ORDER
Phool Singh, J.M.:
This appeal, preferred by the assessed, is directed against order dated 21-3-2002, passed by the CIT, Delhi (Central)-HI, New Delhi, under section 263 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), modifying the assessment made under section 143(3) of the Act.
2. Relevant facts giving rise to this appeal are that assessed filed return for assessment year 1997-98 at an income of Rs. 63,190 and assessment was completed under section 143(3) of the Act at Rs. 1,26,520 by the assessing officer. After going through the record the learned CIT was of the view that assessment completed by the assessing officer was erroneous and prejudicial to the interest of revenue. Accordingly, he issued notice under section 263 of the Act to the assessed pointing out different errors committed by the assessing officer in respect of different disallowances, etc. and after considering the reply submitted by the assessed the CIT passed impugned order by which he has recomputed the income of the assessed to the extent of Rs. 63,92,000 making out different disallowances and additions. At the very outset the learned counsel referring to the impugned order passed by the learned CIT submitted that the learned CIT had recomputed deduction under section 80HHC of the Act and also made separate computation of total income by making disallowances and also making different additions on account of undisclosed investment in stock, etc. and directed the assessing officer to modify the assessment order under section 143(3) of the Act and to issue demand notice and challan as well as penalty notice. The contention of the learned counsel ‘ is that learned CIT had not set aside the assessment order with direction to assessing officer to reframe the assessment order but he has already completed the assessment order and assessing officer was supposed to carry out the necessary direction and to issue demand notice and challan as per income computed by the learned CIT. The learned counsel submitted that different disallowances and additions made by the learned CIT are being challenged through different grounds of appeal and he started arguing the matter as per grounds raised in the grounds of appeal. We are disposing of the grounds accordingly as per arguments of the learned counsel as well as the learned departmental Representative.
3. In ground of appeal No. 1 the assessed has challenged the impugned order, inter alia, on the ground of jurisdiction. The learned counsel for the assessed made arguments on the issue of jurisdiction while dealing with specific grounds of appeal. It is, therefore, not necessary for us to advert to the arguments on this aspect of the matter at this stage.
4. Ground of appeal No. 2 is general and does not call for any decision. The same is dismissed.
5. In ground of appeal No. 3, the assessed has challenged the computation of deduction under section 80HHC of the Act by the CIT at Rs. 19,26,717 as against Rs. 32,96,071 allowed in the original assessment. In the broad propositions filed, the assessed has stated that the variation in the deduction admissible under section 80HHC was an account of the following:
(i) excluding interest income earned on FDRs placed as margin money with the Bank (for availing packing credit limit) from “profits of business”,
(ii) alternatively, not accepting that only the net interest income, if any, had to be excluded in terms of clause (baa) of Explanation to section 80HHC; and
(iii) not calculating deduction admissible under section 80HHC with reference to proviso to sub-section (3), ignoring the loss on export of goods calculated in terms of cis. (a), (b) and (c) of the said sub-section.
6. The CIT, in the impugned order, held that 90 per cent of receipts by way of interest on FDRs placed with Banks needs to be excluded as per Expln. (baa.) of section 80HHC of the Act. The CIT did not accept the contention raised on the side of the assessed that the interest income had to be reduced by the interest paid to the Bank for obtaining credit facilities for which the FDRs have been placed as margin money. The CIT referred to the decision of the Commissioner (Appeals) in the appellant’s case for as.st. yr. 1996-97 wherein the Commissioner (Appeals).had held that the exclusion had to be of the entire receipts and no netting of interest was to be allowed.
