M/S K R CONSTRUCTION , MUMBAI v. PR CIT CENTRAL-3, MUMBAI

ITA 7615/MUM/2019 | 2014-2015
Pronouncement Date: 28-02-2020 | Result: Allowed

Appeal Details

RSA Number 761519914 RSA 2019
Assessee PAN AANFK0144N
Bench Mumbai
Appeal Number ITA 7615/MUM/2019
Duration Of Justice 2 month(s) 17 day(s)
Appellant M/S K R CONSTRUCTION , MUMBAI
Respondent PR CIT CENTRAL-3, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-02-2020
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 28-02-2020
Assessment Year 2014-2015
Appeal Filed On 11-12-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH MUM BAI BEFORE SHRI SAKTIJIT DEY JUDICIAL MEMBER & SHRI G. MANJUNATHA ACCOUNTANT MEMBE R ITA NO.7615/MUM/2019 ( ASSESSMENT YEAR: 2014-15 ) K.R.CONSTRUCTION BASEMENT HINAL RESIDENCY DATTA MANDIR ROAD DAHANUKAR WADI KANDIVALI(W) MUMBAI-400 067 VS. PRINCIPAL COMMISSIONER OF INCOME TAX-CENTRAL-3 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021 PAN/GIR NO. AANFK0144N AP PELLANT ) .. RESPONDENT ) REVENUE BY SHRI RAJEEV HARIT CIT-DR ASSESSEE BY SHRI NARESH JAIN AR DATE OF HEARING 11/02 /2020 DATE OF PRONOUNCEMENT 28 /0 2 /2020 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX C ENTRAL-3 MUMBAI DATED 06/11/2019 U/S 263 OF THE I.T.ACT 19 61 FOR THE AY 2014-15. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. THAT IN THE FACTS AND CIRCUMSTANCE OF THE CASE A ND IN LAW THE SHOW CAUSE NOTICE U/S 263 OF THE ACT WAS ISSUED WITH PRE - MEDIATED MIND AS SUCH THE SHOW CAUSE AS WELL AS CONSEQUENTIAL PROCE EDING IS BAD-IN-LAW AND LIABLE TO BE QUASHED. 2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE T HE IMPUGNED ORDER PASSED BY THE LD. CIT U/S 263 IS TIME BARRED AS PER THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN ALAGENDRAN FINANCE LIMITE D [(2007) 293 ITR 1] IN SO FAR AS THE LD. PR. CIT SET-ASIDE THE ORDER FO R FRESH ENQUIRY WITH ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 2 RESPECT EXPENSES AND UNSECURED LOAN WHICH WAS THE SUBJECT MATTER OF ORIGINAL SCRUTINY ASSESSMENT PROCEEDINGS AND NOT RE -ASSESSMENT PROCEEDING AS SUCH THE ORDER U/S 263 IS BAD-IN4AW AND LIABLE TO BE QUASHED. 3. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE IMPUGNED ORDER IS BAD IN LAW IN SO FAR AS THE LD. PR. CIT SE EKS TO REVISE THE REASSESSMENT ORDER U/S 147 OF THE ACT WHICH IS ITSE LF BAD IN LAW AND LIABLE TO BE QUASHED. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE RE- ASSESSMENT ORDER PASSED U/S 147 R.W.S 143(3) OF THE ACT IS BAD IN LAW IN SO FAR AS THE NOTICE U/S 148 HAD BEEN ISSUED WITHOU T THE APPROPRIATE APPROVAL U/S 151 OF THE ACT AS SUCH THE REVISIONA RY PROCEEDINGS WITH RESPECT TO THE REASSESSMENT ORDER WHICH IS ITSELF N ON-EST IN LAW IS NOT SUSTAINABLE AND IS LIABLE TO BE QUASHED. THAT THE A PPROVAL IS TAKEN FROM ADDITIONAL CIT INSTEAD OF JOINT CIT AS REQUIRED U/S 151 OF THE ACT. 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE REASON TO BELIEVE RECORDED FOR REOPENING OF ASSESSMENT U/S 14 8 IS BAD IN LAW IN SO FAR AS IT HAS BEEN RECORDED THAT SUB-CONTRACT EXPEN SES AMOUNTING TO RS. 2 35 25 258/- HAS ESCAPED ASSESSMENT WHEREAS THE S AME ADDITION HAD ALSO BEEN MADE IN THE ORIGINAL SCRUTINY ASSESSMENT PROCEEDINGS AS BEING BOGUS AS SUCH THE IMPUGNED REASONS ARE CLEARLY WI THOUT ANY APPLICATION OF MIND BAD IN LAW AND LIABLE TO BE QUASHED AND AL SO THE CONSEQUENTIAL REVISION ORDER U/S 263. 6. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WITHOUT PREJUDICE TO THE ABOVE THE SANCTION GRANTED TO REA SON TO BELIEVE IS BAD IN LAW IN SO FAR AS THE ADDL. CIT FAILED TO APPRECIATE THAT THE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT HAS ALREADY BEEN THE SUB JECT MATTER OF ADDITION IN THE ORIGINAL SCRUTINY ASSESSMENT PROCEE DINGS AS SUCH THE SAID SANCTION GRANTED WITHOUT ANY DUE APPLICATION O F MIND RENDERS THE ENTIRE PROCEEDINGS AS VOID AS INITIO AND THE CONSEQ UENTIAL PROCEEDINGS AS BAD IN LAW AND LIABLE TO BE QUASHED. 7. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE IMPUGNED ORDER IS BAD IN LAW IN SO FAR AS THE LD. PR. CIT ER RED IN INVOKING JURISDICTION U/S 263 OF THE ACT WITHOUT APPRECIATIN G THAT IF NO ADDITION IS MADE ON THE ISSUE FOR WHICH REASON WERE RECORDED N O OTHER ADDITIONS CAN BE MADE WITH RESPECT TO ISSUES FOR WHICH NO REA SONS WERE RECORDED. THEREFORE DIRECTION FOR MAKING OTHER ENQUIRY/ADDIT ION IS BAD-IN-LAW. 8. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE AFORESAID GROUND THE PR. CIT HAS GROSSLY ERRED IN DIRECTING THE LD. AO TO EXAMINE THE ISSUE WITH RESP ECT TO UNSECURED LOAN WITHOUT APPRECIATION THE FACT THAT SHE HAS ALREADY DIRECTED THE LD. AO TO ASSESS THE INCOME AS PER APPLICABLE NET PROFIT AFTE R REJECTING THE BOOKS OF ACCOUNTS SO NO ITEM OF BOOKS CAN BE EXAMINED AFTER THE INCOME IS TO BE COMPUTED ON ESTIMATED NET PROFIT BASIS. ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 3 9. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW AND WITHOUT PREJUDICE TO THE AFORESAID GROUND THE PR. CIT HAS GROSSLY ERRED IN DIRECTING THE LD. AO TO EXAMINE THE ISSUE WITH RESP ECT TO EXPENSE WITHOUT APPRECIATION THE FACT THAT SHE HAS ALREADY DIRECTED THE LD. AO TO ASSESS THE INCOME AS PER APPLICABLE NET PROFIT AFTER REJEC TING THE BOOKS OF ACCOUNTS SO NO ITEM OF BOOKS CAN BE EXAMINED AFTER THE INCOME IS TO BE COMPUTED ON ESTIMATED NET PROFIT BASIS. 