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2017 (12) TMI 1734 - AT - Income TaxRevision u/s 263 - an order which is erroneous and prejudicial to revenue - Deduction U/s 80IA - Objection raised by CAG - Irregular allowance of deduction u/s.80IA in respect of Power Plant unit SBU 2 (2 X 300MW), which were earlier owned by JSW (Vijaynagar) Ltd. and then transferred to assessee company as a result of merger. - Irregular allowance of deduction u/s. 80IA in respect of the amount of income enhanced u/s.92CA of the Act (on account of TP adjustment. - Held that:- Ld. PCIT cannot assume jurisdiction u/s. 263 of the Act on the issue of TP Adjustment and disallowance u/s. 14A r.w. Rule 8D which were already subject matter of the appeal before the Ld.CIT(A). - Assessment Order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue in so far as these two issues are concerned. - Decided in favor of assessee. Deduction U/s 80IA regarding power plant - post merger - revision u/s 263 - Held that:- the Ld.PCIT failed to demonstrate with reasons that the Assessment Order was erroneous and prejudicial to the interest of the Revenue not only that, the Ld.PCIT failed to address the objections of the assessee on the issues which explained that why the order sought to be revised is not erroneous and prejudicial to the interest of the Revenue. In the case on hand also the Ld.PCIT merely extracted the objections of the assessee and he could not explain why the objections were wrong and lead to the Assessment Order being erroneous and prejudicial to the interest of the Revenue and rather he has simply rested his decision by observing that the Assessing Officer in the subsequent year examined the claim of the assessee and made disallowance and therefore order passed is erroneous and prejudicial to the interest of the Revenue. The claim for deduction u/s. 80IA is to be allowed in the assessment years subsequent to the initial Assessment Year the expected enquiries which could have been made by the Assessing Officer is to call for the computation of profits for the units eligible for 80IA and the units not eligible for 80IA which exactly has been done by the Assessing Officer in the course of Assessment Proceedings for search assessments for the Assessment Years 2005-06 to 2011-12 in order to satisfy himself that the claim of the assessee is in order. Therefore, it cannot be said that the Assessing Officer has not made proper enquiries and there is no application of mind by the Assessing Officer. There is merit in the contentions of the assessee that the revision order passed by the Ld.PCIT for the year under consideration is beyond the scope of section 263 and hence not valid in so far as the action of the Assessing Officer in allowing the claim for deduction u/s. 80IA in respect of SBU 2 unit. - Decided in favor of assessee.
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