M/S METAL CRAFT INDUSTRIES PVT. LTD.,KOLKATA vs. I.T.O.,WARD-12(3), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA VIRTUAL COURT HEARING (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri Aby T. Varkey, Hon’ble Judicial Member) ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd..................……….............................………………….............Appellant 1B, Elgin Road Kolkata – 700 020 [PAN : AAGCM 6979 D] Vs. Income Tax Officer, Ward-12(3), Kolkata……………………………………..........………..…......Respondent Appearances by: Shri S.M. Surana, Advocate, appeared on behalf of the assessee. Shri Tajider Pal Singh, CIT, D/R, appearing on behalf of the Revenue. Date of concluding the hearing : January 6th, 2021 Date of pronouncing the order : February 10th, 2021 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Principal Commissioner of Income Tax, Kolkata – 4, (hereinafter the “ld. CIT(A)”), passed u/s. 263 of the Income Tax Act, 1961 (the ‘Act’), dt. 11/03/2019, for the Assessment Year 2012-13. 2. The assessee is a company and is in the business of engineering goods. It filed its return of income for the Assessment Year 2012-13 disclosing Nil income. The Assessing Officer passed an order u/s 143(3) of the Act on 27/03/2015 determining the total income of the assessee at Rs.5,15,00,000/-, being addition u/s 68 of the Act, on the ground that the share capital introduced long with premium as unexplained cash credit and further making a disallowance u/s 14A of the Act. 2.1. The ld. Pr. CIT, issued a notice u/s 263 of the Act on 14/03/2016 asking the assessee company to showcause why the assessment made u/s 143(3) of the Act on 27/03/2015 should not be revised u/s 263 of the Act. The assessee gave a detailed reply. After considering this reply, the ld. Pr. CIT passed an order u/s 263 of the Act, holding as follows:- “Considering the facts and circumstances of case as discussed above and as per submission of assessee, the assessment order was passed without making inquiries or verifications which should have been made and therefore the order passed on 21.03.2015 stands erroneous in so far as prejudicial to the interest of revenue and is set aside denovo with a direction to AO to carry out proper examination of books of accounts and Bank accounts of assessee as well as investors. A.O. is also directed to examine the source of share application, identity of investor and its genuineness.

2 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. The assessment proceedings may be initiated at the earliest and to be The assessment proceedings may be initiated at the earliest and to be The assessment proceedings may be initiated at the earliest and to be completed without waiting time barring date. The A.O. must provide sufficient completed without waiting time barring date. The A.O. must provide sufficient completed without waiting time barring date. The A.O. must provide sufficient opportunity of being heard to the assessee in order to meet natural justice, equity and ing heard to the assessee in order to meet natural justice, equity and ing heard to the assessee in order to meet natural justice, equity and fairness.” 2.1.1. The Assessing Officer The Assessing Officer passed a fresh order u/s 263/143(3) of the Act on passed a fresh order u/s 263/143(3) of the Act on 13/05/2016. The Assessing Officer 13/05/2016. The Assessing Officer assessed the total income at Rs.1,55,560/ 1,55,560/-. 2.2. The ld. Pr. CIT issued another CIT issued another showcause notice u/s 263 of the Act on 16/01/2019 showcause notice u/s 263 of the Act on 16/01/2019 proposing to revise the second assessment order passed u/s 263/143(3) of the Act, dt. proposing to revise the second assessment order passed u/s 263/143(3) of the Act, dt. proposing to revise the second assessment order passed u/s 263/143(3) of the Act, dt. 13/05/2016. After receiving the reply of the assessee, the ld. Pr. CIT, passed a second 263 13/05/2016. After receiving the reply of the assessee, the ld. Pr. CIT, passed a second 263 13/05/2016. After receiving the reply of the assessee, the ld. Pr. CIT, passed a second 263 order on 11/03/2019. In this order, at para 7, he held as follows: 11/03/2019. In this order, at para 7, he held as follows:- “7. I have carefully considered the submission of the assessee and perused the “7. I have carefully considered the submission of the assessee and perused the “7. I have carefully considered the submission of the assessee and perused the material available on record and found that the issue pointed out in the show cause material available on record and found that the issue pointed out in the show cause material available on record and found that the issue pointed out in the show cause needs verification. After having considered the position of law and facts and needs verification. After having considered the position of law and facts and needs verification. After having considered the position of law and facts and circumstances of the instant case, I am of the considered opinion that the f the instant case, I am of the considered opinion that the f the instant case, I am of the considered opinion that the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the assessment order passed by the A.O. is erroneous in so far as it is prejudicial to the interest of revenue in accordance with the Explanation 2(e) below section 263 (1) interest of revenue in accordance with the Explanation 2(e) below section 263 (1) interest of revenue in accordance with the Explanation 2(e) below section 263 (1) of the Act on the ground of of the Act on the ground of lack of enquiry. Accordingly, the assessment made by the lack of enquiry. Accordingly, the assessment made by the Assessing officer is set aside on the issue as outlined in para 2 above. The A.O. is Assessing officer is set aside on the issue as outlined in para 2 above. The A.O. is Assessing officer is set aside on the issue as outlined in para 2 above. The A.O. is directed to provide reasonable opportunity to the assessee company to produce directed to provide reasonable opportunity to the assessee company to produce directed to provide reasonable opportunity to the assessee company to produce documents & evidences which it may documents & evidences which it may choose to rely upon for substantiating it’s own choose to rely upon for substantiating it’s own claim. The AO is further directed to adjudicate the said issue de novo and pass a claim. The AO is further directed to adjudicate the said issue de novo and pass a claim. The AO is further directed to adjudicate the said issue de novo and pass a fresh assessment order in accordance with the relevant provisions of law.” fresh assessment order in accordance with the relevant provisions of law.” fresh assessment order in accordance with the relevant provisions of law.” 3. Aggrieved the assessee is in appeal before us. Aggrieved the assessee is in appeal before us. 4. The ld. Counsel for the assessee, Mr. S.M. Surana, submitted that the Assessing The ld. Counsel for the assessee, Mr. S.M. Surana, submitted that the Assessing The ld. Counsel for the assessee, Mr. S.M. Surana, submitted that the Assessing Officer has, in his second assessment order passed u/s 143(3)/263 of the Act, followed Officer has, in his second assessment order passed u/s 143(3)/263 of the Act, followed Officer has, in his second assessment order passed u/s 143(3)/263 of the Act, followed the directions given by the ld. Pr. CIT, in his order passed u/s 263 of the Act, dt. the directions given by the ld. Pr. CIT, in his order passed u/s 263 of the Act, dt. the directions given by the ld. Pr. CIT, in his order passed u/s 263 of the Act, dt. 31/03/2016 [first revisionary order]. He submitted that the Assessing Officer is bound /03/2016 [first revisionary order]. He submitted that the Assessing Officer is bound /03/2016 [first revisionary order]. He submitted that the Assessing Officer is bound by the directions of the ld. Pr. CIT by the directions of the ld. Pr. CIT’s order u/s 263 of the Act and that he could not have ’s order u/s 263 of the Act and that he could not have gone beyond these directions. He filed a paper book running into 256 pages and d gone beyond these directions. He filed a paper book running into 256 pages and d gone beyond these directions. He filed a paper book running into 256 pages and drew the attention of this Bench to the notice issued by the Assessing Officer u/s 142(1) of the attention of this Bench to the notice issued by the Assessing Officer u/s 142(1) of the attention of this Bench to the notice issued by the Assessing Officer u/s 142(1) of the Act on 04/04/2016, during the course of the second round of assessment the Act on 04/04/2016, during the course of the second round of assessment the Act on 04/04/2016, during the course of the second round of assessment proceedings and the reply filed by the assessee along with details on 12/04/2016. He proceedings and the reply filed by the assessee along with details on 12/04/2016. He proceedings and the reply filed by the assessee along with details on 12/04/2016. He pointed out that the Assessing Officer directed the assessee to produce the directors of ted out that the Assessing Officer directed the assessee to produce the directors of ted out that the Assessing Officer directed the assessee to produce the directors of the assessee company and that they had appeared before the Assessing Officer and that they had appeared before the Assessing Officer and that they had appeared before the Assessing Officer. He further pointed out that the Assessing Officer issued summons issued u/s 131 of the Act further pointed out that the Assessing Officer issued summons issued u/s 131 of the Act further pointed out that the Assessing Officer issued summons issued u/s 131 of the Act to the directors of the share applicant companies and the directors of the share applicant companies and submitted that all submitted that all the directors of the share applicant companies had appeared before the Assessing Officer in response to the share applicant companies had appeared before the Assessing Officer in response to the share applicant companies had appeared before the Assessing Officer in response to

3 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. these summons and that the that the statements of all these persons were recorded on oath. were recorded on oath. He took his Bench through the copies of the statements recorded on oath, which are at page took his Bench through the copies of the statements recorded on oath, which are at page took his Bench through the copies of the statements recorded on oath, which are at page 173 to 209 of the paper book 173 to 209 of the paper book as well as the documents filed and as well as the documents filed and argued that the Assessing Officer considered all the evidences filed before him and after detailed Assessing Officer considered all the evidences filed before him and after detailed Assessing Officer considered all the evidences filed before him and after detailed examination and investigation evidences, has taken a plausible view and not made any xamination and investigation evidences, has taken a plausible view and not made any xamination and investigation evidences, has taken a plausible view and not made any addition u/s 68 of the Act. 4.1. He referred to the impugned second order passed u/s 263 of the Act and He referred to the impugned second order passed u/s 263 of the Act and He referred to the impugned second order passed u/s 263 of the Act and submitted that nowhere in this order passed u/s 263 of the Act, the submitted that nowhere in this order passed u/s 263 of the Act, the submitted that nowhere in this order passed u/s 263 of the Act, the ld. Pr. CIT stated that the directions given in the first ons given in the first order passed u/s 263 of the Act, were not followed. were not followed. He referred to para 7 of the order passed u/s 263 of the Act dt. 11/03/2019 [second He referred to para 7 of the order passed u/s 263 of the Act dt. 11/03/2019 [second He referred to para 7 of the order passed u/s 263 of the Act dt. 11/03/2019 [second revisionary order] and pointed out that the and pointed out that the ld. Pr. CIT states that cash credits need that cash credits need verification. He argued that this is not a verification. He argued that this is not a legally permissible ground for invoking powers ground for invoking powers u/s 263 of the Act. He further points out that the u/s 263 of the Act. He further points out that the ground on which the revision has on which the revision has taken place is “lack of enquiry” and that this taken place is “lack of enquiry” and that this aspect is factually incorrect is factually incorrect as the Assessing Officer had conducted through enquiry Assessing Officer had conducted through enquiry. He submitted that the ld. Pr. CIT has . He submitted that the ld. Pr. CIT has not pointed out any error in the order passed u/s 143(3)/263 of the Act on 13/05/2016 not pointed out any error in the order passed u/s 143(3)/263 of the Act on 13/05/2016 not pointed out any error in the order passed u/s 143(3)/263 of the Act on 13/05/2016 and under these circumstances, the order passed by t and under these circumstances, the order passed by the ld. Pr. CIT on 11/03/2019 is he ld. Pr. CIT on 11/03/2019 is bad in law. Coming to explanation bad in law. Coming to explanation to sub-Section (1) of Section 263 of the Act, he Section (1) of Section 263 of the Act, he submitted that there is no direction by the CBDT which had not been followed by the is no direction by the CBDT which had not been followed by the is no direction by the CBDT which had not been followed by the Assessing Officer issued u/s 119 of the Act, and hence, t Assessing Officer issued u/s 119 of the Act, and hence, the ld. Pr. CIT is wrong in he ld. Pr. CIT is wrong in invoking the same. The ld. Counsel for the assessee submitted that on identical issues, invoking the same. The ld. Counsel for the assessee submitted that on identical issues, invoking the same. The ld. Counsel for the assessee submitted that on identical issues, this Bench of the Tribunal has adjudicated the issue in favour of the assessee in the this Bench of the Tribunal has adjudicated the issue in favour of the assessee in the this Bench of the Tribunal has adjudicated the issue in favour of the assessee in the following cases:-  Omkar Infracom Omkar Infracom (P) Ltd. vs. ITO in ITA No. 896/Kol/2019, dt. 18/03/2020 (P) Ltd. vs. ITO in ITA No. 896/Kol/2019, dt. 18/03/2020  Intent Dealers Pvt. Ltd. v. ITO in ITA No. 2179/Kol/2019, dt. 20/03/2020 Intent Dealers Pvt. Ltd. v. ITO in ITA No. 2179/Kol/2019, dt. 20/03/2020 Intent Dealers Pvt. Ltd. v. ITO in ITA No. 2179/Kol/2019, dt. 20/03/2020  Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020 Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020 Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020 4.1.1. He further relied on the judgment of the He further relied on the judgment of the Hon’ble Delhi High Court in the case of Hon’ble Delhi High Court in the case of CIT vs. K.L. Ahuja reported in reported in [2001] 250 ITR 763 (Delhi) for the proposition for the proposition that when the ITO passes an order, not on his own discretion or wisdom but not on his own discretion or wisdom but, , by following the directions of the Commissioner of Income Tax, directions of the Commissioner of Income Tax, then, such order cannot be held as then, such order cannot be held as erroneous or prejudicial to the interest of the revenue because, it would in fact amount erroneous or prejudicial to the interest of the revenue because, it would in fact amount erroneous or prejudicial to the interest of the revenue because, it would in fact amount

4 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. to reviewing the predecessors order which is not permissible u/s 263 of the Act. He to reviewing the predecessors order which is not permissible u/s 263 of the Act. He to reviewing the predecessors order which is not permissible u/s 263 of the Act. He prayed for relied. 5. The ld. D/R, Mr. Tajinde The ld. D/R, Mr. Tajinder Pal Singh, opposed the contentions of the assessee and r Pal Singh, opposed the contentions of the assessee and submitted that the assessment order passed by the Assessing Officer u/s 263/143(3) of submitted that the assessment order passed by the Assessing Officer u/s 263/143(3) of submitted that the assessment order passed by the Assessing Officer u/s 263/143(3) of the Act on 13/05/2016, is cryptic which runs into three pages. He submitted that the the Act on 13/05/2016, is cryptic which runs into three pages. He submitted that the the Act on 13/05/2016, is cryptic which runs into three pages. He submitted that the Assessing Officer passed the Assessing Officer passed the order without carrying out investigations and verification order without carrying out investigations and verification as pointed out by the ld. Pr. CIT. He submitted that the Assessing Officer failed to as pointed out by the ld. Pr. CIT. He submitted that the Assessing Officer failed to as pointed out by the ld. Pr. CIT. He submitted that the Assessing Officer failed to examine the net worth of shareholders in order to see the justifiability of such huge examine the net worth of shareholders in order to see the justifiability of such huge examine the net worth of shareholders in order to see the justifiability of such huge investment and admitted that the quantum of share premium raised by the assessee hat the quantum of share premium raised by the assessee hat the quantum of share premium raised by the assessee company has not been examined. He took this Bench through para 4.5. of the order of company has not been examined. He took this Bench through para 4.5. of the order of company has not been examined. He took this Bench through para 4.5. of the order of the ld. Pr. CIT and relied on the observations made therein and argued that the ld. Pr. CIT and relied on the observations made therein and argued that the ld. Pr. CIT and relied on the observations made therein and argued that, on facts it is evident that the order passed u/s 263/143(3) of the Act on 13/05/2016 suffers from passed u/s 263/143(3) of the Act on 13/05/2016 suffers from passed u/s 263/143(3) of the Act on 13/05/2016 suffers from lack of enquiry and hence erroneous and prejudicial to the interest of the revenue. lack of enquiry and hence erroneous and prejudicial to the interest of the revenue. lack of enquiry and hence erroneous and prejudicial to the interest of the revenue. 5.1. He further relied on the decision of the Hon’ble Supreme Court in the case of He further relied on the decision of the Hon’ble Supreme Court in the case of He further relied on the decision of the Hon’ble Supreme Court in the case of Pr. CIT vs. NRA Iron and Steel Pvt. Ltd. CIT vs. NRA Iron and Steel Pvt. Ltd. [2019] 103 taxmann.com 48 (SC) and submitted that and submitted that the Hon’ble Supreme Court has noticed the practice of conversion of unaccounted the Hon’ble Supreme Court has noticed the practice of conversion of unaccounted the Hon’ble Supreme Court has noticed the practice of conversion of unaccounted money through the allotment allotment of share capital at premium and that this requires carefu premium and that this requires careful scrutiny. He referred to the various case scrutiny. He referred to the various case-law relied upon by the ld. Pr. CIT in the law relied upon by the ld. Pr. CIT in the impugned order passed u/s 263 of the Act and submitted that impugned order passed u/s 263 of the Act and submitted that impugned order passed u/s 263 of the Act and submitted that, applying the propositions of law laid down in these case propositions of law laid down in these case-law to the facts of the case on hand, the law to the facts of the case on hand, the order of the ld. Pr. CIT holding that the assessment order passed on 13/05/2016 u/s he ld. Pr. CIT holding that the assessment order passed on 13/05/2016 u/s he ld. Pr. CIT holding that the assessment order passed on 13/05/2016 u/s 143/263 of the Act is erroneous insofar as it is prejudicial to the interest of the revenue 143/263 of the Act is erroneous insofar as it is prejudicial to the interest of the revenue 143/263 of the Act is erroneous insofar as it is prejudicial to the interest of the revenue has to upheld. He pleaded that the impugned has to upheld. He pleaded that the impugned order of the ld. Pr. CIT be upheld. order of the ld. Pr. CIT be upheld. 5.2. In reply, the ld. Counsel for the assessee submitted that the judgment of the eply, the ld. Counsel for the assessee submitted that the judgment of the eply, the ld. Counsel for the assessee submitted that the judgment of the Hon’ble Supreme Court in the case of Hon’ble Supreme Court in the case of NRA Iron and Steel Pvt. Ltd. (supra) NRA Iron and Steel Pvt. Ltd. (supra), does not apply as in the facts of that case, are different as in the facts of that case, are different from the facts of the case of the assessee from the facts of the case of the assessee. He submitted that, the shareholder companies were not traceable and have not responded ubmitted that, the shareholder companies were not traceable and have not responded ubmitted that, the shareholder companies were not traceable and have not responded to the notice issues to them, in the case of them, in the case of NRA Iron and Steel Pvt. Ltd. (supra) NRA Iron and Steel Pvt. Ltd. (supra) and whereas in this case of the assessee company, the of the assessee company, the directors of the share holding directors of the share holding companies had appeared before the Assessing Officer and the Assessing Officer companies had appeared before the Assessing Officer and the Assessing Officer companies had appeared before the Assessing Officer and the Assessing Officer recorded their statements on oath and all details called for by the Assessing Officer recorded their statements on oath and all details called for by the Assessing Officer recorded their statements on oath and all details called for by the Assessing Officer

5 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. were filed by the share holding companies were filed by the share holding companies, as well as the assessee company. sessee company. He also distinguished the case law relied upon by the ld. D/R distinguished the case law relied upon by the ld. D/R 6. We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: as case law cited, we hold as follows:- 7. In the order passed u/s 263 of the Act, on 11/03/2019, the ld. Pr. CIT, made In the order passed u/s 263 of the Act, on 11/03/2019, the ld. Pr. CIT, made In the order passed u/s 263 of the Act, on 11/03/2019, the ld. Pr. CIT, made certain observations. Some of these are certain observations. Some of these are listed point wise. a) Assessing Officer has failed to examine the net worth of shareholders in or Assessing Officer has failed to examine the net worth of shareholders in or Assessing Officer has failed to examine the net worth of shareholders in order to see the justifiability of such huge investment . see the justifiability of such huge investment . b) Quantum of share premium raised by the assessee company has not been Quantum of share premium raised by the assessee company has not been Quantum of share premium raised by the assessee company has not been examined by analysing the net worth of the investments from their balance examined by analysing the net worth of the investments from their balance examined by analysing the net worth of the investments from their balance sheets. c) Assessing Officer failed to examine the reason f Assessing Officer failed to examine the reason for charging such huge share or charging such huge share premium. d) Assessing Officer has merely accepted the submissions of the assessee without Assessing Officer has merely accepted the submissions of the assessee without Assessing Officer has merely accepted the submissions of the assessee without making detailed investigations, verification making detailed investigations, verifications/ independent enquiry regarding the s/ independent enquiry regarding the identity, creditworthiness of the shareholders and also the identity, creditworthiness of the shareholders and also the genuineness of the genuineness of the transactions related to the share capital. transactions related to the share capital. e) Assessing Officer has failed to examine the directors on oath regarding the Assessing Officer has failed to examine the directors on oath regarding the Assessing Officer has failed to examine the directors on oath regarding the genuineness of controlling interest. genuineness of controlling interest. f) Assessing Officer has failed to examine the bank statements to trace out the Assessing Officer has failed to examine the bank statements to trace out the Assessing Officer has failed to examine the bank statements to trace out the money trail to ascertain the genuineness of the source of funds invested by the y trail to ascertain the genuineness of the source of funds invested by the y trail to ascertain the genuineness of the source of funds invested by the shareholders. g) The assessment order passed on 13/05/2016 suffers from “lack of enquiry”. He The assessment order passed on 13/05/2016 suffers from “lack of enquiry”. He The assessment order passed on 13/05/2016 suffers from “lack of enquiry”. He Assessing Officer could have made kaleidoscopic investigation by extending his Assessing Officer could have made kaleidoscopic investigation by extending his Assessing Officer could have made kaleidoscopic investigation by extending his scope of enquiry of of the shareholders to ascertain the genuineness of the the shareholders to ascertain the genuineness of the transactions. But the same was not done. transactions. But the same was not done. h) The investigations of the Assessing Officer remained half cooked. The investigations of the Assessing Officer remained half cooked. The investigations of the Assessing Officer remained half cooked. i) The Assessing Officer has merely accepted the contention of the assessee and The Assessing Officer has merely accepted the contention of the assessee and The Assessing Officer has merely accepted the contention of the assessee and conducted enquiry for legally sustainable adjudication. enquiry for legally sustainable adjudication. j) Details, documents, available in the assessment records were not examined Details, documents, available in the assessment records were not examined Details, documents, available in the assessment records were not examined judiciously.

