TMI Blog2016 (12) TMI 1629X X X X Extracts X X X X X X X X Extracts X X X X ..... emable at premium of ₹ 20 per share and the premium was required to be refunded by the company on its redemption. As regards to the issue of demerger of infrastructure division into Reliance Capital Asset Management Company Ltd., we find that the scheme of an arrangement of demerger approved by Hon’ble High Court of Bombay and Hon’ble High Court of Gujarat, looked into all the aspects before approving the schemes of demerger and now the PCIT cannot raise any question on the judgment of Hon’ble High Courts. We are of the view that when the scheme and orders of Hon’ble High Courts are in public domain and the same are also filed with the Registrar of companies (ROC), the same cannot be questioned by the Revenue and moreover in the revision proceedings u/s 263 of the Act. For claim of deduction towards loss incurred on forward brokering trade settlement complete details in respect to this loss is filed before the AO during the course of assessment proceedings in lieu of query raised and it is presumed that the AO has applied his mind to the facts of the case and passed an appropriate order. Hence, the assessment order cannot be said to be erroneous so as to prejudicial to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above factual position, we are of the view that the assessment order framed under 143(3) of the Act is neither erroneous nor prejudicial to the interest of the Revenue. On lease rent and improvement expenditure the AO enquired the issue by raising a query u/s 142(1) of the Act dated 30-05-2013, wherein vide question No.19 the AO has asked the details of merger expenses including breakup and nature. We find that complete expenses of rent rates and taxes and details of rent premises which are filed before the AO vide letter dated 17-01-2014, wherein, the assessee has debited the sum of ₹ 56,41,858/- as property tax under the head rates and taxes and the details were submitted before the AO. It is a fact that this premise was taken on leave and license basis from Uptown Properties And Leasing Properties Pvt. Ltd. vide agreement dated 12-10-2007 and the same was evicted on 04-06-2009 Section 263 is a section which enables the Commissioner to have a look at the orders or proceedings of the lower authorities and to effect a correction, if so needed, particularly if the order or proceeding is erroneous and prejudicial to the interest of the Revenue. The object of the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant prays that it be held that the action of the Learned PCIT in invoking provisions of section 263 of the Act and directing the Assessing Officer to pass a fresh assessment order be held to be ab-initio and/or otherwise void and bad in law. 3. Briefly stated facts are that the assessee is Ltd. Company engaged in the business of marketing and distribution of insurance and mutual fund products, trading in bullion, real estate broking services, derivatives trading in commodity market, providing infrastructural facilities to its associate concerns etc. Original assessment for the relevant A.Y. 2011-12 was completed by the AO u/s 143(3) of the Act vide his order dated 30-01-2014. Subsequently, the PCIT issued show cause notice u/s 263 for revising of the assessment order passed u/s 143(3) of the Act vide show cause notice No.Pr.CIT-1/263/Show Cause Notice/2015-16 dated 07-07-2015 for the reason that the AO failed to carry out relevant and meaningful enquiries on the followings: - It is observed that during F.Y.2010-1 1, the Assessee Company issued 200,000,000, 10% cumulative redeemable preference shares of ₹ 10/- each at a premium of ₹ 20/- to Reliance Money Mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intriguing. It is relevant to mention here that Reliance Money Mall Ltd. itself had not got sufficient funds to invest in preference shares of Assessee Company. It (Reliance Money Mall Ltd.) obtained funds from Reliance Capital Ltd. in the form of preference shares issued to Reliance Capital Ltd. at the premium of ₹ 999/- per share. The Reliance Money Mall Ltd. also was running into losses and had not started its business operations fully. The fa ade of preference shares by Reliance Money Mall Ltd. at huge premium was adopted to transfer funds from Reliance Capital Ltd. to Reliance Money Infrastructure Ltd, through the conduit/medium of Reliance Money Mall Ltd. No enquiries whatsoever were carried out in this regard. The A.O. failed to verify when the actual allotment of preference shares was made and how the funds obtained through preference shares were utilised by the Assessee Company. It is relevant to mention here that demerged Infrastructure division of the Assessee Company had 95.29% of total assets of the Assessee Company which got transferred on merger with Reliance Capital Asset Management Co.Ltd to the amalgamated company . It can be inferred that Reliance C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined B. It is also stated in Schedule-16 giving details of Significant Accounting Policies and