ENKAY TRAFFIN (P) LTD.,KOLKATA vs. PR.CIT-4, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA VIRTUAL COURT HEARING (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri S.S. Godara, Hon’ble Judicial Member) ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd..…………………………………………….............................………………......…....Appellant C/o Subash Agarwal & Associates Siddha Gibson 1, Gibson Lane Suite 213 2nd Floor Kolkata – 700 069 [PAN : AAACE 5682 P] Vs. Pr. Commissioner of Income Tax -4, Kolkata…......................………..................………..…....Respondent Appearances by: Shri Subash Agarwal, Advocate, appeared on behalf of the assessee. Shri Imokaba Jamir, CIT D/R, appearing on behalf of the Revenue. Date of concluding the hearing : October 21st, 2020 Date of pronouncing the order : January 12th, 2021 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Pr. Commissioner of Income Tax – 4, Kolkata, (hereinafter the “ld. Pr. CIT”), passed u/s. 263 of the Income Tax Act, 1961 (the ‘Act’), dt. 14/03/2019, for the Assessment Year 2011- 12. 2. The assessee is a private limited company trading in securities and investments. It filed its original return of income for the Assessment Year 2012-13 on 26/09/2012, declaring total income of Rs.73,010/-. The return was duly processed u/s 143(1) of the Act. Thereafter, the case was selected for scrutiny and an assessment order was passed u/s 143(3) of the Act on 04/03/2015 (hereinafter referred to as the “original assessment order”) determining the total income of the company at Rs.7,17,04,500/- interalia making additions u/s 68 of the Act and disallowance u/s 14A of the Act. In the assessment order, the Assessing Officer held as follows:- “In the light of the facts of the case and aforesaid exposition of the legal position, with regard to the identity and creditworthiness of the subscriber companies and the genuineness of the transaction, it can be said that assessee has introduced its own unaccounted fund in the form of share application money to legalize its own black money. Accordingly, the credit of

2 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. Rs.7,15,00,000/- in the books of the assessee is considered as income of the assessee for the in the books of the assessee is considered as income of the assessee for the in the books of the assessee is considered as income of the assessee for the instant previous year and charged to income instant previous year and charged to income-tax. Considering the aforesaid facts and discussion, share application money of Considering the aforesaid facts and discussion, share application money of Considering the aforesaid facts and discussion, share application money of Rs.7,15,00,000/- received by the assess received by the assessee during the year is added to the total income of ee during the year is added to the total income of the assessee as unaccounted cash credit in the books of the assessee as per the provisions the assessee as unaccounted cash credit in the books of the assessee as per the provisions the assessee as unaccounted cash credit in the books of the assessee as per the provisions of section 68 of the I.T. Act.” 2.1. The ld. Pr. CIT, issued a showcause notice to the assessee u/s 263 of the Ac The ld. Pr. CIT, issued a showcause notice to the assessee u/s 263 of the Ac The ld. Pr. CIT, issued a showcause notice to the assessee u/s 263 of the Act on 04/08/2016 proposing to revis 04/08/2016 proposing to revise of the original assessment order dt. 04/03/2015 u/s of the original assessment order dt. 04/03/2015 u/s 263 of the Act. Thereafter, t Thereafter, the ld. Pr. CIT passed an order u/s 263 of the Act on he ld. Pr. CIT passed an order u/s 263 of the Act on 09/09/2016, holding that the original assessment order passed on 04/03/2015 was 09/09/2016, holding that the original assessment order passed on 04/03/2015 was 09/09/2016, holding that the original assessment order passed on 04/03/2015 was erroneous, insofar as, prejudicial to the interest of the revenue ous, insofar as, prejudicial to the interest of the revenue (hereinafter, refer to this (hereinafter, refer to this order as the 1st order u/s 263 of the Act). order u/s 263 of the Act). At para 4(v) of his order, he held as follows: At para 4(v) of his order, he held as follows:- “Considering the above facts and circumstances of the case, the assessment o “Considering the above facts and circumstances of the case, the assessment o “Considering the above facts and circumstances of the case, the assessment order passed on 04.03.2015 is set aside denovo with a direction to AO to carry out proper passed on 04.03.2015 is set aside denovo with a direction to AO to carry out proper passed on 04.03.2015 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. examination of books of accounts and Bank accounts of assessee as well as investors. 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 inve A.O. is also directed to examine the source of share application, identity of inve A.O. is also directed to examine the source of share application, identity of investor and its genuineness and issue of purchase & sale of shares & its valuation. The and its genuineness and issue of purchase & sale of shares & its valuation. The and its genuineness and issue of purchase & sale of shares & its valuation. The assessment proceedings may be initiated at the earliest and to be completed without assessment proceedings may be initiated at the earliest and to be completed without assessment proceedings may be initiated at the earliest and to be completed without waiting time barring date. The A.O. must provide sufficient opportunity of being waiting time barring date. The A.O. must provide sufficient opportunity of being 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 fairness.” to the assessee in order to meet natural justice, equity and fairness.” to the assessee in order to meet natural justice, equity and fairness.” Thereafter, the Assessing Officer passed an order u/s 143(3) r.w.s. 263 of the Act Thereafter, the Assessing Officer passed an order u/s 143(3) r.w.s. 263 of the Act Thereafter, the Assessing Officer passed an order u/s 143(3) r.w.s. 263 of the Act on 26/12/2016. In this second assessment order, the Assessing Officer conducted on 26/12/2016. In this second assessment order, the Assessing Officer conducted on 26/12/2016. In this second assessment order, the Assessing Officer conducted enquiries as directed by the ld. Pr. CIT in his order u/s 263 of the Act dt. 09/09/2016 d by the ld. Pr. CIT in his order u/s 263 of the Act dt. 09/09/2016 d by the ld. Pr. CIT in his order u/s 263 of the Act dt. 09/09/2016 and completed the assessment. No addition was made u/s 68 of the Act in this 2 and completed the assessment. No addition was made u/s 68 of the Act in this 2 and completed the assessment. No addition was made u/s 68 of the Act in this 2nd assessment order. 2.2. The ld. Pr. CIT issued a notice u/s 16/01/2019 initiating proceedings u/s 263 of issued a notice u/s 16/01/2019 initiating proceedings u/s 263 of issued a notice u/s 16/01/2019 initiating proceedings u/s 263 of the Act, proposing to revise the second assessment order passed u/s 263 r.w.s. 143(3) Act, proposing to revise the second assessment order passed u/s 263 r.w.s. 143(3) Act, proposing to revise the second assessment order passed u/s 263 r.w.s. 143(3) of the Act on 26/12/2016. Para 3 of this showcause notice reads as follows: of the Act on 26/12/2016. Para 3 of this showcause notice reads as follows: of the Act on 26/12/2016. Para 3 of this showcause notice reads as follows:- “3. Subsequently, the assessment records of the assessee were called for & “3. Subsequently, the assessment records of the assessee were called for & on the basis of the verification of the material available 011 records, it was found that the order of assessment was verification of the material available 011 records, it was found that the order of assessment was verification of the material available 011 records, it was found that the order of assessment was erroneous so far as it is prejudicial to the interest of revenue on the following grounds: erroneous so far as it is prejudicial to the interest of revenue on the following grounds: erroneous so far as it is prejudicial to the interest of revenue on the following grounds:- (i) The A.O passed the order without carrying ou The A.O passed the order without carrying out detailed investigation/verification/ t detailed investigation/verification/ independent enquiry regarding identity, creditworthiness of the shareholders & also independent enquiry regarding identity, creditworthiness of the shareholders & also independent enquiry regarding identity, creditworthiness of the shareholders & also the genuineness of transactions relating to share capital that was intended to be the genuineness of transactions relating to share capital that was intended to be the genuineness of transactions relating to share capital that was intended to be carried out and merely accepted the submission of t carried out and merely accepted the submission of the assessee in this regard. he assessee in this regard. (ii) That A.O has also failed to carryout detailed investigation of the shareholders on the That A.O has also failed to carryout detailed investigation of the shareholders on the That A.O has also failed to carryout detailed investigation of the shareholders on the very issue that how they decided to invest in such a company which was never known very issue that how they decided to invest in such a company which was never known very issue that how they decided to invest in such a company which was never known

