TaxTMI 
TaxTMI 
2022 (10) TMI 1255
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....eous and prejudicial to the interest of the revenue. 3. The Ld. Pr. CIT erred in passing the revisionary order by forming different opinion from that of the Assessing Officer taken during the course of assessment proceedings. 4. The Ld. Pr. CIT ought to have well appreciated that the issue was already examined by the AO thoroughly in the course of assessment proceedings u/s 143(3) of the Act on 24.12.2019 and has not meddled with the above issue as he was fully satisfied with the details furnished as available with him and therefore the Ld. Pr. CIT cannot direct the Ld.AO u/s 263 of the Act to re-examine the same issue or conduct further enquiries on the issue already considered by the AO. 5. The Ld. Pr. CIT ought to have appreciated that there is no mistake of application of law or shortcoming or failure on the part of the AO in the making further enquiry or examination of the issues. 6. The Ld. Pr. CIT ought to have appreciated that the AO has verified all the issues which, in the opinion of the AO needs examination and therefore taking recourse u/s 263 of the Act on the issues examined is erroneous. 7. The Ld. Pr.CIT ought to have appreciated the fact that AO has ....
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....ue. The ld.PCIT set aside the issue of allowability of expenditure u/s 37 of the Act to the file of Assessing Officer to the limited extent for verification with certain directions by observing as under at paragraph 3 of his order : "3. The submissions of the Authorized Representative of the assessee have been carefully considered. As seen from the assessment records, the claim of the Authorized Representative of the assessee that the issue in the present proceedings have been verified and allowed by the Assessing Officer is not correct. With regard to the other claim that the tax payer is in appeal on the issue of disallowance of interest before CIT (A), therefore, the present proceedings are not correct is also not tenable in view of the reason that the Assessing Officer made an ad-hoc disallowance of 30% of the total finance cost stating that the same is disallowed, as no TDS was done u/s 40(a) (ia) of the I.T Act, whereas the entire amount should have been disallowed due to contravention of TDS provisions, on which the taxpayer is in appeal against the said ad-hoc disallowance. Therefore the issues before the CIT (A) and in the present proceedings are different as discussed a....
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.... signed by an Accountant. Otherwise, the same will be added back to the income of the assessee as per the provisions of Sec. 40(a)(ia) of the Income tax Act, 1961. In this connection the assessee has submitted form.26A in respect of Rs.1,83,94,752/- for payment to M/s.Kronafinsteck Pvt.Ltd and Rs.47,13,202/- to M/s. Monarch Reasearch and Brokerage Pvt. Ltd. On verification of the form 26A submitted, it is noticed that the same is not as prescribed under Rule.31ACB and is not certified by Accountant as required u/s.201 of the Income-tax Act, 1961. Further, no evidence is produced by the assessee to confirm that the above parties have included the above income in their Return of Income by providing their Financial Statements and Balance sheet and computation of total income along with copy of ITR. Hence 30% of interest expenditure which works out to Rs.69,32,300/- is disallowed u/s 40(a)(ia) (30% of Rs.2,31,07,667/-) and added back to the income of the assessee. 9. It was submitted by the learned Authorised Representative that after the Assessing Officer enquired with the assessee about the allowability of the expenditure, the assessee had replied to the said questionnaire and t....
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.... capitalize the above said amount as the project of the assessee has not started and the said amount was pre-operative business expenditure. It was submitted that the view taken by the Assessing Officer and the view taken by the ld.PCIT are different and when there are two different possible views, then the order of the Assessing Officer cannot be set aside merely because of the reason that the Assessing Officer has not taken the view as taken by the ld.PCIT. 13. The second argument raised by the learned Authorised Representative was that the assessee has challenged the order passed by the Assessing Officer before the ld.CIT(A) and the ld.CIT(A) was having co-terminus power as that of Assessing Officer and further the ld.CIT(A) has a power to enhance the additions and for the above said proposition, he relied upon the decision of Hon'ble Delhi High Court in the case of PCIT v. Jansampark Advertising & Marketing (P.) Ltd. [2015] 56 taxmann.com 286/231 Taxman 384/375 ITR 373 (Delhi) and also section 251 of the Income Tax Act 1961 , which is to the following effect:- 251. (1) In disposing of an appeal, the 88[***] 89[Commissioner (Appeals)] shall have the following powers- (a) i....
