TaxTMI 
TaxTMI 
2022 (11) TMI 476
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....3) of the Act is not 'erroneous and prejudicial to the interest of the revenue' and thereby erred in setting aside the Order passed by the Assessing Officer u/s.143(3) of the Act dated 31.12.2019. 3. For that the Learned Principal Commissioner of Income Tax (Central) - 2, Chennai has failed to appreciate the fact that expenses referred to in the Show Cause Notice were not incurred during the subject A Y and thus the very basis for issuing a direction to the Assessing Officer for verification of these expenses fails. 4. For that the Learned Principal Commissioner of Income Tax (Central) - 2, Chennai has set aside the assessment with a direction to examine the issues raised in the Show Cause Notice u/s 263 of the Act, thereby the PCIT is not justified in invoking his jurisdiction u/s 263 of the Act. Prayer: For these grounds and such other grounds that may be adduced before or during the. hearing of the appeal, it is most humbly and respectfully prayed that the Hon'ble Tribunal may be pleased to quash the order of PCIT dated 18.03.2022 u/s 263 of the Act or provide such other relief as this Hon'ble Tribunal may deem fit. 3. The brief f....
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....sessee has filed a written submission on the issue, which has been reproduced at Para No.14 at Page Nos.5-12 of the PCIT's order. The sum and substance of the arguments of the assessee before the PCIT are that the assessment order passed by the AO u/s.144 r.w.s.153C of the Act, is neither erroneous nor prejudicial to the interest of the Revenue. Because, all four issues questioned by yourself had been thoroughly examined by the AO during the course of assessment proceedings, where the assessee has furnished complete details about payment made to M/s.Sun Med Health Care Pvt. Ltd., and procurement of medical equipments from the parties. The assessee had also furnished copies of bills along with VAT returns filed for the relevant month to prove that purchases from said parties are genuine in nature. The assessee had also filed details about additions to building construction and depreciation claimed on said building and the AO has considered all evidences filed by the assessee and accepted depreciation claimed on building. Likewise, the assessee has furnished details of depreciation on building under construction and also name and address of creditors appears in the books of accounts.....
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....h ledger copy, copy of invoices, payment details and VAT returns of the above company. The assessee had also furnished details of improvement to building and payment made to M/s.VSK Constructions, for renovation work done by them. The assessee had also filed details about depreciation claim on building under construction and filed necessary details. As regards to Issue No.4 of the show cause notice dated 15.02.2022, the assessee has filed name and address of the creditors and confirmation letters including purpose of said creditors was also explained. The AO after examining the issue has chosen not to make any additions on those issues. Therefore, invocation of revisional powers on said issue is incorrect. 8. The Ld.DR, on the other hand, referring to the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. (supra) submitted that although, the Counsel for the assessee has heavily relied upon the decision of the Hon'ble Supreme Court in the above case, but fact remains that said decision goes in favour of the Revenue, because, it has clearly laid down a ratio on the powers of the PCIT u/s.263 of the Act, and as per which, if the assessment order passed....
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....we examine the facts of the present case, we find that the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue, for the simple reason that all four issues finding place in the show cause notice of the PCIT, are emanating from the balance sheet and financial statement filed by the assessee for the relevant assessment year. Further, the PCIT has questioned payment made to M/s.Sun Med Health Care Pvt. Ltd., and procurement of medical equipments from the parties. We find that said issue is emanating from the financial statement filed by the assessee and during the course of assessment proceedings which is a primary document placed before the AO and the AO has considered financial statement of the assessee and has chosen not to make any additions on this issue, which means, the assessee has furnished complete details on the issue and the AO has examined the case in right perspective of law. As regards depreciation on improvement to building, the only objection of the PCIT is that no proper evidence was filed, otherwise, the PCIT did not make any observations with regard to 'how and why' depreciation claimed on improvement to building is ....
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....lted in loss of revenue or where two views are possible and the ITO has taken one view with which the CIT did not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue. The Madras High Court followed the above decision of the Supreme Court in the case of CIT Vs. Tamilnadu Warehousing Corpn. (292 ITR 310). The Punjab and Haryana High Court followed the above decision of Supreme Court in the case of CIT Vs. Nahar Exports Ltd. (173 Taxman 3 P & H). The jurisdictional Madras High Court in the case of CIT Vs. Mepco Industries Ltd. (294 ITR 121) has held that the order to be revised under section 263 should not only be erroneous but also prejudicial to the interest of revenue. It held that where two views are possible order cannot be termed as erroneous. The powers under section 263 cannot be exercised merely because a different view is possible - SC dismissed the SLP against 259 ITR 502 CIT Vs. Arvind Jewellery (266 ITR 101) St. In the case of CIT vs. Bharat Aluminum Co. Ltd. (303 ITR 256), the Hon'ble High 'Court of Delhi has held that for revision under section 263, the Commissioner of Income-tax has to be satisfied....