Notes to Accounts under the captioned 'Scheme of Arrangement'. Scheme of Arrangement: Pursuant to the Scheme of Arrangement u/s.391 to 394 of the Companies Act, 1956 sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dtd. 15th October, 2010 and, filled with the Registrar of Companies (RoC), Maharashtra on 4th February, 2011 and by the Hon'ble High Court of Gujarat at Ahmedabad vide its order dtd. 13th January, 2011 and filed with the RoC, Gujarat on 171h 2011, the Infrastructure Services division of the Company has been demerged and transferred to Reliance Capital Asset Management Ltd. (RCAM) with effect from the appointed date ( Effective Date) i.e., 17th February, 2011. Consequently, the following assets and liabilities have been transferred to RCAM. Assets and Liabilities Transferred Amount in Rs. Fixed assets 45,381,530 Current assets 704,618,470 Liabilities (unsecured loan) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the A.O. is against the ratio of the decision of Goetze India Ltd. It is admitted that some judicial pronouncements have carved out a small window for allowing claims of the assessee not made in the return filed. However, this power is available (As per the judicial pronouncement) only with the appellate authorities and A.O. still has no power to allow claim of the assessee made during the assessment proceedings which has not been made in the Return of Income filed and /or in the revised return. D. The assessee has claimed deduction for refund of referral fee of ₹ 9,60,44,600/- pursuant to Note received from Insurance Regulatory Development Authority. No details have been called for by the A,O. in respect of this Note. No enquiry as to why the payment has been made to the Assessee Company for alleged referral fee? Whether any services were rendered by the Assessee Company and if yes,, the nature thereof was not examined by the A.O. The A.O. also failed to examine whether it was only an attempt to reduce the profit of 'Associate Company' which has paid alleged referral fee. E. The assessee has claimed the deduction for expense under the head 'Forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the information has been made available to the A.O. in the course of assessment proceedings. Only cryptic statement was made before the A.O. that sale of leasehold improvements and, at various stations. What were the assets sold to whom these were sold have not been examined. Sale of leasehold improvements for ₹ 27,172,549/- has been accepted without carrying out any meaningfully enquiries. There is one more issue related to leased premises and that is payment of property taxes to the extent of ₹ 56,41,858/- Whether it was liability of lessee or not ought to have been examined after seeing the lease contract whether there was reimbursement from the lessor was also not examined by the A.O. 3. It is settled proposition of Law that failure of the A.O to carry out relevant and meaningful enquiries as warranted by the facts and circumstances of the case renders the assessment order erroneous and prejudicial to the interest of the revenue. This also emerges from the ratio of the decisions such as Malabar Industrial Co. Ltd. vs CIT 243 ITR 83(SC), CIT vs Max India Ltd. 295 ITR 282 (SC), CIT vs Mangal Castings 303 ITR 23 (P H), CIT Vs. Kohinoor Tobacco Prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment u/s 143(3) of the Act failed to carry out the relevant and meaningful enquiries. Now, we will discuss the facts and evidences produced before the AO during the assessment proceedings by the assessee on the questionnaires and replies given. The brief facts relating to the first issue are that the PCIT while deciding the issue on revision u/s 263 of the Act noted that the assessee was asked to explain the source of credit introduced in the books of accounts by way of issue of 20 lakh preferential shares, each having face value of ₹ 10 at the premium of ₹ 20 each to its holding company RMML Ltd. According to PCIT no proper enquiry to verify the source of funds / credits introduced as well as genuineness of the transaction was verified while passing of the assessment order u/s 143(3) of the Act by the AO. The PCIT was of the view that no details regarding source, capacity and genuineness of such credits or share capital introduced was enquired by the AO. The PCIT was of the view that due to demerger of the infrastructure and real-estate broking business of the assessee company i.e. Reliance Money Infrastructure Ltd (RMML) resulted into the erosion of the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r or raised any amount by way of debenture/FD etc. If so, how the issue expenses have been dealt with in the accounts. This detail was submitted by the assessee vide reply dated 17-01-2014 wherein complete detail of parties to whom new preferential shares were issue and preferential shares are redeemed and enclosed as Annexure-15 16. The relevant Annexure are enclosed at assessee s paper book page 47 and the relevant reads as under: - Annexure-15 Sr. No Name of Party PAN Address Amount 1. Emerging Money