TaxTMI 
TaxTMI 
2025 (3) TMI 1939
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....ssment order passed by Assessing Officer u/s. 143(3) as erroneous and prejudicial to the interest of revenue without appreciating facts of the case or application of mind. 1(ii) That in the absence of any finding that order passed by the AO u/s. 143(3) is erroneous and prejudicial to the interest of revenue, it is not open to set-aside the same for re-verification and as such direction of PCIT, Delhi- 1 are highly arbitrary and contrary to purpose, object and scope of sec, 263 of the Act. 2. That various issues regarding principles of revenue recognition raised by the PCIT, Delhi-1 in the notice u/s. 263 have already been examined by the Assessing Officer during assessment proceedings u/s. 143(3) and as such there is no case for treating the assessment order as erroneous and prejudicial to the interest of revenue. 3(1) That the direction by PCIT to compute capital gains of Rs 181,68,56,735/- (wrongly mentioned in the order as Rs. 181,65,56,735/-) as against Rs. 95,66,00,000/- on slump sale of business of power, maintenance and business support services, by relying upon the decision of Hon'ble ITAT Special Bench, Mumbai in DCIT vs. Summit Securities (6....
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....will be offered to tax when sale in respect of the same would take place. 8. That the direction by PCIT to the AO to compute disallowance for expenses related to exempted income u/s 14A as per past assessment years is not justified as during the year under consideration the assessee has not earned any exempt income and further the assessee has itself suo motto disallowed a sum of Rs. 6,83,052/- in respect of amount inadmissible u/s 14A even though no disallowance was called for in absence of any exempt income. 9. That the direction by PCIT to the AO to examine the interest amount disallowable u/s 36(1)(iii) and disallow the same is contrary to past history and judgment of Hon'ble ITAT and Delhi High Court which are final and conclusive. 10. That order was passed by the Assessing Officer after necessary verification of issues under consideration and assessment order is neither erroneous nor prejudicial to the interest of the revenue. 11. That order passed by the PCIT, Delhi-1 is not justified on facts and same is bad in law. 12. That the appellant craves leave to add, alter, amend or forgo any of the grounds of appeal at the time of h....
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....his effect, he drew our attention to pages 131 to 132 of the supplementary paper book wherein the Hon'ble Bombay High Court vide its order dated 19-9-2014 had admitted the substantial questions of law. The said appeal is still pending before the Hon'ble Bombay High Court. Accordingly, the Learned AR submitted that since the substantial question of law has been admitted by the Hon'ble Bombay High Court, the same constitutes a debatable issue which alone prompted the Hon'ble Bombay High Court to admit the appeal filed by the assessee. Hence, it could be reasonably concluded that the Learned AO in the course of assessment proceedings had taken one of the plausible views in the matter on a debatable issue. Hence, the same cannot be treated as erroneous much less prejudicial to the interest of the revenue warranting revision under section 263 of the Act. 5. The copy of slump sale agreement is enclosed in Pages 19 to 98 of the Supplementary Paper Book filed before us. On perusal of the various papers enclosed in the paper book, we find that the Learned AO has specifically taken note of the transaction of slump sale, vide query number 6 in the notice issued under section 142(1) of the ....
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.... the Learned AR that the very fact that the substantial questions of law framed by the assessee were indeed admitted by the Hon'ble Bombay High Court against the decision of Special Bench of Mumbai Tribunal, the issue decided by the Special Bench thereon becomes purely debatable. On a debatable issue, revision jurisdiction under section 263 of the Act would not lie. Reliance in this regard was rightly placed on the decision of Hon'ble Supreme Court in the case of Malabar Industrial Co Ltd reported in 243 ITR 83 (SC) ; decision of Hon'ble Supreme Court in the case of Max India Ltd reported in 295 ITR 282 (SC) and decision of Hon'ble Bombay High Court in the case of Gabriel India Ltd reported in 203 ITR 108 (Bom). 7. In any event, the ld AO had already made adequate enquiries on the issue of slump sale as narrated hereinabove and hence the ld PCIT erred in assuming revision jurisdiction under section 263 of the Act to look into the same issue of capital gains on slump sale. 8. It is also pertinent to note that Learned AO in the instant case had examined the list of 8 items and an offshoot of those items during the course of scrutiny assessment proceedings as mandated in the CBD....
