Dr. Prashant R. Patel, Borsad v. The CIT-I,, Baroda

ITA 2358/AHD/2006 | 2002-2003
Pronouncement Date: 22-01-2010 | Result: Dismissed

Appeal Details

RSA Number 235820514 RSA 2006
Assessee PAN AEIPP5082M
Bench Ahmedabad
Appeal Number ITA 2358/AHD/2006
Duration Of Justice 3 year(s) 2 month(s) 15 day(s)
Appellant Dr. Prashant R. Patel, Borsad
Respondent The CIT-I,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 22-01-2010
Date Of Final Hearing 18-01-2010
Next Hearing Date 18-01-2010
Assessment Year 2002-2003
Appeal Filed On 07-11-2006
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI T.K. SHARMA JM AND D.C.AGRAWAL AM DR. PRASHANT PATEL NR. GANDHI GUNJ OPP. ZATKI TALAV BORSAD. V/S . THE COMMISSIONER OF INCOME-TAX-I AYAKAR BHAVAN RACE COURSE CIRCLE BARODA. PAN NO.AEIPP 5082M (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI SUNIL H. TALATI AR RESPONDENT BY:- SHRI SHELLEY JINDAL DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE ORDERS OF LD. CIT FOR ASST. YEARS 2002-03 & 2003-04 PASSED ON 6.9 .2006 UNDER SECTION 263 OF THE I.T.ACT 1961 SETTING ASIDE THE ORDERS OF AO FOR MAKING FRESH ASSESSMENTS. SINCE COMMON ISSUES ARE INVOLVED IN TH ESE TWO APPEALS THEY ARE TAKEN UP TOGETHER FOR THE SAKE OF CONVENIE NCE. ITA NO.2358/AHD/2006 ASST. YEAR 2002-03 2. IN THIS CASE ASSESSMENT UNDER SECTION 143(3) WAS PASSED ON 22.12.2004. THE ASSESSEE IS A PRACTICING MEDICAL DO CTOR. A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT HIS PREMISES ON 13. 02.2004. DURING THE ITA NOS.2358 & 2359/AHD/2006 ASST. YEARS :2002-03 & 2003-04 2 COURSE OF SURVEY STATEMENT UNDER SECTION 133A(3)(I II) WAS RECORDED. IN THIS STATEMENT ASSESSEE ADMITTED TO HAVE MADE INVES TMENTS IN THE PURCHASE OF LAND AND CONSTRUCTION OF HOSPITAL THERE ON KNOWN AS DEEP HOSPITAL BORSAD. IN THIS STATEMENT HE DECLARED AN ADDITIONAL INCOME OF RS.5 LACS WHICH COMPRISES A SUM OF RS.4 65 LACS TOW ARDS PURCHASE OF PLOT FOR HOSPITAL AND RS.35 000/- TOWARDS INVESTMENT IN SURYAPRASTH SOCIETY BORSAD. 3. THE ASSESSEE HAD ORIGINAL FILED RETURN OF INCOME ON 31.03.2003 DECLARING INCOME OF RS.1 65 650/-. SUBSEQUENTLY AFT ER SURVEY ASSESSEE FILED REVISED RETURN ON 25.03.2004. ORIGINAL AND SU BSEQUENT RETURNS BOTH WERE ACCEPTED UNDER SECTION 143(1). LATER AO CARRIE D OUT COMPULSORY SCRUTINY OF THE REVISED RETURN ISSUED NOTICES UNDE R SECTION 143(2) AND 142(1) EXAMINED THE BOOKS OF ACCOUNTS PRODUCED BEF ORE HIM AND COMPLETED THE ASSESSMENT ON AN INCOME OF RS.6 91 23 0/- MAKING THEREIN AN ADDITION OF RS.5 00 580/- ON ACCOUNT OF UNDISCLO SED INCOME DECLARED DURING SURVEY AND RS.25 000/- OUT OF LOW WITHDRAWAL FOR HOUSEHOLD EXPENSES. THE ORDER PASSED BY THE AO UNDER SECTION 143(3) WHICH WAS SUBJECT MATTER OF REVISION UNDER SECTION 263 WAS AS UNDER :- ASSESSMENT ORDER RETURN OF INCOME IS FILED ON 31/3/2003 DECLARING T OTAL INCOME AT RS.1 65 650/-. SUBSEQUENTLY SURVEY OPERATIONS U/S 1 33A OF THE ACT WERE CARRIED OUT ON 13/2/2004 AT THE BUSINESS PREMISES O F THE ASSESSEE. DURING THE COURSE OF SURVEY THE ASSESSEE DECLARED ADDITION AL INCOME OF RS.5 00 000/- WHICH COMPRISES OF RS.4 65 000/- TOWA RDS PURCHASE OF PLOT FOR HOSPITAL AT BORSAD AND RS.35 000/- TOWARDS INVE STMENT IN SURYAPRASTHA SOCIETY BORSAD BEING NOT ACCOUNTED FO R IN THE REGULAR BOOKS OF ACCOUNTS. REVISED RETURN WAS THEREFORE FIL ED ON 25/3/2004 DECLARING INCOME OF RS.6 66 230/-. BOTH THE RETURNS HAVE BEEN DULY PROCESSED UNDER SECTION 143(1) OF THE ACT. 3 2. THE CASE WAS TAKEN UP FOR SCRUTINY UNDER COMPUL SORY SCRUTINY SINCE THIS IS A CASE WHERE SURVEY OPERATIONS U/S 13 3A WERE CARRIED OUT. FIRST NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 25 /6/2004 WHICH WAS DULY SERVIED. IN RESPONSE TO NOTICES U/1 43(2) AND 142(1 ) THE ASSESSEE AS WELL AS HIS ACCOUNTANT SHRI HEMANT SUTHAR AND SHRI ASHWI N SHAH CA ATTENDED FROM TIME TO TIME AND FILED NECESSARY SUBM ISSIONS. BOOKS OF ACCOUNTS WERE PRODUCED AND THE SAME WERE EXAMINED. 