TMI Blog2017 (10) TMI 630X X X X Extracts X X X X X X X X Extracts X X X X ..... above while a series of cases relied upon by the revenue have been carefully perused and are found to be distinguishable on facts and are not applicable. The amendment to section 263 is also prospective. Thus, the reversionary proceedings u/s 263 are not validly initiated in view of the facts that the issues raked up by the Pr,IT stand examined by the AO in the assessment proceedings and the ld Pr CIT has failed to state as to how the order of AO is erroneous and not in accordance with law or settled legal position. Even on merit, the assessee is entitled to all the deductions/claims as per the provisions of the Act. Considering all these facts in totality and respectfully following the ratio laid down in the various decisions of the Jurisdictional and other High Courts e are of the considered view that the jurisdiction by the Pr,IT u/s 263 of the Act was invalidly assumed. Accordingly we set aside the proceedings u/s 263 of the Act as being invalid and also consequent order of PCIT u/s 263 of the Act. Appeal of the assessee is allowed. - I.T.A. No.3259/Mum/2017 - - - Dated:- 6-10-2017 - SHRI D.T.GARASIA, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Shri Arvind Sond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in the facts and in the circumstances of the case, the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue as the allowance of deprecation is less than the claim made in the return. WITHOUT PREJUDICE TO GROUND NO. I: GROUND NO. Ill: DEDUCTION OF ₹ 34,86,256 ON ACCOUNT OF INCENTIVE PAID: 5. On the facts and circumstances of the case and in law, the learned PCIT erred in setting aside the assessment order passed under section 143(3) of the Act by the Assessing Officer in respect of addition of the incentive during the course of the assessment proceedings of ₹ 34,86,256 which was allowed as deduction in AY 2011-12. The Appellant submits that, in the facts and in the circumstances of the case, the order of the Assessing Officer is neither erroneous nor prejudicial to the interest 01 the Revenue as the income for the year was increased by the above amount 01 incentive. WITHOUT PREJUDICE TO GROUND NO. I: GROUND NO. IV: PROFIT ON SALE OF ASSETS OF ₹ 5,17,82,414: 6. On the facts and circumstances of the case and in law, the learned PCIT erred in setting aside the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and circumstances of the case and in law, the learned PCIT erred in setting aside the assessment order passed under section 143(3) of the Act by the Assessing Officer in respect of demerger expense under section 35DD of the Act on the alleged ground that claim of deduction for demerger expenses under section 35DD of the Act is accepted by the Assessing Officer without verification. The Appellant submits that, in the facts and in the circumstances of the case, the order of the Assessing Officer is neither erroneous nor prejudicial to the interest of the Revenue and therefore the order directing to the Assessing Officer to pass a fresh assessment order is illegal, bad in law and void. WITHOUT PREJUDICE TO GROUND NO. I: GROUND NO. VIII: CLAIM OF DEDUCTION FOR EXCESS PAYMENT OF INCENTIVE OVER PROVISION AMOUNTING TO ₹ 1,40,72,956: 10. On the facts and circumstances of the case and in law, the learned PCIT erred in setting aside the assessment order passed under section 143(3) of the Act by the Assessing Officer by holding that the Assessing Officer ought to have verified the Appellant's claim of deduction for excess payment of incentive over pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecial provisions of section 115JB of the Act. The assessee revised its return of income on 29.3.2014 declaring the same income under the normal provisions as well as under section 115JB of the Act as the original return with only making higher claim of TDS in the revised return. The case of the assessee was selected for scrutiny and during the course of assessment proceedings, the assessee filed a revised computation of income in which the assessee declared a total loss of ₹ 8,89,70,396/- under the normal provisions of Act and book profit of ₹ 2,14,13,980 claiming therein several additions and deductions which as per the provisions of the Act inadvertently not claimed either in original or revised return of income. The AO after considering the revised computation during the assessment proceedings and after calling the various details information and explanations as to various items contributing to the reduction of loss and after taking into consideration the said details/information, framed the assessment vide order dated 24.3.2015 passed u/s 143(3) of the Act accepting the loss at ₹ 8,89,70,396/- as per the revised computation. However, accordingly to Pr. CIT, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or by allowing various erroneous claims which were prejudicial to the interest of the revenue and directed the AO to reframe the assessment after giving opportunity to the appellant and decide the following issues: (a) Claim of depreciation of ₹ 