Nav Bharat International Ltd., New Delhi v. CIT, New Delhi

ITA 1684/DEL/2011 | 2006-2007
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 168420114 RSA 2011
Assessee PAN AABCN9065G
Bench Delhi
Appeal Number ITA 1684/DEL/2011
Duration Of Justice 11 month(s) 23 day(s)
Appellant Nav Bharat International Ltd., New Delhi
Respondent CIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-03-2012
Date Of Final Hearing 20-01-2012
Next Hearing Date 20-01-2012
Assessment Year 2006-2007
Appeal Filed On 07-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 1684/DEL/2011 ASSESSMENT YEAR: 2006-07 NAV BHARAT INTERNATIONAL LTD. VS. COMMISSIONER OF INCOME-TAX 5192 LAHORI GATE NAYA BAZAR CENTRAL-II DELHI-1100 01 NEW DELHI. (PAN: AABCN9065G) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SATISH A GGARWAL CA RESPONDENT BY: SHRI RAJ TANDON CIT(DR) DATE OF HEARING : 20.01.2012 DATE OF PRONOUNCEMENT : 30.03.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED COMMISSIONER OF INCOME-TAX DATED 28.02.2011 PASSED UNDER SECTION 263 OF THE INCOME-TAX ACT 1961 FOR ASSESSMENT YEAR 2006-0 7. THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNED COMMISSIONER HAS ERRED IN TAKING COGNIZANCE UNDER SECTION 263 OF THE INCOME-TAX ACT 1961 AND THEREBY SETTING ASIDE THE ASSESSMENT ORDER ON THE FOLLOWING ISSUES WITH A DIR ECTION TO FRAME THE ASSESSMENT ORDER AFRESH: (A) TO EXAMINE THE SOURCE OF INVESTMENT CREDITWORT HINESS AND GENUINENESS OF TRANSACTION FOR RECEIPT OF SHARE APP LICATION MONEY AMOUNTING TO RS.14.95 CRORES; 2 (B) TO EXAMINE THE PURPOSE AND NATURE OF LOANS AND ADVA NCES AMOUNTING TO RS.20.48 CRORES GIVEN TO VARIOUS PARTI ES; (C) TO EXAMINE THE ALLOWABILITY OF CLAIM OF DEPRECIATIO N AMOUNTING TO RS.3 04 76 827 ON WIND POWER PLANT AND TO VERIFY TH E CLAIM OF GENERATION OF ELECTRICITY MADE BY THE ASSESSEE BY U SING WIND POWER PLANT DURING THE ASSESSMENT YEAR. (D) TO EXAMINE THE CLAIM OF THE ASSESSEE FOR YIELD AND SHORTAGE OF RICE. (E) TO EXAMINE THE CLAIM OF CURRENT LIABILITY AMOUNTING TO RS.48.28 CRORES. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ELECTRONICALLY ON 29.11.2006 DECLARING AN IN COME OF RS.1 45 51 080. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND N OTICES UNDER SEC. 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE AT THE RELEVANT TIME WAS ENGAGED IN THE BU SINESS OF MANUFACTURING TRADING AND EXPORT OF RICE. ASSESSING OFFICER HAS P ASSED AN ASSESSMENT ORDER ON 16.4.2008. THE ASSESSMENT ORDER IS A VERY BRIEF ASSESSMENT ORDER IT DOES NOT CONTAIN ANY TYPE OF DISCUSSION RATHER IT EMERGE S OUT THAT ASSESSING OFFICER HAS BRIEFLY NOTICED ACTIVITIES OF THE ASSES SEE G.P. SHOWN BY IT AND THE EXPENSES CLAIMED TOWARDS VEHICLE RUNNING AND MAINTE NANCE AND