TaxTMI 
TaxTMI 
2025 (1) TMI 1231
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....ts return of income on 29.03.2019 declaring total income at Rs. 26,55,680/- for the year under consideration assessment whereof was completed under Section 143(3) of the Act upon accepting the same. Subsequently, show cause notice dated 26.02.2024 was issued by the PCIT Central-1, Delhi on the issue that though the assessee made investment in equity shares as reflected from the balance sheet but not deducted any expenses related to such income and the Ld. AO has not disallowed any expense related to such exempt income under Section 14A of the Act, reply whereto were submitted by the assessee. However, the same was found to be not acceptable by the PCIT. The Ld. PCIT enhanced the income of the assessee to Rs. 79,34,636/- for the year under consideration and further directed the AO to recompute the total income of the assessee which is impugned before us. 3. At the time of hearing of the instant appeal, the Ld. Counsel appearing for the assessee submitted before us that the issue is squarely covered by the judgment passed by the Coordinate Bench in the case of M/s Jagriti Job Finder Private Ltd. Vs. PCIT (Central)-1, in ITA No. 2133/Del/2024 dated 14.08.2024. In fact, on the ident....
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....issions made by the respective parties and we have also perused the relevant materials available on record. We find that the assessee was issued specific queries by and under the notice under Section 142(1) dated 16.01.2020 (Pages 40 to 43 of the PB) in regard to the application of Section 14A in the case of the assessee, the contents whereof is as follows: Government of India Ministry of Finance Income Tax Department Office of the Assistant Commissioner of Income Tax Central Circle 3, Delhi To, JAGRITI JOB FINDER PRIVATE LIMITED 134A, 1ST FLOOR SOMDUTTA CHAMBERS- 1,5, NEW DELHI 110066, DELHI, INDIA PAN: AABCJ5974E AY: 2018-19 Dated; 16/01/2020 DIN & Notice No: ITBA/AST/F/142(1)/2019- 20/1023924836(1) Notice under sub-section (1) of Section 142 of the Income Tax Act, 1961 Sir/Madam/ M/s In connection with the assessment for the assessment year 2018-19 you are required to: a) Furnish or cause to be furnished on or before 23/01/2020 at 11:30 AM the accounts and documents specified overleaf b) Furnish and verified in the prescribed mariner under Rule 14 of....
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.....Y. 2018-19 4. Copy of Form 26AS in support of taxes paid (Advance & self assessment tax) and TDS credit claimed in return along with reconciliation of receipts as per the form with those shown in income of the A.Υ. 2018-19 5. Brief note on the source of income of the assessee and detail of business activities carried out if any during the year and method of accounting followed during the F.Y. 2017-18. In case of deviation in method of accounting, please mention and give. 6. Please furnish all addresses where offices / godowns are situated Also give details of ownership of such properties 7. Please furnish details of the Bank Accounts including Fixed Deposits in the name of the individual/firm as well as those in the names of the partners in the following format: Name & Address of the Bank with Branch Account in the name of Account No. Account type (i) (ii) (iii) (iv) 8. If applicable, please submit true copy of assessment order passed u/s 143(3) (scrutiny assessment) of the Act during the last 3 years If there is no such assessment order, kindly mention the same 9. Complete name, addresses & bank....
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....rom Aayushi Credit and Capital Services Limited during the relevant Assessment year 2,45,500/- 2. 500 Unquoted equity shares of Marvelous Cement Prviate Limited purchased from Shri Raj Investments & Finance Limited during the relevant Assessment year. 2,45,500/- 3. 500 Unquoted Equity Shares of Remarkable Consumer Electronic Private Limited from Aayushi Credit and Capital Services Limited during the relevant Assessment Year 2,96,500/- 4. 500 Unquoted Equity Shares of Remarkable Consumer Electronic Private Limited from Shri Raj Investments & Finance Limited during the relevant Assessment Year 2,96,500/- Grand Total 10,84,000/- In this connection, copy of the relevant bank statement reflecting the payment made during the relevant Assessment Year are enclosed herewith. 1.2 As regard Your Honour's regarding applicability of section 14A read with Rule BD of the Income-tax Act 1961, In this regard, it is submitted that the Assessee Company has not earned any exempt income hence the provisions of Section 14A of the Income tax Act, 1961 are not applicable to the Assessee Company In this connection reference may be made to ....