8,66,55,484/- - as per IT Act as against ₹ 80,25,356/- in original computation; (b) Deduction of ₹ 34,86,256/- on account of incentive paid in F,.2011-12, offered for taxation in revised computation for A,.2012-13. (c) Profit on sale of assets ₹ 5,17,82,414/- reduced from Computation of Total Income (d) Claim of Hedging and Transportation Cost of ₹ 76.89 crores. (e) Purchase of entire equity share capital of M/s,eliance Infrastructure Finance P. Ltd (RIFPL) at par for ₹ 5.25 crores from M/s. Emerging Money Mall Ltd., which was itself purchased from Reliance Capital Ltd. for short period only after borrowing funds and claiming expenditure in respect of interest liability. (f) Claim of deduction for demerger expenses u/s.35DD (g) Claim of deduction for excess payment of incentive over provisions amounting to ₹ 1,40,72,956 (h) Any other issue that may aris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 80,25,356/- ii) Mark to market los on hedging cost included in the cost of goods sold; iii) Referral fees of ₹ 918.71 lacs; iv) Provision for doubtful debts of ₹ 16,22,45,358/- The ld Counsel for the assessee submitted that after receiving the above letter dated 10.03.2015, the AO issued notice u/s 142(1) of the Act on 11.3.2015 to the assessee calling for details/explanation qua the above issues which was replied and supplied by the assessee vide letter dated 19.3.2015 and it is only after examining these issues, the assessment was framed by the AO u/s 143(3) on 24.3.2015 by taking a possible view on each and every item. Till 24.3.2015 various notices were issued to the assessee which were complied with by the assessee by filing details as called for by the assessing officer. Thus, issue raised by the Addl. CIT u/s 144A of the Act also stands duly replied and complied with and considered by the AO before framing the assessment. The ld. AR submitted that the allegations of Pr. CIT that the assessment was framed in undue haste was wrong and without any basis since the AO passed the assessment 7 days before the last date on which the case would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unication Ltd 69 Taxmann,om 103 (Bom) submitting that the AO was not liable to make any reference to each and every item/issue dealt with during the course of assessment proceedings. The mere fact that AO did not make any reference/discussion in the assessment order would not render an assessment order erroneous. The said decision stands approved by the Hon‟ble Supreme Court in the case of Reliance Communication reported in 76 taxman,om 226(SC). The ld. AR also relied upon the decision of the Hon‟ble Allahabad High Court in the case of CIT V/s Goyal Private Family Specific Trust (171 ITR 698). Ld counsel contended that in order to render an assessment order erroneous, it is not sufficient on the part of Pr. CIT to mention that there was an error in the assessment order but it has to be state as to how the same is not in accordance with law. Thus, the ld. Pr. CIT has failed to point out as to how the order of Assessing officer is incorrect or is not in accordance with law. The ld. AR also referred to the issue of reduction in the depreciation which has resulted into the decrease in loss(increasing income) which could not be considered as prejudicial to the interest of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel explained as to how the mistake in opening the Written Down Value due to wrong linkage of excel formulae has occurred. Secondly the assessee has not reduced profit on sale of fixed assets from the WDV while computing depreciation for income tax purposes as the sale proceeds of the assets have to be reduced from the WDV in the light of the provisions of section 50 of the Act. Hence in the revised computation, the assessee reduced the profit on sale of assets from WDV which resulted into reduction of depreciation. The fact was further confirmed by the Tax Auditor who certified that due to mistake in the linkage of excel file the opening balance of WDV in form No. 3CD was inadvertently taken wrong which has resulted into an advertent and genuine mistake in the calculation of depreciation further resulting into the higher claim of depreciation. The ld. AR also stated that the said profit on sale of fixed assets of ₹ 5,17,82,414/- was wrongly shown in the income of the assessee. Thus, the reduction in the claim of the depreciation has resulted due to two reasons viz (1) error in taking the opening WDV of the assets and (2) non deduction of profit on sale of assets from the blo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng claim of depreciation and non initiation of penalty proceedings was incorrect as the order of the AO is not prejudicial to the interest of the Revenue. (b) The ld,R, in respect of incentive paid amounting to ₹ 34,86,253/-, submitted that the assessee makes the payment of incentives to its employees on year to year basis. Liability to pay incentives arises on accrual system of accounting in the year to which it pertains though the same may be paid after the end of the year. As per the method of accounting followed the