TaxTMI 
TaxTMI 
2013 (6) TMI 531
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....pre-operative capitalisation of interest to the extent of Rs. 2,83,41,184. d. In directing the Assessing Officer to enquire into the genuineness of transaction relating to 22% non-convertible debentures i.e., Rs. 248.32 crores subscribed by the holding company M/s. PVP Ventures Pvt. Ltd. e. In directing the Assessing Officer to enquire into the genuineness of transaction relating to advances made by the assessee of Rs. 135.56 crores for the purpose of land development charges and disallow @ 22% p.a. as interest from preoperative capitalisation. f. In directing the assessment order to enquire into the genuineness of claim of interest of Rs. 2,00,95,891 include in preoperative capitalisation; and g. In directing the Assessing Officer to compute interest on the deposit of Rs. 15.50 crores at 15% from the date of deposit till the closing date relevant accounting period. 3. Brief facts of the case are that the assessee for the assessment year under consideration filed a return of income on 30.10.2007 declaring nil income. Assessment was completed u/s. 143(3) of the Act. The CIT after going through the assessment record found certain discrepancy. Accordingly, provisions of section 2....
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..../s. PVP Ventures Pvt. Ltd. (c) Regarding the third issue, he directed the Assessing Officer to enquire into genuineness of the transaction relating to the advance made by the assessee at Rs. 135.56 crores for the purpose of land development charges. (d) On the fourth issue, he directed the Assessing Officer to enquire into genuineness of the claim of interest of Rs. 2,00,95,891. On this issue, he has also directed the Assessing Officer to compute interest on the deposit of Rs. 15.5 crores at 15% from the date of deposit till the closing date relevant to accounting period. Against these directions, the assessee is in appeal before us. 5. The learned AR submitted that invoking of jurisdiction u/s. 263 of the Act is bad in law. According to the AR the assessee has not commenced any business in the relevant assessment year and it has filed return of income with nil income. Being so there is no question of passing any order by the Assessing Officer which is neither erroneous much less prejudicial to the interest of revenue which warrants revision u/s. 263 of the Act. He further submitted that even there is no carry forward of any loss or depreciation to the subsequent assessment year....
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....ITR 172). 7. Regarding the second issue, he has submitted that the assessee has advanced a sum of Rs. 49.15 crores to the holding company and this is an independent transaction as has no connection to the debenture subscription made by the holding company. The land development advance was paid to M/s. SPR Infrastructure Ltd., and the assessee has paid the said sum after deducting TDS. The TDS section of the Department has levied interest u/s. 201(1A) of the Act for the belated payment of TDS. Even this advance was not claimed as expenditure. The assessment order cannot be considered as erroneous or prejudicial to the interest of the revenue. 8. Regarding the third issue the assessee has borrowed money from M/s. Karvy Consulting Ltd. and Development Commercial Bank on which assessee paid interest at Rs. 2,02,98,803. This interest was also capitalised and not claimed any expenditure. On this count also there is no loss to the revenue. 9. Regarding the fourth issue relating to deposit of Rs. 15.50 crores, this deposit was not interest bearing deposit and as such no interest was offered to tax. The assessee also not claimed any expenditure. Being so no question of disallowing of any....
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.... completing assessment u/s. 143(3) of the Act made proper scrutiny and passed the assessment order dated 18.9.2009. To invoke the provisions of section 263 of the Act it requires two prerequisite conditions which must be present before the CIT can exercise revisional jurisdiction power conferred on him. First condition is that the order passed by the ITO must be erroneous and the second condition is that the error must be such that it is prejudicial to the interest of the revenue. If the order is erroneous but it is not prejudicial to the interest of the revenue, the CIT cannot exercise revisional jurisdiction u/s. 263(1) of the Act. The revisional authority is required to give findings that the order sought to be revised is prejudicial to the interest of revenue as well as erroneous. If one of that is absent, the revisional authority cannot exercise the power u/s. 263 of the Act. In the present case, the assessee is having no taxable income for the assessment year under consideration and the returned income is nil and the assessee is also having no claim of carried forward loss or depreciation in the assessment year under consideration. Even assuming that there are certain errors ....
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....f the proceedings called for by him. If there are no materials on 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 proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well- accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. (Parashuram Pottery Works Co. Ltd. v. ITO [1977) 106 ITR 1 (SC) at page 10). 14. From the provisions of section 263(1) it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax officer acting in accordance with law makes a certain assessment, the same cannot be branded as 'erroneous by the Commissioner simply because, according to him, the order should have been ....