TaxTMI 
TaxTMI 
2011 (4) TMI 1563
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....istency principle as claimed by the assessee and allowed by the Assessing Officer. The allegation that the order of the Assessing Officer is erroneous and prejudicial to the interest of the revenue is without any evidence, or material. Therefore, also the order of CIT u/s 263 deserves to the cancelled. 3. The learned CIT has erred in law and on facts in not appreciating that the interest on bank deposits, misc. receipts, dividend on long term investments, interest on advances to staffs and service charges on sugar development fund loans are all integral part of the assessee's business of providing long term finance for the growth of the cooperative sector. The claim of the assessee stands already examined by the Assessing Officer and allowed in the assessment. Therefore, action u/s 263 of the Income-tax Act, 1961 is without any material, illegal on surmises and conjectures and to be cancelled. 4. The appellant contends that, even assuming for a movement that there are two views that are possible i.e., the one preferred by the assessee and the other by .the department, the view that is in favour of the assessee has to be followed and allowed and cannot be a ground ....
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....granting the deduction. In this connection, our attention has been drawn towards various papers placed in the paper book, which are as under:- i) Object clause 9(2) regarding advancing loans or granting subsidies to State Governments for financing cooperative societies inter alia for purchase of agricultural produce etc., supply of seeds etc, and participating in share capital of national level cooperatives societies. It is submitted that the assessee has been granting long-term finance in pursuance of this object. ii) Statement of income showing net income of Rs.74,37,801/- and transfer of Rs.29,75,120/- being 40% of the aforesaid income to the special reserve credited in pursuance of section 36(1)(viii); iii) Break up of the miscellaneous income of Rs.2,01,38,611/- and income of Rs.282,74,87,775/-, and term loans raised from banks amounting to Rs.555,50,30,000/-; iv) The past assessments of the assessee for assessment years 1999-00 to 2002-03 made either u/s 143(1) or 143(3), in which the deduction was allowed; v) The details of interest received on short-term deposits from various banks; vi) Assessment order passed u/s 143(3)....
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.... such business of providing long-term (emphasis supplies). It is submitted that the word "derived" stands contradistinguished from the words "attributable to", and there is a long standing jurisprudence regarding interpretation of these words. The conclusion of "derived from" can be inferred only if there is a proximate connection between the income and the business of providing long-term finance. This intention has also been clarified in Circular No.717 dated 14.08.1995, issued in respect of this amendment and reported in (1995) 215 ITR (Statute) 70, at page 86 of the report. Prior to this amendment, the assessee was entitled to the deduction on an altogether different basis. Therefore, the assessee was allowed the deduction as claimed. However, the learned CIT noted from the record of assessment for this year that the deduction was allowed excessively against the plain language of the applicable provision. Therefore, the revisionary order was passed. Consequently, assessment of earlier years, to which the amended provision applied, was also reopened. The Tribunal has already confirmed the stand of the revenue in the case of assessee itself for assessment year 2007-08. It is argue....
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....ered the matter, the CIT cannot brand the order to be erroneous and prejudicial to the interest of revenue simply because no elaborate discussion has been made in the assessment order. In the case of CIT Vs. Design and Automation Engineers (Bombay) Pvt. Ltd. (2010) 323 ITR 632, the Hon'ble Bombay High Court held that if the view taken by the Assessing Officer is a possible view, it can not be said that the order is erroneous and prejudicial to the interest of revenue because there could be another view in the matter. The learned counsel also relied on the decision in the case of CIT Vs. Nirma Chemical Works Pvt. Ltd. (2009) 309 ITR 67 (Gujarat); CIT Vs. Greenworld Corporation (2009) 314 ITR 81 (Supreme Court); CIT Vs. Bharat Aluminium Company Ltd.; (2008) 303 ITR 256 (Delhi); and CIT Vs. Deepak Mittal (2010) 324 ITR 411 (P&H). These cases further lead to the inference that the CIT cannot interfere with the independence of the Assessing Officer. 4.2 The revenue, on the other hand, relied on the decision of Ahmedabad Bench of the Tribunal in the case of Gruh Finance Limited Vs. ACIT (2009) 316 ITR (AT) 440 dated 16.05.2008, dealing directly with the provision under consideration. ....