7. Challenging the correctness of the order of learned CIT, the learned counsel for the assessed Shri Ajay Vohra, submitted that FDRs with Banks were placed as marginal money for securing credit facilities and in such circumstances the interest income would be of the nature of business income, eligible for tax benefit under section 80HHC of the Act. The learned counsel placed reliance on the ratio of decision of Hon’ble Bombay High Court in the case of CIT v. Punit Commercial Ltd. (2000) 163 CTR (Bom) 594 : (2000) 245 ITR 550 (Bom); as also the orders of the Tribunal in the case of Anand & Co. v. Assistant Commissioner (1995) 54 ITD 82 (Cal) and Income Tax Officer v. General Supplies Agencies (1993) 66 Taxinan 108 (Coch)(Mag). The learned counsel also submitted that no doubt the contrary decisions have also been rendered by different High Courts and different Benches of the Tribunal and he was fair enough to refer the contrary view laid down in the cases of CIT v. RaW Ratan Exports (P) Ltd. (2000) 246 ITR 443 (Bom), Smt. T.C. Usha v. Dy. CIT (1999) 65 TTJ (Coch) 826 : (1999) 70 ITD 279 (Coch), Synthite Industiial Chemicals Ltd. v. Dy. CIT (1999) 64 TTJ (Coch) 494, Eicher Goodearth Ltd. v. Dy. CIT (2001) 71 TTJ (Del) 841 and Income Tax Officer v. Smt. Kalavati R. Agarwal (2001) 71 TTJ (Mumbai) 792.
8. It was further contended by the learned counsel that FDRs were placed with the Banks as marginal money for securing credit facilities and thus there was clear nexus between the interest earned on the FDRs and interest paid to the Bank on use of credit facilities. According to learned counsel the exclusion in terms of clause (baa) of Explanation to section 80HHC could only be of net interest income, if any. To substantiate this plea the learned counsel referred to the following decisions wherein same view has been taken
(i) Suhag Traders (P) Ltd. v. Income Tax Officer (1996) 89 Taxman 287 (Del)(Mag);
(ii) Pink Star v. Dy. CIT (2000) 66 TTJ (Mumbai) 885:(2000) 72 TTD 137 (Mumbai);
(iii) Asstt. CIT v. Sharda Gums & Chemicals (2000) 66 TTJ Ud) 256 : (2001) 76 17D 282 (Jd);
(iv) Kantilal Chhotalal v. Dy. CIT (1999) 63 TTJ (Mumbai) 527: (1999) 6~ ITD 395 (Mumbai); and
(v) Khimijee Hansraj v. Dy. CIT (1999) 65 TTJ (Cal) 322: (1999) 69 ITD 322 (Cal)..
He also filed certain decisions of Tribunal which are appearing from pp. 28 to 39 of the paper book dated 16-11-2000.
9. Alternatively, it was contended that even if the other view was possible, the matter was clearly debatable and hence outside the purview of proceedings under section 263 of the Act. The learned counsel for the assessed laid stress on the decision of the Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT (2000) 159 CTR (SC) 1 : (2000) 243 TTR 83 (SC) for the proposition that where the view taken by the assessing officer is a possible view, the CIT cannot substitute his view in place of that of the assessing officer.
10. Learned counsel also referred to the ratio of decisions on the same point in the cases of Russel Properties (P) Ltd. v. A. Chowdhury, Add). CIT & Ors. (1977) 109 ITR 229 (Cal), K.N. Agarwal v. CIT (1991) 100 CTR (All) 170 : (1991) 189 ITR 769 (All) and CIT v. Orissa State Financial Corporation (1993) 114 CTR (On) 1 (199-3) 203 ITR 747 (Jd) as also the grder of Tribunal in the case of Amrit Steels Ltd. v. Dy. CIT (2001) 71 M (Del) 761 : (2001) 79 ITD 498 (Del).
11. Learned counsel also submitted that in case order passed by the assessing officer is in accordance with the ratio of decisions of High Courts/Benches of the Tribunal, there could be said to be no error in the order of assessing officer which may clothe the CIT with powers to exercise jurisdiction under section 263 of the Act. Reliance was placed on the ratio of decision of Hon’ble Bombay High Court in the case of CIT v. Gabriel India Ltd. (1993) 114 CTR (Bom) 81 : (1993) 203 ITR 108 (Bom); as also on the orders of Tribunal in the case of Super Cassettes Industries (P) Ltd. v. CIT (1992) 41 ITD 530 (Del).
12. In reply, the learned departmental Representative submitted that the proceedings under section 263 of the Act could be taken by the CIT to modify/revise the assessment even in respect of debatable issue. The learned departmental Representative referred to the decision of the Gujarat High Court in the case of CIT v. M.M. Kharnbhatwala (1992) 198 M 144 (Guj) in support of the contention. On the issue of netting of interest, in terms of clause (baa) of Explanation to section 80HHC of the Act, the learned departmental Representative forcefully contended that in terms of said clause, exclusion has to be of the gross interest received, without being reduced by any expenditure. The learned departmental Representative relied upon the contrary decisions on the issue, very fairly pointed out by the learned counsel for the appellant at p. 2.of the broad propositions. In addition, our attention was also drawn to the Supreme Court decision in the case of CIT v. Dr. VP. Gopinathan (2001) 166 CTR (SC) 504: (2001) 248 ITR 449 (SC).