3. ON VERIFICATION OF CAPITAL ACCOUNT IT IS SEEN T HAT WITHDRAWALS FOR H.H.EXPENSES ARE SHOWN AT RS.26415/- ONLY. CONSIDER ING THE NATURE OF PROFESSION OF THE ASSESSEE AND HIS WIFE WHO IS ALSO A DOCTOR THE H.H.EXPENSES SHOWN ARE VERY LOW. WHEN THIS FACT WAS POINTED OUT TO THE ASSESSEE IT WAS SUBMITTED BY HIM THAT THEIR FAMILY OWNS AGRICULTURAL LAND ABOUT 120 BIGHAS AND THEREFORE THE EXPENDITURE DI SCLOSED BY HIS CANNOT BE SAID TO BE LOW. I HAVE CONSIDERED THE SUBMISSION OF THE ASSESSEE AND CONSIDERING THE STATUS OF THE ASSESSEE AS WELL AS A GRICULTURAL INCOME I AM STILL OF THE OPINION THAT THE H.H. EXPENSES ARE ON LOWER SIDE. I THEREFORE ADD A SUM OF RS.25 000/- ON ACCOUNT OF LOW H.H. EXP ENSES. 4. ON THE BASIS OF INFORMATION AVAILABLE AND AFTER DISCUSSION TOTAL INCOME IS DETERMINED AS UNDER :- NET PROFIT AS PER P & L ACCOUNT RS.1 65 650/- ADD: UNDISCLOSED INCOME DECLARED DURING SURVEY RS.5 00 580/- ON ACCOUNT OF LOW WITHDRAWAL FOR HH EXP. AS RS.25 000/- DISCUSSED ABOVE ------------------- TOTAL INCOME RS.6 91 230/- ASSESSED U/S 143(3). ISSUE DEMAND NOTICE AND CHALLA N AFTER GIVING CREDIT FOR ALL PREPAID TAXES. CHARGE INTEREST U/S 234A/B/C . ALSO ISSUE NOTICE U/S 274 READ WITH SECTION 271(1)(C) OF THE ACT. SUBSEQUENTLY LD. CIT EXAMINED THE ORDER OF AO AND NOTICED THAT AO HAS NOT CARRIED OUT NECESSARY ENQUIRIES IN RESPECT OF S EVERAL POINTS AS UNDER :- (I) INCRIMINATING DOCUMENTS FOUND DURING SURVEY WHICH A DMITTEDLY CONTAINED RECORD OF UNACCOUNTED TRANSACTIONS OF RS. 3 45 000/- 4 [ANSWER TO QUESTION NO.16 IN THE STATEMENT U/S 133A (3) WAS NOT UTILIZED WHILE FINALIZING THE ASSESSMENT U/S 143(3) OF THE ACT. (II) THE SOURCE OF INVESTMENT OF RS.28 LACS IN THE HOSPI TAL BUILDING WAS NOT EXAMINED. IN THIS REGARD INTER ALIA THE C LAIM OF GIFT OF RS. 2 LACS WAS ACCEPTED OUT VERIFICATION. THE CLAIM OF RECEIPT OF RS.2 LACS FROM THE SALE OF VEHICLE WAS ACCEPTED WHE REAS THE SALE PRICE AS PER DEPRECIATION CHART WAS ONLY RS.1 50 01 6/-. THE CLAIM OF OUTSTANDING MATERIAL PURCHASES WAS ACCEPTE D WITHOUT VERIFICATION EVEN WHEN THE CASH VOUCHERS MOSTLY PER TAINED TO THE PERIOD AFTER THE DATE OF SURVEY AND THEIR GENUI NENESS WAS NEVER EXAMINED. (III) THE SOURCE OF CASH DEPOSITS IN VARIOUS BANK ACCOUNT S WAS NOT AT ALL LOOKED INTO. (IV) CERTAIN BANK ACCOUNTS DETECTED DURING THE SUREY AND THE TRANSACTIONS REFLECTED THEREIN WERE NOT VERIFIED FR OM THE BOOKS OF ACCOUNT. (V) FOLLOWING CONFIRMATIONS FILED DURING THE ASSESSMENT PROCEEDINGS APPEAR TO HAVE BEEN SIGNED BY THE SAME PERSON AND LACK THE PROFILE OF GENUINENESS: (A) SHRI HETAL J. PATEL FOR RS.15 000/- CASH DEPOSIT (B) SHRI BHAVESHKUMAR R. PATEL FOR RS.15 000/- FOR CASH DEPOSIT. (C) SHRI KETAN R. PATEL FOR RS.15 000/- FOR CASH DEPOSI T. (D) SHRI RAJESH R. PATEL FOR RS.15 000/- FOR CASH DEPOS IT. BUT NO ENQUIRY WAS MADE IN THIS REGARD. (VI) BOOK RESULTS WERE ACCEPTED EVEN THOUGH THE BOOKS WE RE ADMITTED TO BE INCOMPLETE ON THE DATE OF SURVEY. HE ACCORDINGLY PROPOSED TO SET ASIDE THE ORDER OF T HE AO. THE ASSESSEE IN RESPONSE TO THIS NOTICE SUBMITTED FOLLOWING REPLY : - 5 1. REGARDING TRANSACTION OF RS.3 45 000/- (ANSWER TO QUESTION NO.16 IN THE STATEMENT U/S 133A) IT IS SUBMITTED THAT SAME HAS B EEN DISCLOSED AS ADDITIONAL INCOME IN ASST. YEAR 2004-05 AS UNDER (REFER Q. NO. 19) REGULAR INCOME RS.2 00 000/- UNDISCLOSED INCOME RS.3 45 000/- UNDISCLOSED INCOME INVESTED IN HOSPITAL RS.2 55 000/- ------------------- - TOTAL RS.8 00 000/- THEREFORE THE AO IS JUSTIFIED IN ASSESSING THE INC OME INCLUDING THE DISCLOSURE MADE DURING THE COURSE OF SURVEY. 