appellant claimed the deduction of incentive paid in the year to which it pertains and disallows the same in the year in which the same is paid. There is a possibility that the provisions made in the year to which they pertain may be more or less than the actual disbursement in the next year. The ld. AR submitted that the assessee had debited in the books of accounts in the previous year relevant to assessment year 2012-13 (year under appeal) an amount of ₹ 34,86,253. This amount was debited to profit and loss account of FY 2011-12. However the same was pertaining to F,.2010-11 i,. AY.2011-12. The appellant had claimed the said amount as deduction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pments and vehicles, the sale of such assets does not generate profit and such unusual transaction should have been probed when specifically directed u/s. 144A of the Act. The appellant submits that the directions of the Add!. CIT in this regard are reproduced hereunder:- 1. It is seen that assessee has claimed Depreciation as per I. T. Act at ₹ 8, 65, 52, 484/- as against Depreciation as per Companies Act of just ₹ 18,17,815/-. While perusing the Depreciation Schedule as per I. T. Act, it appears that assessee has shown opening WDV of Computer Software Data Processing Equipments at ₹ 15,31,25, 790/-, assessee has claimed high depreciation. The figure of such magnitude is nowhere reflected in the Fixed Asset Schedule, as per books as it shows gross block of Data Processing Equipments at just ₹ 1,22,26,5401-, the WDV of which would be even lower as per I. T. Act. This issue may be examined to ascertain the correct allowability of depreciation. 10. The ld. AR submitted that from the above, it can be seen that the directions of the Addl. CIT were with respect to WDV of certain assets as per books and as per the income tax depreciation statement. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to tax and sale price is to be reduced from block of assets. The appellant submits that the Assessing Officer has correctly accepted the working as per the provisions of section 50 of the Act and therefore the order of Assessing Officer is not erroneous in law. The CIT's observations tantamount to roving or fishing inquiries and the assessment order cannot be revised to conduct such inquiries. The appellant in this regard relies upon the decision of Bombay High Court in case of CIT v Gabriel India Ltd. 203 ITR 108 (Bom). The appellant further submits that the Assessing Officer is duty bound to compute the income in accordance with law. The CBOT in Circular No.14(XL-35) of 1955 dated 11.4.1955 has directed their officers not to take advantage of ignorance of an assessee as to his rights. Accordingly, the CBDT advised their officers to draw attention to tax payer of reliefs which they appear to be clearly entitled but which they omitted to claim for some reason or other. The appellant also relies upon the decision of Bombay High Court in the case of CIT v V,. Salgaonkar Brothers Ltd. 253 CTR 59 (Bom). In view of the above, the appellant submits that the Assessing Officer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer cannot pick up one item of adjustment and apply the decision of Goetz India Ltd. The appellant submits that the applicability of decision of Goetz India Ltd. has to be considered with reference to the total income or loss computed and not segment thereof. The appellant therefore submits that the Assessing Officer was not wrong in accepting the computation where the loss ultimately assessed was less than the loss returned. CIT(OR) further omitted to consider the fact that the impact of the profit on sale of fixed assets is two fold, one in non taxability of the profit and second reduction of depreciation on account of reduction of WDV of block of assets by an amount of sale proceeds of fixed assets. CIT(DR) failed to appreciate that while computing the revised depreciation at ₹ 80,25,356, the appellant had reduced the WOV of the fixed assets by ₹ 5,75,00,000 which gave rise to the profit of ₹ 5,17,82,414. CIT(DR) has not objected to the reduction in the WOV of block of assets by ₹ 5,75,00,000 which is the other side of the same coin. The appellant submits that the action of the Assessing Officer was in accordance with the provisions of section 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that hedging and transportation cost is roughly 10.72% of the cost of goods sold and therefore the Assessing Officer should have inquired about such unusually high expenditure and its nexus with the business of the appellant in view of Instruction No.3 of 2010 dated 23.3.2010 and provisions of section 43(5) of the Act. The appellant submits that the break-up of the expenditure of ₹ 76.82 crs. (Page Nos. 20 to 22 of the Paperbook) was as under:- Rupees Discount on sale 57,22,72,888 Forward booking trade settlement 12,52,23,946 Movement of stock - Opening stock - Closing stock -35,12,01,031 - 28,05,07,115 ---------------------- 7,06,93,916 Total 76,81,90,750 11. The ld. AR submitted that from the above it can be seen that the forward booking trade settlement