3 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. for its line of business and also they invested at for its line of business and also they invested at huge premium without verifying the huge premium without verifying the financial position. (iii) The A.O further failed to examine the rationale behind raising the said share premium The A.O further failed to examine the rationale behind raising the said share premium The A.O further failed to examine the rationale behind raising the said share premium and also did not verify the method adopted by assessee for determining such and also did not verify the method adopted by assessee for determining such and also did not verify the method adopted by assessee for determining such abnormally huge premium specially keeping in view that prima facie there was no abnormally huge premium specially keeping in view that prima facie there was no abnormally huge premium specially keeping in view that prima facie there was no material in the balance sheet of the assessee warranting/justifying such huge e balance sheet of the assessee warranting/justifying such huge e balance sheet of the assessee warranting/justifying such huge premium. (iv) The A.O failed to collect the relevant evidences in order to reach a logical conclusion The A.O failed to collect the relevant evidences in order to reach a logical conclusion The A.O failed to collect the relevant evidences in order to reach a logical conclusion regarding the genuineness of controlling interest. regarding the genuineness of controlling interest. (v) The A.O. failed to examine all th The A.O. failed to examine all the bank accounts for the entire period in the course of e bank accounts for the entire period in the course of verification to find out the money trail of the share capital. verification to find out the money trail of the share capital. (vi) The A.O. failed to adequately trace out the money trail to ascertain the genuineness of The A.O. failed to adequately trace out the money trail to ascertain the genuineness of The A.O. failed to adequately trace out the money trail to ascertain the genuineness of source of fund invested by share holders in t source of fund invested by share holders in the assessee company. (vii) On the whole the impugned order dated 26 On the whole the impugned order dated 26-12-2016 passed u/s 263/143(3) of the 2016 passed u/s 263/143(3) of the Income Tax Act, 1961 prima facie suffers from lack of independent and adequate Income Tax Act, 1961 prima facie suffers from lack of independent and adequate Income Tax Act, 1961 prima facie suffers from lack of independent and adequate enquiry on the aforesaid issues.” enquiry on the aforesaid issues.”

2.2.1. The assessee filed a letter dt The assessee filed a letter dt. 21/12/2019 replying to the above showcause 21/12/2019 replying to the above showcause notice wherein, he stated as follows: notice wherein, he stated as follows:-

“Our submission is that the A O has initiated both tools that is notice under section 133(6) r submission is that the A O has initiated both tools that is notice under section 133(6) r submission is that the A O has initiated both tools that is notice under section 133(6) and Notice under section 131 to see the aspects referred to and has considered and Notice under section 131 to see the aspects referred to and has considered and Notice under section 131 to see the aspects referred to and has considered the submissions in details while framing order. submissions in details while framing order. Our submissions is that the ld. A O has very well covered this issue as well by categorically Our submissions is that the ld. A O has very well covered this issue as well by categorically Our submissions is that the ld. A O has very well covered this issue as well by categorically questioning this issue while recording the statements under oath and all of the applicants questioning this issue while recording the statements under oath and all of the applicants questioning this issue while recording the statements under oath and all of the applicants have answered these que have answered these questions. Our submission is that the ld. A O has also put up this question before directors appearing Our submission is that the ld. A O has also put up this question before directors appearing Our submission is that the ld. A O has also put up this question before directors appearing in pursuance to notice under section 131. Moreover in view of the decision in the case of in pursuance to notice under section 131. Moreover in view of the decision in the case of in pursuance to notice under section 131. Moreover in view of the decision in the case of Green infra, share premium can not share premium can not be questioned where there is no doubt about the basic be questioned where there is no doubt about the basic three principles deciding a transaction as unexplained cash credit under section 68 of the three principles deciding a transaction as unexplained cash credit under section 68 of the three principles deciding a transaction as unexplained cash credit under section 68 of the Act. Our submission is that the share capital issued on last day of the previous year, for which Our submission is that the share capital issued on last day of the previous year, for which Our submission is that the share capital issued on last day of the previous year, for which there was no change in controlling interest and genuineness of share capital itself signifies change in controlling interest and genuineness of share capital itself signifies change in controlling interest and genuineness of share capital itself signifies genuineness of controlling interest. genuineness of controlling interest. Our submission is that it is clearly mentioned in the order that the A O has seen the bank Our submission is that it is clearly mentioned in the order that the A O has seen the bank Our submission is that it is clearly mentioned in the order that the A O has seen the bank statements submitted by applicants and also the statements submitted by applicants and also the source of the fund used for giving share source of the fund used for giving share application money. Our submission is that the A O has mentioned that source of funds was explained. Our submission is that the A O has mentioned that source of funds was explained. Our submission is that the A O has mentioned that source of funds was explained. Our submission is there was no lack of enquiry or even inadequate independent enquiry in Our submission is there was no lack of enquiry or even inadequate independent enquiry in Our submission is there was no lack of enquiry or even inadequate independent enquiry in as much as both notices as much as both notices under section 133(6) and under 131 were complied with in full.” under section 133(6) and under 131 were complied with in full.” 2.2.2 Other legal arguments were raised on the validity of the institution of Other legal arguments were raised on the validity of the institution of Other legal arguments were raised on the validity of the institution of proceedings u/s 263 of the Act, including proceedings u/s 263 of the Act, including the grounds on limitation. The ld. Pr. CIT, limitation. The ld. Pr. CIT, considered all these submiss considered all these submissions and thereafter passed an order u/s 263 of the Act on passed an order u/s 263 of the Act on

4 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 14/03/2019, revising the second assessment order passed u/s 263/143(3) of the Act on 14/03/2019, revising the second assessment order passed u/s 263/143(3) of the Act on 14/03/2019, revising the second assessment order passed u/s 263/143(3) of the Act on 26/12/2016. In this order, after discussing in detail, the reply of the assessee from para 26/12/2016. In this order, after discussing in detail, the reply of the assessee from para 26/12/2016. In this order, after discussing in detail, the reply of the assessee from para 4 to para 5.4. of the order at para 6 order at para 6 the ld. Pr. CIT, held as follows:-

“1. I have carefully considered the submission of the assessee and perused the material “1. I have carefully considered the submission of the assessee and perused the material “1. 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 needs available on record and found that the issue pointed out in the show cause needs available on record and found that the issue pointed out in the show cause needs verification. After having considere verification. After having considered the position of law and facts and circumstances of d the position of law and facts and circumstances of the instant case, I am of the considered opinion that the assessment order passed by the instant case, I am of the considered opinion that the assessment order passed by 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 interest of revenue in the A.O. is erroneous in so far as it is prejudicial to the interest of revenue in the A.O. is erroneous in so far as it is prejudicial to the interest of revenue in accordance with the Explanation 2(c accordance with the Explanation 2(c) below section 263 (1) of the Act on the ground of ) below section 263 (1) of the Act on the ground of lack of enquiry. Accordingly, the assessment made by the Assessing officer is set aside lack of enquiry. Accordingly, the assessment made by the Assessing officer is set aside lack of enquiry. Accordingly, the assessment made by the Assessing officer is set aside on the issues as outlined in para 2 above. The A.O. is directed to provide reasonable on the issues as outlined in para 2 above. The A.O. is directed to provide reasonable on the issues as outlined in para 2 above. The A.O. is directed to provide reasonable opportunity to the assessee co opportunity to the assessee company to produce documents & evidences which it may mpany to produce documents & evidences which it may choose to rely upon for substantiating its own claim. Thereafter a fresh assessment choose to rely upon for substantiating its own claim. Thereafter a fresh assessment choose to rely upon for substantiating its own claim. Thereafter a fresh assessment order may be passed in accordance with the relevant provisions of law.” order may be passed in accordance with the relevant provisions of law.” order may be passed in accordance with the relevant provisions of law.” 3. Aggrieved, the assessee is in appeal before Aggrieved, the assessee is in appeal before us on the following grounds: us on the following grounds:-