6 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. 7.1. Thereafter, he referred to a number of case Thereafter, he referred to a number of case-law and thereafter at para 5 to 5.3. law and thereafter at para 5 to 5.3. held as follows:- “

7 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd.

7.2. A perusal of para 5.3., demonstrates that the ld. Pr. CIT was of the view that any A perusal of para 5.3., demonstrates that the ld. Pr. CIT was of the view that any A perusal of para 5.3., demonstrates that the ld. Pr. CIT was of the view that any order passed subsequent to an order passed u/s 263 of the Act, must be in favour of the order passed subsequent to an order passed u/s 263 of the Act, must be in favour of the order passed subsequent to an order passed u/s 263 of the Act, must be in favour of the revenue. This is an erroneous conclusion. This is an erroneous conclusion. This observation is not legal. This observation is not legal. When the assessment order is set aside by the ld. Pr. CIT u/s 263 of the Act, for assessment order is set aside by the ld. Pr. CIT u/s 263 of the Act, for assessment order is set aside by the ld. Pr. CIT u/s 263 of the Act, for de novo assessment, it does not mean that the assessment order passed consequent to such 263 assessment, it does not mean that the assessment order passed consequent to such 263 assessment, it does not mean that the assessment order passed consequent to such 263 order has to have an addition. I order has to have an addition. If such is the case, the ld. Pr. CIT himself should have case, the ld. Pr. CIT himself should have directed an addition after examining the records. directed an addition after examining the records. The entire findings of the ld. Pr. CIT as analyzed above demonstrates that he does The entire findings of the ld. Pr. CIT as analyzed above demonstrates that he does The entire findings of the ld. Pr. CIT as analyzed above demonstrates that he does not agree with the view taken by the Assessing Officer. This is not a case of lack of not agree with the view taken by the Assessing Officer. This is not a case of lack of not agree with the view taken by the Assessing Officer. This is not a case of lack of enquiry/investigation. In fact, the enquiry/investigation. In fact, the Assessing Officer had held independent enquiries by Assessing Officer had held independent enquiries by issuing summons u/s 131 of the Act to the directors of the assessee company as well as issuing summons u/s 131 of the Act to the directors of the assessee company as well as issuing summons u/s 131 of the Act to the directors of the assessee company as well as to the directors of the share holder companies. Representatives of the share applicant to the directors of the share holder companies. Representatives of the share applicant to the directors of the share holder companies. Representatives of the share applicant companies have appeared befor companies have appeared before the Assessing Officer and they were examined on oath. e the Assessing Officer and they were examined on oath. All the statements recorded by the Assessing Officer from these All the statements recorded by the Assessing Officer from these persons persons are filed as part of the paper book. 8. In the first round of the 263 proceedings, the then ld. Pr. CIT in the order dt. In the first round of the 263 proceedings, the then ld. Pr. CIT in the order dt. In the first round of the 263 proceedings, the then ld. Pr. CIT in the order dt. 22/03/2016, gave the following directions: 2016, gave the following directions:- a) The Assessing Officer shall carry out proper examination of the books of The Assessing Officer shall carry out proper examination of the books of The Assessing Officer shall carry out proper examination of the books of accounts including the bank account of the assessee accounts including the bank account of the assessee company, company, as well as that of the investor companies. the investor companies. b) The Assessing Officer The Assessing Officer is directed to examine the source of mine the source of share application money money, identity, creditworthiness of invest , identity, creditworthiness of investors and directed that the assessment proceedings the assessment proceedings are to be initiated immediately without initiated immediately without wasting time In compliance of these directions, the Assessing Officer in the impugned o In compliance of these directions, the Assessing Officer in the impugned o In compliance of these directions, the Assessing Officer in the impugned order states as follows:-

8 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. “As per the direction of the Pr. Commissioner of Income Tax “As per the direction of the Pr. Commissioner of Income Tax “As per the direction of the Pr. Commissioner of Income Tax-4, Kolkata, the following enquires were conducted following enquires were conducted- a) The amount of share capital including premium was received from various a) The amount of share capital including premium was received from various a) The amount of share capital including premium was received from various Companies. b) Summons u/s 1.31 were issued b) Summons u/s 1.31 were issued to the director, Mr. Sanjay Kr. Todi of the to the director, Mr. Sanjay Kr. Todi of the assessee company and their statements were recorded on oath. assessee company and their statements were recorded on oath. assessee company and their statements were recorded on oath. c) Director of the assessee company was also directed in the summon issued to c) Director of the assessee company was also directed in the summon issued to c) Director of the assessee company was also directed in the summon issued to produce directors ·of the share applicant companies to record their produce directors ·of the share applicant companies to record their produce directors ·of the share applicant companies to record their statements. d) Directors of the thirteen share applicant companies from whom share d) Directors of the thirteen share applicant companies from whom share d) Directors of the thirteen share applicant companies from whom share application money was received along with share premium appeared and application money was received along with share premium appeared and application money was received along with share premium appeared and recorded their statements under oath. recorded their statements under oath. e) Details with supporting evidences in relation to the share applic e) Details with supporting evidences in relation to the share applic e) Details with supporting evidences in relation to the share applicant companies were duly furnished by the directors of the respective share companies were duly furnished by the directors of the respective share companies were duly furnished by the directors of the respective share applicant companies. The source of the share applicants were duly cross applicant companies. The source of the share applicants were duly cross applicant companies. The source of the share applicants were duly cross checked with the bank statement and verified. checked with the bank statement and verified. f) Details of the fixed asset with supporting were checked with f) Details of the fixed asset with supporting were checked with f) Details of the fixed asset with supporting were checked with the audited books of accounts and trade payable are mainly related to the fixed assets only. books of accounts and trade payable are mainly related to the fixed assets only. books of accounts and trade payable are mainly related to the fixed assets only. The information and evidences collected through the above enquiries The information and evidences collected through the above enquiries The information and evidences collected through the above enquiries as well as the statements recorded on oath of the director and the directors of as well as the statements recorded on oath of the director and the directors of as well as the statements recorded on oath of the director and the directors of the Share Applicant companies were examined carefully and placed on Applicant companies were examined carefully and placed on Applicant companies were examined carefully and placed on record.” 8.1. A perusal of the above shows that the Assessing Officer had carried out the A perusal of the above shows that the Assessing Officer had carried out the A perusal of the above shows that the Assessing Officer had carried out the directions issued to him u/s 263 of the Act directions issued to him u/s 263 of the Act by the ld. Pr. CIT and then only by the ld. Pr. CIT and then only completed the assessment. Just because the Assessing Officer has not drawn because the Assessing Officer has not drawn conclusions, which as conclusions, which as per the ld. Pr. CIT should have been drawn, it does not make the assessment erroneous per the ld. Pr. CIT should have been drawn, it does not make the assessment erroneous per the ld. Pr. CIT should have been drawn, it does not make the assessment erroneous to the extent it is prejudicial to the interest of the revenue. to the extent it is prejudicial to the interest of the revenue. 9. We find that this Bench of the Tribu We find that this Bench of the Tribunal, has under identical circumstances and nal, has under identical circumstances and identical facts, in the case of identical facts, in the case of Amritrashi Infra Private Ltd. (supra) where the ld. Pr. CIT where the ld. Pr. CIT had passed a second order u/s 263 of the Act, held as follows: had passed a second order u/s 263 of the Act, held as follows:- “46. In the light of the afore In the light of the afore-cited judicial precedents, let us examine the case in precedents, let us examine the case in hand and find out whether pursuant to the specific direction of First Ld. Pr. CIT, the hand and find out whether pursuant to the specific direction of First Ld. Pr. CIT, the hand and find out whether pursuant to the specific direction of First Ld. Pr. CIT, the second AO has discharged his role as an investigator in respect of share capital and second AO has discharged his role as an investigator in respect of share capital and second AO has discharged his role as an investigator in respect of share capital and premium collected by the assessee or whether premium collected by the assessee or whether the AO failed to enquire on this issue and the AO failed to enquire on this issue and whether his re-assessment/second assessment order is a plausible view or it can be assessment/second assessment order is a plausible view or it can be assessment/second assessment order is a plausible view or it can be termed as an unsustainable view in law. We on a conjoint reading of the First termed as an unsustainable view in law. We on a conjoint reading of the First termed as an unsustainable view in law. We on a conjoint reading of the First Revisional Order of the First Pr. CIT dated 23.08.20 Revisional Order of the First Pr. CIT dated 23.08.2016 and the reassessment /Second 16 and the reassessment /Second assessment of the AO dated 07.12.2016, the following facts can be discerned: assessment of the AO dated 07.12.2016, the following facts can be discerned: assessment of the AO dated 07.12.2016, the following facts can be discerned:-

(a)The First Ld. Pr. CIT has recorded a finding after perusal of the first (a)The First Ld. Pr. CIT has recorded a finding after perusal of the first (a)The First Ld. Pr. CIT has recorded a finding after perusal of the first assessment records/folder that during the first round of scrutiny pro assessment records/folder that during the first round of scrutiny pro assessment records/folder that during the first round of scrutiny proceeding, the assessee company produced the following documents before the first AO in the original assessee company produced the following documents before the first AO in the original assessee company produced the following documents before the first AO in the original

9 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. assessment to satisfy the AO in respect of identity, creditworthiness and genuineous of assessment to satisfy the AO in respect of identity, creditworthiness and genuineous of assessment to satisfy the AO in respect of identity, creditworthiness and genuineous of share subscribers:- (i) audited financial statements; audited financial statements; (ii) copy of Form filed copy of Form filed with the ROC; (iii) copy of PAN Card of the assessee company; copy of PAN Card of the assessee company; (iv) details and copy of share applicants; details and copy of share applicants; (v) bank statement reflecting the transaction; bank statement reflecting the transaction; (vi) records relating to investors in order to establish identity, genuineness records relating to investors in order to establish identity, genuineness records relating to investors in order to establish identity, genuineness and creditworthiness of the share subscribers and creditworthiness of the share subscribers. 47. We note that the First Ld. Pr. CIT in his first revisional order, found that AO in We note that the First Ld. Pr. CIT in his first revisional order, found that AO in We note that the First Ld. Pr. CIT in his first revisional order, found that AO in the first assessment proceedings though has been provided with the aforesaid the first assessment proceedings though has been provided with the aforesaid the first assessment proceedings though has been provided with the aforesaid documents has not examined these documents, which according to him, should have documents has not examined these documents, which according to him, should have documents has not examined these documents, which according to him, should have been carried out by the AO. The First Ld. Pr. CIT at para (4) of his first revisional order rried out by the AO. The First Ld. Pr. CIT at para (4) of his first revisional order rried out by the AO. The First Ld. Pr. CIT at para (4) of his first revisional order has clearly made a finding that “ From the above discussion it is evident that the has clearly made a finding that “ From the above discussion it is evident that the has clearly made a finding that “ From the above discussion it is evident that the assessment proceedings in the case of assessee was completed in a very casual manner assessment proceedings in the case of assessee was completed in a very casual manner assessment proceedings in the case of assessee was completed in a very casual manner and hurried manner flouting all established procedures. and hurried manner flouting all established procedures. The assessee had discharged The assessee had discharged its onus by furnishing/documents before the AO its onus by furnishing/documents before the AO.”Further, the First Ld. Pr. CIT mainly .”Further, the First Ld. Pr. CIT mainly found fault with the AO’s order for non found fault with the AO’s order for non-issuance of notice u/s. 133(6) of the Act to issuance of notice u/s. 133(6) of the Act to the shareholders. The First Ld. Pr. CIT found fault with the AO’ s order in not discussing the shareholders. The First Ld. Pr. CIT found fault with the AO’ s order in not discussing the shareholders. The First Ld. Pr. CIT found fault with the AO’ s order in not discussing the basis of evidence on which adverse inference was drawn against the assessee. basis of evidence on which adverse inference was drawn against the assessee. basis of evidence on which adverse inference was drawn against the assessee. Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to exami Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to exami Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the contention of the assessee or to bring on record anything against the assessee and thus contention of the assessee or to bring on record anything against the assessee and thus contention of the assessee or to bring on record anything against the assessee and thus according to him, the AO with a pre according to him, the AO with a pre-determined mind has simply jumped to the determined mind has simply jumped to the conclusion that the share capital collected by assessee as unexplained cash credit u conclusion that the share capital collected by assessee as unexplained cash credit u conclusion that the share capital collected by assessee as unexplained cash credit u/s. 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment order framed u/s. 143(3) of the Act dated 26 order framed u/s. 143(3) of the Act dated 26-03-2015 was against the principle of 2015 was against the principle of natural justice and, therefore, he found it fit to order denovo assessment and natural justice and, therefore, he found it fit to order denovo assessment and natural justice and, therefore, he found it fit to order denovo assessment and gave specific direction in respect of share capital & premium collected by assessee. specific direction in respect of share capital & premium collected by assessee. specific direction in respect of share capital & premium collected by assessee.

10 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd.

Sl. Name of company CIN PAN ITR filed No for AY . 2012-13 1. M/s. K. R. Overseas Pvt. Ltd. M/s. K. R. Overseas Pvt. Ltd. U51109WB1994PTC061965 AACCK0101B AACCK0101B yes 2. M/s. Kakrania Trading Pvt. M/s. Kakrania Trading Pvt. U70101WB1994PTC062137 AABCK151611 AABCK151611 yes Ltd. 3. M/s. AmbalaTrafin Pvt. Ltd. M/s. AmbalaTrafin Pvt. Ltd. U67120WB1995PTCO74397 AACCA1184G AACCA1184G yes 4. M/s. Subhiksha Pvt. Ltd. U52190WB2011PTC157073 AAPCS2068E AAPCS2068E yes 5. M/s. Shivarshi Construction M/s. Shivarshi Construction U45400WB2011PTC170957 AAQCS7848M AAQCS7848M yes Pvt. Ltd. 6. M/s. Shivashiv Pvt. Ltd. U74999WB2012PTC 173749 AARCS0094C AARCS0094C yes 7. M/s. Flowtop Agency Pvt. Ltd. M/s. Flowtop Agency Pvt. Ltd. U52190WB2012PTC 173352 AABCF9036D AABCF9036D yes 8. M/s. SukhSagar Residency M/s. SukhSagar Residency U45400WB2011PTC170958 AARCS1553N AARCS1553N yes Pvt. Ltd. 9. M/s. Kamaldhan Developers M/s. Kamaldhan Developers U45400WB2011PTC170944 AAECK6810D AAECK6810D yes Pvt. Ltd. 10 M/s. LabhdhanImpex Pvt. Ltd. M/s. LabhdhanImpex Pvt. Ltd. U51909WB2011PTC171524 AACCL2111J AACCL2111J yes . 11 M/s. SubhsreeImpex Pvt. Ltd. SubhsreeImpex Pvt. Ltd. U51909WB2011PTC171513 AARCS1845D AARCS1845D yes . 12 M/s. M/s. Maharaja Maharaja Merchants Merchants U51109WB2005PTC102343 AAECM224E AAECM224E yes . Pvt. Ltd. 13 M/s. Sristi Sales Pvt. Ltd. U51109WB2005PTC102121 AAICS8900L AAICS8900L yes .