13. In rejoinder, the learned counsel for the appellant pointed out that the decision of the Gujarat High Court in case of CIT v. MM. Khambhatwala (supra) relied upon by the learned departmental Representative could not be regarded as good law in view of the subsequent decision of the Supreme Court in the case of Malabar Industrial Co. Ltd. (supra).
14. On the issue of netting of interest for computation of deduction under section 80HHC of the Act, the learned counsel fairly admitted the divergence of the opinion on the issue but hastened to add that the section being a beneficial provision, the view favorable to the assessed should be adopted. The decision of the Supreme Court in VP. Gopinathan’s case (supra) relied upon by the learned departmental Representative, was distinguished on the ground that the said case related to the allowabihty of deduction of interest paid under section 67(iii) and had no dpplication in the context of the controversy relating to the interpretation of section 80HHC of the Act.
15. The second controversy with regard to deduction claimed under section 80HHC centers on the interpretation of sub-s, (3) of that section read with proviso thereto. As -a consequence of working made by the CIT, the deduction under section 80HHC of the Act, admissible to the appellant was calculated at (Rs. 3,44,615) (p. 11 of’the impugned order), In terms of proviso to the said section, the appellant was entitled to deduction of Rs. 22,71,332 being 90 per cent of the export incentive apportioned in the ratio of export turnover to the total turnover. The CIT aggregated the amounts of (Rs. 3,44,615 and Rs. 22,71,332-to arrive at the deduction admissible under section 80HHC at Rs. 19,26,717.
16. Assailing the aforesaid finding of the CIT, the learned counsel for the appellant submitted that where in terms of clauses (a), (b) and (c) of sub-section (3) of section 80HHC, the deduction admissible worked out at a loss, the loss needed to be ignored and deduction under section 80HHC had to be quantified with reference to 90 per cent of the export incentives allocated in the ratio of the export turnover to total turnover as per the proviso thereto. Shri Ajay Vohra, the learned counsel for the appellant referred to the following decisions, which ac~ording to him directly support the viewpoint canvassed on behalf of the assessed
(i) A.M. Moosa v. Assistant Commissioner (1996) 54 TTJ (Coch) 193;
(ii) Avon Cycles (P) Ltd. v. Assistant Commissioner (1997) 59 TTJ (Chd) 75;
(iii) Assistant Commissioner v. Pratibha Syntex Ltd. (1999) 63 7TJ (Ahd) 409 (1999) 106 Taxman 32 (Ahd)(Mag); and
(iv) Indian Sugar & Gen. Indusay Export & Import Corp. Ltd. v. Dy. CIT (2002) 121 Taxman 305 Qel)(Mag).
17. The learned departmental Representative, on the other hand, supported the order of the CIT and placed reliance on the following contrary decisions
(i) IPCA Laboratories Ltd. v. Dy. CIT (2001) 170 CTR (Bom) 568: (2001) 251 ITR 401 (Bom);
(ii) Kiislar Diesel Engines (P) Ltd. v. Assistant Commissioner (2000) 69 TTJ (Mad) 46 (2000) 74 ITD 414 (Mad); and
(iii) JPCA Laboratories Ltd. v. Dy. CIT (2001) 70 TTJ (Mumbai) 991
18. In rejoinder, the learned advocate submitted that the decision of the Bombay High Court in the brder of IPCA Laboratories Ltd. v. Dy. CIT (supra) relied upon by the learned departmental Representative does not cover the controversy since in that case there was no issue as raised in the present appeal. With regard to the other contrary decisions referred to by the learned departmental Representative, the learned counsel fairly admitted the existence of divergent views and supported his alternative arguments that in respect of debatable issue, the jurisdiction of CIT under section 263 of the Act was ousted.