5 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 4. The ld. Counsel for the assessee submitted that, ld. Pr. CIT’s order u/s 263 The ld. Counsel for the assessee submitted that, ld. Pr. CIT’s order u/s 263 The ld. Counsel for the assessee submitted that, ld. Pr. CIT’s order u/s 263 of the Act, dt. 14/03/2019, is bad law for the following reasons: , is bad law for the following reasons:- a) The Assessing Officer had The Assessing Officer had examined the net worth of the shareholders and the net worth of the shareholders and had given a finding in his assessment order about the source of funds, had given a finding in his assessment order about the source of funds, had given a finding in his assessment order about the source of funds, identity, creditworthiness identity, creditworthiness of the share applicant and the creditworthin of the share applicant and the creditworthiness, of each of the credit of each of the creditors. He filed a paper book wherein, in annexure . He filed a paper book wherein, in annexure-B, details and documentation submitted by and documentation submitted by each of the share applicant each of the share applicant company are enclosed. That the Assessing Officer was not required to company are enclosed. That the Assessing Officer was not required to company are enclosed. That the Assessing Officer was not required to examine the justification of the examine the justification of the share premium charged charged as per the directions of the ld. Pr. CIT, in the first revisionary order passed u/s 263 of directions of the ld. Pr. CIT, in the first revisionary order passed u/s 263 of directions of the ld. Pr. CIT, in the first revisionary order passed u/s 263 of the Act on 09/09/2016. the Act on 09/09/2016. b) That the Assessing Officer had scrupulously followed the direction That the Assessing Officer had scrupulously followed the direction That the Assessing Officer had scrupulously followed the direction of the ld. Pr. CIT, given in the ld. Pr. CIT, given in the first revisionary order passed u/s 263 of the Act on u/s 263 of the Act on 09/09/2016. Even otherwise, 09/09/2016. Even otherwise, each of the shareholder companies had the shareholder companies had robust financials as can be seen from annexure robust financials as can be seen from annexure-B of the submissions. He B of the submissions. He submitted that the Assessing Officer had specifically asked the submitted that the Assessing Officer had specifically asked the submitted that the Assessing Officer had specifically asked the shareholders shareholders for the reasons for investing in the assessee company and r investing in the assessee company and after getting cogent replies, accepted the same. after getting cogent replies, accepted the same. c) That the Assessing Officer had issued notice u/s 131 of the Act to all the That the Assessing Officer had issued notice u/s 131 of the Act to all the That the Assessing Officer had issued notice u/s 131 of the Act to all the shareholders and that the shareholders had appeared before him on shareholders and that the shareholders had appeared before him on shareholders and that the shareholders had appeared before him on 20/12/2016 to 22/12/2016. 20/12/2016 to 22/12/2016. That the Assessing Officer recorded the That the Assessing Officer recorded the deposition of each of these shareholders and that this fact is evident from deposition of each of these shareholders and that this fact is evident from deposition of each of these shareholders and that this fact is evident from the order sheet entries and the deposition on record. the order sheet entries and the deposition on record. d) That the Assessing Officer had taken pro hat the Assessing Officer had taken pro-active steps in making active steps in making independent enquiries, only after which he was satisfied that independent enquiries, only after which he was satisfied that independent enquiries, only after which he was satisfied that all the necessary ingredients of Section 68 of the Act, necessary ingredients of Section 68 of the Act, are existing in these are existing in these transactions. e) That the ld. Pr. CIT has not That the ld. Pr. CIT has not asked the Assessing Officer to ex Assessing Officer to examine the Directors on the issue of genuineness of controlling interest Directors on the issue of genuineness of controlling interest Directors on the issue of genuineness of controlling interest as the same was not relevant. He submitted that the ld. Pr. CIT in the first round has was not relevant. He submitted that the ld. Pr. CIT in the first round has was not relevant. He submitted that the ld. Pr. CIT in the first round has directed the Assessing Officer to directed the Assessing Officer to examine all the bank accounts of the the bank accounts of the

6 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. investors and estors and also to examine the source of share applicant the source of share applicant which investigation was done by the Assessing Officer investigation was done by the Assessing Officer and that there was not and that there was not direction to trace out the money trails direction to trace out the money trails so as to ascertain the source of to ascertain the source of funds. 4.1. He argued that the Assessing Officer He argued that the Assessing Officer was bound by the directions of the ld. Pr. was bound by the directions of the ld. Pr. CIT given in the first round of revisionary proceedings u/s 263 of the Act and that the CIT given in the first round of revisionary proceedings u/s 263 of the Act and that the CIT given in the first round of revisionary proceedings u/s 263 of the Act and that the Assessing Officer has followed each of these directions and after conducting detailed Assessing Officer has followed each of these directions and after conducting detailed Assessing Officer has followed each of these directions and after conducting detailed enquiries and obtaining necessary docu enquiries and obtaining necessary documents has taken a plausible view and it cannot ments has taken a plausible view and it cannot be said that this is a case where there was be said that this is a case where there was lack of enquiry or a case of inadequate lack of enquiry or a case of inadequate enquiry and hence that the ld. Pr. CIT has erred in invoking his powers u/s 263 of the and hence that the ld. Pr. CIT has erred in invoking his powers u/s 263 of the and hence that the ld. Pr. CIT has erred in invoking his powers u/s 263 of the Act. He relied on a number of case . He relied on a number of case-law for each of the propositions cited by him. He for each of the propositions cited by him. He submitted that its case in question is squarely covered in his favour by the decision of in question is squarely covered in his favour by the decision of in question is squarely covered in his favour by the decision of the Kolkata ‘B’ Bench of the Tribunal in the case of the Kolkata ‘B’ Bench of the Tribunal in the case of Amritrashi Infra P Amritrashi Infra Private Ltd. Vs. Principal ipal Commission Commissioner of Income-tax in ITA ITA No. No. 838/Kol/2019; Assessment Year: 2012-13 order dt. order dt. 12.08.2020 and the decision of the Kolkata ‘A’ Bench and the decision of the Kolkata ‘A’ Bench of the Tribunal in the case M M/s Omkar Infracon Private vs ITO,Ward-12(2), Kolkata 12(2), Kolkata in ITA No. 896/Kol/2019; Assessment Year 2012 No. 896/Kol/2019; Assessment Year 2012-13, order dt. 18/03/2020 13, order dt. 18/03/2020, wherein under similar circumstances the order of the ld. Pr. CIT u/s 263 of the Act, was quashed as bad similar circumstances the order of the ld. Pr. CIT u/s 263 of the Act, was quashed as bad similar circumstances the order of the ld. Pr. CIT u/s 263 of the Act, was quashed as bad in law. He further relied on the He further relied on the decision in the case of Kanchan Plywood Produc Kanchan Plywood Products Pvt. Ltd. in ITA No. 2411/Kol/2017; Assessment Year: 2012 Ltd. in ITA No. 2411/Kol/2017; Assessment Year: 2012-13, order dt. 01/05/2019, 13, order dt. 01/05/2019, and other decisions for the proposition that share premium cannot be taxed, even if it other decisions for the proposition that share premium cannot be taxed, even if it other decisions for the proposition that share premium cannot be taxed, even if it exceeds the fair market value, prior to the amendment brought to the Income Tax A exceeds the fair market value, prior to the amendment brought to the Income Tax A exceeds the fair market value, prior to the amendment brought to the Income Tax Act in the Assessment Year 2013-14. We would be considering each of these decisions as and 14. We would be considering each of these decisions as and 14. We would be considering each of these decisions as and when necessary. 5. The ld. D/R, Shri Imokaba Jamir The ld. D/R, Shri Imokaba Jamir, on the other hand, controverted the arguments , on the other hand, controverted the arguments of the assessee and submitted that the ld. Pr. CIT of the assessee and submitted that the ld. Pr. CIT in the impugned order passed u/s 263 in the impugned order passed u/s 263 of the Act on 14/03/2019 of the Act on 14/03/2019 has dealt with each and every argument made by the y argument made by the assessee. He took this Bench through para 4 to para 5.1. of the impugned order . He took this Bench through para 4 to para 5.1. of the impugned order . He took this Bench through para 4 to para 5.1. of the impugned order passed u/s 263 of the Act and relied on the and relied on the finding of the ld. Pr. CIT. He specifically drew the He specifically drew the attention of the Bench to the judgment of the Hon’ble Supreme Court in the case of attention of the Bench to the judgment of the Hon’ble Supreme Court in the case of attention of the Bench to the judgment of the Hon’ble Supreme Court in the case of Principal Commissioner of Income Principal Commissioner of Income-tax (Central)-1 v. NRA Iron & Steel (P.) Ltd. Iron & Steel (P.) Ltd. reported in