10. YOUR APPELLANT PRAYS FOR LEAVE TO ADD ALTER AN D AMEND ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORK FILED ITS RETURN OF INCOME FOR AY 2014-15 ON 29/11/2014 DECLARING TOTAL INCOME OF RS.7 47 37 490/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T.ACT 1961 ON 30/12/2016 DETERMINING THE TOTAL INCOME AT RS. 9 82 62 750/-. SUBSEQUENTLY A SURVEY ACTION U/S 13 3A OF THE I.T.ACT 1961 WAS CARRIED OUT AT THE BUSINESS PREMISE OF THE ASSESSEE ON 30/08/2016. DURING THE COURSE OF SURVEY PROCEEDING S A COPY OF THE BALANCE SHEET FOR AY 2014-15 CERTIFIED BY THE AUDIT ORS ON 31/08/2014 WAS FOUND AND AS PER THE SAID BALANCE SH EET THE TURNOVER WAS FOUND DECLARED AT RS.219 25 42 121/-. CONSEQUENT TO SURVEY U/S 133A OF THE ACT THE ASSESSMENT HAS BEEN REOPENED U/S 147 OF THE I.T.ACT 1961 BY ISSUING NOTICE U/S 148 OF THE ACT DATED 02/02/2018. IN RESPONSE TO NOTICE U/S 148 OF THE AC T THE ASSESSEE HAS FILED RETURN OF INCOME ON 09/02/2018 DECLARING TOTAL INCOME AT RS.9 82 62 750/-. THE ASSESSEE HAD ALSO REQUESTED F OR COPY OF REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AN D AS REQUESTED THE REASONS FOR REOPENING OF THE ASSESSM ENT WAS SUPPLIED TO THE ASSESSEE VIDE LETTER DATED 12/02/2 018. THE ASSESEE HAS FILED ITS OBJECTIONS FOR REOPENING ASSESSMENT O N 26/02/2018 WHICH HAS BEEN REPRODUCED AT PARA 3 ON PAGES 4 TO 1 1 OF ASSESSMENT ORDER. THE LD. AO HAS DISPOSED -OFF OBJE CTIONS FILED BY ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 4 THE ASSESEE VIDE LETTER DATED 27/02/2018. THEREAFT ER THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) R.W.S. 14 7 OF THE I.T.ACT 1961ON 10/05/2018 AND DETERMINED THE TOTAL INCOME AT RS.9 82 62 750/- WITHOUT MAKING ANY ADDITIONS TOWA RDS SUPPRESSION OF GROSS RECEIPTS AND BOGUS LABOUR CONTRACT CHARGES . 4. SUBSEQUENTLY THE LD.PCIT CENTRAL-3 MUMBAI HAS ISSUED SHOW CAUSE NOTICE U/S 263 OF THE I.T.ACT 1961 DAT ED 11/07/2019 AND CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY T HE ASSESSMENT ORDER PASSED BY THE LD. AO U/S 143(3) RWS 147 OF T HE I.T.ACT 1961 DATED 10/05/2018 SHALL NOT BE REVISED UNDER THE PRO VISIONS OF SECTION 263 OF THE ACT FOR THE REASONS STATED IN H IS SHOW CAUSE NOTICE. THE LD.PCIT IN THE SAID SHOW CAUSE NOTICE HAS TAKEN UP THE ISSUE OF SUPPRESSION OF GROSS RECEIPTS ON THE BASIS OF REASONS RECORDED FOR REOPENING OF ASSESSMENT WHICH IS FURT HER SUPPORTED BY EVIDENCES FOUND DURING THE COURSE OF SURVEY IN FOR M OF SECOND SET OF FINANCIAL STATEMENTS PREPARED BY THE ASSESSEE FO R THE IMPUGNED ASSESSMENT YEAR. ACCORDING TO THE LD. PCIT ALTHOUGH THE LD. AO SEEMS TO HAVE VERIFIED THE ISSUE OF SUPPRESSION OF GROSS RECEIPTS DURING THE RE-ASSESSMENT PROCEEDINGS BUT HE HAS FA ILED TO TAKE NOTE OF EVIDENCES GATHERED DURING THE COURSE OF SURVEY I N FORM OF SECOND SET OF FINANCIAL STATEMENTS AS PER WHICH THE TURNO VER SHOWN FOR THE YEAR UNDER CONSIDERATION WAS AT RS.219.25 CRORES W HEREAS THE TURNOVER DECLARED IN RETURN OF INCOME FILED FOR THE YEAR WAS AT RS.132.11 CRORES. THE LD.PCIT FURTHER STATED THAT ALTHOUGH BOTH AUDIT REPORTS WERE DULY SIGNED BY THE PARTNERS AND BY THE AUDITORS THE FIRM BUT THE AUDITED FINANCIAL STATEMENTS SHOW ING LOWER RECEIPTS WAS FILED BEFORE THE INCOME-TAX DEPARTMENT ALONG WI TH RETURN OF INCOME. THE LD. AO DURING REASSESSMENT PROCEEDINGS HAS FAILED TO ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 5 TAKE NOTE OF VITAL FACTS GATHERED DURING THE COURSE OF SURVEY WHILE CONCLUDING THE ASSESSMENT WHICH RESULTED IN ERRON EOUS ORDER PASSED INSOFAR AS IT IS PREJUDICIAL TO THE INTERE ST OF REVENUE. THE LD.PCIT FURTHER NOTED THAT ALTHOUGH THERE IS A DI SCREPANCY IN UNSECURED LOANS WHICH HAS BEEN SHOWN AT RS. 45.58 LACS IN THE FINANCIAL STATEMENTS FILED BEFORE THE DEPARTMENT B UT THE SAME HAVE BEEN SHOWN AT RS. 2.62 CORES IN THE PARALLEL FINANC IAL STATEMENTS HOWEVER NO ENQUIRY HAS BEEN MADE REGARDING SAID DIS CREPANCY IN UNSECURED LOANS AS PER TWO SET OF FINANCIAL STATEM ENTS. THEREFORE HE OPINED THAT THE ASSESSMENT ORDER PASSED BY THE L D. AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE AND ACCORDINGLY ISSUED A SHOW CAUSE NOTICE. 5. IN RESPONSE TO SHOW CAUSE NOTICE THE ASSESSEE VIDE LETTER DATED 18/07/2019 17/09/2019 09/10/2019 AND 22/10/ 2019 HAS SUBMITTED THAT THE ASSESSMENT ORDER PASSED BY THE L D. AO IS NEITHER ERRONEOUS NOR IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE ISSUE OF SUPPRESSION OF TURNOVER HAS BEEN THORO UGHLY EXAMINED BY THE LD. AO IN REASSESSMENT PROCEEDINGS WHICH IS CLEARLY EVIDENT FROM THE FACT THAT THE ASSESSMENT HAS BEEN REOPENED FOR THE PURPOSE OF VERIFICATION OF SUPPRESSION OF TURNOVER ON THE BASIS OF FINDINGS OF SURVEY PROCEEDINGS INITIATED AGAINST TH E ASSESSEE U/S 133A OF THE I.T.ACT 1961. THE ASSESSEE FURTHER SU BMITTED THAT IT HAS EXPLAINED THE DISCREPANCY IN TURNOVER DECLARED IN TWO SET OF FINANCIAL STATEMENTS BEFORE THE LD. AO DURING THE R EASSESSMENT PROCEEDINGS AS PER WHICH THE ACCOUNTANT MADE A MIS TAKE WHILE TAKING OUT THE PRINTOUT OF THE TRIAL BALANCE FOR T HE PERIOD FROM 01/04/2013 TO 31/08/2014 INSTEAD OF 01/04/2013 TO 3 1/03/2014 AND AS A RESULT OF WHICH THE GROSS TURNOVER FOR THE SE LECTED PERIOD WAS ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 6 AT RS. 219.25 CRORES. THE AUDITOR WHO SIGNED BY TH E BALANCE SHEET HAS ALSO PREPARED THE FINANCIAL STATEMENTS FOR A P ERIOD OF 17 MONTHS FROM 01/04/2013 TO 31/08/2014 ON THE ASSUMPTION T HAT THE ASSESEE REQUIRES FINANCIAL STATEMENTS FOR A PERIOD OF 17 MO NTHS AND ACCORDINGLY THE TURNOVER HAS BEEN SHOWN AT RS. 219 .25 CRORES. BUT FACT REMAINS THAT THE ASSESSEE HAS RECONCILED DIFFE RENCE BETWEEN TURNOVER SHOWN IN PARALLEL SET OF FINANCIAL STATEME NTS ALONG WITH NECESSARY EVIDENCES INCLUDING COPIES OF TDS CERTIF ICATES ISSUED BY THE PRINCIPLES AND AIR INFORMATION AVAILABLE IN INC OME TAX DATA BASE AS PER WHICH THE TURNOVER FOR THE IMPUGNED ASSESSM ENT YEAR IS AT RS.132.11 CRORES. THE LD. AO AFTER CONSIDERING RELE VANT SUBMISSIONS OF THE ASSESSEE HAS COMPLETED THE ASSES SMENT WITHOUT MAKING ANY ADDITIONS TOWARDS SUPPRESSION IN TURNOVE R. THEREFORE IT CANNOT BE SAID THAT THE ASSESSMENT ORDER PASSED BY THE LD. AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. THE ASSESSEE FURTHER SUBMITTED THAT AS REGARDS BOG US LABOUR CONTRACT CHARGES ALTHOUGH THE ASSESSMENT HAS BEEN REOPENED IN RESPECT OF BOGUS LABOUR CONTRACT CHARGES BUT FACT REMAINS THAT VERY SAME ISSUE HAS BEEN CONSIDERED BY THE LD. AO IN ORI GINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT AND M ADE ADDITIONS TOWARDS ALLEGED BOGUS BILLS FROM CERTAIN PARTIES I N RESPECT OF LABOUR CONTRACT CHARGES AND ACCORDINGLY DURING THE REASSE SSMENT PROCEEDINGS HAVING NOTICED THE FACT THAT THE ISSUE HAS BEEN CONSIDERED IN THE ORIGINAL ASSESSMENT PROCEEDINGS HE HAS CHOSEN NOT TO MAKE ANY ADDITIONS ON THE ISSUE. THEREFORE IT IS INCORRECT ON THE PART OF LD.PCIT TO ALLEGED THAT THE LD. AO HAS NOT VERIFIED THE ISSUE OF LABOUR CONTRACT CHARGES WHICH RESULTED IN ERRONEOUS ORDER PASSED INSOFAR AS IT IS PREJUDICIAL TO THE INTER EST OF THE REVENUE. ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 7 6. THE LD.PCIT AFTER CONSIDERING RELEVANT SUBMISSIO NS OF THE ASSESSEE AND ALSO TAKEN NOTE OF VARIOUS FACTS INCL UDING THE SURVEY PROCEEDINGS CONDUCTED U/S 133A OF THE ACT AND CONS EQUENT EVIDENCES IN FORM OF PARALLEL SET OF FINANCIAL STAT EMENTS OPINED THAT THE ASSESSMENT ORDER PASSED BY THE LD. AO IS ERRONE OUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. H E FURTHER NOTED THAT ALTHOUGH THE LD. AO SEEMS TO HAVE BEEN VERIFIED IS SUE OF SUPPRESSION OF TURNOVER BUT FACT REMAINS THAT THE LD. AO NEVER EVER HAS MADE ANY ATTEMPT TO CALL FOR NECESSARY DETAILS EVEN THOUGH THERE ARE LARGE DIFFERENCES IN EXPENDITURE CLAIM TO HAVE INCURRED FOR PAYMENT TO CONTRACTOR AND SUB-CONTRACTOR POWER AND FUEL EXPENSES TENDER EXPENSES AND STAFF WELFARE EXPENSES WHICH I S EVIDENT FROM THE FACT THAT HE HAS SIMPLY ACCEPTED THE STORY OF A MISTAKE GIVEN BY THE ASSESSEE IN RESPECT OF PARALLEL SET OF FINANCI AL STATEMENTS PREPARED FOR 17 MONTHS AND CONCLUDED ASSESSMENT U/S 143(3) R.W.S. 147 OF THE I.T.ACT 1961. THE LD.PCIT FURTHER NOTE D THAT THE LD. AO NOT EVEN VERIFIED TWO SET OF FINANCIAL STATEMENTS W ITH REFERENCE TO UNSECURED LOANS WHERE THERE IS A HUGE DIFFERENCE IN RESPECT OF UNSECURED LOANS SHOWN IN TWO BALANCE SHEETS HOWEVE R DETAILS OF THE DATE OF THE RETURN OF THESE LOANS AND CONSEQUEN T APPLICATION OF PROVISIONS OF 68 OF THE ACT HAS NOT BEEN EXAMINED B Y THE LD. AO. THEREFORE HE OPINED THAT THE ASSESSMENT ORDER PASS ED BY THE LD. AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO TH E INTEREST OF THE REVENUE AND ACCORDINGLY SET ASIDE THE ASSESSMENT O RDER AND DIRECT THE LD. AO TO RE-DO THE ASSESSMENT AND DETERMINE TH E NET PROFIT BY TAKING NOTE OF PROFIT DECLARED BY THE ASSESEE FOR T HE YEAR. AGGRIEVED BY THE LD.PCIT ORDER THE ASSESSEE IS IN APPEAL BEF ORE US. ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 8 7. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT THE L D.PCIT HAS ERRED IN INVOKING JURISDICTION U/S 263 OF THE ACT WITHOUT APPRECIATING THAT IF NO ADDITION IS MADE ON THE ISSUE FOR WHICH REASON WAS RECORDED NO OTHER ADDITION CAN BE MADE WITH RESPEC T TO ISSUES FOR WHICH NO REASONS WERE RECORDED AND CONSEQUENTLY DI RECTIONS FOR MAKING OTHER ENQUIRIES /ADDITIONS IS NOT PERMITTED UNDER THE PROVISIONS OF LAW. THE LD. AR FURTHER SUBMITTED TH AT IT IS A FACT OF MATTER THE ASSESSMENT HAS BEEN ORIGINALLY COMPLETE D U/S 143(3) OF THE ACT WHERE THE LD. AO HAS MADE ADDITIONS TOWARD S ALLEGED BOGUS EXPENDITURE IN FORM OF LABOR CONTRACT CHARGES . THE ASSESSMENT HAS BEEN SUBSEQUENTLY REOPENED FOR THE R EASONS RECORDED AS PER WHICH THERE IS ALLEGATION OF SUPPR ESSION OF TURNOVER ON THE BASIS OF FINDINGS OF SURVEY CONDUCTED U/S 13 3A OF THE ACT AND ALSO IN THE ASPECT OF BOGUS LABOR CONTRACT. DURING THE COURSE OF REASSESSMENT PROCEEDINGS THE ASSESSEE HAS EXPLAINE D THE DIFFERENCE BETWEEN TURNOVER REPORTED IN TWO SET OF FINANCIAL STATEMENTS AND ALSO EXPLAINED THE ISSUE OF BOGUS LABOUR CONTRACT EXPENSES WITH REFERENCE SPECIFIC QUESTIONNAIRE ISS UED BY THE LD. AO ALONG WITH NOTICE U/S 142(1) DATED 04/07/2016 A ND 20/07/2016 FOR WHICH THE ASSESEE HAS FILED A DETAILED WRITTEN SUBMISSIONS VIDE LETTER DATED 29/07/2016 EXPLAINING THE REASONS FOR DIFFERENCE IN TURNOVER REPORTED IN TWO SET OF FINANCIAL STATEMENT S. THE ASSESSEE HAD ALSO EXPLAINED THE ISSUE OF BOGUS LABOUR CONTRA CT EXPENSES AND FILED NECESSARY EVIDENCES TO PROVE THAT SIMILAR AMO UNT HAS BEEN ADDED IN ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT. THE LD. AO ON BEING SATISFIED WITH EXPLANATION FURNISHED BY THE A SSESSE HAS COMPLETED ASSESSMENT U/S 143(3) R.W.S. 147 OF THE A CT WHICH CANNOT BE TERMED AS ERRONEOUS INSOFAR AS IT IS PRE JUDICIAL TO THE INTEREST OF THE REVENUE. ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 9 8. THE LD. AR FURTHER SUBMITTED THAT INSOFAR AS DI FFERENCE IN TURNOVER AS PER TWO SET OF FINANCIAL STATEMENTS T HE ASSESEE HAS FILED VARIOUS DETAILS INCLUDING TDS CERTIFICATES A ND RECONCILED TURNOVER REPORTED IN FINANCIAL STATEMENTS TO FORM 2 6AS AVAILABLE IN ITS DATA BASE AND EXPLAINED THAT THE ASSESSEE HAS E XECUTED WORKS CONTRACTS FOR GOVERNMENT AGENCIES LIKE BMC ETC. TH E ASSESSEE HAS ALSO FILED VARIOUS DETAILS IN RESPECT OF LABOUR CO NTRACT EXPENSES INCURRED FOR THE YEAR. THE LD. AO AFTER VERIFICATIO N OF NECESSARY DETAILS FILED BY THE ASSESSEE HAS COMPLETED THE REA SSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE ACT WITHOUT M AKING ANY ADDITION/ADJUSTMENTS TO TOTAL INCOME DECLARED FOR T HE YEAR. HE FURTHER SUBMITTED THAT IT IS A SETTLED POSITION OF LAW THAT ONCE THE REASONS RECORDED FOR REOPENING OF ASSESSMENT IS F AILS AND NO ADDITION IS MADE ON THIS ASPECT THEN THE LD. AO IS PRECLUDED FROM MAKING ANY OTHER ADDITIONS EVEN THOUGH HE HAS COME ACROSS CERTAIN ISSUES DURING THE ASSESSMENT PROCEEDINGS. O NCE THE LD. AO HIMSELF IS PRECLUDED FROM MAKING ANY ADDITIONS AND THEN DIRECTING THE LD. AO TO MAKE ENQUIRY/ADDITION ON OTHER ISSUES IS OUTSIDE THE SCOPE OF PROVISIONS OF SECTION 263 OF THE ACT. THE LD. AR FURTHER SUBMITTED THAT IT IS ALSO SETTLED POSITION OF LAW THAT AN AUTHORITY FRAMING AN ASSESSMENT OR REVISION OF ANY PROCEEDING S SHALL CONFINE ITS JURISDICTION TO THE ISSUES QUESTIONED IN THE RE ASONS RECORDED FOR REOPENING OF ASSESSMENT OR SHOW CAUSE NOTICE ISSUED FOR REVISION OF PROCEEDINGS WITHOUT ANY MODIFICATIONS OR IMPROVEMEN T TO SHOW CAUSE NOTICE ISSUED IN ASSESSMENT PROCEEDINGS. THE MEANING THEREBY IS THAT IF SHOW CAUSE NOTICE IS ISSUED FOR MAKING CERTAIN