2025 (2) TMI 919

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.... under Section 263 of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], for the Assessment Year 2018-19. 2. The Assessee has taken the following grounds of appeal:- "1. In law and in the facts and circumstances of the Appellant's case, impugned order u/s. 263 of the Act passed by PCIT-1, Ahmedabad is bad in law and deserves to be quashed. 2. In law and in the facts and circumstances of the Appellant's case, the PCIT-1, Ahmedabad has erred in setting aside the assessment order dated 16.04.2021 passed by the Assessing Officer without considering the fact that the Assessing officer during the course of Assessment proceedings has already gone through issue regarding disallowance u/s 14A of the Act and....

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....sessment order in this case has been passed by the Income-tax Department, National e-assessment Centre, Delhi u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act on 16.04.2021 determining the total loss of Rs. 35,36,60,186/- against the returned income of Rs. (-) 35,46,83,225/-. Subsequently, the Ld. PCIT had assumed revisionary jurisdiction u/s 263 of the Act, based on following issues which were allegedly not verified by the Assessing Officer during the course of assessment proceedings: (i) Disallowance u/s 14A of the Act read with Rule 8D to tune of Rs. 27,05,510/-, and (ii) Payment of compensation of Rs. 60,00,000/- being allegedly not allowable as deduction u/s 28 to 44DA of the Act. 4. Aggrieved by the order of the Ld.....

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....xempt income is earned should only be considered while calculating the annual average of the monthly average of the opening and closing balance of the value of investment. * The interest-bearing fund has been specifically utilized for the purpose of investing in trade & business assets. * Disallowance u/s 14A cannot be made for investment made in Partnership Firm. * The administrative expenses incurred during the current year is purely for the purpose of main business and hence no disallowance of any administrative expense should be made only on presumption of incurrence thereof for the purpose of earning tax free income. 6. The Ld. DR, on the other hand, supported the order of the Ld. PCIT and contended that t....

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....isions of section 28 to 44DA of the Act. The assessee-company has filed a detailed written reply dated 01.02.2024 before the ld. PCIT wherein it was contended that the assessment order passed by the Assessing Officer was neither erroneous nor prejudicial to the interest of the revenue. In conclusion, Ld. PCIT and held as under: (ii) On the issue of compensation of Rs. 60,00,000/-, the Assessing Officer is directed to call for all the details of expenses and verify its allowability considering the provisions of section 28 to 44DA and also in view of provisions of section 37(1) of the Act. The Assessing Officer may allow such expenditure if it is found to be incurred for the purpose of business. 10. After hearing the arguments of ....