TELEPHONE ETC. LEARNED COMMISSIONER RECEIVED A REPORT FROM TH E ADDITIONAL CIT CENTRAL RANGE-2 IN AUGUST 2008. HE FOUND THAT THE ASSESSING OFFICER HAD 3 ISSUED A QUESTIONNAIRE ON 20.3.2008 WHEREBY HE SOUG HT EXPLANATION OF THE ASSESSEE ON VARIOUS ISSUES INCLUDING LOAN AND ADVAN CES CURRENT LIABILITY DEPRECIATION CLAIMED BY THE ASSESSEE ON WIND MILL. THE ASSESSEE HAS GIVEN A REPLY ON 7.4.2008 AS WELL AS ON 15.4.2008. ACCORDIN G TO THE LEARNED COMMISSIONER THE REPLIES DO NOT CONTAIN COMPLETE D ETAILS. ASSESSING OFFICER HAS TIME TO FRAME THE ASSESSMENT ORDER UP TO 31.12. 2008 BUT WITHOUT CONDUCTING ANY PROPER INQUIRY HE PASSED THE ASSESS MENT ORDER ON 16.4.2008. IN THIS WAY LEARNED COMMISSIONER TOOK COGNIZANCE U NDER SEC. 263 OF THE ACT AND ISSUED A SHOW-CAUSE NOTICE ON 14.10.2008 IN VITING EXPLANATION OF THE ASSESSEE AS TO WHY THE ASSESSMENT ORDER SHOULD NOT BE SET ASIDE. THE ASSESSEE MADE DETAILED SUBMISSIONS HOWEVER LEARNE D COMMISSIONER HAS SET ASIDE THE ASSESSMENT ORDER ON THE ISSUES EXTRAC TED IN THE FIRST PARAGRAPH OF THIS ORDER ( (A) TO (E) ). HE DIRECTED THE ASSE SSING OFFICER TO FRAME THE ASSESSMENT ORDER ON THESE ISSUES AFTER AFFORDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUT SET SUBMITTED THAT ASSESSING OFFICER HAS FRAMED THE ASSESSMENT ORDER O N 30 TH DECEMBER 2011 UNDER SEC. 143(3) READ WITH SECTION 263 OF THE ACT. IN THIS ASSESSMENT ORDER ASSESSING OFFICER HAS DISALLOWED ONLY THE DEPRECIAT ION CLAIMED BY THE 4 ASSESSEE ON WIND MILL THEREFORE ASSESSEE DOES NOT WANT TO PRESS ALL OTHER ISSUES EXCEPT SUB-GROUND NO. (C) OF GROUND NO.5 EXT RACTED SUPRA. IN OTHER WORDS HE IS ONLY PRESSING THIS APPEAL FOR JUDGING THE ACTION OF THE LEARNED COMMISSIONER UNDER SEC. 263 OF THE ACT ON THE ISSUE S WHETHER ACTION UNDER SEC. 263 CAN BE TAKEN FOR TREATING THE ASSESSMENT O RDER AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE IN RE SPECT OF ALLOWABILITY OF CLAIM OF DEPRECIATION AMOUNTING TO RS.3 04 76 827 ON WIND POWER PLANT. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S DULLY ISSUED A SHOW- CAUSE NOTICE ON THIS ISSUE AND INVESTIGATED IT. HE TOOK US THROUGH QUESTIONNAIRE DATED 20.3.2008 AVAILABLE ON PAGES 16 4 TO 165 OF THE PAPER BOOK AT SR. NO. 10 ASSESSING OFFICER CALLED FOR F OLLOWING INFORMATION: IT IS SEEN THAT A WIND TURBINE PLANT OF RS.6.09 CR ORE HAS BEEN INSTALLED. PLEASE EXPLAIN THE PURPOSE OF INSTALLATI ON & ITS RELATION WITH YOUR BUSINESS. 