2. REGARDING SOURCE OF INVESTMENT IN HOSPITAL BUILD ING THE SAME HAS BEEN EXPLAINED DURING THE COURSE OF SURVEY AND PROPER DI SCLOSURE HAS BEEN MADE AT THAT TIME. THE TAXES HAVE ALSO BEEN PAID ON ADDITIO NAL INCOME DISCLOSED. DURING THE YEAR GIFTS OF RS.1 89 260/- WERE RECEIV ED FROM THE FOLLOWING PERSONS WHICH ARE STATED TO BE RS.2 00 000/- (IN RO UND FIGURE) (I) RS.47 315/- (US $ 1000) FROM GAYATRI BEN VIKRAMBHAI PATEL (MY FIRST MATERIAL COUSIN RESIDING AT USA IN MY NAME DEPOSIT ED IN BANK OF BARODA ANKLAV BRANCH (II) RS.47 315 (US $ 1000) FROM GAYATRIBEN VIKRAMBHAI PA TEL (MY FIRST MATERNAL COUSIN RESIDING AT USA IN MY WIFES NAME D EPOSITED IN BANK OF BARODA BORSAD BRANCH (III) RS.47 315 (US $ 1000) FROM NALINBHAI GORDHANBHAI PA TEL (MY MATERNAL UNCLE RESIDING AT USA IN MY NAME DEPOSITE D IN BANK OF BARODA ANKLAV BRANCH. (IV) RS.47 315 (US$ 1000) FROM NALINBHAI GORDHANBHAI PAT EL (MY MATERNAL UNCLE RESIDING AT USA IN MY WIFES NAME D EPOSITED IN BANK OF BARODA BORSAD BRANCH. ACCORDINGLY THE AGGREGATE GIFTS OF RS.1 89 260/- S TANDS EXPLAINED. REGARDING REALIZATION FROM SALE OF CAR I HAVE TO SUBMIT THAT SAID VEHICLE WAS SOLD FOR RS.2 10 000/- IN CASH AS PER COPY OF RECEI PT ENCLOSED HEREWITH. AGAINST THE SALE PRICE OF RS.2 10 000/- THE WDV AS PER BOOKS IS RS.2 13 597/-. 3. REGARDING SOURCE OF CASH DEPOSITS INTO BANK ACCO UNTS THE SAME ARE BEING CASH DEPOSITS OUT OF FEES RECEIVED FROM THE PATIENT S AND DEPOSITED FROM TIME TO TIME. THE SAME ARE VERIFIABLE FROM CASH BOOK REGULA RLY MAINTAINED. 4. BANK ACCOUNTS ALL THE TRANSACTIONS IN THE VARIO US BANK ACCOUNTS ARE COMPLETELY VERIFIABLE FROM REGULAR BOOKS OF ACCOUNT S MAINTAINED AND AO HAS 6 VERIFIED THE SAME DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. HOWEVER THIS CAN BE VERIFIED BY THE AO IF REQUIRED. 5. CONFIRMATION FROM PARTIES FRESH CONFIRMATIONS D ULY SIGNED BY RESPECTIVE PARTIES ARE ENCLOSED. DURING THE COURSE OF ASSESSME NT PROCEEDINGS THE SAME WERE SIGNED ON BEHALF OF RESPECTIVE DEPOSITORS. 6. THE BOOKS OF ACCOUNTS FOR THE YEAR UNDER CONSIDE RATION WERE PRODUCED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS AND AFTER VERIFYING THE SAME THE AO HAS ACCEPTED THE BOOK RESULTS. AS PER STATEMENT RECORDED DURING SURVEY BOOKS OF ACCOUNTS FOR THE ASST. YEAR 03-04 AND 04-0 5 WERE NOT READY (TWO YEARS). THE SAME WERE ALSO PREPARED BEFORE THE ASSE SSMENTS WERE COMPLETED. IN VIEW OF THE ABOVE FACTS IT IS REQUESTED DROP TH E PROCEEDINGS UNDER SECTION 263 OF THE ACT. 4. THUS THE ASSESSEE SOUGHT TO EXPLAIN INVESTMENTS IN BUILDING GIFTS DEPOSITS IN BANK ACCOUNTS ETC. AS ABOVE. THE LD. CI T HOWEVER DID NOT AGREE AND SET ASIDE THE ORDER TO AO WITH THE DIRECT ION TO MAKE FRESH ASSESSMENT IN RESPECT OF INVESTMENT IN PLOT AND COS T OF CONSTRUCTION OF DEEP HOSPITAL AND DEPOSITS IN BANK ACCOUNTS WHICH W ERE DISCOVERED DURING SURVEY OPERATIONS. THESE BANK ACCOUNTS WERE WITH CORPORATION BANK ANAND A/C NO.990018 BANK OF BARODA ANKLAV A /C NO.11515 CORPORATION BANK ANAND A/C NO.645 AND PPF A/C NO.1 537 WITH STATE BANK OF INDIA BORSAD. 5. BEFORE US LD. AR FOR THE ASSESSEE SUBMITTED THAT AO HAS CARRIED OUT ALL THE ENQUIRIES IN RESPECT OF THESE ISSUES EXAMI NED BOOKS OF ACCOUNT INCORPORATED DISCLOSURE MADE IN SURVEY WHILE CARRYI NG OUT REGULAR ASSESSMENT BUT DID NOT FIND ANYTHING CONTRARY TO TH E DISCLOSURE MADE AND THEREFORE ACCEPTED THE DISCLOSURE MADE BY THE ASSE SSEE. THE AO HAD APPLIED HIS MIND AND THEREAFTER ACCEPTED THE INCOME AS PER REVISED RETURN AFTER MAKING SMALL VARIATION ON ACCOUNT OF HOUSEHOL D EXPENSES. HE REFERRED TO THE QUESTIONNAIRE ISSUED BY THE AO ON 4 .10.2004 AS REPLIED BY 7 THE ASSESSEE ON 8 TH NOVEMBER 2004 WHICH ARE ENCLOSED AS PAGES NO.3 & 4 OF THE PAPER BOOK. HE REFERRED TO THE DECISION OF T HE TRIBUNAL IN SALORA INTERNATIONAL LTD. VS. ACIT 2 SOT 705 (DEL) BRIJ B HUSHAN AGARWAL VS. CIT 2 SOT 811 (AGRA) AND SHAILESHBHAI SHAH VS. ACIT 98 TTJ (AHD) 154 FOR THE PROPOSITION THAT LACK OF PROPER ENQUIR Y CANNOT BECOME THE BASIS FOR ACTION UNDER SECTION 263 AND THAT THE COM MISSIONER CANNOT SIT OVER THE AO TO SUGGEST HOW AND WHAT ENQUIRY AO SHOU LD DO WHILE MAKING ASSESSMENT. THE ORDER OF THE AO WILL NOT BE ERRONEOUS AND PREJUDICIAL MERELY BECAUSE AO DID NOT CARRY OUT ENQ UIRIES THE WAY THE COMMISSIONER WOULD HAVE CARRIED OUT. ACCORDING TO T