i,. Hedging cost included in the above is ₹ 12,52,23,946. This again comprises of realized loss and unrealized loss. Realiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased the above shares on 4.7.2011 from Emerging Money Mall Ltd. (EMML) which had purchased the same from Reliance Capital Ltd. CIT further states that EMML has held the same for short period after borrowing funds and claiming interest expenditure. CIT further observes that the Assessing Officer did not apply his mind despite that in revised computation of income expenditure for stamp duty was added back. The appellant submits that the observation of CIT that stamp duty was added back in revised computation is not correct. The attention is invited to page 107 of Paperbook in which the computation of income as per original return, revised return and revised computation of income were tabulated. It can be seen that stamp duty on purchase of shares was added back in the original return, revised return and therefore in the revised computation of income also. As regards the observation of CIT that EMML has borrowed the funds and claimed interest expenditure is not a matter which is required to be considered and looked into by the Assessing Officer of EMML and the Assessing Officer of the appellant has nothing to do with it. The appellant therefore submits that the observations of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction claimed u/s.35DD is in respect of demerger which was carried out in AY.2011-12. The expenditure incurred on demerger are allowed as deduction in five years. During the year under consideration the appellant had paid certain additional expenses on the demerger carried out in AY.2011-12. Thus the claim for expenditure during the year was 1/5th of the expenditure incurred in AY.2011-12 and in AY.2012-13. However there was no demerger during the year under consideration. The appellant therefore submits that the observations of the CIT as regards the demerger scheme are incorrect as there is no demerger during the year. The Assessing Officer has allowed demerger expenses u/s.35DD amounting to ₹ 2,29,200 in AY.2011-12. Claim of ₹ 2,29,200 during AY.2012-13 was a second year. Deduction u/s.35DD is therefore rightly claimed by the appellant and was rightly allowed by the Assessing Officer. The order of the Assessing Officer is not erroneous. CIT has not been able to point out as to how the order of Assessing Officer is erroneous. The appellant therefore submits that the order u/s.263 on this matter cannot be sustained. (g) Excess payment of incentive over provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revised computation without application of mind and without bothering whether this power of accepting revision after time given in section 139(5) of the Act was over, was within his jurisdiction or not. It is not known as to whether CIT is referring to incentive payment or whether he is referring to computation of revised computation as a whole. Assuming that he is referring to incentive payment, the appellant submits that claim of excess payment of incentive was made in original return, revised return and thereafter reflected in revised computation of income. Thus provision of section 139(5) are wrongly referred as the claim for deduction was made in the original return itself. If the CIT is referring to revised computation of income as a whole the appellant has already made submission in this regard in para 12.3 above. (h) Any other issue that may arise during fresh assessment proceedings 17. The ld. AR submits that the CIT in para 7 of his order directed the Assessing Officer to consider any other issue that may arise during the fresh assessment proceedings. The appellant submits that the above directions of the Assessing Officer are extra jurisdictional. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld DR contended that even after filing the revised return of income by the assessee, a revised computation was filed making several claims which has the effect of increasing/decreasing the loss returned by the assessee. The ld DR submitted that the AO accepted all those claims despite the fact that the AO did not have any authority under the Act to entertain any such claims in the assessment proceedings. The ld. DR also contended that the directions issued by the Addl. CIT u/s 144A of the Act were ignored by the AO completely as the issues pointed out by the Addl. CIT were not examined properly by the AO. The ld DR further stated that the passing of order in undue haste and non making proper enquiries before accepting claims in the revised computation of income has rendered the assessment order erroneous as well as prejudicial to the interest of the revenue. The ld DR also submitted that the PCIT has shown candidly on each of the issues as to how the allowance of each of the issues was erroneous and has caused prejudice to the interest of the revenue. In support of his contention the ld,R relied on the serious of decisions which are as under : i) CIT V/s Infosys Technologies Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that DVO report