5. THE ASSESSEE HAS SUBMITTED A REPLY ON 07.04.2008 WHICH READS AS UNDER: 7) REG. PURCHASE OF WIND TURBINE PLANT THE ASSESSEE HAS PURCHASED WIND TURBINE PLANT AND H AS DIVERSIFIED INTO PRODUCTION OF WIND ENERGY. THE PLA NT HAS BEEN PURCHASED FROM M/S. SUZLON ENERGY LTD. THE ASSESSEE COMPANY 5 HAD ENTERED INTO POWER PURCHASE AGREEMENT WITH BANG ALORE ELECTRICITY SUPPLY CO. LTD. A GOVERNMENT OF KARNATA KA UNDERTAKING. PHOTO COPY OF POWER PURCHASE AGREEMENT AND SALES BILL FOR SALE OF ELECTRICITY DURING THE MONTH OF MARCH 06 TO ABOVE COMPANY IS ENCLOSED. IN VIEW OF THE FACT THAT WIND TURBINE PLANT WAS FUN CTIONAL DURING THE ASSESSMENT YEAR 2006-07 EVIDENCE FOR THE SAME IS EN CLOSED AND ELECTRICITY WAS GENERATED THE DEPRECIATION ON THE SAME AFTER BEING PUT TO USE IS JUSTIFIED AND ALLOWABLE TO THE ASSESSEE. 6. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS PRODU CED COPY OF THE POWER PURCHASE AGREEMENT BETWEEN BANGALORE ELECTRICITY SU PPLY CO. LTD. AND THE ASSESSEE. IT WAS EXECUTED ON 28.3.2006. THE ASSESSE E HAS ALSO PRODUCED COMMISSIONING CERTIFICATE WHICH IS AVAILABLE ON PAG E 159 OF THE PAPER BOOK. THE ASSESSEE HAS PRODUCED SALE BILL OF THE ELECTRIC ITY AND REALIZATION OF THE POWER CHARGES ON SUCH SALES. ACCORDING TO THE LEARN ED COUNSEL FOR THE ASSESSEE ALL THESE DOCUMENTS WERE PRODUCED BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS WHICH SUGGEST THAT WIND MILL WAS INSTALLED BEFORE 31.3.2006 AND ASSESSEE HAS RIGHTLY CLAIMED THE DEPRECIATION ON SUCH WIND POWER GENERATION PLANT. ASSESSING OFF ICER THOUGH DID NOT MAKE ELABORATE DISCUSSION IN THE ASSESSMENT ORDER B UT HE HAS CONSIDERED ALL 6 THESE ASPECTS AND THEREAFTER ALLOWED THE DEPRECIATI ON TO THE ASSESSEE. LEARNED COMMISSIONER HAS ERRED IN HARBORING A BELIE F THAT ASSESSING OFFICER HAS ACCEPTED THE ACCOUNTING ENTRIES OF THE ASSESSEE WITHOUT CONDUCTING ANY INQUIRY. IN SUPPORT OF HIS CONTENTIONS LEARNED COU NSEL FOR THE ASSESSEE RELIED UPON THE JUDGMENTS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR SHARMA REPORTED IN 335 ITR 83 CIT VS. S UN BEAM AUTO REPORTED IN 227 CTR (DEL) 133. HE FURTHER RELIED UP ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT VS. DEVELOPMEN T CREDIT BANK LTD. REPORTED IN 323 ITR 206 (BOM.). HE PLACED ON RECORD COPIES OF ALL THESE DECISIONS. APART FROM THESE DECISIONS HE RELIED UP ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF INDIAN OVERSEAS REP ORTED IN 244 CTR 380. 7. ON THE OTHER HAND LEARNED DR POINTED OUT THAT T HE DETAILS WERE SUBMITTED TO THE LEARNED ASSESSING OFFICER ON 15.4. 2008. HE PASSED THE ASSESSMENT ORDER ON THE NEXT DATE. IT IS NOT DISCER NIBLE WHETHER HE APPLIED HIS MIND OBJECTIVELY ON SUCH DETAILS. THUS LEARNED COMMISSIONER HAS RIGHTLY TAKEN COGNIZANCE UNDER SEC. 263 OF THE ACT FOR ACCEPTING THE ACCOUNTING ENTRY OF THE ASSESSEE WITHOUT CONDUCTING ANY PROPER INQUIRY. HE POINTED OUT THAT THE HON'BLE DELHI HIGH COURT IN TH E CASE OF SUNBEAM AUTO HAS OBSERVED THAT INADEQUACY OF INQUIRY MAY NOT BE A CRITERIA FOR TAKING 7 ACTION UNDER SEC. 263 BUT