HE LD. AR AN ORDER WOULD BE ERRONEOUS ONLY WHEN THERE IS ERROR. IN ADD ITION TO THE ORDER TO BE ERRONEOUS IT SHOULD BE PREJUDICIAL TO THE INTEREST OF REVENUE WHICH IN THIS CASE HAS NOT BEEN SHOWN BY THE LD. CIT. MERELY NOT CARRYING OUT DETAILED ENQUIRY AN ORDER CANNOT BECOME ERRONEOUS. THE LD. A R ALSO SUBMITTED THAT ORDERS PASSED BY THE AO AFTER SURVEY OPERATION ARE MONITORED BY HIGHER AUTHORITY THEREFORE IT CANNOT BE SAID THAT THEY WERE PASSED WITHOUT APPLICATION OF MIND. 6. ON THE OTHER HAND LD. DR SUBMITTED THAT THERE I S NO INSTRUCTION THAT ASSESSMENT IN THE CASES WHERE SURVEY IS CARRIED OUT IS TO BE PASSED AFTER APPROVAL FROM HIGHER AUTHORITIES. THERE MAY BE AN I NFORMAL DISCUSSION BUT IT IS NOWHERE REFLECTED FROM THE RECORD THAT SU CH INFORMAL DISCUSSION HAD TAKEN PLACE. EVEN IF THERE IS SOME SORT OF DISC USSION OR TACIT APPROVAL OF JT. CIT IT DOES NOT MAKE THE ORDER ERROR PROOF I F ACTUALLY THERE IS AN ERROR IN THE ORDER OF AO. THE LD. CIT HAS STILL POW ER TO REVISE THE ORDER BY EXERCISING HIS POWER UNDER SECTION 263 EVEN WHERE A N ORDER IS PASSED BY THE AO AFTER THE FORMAL APPROVAL OF JCIT/ADDL.CIT. LD. DR SUBMITTED THAT NOTWITHSTANDING THE AO IN THE PRESENT CASE PRA CTICALLY ACCEPTED THE RETURN FROM THE ORDER OR FROM THE QUERY LETTER ISS UED BY HIM IT DOES NOT 8 APPEAR THAT HE HAS CONSIDERED OR APPLIED HIS MIND I N RESPECT OF THE ISSUES RAISED BY LD. CIT IN HIS NOTICE UNDER SECTION 263 O R IN THE ORDER PASSED SUBSEQUENTLY UNDER THAT SECTION. AO HAS NOT REFERRE D TO FINDINGS IN SURVEY ABOUT PLOT AND CONSTRUCTION OF THE BUILDING AND ABOUT THE BANK ACCOUNT. ONCE THESE POINTS ARE NOT TOUCHED WHICH AR E ESSENTIAL AS INFORMATION IS AVAILABLE IN THE RECORD OF THE AO AS TO THE UNACCOUNTED INVESTMENT THEREIN AND AO CHOSES TO ACCEPT THE RETU RN WITHOUT CARRYING OUT NECESSARY VERIFICATION HIS ORDER WOULD BE ERRO NEOUS. LD. DR SUBMITTED THAT NOT CARRYING OUT ENQUIRIES WOULD MAK E ORDER ERRONEOUS AS HAS BEEN HELD BY VARIOUS COURTS AS UNDER :- 1. CIT VS. SHRI BHAGWANDAS 272 ITR 367 2. CIT VS. GABRIEL INDIA LTD. 203 ITR 108 (BOM) 3. CIT VS. KOHINOOR TOBACCO PRODUCTS (P) LTD. 234 ITR 557 (MP) 4. LAJJA WATI SINGHAL (SMT) VS. CIT 226 ITR 527 (ALL) 5. RAMASWAMY CHETTIAR (K.A.) VS. CIT 220 ITR 657 (MAD) 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE AO HAS NOT CA RRIED OUT THE ENQUIRIES IN RESPECT OF THE POINTS RAISED BY THE LD . CIT IN HIS ORDER. IN THIS REGARD WE REPRODUCE THE QUERY LETTER ISSUED BY THE AO ON 4.10.2004. QUESTIONAIRE DR. PRASHANT RASIKLAL PATEL NR. GANDHI GANJ OPP. ZAKLI TALAV BORSAD. ASST. YEAR 2002-03 (1) INVENTORY AS ON FIRST AND LAST DAY OF THE YEAR UNDER CONSIDERATION OF STOCK OF DRUGS MEDICINES AND OTHER CONSUMABLES USED FOR THE PURPOSE OF THE PROFESSION. 9 (2) LIST OF PATIENTS WITH COMPLETE ADDRESS FRO M WHOM CHARGES OF MORE THAN RS.5000/- (INCLUDING OPERATION CHARGES IF ANY ) ARE RECOVERED. (3) DETAILS OF EXPENDITURE MORE THAN RS.20 000/- UNDER EACH HEAD. (4) DETAILED INTEREST ACCOUNT INCLUDING RE CEIPTS AND PAYMENTS (5) PURCHASE BILLS IN RESPECT OF DEPRECIABLE AN D OTHER FIXED ASSETS PURCHASED DURING THE YEAR WITH PURCHASE BILL OR EVI DENCE THEREOF. (6) NATURE AND SOURCE OF FRESH CAPITAL INTRO DUCED IF ANY. IN RESPONSE TO THIS ASSESSEE FURNISHED FOLLOWING RE PLY :- TO THE INCOME-TAX OFFICER WARD 3(4) PETLAD. SUB: ASSESSMENT PROCEEDINGS FOR ASST. YEAR 2002- 03 RESPECTED SIR WITH REFERENCE TO YOUR NOTICE U/S 142(1) DATED 01/1 0/2004 VIDE NO.WD- 3(4)AEIPP 5082M WE FURNISH INFORMATION AS DESIRED BY YOU. 1. THERE IS NO INVENTORY AS ON THE FIRST AND LAST DAY OF THE YEAR UNDER CONSIDERATION. 2. WE HAVE NOT CHARGED MORE THAN RS.5 000/- (INCLUDING OPERATION CHARGES) FROM ANY PATIENT. 3. DETAILED A/C OF EXPENDITURE OVER RS.20 000/- ARE EN CLOSED HEREWITH. THE ACCOUNTS SO ENCLOSED ARE AS UNDER : A/C NAME RS. (I) RENT ACCOUNT 50 000/- (II) ELECTRIC EXP. 23 850/- (III) DRUGS & MEDICINES EXP. 65 119/- (IV) DEPRECIATION 3 3 928/- 4. DETAILED INTEREST ACCOUNT INCLUDING RECEIPTS AND PA YMENTS IS ENCLOSED. 