7 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. [2019] 103 taxmann.com 48 (SC) [2019] 103 taxmann.com 48 (SC) and argued that in case of private placement of shares, n case of private placement of shares, there is a higher onus placed on the assessee and the assessee there is a higher onus placed on the assessee and the assessee is under a legal obligation, to justify the receipt of share capital and share premium to the satisfaction of justify the receipt of share capital and share premium to the satisfaction of justify the receipt of share capital and share premium to the satisfaction of the Assessing Officer. He submitted that the He submitted that the order of the Assessing Officer is a non order of the Assessing Officer is a non- speaking order and that a perusal of the same demonstrates that the assessment order speaking order and that a perusal of the same demonstrates that the assessment order speaking order and that a perusal of the same demonstrates that the assessment order is erroneous insofar as it is prejudicial to the interest of the revenue. On a specific query is erroneous insofar as it is prejudicial to the interest of the revenue. On a specific query is erroneous insofar as it is prejudicial to the interest of the revenue. On a specific query from the Bench, though not leaving h from the Bench, though not leaving his ground, the ld. D/R could not distinguish the is ground, the ld. D/R could not distinguish the orders of this Bench of the Tribunal, on facts, orders of this Bench of the Tribunal, on facts, in identical circumstances, in identical circumstances, in the case of Amritrashi Infra Private Ltd. vs. rivate Ltd. vs. Principal Commissioner of Income-tax (supra) tax (supra) and M/s Omkar Infracon Private vs ITO Omkar Infracon Private vs ITO (supra). He prayed that the order of the ld. Pr. CIT passed He prayed that the order of the ld. Pr. CIT passed u/s 263 of the Act to be upheld. u/s 263 of the Act to be upheld. 5.1. In reply, the ld. Counsel for the assessee, submitted that the judgment of the In reply, the ld. Counsel for the assessee, submitted that the judgment of the In reply, 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 & Steel (P.) Ltd. (supra), (supra), is not applicable as, in that case, the shareholders were not traceable and whereas in the case of as, in that case, the shareholders were not traceable and whereas in the case of as, in that case, the shareholders were not traceable and whereas in the case of hand each of the shareholder companies’ representatives appeared before the Assessing each of the shareholder companies’ representatives appeared before the Assessing each of the shareholder companies’ representatives appeared before the Assessing Officer in response to summons Officer in response to summons and that the Assessing Officer recorded and that the Assessing Officer recorded statements on oath from them and that they oath from them and that they filed all necessary documents including assessment filed all necessary documents including assessment orders passed in their cases u/s 143(3) of the Act, by the Department orders passed in their cases u/s 143(3) of the Act, by the Department orders passed in their cases u/s 143(3) of the Act, by the Department in their cases, copies of the final accounts, copies of the returns of income filed by them accounts, copies of the returns of income filed by them accounts, copies of the returns of income filed by them, copies of the bank account statements and bank account statements and also evidence of sources of investments etc. He submitted evidence of sources of investments etc. He submitted that when the assessments of the share applicant companies have been completed by that when the assessments of the share applicant companies have been completed by that when the assessments of the share applicant companies have been completed by the Department u/s 143(3) of the Act, and the Department u/s 143(3) of the Act, and when nothing adverse was found nothing adverse was found, no addition u/s 68 of the Act, can be made in the case of the assessee company, which is a recipient u/s 68 of the Act, can be made in the case of the assessee company, which is a recipient u/s 68 of the Act, can be made in the case of the assessee company, which is a recipient of the share application money. For this proposition, he relied on a number of case of the share application money. For this proposition, he relied on a number of case of the share application money. For this proposition, he relied on a number of case-law, which we will be referring to which we will be referring to, as and when required. 5.1.1. He once again relied on the order of the Co nce again relied on the order of the Co-ordinate Bench of the Tribunal in the ordinate Bench of the Tribunal in the case of Amritrashi Infra Private Ltd. vs. rivate Ltd. vs. Principal Commissioner of Income ipal Commissioner of Income-tax (supra) and submitted that the facts of the assessee’s case are identical to the facts in the case submitted that the facts of the assessee’s case are identical to the facts in the case submitted that the facts of the assessee’s case are identical to the facts in the case of Amritrashi Infra Private Ltd. (supra) rivate Ltd. (supra) and under those circumstances, the decision of the and under those circumstances, the decision of the Tribunal in the case of Amritrashi Infra P Amritrashi Infra Private Ltd. (supra), has to be followed , has to be followed, specifically when no contrary decision is brought to the notice of the Tribunal. specifically when no contrary decision is brought to the notice of the Tribunal. specifically when no contrary decision is brought to the notice of the Tribunal.

8 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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: below as well as case law cited, we hold as follows:-

“46. In the light of the afore In the light of the afore-cited judicial precedents, let us examine the case in ts, 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 the AO f premium collected by the assessee or whether the AO failed to enquire on this issue and ailed 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 23.08.2016 and t Revisional Order of the First Pr. CIT dated 23.08.2016 and the reassessment /Second he 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 proceeding, assessment records/folder that during the first round of scrutiny proceeding, 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 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 with the 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 e note that the First Ld. Pr. CIT in his first revisional order, found that AO in e 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 t by the AO. The First Ld. Pr. CIT at para (4) of his first revisional order t 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. ied 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 the 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 basis of evidence on which adverse inference was drawn against the assessee. inference was drawn against the assessee. Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the 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 etermined mind has simply jumped to the conclusion that the share capital collected by assessee as unexplained cash credit u/s. conclusion that the share capital collected by assessee as unexplained cash credit u/s. 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 order framed u/s. 143(3) of the Act dated 26-03-2015 was against the principle of 2015 was against the principle of

ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. natural justice and, therefore, he found it fit to order denovo assessment and gave natural justice and, therefore, he found it fit to order denovo assessment and gave 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.

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. 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. 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 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. M/s. SubhsreeImpex Pvt. Ltd. U51909WB2011PTC171513 AARCS1845D AARCS1845D yes . 12 M/s. M/s. Maharaja Maharaja Merchants Merchants U51109WB2005PTC102343 AAECM224E AAECM224E yes

10 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. . Pvt. Ltd. 13 M/s. Sristi Sales Pvt. Ltd. M/s. Sristi Sales Pvt. Ltd. U51109WB2005PTC102121 AAICS8900L AAICS8900L yes . v) The AO to complete the assessment at the earliest without waiting for the time The AO to complete the assessment at the earliest without waiting for the time The AO to complete the assessment at the 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 direction of Ld. First Pr. CIT, the Second AO firstly proceeding. As per the specific direction of Ld. First Pr. CIT, the Second AO firstly proceeding. As per the specific direction of Ld. First Pr. CIT, the Second AO firstly summoned the director of the assessee company Shri NavinTahin before him, who duly mmoned the director of the assessee company Shri NavinTahin before him, who duly mmoned 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) audited accounts, (iii) details of directors, (iv) the details viz., (i) copy of ITR, (ii) audited accounts, (iii) details of directors, (iv) the details viz., (i) copy of ITR, (ii) 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 reas through banking transaction, which fact the AO has acknowledged in the reas through banking transaction, 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 co produced PAN,ROC details, audited financial statements, details and co produced PAN,ROC 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 befo that assessee had discharged its onus by furnishing/documents befo that assessee 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 de the notice, all the shareholders have filed their respective (i) PAN de the notice, all 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 identity of the investors were duly furnished by the and thus we note that the identity of the investors were duly furnished by the and thus we note that the identity of the investors were duly furnished by the assessee’s director; and the AO verified the veracity of the same from all the share ssee’s director; and the AO verified the veracity of the same from all the share ssee’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 era, the AO on a click of the mouse, could have knowledge that in this computer/digital era, the AO on a click of the mouse, could have knowledge that in this computer/digital era, 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 ified the identity of the share applicant which is available in the website of ified 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 details from the AO of the respective share applicants the AO to cross verify and collect details from the AO of the respective share applicants the AO to cross verify and collect details from the AO of the respective share applicants and independently from the Revenue’s departmental data base. We note that all the nd independently from the Revenue’s departmental data base. We note that all the nd 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 also examined by the AO along with audited accounts from which these details show also examined by the AO along with audited accounts from which these details show also examined by the AO along with 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 possible view in the light of the documents referred to and we also by applying the possible view in 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 reg judicial act of the second AO have been regularly performed. Coming to the contention ularly performed. Coming to the contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO of Ld. CIT, DR, that 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 o his reassessment/second assessment order has clearly asserted that he had issued rder 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. notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. notice u/s. 133(6) 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 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 the clear assertion of the Second AO in his order that pursuant to his issue of notice the clear assertion 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 he did not mention this event in the order sheet. Moreover, the assessee or the share in the order sheet. Moreover, the assessee or the share

11 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. applicants does not have any control over the order sheet maintained by the AO and applicants does not have any control over the order sheet maintained by the AO and applicants 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 assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine u/s. 133(6) of the Act. Moreover, we have to examine the re-assessment/second assessment order of AO and not the order assessment/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 is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we 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 note that second AO issued sec. 133(6) notice and collected documents running more note that second 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 ass has returned a finding that assessee in the first round itself has filed the relevant essee in the first round itself has filed the relevant documents to prove the identity, creditworthiness and genuineness of the share capital documents to prove the identity, creditworthiness and genuineness of the share capital documents 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 iss 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, their replies and supporting documents and thereafter having verified their veracity, their 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 capi and source of share capital which view of second AO cannot be faulted. And we also tal 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 cannot be ect of identity of the shareholders is a possible view and cannot be ect 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 efore the AO and the Ld. Pr. CIT and we note that their source of investment and net worth as per balance Ld. Pr. CIT and we note that their source of investment and net worth as per balance Ld. Pr. CIT and we note that their source of 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. Rs.222,397,317 Rs.222,397,317 Rs.45,00,000/- Page 115Paper Book- (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/- 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. M/s. SubhsreeI mpex 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.