19. We have given our anxious thoughts to the matter. In our view, the position in law is now settled by the Hon’ble Supreme Court decision in the case of Malabar Industlial Co. Ltd. (supra). The Hon’ble Supreme Court had in that case held that (on p. 88 of the decision) as under
“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 revenue as a consequence of an order of the assessing officer canilot be treated as 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 revenue; or where two views are possible and the Income Tax Officer has taken one view with which the CIT 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 Tax Officer is unsustainable in law ……..
20. It is undisputed that both the grounds raised in the computation of deduction under section 80HHC of the Act involve contentious issues on which there exist decisions on both sides. In case the CIT does not agree with the view taken by the assessing officer, which is a possible view, supported by judicial precedents relied upon by the learned, counsel of the appellant, the CIT does not, in our opinion, assume valid jurisdiction under section 263 of the Act.
21. The Gujarat High Court decision referred to by the learned departmental Representative has no doubt held that the CIT can exercise his power under section 263 of the Income Tax Act, even in a case where the issue is debatable, but after the Hon’ble Supreme Court decision, the decision of Hon’ble Gujarat High Court cannot, with respect, be said to be good law.
22. In view of above factual position, the fact remains that assessing officer had accepted the submissions of the assessed while completing the assessment on both the points and view taken by the assessing officer on both the counts was in consonance with the view taken by different Benches of the Tribunal and even by some High Courts. No doubt there were contrary views on the same poirit but once the assessing officer has taken one view then, as laid down by Their Lordships in the case of Malabar Industiial Co. Ltd. v. CIT, the learned CIT has no jurisdiction under section 263 of the Act to term the impugned assessment order as erroneous or prejudicial to the interest of revenue. Accordingly, the ground is allowed and order of the learned CIT on this point in the impugned order is quashed.
23. In ground of appeal No. 4, the assessed has challenged addition of Rs. 48,98,127 held by the CIT to be the excess stock funded out of undisclosed income. The CIT computed the value of the closing stock at Rs. 3,03,62,095 as against Rs. 3,52,58,921 recorded in the books of accounts. The difference of Rs. 48,98,127 was added by the CIT in the impugned order holding that the same represented excess stock funded out of undisclosed income.
24, The learned counsel for the assessed pointed out that the working of closing stock adopted by the CIT at Rs. 3,03,62,095 is erroneous. It was submitted that there is no difference in quantity of stock worked out by the CIT and that declared by the assessed. There was no difference both regards as quantity and valuation of the following stock
(a) Gold loan stock
(b) Local gold purchase
(c) Local jewellery purchase
25. The learned advocate invited our attention to the reconciliation at p. 1 of the paper book and submitted that the difference arose on account of the following
(i) The CIT has ignored the value of silver moulds capitalized by the assessed during the relevant previous year amounting to Rs. 40,48,860 and instead has taken the value of pure silver at Rs. 28,557.
(ii) Similarly, the value of diamond has been taken by the assessed at Rs. 8,22,000 as against Rs. 4,33,160, considered by the CIT on the basis of valuation as on 31-3-1996. In addition to this, the CIT has not taken the g to Rs. 25,287 in arriving at the value of closing value of consurnables amountin stock.
26. On a query by the Bench, the learned counsel had submitted a note on expenditure incurred on moulds, which is extracted below for ready reference to understand the issue :
“The appellant had during the relevant previous year for the first time recorded as part of closing stock the value of silver moulds which are used in the manufacturing process of jewellery.
The moulds are used for preparing dyes of different designs from which the jewellery is made. The process of preparing moulds is a tedious and timeconsuming job. To appreciate the time, labour and costs involved, it is inerative to understand the process of making moulds, which is explained in brief hereunder
At the initial stage, the manufacturer has to study the jewellery in vogue in the target market. Thereafter, dyes of the selected designs are prepared. These dyes are made of silver and a skilled artisan requires about two to three weeks to make a proper dye. These silver dyes which are called ‘master pieces’ are used for making rubber dyes.
The master piece is sent to quality control where it is checked and approved by a professional designer. If the same is not found up to the mark, it goes back to the craftsman for modification. After modification, the master piece goes for polishing and finishing where a spruce is attached to make it fit for casting.
The master piece is then used for making a rubber dye, which, in turn, goes through the process of quality control. After being approved, the rubber dye is placed into the wax injector where wax is injected into the dye to create a true replication in wax of the final product. If, on the other hand, master piece is not found up to the mark, the entire process is got to be repeated to make another master piece.