10 5. THERE IS NO PURCHASE DURING THE YEAR UNDER CONSIDER ATION ON WHICH DEPRECIATION IS CLAIMED. 6. CAPITAL INTRODUCED DURING THE YEAR UNDER CONSIDERAT ION IS RS.NIL. THANKING YOU. A PERUSAL OF THESE TWO CLEARLY SHOWS THAT AO HAS NO T RAISED THE ISSUES REGARDING PURCHASE OF PLOT AND COST OF CONSTRUCTION OF DEEP HOSPITAL AND HAS NOT APPLIED HIS MIND AS TO THE CORRECT INVESTME NT MADE THEREIN. IT IS APPARENT THAT WHATEVER IS DECLARED DURING SURVEY BY THE ASSESSEE AND INCORPORATED IN THE RETURN OF INCOME IS ACCEPTED BY THE AO. IT IS NECESSARY TO SHOW THAT HE HAD APPLIED HIS MIND AND FOUND THE DECLARATION CORRECT. ONCE MATERIAL AVAILABLE ON RECORD REVEAL T HAT AO HAS CONSIDERED ISSUES SOUGHT EXPLANATION FROM THE ASSESSEE OR COL LECTED INFORMATION THEREOF BY CARRYING OUT ENQUIRIES AND THEREAFTER AR RIVED AT A CONCLUSION MAY BE ACCEPTING THE VERSION OF THE ASSESSEE THEN ORDER CANNOT BE SAID TO BE ERRONEOUS IF IN THE EYES OF THE LD. CIT SOME MOR E ENQUIRIES ARE REQUIRED TO BE CARRIED OUT. WE AGREE WITH THE LD. A R THAT AO IS NOT EXPECTED TO VISUALIZE WHAT ENQUIRIES COMMISSIONER W OULD HAVE THOUGHT PROPER WHICH HE WOULD HAVE CARRIED OUT. IN OTHER WO RDS OPINION OF THE COMMISSIONER AS TO THE EXTENT OF ENQUIRIES OR DEPTH OF ENQUIRIES ON AN ISSUE CANNOT BECOME THE BASIS FOR SETTING ASIDE THE ORDER IF AO HAS ACTUALLY CONSIDERED THE ISSUE APPLIED HIS MIND AND ARRIVED AT A CONCLUSION. IN ANY CASE THERE SHOULD BE A GENUINE A PPLICATION OF MIND BY THE AO ON AN ISSUE AND NOT MERELY A PRETENCE. IF TH E RECORDS REVEAL THAT AO HAS SUPERFICIALLY TOUCHED AN ISSUE MERELY ISSUE D A QUERY LETTER AND OBTAINED REPLY AND PLACED THEM ON RECORD I.E. IF I T IS APPARENT THAT WHATEVER EXERCISE THE A.O. HAS DONE WAS MERELY A PR ETENCE AND A RITUAL OR FULFILLMENT OF FORMALITIES THEN ONE CANNOT SAY THAT THERE WAS A GENUINE 11 APPLICATION OF MIND. IN ANY CASE ONCE AO HAS TOUCHE D AN ISSUE BY ISSUING QUERY LETTER AND OBTAINED NECESSARY CLARIFICATION/E XPLANATION FROM THE ASSESSEE ON THAT ISSUE AND PLACED RELEVANT MATERIAL ON RECORD THEN ONUS SHIFTS ON THE REVENUE TO SHOW THAT WHAT WAS DONE BY THE AO WAS ONLY A PRETENCE AND NOT A CASE OF GENUINE ENQUIRIES. AN OR DER WOULD BE ERRONEOUS BOTH IN A CASE WHERE NO ENQUIRY IS CARRIE D OUT BY THE AO OR WHERE THERE WAS MERELY A PRETENCE. THE POWER OF THE COMMISSIONER UNDER SECTION 263 IS NOT MERELY HOLISTIC BUT TO COR RECT ERRORS COMMITTED BY THE AO UNKNOWINGLY AS WELL AS KNOWINGLY. THE ERR OR BEING PRETENCE OF ENQUIRIES COMES IN THE SECOND CATEGORY. 8. NOTWITHSTANDING THAT IN THE PRESENT CASE WE FIND THAT LD. AO CHOSE NOT TO ENQUIRE ON THE ISSUES OF INVESTMENT IN PLOT AND COST OF CONSTRUCTION OF DEEP HOSPITAL BUT ALSO CHOSE TO QUITELY IGNORE T HE DETAILS OF THE BANK ACCOUNTS FOUND BY SURVEY TEAM WHICH FORM PART OF TH E MATERIAL ON RECORD. THERE IS NO WHISPER OF DISCUSSION EITHER IN THE QUE RY LETTER ANSWERS GIVEN BY THE ASSESSEE OR IN THE ORDER OF THE AO. THE RELE VANT MATERIAL FOUND DURING THE SURVEY WAS CONVENIENTLY IGNORED. THESE M ATERIALS INCLUDED INFORMATION ABOUT PURCHASE OF PLOT COST OF CONSTRU CTION OF THE HOSPITAL AND THE BANK ACCOUNTS. THE AO WAS EXPECTED TO CARRY OUT ENQUIRIES IN THESE ASPECTS AND SATISFY OBJECTIVELY AS TO WHETHER THE STAND OF THE ASSESSEE AS REFLECTED IN THE DISCLOSURE WAS CORRECT . IT WAS CLEARLY NOT DONE. NO QUERY WAS RAISED AT ALL BY THE AO IN THE SHOW CA USE NOTICE ISSUED AS REPRODUCED ABOVE ; RATHER QUERY LETTER IS CRYPTIC A ND IN THE SAME WAY REPLY OF THE ASSESSEE IS ALSO CRYPTIC. 9. FURTHER MERELY BECAUSE AO MENTIONS IN THE ASSES SMENT ORDER THAT HE HAS EXAMINED THE BOOKS OF ACCOUNT IT DOES NOT S HOW THAT HE HAS APPLIED HIS MIND ON THE TWO IMPORTANT ISSUES RAISED BY THE CIT IN HIS 12 ORDER. ONE CANNOT IGNORE THE SUBMISSION OF THE LD. DR THAT MENTIONING IN THE ORDER THAT BOOKS OF ACCOUNT WERE PRODUCED AND E XAMINED IS MERELY A RITUALISTIC REFERENCE AND DOES NOT REFLECT APPLICAT ION OF MIND ON VARIOUS ISSUES THAT COULD ARISE FROM THE EXAMINATION OF THE BOOKS AND MATERIAL AVAILABLE ON THE RECORD. 