https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=769748 https://www.taxtmi.com/caselaws?id=769748 Revision u/s 263 - no inquiry or sufficient inquiry was not conducted by the assessing officer, during the assessment proceedings - whether the assessee's case be considered in the category of "No Inquiry"? PCIT has mainly raised two issues of unsecured loans given to family members and other depositors without charging interest and notional rent income under the head "House Property" u/s. 22 r.w.s.23 which has resulted into under assessment - HELD THAT:- We find that in the course of assessment proceedings, the assessing officer, vide notice u/s 142(1) has called for voluminous details covering 25 points which include the justification of borrowed money and payment of interest etc. The assessee has categorically explained the details of opening balance and subsequent transactions in partners cases and the receipts/payments of all other loan and advances etc. The copy of reply dated 04.01.2021, is attached as Annexure-2, in the paper book of the assessee. Thus, the issue now raised in the notice u/s 263 of the Act, had been verified by the assessing officer in detail and as such the present proceedings are not within the provisions of section 263 of the Act. It may be observed from the balance sheet that the assessee is having Interest free booking deposits Similarly the ledger of unsecured loans reflect unsecured loans interest free loans from Mohanlal C. Patel. As seen from the ledger of current liabilities that at the beginning of the accounting year booking deposits was at Rs. 3,38,92,434/- and at the end of the year at Rs. 2,47,01,636/-. Thus, average interest free fund of Rs. 2,93,00,000/- was available [3.39+2.47Cr/2). As against the same partner's average negative balance comes to Rs. 4.13 [6.40+1.87Cr./2]against which interest free average customer deposits are Rs. 2.93Cr. [3.39+2.47/2], as such there is negative balance in partner's account comes to Rs. 1.20 Cr. [4.3-2.93], however, at the same time the assessee has average interest free unsecured loans at Rs. 2.05 Cr. [1.80+2.3/2] which covers deficit of Rs. 1.20 Cr. Thus, there is no case of any under assessment on account of payment of interest on unsecured loans, as alleged. Not adding presumptive letting value of rent on vacant closing stock - In the present case, the completion certificates were issued on 30.01.2017 and 28.06.2017 and as such the cooling period is not over during the assessment year under consideration and hence the assessee is not required to offer any property income from this stock in trade. We note that in the case of Canara Bank Securities Ltd [2019 (10) TMI 1512 - SC ORDER] dismissed the Revenue's SLP holding that 263 proceedings are invalid when assessing officer had made enquiries and taken a plausible view in law. As in the case of CIT vs. Green world Corporation [2009 (5) TMI 14 - SUPREME COURT] that an order of assessment passed by ITO cannot be interfered with only because another view is possible. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue "unless the view taken by the Assessing Officer is unsustainable in law". In the conclusion we are of the view that none of the reasons set out by the PCIT for invoking the jurisdiction u/s 263 of the Act are sustainable. The impugned order of the PCIT has to be quashed - Assessee appeal allowed. Case-Laws Income Tax Mon, 28 Apr 2025 00:00:00 +0530