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2019 (12) TMI 909 - AT - Income TaxRevision u/s 263 - Characterization of interest earned on funds primarily brought for infusion in the business - HELD THAT:- PCIT while reading the provisions of section 263 of the Act and the decision of Hon’ble Apex Court in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd [1997 (7) TMI 4 - SUPREME COURT] reached a conclusion that inasmuch as there was no specific inquiry by the Assessing Officer, the assessment order was erroneous in so far as it is prejudicial to the interest of Revenue. He does not conduct any independent enquiry to reach the conclusion that the assessment order was erroneous in so far as it is prejudicial to the interest of Revenue. If we accept the submission of the ld. DR that since all the material was available on record, there was no need for the PCIT to conduct any further inquiry, it also inures to the benefit of the assessee because all these things are available on record and the assessee specifically submitted that the difference in the ITR and 26AS occurred because of the adjustment of the interest received against the project expenditure. Admittedly, this is the only project conducted by the assessee and there is no other project. In such an event, it is not the passive submission to be recorded to the AO, but also actively pleading before him that the interest received was adjusted against the project expenditure. Hon’ble jurisdictional High court considered the decision of the Hon’ble Apex Court in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd.(supra) and Bokaro Steel Ltd. [1998 (12) TMI 4 - SUPREME COURT] in Indian Oil Panipat Power Consortium Ltd. Vs. ITO [2009 (2) TMI 32 - DELHI HIGH COURT] and held that the interest earned on funds primarily brought for infusion in the business could not have been classified as income from other sources. Further, unlike in the case of M/s. Tuticorin Alkali Chemicals and Fertilizers Ltd.(supra), in the case on hand, the assessee had already commenced business. Viewing from another angle, we are of the considered opinion that the ld. PCIT is not justified in invoking the jurisdiction u/s. 263 of the Act or to hold that the assessment order is erroneous or prejudicial to the interest of Revenueand we find it difficult to sustain the same. Hence, we allow the ground appeal.
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