TaxTMI 
TaxTMI 
2024 (4) TMI 736
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....t order framed u/s 143(3) of the Act by holding that the assessing officer has not conducted any inquiries/verification in respect of genuineness of the expenses and that there is incorrect application of law by the A.O. 3. The learned Principal Commissioner of Income-tax, Guwahati - 1, Assam failed to appreciate that the impugned issue was duly examined by the assessing officer by way of specific inquiry/notice and reply thereto, while finalizing assessment proceedings u/s 143(3) of the Act. 4. The learned Principal Commissioner of Income-tax, Guwahati - 1, Assam failed to appreciate that the first appeal of the Appellant against addition made in the assessment order on impugned issue was pending before the Commissioner (Appeals) and therefore the order u/s 143(3) could not be revised u/s 263 of the Act. 5. The learned Principal Commissioner of Income-tax, Guwahati - 1, Assam failed to understand the circumstances and business nature and did an addition of a total amount Rs. 10,483,749 on allegation that respective expense has not fulfilled the condition of Section 36 (1) (iii) of act, 1961. 6. That on the facts and circumstances of the case and in law, the order passed by....
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....ds for assessee's own business. 4.1. During the course of revisionary proceedings, it was stated by the assessee that secured loan was taken from SREI Infrastructure Finance Ltd. (in short "SREIIFL") for the purpose of executing real estate and commercial business. Since the business was in the initial stage, the borrowed funds were advanced to M/s. M.L. Singhi, so as to avoid NPA account and generated interest income which gave effect to 95% of the interest repayment liability towards SREIIFL. It was also claimed by the assessee that the interest payments was @ 14.21% and the interest income from M.L. Singhi was @ 13.96% and in view of the commercial expediency as held by the Hon'ble Apex Court in the case of S.A. Builders Ltd. Vs. Commissioner of Income Tax (Appeals)" (2007) 288 ITR 0001, claim of expenditure was rightly allowed by ld. Assessing Officer. 4.2. However, the ld. Pr. CIT after dealing with the issue elaborately came to the conclusion that since there was no business activity during the year and the borrowed funds were utilized to the third party without any commercial expediency, interest expenditure claimed at Rs. 1,04,83,749/- should not have been allowed....
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....on 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time ....
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....;ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC) has laid down following ratio with regard to provisions of section 263 of the Act: "There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order ....
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....eseen circumstances, project was not take off. The assessee company has lend the same fund on short term basis to other company and earned interest income of Rs. 97,89,770/- from M/s M.L. Singhi & Associates (P) Ltd. Assessee was asked to furnish the documentary evidence regarding payment of interest to M/s SREI Equipments Finance Ltd. Amounting to Rs. 1,04,83,749/-and receipt of interest of Rs. 97,89,770/- to M/s M.L. Singhi & Associates (P) Ltd. On perusal of ledger account of M/s M.L.Singhi & Associates (P) Ltd. It was noticed that an amount of Rs. 1,05,12,707/- as interest was paid by M/s M.L. Singhi & Associates to the assessee instead of Rs. 97,89,770/-. Therefore, assessee was asked vide notice u/s 05.03.2021 to re-concile the same. It was specifically mentioned in the letter that this is a time barring matter and no further opportunity will be given. In case of non compliance assessment will be completed by making addition of Rs. 7,22,937/-. Vide reply dated 10.03.2021 assessee stated that the information/reply will be submitted on or before 15th March 2021 but till date no reply received from the assessee. Thus, it is clear that the assessee has nothing to say in the. matt....