TaxTMI 
TaxTMI 
2015 (9) TMI 228
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....t year 2000-01. The appeal was admitted on a substantial question of law. However, after hearing Mrs. Das De, learned advocate for the appellant and Mr. Khaitan, learned senior advocate for the respondent, the said question is reformulated, which is as under: "Whether, on the facts and in the circumstances of the case, the Income-Tax Appellate Tribunal is correct in quashing the order of the Commissioner of Income-Tax passed under section 263 of the Income-tax Act, 1961, setting aside the order passed by the Assessing Officer under section 143(1) of the Income-tax Act, 1961 wherein he allowed interest of Rs. 28,33,383 paid in respect of income by way of dividend exempt under section 10(34) against taxable income, contrary to the provi....
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....fter 1.6.99 specifying the sum payable by the assessee or refundable to the assessee. Therefore, not excluding the expenditure relating to earning of exempted dividend income while making the intimation u/s 143(1) cannot by any stretch of imagination render the intimation issued u/s 143(1) as erroneous in so far it has become prejudicial to the interest of the revenue to disallow any claim or deduction or allowance or relief claimed by the assessee in the return of income while sending the intimation u/s 143(1) of the Act as it does not come within the ambit of provisions of section 143(1) of the Act effected from 1.6.99. Therefore, by not disallowing the expenditure relating to earning of exempted dividend income at the time of making an i....
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....d income of Rs. 18,36,848/-, which has been claimed as exempt income in the return, has not been excluded while computing the total income. Notice u/s. 263 was issued to the assessee requiring him to explain as to why the amount of interest paid or payable on the investment in shares which yielded dividend income (exempt), will be allowed as expenditure." ....................... " I have gone through the submissions of the Ld. A.R. But I do not agree with him that involving of provisions of Sec.263 of the I.T. Act in this case is prohibited in any matter whatsoever by the Income Tax Act. From the facts of the case it transpires that no expenditure relating to earning of dividend income of the case u/s. 143(1) which made it erroneous i....
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.... loss, deduction or relief or allowance claimed in the return, when the claim was prima facie found inadmissible. However, after the amendment, with effect from 1st June, 1999, the system of prima facie adjustment has been done away with. Submission is, the judgment dated 28th July, 2003 passed by the High Court in W.P. No.446 of 2002 [ Hilltop Holdings India Ltd. -vs- CIT, Kolkata -II & Others], relied on by the CIT, Kolkata-IV in the order passed in Section 263 proceedings, is no longer a good law as it stood reversed in appeal by the judgment passed in Hilltop Holdings India Ltd. vs. C.I.T & Ors. : 278 ITR 501 (Cal). After the amendment, under Section 143(1)power has been conferred on the Assessing Officer to find out whether there has b....