Mall Ltd. AAECR3099M 570, Rectifier House, Naigum Cross Road, Next to Royal Industrial Estate, Wadala, Mumbai-31 2,000,000,000 Annexure-16 Sr. No Name of Party PAN Address Amount 1. Reliance Capital AAACR5054J H‟ Block, 1st Floor, Dhirubhai Ambani Knowledge 1,000,000,000 2. Relia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon‟ble High Court of Gujarat at Ahmedabad, the Infrastructure Services Division of the Company has been demerged and transferred to Reliance Capital Asset Management Ltd w. e. f. the Appointed date (Effective date0 in terms of the Scheme i.e. 17th February 2011. In view of the above of these facts, the learned Counsel for the assessee further argued that the AO has examined everything and even the nature of transaction in regard to the issue of share and it is also a fact that this investment was made on the basis of erosion of loss of the company as on 31-03-2011, wherein, paid up capital resulting in an erosion of its capital and amounts have been paid on a going concern basis on the understanding that finance will be available with the company for work-in-capital requirement from its promoters. In view of the above, the observation of PCIT that huge investment is made in loss making company by paying a premium of ₹ 20 per share does not make commercial sense and investment ought to have looked into closely by the assessee. The learned Counsel for the assessee argued that the promoter has brought in the funds by way of preference shares as their holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Counsel for the assessee stated that this is only conjunctures and surmises of the PCIT. He explained that the AO is required to look into the source of funds by way of share capital, which has been confirmed by the PCIT that the funds are fully explained. To confirm this the assessee explained vide letter dated 27-01-2014, whereby copy of board resolution allotting of shares of RMML was submitted which shows that the shares were allotted on 07-09-2010 and this fact was filed during the course of assessment proceedings. The assessee before the AO filed complete bank statements including the details of utilization of funds received on issued of preference shares. He referred to the utilization as under: - Name Amount in Crs Purpose Reliance Securities Ltd. 100 Redemption of preference shares Reliance capital Ltd. 100 Redemption of preference shares Reliance Capital Ltd 285 Repayment of loan Reliance Securities Ltd 112.38 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given control direct or indirect but the control arise only out of quantity holding it has made investment only in RMML. The learned Counsel explained that many companies may be part of group but that does not mean there is a direct or indirect control, which arises only on account of the quantity holding. The learned Counsel for the assessee stated that each and every company is independent and their existence cannot be questioned. The learned Counsel for the assessee also explained that the balance sheet of RMML clearly shows that there is loss and erosion of wealth and the investment made have to be continued only for the reason that they are repaid in terms of the provision of its allotment. He explained that the findings of PCIT is wrong that RCL has indirectly invested in the preference shares of the company, actually RCL has invested in the preferential shares of RMML and the same cannot be constituted as indirect investment in the preference shares of the company. It was stated that the preference shares subscribed during the year, whereby majority shareholders being RMML, who was holding 62% equity shares being largest shareholder and they have infused the fund into the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad vide its order dated 13th January, 2011 and filed with the RoC, Gujarat on 17th February, 2011 the infrastructure services division of the company has been damaged and transferred to Reliance Capital Asset Management Ltd ( RCAM ) with effect from the Appointed Date (Effective Date) i.e. 17th February 2011. Consequently the following assets and liabilities have been transferred to RCAM:. Assets and Liabilities Transferred Amount in Rs. Fixed Assets 45,381,530 Current assets 704,618,470 Liabilities (unsecured loan) 750,000,000 Consideration for arrangement In respect of every 100 equity shares of ₹ 10 each fully paid up held by shareholders in the company, 1 preference share of ₹ 100 each fully shareholders in the Company, 1 Preference shares of ₹ 100 each fully paid up have been issued by RCAM. Preference shares of face value ₹ 10 lakh of RCAM have been issued and allotted by RCAM to the preference shareholders of the Company on a proportionate basis. In view of dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that it offered its total income in the respective assessment years but it is claimed that RCIBL is a registered Insurance broker with IRDA and the IRDA inspected the books of account of RCIBL as per the regulatory powers granted to IRDA. When IRDA raised objection for the payment made by RCBIL