IN THE SUBSEQUENT DECISIO N HON'BLE DELHI HIGH COURT HAS OBSERVED THAT NOT ONLY INQUIRY BUT IT SHO ULD BE A PROPER INQUIRY. HE MADE REFERENCE TO THE DECISION OF CIT VS. ASHOK LOGANI [2011] 11 TAXMANN.COM (DELHI) CIT VS. NALWA INVESTMENTS LTD. [2011] 311 ITR 522 (DELHI) PME POWER SOLUTIONS V. CIT 2011-TOIL-280-I TAT-DEL. CHOKKAIYAN KARTHIKEYAN & CO. VS. ACIT 2011-TOIL-144 - ITAT.MAD DALMIA PVT. LTD. VS. CIT [2011] 202 TAXMA N 372 (DELHI) CIT VS. DLF POWER LTD [2011]-TOIL-850 CIT VS. REGENCY PARK PROPERTY MANAGEMENT SER. PVT. LTD. DATED 15.1.2012 DELHI HIG H COURT ITA NO. 1991/2010 AND GEE VEE ENTERPRISES REPORTED IN 99 IT R 373. HE PLACED ON RECORD COPIES OF ALL THESE DECISIONS. 7. ON THE STRENGTH OF THESE DECISIONS HE POINTED O UT THAT NO DISCUSSION IS DISCERNIBLE IN THE ASSESSMENT ORDER IN RESPECT OF G RANT OF DEPRECATION TO THE ASSESSEE ON WIND POWER GENERATION PROJECT AND THER EFORE LEARNED COMMISSIONER HAS RIGHTLY TAKEN COGNIZANCE UNDER SEC TION 263 OF THE INCOME-TAX ACT 1961. 8. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. WE DO NOT DEEM IT NECESSARY TO R ECITE AND RECAPITULATE ALL THE DECISIONS ON THE LEGAL ASPECT AS TO HOW THE ORD ER OF THE LEARNED 8 COMMISSIONER PASSED UNDER SEC. 263 IS TO BE JUDGED. THE ITAT IN THE CASE OF MRS. KHATIZA S. OOMERBHOY VS. ITO MUMBAI 101 T TJ 1095 HAS ANALYZED IN DETAIL VARIOUS AUTHORITATIVE PRONOUNC EMENTS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MA LABAR INDUSTRIES 243 ITR 83 AS WELL AS HONBLE BOMBAY HIGH COURT RENDER ED IN THE CASE OF GABRIEL INDIA LTD. REPORTED IN 203 ITR 108 AND HAS PROPOUNDED THE FOLLOWING BROADER PRINCIPLE TO JUDGE THE ACTION OF CIT TAKEN UNDER SECTION 263. (I) THE CIT MUST RECORD SATISFACTION THAT THE ORD ER OF THE A.O IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BO TH THE CONDITIONS MUST BE FULFILLED. (II) SEC. 263 CANNOT BE INVOKED TO CORRECT EACH AN D EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE A O AND IT WAS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCOR RECT APPLICATION OF LAW WILL SUFFICE THE REQUIREMENT OF ORDER BEING ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION O F MIND SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PRE JUDICIAL TO THE INTERESTS OF THE REVENUE AND IF THE A.O HAS ADOPTED ONE OF TH E COURSES PERMISSIBLE UNDER LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE A.O HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE IT CANNOT B E TREATED AS AN ERRONEOUS ORDER UNLESS THE VIEW TAKEN BY THE A.O I S UNSUSTAINABLE UNDER LAW. (VI) IF WHILE MAKING THE ASSESSMENT THE A.O EXAMI NES THE ACCOUNTS MAKES ENQUIRIES APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINE THE INCOME THE CIT WHILE EXERC ISING HIS POWER UNDER