was not before the AO at the time of passing the assessment order and the records have to be seen at the time of examination of records which was upheld by the ITAT and also by the High Court. Further the Supreme Court held that it was open to commissioner to take into consideration all the records available at the time of examination by him and thus to consider the valuation report submitted by the DVO after assessment is over, the order u/s 263 is legal. This case is also distinguishable on facts. In the other two cases relied by the revenue namely RamPyari Devi Sarogi(Supra) and Smt Tara Devi Aggarwal(Supra), the ld AR submitted that the position has been settled by the Hon‟ble apex court in the case of Malabar Industrial Co Ltd Vs. CIT (2000) 243 ITR 83 after considering both the above decisions by holding that each and every error or mistake committed by the AO can not be rectified by invoking jurisdiction u/s 263 of the Act. It is only when the order is erroneous and prejudicial, the provisions of section 263 are attracted. Incorrect assumption of facts or incorrect application of law will satisfy the requirement of being erroneous and the orders passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of ₹ 8,66,55,484/- claimed in the original return of income and addition on account of incentives of ₹ 34,86,256/- relating to A,. 2011-12 despite the facts that the time limit for filing the original and revised return of income has elapsed and the said claim was made by the assessee in the course of original assessment proceedings by way of revised computation of income in contrast and contradiction to PCIT own stand that such can not be accepted on the basis of revised computation in the assessment proceedings. The ld. PCIT was of the opinion that there was an excess claim of depreciation to the tune of ₹ 7,86,30,128/- and penalty proceedings u/s 271(1)( c ) were not initiated by the AO. In our considered view the claiming higher depreciation was due inadvertent, genuine and bonafide reasons as it has happened due to two reasons one due to wrong linkage of excel sheet and two due to non reduction of profit on sale of fixed assets from WDV as per the provisions of section 50 of the Act and no penalty u/s 271(1) of the Act is leviable in such scenario. The case of the assessee also supported by the decisions of the jurisdictional high court in the cases of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er IT Act as against ₹ 18,17,815/- under Company's Act. (b) Deduction of ₹ 34,86,256/- on account of incentive paid in F,.2011-12, offered for taxation in revised computation for A,.2012-13. (c) Profit on sale of assets ₹ 5,17,82,414/- reduced from Computation of Total Income (d) Claim of Hedging and Transportation Cost of ₹ 76.89 crores. (e) Purchase of entire equity share capital of M/s. Reliance Infrastructure Finance P. Ltd (RIFPL) at par for ₹ 5.25 crores from M/s. Emerging Money Mall Ltd., which was itself purchased from Reliance Capital Ltd. for short period only after borrowing funds and claiming expenditure in respect of interest liability. (f) Claim of deduction for demerger expenses u/s.35DD (g) Claim of deduction for excess payment of incentive over provisions amounting to ₹ 1,40,72,956 (h) Any other issue that may arise during fresh assessment proceedings 22. A perusal of the above reveals that only two issues raised by the Additional CIT u/s 144A of the Act found place in the notice issued u/s 263 of the Act i,. items no. (a) and (d) above, whereas the items No, , and g were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be erroneous and prejudicial simply because the assessment order did not make elaborate discussion on certain points and the court held that the Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters which are already concluded. The Hon‟ble High Court also held that: 14. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is not in accordance with the law or which has been passed by the Income-tax Officer without making any enquiry in undue haste. We have also held as to what is prejudicial to the interests of the Revenue. An order can be said to be prejudicial to the interests of the Revenue if it is not in accordance with the law in consequence whereof the lawful revenue due to the State has not been realised or cannot be realised. There must be material available on the record called for by the Commissioner to satisfy him pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed 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 but an expenditure of capital nature. He simply asked the Income-tax Officer to re-examine the matter. That, in our opinion, is not permissible. Further inquiry and/or fresh determination can be directed by the Commissioner only after coming to the conclusion that the earlier finding of the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue. Without doing so, he does not get the power to set aside the assessment. In the instant case, the Commissioner did so and it is for that reason that the Tribunal did not approve his action and set aside his order. We do not find any infirmity in the above conclusion of the Tribunal. 