v) The AO to complete the assessment at the The AO to complete the assessment at the earliest without waiting for the time earliest without waiting for the time barring date. 50. In the second round before the AO for de novo re In the second round before the AO for de novo re-assessment, the second AO as assessment, the second AO as per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment proceeding. As per the specific proceeding. As per the specific direction of Ld. First Pr. CIT, the Second AO firstly direction of Ld. First Pr. CIT, the Second AO firstly summoned the director of the assessee company Shri NavinTahin before him, who duly summoned the director of the assessee company Shri NavinTahin before him, who duly summoned the director of the assessee company Shri NavinTahin before him, who duly appeared and produced the books of account on 01.12.2016 and furnished the relevant appeared and produced the books of account on 01.12.2016 and furnished the relevant appeared and produced the books of account on 01.12.2016 and furnished the relevant details viz., (i) copy of ITR, (ii) details viz., (i) copy of ITR, (ii) audited accounts, (iii) details of directors, (iv) the audited accounts, (iii) details of directors, (iv) the details of the share-applicants, (v) details of business activity, (vi) details of increase in applicants, (v) details of business activity, (vi) details of increase in applicants, (v) details of business activity, (vi) details of increase in share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment through banking transaction, which fact the AO has acknowledged in the reassessment nsaction, which fact the AO has acknowledged in the reassessment nsaction, which fact the AO has acknowledged in the reassessment order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after perusal of original assessment records that assessee in the first round before AO has perusal of original assessment records that assessee in the first round before AO has perusal of original assessment records that assessee in the first round before AO has produced PAN,ROC details, audited financial statements, details and copy of share OC details, audited financial statements, details and copy of share OC details, audited financial statements, details and copy of share applicants, bank statements reflecting the transaction, records relating to investors to applicants, bank statements reflecting the transaction, records relating to investors to applicants, bank statements reflecting the transaction, records relating to investors to establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that assessee had discharged its onus by furnishing/documents before the see had discharged its onus by furnishing/documents before the see had discharged its onus by furnishing/documents before the AO.]Secondly, after examining these documents, we also find that the second AO issued AO.]Secondly, after examining these documents, we also find that the second AO issued AO.]Secondly, after examining these documents, we also find that the second AO issued notices u/s. 133(6) of the Act to all the thirteen (13) share applicants and pursuant to notices u/s. 133(6) of the Act to all the thirteen (13) share applicants and pursuant to notices u/s. 133(6) of the Act to all the thirteen (13) share applicants and pursuant to the notice, all the shareholders have filed their respective (i) PAN details, (ii) CIN the shareholders have filed their respective (i) PAN details, (ii) CIN the shareholders have filed their respective (i) PAN details, (ii) CIN detail, (iii) Audited Annual Report for FY 2011 detail, (iii) Audited Annual Report for FY 2011-12 (AY 2012 12 (AY 2012-13), (iv) ITR acknowledgment for AY 2012 acknowledgment for AY 2012-13 which the AO acknowledges that he verified the same 13 which the AO acknowledges that he verified the same and thus we note that the i and thus we note that the identity of the investors were duly furnished by the dentity of the investors were duly furnished by the assessee’s director; and the AO verified the veracity of the same from all the share assessee’s director; and the AO verified the veracity of the same from all the share assessee’s director; and the AO verified the veracity of the same from all the share applicants by issuing notice u/s 133(6) of the Act and moreover it is common applicants by issuing notice u/s 133(6) of the Act and moreover it is common applicants by issuing notice u/s 133(6) of the Act and moreover it is common knowledge that in this computer/digital er knowledge that in this computer/digital era, the AO on a click of the mouse, could have a, the AO on a click of the mouse, could have easily verified the identity of the share applicant which is available in the website of easily verified the identity of the share applicant which is available in the website of easily verified the identity of the share applicant which is available in the website of Ministry of Corporate Affairs and the ITR Acknowledgments filed by them, will enable Ministry of Corporate Affairs and the ITR Acknowledgments filed by them, will enable Ministry of Corporate Affairs and the ITR Acknowledgments filed by them, will enable the AO to cross verify and collect the AO to cross verify and collect details from the AO of the respective share applicants details from the AO of the respective share applicants and independently from the Revenue’s departmental data base. We note that all the and independently from the Revenue’s departmental data base. We note that all the and independently from the Revenue’s departmental data base. We note that all the share subscribing parties filed all the documents called for by the AO [PB share subscribing parties filed all the documents called for by the AO [PB share subscribing parties filed all the documents called for by the AO [PB-2] and were

11 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. also examined by the AO along wi also examined by the AO along with audited accounts from which these details show th audited accounts from which these details show their identity. 51. Thus, we note that the AO after verification as aforesaid, has not drawn any 51. Thus, we note that the AO after verification as aforesaid, has not drawn any 51. Thus, we note that the AO after verification as aforesaid, has not drawn any adverse opinion or doubted the adverse opinion or doubted the identity of the share applicants which view of AO is a of the share applicants which view of AO is a possible view in the light of the documents referred to and we also by applying the the light of the documents referred to and we also by applying the the light of the documents referred to and we also by applying the presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi- judicial act of the second AO have been regularly performed. Coming to the contention judicial act of the second AO have been regularly performed. Coming to the contention judicial act of the second AO have been regularly performed. Coming to the contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO order sheet maintained by the Second AO does not reveal that AO order sheet maintained by the Second AO does not reveal that AO had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in his reassessment/second assessment order has clearly asserted that he had issued his reassessment/second assessment order has clearly asserted that he had issued his reassessment/second assessment order has clearly asserted that he had issued notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. of the Act to all the share applicants as directed by the First Ld. Pr. of the Act to all the share applicants as directed by the First Ld. Pr. CIT and we note from the perusal of some letters written by the share applicants CIT and we note from the perusal of some letters written by the share applicants CIT and we note from the perusal of some letters written by the share applicants clearly referring to the AO’s sec. 133(6) notice (refer inter clearly referring to the AO’s sec. 133(6) notice (refer inter-alia page 32 of PB alia page 32 of PB-I). So, the clear assertion of the Second AO in his order that pursuant to his issue of notice sertion of the Second AO in his order that pursuant to his issue of notice sertion of the Second AO in his order that pursuant to his issue of notice u/s. 133(6), he received the documents called for cannot be disbelieved merely because u/s. 133(6), he received the documents called for cannot be disbelieved merely because u/s. 133(6), he received the documents called for cannot be disbelieved merely because he did not mention this event in the order sheet. Moreover, the assessee or the share he did not mention this event in the order sheet. Moreover, the assessee or the share he did not mention this event in the order sheet. Moreover, the assessee or the share applicants does not have any control over the order sheet maintained by the AO and nts does not have any control over the order sheet maintained by the AO and nts does not have any control over the order sheet maintained by the AO and the failure of AO to mention this action cannot be a reason to disbelieve the AO’s the failure of AO to mention this action cannot be a reason to disbelieve the AO’s the failure of AO to mention this action cannot be a reason to disbelieve the AO’s assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine the re-assessment/second assessment order of AO and not the order ssment/second assessment order of AO and not the order-sheet maintained sheet maintained by him which has not been negatively commented upon by the Second Ld Pr CIT and it by him which has not been negatively commented upon by the Second Ld Pr CIT and it by him which has not been negatively commented upon by the Second Ld Pr CIT and it is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we note that second AO issued sec. 133(6) notice and collected documents running more econd AO issued sec. 133(6) notice and collected documents running more econd AO issued sec. 133(6) notice and collected documents running more than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order has returned a finding that assessee in the first round itself has filed the relevant has returned a finding that assessee in the first round itself has filed the relevant has returned a finding that assessee in the first round itself has filed the relevant documents to prove the identity, creditworthiness and genuineness of the share capital to prove the identity, creditworthiness and genuineness of the share capital to prove the identity, creditworthiness and genuineness of the share capital and that assessee had discharged its onus by filing the same. So we find that during and that assessee had discharged its onus by filing the same. So we find that during and that assessee had discharged its onus by filing the same. So we find that during the second round, the AO issued notices to share the second round, the AO issued notices to share-holders u/s. 133(6) and after perusing holders u/s. 133(6) and after perusing their replies and supporting documents and thereafter having verified their veracity, r replies and supporting documents and thereafter having verified their veracity, r replies and supporting documents and thereafter having verified their veracity, the second AO was satisfied with the explanation of assessee in respect to the nature the second AO was satisfied with the explanation of assessee in respect to the nature the second AO was satisfied with the explanation of assessee in respect to the nature and source of share capital which view of second AO cannot be faulted. And we also and source of share capital which view of second AO cannot be faulted. And we also and source of share capital which view of second AO cannot be faulted. And we also note that all the share-holders are regular income tax assessee’s. Therefore in the light holders are regular income tax assessee’s. Therefore in the light holders are regular income tax assessee’s. Therefore in the light of the aforesaid documents discussed their of the aforesaid documents discussed their identity cannot be disbelieved and the AO’s cannot be disbelieved and the AO’s satisfaction in respect of identity of the shareholders is a possible view and canno satisfaction in respect of identity of the shareholders is a possible view and canno satisfaction in respect of identity of the shareholders is a possible view and cannot be termed as unsustainable in law or facts. termed as unsustainable in law or facts. 52. Coming to the creditworthiness creditworthiness of the shareholders, our attention was drawn of the shareholders, our attention was drawn to the balance sheet of the shareholders (PB to the balance sheet of the shareholders (PB- 2) which was filed before the AO and the 2) which was filed before the AO and the Ld. Pr. CIT and we note that their source o Ld. Pr. CIT and we note that their source of investment and net worth as per balance f investment and net worth as per balance sheet as on 31.03.2012 as well as the sum invested by them in the assessee is sheet as on 31.03.2012 as well as the sum invested by them in the assessee is sheet as on 31.03.2012 as well as the sum invested by them in the assessee is discernible as under: Name Source of investment Capital & Sum invested in Reserves assessee’s business M/s. K. R. Overseas Pvt. Ltd. Page 8 Paper Book-2 Rs.66,77,47,921 Rs.66,77,47,921 Rs.1,30,000/- (page 22 PB-2 2) M/s. Kakrania Trading Pvt. M/s. Kakrania Trading Pvt. Page 45Paper Book-2 Rs.66,52,71,914 Rs.66,52,71,914 Rs.1,39,00,000/- Ltd. (page 62 PB-2 2) M/s. AmbalaTrafinpvt. Ltd. Page 88Paper Book-2 Rs.624,711,003 Rs.624,711,003 Rs.4,40,00,000/- (page 101 PB PB- 2) M/s. Subhiksha Pvt. Ltd. Page 115Paper Book- Rs.222,397,317 Rs.222,397,317 Rs.45,00,000/- (page 128 PB-2 2) 2 M/s. Shivarshi Construction M/s. Shivarshi Construction Page 146Paper Book-2 Rs.53,89,95,046 Rs.53,89,95,046 Rs.4,66,00,000/-

12 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. Pvt. Ltd. (page 153 PB-2 2) M/s. Shivashiv Pvt. Ltd. Page 170Paper Book-2 Rs.14,29,56,146 Rs.14,29,56,146 Rs.6,55,00,000/- (page 178 PB-2 2) M/s. Flowtop Agency Pvt. Ltd. M/s. Flowtop Agency Pvt. Ltd. Page 193Paper Book-2 Rs.15,38,94,946 Rs.15,38,94,946 Rs.4,49,00,000/- (page 200 PB-2 2) M/s. Sukh Sagar Residency M/s. Sukh Sagar Residency Page 212 Paper Book-2 Rs.56,18,93,960 Rs.56,18,93,960 Rs.2,31,00,000/- Pvt. Ltd. (page 220 PB-2 2) M/s. Kamaldhan Developers M/s. Kamaldhan Developers Page246-247Paper Rs.56,18,94,080 Rs.56,18,94,080 Rs.12,54,00,000/- Pvt. Ltd. Book-2 (page 254 PB-2 2) M/s. Labhdhan Impex Pvt. M/s. Labhdhan Impex Pvt. Page 270PaperBook-2 Rs.56,18,94,080 Rs.56,18,94,080 Rs. 3,80,00,000/- Ltd. (page 277 PB-2 2) M/s. SubhsreeI mpex Pvt. Ltd. Pvt. Ltd. Page 290 of paper book Rs.76,60,93,960 Rs.76,60,93,960 Rs. 2,76,00.000/- (page 297 PB-2 2) M/s. M/s. Maharaja Maharaja Merchants Merchants - Rs.1,54,58,399 Rs.1,54,58,399 Rs. 50,00,000/- Pvt. Ltd. (page 313 PB-2 2) M/s. Sristi Sales Pvt. Ltd. - Rs.1,12,25,632 Rs.1,12,25,632 Rs.50,00,000/- (page 336 PB-2 2)

(i) On perusal of the paper book On perusal of the paper book-2, it reveals that the documents are placed 2, it reveals that the documents are placed at page 12 to 37 of share applicant at page 12 to 37 of share applicant M/s. K.R. Overseas Pvt. Limited M/s. K.R. Overseas Pvt. Limited which is a Private Limited Company, and which has Permanent Account No. a Private Limited Company, and which has Permanent Account No. a Private Limited Company, and which has Permanent Account No. AACCK0101B AACCK0101B and CIN U51109WB1994PTC061965 and its Net and its Net-worth as on 31.03.2012 (in total) 31.03.2012 (in total)- share capital & reserve is to the tune of share capital & reserve is to the tune of Rs.66,77,47,921/ Rs.66,77,47,921/- (PB page 22) and the investment made in the assessee (PB page 22) and the investment made in the assessee- company including the share premium comes to Rs.1,30,00 company including the share premium comes to Rs.1,30,00 company including the share premium comes to Rs.1,30,00,000/-. The payment has been made through banking channel and deposit amount of payment has been made through banking channel and deposit amount of payment has been made through banking channel and deposit amount of Rs.1,05,00,000/ Rs.1,05,00,000/- took place as on 01.03.2012 by NEFT and Rs.25,00,000/ took place as on 01.03.2012 by NEFT and Rs.25,00,000/-

13 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. as on 06.03.2012. The Board Resolution for investment of the Company is as on 06.03.2012. The Board Resolution for investment of the Company is as on 06.03.2012. The Board Resolution for investment of the Company is filed and the share application filed and the share application form, ITR acknowledgment, Bank form, ITR acknowledgment, Bank statement, explanation of source of funds as well as financial statements statement, explanation of source of funds as well as financial statements statement, explanation of source of funds as well as financial statements have been filed by the assessee at P. B page 3 have been filed by the assessee at P. B page 3-37and thus we note that the 37and thus we note that the assessee had duly discharged its onus to prove the identity of the share assessee had duly discharged its onus to prove the identity of the share assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income licants by adducing PAN as well as income-tax returns. The financial tax returns. The financial statement shows that the share applicant had enough funds to invest in the statement shows that the share applicant had enough funds to invest in the statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking company and the transaction has happened through banking company and the transaction has happened through banking channel. Further, it is noted that the share a channel. Further, it is noted that the share applicant had furnished the pplicant had furnished the source of investment made in the assessee source of investment made in the assessee-company after getting the company after getting the notice under section 133(6) of the Act. notice under section 133(6) of the Act. (ii) We note from a perusal of the paper book We note from a perusal of the paper book-2 pages 38 to 77 38 to 77, the details of share applicant share applicant M/s. Kakrania Trading Pvt. Ltd. It is a Private Limited It is a Private Limited Company which has a PAN Company which has a PAN AABCK151611and its CIN number is and its CIN number is U70101WB1994PTC062137 U70101WB1994PTC062137 and the Net worth of this company as on and the Net worth of this company as on 31.3.2012Rs.66,52,71,914/ 31.3.2012Rs.66,52,71,914/- (PB-page62) and investment made in the page62) and investment made in the assessee company is to the assessee company is to the tune of Rs.1,39,00,000/- and this share applicant has made the transaction through banking channel four times applicant has made the transaction through banking channel four times applicant has made the transaction through banking channel four times on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a sum of Rs. 59,00,000/ sum of Rs. 59,00,000/-; and on 7.3.2012 and by cheque on 12.3.2012 Rs. 25 ; and on 7.3.2012 and by cheque on 12.3.2012 Rs. 25 lakh each. There is board resolution for investment in assessee’s company kh each. There is board resolution for investment in assessee’s company kh each. There is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, and and Share Application Form, Bank statement, ITR acknowledgement, and and Share Application Form, Bank statement, ITR acknowledgement, and explanation of source of fund as well as financial statement available in explanation of source of fund as well as financial statement available in explanation of source of fund as well as financial statement available in the PB-page 39 to 77. This share applica page 39 to 77. This share applicant regularly filed Income Tax nt regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has Return (ITR) and it has filed its Bank statement. This company has Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial furnished the details of source of Funds and has duly filed financial furnished the details of source of Funds and has duly filed financial statements and thus we note that the assessee had duly discharged its onus statements and thus we note that the assessee had duly discharged its onus statements and thus we note that the assessee had duly discharged its onus to prove the i to prove the identity of the share applicant by adducing PAN as well as dentity of the share applicant by adducing PAN as well as income-tax returns. The financial statement shows that the share tax returns. The financial statement shows that the share tax returns. The financial statement shows that the share applicants had enough funds to invest in the assessee applicants had enough funds to invest in the assessee-company and the company and the transaction has happened through banking channel. Further, it i transaction has happened through banking channel. Further, it i transaction has happened through banking channel. Further, it is noted that the share applicant had furnished the source of investment made in that the share applicant had furnished the source of investment made in that the share applicant had furnished the source of investment made in the assessee the assessee-company after getting the notice under section 133(6) of the company after getting the notice under section 133(6) of the Act. (iii) We note from a perusal of the paper book (iii) We note from a perusal of the paper book-2 pages78 to 111 78 to 111, the details of share applicant of share applicant M/s. Ambala Trafin Pvt. Ltd. It is a Private Limited It is a Private Limited Company which has a PAN Company which has a PAN AACCA1184G and its CIN number is and its CIN number is U67120WB1995PTCO74397 U67120WB1995PTCO74397 and the Net worth of this company as on and the Net worth of this company as on 31.3.2012 Rs.62,47,11,003 31.3.2012 Rs.62,47,11,003- (PB-page101) and investment made in the ) and investment made in the assessee compan assessee company is to the tune of Rs. 4,40,00,000/- and this share applicant and this share applicant has made the transaction through banking channel on 01.03.2012 Rs. 25 has made the transaction through banking channel on 01.03.2012 Rs. 25 has made the transaction through banking channel on 01.03.2012 Rs. 25 lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; and by cheque on Rs. lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; and by cheque on Rs. lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; and by cheque on Rs. 3,75,00,000/ 3,75,00,000/-on 27.3.2012 . There is board resolution for investment in ion for investment in assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 79 to 111 in the PB page 79 to 111 in the PB-II. This share applicant regularly filed Inc applicant regularly filed Income Tax Return (ITR) and it has filed its Bank ome Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and statement. This company has furnished the details of source of Funds and statement. This company has furnished the details of source of Funds and has duly filed financial statements. Thus we note that the assessee had duly has duly filed financial statements. Thus we note that the assessee had duly has duly filed financial statements. Thus we note that the assessee had duly discharged its onus to prove the identity of the share appl discharged its onus to prove the identity of the share appl discharged its onus to prove the identity of the share applicants by adducing PAN as well as income adducing PAN as well as income-tax returns. The financial statement shows tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee that the share applicant had enough funds to invest in the assessee that the share applicant had enough funds to invest in the assessee- company and the transaction has happened through banking channel. company and the transaction has happened through banking channel. company and the transaction has happened through banking channel. Further, it is noted that the share ap Further, it is noted that the share applicants had furnished the source of plicants had furnished the source of

14 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. investment made in the assessee investment made in the assessee-company after getting the notice under company after getting the notice under section 133(6) of the Act. section 133(6) of the Act. (iv) We note from a perusal of the paper book pages (iv) We note from a perusal of the paper book pages-2,112 to 137 112 to 137, the details of share applicant details of share applicant M/s. Subhiksha Pvt. Ltd. It is a Private Limited It is a Private Limited Company which has a PAN Company which has a PAN AAPCS2068E and its CIN number is and its CIN number is U52190WB2011PTC157073 U52190WB2011PTC157073 and the Net worth of this company as on and the Net worth of this company as on 31.3.2012 Rs.22,23,97,317/ 31.3.2012 Rs.22,23,97,317/- (PB-page 128.) and investment made in the page 128.) and investment made in the assessee company is to the tune of Rs. 4 assessee company is to the tune of Rs. 45,00,000/- and this share applicant and this share applicant has made the transaction through banking channel on 02.03.2012 a sum of has made the transaction through banking channel on 02.03.2012 a sum of has made the transaction through banking channel on 02.03.2012 a sum of Rs.45 lakhs through NEFT. There is board resolution for investment in Rs.45 lakhs through NEFT. There is board resolution for investment in Rs.45 lakhs through NEFT. There is board resolution for investment in assessee’s company and Share Application Form Bank statement, ITR assessee’s company and Share Application Form Bank statement, ITR assessee’s company and Share Application Form Bank statement, ITR acknowledgement, explanation of source of fund as well as financial ement, explanation of source of fund as well as financial ement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 113 to 137 in the PB. This share page 113 to 137 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank applicant regularly filed Income Tax Return (ITR) and it has filed its Bank applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of s statement. This company has furnished the details of source of Funds and ource of Funds and has duly filed financial statements and thus we note that the assessee had has duly filed financial statements and thus we note that the assessee had has duly filed financial statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by duly discharged its onus to prove the identity of the share applicants by duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income adducing PAN as well as income-tax returns. The financial statement shows tax returns. The financial statement shows that the share that the share applicant had enough funds to invest in the assessee applicant had enough funds to invest in the assessee- company and the transaction has happened through banking channel. company and the transaction has happened through banking channel. company and the transaction has happened through banking channel. Further, it is noted that the share applicants had furnished the source of Further, it is noted that the share applicants had furnished the source of Further, it is noted that the share applicants had furnished the source of investment made in the assessee investment made in the assessee-company after getting the not company after getting the notice under section 133(6) of the Act. section 133(6) of the Act.