S. 263 IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME IN PLACE OF THE INCOME ESTIMATED BY THE A.O. 9 (VII) THE A.O EXERCISES QUASI-JUDICIAL POWER VEST ED IN HIS AND IF HE EXERCISES SUCH POWER IN ACCORDANCE WITH LAW AND ARR IVES AT A CONCLUSION SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SI MPLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH THE CONCLUSION. (VIII) THE CIT BEFORE EXERCISING HIS JURISDICTION UNDER S. 263 MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE A.O HAS MADE ENQUIRIES DURING THE COU RSE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND THE ASSESSEE HAS GIVEN D ETAILED EXPLANATION BY A LETTER IN WRITING AND THE A.O ALLOWS THE CLAIM ON BEING SATIS FIED WITH THE EXPLANATION OF THE ASSESSEE THE DECISION OF THE A.O CANNOT BE HEL D TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DOES NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD. 9. APART FROM THE ABOVE WE DEEM IT APPROPRIATE TO MAKE A REFERENCE OF THE OBSERVATIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF VEE GEE ENTERPRISES REPORTED IN 99 ITR 373 WHEREIN HON'BLE HI GH COURT HAS EXPOUNDED THE APPROACH OF THE ASSESSING OFFICER WHI LE PASSING ASSESSMENT ORDER. THE OBSERVATIONS OF THE HON'BLE HIGH COURT RE AD AS UNDER:- IT IS NOT NECESSARY FOR THE COMMISSIONER TO MAKE F URTHER INQUIRIES BEFORE CANCELING THE ASSESSMENT ORDER OF THE INCOME-TAX OF FICER. THE COMMISSIONER CAN REGARD THE ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE INCOME-TAX OFFICER SHOULD HAVE MADE FURTHER INQ UIRIES BEFORE ACCEPTING THE STATEMENTS MADE BY THE ASSESSEE IN HIS RETURN. THE REASON IS OBVIOUS. THE POSITION AND FUNCTION OF THE INCOME-TAX OFFICER IS VERY DIFF ERENT FROM THAT OF A CIVIL COURT. THE STATEMENT MADE IN A PLEADING PROVED BY THE MINI MUM AMOUNT OF EVIDENCE MAY BE ADOPTED BY A CIVIL COURT IN THE ABSENCE OF A NY REBUTTAL. THE CIVIL COURT IS NEUTRAL. IT SIMPLY GIVES DECISION ON THE BASIS OF T HE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. THE INCOME-TAX OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FACE OF THE RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER INQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMST ANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. IT IS BECAUSE IT IS INCUMBENT O N THE ITO TO FURTHER INVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES W OULD MADE SUCH AN INQUIRY PRUDENT THAT THE WORD ERRONEOUS IN SECTION 263 IN CLUDES THE FAILURE TO MAKE SUCH 10 AN ENQUIRY. THE ORDER BECOMES ERRONEOUS BECAUSE SUC H AN INQUIRY HAS NOT BEEN MADE AND NOT BECAUSE THERE IS ANYTHING WRONG WITH T HE ORDER IF ALL THE FACTS STATED THEREIN ARE ASSUMED TO BE CORRECT. 