ENQUIRIES ON CERTAIN ISSUES THEN PROCEEDINGS SHOUL D BE CONFINED TO THOSE ISSUES ONLY. IN THIS CASE THE LD.PCIT HAS I SSUED SHOW CAUSE ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 10 NOTICE TO REVISE THE ASSESSMENT ORDER ON THE ISSUE OF SUPPRESSION OF TURNOVER AND ALLEGED BOGUS LABOUR CONTRACT EXPENSES WHEREAS IN 263 PROCEEDINGS HE HAS DIRECTED THE LD. AO TO EXAM INE THE ISSUE OF VARIOUS EXPENSES CLAIMED IN TWO SET OF FINANCIAL ST ATEMENTS ALTHOUGH THE SCOPE OF HIS REVISIONAL POWERS IS LIMI TED TO THE ISSUES QUESTIONED IN SHOW CAUSE NOTICE. THEREFORE HE SUBM ITTED THAT THE INITIATION OF PROCEEDINGS U/S 263 IS BAD IN LAW AND LIABLE TO BE SET ASIDE. IN THIS REGARD HE RELIED UPON THE FOLLOWING JUDICIAL PRECEDENTS:- CIT VS. ALAGENDRAN FINANCE LTD (2007) (7) TMI 304 CIT VS. JET AIRWAYS (195 TAXMANN 117) HINDUSTAN LEVER LTD VS. R B WADKAR (137 TAXMANN 479 ) MY CAR (PUNE) P. LTD. VS. ITO 14(4) (104 TAXMANN.CO M IS) MULTI COMMODITY EXCHANGE OF INDIA LTD VS. DCIT (WP 451/2018) MALABAR INDUSTRIAL CO. LTD VS. CIT (243 ITR 83) SIEMENS LTD VS. STATE OF MAHARASHTRA (2006 (12) TM I 203) KALPANA SHANTILAL HARIA VS. ACIT (2018 (1) TMI 195) 9. THE LD. DR ON THE OTHER HAND STRONGLY SUPPORTI NG ORDER OF THE LD.PCIT SUBMITTED THAT THE COMMISSIONER HAS BROUGHT OUT VARIOUS FACTS IN HIS 263 PROCEEDINGS TO PROVE THAT THE ASS ESSMENT ORDER PASSED BY THE LD. AO IS ERRONEOUS INSOFAR AS IT I S PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH IS EVIDENT FROM THE FACT THAT ALTHOUGH THE EVIDENCE WAS FOUND DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A OF THE ACT IN RESPECT OF DIFFERENCE IN TURNOV ER REPORTED FOR THE YEAR BUT THE LD. AO HAS ACCEPTED THE ARGUMENTS OF THE ASSESSEE OF THE THEORY OF MISTAKE COMMITTED BY AN ACCOUNTANT IN PREPARATION OF FINANCIAL STATEMENT WITHOUT ANY EFFORT TO FIND OUT THE CORRECT FACTS WITH REGARD TO TURNOVER REPORTED IN TWO SET OF DOC UMENTS. THE LD. DR FURTHER SUBMITTED THAT IT IS A SETTLED POSITIO N OF LAW THAT THERE IS A VAST DIFFERENCE BETWEEN THE REASSESSMENT AND REVI SION WHERE IN CASES OF REVISION IF THE COMMISSIONER SATISFIED TH AT THE ASSESSMENT ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 11 ORDER PASSED BY THE LD. AO IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE THEN HE IS VERY MUC H WITHIN HIS POWERS TO INVOKE JURISDICTION TO ASCERTAIN CORRECT FACTS W ITH REGARD TO THE PROCEEDINGS TO KNOWN WHETHER THE LD. AO HAS CARRIE D OUT REQUIRED ENQUIRIES TO BE CONDUCTED IN ACCORDANCE WITH LAW. I N THIS CASE IT IS VERY CLEAR FROM THE FACTS BROUGHT OUT BY THE LD.PCI T THAT THE LD. AO HAD COMMITTED AN ERROR IN NOT MAKING ANY FURTHER ENQUIRY INTO DETAILS AS REGARDS DIFFERENCE IN TURNOVER REPORTED AS PER TWO SET OF AUDITED FINANCIAL STATEMENTS AND ALSO VARIOUS EXP ENSES CLAIMED IN THOSE SET OF FINANCIAL STATEMENTS BUT SIMPLY ACCEP TED THE ARGUMENTS OF THE ASSESSEE AND CONCLUDED THE ASSESSMENT WHICH RESULTED IN ERRONEOUS ORDER PASSED WHICH CAUSED PREJUDICE TO T HE INTEREST OF THE REVENUE. THEREFORE THE LD.PCIT WAS RIGHT IN IN VOKING JURISDICTION U/S 263 OF THE I.T.ACT 1961 AND THERE IS NO REASON TO INTERFERE IN THE FINDINGS RECORDED BY THE LD.PCIT. IN THIS REGARD H E RELIED UPON THE FOLLOWING JUDICIAL PRECEDENTS:- 1. LALSINGH ESTATE (P.) LTD. VS. COMMISSIONER OF IN COME TAX [1994] 74 TAXMAN 525(GAU.) 2. ARVEE INTERNATIONAL VS. ADDITIONAL COMMISSIONER OF INCOME TAX RANGE 19(1) [2006] 101 ITD 495 (MUM.) 3. PR.CIT-II VS. BRAHAM DEV GUPTA IN ITA NO.907/MUM /2017 C.M.APPL. 38789/2017(DELHI HIGH COURT) DATED 20.07.2018 4. KUSHI CONBUILD PVT.LTD. VS CIT IN ITA NO. 1611/K OL/2013 DATED 03/11/2015 5. LAXMI MANAGEMENT VS CIT IN ITA NO.1632/KOL/2013 DATED 03/11/2015 6. ROYAL MORAN PLANT & MACHINERY PVT.LTD. VS CIT IN ITA NO.1635/MUM/2013 DATED 03/11/2015 7. SWARNSATHI ACADEMY PVT.LTD. VS CIT IN ITA NO.163 8/MUM/2013 DATED 03/11/2015 8. BHABISYA RICE MILL LTD. VS CIT IN ITA NO.1920/MU M/2013 DATED 03/11/2015 9. ADL.CIT VS MUKUR CORPORATION [1978] 111 ITR 312 (GUJ.) 10. RISING TRACOM PVT.LTD. VS CIT IN ITA NO.1436/KO L/2013 DATED 03/11/2015. 11. GARUD CREDIT & HOLDINGS VS ITO WARD-9(2) IN IT A NO.1270/KOL/2013 DATED 03/11/2015 12. GUINEA DEALCOM PVT.LTD. VS ITO WARD 6(1) IN ITA NO.1273/KOL/2013 DATED 03/11/2015 ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 12 13. RAJMANDIR ESTATES (P.) LTD. VS PRL.CIT KOLKATT A-III KOLKATTA [2016] 70 TAXMANN.COM 124 (CALCUTTA)/[2016] 240 TAXMAN 306 (C ALCUTTA)/[2016] 386 ITR 162(CALCUTTA)/[2016] 287 CTR 512 (CALCUTTA) 14. RAJMANDIR ESTATES (P.) LTD. VS PR.CIT KOLKATTA -III [2017] 77 TAXMANN.COM 285 (SC) 15. CIT V TOYOTA MOTOR CORPN [2008] 174 TAXMAN 395 (DELHI)/[2008] 306 ITR 49 ) (DELHI) /[2008] 218 CTR 628 (DELHI) 16. TOYOTA MOTOR COPROATION VS CIT [2018] 306 ITR 5 2(SC)/[2008] 218 CTR 539 (SC) 17. DENIEL MERCHANTS PVT.LTD. & ANR VS ITO AND ANR. (SUPREME COURT) DATED 29.11.2017. 18. CIT VS. DEEPAK KUMAR GARG [2008] 299 ITR 435 (M ADHYA PRADESH)/[2007] 212 CTR 152 (MADHYA PRADESH) 19. SRIPAN LAND DEVELOPMETN (P.) LTD. VS CIT [2011] 11 TAXMANN.COM 429 (MUMBAI)/[2011] 46 SOT 447 (MUMBAI) 20. BINOD KUMAR AGARWALA VS CIT W.B-XIX N ITAT NO. 22 OF 2015 GA NO.436 OF 2015 DATED 21/06/2018 10. WE HAVE HEARD BOTH THE PARTIES PERUSED THE MAT ERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW ALONG WITH PLETHORA OF CASE LAWS CITED BY BOTH THE PARTIE S. THE PROVISIONS OF 263 OF THE I.T.ACT 1961 PROVIDES INHERENT POWER S TO THE COMMISSIONER OR PRINCIPAL COMMISSIONER TO INVOKE JU RISDICTION TO REVISE THE ASSESSMENT ORDER IF HE CONSIDERS THAT A NY ORDER PASSED BY THE LD. AO IS ERRONEOUS INSOFAR AS IT IS PREJU DICIAL TO THE INTEREST OF THE REVENUE. THE LANGUAGE USED BY THE LEGISLATU RE IN S. 263 IS TO THE EFFECT THAT THE CIT MAY INTERFERE IN REVISION I F HE CONSIDERS THAT THE ORDER PASSED BY THE ITO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS QUITE CLEAR THAT TWO THINGS MUST CO-EXIST IN ORDER TO GIVE JURISDICTION TO THE CIT T O INTERFERE IN REVISION. THE ORDER OF THE