TMI Blog2011 (6) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O in his assessment order passed u/s. 143(3) of the Act denied 75% of the deduction claimed u/s. 80-IB of the Act and thereby computed the income at ₹ 1,40,42,960/- as against ₹ 3,45,586/- shown by the assessee. 3. The ld. C.I.T. on perusal of the impugned assessment order found that the A.O. has not properly examined the case of the assessee while making the assessment u/s. 143(3) of the Act which, according to him, caused the assessment order to be erroneous and prejudicial to the interests of revenue. He, therefore, proposed to take action u/s. 263 of the Act and issued notice accordingly on the following points, which is placed at page-13 of the assessee's paper book : - (a) Making gifts to and taking unsecured loans from same persons. (b) Partnership Deed of Poddar Tyre Tread - introduction of immovable properties as capitals (c) Deduction u/s. 80-IB - allowed without proper examination verification. (d) Net loss of ₹ 6,60,628/- from partnership firm M/s Poddar Tyre Tread. (e) Purchase of land at Lokhara Charali - ₹ 4,61,718/-. (f) Long term capital gains - sale of land at N.H. 37, ₹ 1,08,211/-. (g) Modvat rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the bank statement of M/s Tread N Patches with Industrial Co-operative Bank the amount paid to M/s Poddar Tyre Tread comes to ₹ 1,61,00,000/- which includes alleged gifts to the different persons stated above. The AO's action of not looking into the sources of cash deposits of ₹ 29,50,000/- and the payments made to M/s. Poddar Tyre Tread of ₹ 1,61,00,000/- alleged to include gifts to the above persons are found erroneous and prejudicial to the interest of revenue. Therefore, on these two issues and the sources of deposits, I hereby direct the AO to re-examine the above issues and pass fresh assessment order if found warranted after proper verification/cross verification. The assessee may be given sufficient opportunities to prove with documentary evidence. Hence this appeal by the assessee. 4. At the time of hearing before us, the learned counsel for the assessee submitted that assessee filed a detailed reply to the notice and referred pages 6 to 12 of the paper book. He submitted that ld. C.I.T. initiated proceedings u/s. 263 of the Act with suspicious mind that A.O. passed the assessment order u/s. 143(3) of the Act without proper examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also put up before him and after getting his approval, the assessment order was finally passed by the A.O. Therefore, the A.O. has taken a possible view after making proper enquiries and taking guidance of Addl. C.I.T. and it is settled law that in such circumstances, it is not open to ld. C.I.T. to invoke revisionary jurisdiction u/s. 263 of the Act. In this connection, he relied on Hon'ble Apex Court decision in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66. The learned counsel further submitted that even assuming but not admitting that the enquiry made in this case was inadequate, this by any means would not give jurisdiction to ld. C.I.T. to issue notice u/s. 263 of the Act as there is a clear distinction between 'lack of enquiry' and 'inadequate enquiry' and if there was any enquiry, even inadequate, that would not by itself give occasion to ld. C.I.T. to invoke provisions of sec. 263 of the Act merely because he has different opinion in the matter. He relied on the following decisions :- CIT v. Sunbeam Auto Ltd. [2011] 332 ITR 167/[2010] 189 Taxman 436 (Delhi) Plastic Concern v. Asstt. CIT [1998] 61 TTJ 87 (Cal) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in setting aside an assessment is large and wide, but this cannot be exercised on the basis of suspicion and surmise. It is also a settled position that the proceedings u/s. 263 cannot be initiated by ld. C.I.T. merely in his supervisory capacity and to substitute his subjective opinion for that of the A.O. Before invoking the powers u/s. 263 of the Act, it is necessary for ld. C.I.T. to demonstrate that A.O. had committed a patent error which resulted in prejudice to the revenue. On the contrary, where the ld. A.O. has conducted enquiries and after due consideration of facts and circumstances of the case he comes to a possible conclusion, then it is not open to ld. C.I.T. to invoke revisionary jurisdiction just to re-examine or re-verify the issues already examined/verified at the assessment level; otherwise it will tantamount to give a second inning to the A.O. to re-examine and re-adjudicate the concluded issues. The Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. (supra) has held that if two views are possible on an issue and the A.O. has taken one view, the Ld. C.I.T. would not be justified in setting aside the A.O.'s order u/s. 263 of the IT. Act. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der : The submission of the counsel for the Revenue was that while passing the assessment order, the AO did not consider the aspect specifically whether the expenditure in question was revenue or 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. 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 from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. The counsel for the assessee is right in his submission that one has to keep in mind the distinction between lack of inquiry' and inadequate inquiry . If there was any inquiry, even inadequate that would not by itself give occasion to the CIT to pass orders under s. 263, merely because he has different opinion in the matter. It is only in cases of lack of inquiry that such a course of action would be open. The AO had called ..... X X X X Extracts X X X X X X X X Extracts X X X X
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