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....he ld.PCIT was correct. It was submitted that the Revenue had filed the paper book whereby the Revenue seek to rely upon the following decisions : 1. Smt. Tara Devi Aggarwal Vs. CIT - 88 ITR 323 (SC) 2. Rampyari Devi Saraogi Vs. CIT - 67 ITR 84 (SC) 3. Gee Vee Enterprises Vs. ACIT - 99 ITR 375 (Delhi) 4. Radiant Life Care Mumbai Pvt. Ltd. Vs. PCIT, Mumbai - ITA Nos.895 & 896/Mum/2021 dt.31.05.2022. 16. We have heard the rival contentions and perused the material on record. Whether the jurisdiction exercised by the ld.PCIT was correct or not, it is essential to point out whether the order passed by the Assessing Officer was erroneous and prejudicial to the interest of Revenue. For the above said purposes, we may draw strength from various judgments of Hon'ble Supreme Court and High Courts. In the case of M/s. United Breweries Ltd I.T.A No.782/Bang/2013 wherein one of us i.e., Judicial Member is a party; the Tribunal has held as under : "09 We have considered the rival contentions and submissions including the decisions relied upon by both the sides. At the time of argument the Ld. AR had relied on the order passed by the AO u/s.201 & 201(1A) and the Ld. DR relied on the o....
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....erests of the Revenue. The phrase "prejudicial to the interest 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 Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law." A similar view has also been taken by the Hon'ble Apex Court in the case of CIT Vs Max India Ltd. (2007) 295 ITR 282 (supra), wherein it has been held as under: "The phrase "prejudicial to the interests of the Revenue" in section 263 of the Income-tax Act, 1962, has to be read in conjunction with the expression "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 ....
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....Pr. CIT v. Delhi Airport Metro Express P. Ltd [ITA.705/2017, dt.05.09.2017], ITO v. D.G. Housing Projects Ltd. 2012 (343) ITR 329 (Delhi), decided by Delhi High Court and also in the case of CIT v. Nirav Modi, 390 ITR 292, it was held that it is incumbent on the CIT to conduct some minimum enquiry before invoking the jurisdiction u/s.263 and set aside the order passed by the AO. In the case of Nagesh Knitwears P Ltd (2012)(345 ITR 135), the Hon'ble Delhi High Court has elucidated and explained the scope of the provisions of sec. 263 of the Act and the same has been extracted by the Delhi High court in the case of CIT Vs. Goetze (India) Ltd (361 ITR 505) as under:- "Thus, in cases of wrong opinion or finding on merits, the Commissioner of Income tax has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order is not sustainable in law and the said finding must be recorded. The Commissioner of Income tax cannot remand the matter to the Assessing Officer to decide whether the ....
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....wing the entire expenditure, had restricted the disallowance to 30% of the amount. Therefore, it can be assumed that there is an application of mind by the Assessing Officer after due examination of the facts of the case on record. It may be noted that the view taken by the Assessing Officer though may not be echoing with the view as that of the ld.PCIT, as the ld.PCIT has held that the entire expenditure of the financial expenditure made by the assessee has to be capitalized being pre-operative period expenditure. Nonetheless, the Assessing Officer on the other hand has allowed the business expenditure to the extent of 70% and has restricted to 30% being violation of section 40(a)(ia) of the Act. Once the issue has been examined, it cannot be said that the Assessing Officer has not examined the issue and therefore, the question of invocation of Explanation II of Section 263 of the Act does not arise. In the present case, Assessing Officer has duly applied his mind and thereafter, restricted the disallowance to 30%. Merely because the Assessing Officer has not applied the view as taken by the ld.PCIT, it cannot be said that the order passed by the Assessing Officer is erroneous as ....