ITO IN QUESTION MUST NOT ONLY BE E RRONEOUS BUT ALSO THE ERROR IN THE ITO'S ORDER MUST BE OF SUCH A KIND THAT IT CAN BE SAID OF IT THAT IT IS PREJUDICIAL TO THE INTERESTS OF TH E REVENUE. IN OTHER WORDS MERELY BECAUSE THE OFFICER'S ORDER IS ERRONEO US THE CIT CANNOT INTERFERE. AGAIN MERELY BECAUSE THE ORDER O F THE OFFICER IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE THEN A GAIN THAT IS NOT ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 13 ENOUGH TO CONFER JURISDICTION ON THE CIT TO INTERFE RE IN REVISION. THESE TWO ELEMENTS MUST CO-EXIST. THIS IS BECAUSE THE FIRST OF THE TWO REQUIREMENTS NAMELY (I) THE ORDER IS ERRONEOUS AND (II) THE SAME IS ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE IS NOT SATISFIED. SIMILARLY IF AN ORDER IS ERRONEOUS BUT NOT PREJUDI CIAL TO THE INTERESTS OF THE REVENUE THEN ALSO THE POWER OF SUO-MOTO REV ISION CANNOT BE EXERCISED. ANY AND EVERY ERRONEOUS ORDER CANNOT BE THE SUBJECT- MATTER OF REVISION BECAUSE THE SECOND REQUIREMENT A LSO MUST BE FULFILLED. THERE MUST BE SOME PRIMA FACIE MATERIAL ON RECORD TO SHOW THAT TAX WHICH WAS LAWFULLY EXIGIBLE HAS NOT BEEN I MPOSED OR THAT BY THE APPLICATION OF THE RELEVANT STATUTE ON AN INCOR RECT OR INCOMPLETE INTERPRETATION A LESSER TAX THAN WHAT WAS JUST HAS BEEN IMPOSED. 11. THE PHRASE PREJUDICIAL TO THE INTERESTS OF T HE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASS ED BY THE AO. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF AO CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE FOR EXAMPLE WHEN AN ITO ADOPTED ONE OF THE COURSES PER MISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE; OR WHER E TWO VIEWS ARE POSSIBLE AND THE ITO HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE IT CANNOT BE TREATED AS AN ERRONEOUS ORD ER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ITO IS UNSUSTAINABLE IN LAW. AN ORDER OF ASSESSMENT PASSED BY THE ITO WITHOUT MAKING NECESSARY ENQUIRIES ON CERTAIN IMPOR TANT POINTS CONNECTED WITH THE ASSESSMENT WOULD BE ERRONEOUS AN D PREJUDICIAL TO THE INTERESTS OF THE REVENUE WHEN THE ITO IS EX PECTED TO MAKE AN ENQUIRY OF A PARTICULAR ITEM OF INCOME AND HE DO ES NOT MAKE AN ENQUIRY AS EXPECTED THAT WOULD BE A GROUND FOR THE CIT TO INTERFERE WITH THE ORDER PASSED BY THE ITO SINCE SUCH AN ORDE R PASSED BY THE ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 14 ITO IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS O F REVENUE. WHERE THE ITO HAD MADE ENQUIRIES IN REGARD TO THE ISSUES BY A SPECIFIC QUESTIONNAIRE FOR WHICH THE ASSESSEE HAS GIVEN DETA ILED EXPLANATION IN THAT REGARD BY A LETTER IN WRITING AND ALL THESE ARE PART OF THE RECORD OF THE CASE AND THE CLAIM WAS ALLOWED BY THE ITO ON BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE SUCH DECISION OF THE ITO CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HI S ORDER HE DID NOT MAKE AN ELABORATE DISCUSSION IN THAT REGARD 12. IN LIGHT OF ABOVE LEGAL POSITION IF YOU EXAMIN E THE FACTS OF PRESENT CASE ONE NEEDS TO UNDERSTAND WHETHER THE ASSESSMENT ORDER PASSED BY THE LD. AO U/S 143(3) R.W.S. 147 O F THE INCOME TAX ACT 1961 IS ERRONEOUS INSOFAR AS IT IS PREJUDICIA L TO THE INTEREST OF THE REVENUE. ADMITTEDLY THE ASSESSMENT IN QUESTION WAS ORIGINALLY COMPLETED U/S 143(3) OF THE I.T.ACT 1961 WHERE TH E LD. AO HAS MADE ADDITIONS TOWARDS LABOUR CHARGES INCURRED BY T HE ASSESSEE UNDER THE HEAD LABOUR CONTACT EXPENSES AND MADE ADD ITIONS OF RS.2 35 25 258/- IN RESPECT OF PAYMENTS MADE TO SI X PARTIES AS LISTED BY THE LD. AO IN THE REASONS RECORDED FOR RE OPENING OF ASSESSMENT. IT IS ALSO NOT IN DISPUTE THAT THE ASSE SSMENT HAS BEEN REOPENED U/S 147 OF THE ACT FOR THE REASONS RECORD ED AS PER WHICH THE IMPUGNED ASSESSMENT HAS BEEN REOPENED IN RESPE CT OF ISSUES RELATED TO SUPPRESSION OF GROSS RECEIPTS ON THE BAS IS OF TWO PARALLEL SET OF FINANCIAL STATEMENTS PREPARED BY THE ASSESSE E WHICH WAS FOUND DURING THE COURSE OF SURVEY CONDUCTED U/S 133 A OF THE ACT. AS PER SAID TWO SET OF FINANCIAL STATEMENTS THE ASSES SEE HAS REPORTED TURNOVER OF RS.219.25 CRORES IN ONE SET OF FINANCIA L STATEMENTS PREPARED FOR A PERIOD OF 17 MONTHS 01/04/2013 TO 31 /08/2014 AND IN ANOTHER SET OF FINANCIAL STATEMENTS PREPARED FOR PE RIOD OF 12 MONTHS ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 15 FROM 01/04/2013 TO 31/03/2014 WHICH WAS ALSO PART OF RETURN FILED FOR THE YEAR THE TURNOVER HAS BEEN SHOWN AT RS.132 .11 CRORES. THE ASSESEE HAS EXPLAINED DIFFERENCE BETWEEN TURNOVER S HOWN IN TWO SET OF FINANCIAL STATEMENT WHILE FILING OBJECTIONS TO REOPENING ASSESSMENT U/S 147 OF THE I.T.ACT 1961 AND EXPLAIN ED THAT THE TURNOVER REPORTED IN FINANCIAL STATEMENTS PREPARED AND AUDITED FOR THE YEAR FOR A PERIOD OF 12 MONTHS IS SUPPORTED BY NECESSARY TDS CERTIFICATES ISSUES BY PRINCIPALS AND ALSO WHICH I S MATCHED WITH DATA AVAILABLE IN FORM 26AS OF IT DATA BASE. THE ASSESSE E FURTHER CLARIFIED THAT IT IS EXECUTING WORKS CONTRACT FOR G OVERNMENT AGENCIES AND BILLS ARE CERTIFIED BY COMPETENT AUTHORITY AND AFTER THAT PAYMENT HAS BEEN MADE AFTER DEDUCTING APPLICABLE TDS AS PER LAW. THE TDS DEDUCTED BY THE PRINCIPALS AND CLAIMED BY THE ASSES SE IN RETURN OF INCOME FILED FOR THE YEAR IS MATCHED WITH DATA AVAI LABLE IN FORM 26AS. THE ASSESSE HAS ALSO CLARIFIED THAT THE FINAN CIAL STATEMENTS PREPARED FOR A PERIOD OF 17 MONTHS IS ON THE BASIS OF TRIAL BALANCE GENERATED BY AN ACCOUNTANT BY MISTAKE OF FACTS AS PER WHICH THE TURNOVER WAS AT RS.219.25 CRORES AND THE AUDITOR HA S ALSO PREPARED AND CERTIFIED SECOND SET OF FINANCIAL STATEMENTS ON THE PRETEXT OF ASSESEE REQUIRES FINANCIAL STATEMENTS FOR A PERIOD OF 17 MONTHS FOR SOME SPECIFIED PURPOSE. DURING REASSESSMENT PROCEED INGS THE SAID MISTAKE HAS BEEN CLARIFIED WITH NECESSARY EVIDENCES . THE LD. AO AFTER BEING SATISFIED WITH EXPLANATION FURNISHED BY THE ASSESSEE HAS COMPLETED THE ASSESSMENT WITHOUT MAKING ANY ADDITIO NS TOWARDS SUPPRESSED TURNOVER. SIMILARLY IN RESPECT OF ALLEG ED BOGUS LABOUR CONTRACT