TaxTMI 
TaxTMI 
2022 (8) TMI 202
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....ed in the business of promoters and developers of the properties. The return of income for the assessment year 2015- 16 was filed on 31.10.2015 declaring total income of Rs.Nil. Against the said return of income, the assessment was completed by the Dy. Commissioner of Income Tax, Circle-14, Pune ('the Assessing Officer') vide order dated 29.12.2017 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') at total income of Rs.55,37,02,640/-. The returned income, inter-alia includes the disallowance of interest u/s 36(1)(iii) of Rs.38,87,38,952/-. However, the said addition was undergone change in the proceedings vide order dated 22.01.2018 u/s 154 to Rs.32,39,72,372/-. The said amount was arrived at by the Assessing Officer by applying ....
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....the complete details submitted by the appellant had chosen not to make any addition, as Assessing Officer was satisfied that when the advances are made for the business purposes, the question of disallowance u/s 36(1)(iii) does not arise. 4. As regards to the rate of interest to be applied on the loans and advances made to the sister concern, it is submitted that the Assessing Officer adopted 14% rate of interest after due consideration of the fact that the appellant had paid interest on the loans borrowed ranging from 8% to 20%. Without prejudice to the above, it is finally submitted that the assessment order cannot be termed as erroneous and prejudicial to the interests of the Revenue, inasmuch as, the Assessing Officer took the plausi....
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....iving an opportunity of being heard to the assessee. 6. Being aggrieved, the appellant is in appeal before us in the present appeal. 7. The ld. AR submits that during the course of assessment proceedings, the Assessing Officer had examined all the issue which are subject matter of revision by the ld. PCIT. He submitted that during the course of assessment proceedings, in response to query by the Assessing Officer, the details of advances for properties were furnished by the appellant vide letter dated 16.12.2017 received in his office on 21.12.2017 which are placed at page no.70 to 72 of the Paper Book, wherein it was clearly mentioned that the advances were made for the purchase of properties as per the details furnished therein. Hav....
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....evised by the ld. PCIT found part of subject matter of appeal before the ld. CIT(A). In support of this proposition, he relied upon the decision of the Hon'ble Madras High Court in the case of Smt. Renuka Philip vs. ITO, 101 taxmann.com 119 (Madras) and the decision of the Hon'ble Allahabad High Court in the case CIT vs. Vam Resorts & Hotels (P.) Ltd., 111 taxmann.com 62 (Allahabad). 9. On the other hand, ld. CIT-DR submits that the Assessing Officer had not conducted any enquiry, as to what is the correct rate of interest to be adopted for the purpose of computing the amount of disallowance u/s 36(1)(iii), as well as true nature of the transaction of advances for property of Rs.58,98,18,075/-. The Assessing Officer without examining any....
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....fficer had verified this item i.e. advances for properties. Nevertheless, there is nothing on record triggering enquiry into this item or to substantiate that this transaction is something else and nor the ld. PCIT had referred to any material on record justifying the revision. There is no gainsaying that the power of revision can be exercised by the ld. PCIT based on the opinion formed by himself. The revision based on the subjective opinion of the ld. PCIT cannot be sustained in the eyes of law. As observed by us, there was no existence of facts and circumstances on the base of which the ld. PCIT had formed an opinion that an enquiry is warranted into the item appearing under the head "Advance for properties". In the circumstances, we are....