to assessee company, the assessee refunded the referral fee charges received from its associate concern and raised a debit note qua the amount of ₹ 6,51,54,000/- for the A.Y. 2008-09 and ₹ 3,08,94,600/- for the A.Y. 2009-10. The PCIT was of the view that the income earned by assessee in earlier years is due to various type of infrastructural services provided by the assessee company as per agreement entered into with its associate concerns, which decision was mutually taken to the best of commercial interest of the assessee as well as its associate concern RCIBL therefore, according to the PCIT, the claim of deduction in this year is going to reduce the income already earned and this claim cannot be made on the objection of IRDA which is a regulatory authority for Insurance business. According to the PCIT, this income has already been accrued for and hence, the AO has not enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me which was previously received and offered to tax. According to him, the AO has examined this issue by making a query and the same was replied by the assessee and this aspect has also been considered while framing assessment of RCIBL, wherein, the same AO has framed assessment only on 30-01-2014, which is also the same date when the assessment in the present case was framed. It was explained by the learned Counsel for the assessee that when the AO is the same and assessments were framed on the very same date, he has examined every aspect of this deduction of refund of referral charges. It is not in doubt that assessee has not refunded the amounts and which is very much available on record. Even now, the learned Counsel for the argued that the PCIT while passing revision order u/s 263 of the Act has not doubt the genuineness of transaction, only aspect examined by PCIT is that no enquiry was made by the AO, qua that the learned Counsel stated that complete enquiry by the AO was made while raising a query and the same was answered by the assessee during the course of assessment proceedings. He stated that the AO has formed his opinion and this is one of the possible views. 12. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et position, which is accounted for under the head of forward brokering trade settlement. After going through these details, the AO framed the assessment. But PCIT was of the view that no enquiry or investigation was made by the AO in this regard while allowing entire loss and the relevant of PCIT in para 11 reads as under: - 11. .Major sales and purchases are made to/from various private parties including to /from its associate concerns / companies. The assessment records contain the party-wise purchase and sale of gold conins exceeding ₹ 10 lacs filled by the assessee vide Annexure-1 to its letter dated 25-01-2013. The details thereof are as under: - List of Sales above ₹ 10 Lacs List of purchase above ₹ 25 Lacs The assessee before PCIT filed the complete details and the list of sale of gold above ₹ 10,00,000/- and list of purchase of gold above ₹ 25,00,000/- before the PCIT to explain. According to PCIT, the loss claimed on this amount is speculation loss and therefore is not liable for set off against its normal business income and finally in Para 13, the PCIT holds as under: - ...The loss claimed on this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was for the outstanding contracts of gold futures open at MCX. The assessee has filed the complete details of forward brokerage trade settlement of ₹ 6,025,9,311/-and the assessee realized loss of ₹ 6,58,66,270/-and there is unrealized profit of ₹ 33,56,959 and the net loss is at ₹ 6,025,9,311/-. The learned Counsel for the assessee also stated that this issue is as per the provisions of explanation to Section 43(5) of the Act wherein, speculative transaction is defined and he explained that in the present case the delivery of gold is taken by the assessee and hence, the transaction cannot be called as speculative in nature because Sub-Section 5 of Section 43 clearly stated that the transaction in which the contract for purchase or sale of any commodity is settled otherwise then by actual delivery or transfer of commodity or script i.e. cannot be speculation transaction. But in the present case the assessee has taken actual delivery as noted by PCIT in his order even though payment is made by cash for purchase of gold. The learned Counsel for the assessee further explained that even instruction No.3 of 2010 issued by CBDT dated 23-03-2010 is not appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased and therefore, there was no profit or loss but the loss has arising only on account of the provisions of the Act requiring the assessee to adopt the indexed cost because these shares are held for long term purposes, i.e. beyond one year. The learned Counsel also explained that the assessee has recovered the entire investment and there is no impairment in respect to thereof. The learned Counsel for the assessee relied on the decision of the Hon ble Supreme Court in the case of CIT Vs. Gillander Arbuthnot and Co. 87 