12 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) 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 a Private Limited Company, and which has Permanent Account No. 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 p company including the share premium comes to Rs.1,30,00,000/ remium 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/- 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 form, ITR acknowledgment, Bank and the share application form, ITR acknowledgment, Bank and the share application 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 assessee had duly discharged its onus to prove the identity of the share identity of the share applicants by adducing PAN as well as income applicants 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 channel. Further, it is noted that the share applicant had furnished the is noted that the share applicant had furnished the

13 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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 tune of Rs.1,39,00,000/ 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 01.03.20 on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a 12 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 lakh each. There is board resolution for investment in assessee’s company lakh each. There is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR and Share Application Form, Bank statement, ITR acknowledgement, and 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 applicant regularly filed Income Tax page 39 to 77. This share applicant regularly filed Income Tax page 39 to 77. This share applicant 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 furnished the details of source of Funds and has duly filed financial 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 identity of the share applicant by adducing PAN as well as to prove the identity of the share applicant by adducing PAN as well as to prove the identity of the share applicant by adducing PAN as well as income-tax returns. The financial statement shows that the shar tax returns. The financial statement shows that the shar 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 is noted transaction has happened through banking channel. Further, it is noted 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 tice 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 U67120WB1 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 company is to the tune of Rs. 4,40,00,000/ 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 has made the transaction through banking channel on 01.03 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 on 27.3.2012 . 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 acknowledgement, explanation of source of fund as well as financial 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 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 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 applicants by discharged its onus to prove the identity of the share applicants by 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 that the share applicant had enough funds to invest in the assessee 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 notice under company after getting the notice under section 133(6) of the Act. 6) of the Act.

14 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. (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 th 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. 45,00,000/ 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 s through NEFT. There is board resolution for investment in s 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 113 to 137 in the PB. This 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 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 t duly discharged its onus to prove the identity of the share applicants by o 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 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 notice under 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 hare 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 ma page 153) and investment made in the assessee company is to the tune of Rs. 4,66,00,000/ 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 Shar investment in assessee’s company and Share Application Form Bank e Application Form Bank statement, ITR acknowledgement, explanation of source of fund as well as statement, ITR acknowledgement, explanation of source of fund as well as statement, ITR acknowledgement, 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 source of Funds ment. This company has furnished the details of source of Funds ment. 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 note that the assessee had duly discharged its onus to prove the identity of its onus to prove the identity of the share applicants by adducing PAN as well as income 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 onus to prove the g channel. Thus the assessee has discharged the onus to prove the g 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) ng the notice under section 133(6) of the Act. (vi) We note from a perusal of the paper book pages (vi) 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 Limited Company which has a PAN AARCS0094C and its CIN number Limited Company which has a PAN AARCS0094C and its CIN number is

15 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. U74999WB2012PTC 173749 and the net worth of this company as on U74999WB2012PTC 173749 and the net worth of this company as on U74999WB2012PTC 173749 and the net worth of this 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 c has made the transaction through banking channel on 29.03.2012 hannel on 29.03.2012 Rs.6,55,00,000/ Rs.6,55,00,000/- 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 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 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 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 has duly filed financial statements and thus we note that the 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 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 company and the transaction has happened through banking channel. Thus has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness the assessee has discharged the onus to prove the identity, creditworthiness the assessee 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 applicants had furnished the source of investment made in the 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.

(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 Limited Company which has a PAN AABCF9036D and its CIN number is AABCF9036D and its CIN number is U52190WB2012PTC 173352and the net worth of this company as on U52190WB2012PTC 173352and the net worth of this company as on U52190WB2012PTC 173352and 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 t has made the transaction through banking channel on 30.03.2012 he 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 a acknowledgement, explanation of source of fund as well a 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 page 186 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 t to prove the identity of the share applicants by adducing PAN as well as he 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 dis happened through banking channel. Thus the assessee has dis happened through banking 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 company after getting the notice under section 133(6) o under section 133(6) of the Act. (viii) We note from a perusal of the paper book pages (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 U45400WB2011PTC170958and the net worth of this company as on net worth of this company as on 31.3.2012 Rs.56,18,93,960/ 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/ 000/- through NEFT. There is board resolution for investment in through NEFT. There is board resolution for investment in

16 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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 his 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 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 adducing PAN as us to prove the identity of the share applicants by adducing PAN as us to prove the identity of the share applicants by 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 chann transaction has happened through banking channel. Thus the assessee has el. 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. notice under section 133(6) of the Act.

(ix) We note from a perusal of the paper book (ix) We note 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 company s U45400WB2011 PTC 170944 and the net worth of this company s 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 31.0 made the transaction through banking channel on 31.0 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 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 228 to 261 in the PB. This share 8 to 261 in the PB. This share applicant regularlyfiled Income Tax Return (ITR) and it has filed its Bank applicant regularlyfiled Income Tax Return (ITR) and it has filed its Bank applicant regularlyfiled 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 statement. This company ncome Tax Return (ITR) and it has filed its Bank statement. This company ncome Tax Return (ITR) and it has filed its Bank statement. 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 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, 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 e 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. (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 number is Company which has a PAN AACCL2111J and its CIN number is 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 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.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, explanati acknowledgement, explanation of source of fund as well as financial on of source of fund as well as financial statement available in the PB statement available in the PB-page 163-283 in the PB. This share applicant 283 in the PB. This share applicant

17 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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 an This company has furnished the details of source of Funds an 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 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 t discharged the onus to prove the identity, creditworthiness and genuineness he 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. (xi) We note fr (xi) We note from a perusal of the paper book-2 pages 284 to 303 the 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 297)and investment 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 ere 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 285-303 in the PB. This share applicant 303 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. ularly filed Income Tax Return (ITR) and it has filed its Bank statement. ularly 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 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 i 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 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 shed the source of investment made in the assessee shed 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 AAECM224E and its CIN number is Limited Company which has a PAN AAECM224E and its CIN number is Limited Company which has a PAN AAECM224E 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. assessee company is to the tune of Rs.50 lakhs and this share applicant has 50 lakhs and this share applicant has made the transaction through banking channel on 28.02.2012 a sum of made the transaction through banking channel on 28.02.2012 a sum of made the transaction 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 3 page 304 to 326 in the PB. This share applicant regularly filed Income Tax 26 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 throu company and the transaction has happened through banking channel. Thus gh banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness the assessee has discharged the onus to prove the identity, creditworthiness the assessee 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 section 133(6) of the Act. ter getting the notice under section 133(6) of the Act. ter getting the notice under section 133(6) of the Act.

18 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. (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 which has a PAN AAICS8900L and its CIN number is U51109WB2005PTC number is U51109WB2005PTC 102121 and the net worth of this company as on 31.3.2012 Rs.1,12,25,612/ 102121 and the net worth of this company as on 31.3.2012 Rs.1,12,25,612/ 102121 and the net worth of this 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 Share 02.2012 a sum of Rs. 50 lakhs through Cheque. There is Share 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 Ba Income Tax Return (ITR) and it has filed its Bank statement. The financial nk statement. 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. 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 discussion ess and genuineness of the transactions. Thus from the discussion ess 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 y after getting the notice from second AO under section 133(6) of the Act. Thus we note that the AO on the basis of AO under section 133(6) of the Act. Thus we note that the AO on the basis of AO under section 133(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 t adverse inference against the assessee, and the view thus taken by t 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. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. capital and premium collected from the share subscribers was a plausible view and at capital and premium collected from the share subscribers was a plausible view and at capital and premium collected from the share subscribers was a plausible view and at any rate can be termed as an unsustainable view on law or facts any rate can be termed as an unsustainable view on law or facts