(v) We note from a perusal of the paper book (v) We note from a perusal of the paper book-2, pages 138 to 159 the 2, pages 138 to 159 the details of share applicant details of share applicant M/s. Shivarshi Construction Pvt. Ltd M/s. Shivarshi Construction Pvt. Ltd. It is a Private Limited Company which has a PAN AAQCS7848M and its CIN Private Limited Company which has a PAN AAQCS7848M and its CIN Private Limited Company which has a PAN AAQCS7848M and its CIN number is U45400WB2011PTC170957 and the net worth of this company number is U45400WB2011PTC170957 and the net worth of this company number is U45400WB2011PTC170957 and the net worth of this company as on 31.3.2012 Rs.53,89,95,046/ as on 31.3.2012 Rs.53,89,95,046/- (PB-page 153) and investment made in page 153) and investment made in the assessee company is to the tune of Rs. 4, the assessee company is to the tune of Rs. 4,66,00,000/- and this share applicant has made the transaction through banking channel on applicant has made the transaction through banking channel on applicant has made the transaction through banking channel on 29.03.2012 Rs.4,66,00,000/ 29.03.2012 Rs.4,66,00,000/-through Cheque. There is board resolution for through Cheque. There is board resolution for investment in assessee’s company and Share Application Form Bank investment in assessee’s company and Share Application Form Bank investment in assessee’s company and Share Application Form Bank statement, ITR acknowledgem statement, ITR acknowledgement, explanation of source of fund as well as ent, explanation of source of fund as well as financial statement available in the PB financial statement available in the PB-page 139 to 159 in the PB. This page 139 to 159 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its share applicant regularly filed Income Tax Return (ITR) and it has filed its share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of sou Bank statement. This company has furnished the details of sou Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. This share applicant regularly filed and has duly filed financial statements. This share applicant regularly filed and has duly filed financial statements. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement and thus we Income Tax Return (ITR) and it has filed its Bank statement and thus we Income Tax Return (ITR) and it has filed its Bank statement and thus we note that the assessee had duly discharged its onus to prove the identity of note that the assessee had duly discharged its onus to prove the identity of note that the assessee had duly discharged its onus to prove the identity of the share applic the share applicants by adducing PAN as well as income-tax returns. The tax returns. The financial statement shows that the share applicant had enough funds to financial statement shows that the share applicant had enough funds to financial statement shows that the share applicant had enough funds to invest in the assessee invest in the assessee-company and the transaction has happened through company and the transaction has happened through banking channel. Thus the assessee has discharged the onu banking channel. Thus the assessee has discharged the onu banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is identity, creditworthiness and genuineness of the transactions. Further, it is identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment noted that the share applicants had furnished the source of investment noted that the share applicants had furnished the source of investment made in the assessee made in the assessee-company after getting the notice under section 133(6) company after getting the notice under section 133(6) of the Act. (vi) We note from a perusal of the paper book pages ) We note from a perusal of the paper book pages-2, 160 to 184 the 2, 160 to 184 the details of share applicant details of share applicant M/s. Shivashiv Dealcom Pvt. Ltd M/s. Shivashiv Dealcom Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS0094C and its CIN number is Limited Company which has a PAN AARCS0094C and its CIN number is Limited Company which has a PAN AARCS0094C and its CIN number is

15 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. U74999WB2012PTC 173749 and the net worth of thi U74999WB2012PTC 173749 and the net worth of this company as on s company as on 31.3.2012 Rs.14,29,56,146/ 31.3.2012 Rs.14,29,56,146/-(PB-page 178) and investment made in the page 178) and investment made in the assessee company is to the tune of Rs.6,55,00,000/ assessee company is to the tune of Rs.6,55,00,000/- and this share applicant and this share applicant has made the transaction through banking channel on 29.03.2012 has made the transaction through banking channel on 29.03.2012 has made the transaction through banking channel on 29.03.2012 Rs.6,55,00,000/ Rs.6,55,00,000/- through Cheque. There is board resolution for investment ue. There is board resolution for investment in assessee’s company and Share Application Form Bank statement, ITR in assessee’s company and Share Application Form Bank statement, ITR in assessee’s company and Share Application Form Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 161 to 184 in the PB. This share page 161 to 184 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank ant regularly filed Income Tax Return (ITR) and it has filed its Bank ant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and statement. This company has furnished the details of source of Funds and statement. This company has furnished the details of source of Funds and has duly filed financial statements and thus we note that the assessee had has duly filed financial statements and thus we note that the assessee had has duly filed financial statements and thus we note that the assessee had duly discharged its onus to prove the duly discharged its onus to prove the identity of the share applicants by identity of the share applicants by adducing PAN as well as income adducing PAN as well as income-tax returns. The financial statement shows tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee that the share applicant had enough funds to invest in the assessee that the share applicant had enough funds to invest in the assessee- company and the transaction has happened through banking channel. Thus company and the transaction has happened through banking channel. Thus company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness essee has discharged the onus to prove the identity, creditworthiness essee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share and genuineness of the transactions. Further, it is noted that the share and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee applicants had furnished the source of investment made in the assessee applicants had furnished the source of investment made in the assessee- company after getting the notice under sec company after getting the notice under section 133(6) of the Act. tion 133(6) of the Act.

(vii) We note from a perusal of the paper book (vii) We note from a perusal of the paper book-2, pages 185 to 206 the 2, pages 185 to 206 the details of share applicant details of share applicant M/s. Flowtop Agency Pvt. Ltd. It is a Private . It is a Private Limited Company which has a PAN AABCF9036D and its CIN number is Limited Company which has a PAN AABCF9036D and its CIN number is Limited Company which has a PAN AABCF9036D and its CIN number is U52190WB2012PTC 1 U52190WB2012PTC 173352and the net worth of this company as on 73352and the net worth of this company as on 31.3.2012 Rs.15,38,94,946/ 31.3.2012 Rs.15,38,94,946/- (PB-page 200 ) and investment made in the page 200 ) and investment made in the assessee company is to the tune of Rs. 4,49,00,000/ assessee company is to the tune of Rs. 4,49,00,000/- and this share applicant and this share applicant has made the transaction through banking channel on 30.03.201 has made the transaction through banking channel on 30.03.201 has made the transaction through banking channel on 30.03.2012 Rs.4,49,00,000/ Rs.4,49,00,000/- through Cheque. . There is board resolution for investment through Cheque. . There is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR in assessee’s company and Share Application Form, Bank statement, ITR in assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 186 to 206 n the PB. This share to 206 n the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank applicant regularly filed Income Tax Return (ITR) and it has filed its Bank applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statements and thus we note that the assessee had duly discharged its onus statements and thus we note that the assessee had duly discharged its onus statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as to prove the identity of the share applicants by adducing PAN as well as to prove the identity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant tax returns. The financial statement shows that the share applicant tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee had enough funds to invest in the assessee-company and the transaction has company and the transaction has happened through banking channel. Thus the assessee has discharged the happened through banking channel. Thus the assessee has discharged the happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworth onus to prove the identity, creditworthiness and genuineness of the iness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the transactions. Further, it is noted that the share applicants had furnished the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee source of investment made in the assessee-company after getting the notice company after getting the notice under section 133(6) of the Act. under section 133(6) of the Act. (viii) We note from a perusal of the pa (viii) We note from a perusal of the paper book pages-2,207 to 226 the 2,207 to 226 the details of share applicant details of share applicant M/s. SukhSagar Residency Pvt. Ltd. M/s. SukhSagar Residency Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS1553N and its CIN number is Limited Company which has a PAN AARCS1553N and its CIN number is Limited Company which has a PAN AARCS1553N and its CIN number is U45400WB2011PTC170958and the net worth of this company as on U45400WB2011PTC170958and the net worth of this company as on U45400WB2011PTC170958and the net worth of this company as on 31.3.2012 Rs.56,18 31.3.2012 Rs.56,18,93,960/-(P.B-2 pages-220) and investment made in the 220) and investment made in the assessee company is to the tune of Rs.2,31,00,000/ assessee company is to the tune of Rs.2,31,00,000/- and this share applicant and this share applicant has made the transaction through banking channel on 31.3.2012 Rs. has made the transaction through banking channel on 31.3.2012 Rs. has made the transaction through banking channel on 31.3.2012 Rs. 2,31,00,000/ 2,31,00,000/- through NEFT. There is board resolution for through NEFT. There is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 208-226 in the PB. This share applicant 226 in the PB. This share applicant

16 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. regularly filed Income Tax Retu regularly filed Income Tax Return (ITR) and it has filed its Bank statement. rn (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed This company has furnished the details of source of Funds and has duly filed This company has furnished the details of source of Funds and has duly filed financial statements and thus we note that the assessee had duly discharged financial statements and thus we note that the assessee had duly discharged financial statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by its onus to prove the identity of the share applicants by adducing PAN as adducing PAN as well as income well as income-tax returns. The financial statement shows that the share tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee applicant had enough funds to invest in the assessee-company and the company and the transaction has happened through banking channel. Thus the assessee has transaction has happened through banking channel. Thus the assessee has transaction has happened through banking channel. Thus the assessee has discharged the onus to pr discharged the onus to prove the identity, creditworthiness and genuineness ove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had of the transactions. Further, it is noted that the share applicants had of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee furnished the source of investment made in the assessee furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. getting the notice under section 133(6) of the Act.

(ix) We note from a perusal of the paper book ote from a perusal of the paper book-2, pages 227 to 261 the 2, pages 227 to 261 the details of share applicant details of share applicant M/s. Kamaldhan Developers Pvt. Ltd M/s. Kamaldhan Developers Pvt. Ltd. It is a Private Limited Company which has a PAN AAECK6810D and its CIN Private Limited Company which has a PAN AAECK6810D and its CIN Private Limited Company which has a PAN AAECK6810D and its CIN number is U45400WB2011 PTC 170944 and the net worth of this number is U45400WB2011 PTC 170944 and the net worth of this number is U45400WB2011 PTC 170944 and the net worth of this company as on 31.3.2012 Rs.56,18,94,080/ as on 31.3.2012 Rs.56,18,94,080/- and investment made in the assessee and investment made in the assessee company is to the tune of Rs.12,54,00,000/ company is to the tune of Rs.12,54,00,000/- and this share applicant has and this share applicant has made the transaction through banking channel on 31.03.2012 Rs. made the transaction through banking channel on 31.03.2012 Rs. made the transaction through banking channel on 31.03.2012 Rs. 12,54,00,000/ 12,54,00,000/- through NEFT. There is board resolution for investment in ard resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 228 to 261 in the PB. This share page 228 to 261 in the PB. This share applicant regularly applicant regularlyfiled Income Tax Return (ITR) and it has filed its Bank filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and statement. This company has furnished the details of source of Funds and statement. This company has furnished the details of source of Funds and has duly filed financial statements. This share applicant regularly filed has duly filed financial statements. This share applicant regularly filed has duly filed financial statements. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank st Income Tax Return (ITR) and it has filed its Bank statement. This company atement. This company has furnished the details of source of Funds and has duly filed financial has furnished the details of source of Funds and has duly filed financial has furnished the details of source of Funds and has duly filed financial statements. The financial statement shows that the share applicant had statements. The financial statement shows that the share applicant had statements. The financial statement shows that the share applicant had enough funds to invest in the assessee enough funds to invest in the assessee-company and the transaction has company and the transaction has happened through b happened through banking channel. Thus the assessee has discharged the anking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the onus to prove the identity, creditworthiness and genuineness of the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the transactions. Further, it is noted that the share applicants had furnished the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee source of investment made in the assessee-company after getting the notice getting the notice under section 133(6) of the Act. under section 133(6) of the Act. (x) We note from a perusal of the paper book (x) We note from a perusal of the paper book-2, pages 262 to 283 the 2, pages 262 to 283 the details of share applicant details of share applicant M/s. Labhdhan Impext Pvt. Ltd. It is a Private Limited Company which has a PAN AACCL2111J and its CIN num Limited Company which has a PAN AACCL2111J and its CIN num Limited Company which has a PAN AACCL2111J and its CIN number is U51909WB2011PTC171524 and the net worth of this company as on U51909WB2011PTC171524 and the net worth of this company as on U51909WB2011PTC171524 and the net worth of this company as on 31.3.2012 Rs.56,18,94,080/ 31.3.2012 Rs.56,18,94,080/- (P.B-2, page 277) and investment made in the 2, page 277) and investment made in the assessee company is to the tune of Rs.3,80,00,000/ assessee company is to the tune of Rs.3,80,00,000/- and this share applicant and this share applicant has made the transaction through ba has made the transaction through banking channel on 31.03.2012 a sum of nking channel on 31.03.2012 a sum of Rs.3,80,00,000/ Rs.3,80,00,000/-through NEFT. There is board resolution for investment in through NEFT. There is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB available in the PB-page 163-283 in the PB. This share applicant 283 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. regularly filed Income Tax Return (ITR) and it has filed its Bank statement. regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed This company has furnished the details of source of Funds and has duly filed This company has furnished the details of source of Funds and has duly filed financial statements. The financi financial statements. The financial statement shows that the share al statement shows that the share applicant had enough funds to invest in the assessee applicant had enough funds to invest in the assessee-company and the company and the transaction has happened through banking channel. Thus the assessee has transaction has happened through banking channel. Thus the assessee has transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness discharged the onus to prove the identity, creditworthiness and genuineness discharged the onus to prove the identity, creditworthiness and genuineness

17 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. of the transactions. Further, it is noted that the share applicants had e transactions. Further, it is noted that the share applicants had e transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee furnished the source of investment made in the assessee furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. getting the notice under section 133(6) of the Act. (xi) We note from a perusal of the paper book (xi) We note from a perusal of the paper book-2 pages 284 to 303 t 2 pages 284 to 303 the details of share applicant details of share applicant M/s. Subhsree Impex Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS1845D and its CIN number is Limited Company which has a PAN AARCS1845D and its CIN number is Limited Company which has a PAN AARCS1845D and its CIN number is U51909WB2011PTC171513 and the net worth of this company as on U51909WB2011PTC171513 and the net worth of this company as on U51909WB2011PTC171513 and the net worth of this company as on 31.3.2012 Rs.76,66,93,960/ 31.3.2012 Rs.76,66,93,960/- (P.B-2, page-297)and investment made in the vestment made in the assessee company is to the tune of Rs.2,76,00,000/ assessee company is to the tune of Rs.2,76,00,000/- and this share applicant and this share applicant has made the transaction through banking channel on 31.03.2012 a sum of has made the transaction through banking channel on 31.03.2012 a sum of has made the transaction through banking channel on 31.03.2012 a sum of Rs.2,76,00,0000/ Rs.2,76,00,0000/-through NEFT. There is board resolution for investment in through NEFT. There is board resolution for investment in assessee’s company and Share Application Form , Bank statement, ITR s company and Share Application Form , Bank statement, ITR s company and Share Application Form , Bank statement, ITR acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial acknowledgement, explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 285-303 in the PB. This share applicant 303 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has fil regularly filed Income Tax Return (ITR) and it has filed its Bank statement. ed its Bank statement. This company has furnished the details of source of Funds and has duly filed This company has furnished the details of source of Funds and has duly filed This company has furnished the details of source of Funds and has duly filed financial statements. The financial statement shows that the share financial statements. The financial statement shows that the share financial statements. The financial statement shows that the share applicant had enough funds to invest in the assessee applicant had enough funds to invest in the assessee-company and the company and the transaction has happ transaction has happened through banking channel. Thus the assessee has ened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness discharged the onus to prove the identity, creditworthiness and genuineness discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had of the transactions. Further, it is noted that the share applicants had of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee furnished the source of investment made in the assessee furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. getting the notice under section 133(6) of the Act. (xii) We note from a perusal of the paper book (xii) We note from a perusal of the paper book-2, pages 304 to 326 the 2, pages 304 to 326 the details of share applicant details of share applicant M/s. Maharaja Merchants Pvt. Ltd. M/s. Maharaja Merchants Pvt. Ltd. It is a Private Limited Company which has a PAN AAECM22 Limited Company which has a PAN AAECM224E and its CIN number is 4E and its CIN number is U51109WB2005PTC102343 and the net worth of this company as on U51109WB2005PTC102343 and the net worth of this company as on U51109WB2005PTC102343 and the net worth of this company as on 31.3.2012 Rs.1,54,58,399/ 31.3.2012 Rs.1,54,58,399/-(page 313 of P.B-2)and investment made in the 2)and investment made in the assessee company is to the tune of Rs.50 lakhs and this share applicant has assessee company is to the tune of Rs.50 lakhs and this share applicant has assessee company is to the tune of Rs.50 lakhs and this share applicant has made the transaction made the transaction through banking channel on 28.02.2012 a sum of through banking channel on 28.02.2012 a sum of Rs.50lakhs through Cheque. There is Share Application Form, Bank Rs.50lakhs through Cheque. There is Share Application Form, Bank Rs.50lakhs through Cheque. There is Share Application Form, Bank statement, ITR acknowledgement, financial statement available in the PB statement, ITR acknowledgement, financial statement available in the PB statement, ITR acknowledgement, financial statement available in the PB- page 304 to 326 in the PB. This share applicant regularly filed Income page 304 to 326 in the PB. This share applicant regularly filed Income page 304 to 326 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. The financial statement Return (ITR) and it has filed its Bank statement. The financial statement Return (ITR) and it has filed its Bank statement. The financial statement shows that the share applicant had enough funds to invest in the assessee shows that the share applicant had enough funds to invest in the assessee shows that the share applicant had enough funds to invest in the assessee- company and the transaction has happened through banking channel. Thus company and the transaction has happened through banking channel. Thus company and the transaction has happened through banking channel. Thus the assessee has discharged the o the assessee has discharged the onus to prove the identity, creditworthiness nus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share and genuineness of the transactions. Further, it is noted that the share and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee applicants had furnished the source of investment made in the assessee applicants had furnished the source of investment made in the assessee- company after getting the notice under section 133(6) of the Act. company after getting the notice under section 133(6) of the Act. company after getting the notice under section 133(6) of the Act.