10. LD. AR HAS REFERRED TO THREE DECISIONS. WE HAVE GONE THROUGH THEM. THEY ARE ON THE ISSUE THAT WHERE AO HAS CARRI ED AN ENQUIRY ON AN ISSUE THEN ORDER OF THE AO CANNOT BE ERRONEOUS MERE LY BECAUSE DETAILED ENQUIRIES AS COMMISSIONER THOUGHT AO SHOULD HAVE CA RRIED OUT HAVE NOT BEEN CARRIED OUT. BUT IN THE PRESENT CASE AO HAS NO T TOUCHED TWO ISSUES RAISED BY LD. CIT IN HIS NOTICE AND ORDER. THEREFOR E IT CANNOT BE SAID THAT THERE WAS ANY APPLICATION OF MIND AT ALL BY THE AO. THE REPLY FURNISHED BY THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTIC E TO THE CIT CONTAINED INFORMATION ON THESE ISSUES BUT IT CANNOT BE SAID T HAT THESE WERE AVAILABLE BEFORE THE AO OR THAT HE HAS CONSIDERED THEM BEFORE PASSING HIS ORDER UNDER SECTION 143(3). THIS IS ANOTHER REASON TO SET ASIDE THE ORDER OF THE AO THAT HE FAILED TO ENQUIRE AND COLLECT RELEVANT MATERIAL BEFORE ACCEPTING THE STAND OF THE ASSESSEE. 11. A PERUSAL OF SECTION 263 INDICATES FOUR PARA-ME TERS FOR THE CIT TO EXERCISE HIS POWER OF REVISION UNDER SECTION 263. T HEY ARE - (I) CALLING FOR AND EXAMINING THE RECORDS OF ANY PROCEEDINGS UNDER THE ACT. HE IS NOT REQUIRED TO SHOW ANY REASON FOR CAL LING AND EXAMINING THE RECORDS. IT IS WITHIN HIS ADMINISTRATIVE POWER. (II) SECONDLY HE MAY CONSIDER ANY ORDER PASSED BY A O ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. (III) THIRDLY WHERE HE CONSIDERS THE ORDER OF THE AO AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE ON EVERY 13 ISSUE/ISSUES HE WILL PROVIDE AN OPPORTUNITY TO THE ASSESSEE OF BEING HEARD ON THESE ISSUES AND (IV) FOURTHLY AFTER HEARING THE ASSESSEE AND AF TER MAKING OR CAUSING SUCH ENQUIRY AS HE DEEM FIT PASS AN ORDER THEREON I NCLUDING ENHANCING OR MODIFYING THE ASSESSMENT. 11.1 EVEN THOUGH THE TERM ERRONEOUS HAS NOT BEEN D EFINED UNDER THE ACT BUT INCORRECT ASSUMPTION OF FACTS AND/OR INCORR ECT APPLICATION OF LAW WOULD MAKE AN ORDER ERRONEOUS. THE PHRASE PREJUDICIAL TO THE INTEREST OF REVENUE HAS TO BE READ IN THE CONTEXT AND IN CONJUNCTION W ITH THE ERROR COMMITTED BY THE AO. IT IS SETTLED PROPOSITION OF L AW THAT IF AO HAS TAKEN ONE OF THE TWO POSSIBLE VIEWS BUT THE COMMISSIONER DOES NOT AGREE WITH SUCH VIEWS THEN AOS ORDER WOULD NOT BE ERRONEOUS BUT FOR THIS IT MUST BE SHOWN BY THE ASSESSEE THAT AO HAD IN FACT CONSID ERED THE ISSUE IN DISPUTE COLLECTED THE MATERIAL APPLIED HIS MIND A ND HAS CONSCIOUSLY TAKEN THE VIEW AND CARRYING OUT ENQUIRIES OR FURN ISHING OF REPLY WAS NOT MERELY A PRETENCE. IT HAS BEEN HELD BY HONBLE ALLA HABAD HIGH COURT IN CIT VS. SHRI BHAGWANDAS 272 ITR 367 (ALL) THAT AN ORDER PASSED WITHOUT APPLICATION OF MIND WILL FALL UNDER THE EXPRESSION ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. WHERE THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER ON THE ISSUE IN DISPUTE THE COMMIS SIONER COULD RIGHTLY INITIATE PROCEEDINGS UNDER SECTION 263. HONBLE BOM BAY HIGH COURT IN CIT VS. GABRIEL INDIA LTD. 203 ITR 108 (BOM) HELD T HAT SECTION 263 DOES NOT VILUALISE A CASE OF SUBSTITUTION OF THE JUDGMEN T OF THE COMMISSIONER FOR THAT OF THE ITO WHO PASSED THE ORDER PROVIDED A O HAS JUDGED THE ISSUE. HONBLE MADHYA PRADESH HIGH COURT IN CIT VS. KOHINOOR TABACCO PRODUCTS LTD. 234 ITR 557 (M.P.) HELD THAT WHERE TH E AO WITHOUT MAKING ANY ENQUIRY AT ALL TO ASCERTAIN WHETHER THE INCOME RECEIVED FROM LETTING OUT OF THE PROPERTY WAS ASSESSABLE AS INCOM E FROM BUSINESS OR AS INCOME FROM THE HOUSE PROPERTY ACCEPTED ASSESSEE S CLAIM THAT SUCH 14 INCOME WAS ASSESSABLE AS INCOME FROM BUSINESS AND T HEREBY ALLOWED EXCESS DEDUCTION TOWARDS REPAIRS ETC. AND ALSO DEPR ECIATION THEN THIS FAILURE ON THE PART OF THE AO TO MAKE NECESSARY ENQ UIRIES WOULD RENDER THE ASSESSMENT ERRONEOUS AND ALSO PREJUDICIAL TO TH E INTEREST OF REVENUE. IN