and considered detail submitted before him in response to show-cause notice. In view of this the order passed under s. 263 was held to be invalid. 11. Applying the principles laid down by various High Courts and the Tribunal discussed above, to the facts of the present case, we find that the assessment in this case was firstly completed under s. 143(1), wherein the status of URF was determined, thereby refusing registration. Against that order the assessee filed appeal and the learned first appellate authority set aside the matter with the direction to make order of registration afresh after considering the reply of the assessee dt.21st Nov., 1986. In the second round of litigation, the question of registration was agitated before the AO on issuance of a fresh opportunity in pursuance of direction of the first appellate authority to the assessee, wherein the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers have not been reopened. In these circumstances, when there is no material on record and the AO had gone into aspect of genuineness of the firm in second round of litigation as per directions of the first appellate authority, it cannot be said that no proper enquiries were made by the AO. The CIT on perusal of record may be of the opinion that it appears that no genuine firm came into existence, but for holding this, he had no material on record. Simply because the CIT is of a different opinion, powers given under s. 263 of the Act cannot be invoked simply because a different conclusion can be arrived at in the given facts and circumstances of a particular case. Such a conclusion cannot be termed to be erroneous simply because the CIT does not feel satisfied with this conclusion. It may be said that in such a case in the opinion of the CIT the order in question is prejudicial to the interests of Revenue, but that itself would not be enough to vest the CIT with powers for suo motu revision, as per the principle of law laid down by various High Courts. 13. So far as the decision cited by the learned Departmental Representative in Sharda Trading Co. is concerned, that decision has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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