ITR 407 (SC) for the proposition. The learned counsel for the assessee also drew our attention to page 48 of assessee s paper book, wherein complete details of statement of long term capital loss is filed and also filed before the AO during the course of assessment proceedings. The relevant details read as under: - The learned Counsel for the assessee drew our attention to the notice issued u/s 142(1) No. DCIT 1(3)/Notice/2013-14 dated 13-05-2014, wherein vide question No.15. This particular issue was a queried by the AO, the relevant query which reads as under: - 15. In case of capital gains please provide a comprehensive chart with regard to STCG ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dwise transfer of assets of such demerger and fixed asset of ₹ 4,53,81,530/- were transferred. The assessee has filed a complete detail, which are reflected in Schedule 4 of the fixed assets and the details reads as under: - Asset Gross Block Accumulate depreciation Net asset Leasehold Improvements 6,13,49,097 2,71,72,549 3,41,76,548 Furniture Fixrures 3,01,805 38,250 2,63,555 1,26,63,777 49,49365 77,14,412 36,91,189 4,64,174 32,27,015 Total 7,80,05,868 3,26,24,338 4,53,81,530 The learned Counsel for the assessee argued that the PCIT could not appreciate the fact that the sale of lease hold premises and improvement thereon is stated to be ₹ 2,71,72,549/- is not sale value but it is accumulated depreciation which is removed from the sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder and that does not tantamount to non-application of mind. For this proposition, he relied on the decision of the Hon ble Bombay High Court in the case of CIT VS. Gabriel India Ltd. (1993) 203 ITR 108 (Bom). He further relied on the decision of the CIT Vs Reliance Communication Ltd (2016) 240 taxman 655 (Bom), wherein the similar issue of cash credit of FCCB s was before the Hon ble Bombay High Court and the CIT while revising the assessment by holding that the AO has not enquired into or investigated into the credit worthiness of actual subscribers or genuineness of the transaction. He stated that the Hon ble High Court has quashed the revision order passed by CIT u/s 263 of the Act. Similarly, the learned Counsel also relied on the Hon ble Bombay High Court decision in the case of CIT Vs. Gera developments Pvt. Ltd. (2016) 240 taxman 467 (Bom). In view of the above the learned Counsel for the assessee asked the bench to quash the revision proceedings as there is no lack of enquiry or there is no lack of evidence which were submitted before the AO during the course of assessment proceedings. According to him, the AO has properly applied mind and each having information in relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without any basis for the reason that RMML has brought funds from its associate company is not at all correct as RMML had issued preferential shares and utilized the same proceeds to make investment in the capital. We find that the RMML obtain the funds from RCL in the form of preferential shares and RMML acquiring stake in a holding company does or does not make any commercial sense, it is a businessman decision and same cannot be questioned now by PCIT or Revenue. It is also a fact that RMML is a promoter of the company and they have infused funds into the company from their survival or revival and it is a common knowledge that the promoters have to invest huge funds for managing the affairs of the company and more particularly when the investee company is making loss. The assessee proved this fact that this business was growing and therefore funds were required and turnover in subsequent years went up to ₹ 785 crore in 2012 and ₹ 1356 crore in 2013. It is also a fact that this transaction of issue of preferential shares of RMML and transfer of funds from RCL to RMML has no tax implication. This was explained before us that the assessee had issued preferential shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder AO cannot be held to be erroneous or prejudicial to the interest of the Revenue. 21. As regards to the issue of claim of deduction towards return of referral fee, we find that on the instructions of IRDA who is the controlling authority for Insurance business, this amount was refunded and during the year under consideration no referral fee has been received, which is part of this refunded amount. Thus there is no rendering of service during the year and services were rendered in the earlier years. Therefore, we agree with the assessee that if any enquiry is to be made qua this income or assessment of the income in the hands of the assessee that can only be made in A.Y. 2008-09 and 2009-10 and not in the relevant A.Y. 2011-12. We are of the view that the transaction of debit of referral charges during the year in the profit and loss account is nothing but writing off of income which was previously received and offered to tax. We find from the facts of the case that the AO has examined this issue by making a query and the same was replied by the assessee and this aspect has also been considered while framing assessment of RCIBL, wherein, the same AO has framed assessment only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (supra), wherein the issue as regards to foreign exchange speculation loss provision is allowed on the basis of mark to market loss. We find that in the present case there is no unrealized loss and the question of applying instruction No.3 as applied by the PCIT does not arise and hence this issue is covered by the decision of the Hon ble Supreme Court in the case of Woodward Governors India P Ltd (Supra). Even otherwise the complete details in respect to this loss is filed before the AO during the course of assessment proceedings in lieu of query raised and it is presumed that the AO has applied his mind to the facts of the case and passed an appropriate order. Hence, the assessment order cannot be said to be erroneous so as to prejudicial to the interest of Revenue on this issue. 23. As regards to the issue of claim on long term capital loss on sale of shares, we find that the shares of the above companies are still held by RCL and Reliance Exchange Next Ltd. as evident from the schedule of investments appearing in the financial statement of RC Land Reliance Exchange Next Ltd. as on 31-03-2015. We find from the details filed in the assessee s paper book at page 132-137, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, which were filed by the assessee on query from the AO. In term of the above factual position, we are of the view that the assessment order framed under 143(3) of the Act is neither erroneous nor prejudicial to the interest of the Revenue. 25. As regards to the next issue on lease rent and improvement expenditure the AO enquired the issue by raising a query u/s 142(1) of the Act dated 30-05-2013, wherein vide question No.19 the AO has asked the details of merger expenses including breakup and nature. We find that complete expenses of rent rates and taxes and details of rent premises which are filed before the AO vide letter dated 17-01-2014, wherein, the assessee has debited the sum of ₹ 56,41,858/- as property tax under the head rates and taxes and the details were submitted before the AO. It is a fact that this premise was taken on leave and license basis from Uptown Properties And Leasing Properties Pvt. Ltd. vide agreement dated 12-10-2007 and the same was evicted on 04-06-2009. We find that the assessee has incurred the expenditure as per agreement and reimbursement of municipal taxes was on actual basis at the rate of bills. In view of the above, we are of the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 .41 crore under section 80-1, ₹ 21=8.62 crore under section 80-IA and ₹ 20.20 crore under section 80-HH. The Assessing Officer assessed the income under section 43(3) at ₹ 8 14.66 crore and restricted the deduction claimed to the sum or figure quoted in paragraph 3 of the order. The Commissioner noticed on verification of the records that the expenditure having a bearing on the profits of the units had not been considered for allocation. The Commissioner found that in the exercise carried out by the Assessing Officer there was indeed an error and the order of the Assessing Officer, therefore, is erroneous insofar as it is prejudicial to the interest of the Revenue. The rival contentions have been noted and in dealing with them, the Division Bench found that the Tribunal has interfered with a finding by proceeding on the basis that during the course of assessment, the Assessing Officer made a specific query. This query was with reference to the deduction under the three sections, that assessee gave reply for each and every item qua this deduction which was enquired into by the Assessing Officer. That was replied one by one. It is only thereafter that the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nferred that the Assessing Officer not only made enquiries, but satisfied himself with the assessee's replies furnished from time to time in support of its stand. When the Tribunal concludes in this manner and finally in paragraph 16 holds that the Assessing Officer took a perfectly correct or a possible view, then, the order passed by him cannot be termed as erroneous insofar as it is prejudicial to the interest of the Revenue. The Commissioner of Income Tax was not, therefore, justified in invoking section 263 of the Act. 11. We are of the view that the Tribunal's order and conclusions are essentially on facts. They cannot be termed as perverse and after it adverted to the rival contentions and all the materials on record. The Tribunal's order cannot thus be held to be vitiated by an error of law apparent on the face of record so as to call for interference in our further appellate jurisdiction. The appeal, therefore, does not raise any substantial questions of law, but the attempt of the Revenue is to have a re-appreciation and reappraisal of the same factual material. That is impermissible. The appeal is, therefore, devoid of merits and is dismissed. No order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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