LAJJA WATI SINGHAL (SMT) VS. CIT 226 ITR 527 (AL L) IT WAS HELD THAT IT IS THE DUTY OF THE AO TO MAKE A FULL ENQUIRY AND SA TISFY HIMSELF THAT THE INCOME SURRENDERED WAS IN FACT EARNED BY ASSESSEE. THE ISSUE WAS WHETHER THE INCOME SURRENDERED WOULD BELONG TO THE ASSESSEE OR TO HER HUSBAND. HONBLE MADRAS HIGH COURT IN RAMASWAMY CHE TTIAR VS. CIT 220 ITR 657 (MAD) HELD THAT WHEN THE ITO IS EXPECTE D TO MAKE AN ENQUIRY OF A PARTICULAR ITEM OF INCOME AND HE DOES NOT MAKE ENQUIRY AS EXPECTED THAT WOULD BE A GROUND FOR THE COMMISSIONE R OF INCOME-TAX TO INTERFERE UNDER SECTION 263 OF THE ACT AS ORDER PAS SED BY THE ITO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. HONBLE MADRAS HIGH COURT WHILE RENDERING THIS JUDGMENT RELIED ON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN GEE VEE ENTERPRISES VS. ADDL.CIT (1975) 99 ITR 375 (DEL) OF HONBLE GUJARAT HIGH COURT IN ADDL.CIT VS. MUKUR CORPORATION (1978) 111 ITR 312 (GUJ) AND OF HONBLE APEX COURT IN TARA DEVI AGGARWAL (SMT) VS. CIT (1973) 88 ITR 323 (SC). IN THE CASE BEFORE HONBLE MADRAS HIGH COURT ASSESSEE HAD PURCH ASED SOME PROPERTIES AND NO ENQUIRY WAS CARRIED OUT WITH REGA RD TO THE VALUE OF THE PROPERTIES AT THE TIME OF COMPLETING THE ORIGINAL A SSESSMENT. THE SEARCH CARRIED OUT REVEALED TRANSACTION IN ON MONEY. CIT EXERCISED HIS POWER UNDER SECTION 263 AND SET ASIDE THE ASSESSEE 11.2 ON THE ISSUE WHERE AO DID NOT CARRY OUT ANY EN QUIRY OR THERE WAS NO APPLICATION OF MIND THE ORDER OF LD. CIT IN SET TING ASIDE THE ORDER OF AO ON THOSE ISSUES WAS HELD PROPER BY HONBLE DELHI HIGH COURT IN DUGGAL & CO. VS. CIT (1996) 220 ITR 456 (DEL); BY I TAT CHENNAI 15 BENCH IN RAJALAXMI MILLS LTD. VS. ITO (2009) 303 IT R (AT) 182 AND ALSO IN THERMAL SYSTEMS (HYD) PVT. LTD. VS. ACIT (2 009) 312 ITR (AT) 187 NAGNATH H. JALKOTE VS. ACIT (2009) 311 ITR (AT ) 197 (ITAT PUNE) AND ICICI BANK LTD VS. JCIT (2009) 309 ITR (AT) 235 CIT VS. DIPAKKUMAR GARG (2008) 299 ITR 435 (M.P.). 12 AS A RESULT WE HOLD THAT ORDER PASSED BY THE LD . CIT WAS VALID. NO INTERFERENCE IS CALLED FOR IN HIS ORDER. APPEAL FIL ED BY THE ASSESSEE STANDS DISMISSED. ITA NO.2359/AHD/2006 ASST. YEAR 2003-04 13. IN THIS YEAR AO HAD PASSED THE ORDER UNDER SECT ION 143(3) ON 17.2.2005 AS UNDER :- ASSESSMENT ORDER RETURN OF INCOME IS FILED ON 25/3/2004 DECLARING TOTAL INCOME AT RS.1 63 120/-. THE RETURN WAS DULY PROCESSED U/S 14 3(1) OF THE ACT. IN THIS CASE SURVEY U/S 133A OF THE ACT WAS CARRIED OUT ON 13/2/2004 AND THEREFORE THE CASE WAS TAKEN UP FOR SCRUTINY UNDER COMPULSORY SCRUTINY. ACCORDINGLY FIRST NOTICE U/S 143(2) AS W ELL AS 142(1) & QUESTIONNAIRE WERE ISSUED ON 4/10/2004 WHICH WERE D ULY SERVED ON 7/10/2004. 2. IN RESPONSE TO NOTICES U/S 143(2) AND 142(1) ON THE ACT SHRI ASHWIN SHAH C.A. AND HEMANT SUTHAR ACCOUNTANT ATT ENDED FROM TIME TO TIME AND PRODUCED BOOKS OF ACCOUNTS AND OTHER SUBMI SSIONS. 3. THE ASSESSEE IS A DOCTOR PRACTICING AS GAY NEC AT BORSAD. ON THE DATE OF SURVEY THE ASSESSEE HAS NOT FILED ANY RETU RN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THOUGH THERE WAS NO SPECI FIC DECLARATION OF UNACCOUNTED INCOME FOR THE YEAR UNDER CONSIDERATION IN HIS STATEMENT RECORDED ON OATH THE ASSESSEE SUBMITTED THAT HIS I NCOME FOR THE FINANCIAL YEAR 2002-03 IS NOT MORE THAN RS.2 LACS FOR WHICH H E WILL FILE THE RETURN IMMEDIATELY. ACCORDINGLY HE FILED THE RETURN ON 26/ 3/2004 DECLARING TOTAL INCOME AT RS.1 63 120/- AFTER ALLOWING CURRENT DEPR ECIATION ON CAR AMOUNTING TO RS.92 530/-. 16 4. THE ASSESSEE CLAIMED PETROL EXPENSES OF R S.40 305/-. IT MAY BE POINTED OUT HERE THAT AS PER ASSESSEE THE CAR IS M AINLY USED FOR HIS PROFESSION. HOWEVER CONSIDERING THE STATUS OF THE ASSESSEE PERSONAL USE OF CAR CANNOT BE RULED OUT SINCE THE ASSESSEE HAS N OT MAINTAINED ANY LOG BOOK FOR THE USE OF CAR. ONE SIXTH OF THE PETROL EX PENSES AS WELL AS DEPRECIATION ON CAR IS THEREFORE DISALLOWED BEING IN THE NATURE OF PERSONAL USE OF THE ASSESSEE. 