It will be appreciated that jewellery designs are highly intricate and detailed involving skilled labour and substantial time. It may further be pointed out that there are not one or two but hundreds of silver moulds which have been prepared so as to compete with other suppliers in domestic as well as in international market.
In view of the aforesaid, it is evident that the preparation of silver moulds involves a complicated process. For the purpose of preparing these moulds, the appellant had imported machinery in 1995 and had employed craftsmen, who besides making jewellery were also involved in designing moulds. Apart from that other expenses like electricity, depreciation of the machinery, etc. were some of the expenses which were taken into account in arriving at the value of moulds.
Although no separate account was maintained to detail t ‘ he cost incurred in preparation of the moulds, nevertheless the cost actually incurred is out of those various expenses debited in the books of account under wages, depreciation, electricity expenses, etc.
On the facts of the case, the moulds forming part of closing stock of the relevant previous year are out of capitalization of expenses incurred in the last two-three years and there is no excess stock as alleged by the CIT, warranting any addition.
27. The appellant’s counsel submitted that even if the valuation of closing stock is held to be inflated, no prejudice could be said to have been caused to the revenue by the assessing officer accepting such higher valuation resulting in consequently higher income. It was submitted that in the circumstances, no separate addition was called for, as held in the following cases
(i) Industrial Trading Co. v. Income Tax Officer (1994) 50 TTJ (Bang) 177; and
(ii) Income Tax Officer v. Naresh Fabric (2002) 75 TTJ (Jd) 387.
28. The learned departmental Representative submitted that the assessed could not point out the year-to-year expenditure on moulds and alleged that by inflating the value of closing stock, the assessed had claimed higher deduction under section 80HHC of the Act. The learned departmental Representative further submitted that since the assessing officer had accepted the higher valuation shown by the assessed without any enquiry, there was no application of mind on the part of the assessing officer and the CIT was justified to assume jurisdiction under section 263 of the Act.
29. The learned departmental Representative referred to the following decisions in support of his arguments that where the assessment order is passed in undue haste and hurry without application of mind by the assessing officer, the CIT was justified in setting aside the same:
(i) Gee Vee En teiprises v. Addl. CIT 1975 CTR (Del) 61 : (1975) 99 ITR 375 (Del);
(ii) Duggal & Co. v. CIT (1994) 122 CTR (Del) 171 : (1996) 220 ITR 456 (Del); and
(iii) CIT v. South India Shipping Corporation Ltd. (1998) 147 CTR (Mad) 433 (1998) 233 ITR 546 (Mad).
30. In rejoinder, the learned counsel for the asseS8ee submitted that the deduction under section 80HHC of the Act is admissible with reference to profits as assessed under the head “profits and gains of business” apportioned in the ratio of export turnover to total turnover. Since there were no local sales during the year, the entire profits of the assessed were exempt under section 80HHC of the Act and, therefore, it would not be correct to say that the assessed had inflated the valuation of the closing stock to claim higher deduction under section 80HHC of the Act.
31. The learned counsel for the appellant strongly objected to the arguments d by the departmental Representative that the assessment order was raise passed in undue haste and hurry. It was pointed out that details of the closing stock were submitted before the assessing officer during the course of the assessment. Our attention was drawn to pp. 26-42 of the paper book containing letter dated 31-3-1997, addressed to the assessing officer. It was further submitted that the CIT had made an addition of Rs. 48,94,127 to the income of the appellant for alleged excess stock funded out of undisclosed income and had not set aside the order on ground of non-application of mind by the assessing officer. It was vehemently argued that non-application of mind by the assessing officer not being a ground taken by the CIT to revise the assessment, the learned departmental Representative was not correct in seeking to support the order of the CIT on that ground. Our attention is drawn to the following decisions in support of the above.
(i) CIT v. Jagadhij Elecuic Supply & Industiial Co. (1981) 25 CTR (P&H) 94 (1983) 140 ITR 490 (P&H); and
(ii) Somdatt Buflders (P) Ltd. v. Income Tax Officer (1989) 29 ITD 495 (Cal).