20 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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, so meritless. Since the assessee company has discharged its onus as discussed supra, so meritless. Since the assessee company has discharged its onus as discussed supra, and still if the Second Pr. CIT had to find the order of Second AO erron and still if the Second Pr. CIT had to find the order of Second AO erron 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 called for the additional facts which he thinks that the Second AO has not collected called for the additional facts which he thinks that the Second AO has not collected from the assessee or the shareholders and then explained in his impu from the assessee or the shareholders and then explained in his impugned order as to gned 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 or in other words the impact on the decision making process order/reassessment order or in other words the impact on the decision making process order/reassessment order 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 o of framing the second assessment order due to the failure of second AO’s o 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 exercise or even spelled out in his impugned order, which all carried out any such exercise or even spelled out in his impugned order, which all carried out any such exercise or even spelled out in his impugned order, which all documents the second AO failed to collect for considering the total facts; and documents the second AO failed to collect for considering the total facts; and 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 to upset the view of Second AO. So we find no merit in the adverse factual finding to upset the view of Second AO. So we find no merit in the adverse factual finding to 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 vague allegation of second Pr. CIT that the second AO has not collected the 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 AO, the assessing authority who is a quasi 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 as an investigator as well as an adjudicator. Looking from another angle 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 4 by passing the second revisional order dated 14.03.2019 has substituted the 4 by passing 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 wi First Pr. CIT’s order passed u/s. 263 of the Act dated 23.08.2016 with his own order th 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 dated 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and dated 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter on which specific directions/inst on the very same subject matter on which specific directions/instructions were given ructions 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 into operation the doctrine of merger the subject matter i.e. share capital & premium into operation the doctrine of merger the subject matter i.e. share capital & premium collected by assessee company. Resultantly the second Ld. Pr.CIT collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake , 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, spells out where the error happened to second AO as an investigator or adjudicator, spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the seco which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be nd 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 on the very same subject on which merger has taken place by virtue of the order of on the very 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 the First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the re 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 exactly why the Parliament in its wisdom has brought in safe-guards, restrictions & guards, restrictions & conditions precedent to be satisfied strictly before assumption o conditions precedent to be satisfied strictly before assumption o 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 CIT without satisfying the condition precedent u/s 263 of the Act has invoked the CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio revisional jurisdiction (second time), so all his actions are ab initio void.” void.” 8. 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 second time by the ld. Pr. CIT, exercised second time by the ld. Pr. CIT, this Bench of the Tribunal in the case this Bench of the Tribunal in the case M/s Omkar Infracon Private (supra) (supra) held as under:- “13. Further, we note that even though 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 note that one of the faults pointed out by aside again by the impugned order of Pr. CIT, we note that one of the faults pointed out by aside again by the impugned order of Pr. CIT, we 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 –

21 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. “(a) Detailed investigation /verification in the nat “(a) Detailed investigation /verification in the nature of independent enquiry regarding ure of independent enquiry regarding identify, credit worthiness, and genuineness of transaction that was intended to be carried identify, credit worthiness, and genuineness of transaction that was intended to be carried identify, credit worthiness, and genuineness of transaction that was intended to be carried but not done and merely accepted the submissions of the but not done and merely accepted the submissions of the assessee” However, we are unable to agree with this allegation of Ld. However, we are unable to agree with this allegation of Ld. Pr. CIT. We note that AO in this Pr. CIT. We note that AO in this case had issued during the first and second round of assessment notice u/s. 142(1) of the case had issued during the first and second round of assessment notice u/s. 142(1) of the case had issued during the first and second round of assessment 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) thereafter had issued notice u/s 133(6) of the Act and verified the details, and issued of the Act and verified the details, and issued summon u/s 131 to the directors of the assessee company as well as to all the shareholders. summon u/s 131 to the directors of the assessee company as well as to all the shareholders. summon u/s 131 to the directors of the assessee company 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 o statements were recorded and only one shareholder an individual was new and all the ne shareholder an individual was new and all the shareholder's companies were group companies and the new individual share subscriber shareholder's companies were group companies and the new individual share subscriber shareholder's companies were group companies and 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 iled investigation as to how they decided to invest in a company at premium which iled investigation as to how they decided to invest in a company at premium which was never a known company”. was never a known 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 th did not had taken notice of the important fact that these were the promoters who started ese 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 fly bricks and the only new 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 act assessment year had started expansion activities of the business of making/manufacturing ivities of the business of making/manufacturing fly ash bricks. We note that the share capital infused into the company has yielded result. fly ash bricks. We note that the share capital infused into the company has yielded result. fly ash bricks. We note that the share capital infused 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 was to existing shareholders and only new shareholders was the father of a director. As and only new shareholders was the father of a director. As stated earlier, the promoter and group companies found potential of growth in the stated earlier, the promoter and group companies found potential of growth in the stated earlier, the promoter and group 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 ta all the existing shareholders taking into consideration the expansion and future return king into consideration the expansion and future return expected of it. After appreciating these facts and taking into consideration the financial expected of it. After appreciating these facts and taking into consideration the financial expected of it. After appreciating these facts 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 e transaction, so nothing turns around in respect of this fault raised by e 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 (c) The next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale (c) The 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 behind the premium. From the aforesaid reasons (supra) (b), the AO has 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 (d) The other fault noted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in (d) The other fault noted 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 We do not countenance this fault pointed out by ld. Pr. CIT for the simple reason that it is by ld. Pr. CIT for the simple reason that it is first of all a vague allegation without spelling out what relevant evidences were not first of all a vague allegation without spelling out what relevant evidences were not first of all a vague allegation without spelling out 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 i are produced before us, which is running to three (3) volumes. [ Volume I s 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 362 pages;] and 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 ver statements, and after verifying the documents produced before him, has accepted the share ifying the documents produced before him, has accepted the share capital/premium infused into the assessee company which action of AO cannot be called a capital/premium infused into the assessee company which action of AO cannot be called a capital/premium infused into the assessee 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 discharged his duty as an investigator and adjudicator and taken a plausible view which an investigator and adjudicator and taken a plausible view which cannot be called an un-sustainable view on facts or law. sustainable view on facts or law.

22 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd.

(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. 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

23 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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. 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) pursuant to the first revisional order of considered opinion that AO’s action (reassessment) pursuant to the first revisional order of considered opinion that AO’s action (reassessment) pursuant to the first revisional order of Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possi Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possi 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 AO’s action/reassessment order cannot be termed as Ltd. Vs. CIT 243 ITR 83 (SC) the AO’s action/reassessment order cannot be termed as Ltd. Vs. CIT 243 ITR 83 (SC) the AO’s action/reassessment order cannot be termed as erroneous and prejudicial to the interest of the Revenue. Therefore, erroneous and prejudicial to the interest of the Revenue. Therefore, 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 jurisdiction to assume second time revisional jurisdiction u/s. 263 of the Ld. Pr. CIT lacked jurisdiction to assume second time revisional jurisdiction u/s. 263 of the Ld. Pr. CIT lacked jurisdiction to assume second time revisional jurisdiction u/s. 263 of the Act. Therefore, the assessee succeeds on the lega the Act. Therefore, the assessee succeeds on the legal issue raised and, therefore, on the l 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. Ld. Pr. CIT dated 12.03.2019.

24 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. M/s. Goldline Comtrade Private Limited, assessment order dt. 25/06/2014 M/s. Goldline Comtrade Private Limited, assessment order dt. 25/06/2014 M/s. Goldline Comtrade Private Limited, assessment order dt. 25/06/2014 M/s. Swastik Securities and Finance Ltd., assessment order dt. 30/03/2015 M/s. Swastik Securities and Finance Ltd., assessment order dt. 30/03/2015 M/s. Swastik Securities and Finance Ltd., assessment order dt. 30/03/2015 M/s. Visudh Marketing Pvt. Ltd., assessment order dt. M/s. Visudh Marketing Pvt. Ltd., assessment order dt. 20/03/2015 20/03/2015 M/s. Dove Commerce Private Limited., assessment order 25/03/2014 M/s. Dove Commerce Private Limited., assessment order 25/03/2014 M/s. Dove Commerce Private Limited., assessment order 25/03/2014 M/s. Gajbandan Barter Pvt. Ltd., assessment order 25/03/2015 M/s. Gajbandan Barter Pvt. Ltd., assessment order 25/03/2015 M/s. Indivar Marketing Pvt. Ltd., assessment order 25/03/2015 M/s. Indivar Marketing Pvt. Ltd., assessment order 25/03/2015 M/s. Dream Valley Barter Pvt. Ltd., assessment order M/s. Dream Valley Barter Pvt. Ltd., assessment order 25/03/2015 25/03/2015

When the assessments of the share applicant companies have been passed u/s When the assessments of the share applicant companies have been passed u/s When the assessments of the share applicant companies have been passed u/s 143(3) of the Act, by the Department, it cannot be said that the identity and 143(3) of the Act, by the Department, it cannot be said that the identity and 143(3) of the Act, by the Department, it cannot be said that the identity and creditworthiness of the share applicant companies have not been proved. It is so held by creditworthiness of the share applicant companies have not been proved. It is so held by creditworthiness of the share applicant companies have not been proved. It is so held by the ITAT Kolkata Bench in the following cases: he ITAT Kolkata Bench in the following cases:- 1) M/s. Omkar Infracon (P) Ltd. vs. ITO in ITA No. 896/Kol/2019, Assessment M/s. Omkar Infracon (P) Ltd. vs. ITO in ITA No. 896/Kol/2019, Assessment M/s. Omkar Infracon (P) Ltd. vs. ITO in ITA No. 896/Kol/2019, Assessment Year: 2012-13, order dt. 18/03/2020 13, order dt. 18/03/2020 2) Amritrashi Infra Private Ltd. vs. Pr. CIT in ITA No. 838/Kol/2019, Amritrashi Infra Private Ltd. vs. Pr. CIT in ITA No. 838/Kol/2019, Amritrashi Infra Private Ltd. vs. Pr. CIT in ITA No. 838/Kol/2019, Assessment Year: 2012 Assessment Year: 2012-13, order dt. 12/08/2020