5. ON GOING THROUGH THE DATE MADE AVAILABLE AND AFTER DISCUSSION TOTAL INCOME IS DETERMINED AS UNDER :- TOTAL INCOME AS PER STATEMENT RS.1 63 120/- ADD: DISALLOWABLES AS DISCUSSED ABOVE 1/6 TH OF PETROL EXPENSES 6 717 1/6 TH DEPRECIATION CLAIMED 15 422 RS. 22 139/- TOTAL INCOME RS.1 85 259/- ASSESSED U/S 143(3) OF THE ACT. ISSUE DEMAND NOTICE AFTER GIVING CREDIT FOR ALL PREPAID TAXES. ISSUE NOTICE U/S 271( 1)(C) OF THE ACT FOR CONCEALMENT OF INCOME SINCE THE RETURN HAS BEEN FIL ED ONLY AFTER SURVEY U/S 133A OF THE ACT. AO HAD ISSUED FOLLOWING QUERY LETTER :- QUESTIONAIRE DR. PRASHANT RASIKLAL PATEL NR. GANDHI GANJ OPP. ZAKLI TALAV BORSAD. ASST. YEAR 2003-04 (1) INVENTORY AS ON FIRST AND LAST DAY OF THE YEAR UNDER CONSIDERATION OF STOCK OF DRUGS MEDICINES AND OTHER CONSUMABLES USED FOR THE PURPOSE OF THE PROFESSION. (2) LIST OF PATIENTS WITH COMPLETE ADDRESS FRO M WHOM CHARGES OF MORE THAN RS.5000/- (INCLUDING OPERATION CHARGES IF ANY ) ARE RECOVERED. (3) DETAILS OF EXPENDITURE MORE THAN RS.20 000/- UNDER EACH HEAD. 17 (4) DETAILED INTEREST ACCOUNT INCLUDING RE CEIPTS AND PAYMENTS (5) DETAILS LOAN ACCOUNT OF KOTAK MAHINDRA ( P) LTD. (6) PURCHASE BILLS IN RESPECT OF DEPRECIABLE AN D OTHER FIXED ASSETS PURCHASED DURING THE YEAR WITH PURCHASE BILL OR EVI DENCE THEREOF. (7) NATURE AND SOURCE OF FRESH CAPITAL INTRO DUCED IF ANY. IN RESPONSE TO THIS ASSESSEE FURNISHED FOLLOWING RE PLY :- TO THE INCOME-TAX OFFICER WARD 3(4) PETLAD. SUB: ASSESSMENT PROCEEDINGS FOR ASST. YEAR 2003-04 RESPECTED SIR WITH REFERENCE TO YOUR NOTICE U/S 142(1) DATED 4/10 /2004 VIDE NO.WD- 3(4) AEIPP5082M WE FURNISH INFORMATION AS DESIRED BY YOU. 1. THERE IS NO INVENTORY AS ON THE FIRST AND LAS T DAY OF THE YEAR UNDER CONSIDERATION. 2. WE HAVE NOT CHARGED MORE THAN RS.5 000/- (IN CLUDING OPERATION CHARGES) FROM ANY PATIENT. 3. DETAILED A/C OF EXPENDITURE OVER RS.20 000/- ARE ENCLOSED HEREWITH. THE ACCOUNTS SO ENCLOSED ARE AS UNDER : A/C NAME RS. (I) ELECTRIC EXP. 24 420.00 (II) DRUGS & MEDICINES EXP. 38 662.6 0 (III) PETROL EXP 40 305.00 (IV) RENT A/C 50 000.00 (V) SALARY EXP. A/C 72 000.00 (VI) DEPRECIATION EXP. A/C 54 1 55.00 4. DETAILED INTEREST ACCOUNT INCLUDING RECIPT S AND PAYMENTS IS ENCLOSED. 18 5. DETAILED LOAN A/C OF KOTAK MAHINDRA (P) LTD. AND COPY OF STATEMENT THEREOF AND ADVISE OF INTEREST ENCLOSED. 6. COPIES OF A/C FOR PURCHASE OF ASSETS FOR WHIC H DEPRECIATION IS CLAIMED ARE ENCLOSED. COPIES OF PURCHASE BILLS ARE ALSO ENCLOSED. A) OXY TOP METER B) SANTRO CAR C) WATER COOLER THE LD. CIT EXAMINED THE RECORD OF THE ASSESSMENT A ND ISSUED SHOW CAUSE NOTICE UNDER SECTION 263 ON THE FOLLOWING POINTS :- (1) INVESTMENT IN THE CONSTRUCTION OF THE HOSP ITAL KNOWN AS DEEP HOSPITAL BORSAD. (2) GIFT OF RS.2 LACS RECEIVED BY HIS WIFE. (3) ENQUIRY INTO BANK ACCOUNTS DISCOVERED DUR ING THE COURSE OF SURVEY AND DEPOSITS IN THOSE BANK ACCOUNTS DURING ASST. YE AR IN QUESTION. 14. THE REPLY FURNISHED BY THE ASSESSEE IS THE SAME AS WAS GIVEN FOR ASST. YEAR 2002-03. CONSIDERING THE REPLY THE LD. C IT SET ASIDE THE ASSESSMENT ORDER FOR MAKING AFRESH. 15. THE ARGUMENTS OF THE PARTIES ARE SAME AS TAKEN UP IN ASST. YEAR 2002-03. 16. FOLLOWING OUR REASON GIVEN IN ASST. YEAR 2002-0 3 WE HOLD THAT ORDER OF AO WAS RIGHTLY HELD AS ERRONEOUS BECAUSE I N THE REGULAR ASSESSMENT PROCEEDINGS THE AO HAD NOT TOUCHED AT AL L THREE ISSUES RAISED BY LD. CIT IN HIS NOTICE. THE ENQUIRIES CARRIED OUT BY HIM AND AS REPRODUCED ABOVE DID NOT CONTAIN ANY REFERENCE TO T HOSE THREE ISSUES THEREFORE WE HOLD THAT ORDER OF THE AO WAS ERRONEO US IN SO FAR AS IT IS 19 PREJUDICIAL TO THE INTEREST OF REVENUE. WE UPHOLD T HE ORDER OF LD. CIT AND DISMISS THE APPEAL OF THE ASSESSEE. 17 IN THE RESULT BOTH THE APPEALS OF THE AS SESSEE ARE DISMISSED. SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 22/01/2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD ORDER PRONOUNCED IN OPEN COURT ON 22/1/2010