32. We have carefully considered the arguments and perused the records. We find that the CIT has computed the value of closing stock at Rs. 3.03 crores as against Rs. 3.52 crores shown by the assessed in the P&L a/c. The CIT had not raised any query to the assessed regarding the valuation of silver moulds shown by the assessed before concluding that the assessed had excess stock funded out of alleged undisclosed income. It is noteworthy that there is no difference in quantity in the working of the CIT and that given by the assessed on p. 1 of the paper book. The only difference is on account of valuation of old jewellery, diamonds and silver moulds.
33. It has not been disputed that the assessed requires silver moulds for making of jewellery and by bringing the moulds into the P&L a/c as part of the closing stock, the assessed has enhanced its profits and thereby offered higher income for tax. In such circumstances, the order of the assessing officer accepting the higher profits cannot, in our considered view, be stated to be erroneous and prejudicial to the interest of the revenue warranting exercise of revisional jurisdiction on the part of the CIT.
34. We are also impressed with the arguments -of the learned counsel that even otherwise no further addition was called for, even if one were to assume that the moulds were funded out of undisclosed income. The reliance placed by the learned counsel on the decisions of the Ahmedabad and Bangalore Benches of the Tribunal is appropriate. Respectfully following the same, we hold that no further addition to the income of the assessed was called for since the valuation of closing stock as per the books was higher than that worked out by the CIT.
35. The assessed being a 100 per cent exporter during the year, was entitled to deduction of entire profit under section 80HHC of the Act. We cannot, therefore accept the arguments of the learned departmental Representative that higher stock valuation was shown in order to obtain higher deduction, under the said section, since the entire income, under the circumstances, was exempt from tax.
36. The last objection of the learned departmental Representative that there was no application of mind on behalf of the assessing officer is not borne out from the record, in the context of letter dated 31-3-1997, filed by the assessed during the course of the assessment proceedings in response to the queries raised by the assessing officer. Further, it is not the case of the CIT that assessment order was erroneous and prejudicial to the interests of revenue on account of non- application of mind by the assessing officer. On the other hand, the CIT has been at pains to compute the addition in the hands of the assessed and has not set aside the assessment on ground of alleged non-application of mind. In these circumstances, it is not open to the Tribunal to substitute the grounds other than the one taken by the CIT for modifying/revising the assessment, as held in the following cases relied upon by the counsel of the assesse&
(i) CIT v. Jagadhri Electric Supply & Industrial Co. (supra)
(ii) Somdatt Builders (P) Ltd. v. Income Tax Officer (supra)
37. The cumulative result of findings above is that addition directed to be made by the learned CIT to the extent of Rs. 48,98,127 on account of excess stock as undisclosed income is without any basis as the assessed had shown higher closing stock and suffered the tax. The said addition was not warranted and the order of the learned CIT on that account is not sustainable in the eye of law as the order to that extent is without any basis and the direction for making addition stands quashed.
38. The CIT in the order under section 263 has directed the initiation of penalty proceedings under section 2710)(c) of the Act. The learned counsel referred to the following decisions including of the jurisdictional High Court, which have held that the CIT cannot in revision proceedings under section 263 of the Act direct the assessing officer to initiate penalty proceedings under the said section
(i) CIT v. Nihal Chand Rekyan (1999) 156 CTR (Del) 59.- (2000) 242 ITR 45 (Del)
(ii) Add). CIT v. Sudarshan Talkies (1993) 111 CTR (Del) 368.- (1993) 200 ITR 153 (Del)
(iii) CWT v. AK Sarvaria (1986) 52 CTR (Del) 296: (1986) 161 ITIT? 694 (Del)
(iv) Addl. CIT v. JK.D’Costa (1981) 25 CTR (Del) 224.- (1982) 133 ITR 7 (Del)
(v) D&H Secheron Electrodes Ltd. v. Dy. CIT (1999) 70 lTD 214 (Ind)
(vi) Jain Exports (P) Ltd. v. Dy. CIT (1999) 68 177) 126 (Del).
39. Learned departmental Representative was not able to point out any contrary view and we are of the view that direction of the learned CIT to initiate proceedings under section 271(1)(c) was not sustainable in the eye of law as order to that extent stands quashed.
40. With regard to ground of appeal No. 6 related to levying of interest under sections 234A, 234B and 234C of the Act, the learned counsel for the assessed has prayed for consequential relief. We direct that interest under the aforesaid sections be recomputed after giving effect to the aforesaid order.
41. assessed’s appeal stands allowed accordingly.