9.1 Persons representing the share applicant companies have appeared before the Persons representing the share applicant companies have appeared before the Persons representing the share applicant companies have appeared before the Assessing Officer in the second round of assessment proceedings, in response to notice u/s Assessing Officer in the second round of assessment proceedings, in response to notice u/s Assessing Officer in the second round of assessment proceedings, in response to notice u/s 131 of the Act, and their statements were recorded on oath. 131 of the Act, and their statements were recorded on oath. The share The share applicant companies have also responded to notice u/s 133(6) of the Act by furnishing the information called have also responded to notice u/s 133(6) of the Act by furnishing the information called have also responded to notice u/s 133(6) of the Act by furnishing the information called for. The information filed by the creditor share applicant companies are as follows: The information filed by the creditor share applicant companies are as follows: The information filed by the creditor share applicant companies are as follows:- 1) Copy of I.T. Return/Acknowledgment Copy of I.T. Return/Acknowledgment 2) Copy of annual a Copy of annual audited accounts 3) Balance sheet and profit & loss a/c statement Balance sheet and profit & loss a/c statement 4) Copy of Bank Statement Copy of Bank Statement These documents prove the genuineness of the transactions. These documents prove the genuineness of the transactions. A perusal of these documents show that the Assessing Officer has followed the directions A perusal of these documents show that the Assessing Officer has followed the directions A perusal of these documents show that the Assessing Officer has followed the directions of the ld. Pr. CIT, issued in his . CIT, issued in his first order dt. 09/09/2016 passed u/s 263 of the Act and has order dt. 09/09/2016 passed u/s 263 of the Act and has taken a plausible view. It is not a case of lack of enquiry, nor a case of inadequate enquiry. taken a plausible view. It is not a case of lack of enquiry, nor a case of inadequate enquiry. taken a plausible view. It is not a case of lack of enquiry, nor a case of inadequate enquiry. A decision was taken after examination of all evidences and documents. Such a v decision was taken after examination of all evidences and documents. Such a v decision was taken after examination of all evidences and documents. Such a view cannot be termed as erroneous insofar as it is prejudicial to the interes be termed as erroneous insofar as it is prejudicial to the interest of the revenue. t of the revenue.

25 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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 Commissioner of Income Tax exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax and culled out various principles laid down in principles laid down in different judgments by the Courts by the Courts 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 Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The so far as it is prejudicial to the interests 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 Reven interests of the Revenue. If one of them is absent – if the order of the Income Tax if the order 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 to the interests of the Revenue" has to be read in "The phrase "prejudicial to the interests of the Revenue" has to be read in "The phrase "prejudicial 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 Revenue. For example, when an Income prejudicial to the interests of the Revenue. For example, when an Income prejudicial to the interests of the Revenue. 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 cannot be treated as an ich the Commissioner does not agree, it cannot be treated as an ich the Commissioner does not agree, it 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 that where a sum not earned by a person is assessed as income in his hands on his by a person is assessed as income in his 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 RampyarideviSaraogi v. CIT (1968) 67 ITR 84 (SC) and in Smt. Tara Devi in Smt. Tara Devi Aggarwal V. CIT (1973) 88 ITR 323 (SC)". Aggarwal V. CIT (1973) 88 ITR 323 (SC)". 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 b order of the Assessing Officer cannot be treated as prejudicial to the interests of e 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 possible and the Income Tax Officer has taken one view with which the view with which the Commissioner does not agree, it cannot be treated as an erroneous order Commissioner does not agree, it cannot be treated as an erroneous order Commissioner does 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 Assessing Officer but the Revenue contended then stood was interpreted by the Assessing Officer but the Revenue contended then stood was interpreted by the Assessing 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 correc Commissioner was correct in invoking Sec.263. But the Supreme Court rejected t in invoking Sec.263. But the Supreme 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 sec word "profits" in that section; that the said section was amended eleven times; tion was amended eleven times; that different views existed on the day when the Commissioner passed his order; that different views existed on the day when the Commissioner passed his order; that different 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

26 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. two views were inherently possible; and therefore, the subsequent two views were inherently possible; and therefore, the subsequent amendment in amendment in 2005 even though retrospective will not attract the provision of Sec.263. 2005 even though retrospective will not attract the provision of Sec.263. 2005 even though retrospective 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 judgment" means one which is not in isory in nature; that an "erroneous judgment" means one which is not in isory in nature; that an "erroneous judgment" 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 becaus Commissioner simply because, according to him, the order should have been e, 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 i Officer, who passed the order unless the decision is not in accordance with the s not in accordance with the law; that to invoke suomotu revisional powers to reopen a concluded assessment law; that to invoke suomotu revisional powers to reopen a concluded assessment law; that 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 him that the order of the Income Tax Officer is erroneous in so far as him that 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 prejudicial to the interests of the Revenue, will not suffice; that the reasons must prejudicial to the interests of 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 conclusion that the order of the for, and must irresistibly lead to the conclusion that the order of the for, and must irresistibly lead to 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 givi elaborate judgment giving detailed reasons in respect of each and every ng 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 cour doing so; that if a query is raised during the course of the scrutiny by the se 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 would not by itself lead to the conclusion that the order of the Assessing Officer Assessing Officer called for interference and revision. called for interference 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 deduct of each and every item of deduction, etc.; that whether there was application of ion, 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 b Commissioner to pass orders under Sec.263 merely because he has a different ecause he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a course opinion in the matter; that it is only in cases of lack of inquiry that such a course opinion in the matter; that it is only in cases of lack of inquiry that such a course 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 becau Officer cannot be branded as erroneous by the Commissioner simply becau Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately; there according to him, the order should have been written more elaborately; there according to him, the order should 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 lesser tax than what was rrect or incomplete interpretation, a lesser tax than what was rrect or incomplete interpretation, a lesser 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 ex finding of the Assessing Officer that expenditure on tools and dies by the assessee, penditure 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 a where the same accounting practice followed by the assessee for number of years ssessee for number of years with the approval of the Income Tax Authorities. It held that the Assessing Officer with the approval of the Income Tax Authorities. It held that the Assessing Officer with the approval 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 Offic had furnished its explanation. Merely because the Assessing Officer in his order er in his order

27 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. did not make an elaborate discussion in that regard, his order cannot be termed did not make an elaborate discussion in that regard, his order cannot be termed did not make an elaborate 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 f there was no material before the Commissioner to vary that opinion and ask f there was no material before the Commissioner to vary that opinion and ask for fresh inquiry. 28. In Gabriel India Ltd. 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 by him the record of the proceedings called for by him. If there are no materials on . 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. It held proceedings by him will be illegal and without jurisdiction. It held proceedings by him will be illegal and without jurisdiction. It 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 entertain cannot be permitted to begin fresh litigation because of new views they entertain 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 facts or new versions which they present as to what should be the inference or 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 d; that to do so is to divide one argument into two and multiply the d; 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 circumst to the facts and circumstances of the case and determines the income either by ances 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 side and made by the Officer concerned was on the lower side and left to the Commissioner 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 higher fi to reexamine the accounts and determine the income himself at a higher fi 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 wer to the revising authority to initiate proceedings for revision in wer 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 ssioner under Sec.263 (1) is not limited only to the material which was ssioner 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 available at the time available at the time of examination by him and to take into consideration even 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 the yea revisional powers cancelled assessee’s assessment for the years 1952 rs 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 the from business etc., without any enquiry or evidence whatsoever . He directed the from business etc., without any enquiry or evidence whatsoever . He directed the income tax officer to do fresh assessment after making proper enquiry and come tax officer to do fresh assessment after making proper enquiry and come 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 there Supreme Court held that there was ample material to show that the income tax 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

28 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. 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 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 jurisdiction or showing to the income tax officer whether he had jurisdiction or not and whether 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 culled ou 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 Revenue to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue 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 Reven cannot be treated as prejudicial to the interests of the Revenue. For example, ue. 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, it tax Officer has taken one view with which the Commissioner does not agree, it 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 annot be treated as an erroneous order prejudicial to the interests of the annot 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 Commissi Sec.263, the Commissioner must give reasons; that a bare reiteration by him that oner 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 irresi that the and must irresistibly lead to the conclusion that the order of the Income stibly 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 reasons elaborate judgment giving detailed reasons in respect of each and every 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 b doing so; that if a query is raised during the course of the scrutiny b 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 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. alled 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 becau department cannot be permitted to begin fresh litigation because of new views se 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 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 see question has to be seen; that if there was an inquiry, even inadequate that would n; 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 course lack of inquiry that such a course of action would be open; that an assessment 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 mater written more elaborately; there must be some prima facie material on record to ial 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.

