TaxTMI 
TaxTMI 
2025 (7) TMI 1975
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....t considering the fact that the Assessing officer during the course of Assessment proceedings has already gone through issue regarding write off of loan given to JV of company amounting to Rs. 4,54,26,124/- and after satisfying himself with respect to the details submitted by the appellant company, the Ld. Assessing officer has passed the order under section 143(3) r.w.s 144B of the Act. 3. In law and in the facts and circumstances of the Appellant's case, the PCIT-1, Mumbai has erred in arriving at a conclusion without any basis whatsoever to the effect that the assessment order passed u/s 143(3) of the Act by the Assessing Officer was erroneous as well as prejudicial to the interest of the revenue. 4 in law and in the facts and circumstances of the Appellant's case, the PCIT-1, Mumbai has failed to appreciate that the twin conditions for assuming jurisdiction u/s. 263 of the Act are not satisfied in the case of appellant company as issue which has been relied upon for passing the order u/s. 263 does not show any error or prejudice to the interest of the revenue." 3. The brief facts are that the assessee company is wholly owned subsidiary of ACC Limite....
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....order. 7. Mr. Saurabh Soparkar, ld. Senior Counsel appearing for the assessee brought our attention to the notice issued by the ld. AO u/s. 142(1) of the Act, dated 06.01.2022, seeking for various details which included details of any other amount allowable as deduction claimed in Schedule BP, for which the assessee vide reply dated 30.01.2021 had furnished the breakup of the same which includes write off of loan to JV amounting to 4,54,26,124/-. The ld. Senior Counsel further contended that the same prompted the ld. AO to issue second notice dated 14.03.2021 were again the assessee had given breakup of the deduction claimed in Schedule BP aggregating to Rs. 4,77,74,124/- which included the write off of loan to JV and where the ld. AO had specifically at page no. 4 had sought for details of 'party-wise debtors ledgers and to explain the following with documentary evidences', including the debtor-creditor relationship with the assessee's joint venture company and the debts which are claimed as bad debts whether incidental to the business carried on by the assessee. Mr. Saurabh Soparkar further brought our attention to the response of the assessee dated 19.03.2021, where t....
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.... the ld. AO has merely looked into the allowability of expenditure u/s. 35D of the Act but had not gone into the issue of write off of loan making the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. The ld. DR further relied on the amendment brought about to Explanation 2 Clause (a) of Section 263(1) of the Act, where any assessment made without conducting inquiry or verification, relief allowed without inquiry would hold the assessment order erroneous in so far as it is prejudicial to the interest of the revenue. The ld. DR extensively relied on the decision of the coordinate bench in the case of Apollo Tyres Limited. vs. PCIT, [2024] 163 taxmann.com 35 (Cochin - Trib.) along with the following decisions: - a. Deniel merchants Pvt. Ltd. vs. ITO, 2017-TIOL-455-SC-IT, Special Leave to Appeal (C) No(s). 23976/2017. b. PCIT vs. Shri Braham Dev Gupta, 2018-TIOL-1547-HC-DEL-IT c. Shoreline Hotel (P.) Ltd. Vs. CIT, [2018] 98 taxmann.com 259 Taxman 49 (Bombay) d. Jeevan Investment & Finance (P.) Ltd. Vs. CIT, City-1, Mumbai [2017] 88 taxmann.com 552 (Bombay) e. PCIT Panaji vs. Zuari Maroc Phosphates Ltd....
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....prejudicial to the interest of the revenue and then went about to decide this issue in favour of the assessee. Pertinently, this proposition has also been supported by the decision of the Hon'ble Apex Court in NYA International Solutions (P.) Ltd. [2025] 173 taxmann.com 103 (SC) wherein it was reiterated that in a case of wrong conclusion and the decision, the ld. PCIT ought to have examined the facts on the merits and only then could hold the assessment order to be erroneous and prejudicial to the interest of the revenue, where it was not a case of no inquiry and verification. We also draw support from the decision of the Hon'ble jurisdictional High Court relied upon by the ld. Senior Counsel in the case of Carties Leaflin (P.) Ltd. (supra), wherein it was held that were the ld. AO had examined the details and evidences and had then taken a possible view, the ld. PCIT issuing the show cause notice u/s. 263 of the Act without examining the assessment records, would tantamount to be perverse in holding the assessment order to be erroneous and prejudicial to the interest of the revenue. It further held that there was application of mind by the ld. AO in allowing the claim of ....