2018 (8) TMI 1756

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..... 10.02.2016 allowing the claim of interest payment against the interest receipt is without making proper enquiry or verification ignoring that the AO has examined the claim of interest payment and allowed the same after making complete enquiry/verification. 4. The assessee craves to amend, alter and modify any of the grounds of appeal. 5. Necessary cost be allowed to the assessee. 2. Since common issues are arises in both the appeals and the facts and circumstances are also identical leading to the revision order under section 263 of the Act, therefore, for the purpose of hearing, these two appeals were clubbed together and are being disposed off by this composite order. The appeal for the assessment year 2013-14 is taken as a lead case for the purposes of describing the facts on the issues. The assessee filed his return of income on 30th July, 2013 declaring total income at Rs. 11,96,470/- and losses of the current year to be carried forward Rs. 1,57,580/-. The AO completed the assessment under section 143(3) on 10th February, 2016 accepting the returned income declared by the assessee. Subsequently on examination of the record, the Principal CIT found that t....

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.... then the ld. Pr. CIT cannot exercise his power under section 263 merely because the AO has not passed an elaborate order. The ld. A/R has further submitted that even there was an audit objection on these issues which were subject matter of section 263 and the AO issued a show cause notice dated 21st July, 2017 which was subsequent to the assessment order was passed. The assessee replied the said show cause notice vide letter dated 10.08.2017 and after examination of the issues, the AO did not agree with the audit objections raised on these issues. Thus the ld. A/R has submitted that the ld. Pr. CIT has initiated the proceedings under section 263 on the basis of the audit objections raised by the audit party which were already considered by the AO and did not agree with these objections. Thus once the AO has taken a possible view, then the ld. Pr. CIT cannot invoke the provisions of section 263 merely because he did not agree with the view taken by the AO. The ld. A/R has also referred to the details of the interest paid by the assessee as well as the interest received from various parties as well as the partnership firm in which the assessee is a partner and also from the company ....

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....d while passing the assessment order. He has relied upon the impugned order of the ld. Pr. CIT. 4. We have considered the rival submissions as well as the relevant material on record. The original assessment under section 143(3) was passed by the AO on 10th February, 2016 as under :- " Assessment Order The assessee has filed his return of income on 30.07.2013 declaring total income of Rs. 12,05,000/-. The return was processed u/s 143(1) of Income Tax Act, 1961 on 10.05.2013. The case was selected under scrutiny through CASS and notice u/s 143(2) was issued on 05.09.2014. The preliminary query letter was issued on 30.10.2014. In compliance to these notices, Sh. Ravindra Shah, CA and A/R of the assessee attended the hearing time to time and filed the details which are placed on record. The case is discussed with him. The assessee is partner in M/s. Ajanta Plastic Industries and M/s. Vishal Agencies and has shown interest from these firms. The assessee is deriving salary from M/s. Nangalwala Impex Pvt. Ltd and M/s. Zibaa Builders Pvt. Ltd. Apart from these, the assessee has declared income from house property, capital gain and income from other sources. ....

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.... interest Amit Jain 2,00,000 - 2,00,000 24,000 12% Ashok Kumar Jain 20,00,000 - 20,00,000 2,40,000 12% Bombay Electricals 5,00,000 5,00,000 - 58,500 12% Ganpati Traders 10,00,000  - 10,00,000 1,20,000 12% Kranti Chand Jain HUF 2,00,000 -  2,00,000 24,000 12% Kranti Chand Jain 2,00,000 - 2,00,000 24,000 12% Meenakshi Jain 2,00,000 - 2,00,000 24,000 12% Preeti Tomer 4,00,000 - 4,00,000 60,000  15% Ram Singh 5,00,000 2,00,000  7,00,000 92,500 15.6% Sheetal Jain 2,00,000  - 2,00,000  24,000 12% Shushila Agarwal 6,50,000 (-) 1,50,000 5,00,000 76,438 15% Vishal Agencies (Partner' OD) 1,07,02,272 - 1,07,02,272 19,26,409 18% LIC Loan 1,15,000 -  1,15,000 10,350 9% LIC Loan 3,22,000   -     HDFC Loan 2,03,95,832  (-) 11,96,891 1,91,98,941  22,28,677 12.75% Total : 3,72,63,104 (-) 16,46,891 3,56,16,213 52,32,874     As it is evident f....