2010 (2) TMI 75

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....4,06,770/-. The Assessing Officer issued notice under Section 143(2) of the Income Tax Act, 1961, (for short „the said Act) to the assessee, calling for information. Thereafter vide assessment order dated 30th September, 2005, the Assessing Officer accepted the return of income submitted by the assessee. 3. It is seen from the record that on the proposal of the Assessing Officer, the learned CIT issued a notice under Section 263 of the said Act. The CIT noticed that one Sh. Ashok Kumar Sharma, resident of 12-DM Block, Saket, New Delhi had received compensation for the land at village Tughlakabad and that the said Ashok Kumar Sharma had transferred 50% of such compensation to the assessee at a sum of Rs 27,00,000/- only, whereas the c....

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....ad and a copy of the award passed by the Hon'ble High Court in respect of this land was also submitted to the Assessing Officer. 5. The Tribunal after examining the facts of the case observed that although it is not discernible from the assessment order whether the Assessing Officer had applied his mind or not, but it was the prerogative of the Assessing Officer to draft his order, and if he failed to record certain findings, the assessee could not be penalized therefore. The Tribunal further observed that what has to be ascertained is whether the Assessing Officer had investigated the issue and applied his mind to the whole record. In this behalf it noted that the Assessing Officer had asked the assessee to submit the Purchase Deed in res....

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....ever, that by itself would not be indicative of the fact that the AO had not applied his mind on the issue. There are judgments galore laying down the principle that the AO in the assessing order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Section 263 of the Act, mere....