(xiii)We note from a perusal of the paper book (xiii)We note from a perusal of the paper book-2 pages 327 to 352 the details 2 pages 327 to 352 the details of share applicant of share applicant M/s. Sristi Sales Pvt. Ltd. It is a Private Limited Company It is a Private Limited Company which has a PAN AAICS8900L and its CIN number is U51109WB2005PTC which has a PAN AAICS8900L and its CIN number is U51109WB2005PTC which has a PAN AAICS8900L and its CIN number is U51109WB2005PTC 102121 and the net worth of this 102121 and the net worth of this company as on 31.3.2012 Rs.1,12,25,612/ company as on 31.3.2012 Rs.1,12,25,612/- and investment made in the assessee company is to the tune of Rs.50 lakhs and investment made in the assessee company is to the tune of Rs.50 lakhs and investment made in the assessee company is to the tune of Rs.50 lakhs and this share applicant has made the transaction through banking channel and this share applicant has made the transaction through banking channel and this share applicant has made the transaction through banking channel on 28.02.2012 a sum of Rs. 50 lakhs through Cheque. There is Sh on 28.02.2012 a sum of Rs. 50 lakhs through Cheque. There is Sh on 28.02.2012 a sum of Rs. 50 lakhs through Cheque. There is Share Application, Bank statement, ITR acknowledgement, financial statement Application, Bank statement, ITR acknowledgement, financial statement Application, Bank statement, ITR acknowledgement, financial statement available in the PB available in the PB-2, page 328 to 352. This share applicant regularly filed 2, page 328 to 352. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. The financial Income Tax Return (ITR) and it has filed its Bank statement. The financial Income Tax Return (ITR) and it has filed its Bank statement. The financial

18 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. statement shows that the share statement shows that the share applicant had enough funds to invest in the applicant had enough funds to invest in the assessee-company and the transaction has happened through banking company and the transaction has happened through banking company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, channel. Thus the assessee has discharged the onus to prove the identity, channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Thus from the dis creditworthiness and genuineness of the transactions. Thus from the dis creditworthiness and genuineness of the transactions. Thus from the discussion above, it is noted except the last two investors the other eleven (11) share above, it is noted except the last two investors the other eleven (11) share above, it is noted except the last two investors the other eleven (11) share applicants out of thirteen (13) share applicants out of thirteen (13) share-holders had furnished the source of holders had furnished the source of investment made in the assessee investment made in the assessee-company after getting the notice from second company after getting the notice from second AO under section 13 AO under section 133(6) of the Act. Thus we note that the AO on the basis of 3(6) of the Act. Thus we note that the AO on the basis of the aforesaid documents has taken a plausible view and did not draw any the aforesaid documents has taken a plausible view and did not draw any the aforesaid documents has taken a plausible view and did not draw any adverse inference against the assessee, and the view thus taken by the AO adverse inference against the assessee, and the view thus taken by the AO adverse inference against the assessee, and the view thus taken by the AO cannot be termed as unsustainable in law. cannot be termed as unsustainable in law.

19 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. click of a mouse and could have recorded his finding of fact if he found anything wrong click of a mouse and could have recorded his finding of fact if he found anything wrong click of a mouse and could have recorded his finding of fact if he found anything wrong with these share subscribers and could have pointed out the adverse fact, if any, which with these share subscribers and could have pointed out the adverse fact, if any, which with these share subscribers and could have pointed out the adverse fact, if any, which the Second Ld. Pr. CIT has not made in the impugned order. So the inference tha the Second Ld. Pr. CIT has not made in the impugned order. So the inference tha the Second Ld. Pr. CIT has not made in the impugned order. So the inference that can be drawn is that the veracity of the factual contents of the documents running more be drawn is that the veracity of the factual contents of the documents running more be drawn is that the veracity of the factual contents of the documents running more than 352 pages (PB-2) could not be factually controverted by the Second Ld. Pr. CIT. 2) could not be factually controverted by the Second Ld. Pr. CIT. 2) could not be factually controverted by the Second Ld. Pr. CIT. And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking jurisdiction u/s. 263 of the Act, he has to show that the enquiry conducted by AO was flawed or the u/s. 263 of the Act, he has to show that the enquiry conducted by AO was flawed or the u/s. 263 of the Act, he has to show that the enquiry conducted by AO was flawed or the enquiry conducted by AO was on a wrong direction or on wrong assumption of enquiry conducted by AO was on a wrong direction or on wrong assumption of enquiry conducted by AO was on a wrong direction or on wrong assumption of fact/law or that the AO misdirected himself in factual investigation or applied t fact/law or that the AO misdirected himself in factual investigation or applied t fact/law or that the AO misdirected himself in factual investigation or applied the law erroneously in respect of the facts collected by him. For doing so, in the facts discussed erroneously in respect of the facts collected by him. For doing so, in the facts discussed erroneously in respect of the facts collected by him. For doing so, in the facts discussed supra, he second (Ld. Pr. CIT) should himself had conducted an enquiry or at least supra, he second (Ld. Pr. CIT) should himself had conducted an enquiry or at least supra, he second (Ld. Pr. CIT) should himself had conducted an enquiry or at least conducted a preliminary enquiry and was able to bring some evidence/materia conducted a preliminary enquiry and was able to bring some evidence/materia conducted a preliminary enquiry and was able to bring some evidence/material on record to upset the AO’s satisfaction in respect of identity, creditworthiness or record to upset the AO’s satisfaction in respect of identity, creditworthiness or record to upset the AO’s satisfaction in respect of identity, creditworthiness or genuineness of the share subscribers and thus recorded a finding of fact that the genuineness of the share subscribers and thus recorded a finding of fact that the genuineness of the share subscribers and thus recorded a finding of fact that the decision of AO’s enquiry was faulted or wrong and in that process tried to show that it decision of AO’s enquiry was faulted or wrong and in that process tried to show that it decision of AO’s enquiry was faulted or wrong and in that process tried to show that it has resulted in a view which is “unsustainable in law” which would have justified his has resulted in a view which is “unsustainable in law” which would have justified his has resulted in a view which is “unsustainable in law” which would have justified his action of passing the impugned order u/s. 263 of the Act, which unfortunately is not action of passing the impugned order u/s. 263 of the Act, which unfortunately is not action of passing the impugned order u/s. 263 of the Act, which unfortunately is not the case. Since the AO’s view on the facts collected and discussed is definitely a the case. Since the AO’s view on the facts collected and discussed is definitely a the case. Since the AO’s view on the facts collected and discussed is definitely a possible view, so in the factual background discussed in detail, we are of the considered opinion view, so in the factual background discussed in detail, we are of the considered opinion view, so in the factual background discussed in detail, we are of the considered opinion that Ld. second Pr. CIT ought not to have interfered with the AO’s reassessment order that Ld. second Pr. CIT ought not to have interfered with the AO’s reassessment order that Ld. second Pr. CIT ought not to have interfered with the AO’s reassessment order which in any case can be classified as ‘unsustainable in law’ since it which in any case can be classified as ‘unsustainable in law’ since it which in any case can be classified as ‘unsustainable in law’ since it is in line with plethora of judicial decisions of the subject. plethora of judicial decisions of the subject. 56. To sum up, we find from the above said facts that the Second AO has conducted To sum up, we find from the above said facts that the Second AO has conducted To sum up, we find from the above said facts that the Second AO has conducted enquiry as directed by the First Ld. Pr. CIT on the specific subject matter i.e. share enquiry as directed by the First Ld. Pr. CIT on the specific subject matter i.e. share enquiry as directed by the First Ld. Pr. CIT on the specific subject matter i.e. share capital and premium co capital and premium collected by the assessee-company. Therefore, the finding of company. Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspicion only. And as discussed, the allegation/fault pointed out by the flowing from suspicion only. And as discussed, the allegation/fault pointed out by the flowing from suspicion only. And as discussed, the allegation/fault pointed out by the Second Ld. Pr. CIT that the S Second Ld. Pr. CIT that the Second AO failed to collect total facts also cannot be econd AO failed to collect total facts also cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order what he meant by total facts or in the alternative when the assessee has discharged its what he meant by total facts or in the alternative when the assessee has discharged its what he meant by total facts or in the alternative when the assessee has discharged its onus, as required by the l onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to 13, then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or have called for which ever additional documents/materials or issued summons or have called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then omitted to collect and then demonstrated that those actions/documents which he demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside collected in that process gave result to a different finding of fact which will turn upside collected in that process gave result to a different finding of fact which will turn upside down the claim of the assessee and thus able to show that the actions/omission of AO down the claim of the assessee and thus able to show that the actions/omission of AO down the claim of the assessee and thus able to show that the actions/omission of AO in conducting the investi in conducting the investigation was erroneous, which unfortunately is not the case gation was erroneous, which unfortunately is not the case before us. And equally bad is the bald allegation/fault that second AO has not collected before us. And equally bad is the bald allegation/fault that second AO has not collected before us. And equally bad is the bald allegation/fault that second AO has not collected total facts cannot be accepted being vague and based on conjectures and surmises and total facts cannot be accepted being vague and based on conjectures and surmises and total facts cannot be accepted being vague and based on conjectures and surmises and so meritless. Since the assessee company has discharged its onus as discussed supra, assessee company has discharged its onus as discussed supra, and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack of and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack of and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack of enquiry or for not collecting the entire facts, then the Second Pr. CIT ought to have enquiry or for not collecting the entire facts, then the Second Pr. CIT ought to have enquiry or for not collecting the entire facts, then the Second Pr. CIT ought to have called for the additional facts which he thinks that the Second AO has not collected tional facts which he thinks that the Second AO has not collected tional facts which he thinks that the Second AO has not collected from the assessee or the shareholders and then explained in his impugned order as to from the assessee or the shareholders and then explained in his impugned order as to from the assessee or the shareholders and then explained in his impugned order as to what effect those additional documents would have made on the second assessment what effect those additional documents would have made on the second assessment what effect those additional documents would have made on the second assessment order/reassessment order order/reassessment order or in other words the impact on the decision making process or in other words the impact on the decision making process of framing the second assessment order due to the failure of second AO’s omission to of framing the second assessment order due to the failure of second AO’s omission to of framing the second assessment order due to the failure of second AO’s omission to collect the additional documents. However, we note that the Second Pr. CIT has not collect the additional documents. However, we note that the Second Pr. CIT has not collect the additional documents. However, we note that the Second Pr. CIT has not carried out any such exercis carried out any such exercise or even spelled out in his impugned order, which all e or even spelled out in his impugned order, which all documents the second AO failed to collect for considering the total facts; and even if we documents the second AO failed to collect for considering the total facts; and even if we documents the second AO failed to collect for considering the total facts; and even if we presume he has conducted such an exercise, then he has not been able to bring out any presume he has conducted such an exercise, then he has not been able to bring out any presume he has conducted such an exercise, then he has not been able to bring out any adverse factual finding t adverse factual finding to upset the view of Second AO. So we find no merit in the o upset the view of Second AO. So we find no merit in the vague allegation of second Pr. CIT that the second AO has not collected the full facts vague allegation of second Pr. CIT that the second AO has not collected the full facts vague allegation of second Pr. CIT that the second AO has not collected the full facts necessary to decide the issue of share capital & premium.So we note that the Second necessary to decide the issue of share capital & premium.So we note that the Second necessary to decide the issue of share capital & premium.So we note that the Second

20 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. AO, the assessing authority AO, the assessing authority who is a quasi- judicial office has discharged his dual role judicial office has discharged his dual role as an investigator as well as an adjudicator. Looking from another angle of doctrine of as an investigator as well as an adjudicator. Looking from another angle of doctrine of as an investigator as well as an adjudicator. Looking from another angle of doctrine of merger canvassed before us, we note from the facts of this case that the merger canvassed before us, we note from the facts of this case that the merger canvassed before us, we note from the facts of this case that the second Ld. Pr. CIT – 4 by passing the second revisional order dated 14.03.2019 has substituted the the second revisional order dated 14.03.2019 has substituted the the second revisional order dated 14.03.2019 has substituted the First Pr. CIT’s order passed u/s. 263 of the Act dated 23.08.2016 with his own order First Pr. CIT’s order passed u/s. 263 of the Act dated 23.08.2016 with his own order First Pr. CIT’s order passed u/s. 263 of the Act dated 23.08.2016 with his own order which he cannot do since the second assessment order/re which he cannot do since the second assessment order/re-assessment of the Second AO assessment of the Second AO dated 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and pursuant to the first revisional order of the First Ld. Pr. CIT and pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter on which specific directions/instructions were given on the very same subject matter on which specific directions/instructions were given on the very same subject matter on which specific directions/instructions were given by the First Ld. Pr.CIT, which direction since having been complied by the AO, brings by the First Ld. Pr.CIT, which direction since having been complied by the AO, brings by the First Ld. Pr.CIT, which direction since having been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital & premium he doctrine of merger the subject matter i.e. share capital & premium he doctrine of merger the subject matter i.e. share capital & premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second revisional order the same subject matter without the second Ld. Pr.CIT in the second revisional order the same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an investigator or adjudicator, re the error happened to second AO as an investigator or adjudicator, re the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be permitted to again ask the AO to start the investigation in the way he thinks it proper permitted to again ask the AO to start the investigation in the way he thinks it proper permitted to again ask the AO to start the investigation in the way he thinks it proper on the very same subject on which merger has taken place by virtue of the order of ry same subject on which merger has taken place by virtue of the order of ry same subject on which merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the assessment proceedings meaning no finality to assessment proceedings and that is assessment proceedings meaning no finality to assessment proceedings and that is assessment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe Parliament in its wisdom has brought in safe-guards, restrictions & guards, restrictions & conditions precedent to be satisfied strictly before assumption of revisional conditions precedent to be satisfied strictly before assumption of revisional conditions precedent to be satisfied strictly before assumption of revisional jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the ng the condition precedent u/s 263 of the Act has invoked the ng the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void.” revisional jurisdiction (second time), so all his actions are ab initio void.” revisional jurisdiction (second time), so all his actions are ab initio void.” 10. On similar facts, when the revisionary jurisdiction u/s 263 of the Act, was On similar facts, when the revisionary jurisdiction u/s 263 of the Act, was On similar facts, when the revisionary jurisdiction u/s 263 of the Act, was exercised for a second time by the second time by the ld. Pr. CIT on similar facts, this Bench of the Tribunal , this Bench of the Tribunal in the case M/s Omkar Infracon Private Omkar Infracon Private (supra) held as under:- “13. Further, we note that even though the re 13. Further, we note that even though the re-assessment order dated 5.11.2016 was set assessment order dated 5.11.2016 was set aside again by the impugned order of Pr. CIT, we aside again by the impugned order of Pr. CIT, we note that one of the faults pointed out by note that one of the faults pointed out by the Ld. Pr. CIT to invoke his revisionary jurisdiction were the Ld. Pr. CIT to invoke his revisionary jurisdiction were – “(a) Detailed investigation /verification in the nature of independent enquiry regarding “(a) Detailed investigation /verification in the nature of independent enquiry regarding “(a) Detailed investigation /verification in the nature of independent enquiry regarding identify, credit worthiness, and genuineness of transaction t identify, credit worthiness, and genuineness of transaction that was intended to be carried hat was intended to be carried but not done and merely accepted the submissions of the assessee” but not done and merely accepted the submissions of the assessee” However, we are unable to agree with this allegation of Ld. Pr. CIT. We note that AO in this However, we are unable to agree with this allegation of Ld. Pr. CIT. We note that AO in this However, we are unable to agree with this allegation of Ld. Pr. CIT. We note that AO in this case had issued during the first and second round of assessment case had issued during the first and second round of assessment notice u/s. 142(1) of the notice u/s. 142(1) of the Act, pursuant to which the assessee had filed all details and the AO examined the same, and Act, pursuant to which the assessee had filed all details and the AO examined the same, and Act, pursuant to which the assessee had filed all details and the AO examined the same, and thereafter had issued notice u/s 133(6) of the Act and verified the details, and issued thereafter had issued notice u/s 133(6) of the Act and verified the details, and issued thereafter had issued notice u/s 133(6) of the Act and verified the details, and issued summon u/s 131 to the directors of the assessee co summon u/s 131 to the directors of the assessee company as well as to all the shareholders. mpany as well as to all the shareholders. And we note that all of them responded and duly appeared before the AO and their And we note that all of them responded and duly appeared before the AO and their And we note that all of them responded and duly appeared before the AO and their statements were recorded and only one shareholder an individual was new and all the statements were recorded and only one shareholder an individual was new and all the statements were recorded and only one shareholder an individual was new and all the shareholder's companies were group companies and shareholder's companies were group companies and the new individual share subscriber the new individual share subscriber was father of a director. was father of a director. (b). We note that next fault pointed out by the Ld. Pr. CIT was “the AO failed to carryout (b). We note that next fault pointed out by the Ld. Pr. CIT was “the AO failed to carryout (b). We note that next fault pointed out by the Ld. Pr. CIT was “the AO failed to carryout detailed investigation as to how they decided to invest in a company at premium which detailed investigation as to how they decided to invest in a company at premium which detailed investigation as to how they decided to invest in a company at premium which was never a known company”. n company”. According to us, the Ld Pr. CIT did not appreciate the facts in the proper perspective and According to us, the Ld Pr. CIT did not appreciate the facts in the proper perspective and According to us, the Ld Pr. CIT did not appreciate the facts in the proper perspective and did not had taken notice of the important fact that these were the promoters who started did not had taken notice of the important fact that these were the promoters who started did not had taken notice of the important fact that these were the promoters who started the company in the year 2010 for the business of making ash the company in the year 2010 for the business of making ash-fly bricks and the only new bricks and the only new

