TaxTMI 
TaxTMI 
2024 (11) TMI 1466
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder dated 24-09-21 Rs. 86,88,253 Less: Already disallowed in the return Rs. 1,00,000) 3. Disallowance U/s. 14A r.w. Rule 8D(2) of Rs. 1,10,47,762/- in addition to disallowance u/s 14A made in the assessment order dated 24-09-21 while Calculating Book Profit U/s. 115JB of the Act - MAT (Disallowance as computed in Revision Order dated 13-03-24 Rs. 1,98,36,285 Less: Disallowance as per Assessment Order dated 24-09-21 Rs. 86,88,523 Less: Already disallowed in the return Rs. 1,00,000) 4. Disallowance of Interest on grant of Rs. 4,18,06,812/-" 3. The brief facts of the case are that on verification of case records the PCIT observed that the assessee company made investment in listed and unlisted equity shares for Rs. 197,74,06,788/- and earned exempt income of Rs. 1,42,39,767/- from share of profit and debited an amount of Rs. 1,00,000/- as expenses related to exempt income. On perusal of assessment order the PCIT observed that the AO made disallowance under Section 14A considering investment made in quoted shares of other companies, however, investment made in subsidiaries, Joint Venture and Associated concerns were not taken into account. According to the PCIT the quantum of dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IT has not pointed out to any error committed by the AO while making the disallowance of a sum of Rs. 86.88 lakhs under Section 14A of the Act in the assessment order. Therefore, for the aforesaid reasons, the order passed under Section 263 of the Act is liable to be set-aside. 6. In response, the Ld. D.R. placed reliance on the observations made by the PCIT in the 263 order. 7. We have heard the rival contentions and perused the material on record. 8. On going through the contents of the 263 order, we observed that firstly, Ld. PCIT has failed to appreciate that the AO had made detailed and specific enquiries in to this aspect and had also issued to notices specific to this issue. The assessee has also filed detailed written submissions in response to notices issued by the AO and after taking the same into consideration, had passed a speaking assessment order wherein after taking into consideration the written submissions filed by the assessee, a disallowance of Rs. 86.88 lakhs was made by the AO. Therefore, clearly this is not a case where there was any lack of enquiries or non-application of mind by the AO related to this issue. Secondly, on perusl of the order under Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns in this regard: "From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous." 11. In the case of Rajgul Credit Invest P. Ltd. Vs. PCIT, I.T.A. No. 2519/DEL/2019, dt. 19.09.2019, made the following observations on this aspect of the matter: "Thus, we are of the view that the assessing officer has taken a plausible view in the facts and circumstances of the case. Even though the Ld Pr. CIT has drawn certain adverse inferences from the document, yet it can seen that they are debatable in nature. Further, as noticed earlier, the Ld Pr. CIT has not brought any material on record by making enquiries or verifications to substantiate his inferences. He has also not shown that the view taken by him is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee includes a sum of Rs. 2.10 crores paid to Solar Energy Corporation of India and a sum of Rs. 2.08 crores approximately to various Government entities with regards to unutilized grants as of 31.03.2018. The Counsel for the assessee submitted that in accordance with the letter from Ministry of New and Renewable Energy (MNRE) dated 22.03.2016, funds received from SECI for the 700 Mega Watt Ultra Mega Project may be kept in an interest bearing format, with the interest accrued to be credited to the Government account. Therefore, it was submitted that the assessee has paid interest of Rs. 2.10 crores as interest on this grant, which is in line with the guidelines provided by the Government. In addition, the assessee has paid a sum of Rs. 2.08 crores as interest on various Government grants as on 31.03.2018 to cover unspent balances. The Counsel for the assessee submitted that the PCIT failed to appreciate that the assessee had received various grants / financial assistance for implementing and executing various projects and these grants are kept in deposit with Gujarat State Financial Services until utilized. Further, the interest earned on deposit kept with Gujarat State Financ....