TaxTMI 
TaxTMI 
2023 (11) TMI 500
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....same, assessment was completed accepting returned loss filed by the assessee. 2.1. On verification of the above assessment order, the Ld. PCIT noticed that the assessee had debited Bank Guarantee Commission expenses of Rs. 42,10,986/-. As per joint venture agreement, a separate bank account was to be opened for all financial obligation, but bank guarantee has been issued by M/s. Madhav Infra Projects Ltd. (JV Partner) and the assessee reimbursed the commission expenses of to J.V. Partner. However Madhav Infra Projects Ltd. has not offered the reimbursement of commission expenses of Rs. 42,10,986/- in its Return of Income. The assessee failed to prove the genuineness of the expenditure and the same is not allowable u/s. 37 of the Act. Thus the Assessing Officer failed to verify the same while passing the assessment order, which is erroneous and prejudicial to the interest of Revenue. Therefore the assessee was given a show cause notice as to why revise the assessment order dated 26.03.2021 passed by the Assessing Officer. 3. The assessee filed its reply giving details of the bank guarantees from Dena Bank, State Bank of India, IDBI Bank and submitted that Madhav Infra Projects Ltd....
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....erest of revenue which was passed by AO being satisfied on due verification of Bank Guarantees. Guarantee commission payment by JV partner as well reimbursement of the same by the appellant AOP. 5. Ld. Pr. CIT grievously erred in law and on facts in holding that JV partner. Madhav Infra Projects Ltd. has not declared guarantee commission reimbursement receipts in their books that lead to understatement in case of appellant AOP making the order erroneous and prejudicial to the interest of revenue. 6. Ld. Pr. CIT erred in law and on facts in holding that appellant AOP failed to prove genuineness of reimbursement of guarantee commission which required to be disallowed by AO in accordance with the provisions of section 37 of the Act. 5. Ld. Senior Counsel Shri S.N. Soparkar appearing for the Assessee submitted before us a compilation of Paper Book wherein replies filed by the assessee before the Assessing Officer in response to the notice issued u/s. 142(1) dated 14.12.2020. Ld. Senior Counsel further submitted M/s. Madhav Infra Projects Ltd. offered this bank guarantee commission in the same account and no separate account is maintained for reimbursement of receipts and the net a....
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....dhav Infra Projects Limited with name of the Bank Guarantees, BG number, BG commission and all other details related expenses as Annexure-C. Thus both the ingredients i.e order must be erroneous in nature; and the error must be such that it is prejudicial to the interest of Revenue are present in a given case, it is not legally permissible for a Commissioner to initiate suo motu proceeding under section 263 of the Act, the same has been upheld by Hon'ble Supreme Court in case of Malabar Industrial Co. Ltd.-Vs-CIT 243 ITR 83. However, an assessment cannot be revised if there is no jurisdictional error in the order or if it has been passed after due application of mind or in case where PCIT has a view different from that taken by A.O. Therefore we have no hesitation in quashing the Revision order passed by the Ld. PCIT. 8. Our above view is supported by the following judicial precedents: (a) Supreme Court of India in case of CIT Vs. Nirav Modi [2017] 77 taxmann.com 78 (SC) wherein it was held as under. Section 68, read with section 263, of the Income-tax Act, 1961 - Cash credit (Gift) - Assessment years 2007-08 and 2008-09- Assessee received certain amount as gifts from his f....
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....nue - Held, yes (c) Spectra Shares & Scrips (P.) Ltd. V/s Commissioner of Income-tax III, Hyderabad [2013] 36 taxmann.com 348 (Andhra Pradesh) Section 263 of the Income-tax Act, 1961 Revision Of order prejudicial to interest of revenue [Scope of] Assessment year 2006-07 Whether Assessing Officer in assessment order is not required to give detailed reasons and once it is clear that there was application of mind by an enquiry, Commissioner, merely because he entertains a different opinion in matter, cannot invoke his powers under section 263 Held, yes [Para 59] [In favour of assessee] (d) Decision of Gujarat High Court in case of Aryan arcade Ltd. Vs. CIT [2017] 84 taxmann.com 293 wherein it was held as under: Section 24, read with section 263, of the Income-tax Act, 1961 Income from house property - Deductions (Interest) - Assessment year 2011-12 Assessee-company was engaged in renting of property During relevant period assessee raised funds by issuing debentures - Funds raised through such debentures were utilised for repayment of past loans taken for purpose of construction of building Assessee pointed out this aspect to Assessing Officer during original assessment Through a....