10. IN THE LIGHT OF THE ABOVE PROPOSITIONS LET US EXAMINE THE FACTS OF THE CASE. ACCORDING TO THE ASSESSEE THE ASSESSING OFFI CER HAS ISSUED A QUESTIONNAIRE DURING THE ASSESSMENT PROCEEDINGS VID E WHICH HE CALLED FOR INFORMATION IN RESPECT OF INSTALLATION OF WIND TURB INE PLANT. THE ASSESSEE HAS GIVEN THE REPLY WHEREBY IT HAS PRODUCED ALL RELEVA NT DOCUMENTS INDICATING THE INSTALLATION OF THE WIND TURBINE PLANT MEANT FO R GENERATION OF ELECTRICITY. IN OUR OPINION FOR STATISTICAL POINT OF VIEW THE DETAILS APPEAR TO HAVE BEEN SUBMITTED BY THE ASSESSEE BUT IF WE EXAMINE THE ASP ECTS WITHIN THE LIGHT OF THE HON'BLE HIGH COURTS DECISION IN THE CASE OF GE E VEE ENTERPRISES THEN IT WOULD INDICATE THAT ASSESSING OFFICER HAS NOT MADE ANY ANALYSIS. HE SIMPLY ALLOWED THE ASSESSEE TO PLACE THESE DETAILS ON THE RECORD. IT IS QUITE DIFFICULT TO ASCERTAIN WHETHER ASSESSING OFFICER HAS APPLIED HIS MIND OR NOT. THE ASSESSMENT ORDER PASSED SUBSEQUENT TO PASSING OF 26 3 ORDER BY THE LEARNED COMMISSIONER IS NOT AN INFORMATION WHICH CAN BE USE D FOR JUDGING THE ACTION OF ASSESSING OFFICER WHILE PASSING THE ORIGI NAL ASSESSMENT ORDER BUT CERTAIN FACTS NOTICED IN THIS SUBSEQUENT ORDERS GOA D US TO SAY THAT ASSESSING OFFICER HAS NOT APPLIED HIS MIND ANALYTICALLY IN TH E ORIGINAL ASSESSMENT PROCEEDINGS. THE MUCH EMPHASIS WAS SUPPLIED BY THE LEARNED COUNSEL FOR 11 THE ASSESSEE ON THE POWER PURCHASE AGREEMENT WITH B ANGALORE ELECTRICITY SUPPLY CO. DATED 28.3.2006 AND ON THE STRENGTH OF T HIS AGREEMENT IT WAS CONTENDED THAT THE ASSESSEE HAD SOLD THE ELECTRICIT Y WHICH SUGGESTS THAT POWER PLANT WAS INSTALLED. IN THE SECOND ASSESSMENT ORDER LEARNED ASSESSING OFFICER HAS OBSERVED THAT APPROVAL FROM KARNATAKA R EGULATORY COMMISSION FOR ENTERING INTO THIS AGREEMENT WAS ACCORDED ON 24 .5.2006. IT INDICATES THAT THESE DOCUMENTS THOUGH WERE ON THE RECORD BUT THEY WERE NOT LOOKED INTO BY THE ASSESSING OFFICER. NO DISCUSSION IS AVAILABLE I N THE ASSESSMENT ORDER ALSO. IN OUR OPINION FROM THE RECORD IT CANNOT BE INFERRED THAT ASSESSING OFFICER HAS APPLIED HIS MIND AND THEREAFTER ACCEPTE D THE CLAIM OF THE ASSESSEE FOR GRANT OF DEPRECIATION. LEARNED COMMISS IONER HAS JUST SET ASIDE THE ORDER OF THE ASSESSING OFFICER. HE HAS DIRECTED THE ASSESSING OFFICER TO CONDUCT A FRESH INQUIRY. THE ASSESSEE WILL GET AN O PPORTUNITY TO PUT ITS CASE IN THE SECOND ASSESSMENT PROCEEDINGS. TAKING INTO C ONSIDERATION ALL THESE ASPECTS WE DO NOT FIND ANY ERROR IN THE ORDER OF L EARNED COMMISSIONER. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS DISMISSE D. DECISION PRONOUNCED IN THE OPEN COURT ON 30.03.2012 SD/-( K.G. BANSAL ) SD/-( RA JPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/03/2012 MOHAN LAL 12 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR