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TMI Blog2019 (12) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... man consumption or industrial purposes for residential areas, industry and municipality and for that purpose laid down/set up/water treatment plants and distribution system in the areas where there is a need for adequate water supply and dispose of the waste water. 5. Water concession agreement dated 05.11.2009 entered with New Raipur Development Authority (NRDA), the appellant was granted concession by NRDA to design, construct and develop facilities for extraction of raw water, production of treated water and its supply and storage in the water storage reservoir in the service area by installing plant and equipment and to do civil work. The appellant was awarded the contract on Build, Operate and Transfer (BOT) basis for development and operation of the water supply system. The agreement was entered into for a period of 8 years commencing from 05.11.2009 and the date of expiry of the concession period was 04.11.2017. In the agreement it has been made abundantly clear that ownership of the site and the project facilities shall throughout the concession period remain with NRDA and the appellant was granted right to use the same. 6. It is further provided that NRDA shall pay to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be said that no enquiry was made by the AO. The Counsel further contended that the root cause is whether the financial assistance received by the appellant is capital receipt or Revenue receipt. The Counsel strongly contended that it is the nature of the grant which is the determinative factor and what has to be seen is the purpose of which the financial assistance was received. Since, the financial assistance was received for the set up of facilities for extraction of raw water, production of treated water and supply and storage in the water storage reservoir by installing plant and equipment the financial assistance is a capital receipt and has been rightly accepted by the AO. It is the say of the Counsel that the view taken by the AO is a plausible view and, therefore, proceedings u/s 263 of the Act are unwarranted and deserves to be set aside. The Counsel further stated that it is incumbent upon the PCIT before setting aside the assessment he is required to record the prima facie finding on the merits of the matter after conducting necessary enquiries and the PCIT is not empowered to blanketly set aside the assessment order. Strong reliance was placed on several judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having said all that let us now see what enquiries were made by the AO during the course of the assessment proceedings. The first query letter dated 21.04.2015 contained 47 points and the said query letter is placed at pages 239 to 243 of the PB. A detailed reply was filed vide reply dated 01.07.2015 and the same is placed at pages 367 to 371 of the PB. The second query letter is dated 21.09.2015 which is placed at page 364 of the PB and the reply has placed at page 361 of the PB dated 08.10.2015 in which the assessee specifically explained the treatment of receipts from NRDA and pointed out that the nature of receipts has already been explained in not on business activities. By another reply dated 30.10.2015 which is placed at page 356 of the PB the assessee explained that the financial assistance received from NRDA is in the nature of capital receipt and cannot be considered as Revenue receipt. It was specifically explained that financial assistance if received for creation of an asset is not taxable being capital receipt. It was pointed out that any receipt which is intrinsically connected with construction of assessee's plant would be capital receipt. A further reply was file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nip UK Ltd, ITA No. 1116/DEL/2014 vide order dated 17.12.2018 has held as under: "62. We find the Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar reported in 335 ITR 83 has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Relevant observation of the High Court reads as under: 63. We find the Hon'ble Delhi High Court in the case of Vikas Polymer reported in 341 ITR 537 has held as under: "We are thus of the opinion that the provisions of s. 263 of the Act, when read as a composite whole make it incumbent upon the CIT before exercising revisional powers to : (i) call for and examine the record, and (ii) give the assessee an opportunity of being heard and thereafter to make or cause to be made such enquiry as he deems necessary. It is only on fulfilment of these twin conditions that the CIT may pass an order exercising his power of revision. Minutely examined, the provisions of the section envisage that the CIT may call for the records and if he prima facie considers that any order passed therein by the AO is erron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he A.O has made enquiry to his satisfaction and it is not a case of no enquiry and the DIT/CIT wants that the case could have been investigated/ probed in a particular manner, he cannot assume jurisdiction u/s 263 of the Act. In view of the above discussion, we hold that the assumption of jurisdiction by the DIT u/s 263 of the Act is not in accordance with law. We, therefore, quash the same and grounds raised by the assessee are allowed." 33. In yet another case, Jubilant Energy [P] Ltd ITA No. 3927/DEL/2016 order dated 04.07.2018, the co-ordinate bench under similar facts and circumstances, has held as under: "19. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub-section, viz., (i) the order is erroneous; (ii) by virtue of the order being erroneous prejudice has been caused to the interests of the Revenue. It has, therefore, to be considered firstly as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo motu revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also 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 the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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