TaxTMI 
TaxTMI 
2023 (2) TMI 116
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.... 2017-18. 2. In this appeal, the assessee has raised the following grounds: "1. That on the facts and circumstances of the case and in law, the Ld. PCIT has erred in passing an order u/s. 263 of the Act without appreciating that the assessment order u/s. 143(3) of the Act was neither erroneous nor prejudicial to the interest of the revenue, and as such, no interference u/s. 263 of the Act is warranted. 2. That on the facts and circumstances of the case and in law, the revisionary order u/s 263 of the IT Act, 1961 is bad in law in as much as it is contrary to the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT 2000 (2) TMI 10 which holds that revisionary power cannot be invoke....
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....ts of the case as emanating from the record are: The assessee is a company engaged in the business of real estate development. The assessee e-filed its return of income on 07/11/2017 declaring total income of Rs.7,48,51,580. The return of income filed by the assessee was selected for scrutiny and statutory notices under section 143(2) and section 142(1) were issued and duly served on the assessee. The Assessing Officer ("AO") vide order dated 17/12/2019 passed under section 143(3) of the Act computed the total income of the assessee at Rs.10,94,98,090, after making various additions. 4. Subsequently, vide notice dated 24/03/2022, issued under section 263 of the Act revisionary proceedings were initiated in the case of the assessee on the....
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....t of Revenue and set aside the assessment order to the file of AO limited to examine the above-stated issues in detail while framing assessment. Being aggrieved, the assessee is in appeal before us. 5. During the hearing, the learned Authorised Representative ("learned AR") submitted that during the assessment proceedings, the AO had called for the details regarding the inventory of opening and closing stock along with additions made and sales made during the year, which are duly provided by the assessee. The learned AR further submitted that the issue of taxing the annual letting value of the completed stock of flats as income from house property is a debatable issue and the AO has taken one of the plausible views, therefore, the same i....
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....gs and thus the assessment order is erroneous insofar as it is prejudicial to the interest of the Revenue. In respect of interest on delayed payment of TDS and penalty, the learned DR placed reliance on certain decisions, wherein the said expenditure has been disallowed under section 37 of the Act. 7. We have considered the rival submissions and perused the material available on record. In the present case, as noted above, the revisionary proceeding under section 263 of the Act was initiated on three issues, namely, (i) taxability of annual letting value of unsold stock of flats as income from house property; (ii) claim of loss on sale of car; and (iii) claim of interest on delay payment of TDS and penalty. 8. As regards the first iss....
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....stock as on 01/04/2019 and closing stock as on 31/03/2017. We further find that the assessee also provided the reconciliation of opening and closing stock with additions made and sales made during the year and details of profit/loss recognised on sale of stock, during the year, along with the calculation thereof. The assessee also submitted the details of flat/shop sales offered during the year under consideration. The AO vide assessment order passed under section 143(3) of the Act though made various additions and computed the total income of the assessee at Rs.10,94,98,090, however, made no addition on account of the annual letting value of the unsold stock of flats. 10. During the hearing, the learned AR placed reliance upon the decis....
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....be said that there was no enquiry by the AO on this issue. Accordingly, we set aside the impugned order passed under section 263 of the Act on this issue. As a result, grounds No. 2-5 raised in assessee's appeal are allowed. 11. As regards the claim of loss on sale of car, we find that vide notice dated 10/05/2019 issued under section 142(1) of the Act, the AO asked for claim of expenditure under the head of other expenses and subhead of miscellaneous expenses, vide point no.24. In reply to the said notice, the assessee vide letter dated 04/10/2019 filed before the AO, submitted that the loss has been incurred on sale of car, which was used by the partners for the smooth functioning of the business, and the same has been incurred wholly ....