EXPENSES ALTHOUGH THE ASSESSMENT HAS BEEN REOPENED ON SAID ISSUE BUT NO ADDITION HAS BEEN MADE DURING TH E REASSESSMENT PROCEEDINGS FOR THE REASONS THAT THIS VERY SAME IS SUE HAS BEEN CONSIDERED IN ORIGINAL ASSESSMENT PROCEEDINGS AND A DDITION HAS ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 16 BEEN MADE FOR AN AMOUNT OF RS.2 35 25 258/-. THESE FACTS ARE UNDISPUTED BY THE LOWER AUTHORITIES. IN FACT THE L D.PCIT HAS ACCEPTED THE FACT THAT THE LD. AO SEEMS TO HAVE VER IFIED THE DIFFERENCE IN TURNOVER WITH REFERENCE TO VARIOUS DO CUMENTS FILED BY THE ASSESSEE INCLUDING COPIES OF TDS CERTIFICATES CERTIFIED BILLS ISSUED BY PRINCIPLES VAT AUDIT REPORT IN FORM 702 AND OTHER EVIDENCES WHICH IS EVIDENT FROM THE FACT THAT IN 2 63 PROCEEDINGS THE LD.PCIT HAD CATEGORICALLY ACCEPTED THAT THE LD. AO HAS CARRIED OUT WITH NECESSARY ENQUIRIES WITH REGARD TO DIFFERE NCE IN TURNOVER HOWEVER HE HAS DIRECTED THE LD. AO TO VERIFY THE IS SUE OF TURNOVER DECLARED IN TWO SET OF FINANCIAL STATEMENTS AND ALS O EXAMINE VARIOUS EXPENSES CLAIMED IN TWO SET OF FINANCIAL STATEMENTS . 13. IN THIS FACTUAL BACKGROUND IF YOU EXAMINE REVI SION ORDER PASSED BY THE PCIT U/S 263 OF THE ACT ONE NEEDS TO UNDERSTAND WHETHER THE EXERCISE OF POWERS BY THE LD.PCIT IS WI THIN THE SCOPE OF PROVISION OF SECTION 263 OF THE I.T.ACT 1961. IT I S A SETTLED POSITION OF LAW THAT IF NO ADDITION IS MADE ON THE ISSUE FOR WHICH REASONS WERE RECORDED FOR REOPENING NO OTHER ADDITIONS CAN BE M ADE WITH RESPECT TO ISSUES FOR WHICH NO REASONS WERE RECORDED. THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS JET AIRWAYS INDIA LTD. (2011) 331 ITR 236 HAS CATEGORICALLY HELD THAT IF THE LD. AO ACCEPTS THE CONTENTION OF THE ASSESSEE AND HOLDS THAT THE INCOM E FOR WHICH HE HAD INITIALLY FORMED A REASON TO BELIEVE THAT IT HA D ESCAPED ASSESSMENT AS A MATTER OF FACT NOT ESCAPED ASSESS MENT IT IS NOT OPEN TO HIM TO INDEPENDENTLY ASSESS SOME OTHER INC OME AND IF HE INTENDS DO SO A FRESH NOTICE U/S 148 WOULD BE NECE SSARY THE LEGALITY OF WHICH WOULD BE TESTED IN THE EVENT OF A CHALLENGE BY THE ASSESSEE. A SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 17 RAJASTHAN HIGH COURT IN CASE OF SHRI. RAM SINGH (30 6 ITR 343) AND PUNJAB & HARYANA HIGH COURT IN CASE OF ATLAS CYCLE INDUSTRIES (180 ITR 319). THE HONBE DELHI HIGH COURT IN CASE OF SO FTWARE CONSULTANTS (21 TAXMANN.COM 155) HELD THAT WHERE TH E AO DID NOT MAKE ANY ADDITIONS ON ISSUES INRESPECT OF WHICH REA SONS WERE RECORDRD FOR ISSUE OF NOTICE U/S 148 A GENERAL INF ERENCE IS THAT THE AO COULD NOT HAVE MADE ADDITION ON ACCOUNT NEW ISSU E AND THUS COMMISSIONER COULD NOT HAVE EXERCISED REVISIONAL JU RISDICTION. THE SUM AND SUBSTANCE OF RATIOS LAID DOWN BY HONBLE HI GH COURTS IS THAT IF REASONS RECORDED FOR REOPENING OF ASSESSME NT ON A PARTICULAR ISSUE AND IN REASSESSMENT PROCEEDINGS NO ADDITION IS MADE ON THIS COUNT THEN THE LD. AO IS DEBARRED FROM MAKING ANY OTHER ADDITIONS WHICH HE COME ACROSS DURING REASSESSMENT PROCEEDING S. IF YOU APPLY ABOVE LEGAL PRINCIPLES TO REVISION PROCEEDING S THE OBVIOUS INFERENCE IS THAT WHEN AO COULD NOT HAVE MADE ANY A DDITIONS OTHER THAN THE ISSUES FOR WHICH REOPENING IS MADE THEN T HE CIT COULD ALSO HAVE INTEREFERED WITH HOSE ISSUES WHICH ARE NOT SUB JECT MATTER OF REASSESSMENT PROCEEDINGS. 14. IN THIS LEGAL AND FACTUAL BACKGROUND IF YOU SE E THE FACTS OF PRESENT CASE THE ASSESSMENT HAS BEEN REOPENED IN RESPECT OF SUPPRESSION OF TURNOVER REPORTED IN TWO SET OF FINA NCIAL STATEMENTS. IN REASSESSMENT PROCEEDINGS THE LD. AO HAS NEVER M ADE ANY ADDITIONS TOWARDS SUPPRESSION OF TURNOVER AS ALLEG ED BY HIM IN THE REASONS RECORDED FOR REOPENING OF ASSESSMENT. IT IS ALSO AN ADMITTED FACT THAT THE LD. AO HAS NOT MADE ANY OTHER ADDITIO NS IN RESPECT OF ANY OTHER ISSUES IN REASSESSMENT PROCEEDINGS. THERE FORE ONCE THE LD. AO HIMSELF IS PRECLUDED FROM MAKING ANY OTHER A DDITIONS THEN IT IS NOT OPEN FOR THE LD.PCIT TO QUESTION SOME OTHER ISSUES IN REVISION ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 18 PROCEEDINGS WHICH IS NOT AT ALL SUBJECT MATTER OF R EASSESSMENT. FURTHER IT IS ALSO A MATTER OF FACT THAT ANY PROCE EDINGS INITIATED UNDER ANY PROVISIONS OF THIS ACT I.E. WHETHER IT IS REOP ENING OR REVISION THE PROCEEDINGS SHALL BE CONFINED TO THE ISSUES QUESTIO NED IN EITHER REASONS RECODED FOR REOPENING OF ASSESSMENT OR SHOW CAUSE NOTICE ISSUED FOR INITIATING THE PROCEEDINGS U/S 263 OF TH E ACT. IN OTHER WORDS IF THE PROCEEDINGS HAS BEEN TAKEN UP UNDER T HE PROVISION OF SECTION 263 OF THE ACT TO EXAMINE A PARTICULAR ISS UE THEN LD.PCIT SHOULD RESTRICT HIMSELF TO THE ISSUES QUESTIONED IN HIS SHOW CAUSE NOTICE BUT HE CANNOT PROCEED TO ENLARGE THE SCOPE OF PROCEEDINGS TO ANY OTHER ISSUES WHICH IS NOT FIND PLACE IN SHOW C AUSE NOTICE ISSUED FOR THIS PURPOSE. THIS VIEW IS FORTIFIED BY THE DEC ISION OF HONBLE BOMBAY HIGH COURT IN CASE OF HINDUSTAN LEVER LIMITE D (137 TAXMANN 479) WHERE IT HAS BEEN HELD THAT THE REASON S ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE ASSESSING O FFICER AND NO SUBSTITUTION OR DELETION IS PERMISSIBLE. IN THIS CA SE THE LD.PCIT HAD TAKEN UP PROCEEDINGS U/S 263 OF THE ACT FOR THE PU RPOSE OF EXAMINING THE ISSUE OF DIFFERENCE IN TURNOVER REPOR TED IN TWO SET OF FINANCIAL STATEMENT AND ALSO DIFFERENCE IN UNSECUR ED LOANS REPORTED IN TWO SET OF FINANCIAL STATEMENT PREPARED BY THE A SSESSEE. ADMITTEDLY THE ISSUE OF SUPPRESSION OF TURNOVER WA S A SUBJECT MATTER OF REASSESSMENT PROCEEDINGS AND THE GENISIS OF ISSUE ORGINATED FROM SURVEY PROCEEDINGS CONDUCTED U/S 133 A AND WHICH WAS FOLLOWED BY REASONS RECORDED FOR REOPENING OF A SSESSMENT. HOWEVER IN REASSESSMENT PROCEEDINGS THERE IS NO A DDITION WAS MADE IN RESPECT OF SUPPRESSION OF TURNOVER. IT IS ALSO A MATTER OF FACT THAT IT IS NOT A CASE OF THE LD.PCIT THAT THE LD. A O HAS NEVER EXAMINED THE ISSUE OF TURNOVER IN REASSESSMENT PROC EEDINGS IN FACT THE ASSESSEE HAS FILED DETAILED WRITTEN SUBMISSIONS WHILE FILING ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 19 OBJECTIONS FOR REASSESSMENT AND THE SAME HAS BEEN R EPRODUCED BY THE LD. AO IN HIS ASSESSMENT ORDER. THEREFORE IT C ANNOT BE SAID THAT THE LD. AO HAS NOT CONDUCTED REQUIRED ENQUIRI ES HE OUGHT TO HAVE BEEN CONDUCTED UNDER THE LAW IN RESPECT OF SUP PRESSION OF TURNOVER. IT IS A SETTLED POSITION OF LAW THAT ONCE THE ISSUES ON WHICH THE REVISION PROCEEDINGS WAS INITIATED WERE ALREADY SUBJECTED TO VERIFICATION BY THE LD. AO DURING ASSESSMENT PROCEE DINGS THEN THE SAME ARE OUTSIDE THE SCOPE OF JURISDICTION OF POWER OF THE COMMISSIONER U/S 263 OF THE I.T.ACT 1961 BECAUSE THE CIT CANNOT REPLACE HIS VIEWS ON THE ISSUES IN GUISE OF INADEQU ATE ENQUIRY AS HELD BY THE HONBLE BOMBAY HIGH COURT IN CASE OF CI T VS GABRIEAL INDIA LIMITED (1993) 203 ITR 108. THIS VIEW WAS FUR THER SUPPORTED BY THE DECISION OF HON BLE BOMBAY HIGH COURT IN CAS E OF CIT VS. NIRAV MODI (2017) 390 ITR 292. IN THIS CASE ON PER USAL OF FACTS WE FIND THAT THE LD.PCIT HAS QUESTIONED THE ISSUE O F SUPPRESSION OF TURNOVER WHICH IS ALSO A MATTER OF DELIBERATION B Y THE LD. AO DURING THE REASSESSMENT PROCEEDINGS AND HENCE WE ARE OF T HE CONSIDERED VIEW THAT THE LD. PCIT WAS COMPLETELY ERRED IN INVO KING JURISDICTION TO REVISE THE ASSESSMENT ORDER PASSED BY THE LD. AO U/S 143(3) R.W.S. 147 OF THE I.T.ACT 1961 IN RESPECT OF VERY SAME ISSUE OF SUPPRESSION OF TURNOVER WHICH WAS VERY MUCH DELIBE RATED BY THE LD. AO DURING THE ASSESSMENT PROCEEDINGS. 15. COMING BACK TO OTHER PART OF PROCEEDINGS TAKEN UP BY THE LD.PCIT. THE LD.PCIT HAS DIRECTED THE LD. AO TO EXA MINE THE EXPENSES AND DETERMINE THE NET PROFIT AFTER CONSIDE RING THE PROFIT DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION AFTER TAKING NOTE OF THE FACT THAT THERE IS LARGE NUMBER OF DIFFERENCE IN CERTAIN EXPENSES CLAIMED IN TWO SET OF FINANCIAL ST ATEMENTS. WE FIND ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 20 THAT FIRST AND FOREMOST THE LD.PCIT HAS EXCEEDED HI S JURISDICTION CONFERRED UPON BY HIM U/S 263 OF THE ACT BECAUSE T HE SHOW CAUSE NOTICE IS VERY CLEARLY STATED THAT THE ASSESSMENT O RDER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF TH E REVENUE IN RESPECT OF THE ISSUE OF SUPPRESSION OF TURNOVER. THEREFORE ON CE THE LD.PCIT HAVING FOUND THAT THE ISSUE OF SUPPRESSION OF TURNO VER WAS CONSIDERED BY THE LD. AO AT THE TIME OF ASSESSMENT PROCEEDINGS HE SHOULD HAVE CONFINED ITS SCOPE OF REVISIONAL POW ERS TO THE ISSUE OF SUPPRESSION OF TURNOVER INSTEAD OF GOING TO THE ISSUE OF EXPENSES CLAIMED BY THE ASSESSEE AND PROFIT DECLARED FOR THE YEAR UNDER CONSIDERATION. BECAUSE THE ISSUE OF VARIOUS EXPENS ES CLAIMED IN TWO SET OF FINANCIAL STATEMENTS WAS NEITHER SUBJEC T MATTER OF REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT NOR FI ND PLACE IN SHOW CAUSE NOTICE ISSUED BY THE LD.PCIT U/S 263 OF THE A CT 1961. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE L D.PCIT HAVING ACCEPTED THE FACT THAT THE LD.AO HAS EXAMINED THE I SSUE OF SUPPRESSION OF TURNOVER SHOULD HAVE CONFINED THE SC OPE OF HIS REVISIONAL POWERS TO THE ISSUE WHICH HE HAD QUESTI ONED IN HIS SHOW CAUSE NOTICE RATHER THAN GOING TO THE ISSUE OF VAR IOUS EXPENDITURE WHICH IS NOT AT ALL A SUBJECT MATTER OF PROCEEDINGS U/S 147 OF THE I.T.ACT 1961. AS WE HAVE ALREADY STATED IN EARLIE R PARAGRAPH WHEN AO HIMSELF IS PRECLUDED FROM MAKING ANY OTHER ADDIT IONS IN REASSESSMENT PROCEEDINGS WHEN HE FAILED TO MAKE AD DITIONS ON THE ISSUES ON WHICH REASONS FOR REOPENING OF ASSESSMENT WAS RECORDED THEN CERTAINLY IN OUR CONSIDER VIEW THE LD.PCIT IS ALSO PRECLUDED FROM TAKING THOSE ISSUES IN REVISIONAL PROCEEDINGS U/S 263 OF THE I.T.ACT 1961. FURTHER THE ISSUE OF VARIOUS EXPENS ES QUESTIONED BY THE LD.PCIT WAS EXPLAINED BY THE ASSESSEE DURING TH E ASSESSMENT PROCEEDINGS WITH REFERENCE TO TWO SET OF FINANCIAL STATEMENTS AND THE ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 21 LD. AO HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND C OMPLETED ASSESSMENT WITHOUT MAKING ANY ADDITIONS ON THE ISSU ES. IT IS ALSO A MATTER OF FACT THAT THE TWO SET OF FINANCIAL STATEM ENT HAVE BEEN PREPARED FOR TWO DIFFERENT PERIODS AND THE DIFFEREN CE OF INCOME AND EXPENDITURE RECORDED IN SAID FINANCIAL STATEMENTS H AS BEEN EXPLAINED BEFORE THE LD. AO DURING REASSESSMENT PR OCEEDINGS. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE L D.PCIT WAS INCORRECT IN COMING TO THE CONCLUSION THAT THE LD. AO OUGHT TO HAVE CARRIED OUT NECESSARY ENQUIRIES WITH REGARD TO VARI OUS EXPENDITURE CLAIMED IN TWO SET OF FINANCIAL STATEMENTS AND ALSO THE PROFIT DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION IN COMPARISON WITH AVERAGE PROFITABILITY OF CERTAIN CO MPARABLES FURNISHED BY THE ASSESSEE. WE THEREFORE ARE OF THE OPINION THAT THE LD.PCIT HAS GONE BEYOND THE SCOPE OF HIS REVISIONAL POWERS CONFERRED ON HIM BY THE PROVISION OF SECTION 263 OF THE I.T.ACT 1961. 16. COMING BACK TO THE CASE LAWS RELIED UPON THE LD . AR FOR THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF MALABAR INDUSTRIAL COMPAN Y LIMITED VS CIT (243 ITR 83). WE FIND THAT HONBLE SUPREME COUR T WHILE CONSIDERING ISSUE OF REVISIONAL POWERS OF THE COMMI SSIONER U/S 263 OF THE I.T.ACT 1961 HAS HELD AS UNDER:- THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REV ENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A SSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE. FOR EXAMPLE WHEN AN INCOME-LAX OFFICER ADOPTED CIN E OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF R EVENUE -OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS T AKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE IT CANNOT BE TREATED AS AN CASE ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINAB LE IN LAW. IT HAS BEEN HELD BY THIS COURT THAT WHERE A SUM NOT EARNED BY A PERSON IS ASSESSED AS INCOME IN HIS HANDS ON HIS SO OFFERING ME ORDER PASSED BY THE ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 22 ASSESSING OFFICER ACCEPTING THE