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....vs Paramount Propbuild (P.) Ltd. reported in 161 taxmann.com 85 (Delhi HC) b) Decision of Hon'ble Supreme Court in the case of Daniel Merchants Pvt. Ltd. vs. ITO in Appeal No. 2396/2017 dated 29.11.2017. c) Decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs CIT reported in 243 ITR 83 (SC) d) Decision of Hon'ble Supreme Court in the case of Tara Devi Aggarwal v. CIT reported in 88 ITR 323 (SC) e) Decision of Hon'ble Calcutta High Court in the case of Rajmandir Estates (P.) Ltd. Vs PCIT reported in 386 ITR 162 (Cal) f) Decision of Hon'ble Supreme Court in the case of Rajmandir Estates (P.) Ltd. Vs PCIT reported in 77 taxmann.com 285 (SC) g) Order of ITAT Delhi Bench in the case of PTC Impex (India) Pvt. Ltd. Vs CIT in ITA No. 2860/Del/2010 dated 03.04.2018 h) Order of Hon'ble Karnataka High Court in the case of CIT vs. Infosys Technologies Ltd. reported in 341 ITR 293 dated 04.01.2012 i) Order of Delhi ITAT in the case of CIT vs. Apollo Tyres Ltd reported in 65 ITD 263 j) Order of the Delhi ITAT in the case of Perfetti Van melle India Pvt. Ltd in ITA No. 3046/....
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....Rs. 5.83 crores, salaries, wages and bonus, guarantee, finance and bank charges, interest on loans, legal and professional charges and amounts written off, etc. 13. We have heard the rival submissions and perused the materials available on record. We find that the Learned AO had raised specific queries regarding all these issues vide notice under Section 142(1) of the Act dated 18-12-2020, vide query number 6(a) to 6(g) thereon, by seeking proper justification of claim of salaries, wages, bonus, guarantee, finance and bank charges, interest on loans, legal and professional charges and amounts written off and vide query number 10, the Learned AO specifically sought details of claim of gratuity to the extent of Rs. 5.83 crores. The assessee in response to the above queries filed detailed reply dated 20-1-2021 and 31-01-2021 furnishing proper explanation along with all the documentary evidences in respect of the above claims. Hence, it could be seen that this is not a case of lack of enquiry by the Learned AO warranting revision jurisdiction by the Learned PCIT under Section 263 of the Act. Further, the same replies were even filed by the assessee before the Learned PCIT in respons....
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....s query was duly responded by the assessee vide letter dated 31-01-2021 wherein, it was specifically brought to the knowledge of the ld AO that project activity had not started and hence, there is no scope for recognition or revenue as per POCM during the year. The ld AO having been satisfied with the said reply did not chose to make any addition towards recognition of revenue. Before us, it was also pointed out by the ld AR that assessee is following POCM as per IND-AS 18 which is mandatory, wherein, revenue from a project could be recognized only when a certain threshold of construction work has been completed. The ld AR also drew our attention to the relevant pages of the Paper Book containing the notes of accounts wherein, clear disclosure for real estate transaction and adoption of AS had been mentioned qua the recognition of revenue. It was also submitted that no revenue has been actually realized by the revenue. This fact was also brought to the knowledge of the ld PCIT in response to reply given to the show cause issued u/s 263 of the Act. Ld PCIT summarily ignored the entire contentions of the assessee and without any basis known to law, directed the ld AO to examine the i....
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....d PCIT being very vague, without pointing out what is the error committed by the Learned AO in its order, becomes fatal to the very assumption of revision jurisdiction under Section 263 of the Act by the Learned PCIT. Hence, we have no hesitation to quash the assumption of revision jurisdiction under Section 263 of the Act on this issue by the Learned PCIT. 18. The next issue for which the Learned PCIT had assumed revision jurisdiction under Section 263 of the Act is to consider disallowance of expenses under Section 14A of the Act in relation to earning of exempt income. 19. We have heard the rival submissions and peruse the materials available on record. It is not in dispute that there was no exempt income at all derived by the assessee during the year under consideration. Hence, the provisions of Section 14A of the Act could not be made applicable at all for the year under consideration. Further, there was a specific query raised by the Learned AO in the notice under Section 142(1) of the Act dated 18-12-2020, vide query number 5 and query number 11, asking details of disallowance under Section 14A of the Act made in the last three scrutiny assessments. The assessee gave d....