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....nd act as employment agent and recruitment agent and placement of all kind of personnel including managers, professionals, executives, skilled, semi-skilled, un-skilled workers, labourers & other technical personnel in India and abroad And to provide man power for industry and labour contractors, for security services, security guards, body guards and to provide training to security personals guards, industrial labour / manpower And constitute, promote, subsidise, organise and assist or aid in forming, constituting, promoting, subsidising, organising and assisting or aiding any Company or Companies of all kinds, for the purpose of acquiring all or any of the property. rights and liabilities of this Company or for carrying on any business which this Company is authorised to carry on or for any other purposes which may seem directly or indirectly calculated to benefit this Company or to promote or advance the interests or this Company 6. As desired, details of registered address of the Assessee Company is enclosed herewith 7. As desired, details of bank accounts along with bank statement for the relevant Assessment Year is enclosed herewith 8. As desired co....
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.... concerning the capitalization of interest, the Court finds again that the ITAT took note of the fact that detailed enquires were made by the AO in regard to the major additions to the fixed assets, capital work in progress, the manner in which the depreciation was claimed and the details of both secured as well as unsecured loans. The audited financial statements of the Assessee were also compiled, for the earlier AYs including the AY in question, and placed before the AO. The ITAT also took note of the Significant Accounting Policies in the Auditor's Report and the synopsis filed before the AO. It is only after such an elaborate exercise that it was concluded by the ITAT in the impugned order as under: "16. We have carefully considered the submissions and arguments made by the learned counsel of the assessee as well as the learned CJT(O.R.) and heard both the parties at length. We find that the Assessing Officer had made detailed inquiries and examined the entire block of fixed assets. A brief note on capital work in progress was also filed and queries regarding the manner in which the depreciation was claimed was also raised. Further the assessee is following a sett....
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....m 1" June, 2015. However, on this aspect, the ITAT has specifically held in para 17 of the impugned order as under: "17. Before concluding we would also like to deal with the recent insertion, of Explanation 2 to Section 263 of the Act. We have already held above that in respect of both the issues i.e. allowing credit of deemed taxes paid on dividend in Oman as well as capitalization of interest u/s 36 (1) (iii) detailed enquiries as well as verification have been made by the AO. Further it is also not the case of the Ld. Pr. CIT that the order is not in accordance with any instruction direction issued by the Board or is not in accordance with any decision of Hon'ble Delhi High Court or the Apex Court of India. Accordingly the order passed by the AO cannot be regarded as deemed to be erroneous or prejudicial to the interest of the Revenue under Explanation 2 of the Act." 12. For the above reasons, this Court is of the considered view that no substantial question of law arises for consideration from the impugned order of the ITAT. The appeal is, accordingly, dismissed but in the circumstances, with no orders as to costs." 14. So far as the invocation o....
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....n more elaborately. The expression erroneous refers to an error, in computation applying the relevant law or facts, or selecting a number which would govern the factual situation and moreso, arbitrary exercise and quasi judicial power is certainly not mandated within the scope of Section 263. Provision of Section 263(1) cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer and it is only when an order is erroneous, that the section will be attracted. Furthermore, both the conditions i.e order being erroneous and prejudicial to the interest of revenue could be specified simultaneously and conjunctively. If one of the conditions is not satisfied the order cannot be the subject matter of any revisionary proceedings. The said interpretation and position of law is not only clear from a plain and basic reading of the said section but also has been emphatically upheld by the Hon'ble Supreme Court in the case of Malabar Industrial Company Ltd. Vs. CIT, reported in (2000) 243 ITR 83 (SC) also relied upon by the Ld. A.R. 18. Thus, having regard to the entire aspect of the matter the order passed by the Ld. CIT(A) is found to be bad i....