TaxTMI 
TaxTMI 
2022 (11) TMI 534
X X X X Extracts X X X X
X X X X Extracts X X X X
....he claims without making any enquiry, whatsoever. 2. The learned PCIT has erred in law and on facts in assuming jurisdiction u/s 263 of the Act on the specious ground of 'no enquiry' directing the AO to make further enquiries particularly in respect of three specific issues which have already been considered and granted in the original assessment order made u/s. 143(3), namely (i) claim of deduction u/s. 80IC for a sum of Rs.74,72,390/-, (ii) claim of additional depreciation u/s. 32(1)(iia) for a sum of Rs.6,41,37,291/- and (iii) alleged non-inclusion of interest u/s. 244A of Rs. 4,83,616/- on the income tax refund which has already been included in total income assessed by AO; in utter disregard to the fact that in the course of original assessment proceedings, the AO has made necessary enquiries on all the above issues and after due verification, he has taken a conscious decision in accordance with the provisions of Act. 3. The learned Principal Commissioner of Income Tax-4, Ahmedabad has erred in law and on facts of the case in initiating the proceedings u/s. 263 and finally passing the order dated 27.7.2020 under that section in utter disregard to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the same year. 7. The appellant prays liberty to add or alter any ground at the time of hearing." 3. Return of income was filed on 26.10.2017 declaring total income of Rs. 18,75,68,180/-. The Assessing Officer passed order under Section 143(3) of the Income Tax Act on 21.09.2019 determining total income at Rs. 18,95,54,202/-, thereby making addition of Rs. 19,86,022/- being the amount of payments made to the Provident Fund/ESIC authorities by invoking the provision of Section 36(1)(va) r.w.s. 2(24)(x) of the Act. The Pr. CIT issued notice dated 10.02.2020 under Section 263 thereby invoking the revisionary power of the Pr. CIT. The Pr. CIT on 27.07.2020 directed the Assessing Officer to make the assessment de novo in light of the findings given therein and held that original assessment order dated 21.09.2019 is erroneous and prejudicial to the interest of Revenue. 4. Being aggrieved by the order under Section 263 passed by the Pr. CIT, the assessee is before us. 5. The Ld. A. R. submitted that the Assessee filed return of income for the year under consideration on 26.10.17 declaring total income at Rs.18,75,68,180/- after considering various income and expenses inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der must be erroneous; & • AO's order must be prejudicial to the interest of the revenue. If either of the above stated conditions is not satisfied, Pr. CIT cannot invoke revisionary jurisdiction. The Ld. AR relied upon the decision of the Apex Court in case of "Malabar Industrial Co. Ltd. vs. CIT" - (2000) 243 ITR 83 (SC). The Ld. AR further submitted that the Pr. CIT failed to appreciate that for the purpose of invoking revisionary jurisdiction, it is essential that both the conditions stated above are satisfied. If either of these two conditions is not satisfied in a given case, Pr. CIT cannot invoke revisionary jurisdiction u/s 263 at all. The Assessment Order is not at all 'erroneous' and hence, one of the twin conditions for invoking jurisdiction u/s 263 is not satisfied. Since one of the conditions for invoking jurisdiction u/s 263 of the Act is not satisfied in the present case, the impugned order must be quashed. The Ld. AR further submitted that issues on hand were threadbare examined at the original assessment stage. When an issue has been examined at the original assessment stage, it is not open to the Department to invoke revisionary jurisdi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in view of following legal contentions as well: • Assessee has incurred "interest expenses" of Rs.2,64,84,532/-. Hence, after deducting "interest income" of Rs.11,76,956/-, assessee has incurred "net interest expenditure" of Rs.2,53,07,576/- (i.e. Rs.2,64,84,532 - Rs.11,76,956). "Benefit of netting off" has to be granted. The Ld. AR reliedupon the decision of Hon'ble Apex Court in case of "ACG Associated Capsules P. Ltd. vs. CIT - 343 ITR 89 (SC)". Once the benefit of netting off is granted, question of exclusion of "interest income" for computing deduction u/s 80IC does not arise. • In any case, there is close and direct nexus between "other income" and "business of the assessee". Hence, such "other income" is eligible for "deduction u/s 80IC". The Ld. AR relied uponthe decision of "CIT vs. Meghalaya Steels Ltd. - 383 ITR 217 (SC)". • Interest of Rs.4,83,615/- on income tax refund" has already been offered for tax, as is evident from the followings: • Detailed break-up of "Interest income" of Rs.54,47,339/- which includes "interest of Rs.4,83,615/-". • Ledger of "Interest on IT refund" for the year under conside....
X X X X Extracts X X X X
X X X X Extracts X X X X
....merits and then ought to have established that Assessing Officer's order is erroneous and prejudicial to the interest of the revenue. Without doing so, Pr. CIT could not have set aside the issue to the file of Assessing Officer with a direction to conduct further inquiries. Reliance is placed on "ITO Vs. D.G. Housing Projects Ltd. -(2012) 343ITR 329 (Delhi).In view of the above, the Pr. CIT was not justified in invoking revisionary jurisdiction u/s 263 of the Act. 6. The Ld. D.R. relied upon the order of the Pr. CIT passed under Section 263 of the Act and submitted that the Assessing Officer has not verified the claim of assessee under Section 80IC as well as the additional depreciation claimed by the assessee and interest income arising out of excess payment of advance tax/TDS. 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that in the original assessment under Section 143(3) the Assessing Officer has pointedly raised pre-related to details of deduction claim under Section 80IC in the return of income along with supporting evidences in respect of partly transaction of Himachal Unit in the format given ....