29 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. g) The power of the Comm g) The power of the Commissioner under Sec.263 (1) is not Commissioner is issioner 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 Income Tax when an order passed by the lower authority is erroneous and prejudicial to Income Tax when an 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 investiga 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 passed after inquiry/investigation on the question/issue are not per se or normally treated passed after inquiry/investigation on the question/issue are not per se or normally treated as erroneous and prejudicial to the interest of the Revenue becau as erroneous and prejudicial to the interest of the Revenue because the revisionary se 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 Revenue does not have any right to appeal to the first appellate authority against an to the first appellate authority against an order passed by the Assessing Officer. S. 263 has been enacted to empower the CIT to order passed by the Assessing Officer. S. 263 has been enacted to empower the CIT to order passed by the Assessing Officer. S. 263 has been enacted 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. Fi cumulative conditions are satisfied. Firstly, the order sought to be revised should be rstly, the order sought to be revised should be erroneous and secondly, it should be prejudicial to the interest of the Revenue. The erroneous and secondly, it should be prejudicial to the interest of the Revenue. The erroneous and secondly, it should be prejudicial to the interest 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 te confined to merely loss of tax. The term "erroneous" means a wrong/incorrect decision rm "erroneous" means a wrong/incorrect decision deviating from law. This expression postulates an error which makes an order deviating from law. This expression postulates an error which makes an order deviating from law. This expression postulates an error which 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 decides a question or aspect and makes a wrong assessment which is decides a question or aspect and makes a wrong assessment which is unsustainable in law, it can be corrected by the Commissioner in exercise of revisionary unsustainable in law, it can be corrected by the Commissioner in exercise of revisionary unsustainable in law, it can be corrected 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 red to be examined and verified to compute the taxable income. If the Assessing red to be examined and verified to compute the taxable income. If the Assessing Officer fails to conduct the said investigation, he commits an error and the word Officer fails to conduct the said investigation, he commits an error and the word Officer fails to conduct the 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 ecause enquiry or verification has not been made and not because a wrong ecause 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 conduct and himself decide that the order is erroneous, by conducting necessary enquiry, if ing necessary enquiry, if required and necessary, before the order under s. 263 is passed. In such cases, the order of required and necessary, before the order under s. 263 is passed. In such cases, the order of 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 can and the said finding must be recorded. CIT cannot remand the matter to the Assessing not 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 In cases 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. that the order/inquiry made is erroneous. This can happen if an enquiry and verification This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by is conducted by the CIT and he is able to establish and show the error or mistake made by is conducted by the CIT and he is able to establish and show 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 s though rarely, the CIT can also show and establish that the facts on record or inferences how 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 justified and mandated 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, u 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 to conduct further enquiries without a finding a fresh decision to the Assessing Officer to conduct further enquiries without a finding a fresh decision to the Assessing Officer 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 mu requirement which must be satisfied for exercise of jurisdiction under s. 263 of the Act. In st be satisfied for exercise of jurisdiction under s. 263 of the Act. In

30 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. such matters, to remand the matter/issue to the Assessing Officer would imply and mean such matters, to remand the matter/issue to the Assessing Officer would imply and mean such matters, to remand the matter/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. Assessing Officer to decide the aspect/question. This distinction must be kept in mind by the CIT while exercising jurisdiction under s. 263 This distinction must be kept in mind by the CIT while exercising jurisdiction under s. 263 This distinction must be kept in mind by the CIT while exercising 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 the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. , exercise of jurisdiction under the said section is not sustainable. In most cases of alleged "inadequate investigation", it will be difficult to hold that the order most cases of alleged "inadequate investigation", it will be difficult to hold that the order most cases of alleged "inadequate investigation", it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, i of the Assessing Officer, who had conducted enquiries and had acted as an investigator, i 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 may be or may not be wrong. CIT cannot direct reconsideration on this ground but only may be or may 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 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 order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Office order will not become erroneous because on remit, the Assessing Officer may decide that r may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order is the order is erroneous. Therefore CIT must after recording reasons hold that the order is 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 i conclusion that the order is erroneous and is unsustainable in law. It may be noticed that n law. It may be noticed that the material which the CIT can rely includes not only the record as it stands at the time the material which the CIT can rely includes not only the record as it stands at the time 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. N stands at the time of examination by the CIT. Nothing bars/prohibits the CIT from othing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state that the collecting and relying upon new/additional material/evidence to show and state that the 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 affect any right of the assessee nor was any civil right of the assessee prejudiced. He was affect any right of the assessee nor was any civil right of the assessee prejudiced. He was affect any right of the assessee nor was any civil right of the assessee prejudiced. He was as such under no obligation in law as such under no obligation in law to give reasons. The fact, that all requisite papers were 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 summoned and thereafter the matter was heard from time to time coupled with the fact summoned and 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 that the view taken by him is not shown by the revenue to be erroneous and was also that the view taken by him is not shown by the revenue to be erroneous and was also considered both by the Tribun considered both by the Tribunal as also by us to be a possible view, strengthens the al as also by us to be a possible view, strengthens the presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence, presumption under Clause (e) of Section 114 of the Evidence Act. A prima facie evidence,

31 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the on the basis of the aforesaid presumption, is thus converted into a conclusive proof of the fact that the order was passed by the assessing officer after due application of mind. was passed by the assessing officer after due application of mind. 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. Infosys Meerut Roller Flour Mills Pvt. Ltd. vs. C.I.T., ITA No. 116 /Coch/ 2012; CIT vs. Infosys 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 Technologies Ltd., 341 ITR 293 (Karnataka); S.N. Mukherjee vs. Union of India, AIR 1990 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 A. Doshi vs. JCIT, 256 ITR 685; Hindusthan Tin Works Ltd. Vs. CIT, 275 ITR 43 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 jurisdicti A reference to the provisions of s. 263 shows that jurisdiction thereunder can be exercised on thereunder can be exercised if the CIT finds that the order of the AO was erroneous and prejudicial to the interest of if the CIT finds that the order of the AO was erroneous and prejudicial to the interest of if the CIT 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 be taken, were Revenue. Mere audit objection and merely because a different view could be taken, were Revenue. Mere audit objection and merely because a different view could be taken, were not enough to say that the order of the AO was not enough to say that the order of the AO was erroneous or prejudicial to the interest of erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be exercised if the CIT was satisfied that the basis for the Revenue. The jurisdiction could be exercised if the CIT was satisfied that the basis for the Revenue. The jurisdiction could be 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 exercise of jurisdiction existed. No rigid rule could be laid down about the situation when exercise of jurisdiction existed. No rigid rule could be laid down about the situation when the jurisdiction can be exe the jurisdiction can be exercised. Whether satisfaction of the CIT for exercising rcised. Whether satisfaction of the CIT for exercising jurisdiction was called for or not, has to be decided having regard to a given fact jurisdiction was called for or not, has to be decided having regard to a given fact 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 that the assessee had disclosed that situation. In the present case, the Tribunal has held that the assessee had disclosed that situation. In the present case, the Tribunal has held that the assessee had disclosed that out of sale consideration, out of sale consideration, a sum of Rs. 1 lakh was to be received for sale of permit. If that is 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 so, there was no error in the view taken by the AO and no case was made out for invoking so, there was no error in the view taken by the AO and no case was made out for invoking jurisdiction under s. 263. jurisdiction under s. 263. 11. In view of the above discussion and applying the proposition of law laid In view of the above discussion and applying the proposition of law laid In view of the above discussion and applying the proposition of law laid down in the above case law and specifically applying the above case law and specifically applying the decision of the Tribunal in the case of the decision of the Tribunal in the case of M/s. Amritrashi Infra Private Ltd. rivate Ltd. (supra) and in the case of M/s. Omkar Infrastructur M/s. Omkar Infrastructure Pvt. Ltd. (supra) to the facts of the case on hand, we have to necessarily hold that the to the facts of the case on hand, we have to necessarily hold that the 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 Act, exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the Act, exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the Act, vide order dt. 14/03/2019, is bad in law. Hence we quash the same and allow the appeal of the in law. Hence we quash the same and allow the appeal of the in law. Hence we quash the 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 12th day of January, 2021.

Sd/- Sd/- J. Sudhakar Reddy] [S. S. Godara] [J. Sudhakar Reddy Judicial Member Accountant Member Accountant Member Dated : 12.01.2021 {SC SPS}

32 ITA No. 1177/Kol/2019 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. Copy of the order forwarded to: 1. Enkay Traffin (P) Ltd. C/o Subash Agarwal & Associates C/o Subash Agarwal & Associates Siddha Gibson 1, Gibson Lane Suite 213 2nd Floor Kolkata – 700 069