21 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. shareholder individual was father of an existing director; and the assessee company in this shareholder individual was father of an existing director; and the assessee company in this shareholder individual was father of an existing director; and the assessee company in this assessment year had started expansion activities of the business of making/manufacturing assessment year had started expansion activities of the business of making/manufacturing assessment year had started expansion activities of the business of making/manufacturing fly ash bricks. We note that the share capital inf fly ash bricks. We note that the share capital infused into the company has yielded result. used into the company has yielded result. And moreover the investor companies were group companies and shares allotted this year And moreover the investor companies were group companies and shares allotted this year And moreover the investor companies were group companies and shares allotted this year was to existing shareholders and only new shareholders was the father of a director. As was to existing shareholders and only new shareholders was the father of a director. As was to existing shareholders and only new shareholders was the father of a director. As stated earlier, the promoter and group stated earlier, the promoter and group companies found potential of growth in the companies found potential of growth in the business and had made the investment and premium which was agreed upon mutually by business and had made the investment and premium which was agreed upon mutually by business and had made the investment and premium which was agreed upon mutually by all the existing shareholders taking into consideration the expansion and future return all the existing shareholders taking into consideration the expansion and future return all the existing shareholders taking into consideration the expansion and future return expected of it. After appreciating these f expected of it. After appreciating these facts and taking into consideration the financial acts and taking into consideration the financial results of the assessee company as on the date of reassessment order, the AO had accepted results of the assessee company as on the date of reassessment order, the AO had accepted results of the assessee company as on the date of reassessment order, the AO had accepted the genuinity of the transaction, so nothing turns around in respect of this fault raised by the genuinity of the transaction, so nothing turns around in respect of this fault raised by the genuinity of the transaction, so nothing turns around in respect of this fault raised by the Ld. Pr. CIT. (c) The next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale e next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale e next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale behind the premium. From the aforesaid reasons (supra) (b), the AO has accepted the behind the premium. From the aforesaid reasons (supra) (b), the AO has accepted the behind the premium. From the aforesaid reasons (supra) (b), the AO has accepted the transaction which on the factual background is a probable view. transaction which on the factual background is a probable view. (d) The other fault noted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in ted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in ted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in order to reach a logical conclusion. order to reach a logical conclusion. We do not countenance this fault pointed out by ld. Pr. CIT for the simple reason that it is We do not countenance this fault pointed out by ld. Pr. CIT for the simple reason that it is We do not countenance this fault pointed out by ld. Pr. CIT for the simple reason that it is first of all a vague allegation without spelling ou first of all a vague allegation without spelling out what relevant evidences were not t what relevant evidences were not collected by the AO. We note that assessee had filed documents before AO, copies of which collected by the AO. We note that assessee had filed documents before AO, copies of which collected by the AO. We note that assessee had filed documents before AO, copies of which are produced before us, which is running to three (3) volumes. [ Volume I are produced before us, which is running to three (3) volumes. [ Volume I are produced before us, which is running to three (3) volumes. [ Volume I-201 pages, volume II 231 pages, volume III volume II 231 pages, volume III-362 pages;] and the AO after personally summoning the d the AO after personally summoning the individual share holders and directors of corporate shareholders and after recording their individual share holders and directors of corporate shareholders and after recording their individual share holders and directors of corporate shareholders and after recording their statements, and after verifying the documents produced before him, has accepted the share statements, and after verifying the documents produced before him, has accepted the share statements, and after verifying the documents produced before him, has accepted the share capital/premium infused into the as capital/premium infused into the assessee company which action of AO cannot be called a sessee company which action of AO cannot be called a perverse order and according to us, the AO from the actions discussed above has perverse order and according to us, the AO from the actions discussed above has perverse order and according to us, the AO from the actions discussed above has discharged his duty as an investigator and adjudicator and taken a plausible view which discharged his duty as an investigator and adjudicator and taken a plausible view which discharged his duty as an investigator and adjudicator and taken a plausible view which cannot be called an un-sustainable sustainable view on facts or law. (e) The other fault taken note by the Ld. Pr. CIT is that the AO failed to examine all bank (e) The other fault taken note by the Ld. Pr. CIT is that the AO failed to examine all bank (e) The other fault taken note by the Ld. Pr. CIT is that the AO failed to examine all bank accounts for the entire period. accounts for the entire period. To this allegation of Ld. Pr. CIT, we are unable to comprehend the same since the assessee To this allegation of Ld. Pr. CIT, we are unable to comprehend the same since the assessee To this allegation of Ld. Pr. CIT, we are unable to comprehend the same since the assessee during the first and second round had filed before AO all the relevant bank statements. during the first and second round had filed before AO all the relevant bank statements. during the first and second round had filed before AO all the relevant bank statements. Before us also all copies and details of bank accounts, have been filed and w Before us also all copies and details of bank accounts, have been filed and w Before us also all copies and details of bank accounts, have been filed and we find that AO during the assessment proceeding called for the same and examined it, so he has not made during the assessment proceeding called for the same and examined it, so he has not made during the assessment proceeding called for the same and examined it, so he has not made any adverse observation against it. So, Ld. Pr. CIT’s allegation in respect of nonexamination any adverse observation against it. So, Ld. Pr. CIT’s allegation in respect of nonexamination any adverse observation against it. So, Ld. Pr. CIT’s allegation in respect of nonexamination of bank accounts are baseless and deserves to be rejected. of bank accounts are baseless and deserves to be rejected. (f) The other fault pointed out by the Ld. Pr. CIT is that the AO failed to trace out the money (f) The other fault pointed out by the Ld. Pr. CIT is that the AO failed to trace out the money (f) The other fault pointed out by the Ld. Pr. CIT is that the AO failed to trace out the money trail We note that the assessee company is into manufacturing of bricks using fly ash and had We note that the assessee company is into manufacturing of bricks using fly ash and had We note that the assessee company is into manufacturing of bricks using fly ash and had set up its factory and the share holder are the promoters/group set up its factory and the share holder are the promoters/group companies and no allegation has been levelled against the shareholders that they are entry providers. allegation has been levelled against the shareholders that they are entry providers. allegation has been levelled against the shareholders that they are entry providers. We note that earlier contribution made by them have been accepted in previous years, and We note that earlier contribution made by them have been accepted in previous years, and We note that earlier contribution made by them have been accepted in previous years, and also the fact remains that the earlier years of asse also the fact remains that the earlier years of assessment have not been reopened though ssment have not been reopened though there was sufficient time for the same. In the light of the documents discussed supra, we there was sufficient time for the same. In the light of the documents discussed supra, we there was sufficient time for the same. In the light of the documents discussed supra, we are of the opinion that assessee has discharged the onus on it. are of the opinion that assessee has discharged the onus on it. (g) The last fault taken note by the Ld. Pr. CIT is that the (g) The last fault taken note by the Ld. Pr. CIT is that the reassessment order prima facie reassessment order prima facie suffers from independent and adequate enquiry. suffers from independent and adequate enquiry.

22 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd.

We do not countenance this allegation of the Ld. Pr. CIT. We have already discussed in We do not countenance this allegation of the Ld. Pr. CIT. We have already discussed in We do not countenance this allegation of the Ld. Pr. CIT. We have already discussed in detail about how the AO has called the individual share holders and the directors of the detail about how the AO has called the individual share holders and the directors of the detail about how the AO has called the individual share holders and the directors of the corporate shareholders and recorded their statements and gone through the voluminous corporate shareholders and recorded their statements and gone through the voluminous corporate shareholders and recorded their statements and gone through the voluminous documents filed by the assessee. Thus, the shareholders had discharged the onus on it to documents filed by the assessee. Thus, the shareholders had discharged the onus on it to documents filed by the assessee. Thus, the shareholders had discharged the onus on it to prove the identity, creditworthiness and genuinity of the share transaction who prove the identity, creditworthiness and genuinity of the share transaction who prove the identity, creditworthiness and genuinity of the share transaction who are none other than the promoters, directors and group companies and the AO after examining and other than the promoters, directors and group companies and the AO after examining and other than the promoters, directors and group companies and the AO after examining and satisfying himself about the share capital and premium has accepted it. Thus it is noted satisfying himself about the share capital and premium has accepted it. Thus it is noted satisfying himself about the share capital and premium has accepted it. Thus it is noted that independent and adequate enquiry was made and further it is not that independent and adequate enquiry was made and further it is not that independent and adequate enquiry was made and further it is not pointed out by Ld. Pr. CIT as to what further enquiry was needed or how the enquiry made by AO is wrong, Pr. CIT as to what further enquiry was needed or how the enquiry made by AO is wrong, Pr. CIT as to what further enquiry was needed or how the enquiry made by AO is wrong, without which in the facts of the case as discussed supra, the ld Pr CIT cannot term the without which in the facts of the case as discussed supra, the ld Pr CIT cannot term the without which in the facts of the case as discussed supra, the ld Pr CIT cannot term the order of AO as erroneous. order of AO as erroneous. 15. Thus, we find that during the Thus, we find that during the reassessment proceeding pursuant to the first reassessment proceeding pursuant to the first revisional order under section 263 of the Act dated 10.06.2016 and pursuant to the specific revisional order under section 263 of the Act dated 10.06.2016 and pursuant to the specific revisional order under section 263 of the Act dated 10.06.2016 and pursuant to the specific directions of the Ld. Pr. CIT, the AO in the second round had summoned the directors of directions of the Ld. Pr. CIT, the AO in the second round had summoned the directors of directions of the Ld. Pr. CIT, the AO in the second round had summoned the directors of Group companies as well as tha Group companies as well as that of assessee and examined the books and the bank t of assessee and examined the books and the bank statement and other documents furnished by them to discharge the onus on them about statement and other documents furnished by them to discharge the onus on them about statement and other documents furnished by them to discharge the onus on them about the identity, creditworthiness and genuineness of the transactions and the AO has the identity, creditworthiness and genuineness of the transactions and the AO has the identity, creditworthiness and genuineness of the transactions and the AO has recorded their statement during reasses recorded their statement during reassessment proceedings wherein he has questioned and sment proceedings wherein he has questioned and elicited answers about the identity, creditworthiness and genuineness of the transaction as elicited answers about the identity, creditworthiness and genuineness of the transaction as elicited answers about the identity, creditworthiness and genuineness of the transaction as well as the source of the investment etc. So, from the aforesaid actions carried out by the well as the source of the investment etc. So, from the aforesaid actions carried out by the well as the source of the investment etc. So, from the aforesaid actions carried out by the AO during the reassessment proceeding cannot be found fault with for lack of enquiry and ment proceeding cannot be found fault with for lack of enquiry and ment proceeding cannot be found fault with for lack of enquiry and thus, we note that AO has discharged his duty as an Investigator as per the direction of Ld. thus, we note that AO has discharged his duty as an Investigator as per the direction of Ld. thus, we note that AO has discharged his duty as an Investigator as per the direction of Ld. Pr. CIT dated 10.06.2016 u/s. 263 of the Act (First 263 order) and further we note that the Pr. CIT dated 10.06.2016 u/s. 263 of the Act (First 263 order) and further we note that the Pr. CIT dated 10.06.2016 u/s. 263 of the Act (First 263 order) and further we note that the Ld. Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction for second time has not made even a whisper about the non for second time has not made even a whisper about the non-compliance/failure on the compliance/failure on the part of AO in respect of the specific direction given by the Ld. Pr. CIT dated 1 part of AO in respect of the specific direction given by the Ld. Pr. CIT dated 1 part of AO in respect of the specific direction given by the Ld. Pr. CIT dated 10.06.2016 while setting aside the original assessment order passed by the AO dated 20.03.2015. And while setting aside the original assessment order passed by the AO dated 20.03.2015. And while setting aside the original assessment order passed by the AO dated 20.03.2015. And in the impugned order the Ld. Pr. CIT has not found fault with the action of the AO in giving in the impugned order the Ld. Pr. CIT has not found fault with the action of the AO in giving in the impugned order the Ld. Pr. CIT has not found fault with the action of the AO in giving effect to the specific directions given by him while passing t effect to the specific directions given by him while passing the first revisional order on he first revisional order on 10.06.2016. Thus, we note that when the AO while framing the reassessment order 10.06.2016. Thus, we note that when the AO while framing the reassessment order 10.06.2016. Thus, we note that when the AO while framing the reassessment order pursuant to the specific direction of the Ld. Pr. CIT’s order dated 10.06.2016 (first pursuant to the specific direction of the Ld. Pr. CIT’s order dated 10.06.2016 (first pursuant to the specific direction of the Ld. Pr. CIT’s order dated 10.06.2016 (first revisional order) has complied with the specific directions revisional order) has complied with the specific directions of Ld. Pr. CIT and based on the of Ld. Pr. CIT and based on the inquiry conducted and after perusal of the documents running more than 794 pages which inquiry conducted and after perusal of the documents running more than 794 pages which inquiry conducted and after perusal of the documents running more than 794 pages which reveals the identity, creditworthiness and genuineness of the share capital and premium reveals the identity, creditworthiness and genuineness of the share capital and premium reveals the identity, creditworthiness and genuineness of the share capital and premium collected by the assessee from the share subscrib collected by the assessee from the share subscribers, the satisfaction of AO as envisaged in ers, the satisfaction of AO as envisaged in sec. 68 of the Act is a plausible view and the share subscribers/directors participating in sec. 68 of the Act is a plausible view and the share subscribers/directors participating in sec. 68 of the Act is a plausible view and the share subscribers/directors participating in the reassessment proceedings along with the audited financial statements and other the reassessment proceedings along with the audited financial statements and other the reassessment proceedings along with the audited financial statements and other documents referred supra, the assess documents referred supra, the assessee had discharged the onus on it about the identity, ee had discharged the onus on it about the identity, creditworthiness and genuineness of the share capital and premium collected by the creditworthiness and genuineness of the share capital and premium collected by the creditworthiness and genuineness of the share capital and premium collected by the assessee from the respective share subscribers. Since the aforesaid exercise was carried assessee from the respective share subscribers. Since the aforesaid exercise was carried assessee from the respective share subscribers. Since the aforesaid exercise was carried out by the AO in the original out by the AO in the original as well as reassessment proceedings and the documents are in as well as reassessment proceedings and the documents are in the assessment folder and the statements have been recorded of the individual share the assessment folder and the statements have been recorded of the individual share the assessment folder and the statements have been recorded of the individual share subscribers and directors of the Group company share subscribers, the Ld. Pr. CIT erred in subscribers and directors of the Group company share subscribers, the Ld. Pr. CIT erred in subscribers and directors of the Group company share subscribers, the Ld. Pr. CIT erred in holding the reassessment order of the AO in respect of share capital and premium collected ment order of the AO in respect of share capital and premium collected ment order of the AO in respect of share capital and premium collected by the assessee as erroneous as well as prejudicial to the interest of the revenue unless the by the assessee as erroneous as well as prejudicial to the interest of the revenue unless the by the assessee as erroneous as well as prejudicial to the interest of the revenue unless the Ld. Pr. CIT based on an enquiry conducted by himself in the second round atleast is able to Ld. Pr. CIT based on an enquiry conducted by himself in the second round atleast is able to Ld. Pr. CIT based on an enquiry conducted by himself in the second round atleast is able to upset the AO’s satisfaction in respect of identity, creditworthiness and genuineness of the upset the AO’s satisfaction in respect of identity, creditworthiness and genuineness of the upset the AO’s satisfaction in respect of identity, creditworthiness and genuineness of the share subscribers and his decision not to make any addition under section 68 of the Act. In share subscribers and his decision not to make any addition under section 68 of the Act. In share subscribers and his decision not to make any addition under section 68 of the Act. In the light of the aforesaid discussions and on perusal of the documents the light of the aforesaid discussions and on perusal of the documents the light of the aforesaid discussions and on perusal of the documents, we are of the view that AO’s view to accept the identity, creditworthiness and genuineness of the share capital that AO’s view to accept the identity, creditworthiness and genuineness of the share capital that AO’s view to accept the identity, creditworthiness and genuineness of the share capital and premium collected from the share subscribers as a plausible view and at any rate can and premium collected from the share subscribers as a plausible view and at any rate can and premium collected from the share subscribers as a plausible view and at any rate can be termed as an unsustainable view on law or facts. be termed as an unsustainable view on law or facts.

23 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. 25. Thus, in the light of the judicial precedents of the Hon’ble Apex/High Thus, in the light of the judicial precedents of the Hon’ble Apex/High Thus, in the light of the judicial precedents of the Hon’ble Apex/High court/Tribunal, we are of the view that the action/view taken by the AO after enquiry court/Tribunal, we are of the view that the action/view taken by the AO after enquiry court/Tribunal, we are of the view that the action/view taken by the AO after enquiry made by him as per the direction of the Ld. Pr. CIT in the set aside proceedings dated made by him as per the direction of the Ld. Pr. CIT in the set aside proceedings dated made by him as per the direction of the Ld. Pr. CIT in the set aside proceedings dated 10.06.2016 pursuant to which the AO has reassessed the assessee after inquiry and 016 pursuant to which the AO has reassessed the assessee after inquiry and 016 pursuant to which the AO has reassessed the assessee after inquiry and accepted the share capital and premium collected by assessee is a plausible view and accepted the share capital and premium collected by assessee is a plausible view and accepted the share capital and premium collected by assessee is a plausible view and cannot be held to be unsustainable view in facts or law, therefore, the impugned action of cannot be held to be unsustainable view in facts or law, therefore, the impugned action of cannot be held to be unsustainable view in facts or law, therefore, the impugned action of the Ld. Pr. CIT to interfere with the reassessment order of the AO, is without jurisdiction d. Pr. CIT to interfere with the reassessment order of the AO, is without jurisdiction d. Pr. CIT to interfere with the reassessment order of the AO, is without jurisdiction and liable to be quashed. and liable to be quashed. 26. Therefore, in the light of the discussion on fact as well as on law, we are of the Therefore, in the light of the discussion on fact as well as on law, we are of the Therefore, in the light of the discussion on fact as well as on law, we are of the considered opinion that AO’s action (reassessment) pur considered opinion that AO’s action (reassessment) pursuant to the first revisional order of suant to the first revisional order of Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possible view in Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possible view in Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possible view in facts and law as per the ratio laid by the Hon’ble Supreme Court in Malabar Industrial Co. facts and law as per the ratio laid by the Hon’ble Supreme Court in Malabar Industrial Co. facts and law as per the ratio laid by the Hon’ble Supreme Court in Malabar Industrial Co. Ltd. Vs. CIT 243 ITR 83 (SC) the A Ltd. Vs. CIT 243 ITR 83 (SC) the AO’s action/reassessment order cannot be termed as O’s action/reassessment order cannot be termed as erroneous and prejudicial to the interest of the Revenue. Therefore, the condition erroneous and prejudicial to the interest of the Revenue. Therefore, the condition erroneous and prejudicial to the interest of the Revenue. Therefore, the condition precedent for usurping revisional jurisdiction u/s. 263 of the Act is absent and, therefore, precedent for usurping revisional jurisdiction u/s. 263 of the Act is absent and, therefore, precedent for usurping revisional jurisdiction u/s. 263 of the Act is absent and, therefore, the Ld. Pr. CIT lacked jurisd the Ld. Pr. CIT lacked jurisdiction to assume second time revisional jurisdiction u/s. 263 of iction to assume second time revisional jurisdiction u/s. 263 of the Act. Therefore, the assessee succeeds on the legal issue raised and, therefore, on the the Act. Therefore, the assessee succeeds on the legal issue raised and, therefore, on the the Act. Therefore, the assessee succeeds on the legal issue raised and, therefore, on the facts and circumstances discussed (supra), we are inclined to quash the impugned order of facts and circumstances discussed (supra), we are inclined to quash the impugned order of facts and circumstances discussed (supra), we are inclined to quash the impugned order of Ld. Pr. CIT dated 12.03.2019. IT dated 12.03.2019. 10. The Hone’ble Andhra Pradesh High Court in the case of The Hone’ble Andhra Pradesh High Court in the case of Spectra Shares and Scrips Spectra Shares and Scrips Pvt. Ltd. V CIT (AP) 354 ITR 35 Pvt. Ltd. V CIT (AP) 354 ITR 35 had considered a number of judgments on this issue of had considered a number of judgments on this issue of exercise of jurisdiction u/s 263 of the Act by the Principal Com exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax missioner of Income Tax and culled out various principles laid down in principles laid down in different judgments by the Courts by the Courts on this issue as below :

“24. In Malabar Industrial Co.Ltd. ( 2 Supra), Malabar Industrial Co.Ltd. ( 2 Supra), the Supreme Court held that a the Supreme Court held that a bare reading of Sec.263 makes it clear that the prerequisite for the exercise of bare reading of Sec.263 makes it clear that the prerequisite for the exercise of bare reading of Sec.263 makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suomotu under it, is the order of the Income Tax jurisdiction by the Commissioner suomotu under it, is the order of the Income Tax jurisdiction by the Commissioner suomotu under it, is the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the inte Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The rests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent interests of the Revenue. If one of them is absent – if the order of the Income Tax rder of the Income Tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue but it is prejudicial to the Revenue – recourse cannot be had to Sec.263 (1) of the recourse cannot be had to Sec.263 (1) of the Act. It also held at pg Act. It also held at pg-88 as follows: "The phrase "prejudicial "The phrase "prejudicial to the interests of the Revenue" has to be read in to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of conjunction with an erroneous order passed by the Assessing Officer. Every loss of conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as revenue as a consequence of an order of the Assessing Officer cannot be treated as revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Rev prejudicial to the interests of the Revenue. For example, when an Income enue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Officer adopted one of the courses permissible in law and it has resulted in loss of Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue: or where two views are possible and the Income Revenue: or where two views are possible and the Income-tax Officer has taken tax Officer has taken one view with which the Commissioner does not agree, it one view with which the Commissioner does not agree, it cannot be treated as an cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken erroneous order prejudicial to the interests of the Revenue, unless the view taken erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. It has been held by this Court tax Officer is unsustainable in law. It has been held by this Court tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in h that where a sum not earned by a person is assessed as income in his hands on his is hands on his so offering, the order passed by the Assessing Officer accepting the same as such so offering, the order passed by the Assessing Officer accepting the same as such so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the Revenue. will be erroneous and prejudicial to the interests of the Revenue. will be erroneous and prejudicial to the interests of the Revenue. RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal V. CIT (197 Aggarwal V. CIT (1973) 88 ITR 323 (SC)".