SAME AS SUCH WILL B E ERRONEOUS AND PREJUDICE TO THE INTERESTS OF THE REVENUE. RARNPYAR I DEVI SARAOGI V. CLT [1968] 67 ITR 84(SC) AND IN SMT. TARA DEVI AGGARWAL V. CIT[1973] 88ITR 323(SC). IN THE INSTANT THE COMMISSIONER NOTED THAT THE INC OME-TAX OFFICER PASSED THE ORDER OF NIL ASSESSMENT WITHOUT APPLICAT ION OF MIND. INDEED THE HIGH COURT RECORDED THE FINDING THAT THE INCOME -TAX OFFICER FAILED TO APPLY HIS MIND TO THE CASE IN ALL PERSPECTIVE AND T HE ORDER PASSED BY HIM WAS ERRONEOUS. IT APPEARS THAT THE RESOLUTION PASSE D BY THE BOARD OF THE APPELLANT-COMPANY WAS NO! PLACED BEFORE THE ASSESSI NG OFFICER THUS THERE WAS NO MATERIAL TO SUPPORT THE CLAIM OF THE A PPELLANT THAT THE SAID AMOUNT REPRESENTED COMPENSATION FOR LOSS OF AGRICUL TURAL INCOME. HE ACCEPTED THE ENTRY IN THE STATEMENT OF ME ACCOUNT FILED BY THE APPELLANT IN THE ABSENCE OF ANY SUPPORTING MATERIAL AND WITHO UT MAKING ANY INQUIRY ON THESE FACTS THE CONCLUSION THAT THE ORDER OF THE INCOME-LAX OFFICER WAS ERRONEOUS IS IRRESISTIBLE WE ARE THEREFORE OF THE OPINION THAT THE HIGH COURT HAS RIGHTLY HELD THAT THE EXERCISE OF THE JUR ISDICTION BY THE COMMISSIONER UNDER SECTION 263 WAS JUSTIFIED. THE SECOND CONTENTION HAS TO BE REJECTED IN VIEW OF THE FINDING OF FACT RECORDED BY THE HIGH COURT. IT WAS NOT SHOWN AT ANY STAGE OF THE PROCEEDINGS THAT THE AMOUNT IN QUESTION WAS FIXED OR QUANTIFIED A& LOSS OF AGRICULTURAL INCOME AND ADMITTEDLY IT IS NOT SO ROUND BY THE TRIBUNAL. THE FURTHER QUESTION WHETHER IT WILL TIE AGRICULTUR AL INCOME WITHIN THE MEANING OF SECTION 2(1A) OF THE ACT AS ELUCIDATED B Y THIS COURT IN CIT V RAJA BENOY KUMAR SAHAS ROY 11957] 32 ITR 466 DOES NOT ARISE FOR CONSIDERATION. IT IS EVIDENT FROM THE ORDER OF THE HIGH COURT THAT THAT THE FINDINGS RECORDED BY THE TRIBUNAL THAT THE APPELLAN T STOPPED AGRICULTURAL OPERATION IN NOVEMBER. 1982 AND THIS RECEIPT UNDER CONSIDERATION DID NOT RELATE LO ANY AGRICULTURAL OPERATION CARRIED ON BY THE APPELLANT WERE NOT QUESTIONED BEFORE IT. THOUGH WE DO NOT AGREE WITH T HE HIGH COURT THAT THE SAID AMOUNT WAS PAID FOR BREACH O' CONTRACT AS INDE ED IT WAS PAID IN MODIFICATION/RELAXATION OF THE TERMS OF THE CONTRAC T WE HOLD THAT THIS HIGH COURT IS JUSTIFIED M CONCLUDING THAT THE SAID AMOUN T WAS A 'ARABLE RECEIPT UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. 17. THE LD. DR HAS RELIED UPON PLETHORA OF JUDICIAL PRECEDENTS IN SUPPORT OF HIS ARGUMENTS AND ONE SUCH CASE LAW IS T HE DECISION OF HONBLE KOLKATTA HIGH COURT IN THE CASE OF VINOD K UMAR AGGARWAL. WE HAVE GONE THROUGH THE DECISION CITED BY THE LD. DR AND FIND THAT THE DECISION IS ON LIMITED ISSUE AS TO WHETHER ADDI TION COULD BE SUSTAINED WHEN TWO AUDITED BALANCE SHEET WERE FOUND ONE FOR INCOME TAX PURPOSE AND ONE FOR PROCURING LOAN FROM BANKS. IN THE AFOREMENTIONED DECISION THE ASSESSEE DID NOT PROVE THE DUPLICATE ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 23 BALANCE SHEET AS A MISTAKE OR WRONG WHEREAS IN THE PRESENT CASE THE ASSESSEE HAS PROVED WITH NECESSARY EVIDENCES BE FORE THE LD. AO AS WELL AS THE LD.CIT(A) THAT TURNOVER REPORTED IN SECOND SET OF BALANCE SHEET WAS A MISTAKE AND NOT CORRECT BUT TU NOVER REPORTED IN RETURN OF INCOME WAS CORRECT. BUT THE ISSUE IN THE PRESENT CASE IS ALTOGETHER DIFFERENT BECAUSE WHEN SUPPRESSED TURNO VER FOR THE IMPGUNED ASSESSMENT YEAS WAS AN ISSUE OF REOPENING OF ASESSMENT AND ASSESSEE HAD SUBSTANITATED THE SALES TURNOVER REPORTED IN ORIGINAL RETURN OF INCOME WITH TDS AND WORK CONTRACT CERTIFCIATE CAN REVISION PROCEEDINGS BE INITIATED FOR NON EXAMINATION OF EXPENSES AND UNSECURED LOANS WHICH WERE SUBJECT MATTER OF REOPENING. THEREFORE THE CASE LAW CITED BY THE LD. DR IS CLERELY NOT APPLICABLE TO PRESENT CASE. FURTHER THE LD. DR HAS RELIED UPON PLETHORA OF DECISIONS IN WHICH IT WAS STATED THAT I N CASE OF PROPER ENQUIRY IS NOT DONE BY THE LD. AO THEN REVISIONARY JURISDICITONAL CAN BE EXCERCISED U/S 263 OF THE I.T.ACT 1961. THE CAS E LAWS CITED BY THE LD. DR ARE CLEARLY DISTIGUISHIABLE FIRSTLY BY THE FACT THAT THE ISSUE OF SUPPRESSED TURNOVER FOR REOPENING OF ASSESSMENT HAS BEEN ACCEPTED AS NO SUPPRESSION OF TURNOVER BY THE LD. A O AS WELL AS LD.CIT(A) IN VIEW OF JUDGMENTS RELIED BY THE ASSESS EE AS STATED ABOVE IN WHICH IT IS CLEARLY HELD THAT WHEN REAS ON FOR REOPENING DOES NOT STAND THEN NO OTHER ADDITION CAN BE MADE. THE ISSUE IS NOT OF INADEQUTE ENQUIRY IN PRESENT CASE AS THE LD. CIT(A) HERESELF DOES NOT DISAGREE WITH THE FINDINGS OF LD. AO WITH RESPECT TO ISSUE OF SUPRESSED TURNOVER BUT ISSUE IS WHETHER WHEN NO AD DITION TO TAXABLE INCOME IS CONTEMPLATED ON ISSUE OF REOPENING WHETH ER LD.AO ORDER CAN BE HELD TO BE ERRONEOUS FOR HIS NOT HOLDING ENQ UIRY ON ISSUES WHICH WERE NOT SUBJECT MATTER OF REASONS TO BELIEVE FOR REOPENING OF ASSESSMENT. AS WE HAVE ALREADY STATED IN EARLIER P ART OF THIS ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 24 PARAGRAPH THE PCIT HAS CLEARLY EXCEEDED HIS JURISD ICTION CONFERRED UPON HIM UNDER THE PROVISIONS OF SECTION 263 OF THE I.T.ACT 1961 AND HENCE THE CASE LAWS RELIED UPON BY THE LD. DR ARE CLEARLY NOT APPLICABLE TO THE FACTS OF PRESENT CASE. 18. IN THIS VIEW OF THE MATTER AND CONSIDERING FACT S AND CIRCUMSTANCES OF THIS CASE WE ARE OF THE CONSIDERE D VIEW THAT THE LD.PCIT WAS ERRED IN REVISION OF ASSESSMENT ORDER U /S 263 OF THE I.T.ACT 1961 WITHOUT SATISFYING THE CONDITIONS PR ESCRIBED UNDER THE PROVISION OF THE ACT IN ORDER TO INVOKE HIS JURISD ICTION. HENCE WE SET ASIDE THE ORDER OF THE LD.PCIT PASSED U/S 263 OF TH E I.T.ACT 1961 AND RESTORED THE ASSESSMENT ORDER PASSED BY THE LD. AO U/S 143(3) R.W.S.147 OF THE I.T.ACT 1961. 19. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 /02/2020 SD/- (SAKTIJIT DEY) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 28/02/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) MUMBAI. 4. CIT 5. DR ITAT MUMBAI ITA NO.7615/MUM/2019 K.R.CONSTRUCTION 25 BY ORDER (ASSTT. REGISTRAR) ITAT MUMBAI 6. GUARD FILE. //TRUE COPY//