16. In the light of the foregoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the capital gain of ₹ 1.26 crores has been earned by the assessee on transactions relating to investments 'held to maturity', and secondly whether the depreciation of ₹ 622.39 lakhs was claimed on investments which were held as stock-in-trade. Now from the material on record before the Court it is evident that the assessee, in response to a specific query of the Assessing Officer dated 20-9-2004 supplied details of the long-term investments held for a period in excess of one year which the assessee treated as investments held to maturity. The profit on these investments was computed at ₹ 1.26 crores. Insofar as the aspect of depreciation of ₹ 622.39 lakhs on investments held as stock-in-trade was concerned, the assessee had similarly supplied to the Assessing Officer details of the current investments in response to the query of the Assessing Officer. In addition, it would also have to be noted that, in pursuance of the order passed by the Commissioner of Income-tax under section 263, an assessment order came to be passed on 28-12-2007. During the course of the assessment order, the Assessing Officer noted that the assessee has explained depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The question of law which has been formulated shall stand answered in the aforesaid terms. The appeal shall, accordingly, stand dismissed. There shall be no order as to costs . 24. We also find that in the present case, the AO has made the inquiry from the assessee during the course of assessment proceedings, which were duly replied by the assessee by filing the necessary details and the Commissioner has not pointed out or stated that the AO has not made any inquiry on the various issue as referred in the notice u/s 263. Thus, it is clear from the facts before us that there was no lack of inquiry or non application of mind on the part of the AO or the case of the assessee decided in a hurried manner by the AO. The assessment so framed by the AO can be erroneous because of being against the provisions of law due to non consideration of certain facts or failure on the part of the AO to consider crucial facts, the provisions of law or settled legal precedents on the points which would render the assessment being erroneous and prejudicial to the interest of revenue. However, in the present case, the AO has conducted the inquiries which may be inadequate and allowed the claimed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation in order to show that the finding given by the assessing officer is erroneous, the Ld Pr. CIT should have shown that the view taken by the AO is unsustainable in law. In the instant case, the Ld Pr. CIT has failed to do so and has simply expressed the view that the assessing officer should have conducted enquiry in a particular manner as desired by him. Such a course of action of the Ld Pr. CIT is not in accordance with the mandate of the provisions of sec. 263 of the Act. The Ld Pr. CIT has taken support of the newly inserted Explanation 2(a) to sec. 263 of the Act. Even though there is a doubt as to whether the said explanation, which was inserted by Finance Act 2015 w,,. 1.4.2015, would be applicable to the year under consideration, yet we are of the view that the said Explanation cannot be said to have over ridden the law interpreted by Hon'ble Delhi High Court, referred above. If that be the case, then the Ld Pr. CIT can find fault with each and every assessment order, without conducting any enquiry or verification in order to establish that the assessment order is not sustainable in law and order for revision. He can also force the AO to conduct the enquiries in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Pr CIT in the revisionary proceedings and thereafter framed the assessment whereas the ld Pr,IT has not specified in his order as to how the order of the AO is erroneous so as to prejudicial to the interest of the revenue. The Pr. CIT has even made roving direction that the AO may examine any other issue which may come to his notice in the set aside proceedings. Thus evidently it is not a case of no inquiry or wrong application of law or wrong assumption of facts and therefore the revisionary jurisdiction exercised by the PCIT is not proper and as per the provisions of the section itself. We are of the considered opinion that in the present case the AO has specifically called for explanation from the assessee on all points during the course of assessment proceeding and thereafter has taken a possible view. Moreover, it is not necessary for the AO to give detailed findings or elaborate in the assessment order on each and every issue which has been examined during the course of scrutiny proceedings. Besides, the case of the assessee is squarely covered by the ratio laid down in the various case laws referred to by the ld AR discussed briefly hereinabove while a series of cases rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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