24 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. 25. In Max India Ltd. Max India Ltd. (3 Supra), reiterated the view in Malabar Industrial Malabar Industrial Co.Ltd. (2 Supra) and observed that every loss of Revenue as a consequence of an (2 Supra) and observed that every loss of Revenue as a consequence of an (2 Supra) and observed that every loss of Revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interes order of the Assessing Officer cannot be treated as prejudicial to the interes order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income Tax Officer adopted one of the courses the Revenue. For example, when an Income Tax Officer adopted one of the courses the Revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are permissible in law and it has resulted in loss of revenue; or where two views are permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one view with which the possible and the Income Tax Officer has taken one view with which the possible and the Income Tax Officer has taken one view with which the Commissioner does Commissioner does not agree, it cannot be treated as an erroneous order not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income prejudicial to the interests of the Revenue, unless the view taken by the Income prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it then stood was interpreted by the Asse then stood was interpreted by the Assessing Officer but the Revenue contended ssing Officer but the Revenue contended that in view of the 2005 Amendment which is clarificatory and retrospective in that in view of the 2005 Amendment which is clarificatory and retrospective in that in view of the 2005 Amendment which is clarificatory and retrospective in nature, the view of the Assessing Officer was unsustainable in law and the nature, the view of the Assessing Officer was unsustainable in law and the nature, the view of the Assessing Officer was unsustainable in law and the Commissioner was correct in invoking Sec.263. But the Supreme Commissioner was correct in invoking Sec.263. But the Supreme Court rejected Court rejected the said contention and held that when the Commissioner passed his order the said contention and held that when the Commissioner passed his order the said contention and held that when the Commissioner passed his order disagreeing with the view of the Assessing Officer, there were two views on the disagreeing with the view of the Assessing Officer, there were two views on the disagreeing with the view of the Assessing Officer, there were two views on the word "profits" in that section; that the said section was amended eleven times; word "profits" in that section; that the said section was amended eleven times; word "profits" in that section; that the said section was amended eleven times; that different views existed on the day when the Commissioner passed his order; ferent views existed on the day when the Commissioner passed his order; ferent views existed on the day when the Commissioner passed his order; that the mechanics of the section had become so complicated over the years that that the mechanics of the section had become so complicated over the years that that the mechanics of the section had become so complicated over the years that two views were inherently possible; and therefore, the subsequent amendment in two views were inherently possible; and therefore, the subsequent amendment in two views were inherently possible; and therefore, the subsequent amendment in 2005 even though retrospe 2005 even though retrospective will not attract the provision of Sec.263. ctive will not attract the provision of Sec.263. 26. In Vikas Polymers Vikas Polymers (4 Supra), the Delhi High Court held that the power of (4 Supra), the Delhi High Court held that the power of suomotu revision exercisable by the Commissioner under the provisions of Sec.263 suomotu revision exercisable by the Commissioner under the provisions of Sec.263 suomotu revision exercisable by the Commissioner under the provisions of Sec.263 is supervisory in nature; that an "erroneous jud is supervisory in nature; that an "erroneous judgment" means one which is not in gment" means one which is not in accordance with law; that if an Income Tax Officer acting in accordance with law accordance with law; that if an Income Tax Officer acting in accordance with law accordance with law; that if an Income Tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as "erroneous" by the makes a certain assessment, the same cannot be branded as "erroneous" by the makes a certain assessment, the same cannot be branded as "erroneous" by the Commissioner simply because, according to him, the order should h Commissioner simply because, according to him, the order should h Commissioner simply because, according to him, the order should have been written differently or more elaborately; that the section does not visualize the written differently or more elaborately; that the section does not visualize the written differently or more elaborately; that the section does not visualize the substitution of the judgment of the Commissioner for that of the Income Tax substitution of the judgment of the Commissioner for that of the Income Tax substitution of the judgment of the Commissioner for that of the Income Tax Officer, who passed the order unless the decision is not in accordance with the Officer, who passed the order unless the decision is not in accordance with the Officer, who passed the order unless the decision is not in accordance with the law; that to invoke suomotu revisional powers to reopen a concluded assessment to invoke suomotu revisional powers to reopen a concluded assessment to invoke suomotu revisional powers to reopen a concluded assessment under Sec.263, the Commissioner must give reasons; that a bare reiteration by under Sec.263, the Commissioner must give reasons; that a bare reiteration by under Sec.263, the Commissioner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous in so far as it is him that the order of the Income Tax Officer is erroneous in so far as it is him that the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of prejudicial to the interests of the Revenue, will not suffice; that the reasons must the Revenue, will not suffice; that the reasons must be such as to show that the enhancement or modification of the assessment or be such as to show that the enhancement or modification of the assessment or be such as to show that the enhancement or modification of the assessment or cancellation of the assessment or directions issued for a fresh assessment were cancellation of the assessment or directions issued for a fresh assessment were cancellation of the assessment or directions issued for a fresh assessment were called for, and must irresistibly lead to the called for, and must irresistibly lead to the conclusion that the order of the conclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of Income Tax Officer was not only erroneous but was prejudicial to the interests of Income Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an the Revenue. Thus, while the Income Tax Officer is not called upon to write an the Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons in respect of each elaborate judgment giving detailed reasons in respect of each elaborate judgment giving detailed reasons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrutiny by the doing so; that if a query is raised during the course of the scrutiny by the doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, icer, which was answered to the satisfaction of the Assessing Officer, icer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. nce and revision. 27. In Sunbeam Auto Ltd. Sunbeam Auto Ltd.( 5 Supra), the Delhi High Court held that the Assessing ( 5 Supra), the Delhi High Court held that the Assessing Officer in the assessment order is not required to give a detailed reason in respect Officer in the assessment order is not required to give a detailed reason in respect Officer in the assessment order is not required to give a detailed reason in respect of each and every item of deduction, etc.; that whether there was appli of each and every item of deduction, etc.; that whether there was appli of each and every item of deduction, etc.; that whether there was application of mind before allowing the expenditure in question has to be seen; that if there was mind before allowing the expenditure in question has to be seen; that if there was mind before allowing the expenditure in question has to be seen; that if there was an inquiry, even inadequate that would not by itself give occasion to the an inquiry, even inadequate that would not by itself give occasion to the an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec.263 merely because he has a different Commissioner to pass orders under Sec.263 merely because he has a different Commissioner to pass orders under Sec.263 merely because he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a course e matter; that it is only in cases of lack of inquiry that such a course e matter; that it is only in cases of lack of inquiry that such a course

25 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. of action would be open; that an assessment order made by the Income Tax of action would be open; that an assessment order made by the Income Tax of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, Officer cannot be branded as erroneous by the Commissioner simply because, Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should according to him, the order should have been written more elaborately; there have been written more elaborately; there must be some prima facie material on record to show that the tax which was must be some prima facie material on record to show that the tax which was must be some prima facie material on record to show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant lawfully exigible has not been imposed or that by the application of the relevant lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation, a l statute on an incorrect or incomplete interpretation, a lesser tax than what was esser tax than what was just, has been imposed. In that case, the Delhi High Court held that the just, has been imposed. In that case, the Delhi High Court held that the just, has been imposed. In that case, the Delhi High Court held that the Commissioner in the exercise of revisional power could not have objected to the Commissioner in the exercise of revisional power could not have objected to the Commissioner in the exercise of revisional power could not have objected to the finding of the Assessing Officer that expenditure on tools and dies by the asse finding of the Assessing Officer that expenditure on tools and dies by the asse finding of the Assessing Officer that expenditure on tools and dies by the assessee, a manufacturer of Car parts, is revenue expenditure where the said claim was a manufacturer of Car parts, is revenue expenditure where the said claim was a manufacturer of Car parts, is revenue expenditure where the said claim was allowed by the latter on being satisfied with the explanation of the assessee and allowed by the latter on being satisfied with the explanation of the assessee and allowed by the latter on being satisfied with the explanation of the assessee and where the same accounting practice followed by the assessee for number of years where the same accounting practice followed by the assessee for number of years where the same accounting practice followed by the assessee for number of years with the approval of the Income Tax Authorities. It held that the Assessing Officer proval of the Income Tax Authorities. It held that the Assessing Officer proval of the Income Tax Authorities. It held that the Assessing Officer had called for explanation on the very item from the assessee and the assessee had called for explanation on the very item from the assessee and the assessee had called for explanation on the very item from the assessee and the assessee had furnished its explanation. Merely because the Assessing Officer in his order had furnished its explanation. Merely because the Assessing Officer in his order had furnished its explanation. Merely because the Assessing Officer in his order did not make an elabora did not make an elaborate discussion in that regard, his order cannot be termed te discussion in that regard, his order cannot be termed as erroneous. The opinion of the Assessing Officer is one of the possible views and as erroneous. The opinion of the Assessing Officer is one of the possible views and as erroneous. The opinion of the Assessing Officer is one of the possible views and there was no material before the Commissioner to vary that opinion and ask for there was no material before the Commissioner to vary that opinion and ask for there was no material before the Commissioner to vary that opinion and ask for fresh inquiry. 28. In Gabriel India Gabriel India Ltd. (6 Supra), the Bombay High Court held that a (6 Supra), the Bombay High Court held that a consideration of the Commissioner as to whether an order is erroneous in so far consideration of the Commissioner as to whether an order is erroneous in so far consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on as it is prejudicial to the interests of the Revenue, must be based on materials on as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for the record of the proceedings called for by him. If there are no materials on by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a record on the basis of which it can be said that the Commissioner acting in a record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of reasonable manner could have come to such a conclusion, the very initiation of reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. I proceedings by him will be illegal and without jurisdiction. It held that the t held that the Commissioner cannot initiate proceedings with a view to start fishing and roving Commissioner cannot initiate proceedings with a view to start fishing and roving Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the department inquiries in matters or orders which are already concluded; that the department inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation because of new views they enterta cannot be permitted to begin fresh litigation because of new views they enterta cannot be permitted to begin fresh litigation because of new views they entertain on facts or new versions which they present as to what should be the inference or on facts or new versions which they present as to what should be the inference or on facts or new versions which they present as to what should be the inference or proper inference either of the facts disclosed or the weight of the circumstance; proper inference either of the facts disclosed or the weight of the circumstance; proper inference either of the facts disclosed or the weight of the circumstance; that if this is permitted, litigation would have no end except when legal ingenuity that if this is permitted, litigation would have no end except when legal ingenuity that if this is permitted, litigation would have no end except when legal ingenuity is exhausted; that to do so is to divide one argument into two and multiply the hausted; that to do so is to divide one argument into two and multiply the hausted; that to do so is to divide one argument into two and multiply the litigation. It held that cases may be visualized where the Income Tax Officer while litigation. It held that cases may be visualized where the Income Tax Officer while litigation. It held that cases may be visualized where the Income Tax Officer while making an assessment examines the accounts, makes inquiries, applies his mind making an assessment examines the accounts, makes inquiries, applies his mind making an assessment examines the accounts, makes inquiries, applies his mind to the facts and circumstances of the case and determines the income either by rcumstances of the case and determines the income either by rcumstances of the case and determines the income either by accepting the account or by making some estimate himself; that the accepting the account or by making some estimate himself; that the accepting the account or by making some estimate himself; that the Commissioner, on perusal of the record, may be of the opinion that the estimate Commissioner, on perusal of the record, may be of the opinion that the estimate Commissioner, on perusal of the record, may be of the opinion that the estimate made by the Officer concerned was on the lower si made by the Officer concerned was on the lower side and left to the Commissioner de and left to the Commissioner he would have estimated the income at a figure higher than the one determined he would have estimated the income at a figure higher than the one determined he would have estimated the income at a figure higher than the one determined by the Income Tax Officer; but that would not vest the Commissioner with power by the Income Tax Officer; but that would not vest the Commissioner with power by the Income Tax Officer; but that would not vest the Commissioner with power to reexamine the accounts and determine the income himself at a hig to reexamine the accounts and determine the income himself at a hig to reexamine the accounts and determine the income himself at a higher figure; there must be material available on the record called for by the Commissioner to there must be material available on the record called for by the Commissioner to there must be material available on the record called for by the Commissioner to satisfy him prima facie that the order is both erroneous and prejudicial to the satisfy him prima facie that the order is both erroneous and prejudicial to the satisfy him prima facie that the order is both erroneous and prejudicial to the interests of the Revenue. Otherwise, it would amount to giving unbridled and interests of the Revenue. Otherwise, it would amount to giving unbridled and interests of the Revenue. Otherwise, it would amount to giving unbridled and arbitrary power to the revising authority to initiate proceedings for revision in ary power to the revising authority to initiate proceedings for revision in ary power to the revising authority to initiate proceedings for revision in every case and start re every case and start re-examination and fresh inquiry in matters which have examination and fresh inquiry in matters which have already been concluded under law. already been concluded under law. 29. In M.S. Raju(15 Supra), this Court has held that the power of the (15 Supra), this Court has held that the power of the (15 Supra), this Court has held that the power of the Commissioner under Sec.263 (1) is not limited only to the material which was Commissioner under Sec.263 (1) is not limited only to the material which was Commissioner under Sec.263 (1) is not limited only to the material which was available before the Assessing Officer and, in order to protect the interests of the available before the Assessing Officer and, in order to protect the interests of the available before the Assessing Officer and, in order to protect the interests of the Revenue, the Commissioner is entitled to examine any other records which are Revenue, the Commissioner is entitled to examine any other records which are Revenue, the Commissioner is entitled to examine any other records which are

26 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. available at the time of examination by him and to take into consideration even time of examination by him and to take into consideration even time of examination by him and to take into consideration even those events which arose subsequent to the order of assessment. those events which arose subsequent to the order of assessment. 30. In Rampyari Devi Saraogi Rampyari Devi Saraogi(21 Supra), the Commissioner in exercise of (21 Supra), the Commissioner in exercise of revisional powers cancelled assessee’s assessment for t revisional powers cancelled assessee’s assessment for the years 1952 he years 1952-1953 to 1960-61 because he found that the income tax officer was not justified in 61 because he found that the income tax officer was not justified in 61 because he found that the income tax officer was not justified in accepting the initial capital, the gift received and sale of jewellery, the income accepting the initial capital, the gift received and sale of jewellery, the income accepting the initial capital, the gift received and sale of jewellery, the income from business etc., without any enquiry or evidence whatsoever . He directed from business etc., without any enquiry or evidence whatsoever . He directed from business etc., without any enquiry or evidence whatsoever . He directed the income tax officer to do fresh assessment after making proper enquiry and income tax officer to do fresh assessment after making proper enquiry and income tax officer to do fresh assessment after making proper enquiry and investigation in regard to the jurisdiction. The assessee complained before the investigation in regard to the jurisdiction. The assessee complained before the investigation in regard to the jurisdiction. The assessee complained before the Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court held that Supreme Court held that there was ample material to show that the income tax there was ample material to show that the income tax officer made the assessments in undue hurry; that he had passed a short stereo officer made the assessments in undue hurry; that he had passed a short stereo officer made the assessments in undue hurry; that he had passed a short stereo typed assessment order for each assessment year; that on the face of the record, typed assessment order for each assessment year; that on the face of the record, typed assessment order for each assessment year; that on the face of the record, the orders were pre- -judicial to the interest of the Revenue; and no prejudice was st of the Revenue; and no prejudice was caused to the assessee on account of failure of the Commissioner to indicate the caused to the assessee on account of failure of the Commissioner to indicate the caused to the assessee on account of failure of the Commissioner to indicate the results of the enquiry made by him, as she would have a full opportunity for results of the enquiry made by him, as she would have a full opportunity for results of the enquiry made by him, as she would have a full opportunity for showing to the income tax officer whether he had jurisdict showing to the income tax officer whether he had jurisdiction or not and whether ion or not and whether the income tax assessed in the assessment years which were originally passed the income tax assessed in the assessment years which were originally passed the income tax assessed in the assessment years which were originally passed were correct or not" were correct or not" 31. From the above decisions, the following principles as to exercise of jurisdiction 31. From the above decisions, the following principles as to exercise of jurisdiction 31. From the above decisions, the following principles as to exercise of jurisdiction by the Commissioner u/s.263 of the Act can be cul by the Commissioner u/s.263 of the Act can be culled out: a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If erroneous but is not prejudicial to the Re to the interests of the Revenue. If erroneous but is not prejudicial to the Re to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue – recourse cannot be recourse cannot be had to Sec.263 (1) of the Act. had to Sec.263 (1) of the Act. b) Every loss of revenue as a consequence of an order of the Assessing Officer b) Every loss of revenue as a consequence of an order of the Assessing Officer b) Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the cannot be treated as prejudicial to the interests of the Revenue. For example, Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it tax Officer adopted one of the courses permissible in law and it tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue: or where two views are possible and the Income has resulted in loss of Revenue: or where two views are possible and the Income has resulted in loss of Revenue: or where two views are possible and the Income- tax Officer has taken one view with which the Commissioner does not agree tax Officer has taken one view with which the Commissioner does not agree tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the cannot be treated as an erroneous order prejudicial to the interests of the cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. tax Officer is unsustainable in law. c) To invoke suomotu revisional powers to reopen a concluded assessment under c) To invoke suomotu revisional powers to reopen a concluded assessment under c) To invoke suomotu revisional powers to reopen a concluded assessment under Sec.263, the Commissioner must give reasons; that a bare reiteration by him that mmissioner must give reasons; that a bare reiteration by him that mmissioner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show interests of the Revenue, will not suffice; that the reasons must be such as to show interests of the Revenue, will not suffice; that the reasons must be such as to show that the and must irresistibly lead to the conclusion that the order of the Income irresistibly lead to the conclusion that the order of the Income irresistibly lead to the conclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of the Tax Officer was not only erroneous but was prejudicial to the interests of the Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an Revenue. Thus, while the Income Tax Officer is not called upon to write an Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed re elaborate judgment giving detailed reasons in respect of each and every asons in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scru doing so; that if a query is raised during the course of the scru doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, Assessing Officer, which was answered to the satisfaction of the Assessing Officer, Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Off would not by itself lead to the conclusion that the order of the Assessing Off would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. called for interference and revision. e) The Commissioner cannot initiate proceedings with a view to start fishing and e) The Commissioner cannot initiate proceedings with a view to start fishing and e) The Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the roving inquiries in matters or orders which are already concluded; that the roving inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation department cannot be permitted to begin fresh litigation because of new views because of new views they entertain on facts or new circumstance; that if this is permitted, litigation they entertain on facts or new circumstance; that if this is permitted, litigation they entertain on facts or new circumstance; that if this is permitted, litigation would have no end except when legal ingenuity is exhausted would have no end except when legal ingenuity is exhausted

27 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. f) Whether there was application of mind before allowing the expenditure in f) Whether there was application of mind before allowing the expenditure in f) Whether there was application of mind before allowing the expenditure in question has to be seen; that if there was an inquiry, even inadequate that would be seen; that if there was an inquiry, even inadequate that would be seen; that if there was an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec.263 not by itself give occasion to the Commissioner to pass orders under Sec.263 not by itself give occasion to the Commissioner to pass orders under Sec.263 merely because he has a different opinion in the matter; that it is only in cases of merely because he has a different opinion in the matter; that it is only in cases of merely because he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a lack of inquiry that such a course of action would be open; that an assessment course of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the order made by the Income Tax Officer cannot be branded as erroneous by the order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been Commissioner simply because, according to him, the order should have been Commissioner simply because, according to him, the order should have been written more elaborately; there must be some prima facie written more elaborately; there must be some prima facie material on record to material on record to show that the tax which was lawfully exigible has not been imposed or that by the show that the tax which was lawfully exigible has not been imposed or that by the show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation, a application of the relevant statute on an incorrect or incomplete interpretation, a application of the relevant statute on an incorrect or incomplete interpretation, a lesser tax than what was just, has been imposed. lesser tax than what was just, has been imposed. g) The power of th g) The power of the Commissioner under Sec.263 (1) is not Commissioner is e Commissioner under Sec.263 (1) is not Commissioner is entitled to examine any other records which are available at the time of entitled to examine any other records which are available at the time of entitled to examine any other records which are available at the time of examination by him and to take into consideration even those events which arose examination by him and to take into consideration even those events which arose examination by him and to take into consideration even those events which arose subsequent to the order of assessment. subsequent to the order of assessment.

