Appeal Dismissed: Tribunal Upholds CIT's Denovo Assessment on Interest

The appeal challenging the Pr. CIT's revisional order under section 263 of the Act was dismissed by the Tribunal. The Pr. CIT's direction for denovo assessment on interest earned on short term fixed deposits was upheld, citing lack of enquiry by the Assessing Officer and failure to tax the interest as income. The Tribunal found the revisional order appropriate, considering the Tribunal's previous and subsequent orders, leaving the final decision on the issue to the CIT(A).

---

---

Issues:
1. Challenge to order of Pr. CIT under section 263 of the Act.
2. Jurisdiction of Pr. CIT to revise assessment order.
3. Treatment of interest accrued on share capital.
4. Consideration of Tribunal's order in earlier and subsequent assessment years.
5. Lack of enquiry by Assessing Officer on interest on bank deposits.
6. Legality of revisional order by Pr. CIT.
7. Assessment records and examination by Pr. CIT.
8. Direction to AO for denovo assessment.
9. Consideration of subsequent Tribunal order.
10. Merits of the issue left open for CIT(A) to decide.

Detailed Analysis:

1. The appeal was filed by the assessee against the order of the Pr. CIT under section 263 of the Act, challenging the jurisdiction of the Pr. CIT to revise the assessment order for the assessment year 2012-13.

2. The assessee contended that the order of the Pr. CIT was arbitrary, illegal, and without jurisdiction. The assessee argued that the completed assessment cannot be revised based on the decision of the Hon'ble Supreme Court and that the interest accrued on share capital was capital receipt, not revenue receipt.

3. The Assessing Officer completed the assessment without enquiring into the issue of interest on bank deposits, which was later picked up by the Pr. CIT for revision under section 263 of the Act.

4. The Tribunal's order in earlier and subsequent assessment years favored the assessee's position on the interest earned on short term fixed deposits, which was not considered by the Pr. CIT while passing the revisional order.

5. The Pr. CIT found that the Assessing Officer failed to bring to tax the interest received by the assessee as income from other sources, leading to the order being set aside for denovo assessment.

6. The Tribunal observed that while the subsequent order favored the assessee, it could not be considered in the revisional order as it was passed later.

7. The Pr. CIT's revisional order directing the AO to conduct denovo assessment on the issue of interest earned on short term fixed deposits was held to be correct based on the lack of enquiry by the Assessing Officer.

8. The Tribunal did not express any opinion on the merits of the issue, leaving it open for the CIT(A) to decide while considering the facts and circumstances of the case.

9. Ultimately, the appeal of the assessee was dismissed, with the Tribunal upholding the Pr. CIT's revisional order for denovo assessment on the issue of interest earned on short term fixed deposits.

This detailed analysis covers the various issues raised in the appeal and the Tribunal's decision regarding the revisional powers of the Pr. CIT under section 263 of the Act.

---