10.1. Now we examine the principles laid down in the principles laid down in the following judgements the following judgements. :-

DIRECTOR OF INCOME TAX vs. JYOTI FOUNDATION 357 ITR 388 (Delhi High Court ) DIRECTOR OF INCOME TAX vs. JYOTI FOUNDATION 357 ITR 388 (Delhi High Court ) It was held that revisionary power u/s 263 is conferred on the Commissioner/Director of It was held that revisionary power u/s 263 is conferred on the Commissioner/Director of It was held that revisionary power u/s 263 is conferred on the Commissioner/Director of Income Tax when an order passed by the lower authority is erroneous and prejudicial to order passed by the lower authority is erroneous and prejudicial to order passed by the lower authority is erroneous and prejudicial to the interest of the Revenue. the interest of the Revenue. Orders which are passed without inquiry or investigation are Orders which are passed without inquiry or investigation are treated as erroneous and prejudicial to the interest of the Revenue, but orders which are treated as erroneous and prejudicial to the interest of the Revenue, but orders which are treated as erroneous and prejudicial to the interest of the Revenue, but orders which are passed after inquiry/investigation on the question/issue are not per se or normally treated fter inquiry/investigation on the question/issue are not per se or normally treated fter inquiry/investigation on the question/issue are not per se or normally treated as erroneous and prejudicial to the interest of the Revenue because the revisionary as erroneous and prejudicial to the interest of the Revenue because the revisionary as erroneous and prejudicial to the interest of the Revenue because the revisionary authority feels and opines that further inquiry/investigation was required or deeper or authority feels and opines that further inquiry/investigation was required or deeper or authority feels and opines that further inquiry/investigation was required or deeper or further scrutiny should be undertaken. further scrutiny should be undertaken. INCOME TAX OFFICER vs. DG HOUSING PROJECTS LTD343 ITR 329 (Delhi) INCOME TAX OFFICER vs. DG HOUSING PROJECTS LTD343 ITR 329 (Delhi) Revenue does not have any right to appeal to the first appellate authority against an Revenue does not have any right to appeal to the first appellate authority against an Revenue does not have any right to appeal to the first appellate authority against an order passed by the Assessing Officer. S. 263 has been enacted order passed by the Assessing Officer. S. 263 has been enacted to empower the CIT to to empower the CIT to exercise power of revision and revise any order passed by the Assessing Officer, if two exercise power of revision and revise any order passed by the Assessing Officer, if two exercise power of revision and revise any order passed by the Assessing Officer, if two cumulative conditions are satisfied. Firstly, the order sought to be revised should be cumulative conditions are satisfied. Firstly, the order sought to be revised should be cumulative conditions are satisfied. Firstly, the order sought to be revised should be erroneous and secondly, it should be prejudicial to the int erroneous and secondly, it should be prejudicial to the interest of the Revenue. The erest of the Revenue. The expression "prejudicial to the interest of the Revenue" is of wide import and is not expression "prejudicial to the interest of the Revenue" is of wide import and is not expression "prejudicial to the interest of the Revenue" is of wide import and is not confined to merely loss of tax. The term "erroneous" means a wrong/incorrect decision confined to merely loss of tax. The term "erroneous" means a wrong/incorrect decision confined to merely loss of tax. The term "erroneous" means a wrong/incorrect decision deviating from law. This expression postulates an error whi deviating from law. This expression postulates an error which makes an order ch makes an order unsustainable in law. The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as The Assessing Officer is both an investigator and an adjudicator. If the Assessing Officer as an adjudicator decides a question or aspect and makes a wrong assessment which is an adjudicator decides a question or aspect and makes a wrong assessment which is an adjudicator decides a question or aspect and makes a wrong assessment which is unsustainable in law, it can be correcte unsustainable in law, it can be corrected by the Commissioner in exercise of revisionary d by the Commissioner in exercise of revisionary power. As an investigator, it is incumbent upon the Assessing Officer to investigate the power. As an investigator, it is incumbent upon the Assessing Officer to investigate the power. As an investigator, it is incumbent upon the Assessing Officer to investigate the facts required to be examined and verified to compute the taxable income. If the Assessing facts required to be examined and verified to compute the taxable income. If the Assessing facts required to be examined and verified to compute the taxable income. If the Assessing Officer fails to conduct th Officer fails to conduct the said investigation, he commits an error and the word e said investigation, he commits an error and the word "erroneous" includes failure to make the enquiry. In such cases, the order becomes "erroneous" includes failure to make the enquiry. In such cases, the order becomes "erroneous" includes failure to make the enquiry. In such cases, the order becomes erroneous because enquiry or verification has not been made and not because a wrong erroneous because enquiry or verification has not been made and not because a wrong erroneous because enquiry or verification has not been made and not because a wrong order has been passed on merits order has been passed on merits. Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if and himself decide that the order is erroneous, by conducting necessary enquiry, if and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under s. 263 is passed. In such cases, required and necessary, before the order under s. 263 is passed. In such cases, required and necessary, before the order under s. 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law the Assessing Officer will be erroneous because the order passed is not sustainable in law the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing and the said finding must be recorded. CIT cannot remand the matter to the Assessing and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. Officer to decide whether the findings recorded are erroneous. In cases where there is ases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification that the order/inquiry made is erroneous. This can happen if an enquiry and verification that the order/inquiry made is erroneous. This can happen if an enquiry and verification

28 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. is conducted by the CIT and he is able to establish and sh is conducted by the CIT and he is able to establish and show the error or mistake made by ow the error or mistake made by the Assessing Officer, making the order unsustainable in Law. In some cases possibly the Assessing Officer, making the order unsustainable in Law. In some cases possibly the Assessing Officer, making the order unsustainable in Law. In some cases possibly though rarely, the CIT can also show and establish that the facts on record or inferences though rarely, the CIT can also show and establish that the facts on record or inferences though rarely, the CIT can also show and establish that the facts on record or inferences drawn from facts on record per se drawn from facts on record per se justified and mandated further enquiry or investigation andated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said but the Assessing Officer had erroneously not undertaken the same. However, the said but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. finding must be clear, unambiguous and not debatable. The matter cannot be remitted for The matter cannot be remitted for a fresh decision to the Assessing Officer a fresh decision to the Assessing Officer to conduct further enquiries without a finding to conduct further enquiries without a finding that the order is erroneous. that the order is erroneous. Finding that the order is erroneous is a condition or Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under s. 263 of the Act. In requirement which must be satisfied for exercise of jurisdiction under s. 263 of the Act. In requirement which must be satisfied for exercise of jurisdiction under s. 263 of the Act. In such matters, to remand the matte such matters, to remand the matter/issue to the Assessing Officer would imply and mean r/issue to the Assessing Officer would imply and mean the CIT has not examined and decided whether or not the order is erroneous but has the CIT has not examined and decided whether or not the order is erroneous but has the CIT has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question. directed the Assessing Officer to decide the aspect/question. This distinction must be kept in mind by the CIT while ex This distinction must be kept in mind by the CIT while exercising jurisdiction under s. 263 ercising jurisdiction under s. 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to of the Act and in the absence of the finding that the order is erroneous and prejudicial to of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. In most cases of alleged "inadequate most cases of alleged "inadequate investigation", it will be difficult to hold that the order investigation", it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is erroneous, without CIT conducting verification/inquiry. The order of the Assessing Officer erroneous, without CIT conducting verification/inquiry. The order of the Assessing Officer erroneous, without CIT conducting verification/inquiry. The order of the Assessing Officer may be or may not be wrong. CIT cannot direct reconsideration on this ground but only not be wrong. CIT cannot direct reconsideration on this ground but only not be wrong. CIT cannot direct reconsideration on this ground but only when the order is erroneous. when the order is erroneous. An order of remit cannot be passed by the CIT to ask the An order of remit cannot be passed by the CIT to ask the Assessing Officer to decide whether the order was erroneous. This is not permissible. An Assessing Officer to decide whether the order was erroneous. This is not permissible. An Assessing Officer to decide whether the order was erroneous. This is not permissible. An order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An not erroneous, unless the CIT hold and records reasons why it is erroneous. An not erroneous, unless the CIT hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Officer may decide that order will not become erroneous because on remit, the Assessing Officer may decide that order will not become erroneous because on remit, the Assessing Officer may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order i the order is erroneous. Therefore CIT must after recording reasons hold that the order i the order is erroneous. Therefore CIT must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is that the CIT must come to the erroneous. The jurisdictional precondition stipulated is that the CIT must come to the erroneous. The jurisdictional precondition stipulated is that the CIT must come to the conclusion that the order is erroneous and is unsustainable in law. It may be noticed that conclusion that the order is erroneous and is unsustainable in law. It may be noticed that conclusion that the order is erroneous and is unsustainable in law. It may be noticed that the material which the CIT can rely includes not only the record as it stand the material which the CIT can rely includes not only the record as it stand the material which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it when the order in question was passed by the Assessing Officer but also the record as it when the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT. Nothing bars/prohibits the CIT from stands at the time of examination by the CIT. Nothing bars/prohibits the CIT from stands at the time of examination by the CIT. Nothing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show an collecting and relying upon new/additional material/evidence to show an collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous. order of the Assessing Officer is erroneous. COMMISSIONER OF INCOME TAX vs. J. L. MORRISON (INDIA) LTD. 366 ITR COMMISSIONER OF INCOME TAX vs. J. L. MORRISON (INDIA) LTD. 366 ITR 593 As regard the submission on behalf of the Revenue that power under Section 263 of the As regard the submission on behalf of the Revenue that power under Section 263 of the As regard the submission on behalf of the Revenue that power under Section 263 of the Act can be exercised even in a case where the issue is debatable, it was held that the case Act can be exercised even in a case where the issue is debatable, it was held that the case Act can be exercised even in a case where the issue is debatable, it was held that the case of CIT vs. M. M. Khambhatwala was not applicable. The observation that the of CIT vs. M. M. Khambhatwala was not applicable. The observation that the of CIT vs. M. M. Khambhatwala was not applicable. The observation that the Commissioner can exercise power under Section 263 of the Act even in a case were the missioner can exercise power under Section 263 of the Act even in a case were the missioner can exercise power under Section 263 of the Act even in a case were the issue is debatable was a mere passing remark which is again contrary to the view taken issue is debatable was a mere passing remark which is again contrary to the view taken issue is debatable was a mere passing remark which is again contrary to the view taken by the Apex Court in thecase of Malabar Industrial Company Ltd. & Max India Ltd. If the by the Apex Court in thecase of Malabar Industrial Company Ltd. & Max India Ltd. If the by the Apex Court in thecase of Malabar Industrial Company Ltd. & Max India Ltd. If the Assessing Officer has taken a possible view, it cannot be said that the view taken by him is Assessing Officer has taken a possible view, it cannot be said that the view taken by him is Assessing Officer has taken a possible view, it cannot be said that the view taken by him is erroneous nor the order of the Assessing Officer in that case can be set aside in revision. It erroneous nor the order of the Assessing Officer in that case can be set aside in revision. It erroneous nor the order of the Assessing Officer in that case can be set aside in revision. It has to be shown unmistakably that the order of the Assessing Office has to be shown unmistakably that the order of the Assessing Officer is unsustainable. r is unsustainable. Anything short of that would not clothe the CIT with jurisdiction to exercise power under Anything short of that would not clothe the CIT with jurisdiction to exercise power under Anything short of that would not clothe the CIT with jurisdiction to exercise power under Section 263 of the Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT vs. Section 263 of the Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT vs. Section 263 of the Act. CIT vs. M. M. Khambhatwala reported in 198 ITR 144; CIT vs. Ralson Industries Ltd. reported in 288 ITR 322 (SC), not appli Ralson Industries Ltd. reported in 288 ITR 322 (SC), not applicable; Malabar Industrial cable; Malabar Industrial Co. Ltd. v. CIT reported in 243 ITR 83, relied on. Co. Ltd. v. CIT reported in 243 ITR 83, relied on. (Para 72) As regard the third question as to whether the assessment order was passed by the As regard the third question as to whether the assessment order was passed by the As regard the third question as to whether the assessment order was passed by the Assessing Officer without application of mind, it was held that the Court has to start Assessing Officer without application of mind, it was held that the Court has to start Assessing Officer without application of mind, it was held that the Court has to start with the presumption that the assessment order was regularly passed. There is evidence to the presumption that the assessment order was regularly passed. There is evidence to the presumption that the assessment order was regularly passed. There is evidence to show that the assessing officer had required the assessee to answer 17 questions and to show that the assessing officer had required the assessee to answer 17 questions and to show that the assessing officer had required the assessee to answer 17 questions and to file documents in regard thereto. It is difficult to proceed on the basis that file documents in regard thereto. It is difficult to proceed on the basis that file documents in regard thereto. It is difficult to proceed on the basis that the 17 questions raised by him did not require application of mind. Without application of mind questions raised by him did not require application of mind. Without application of mind questions raised by him did not require application of mind. Without application of mind the questions raised by him in the annexure to notice under Section 142 (1) of the Act the questions raised by him in the annexure to notice under Section 142 (1) of the Act the questions raised by him in the annexure to notice under Section 142 (1) of the Act could not have been formulated. The Assessing Officer was required to ex could not have been formulated. The Assessing Officer was required to examine the return amine the return filed by the assessee in order to ascertain his income and to levy appropriate tax on that filed by the assessee in order to ascertain his income and to levy appropriate tax on that filed by the assessee in order to ascertain his income and to levy appropriate tax on that basis. When the Assessing Officer was satisfied that the return, filed by the assessee, was in basis. When the Assessing Officer was satisfied that the return, filed by the assessee, was in basis. When the Assessing Officer was satisfied that the return, filed by the assessee, was in accordance with law, he was under no obligation to ju accordance with law, he was under no obligation to justify as to why was he satisfied. On stify as to why was he satisfied. On the top of that the Assessing Officer by his order dated 28 the top of that the Assessing Officer by his order dated 28th March, 2008 did not adversely March, 2008 did not adversely

29 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd. affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law under no obligation in law to give reasons. The fact, that all requisite papers were summoned and to give reasons. The fact, that all requisite papers were summoned and thereafter the matter was heard from time to time coupled with the fact that the view taken by him thereafter the matter was heard from time to time coupled with the fact that the view taken by him thereafter the matter was heard from time to time coupled with the fact that the view taken by him is not shown by the revenue to be erroneous and was also considered both by the Tribun is not shown by the revenue to be erroneous and was also considered both by the Tribun is not shown by the revenue to be erroneous and was also considered both by the Tribunal as also by us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus converted Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus converted Evidence Act. A prima facie evidence, on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the fact that the order into a conclusive proof of the fact that the order was passed by the assessing officer after due was passed by the assessing officer after due application of mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. application of mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. application of mind. Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 SC Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 SC Infosys Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 SC 1984; A. A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 (Del), A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 (Del), A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 (Del), distinguished. (Paras 90-92, 102) COMMISSIONER OF INCOME TAX vs. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) COMMISSIONER OF INCOME TAX vs. SOHANA WOOLLEN MILLS 296 ITR 238 (P&H HC) A reference to the provisions of s. 263 shows that jurisdiction thereunder can be exercised if the CIT A reference to the provisions of s. 263 shows that jurisdiction thereunder can be exercised if the CIT A reference to the provisions of s. 263 shows that jurisdiction thereunder can be exercised if the CIT finds that the order of the AO was erroneous and prejudicial to the interest of Revenue. Mere audit finds that the order of the AO was erroneous and prejudicial to the interest of Revenue. Mere audit finds that the order of the AO was erroneous and prejudicial to the interest of Revenue. Mere audit objection and merely because a different view could b objection and merely because a different view could be taken, were not enough to say that the order e taken, were not enough to say that the order of the AO was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be of the AO was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be of the AO was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could exercised if the CIT was satisfied that the basis for exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the aid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the aid down about the situation when the jurisdiction can be exercised. Whether satisfaction of the CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact situation. In the present case, the Tribunal has held th situation. In the present case, the Tribunal has held that the assessee had disclosed that out of sale at the assessee had disclosed that out of sale consideration, a sum of Rs. 1 lakh was to be received for sale of permit. If that is so, there was no consideration, a sum of Rs. 1 lakh was to be received for sale of permit. If that is so, there was no consideration, a sum of Rs. 1 lakh was to be received for sale of permit. If that is so, there was no error in the view taken by the AO and no case was made out for invoking jurisdiction under s. 263. error in the view taken by the AO and no case was made out for invoking jurisdiction under s. 263. error in the view taken by the AO and no case was made out for invoking jurisdiction under s. 263. 11. In view of the above discussion and applying the proposition of law laid down in view of the above discussion and applying the proposition of law laid down in view of the above discussion and applying the proposition of law laid down in the above case law to the facts of this case to the facts of this case and specifically applying the decision of the and specifically applying the decision of the Tribunal in the case of M/s. M/s. Amritrashi Infra Private Ltd. (supra) and in the case of and in the case of M/s. Omkar Infrastructure Pvt. Ltd. (supra) Omkar Infrastructure Pvt. Ltd. (supra) to the facts of the case on hand, we have to to the facts of the case on hand, we have to necessarily hold that the exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the necessarily hold that the exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the necessarily hold that the exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the Act, vide order dt. 11/03/2019, is bad in law. Act, vide order dt. 11/03/2019, is bad in law. The Assessing Officer has fol The Assessing Officer has followed all the directions of the ld. Pr. CIT, in his order u/s 263 of the Act, dt. 31/03/2016 and after directions of the ld. Pr. CIT, in his order u/s 263 of the Act, dt. 31/03/2016 and after directions of the ld. Pr. CIT, in his order u/s 263 of the Act, dt. 31/03/2016 and after detailed examination of witness and evidence has taken a legal and possible view. There detailed examination of witness and evidence has taken a legal and possible view. There detailed examination of witness and evidence has taken a legal and possible view. There is no error to the extent it is prejudicial to the revenue in the is no error to the extent it is prejudicial to the revenue in the order of the Assessing order of the Assessing Officer passed u/s 143(3) r.w.s. 263 of the Act on 13/05/2016. passed u/s 143(3) r.w.s. 263 of the Act on 13/05/2016. Hence we quash the Hence we quash the same and allow the appeal of the assessee. same and allow the appeal of the assessee. In the result, appeal of the assessee is allowed. 12. In the result, appeal of the assessee is allowed.

Kolkata, the Kolkata, the 10th day of February, 2021. Sd/- Sd/- [Aby T. Varkey] [J. Sudhakar Reddy] [J. Sudhakar Reddy] Judicial Member Accountant Member Accountant Member Dated : 10.02.2021 {SC SPS}

30 ITA No. 800/Kol/2019 Assessment Year: 2012-13 M/s. Metal Craft Industries Pvt. Ltd M/s. Metal Craft Industries Pvt. Ltd.

Copy of the order forwarded to: 1. M/s. Metal Craft Industries Pvt. M/s. Metal Craft Industries Pvt. Ltd 1B, Elgin Road Kolkata – 700 020