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2020 (9) TMI 401 - AT - Income TaxRevision u/s 263 - Reopening of assessment u/s 147 - Client Code Modification misuse for tax evasion - PCIT invoked the provisions of section 263 on the ground that AO has failed to examine interest expenditure claimed in the P&L Account, assessee did not have its own capital, therefore, the loan was given from borrowed funds - PCIT observed that the assessee has not shown any interest from borrowed money, as such, interest expenditure debited to the P&L Account was required to be disallowed in proportion to money borrowed but not used for business purpose - HELD THAT:- As perused the impugned order and the assessment order passed under section 143(3) r.w.s. 147. A perusal of the assessment order shows that the assessment was reopened to examine misuse of Client Code Modification for tax evasion. No addition was made by the Assessing Officer in respect of the issue for which the assessment was reopened. It is a well settled law that where no addition is made on the issue for which the assessment is reopened, it is not open to the Assessing Officer to make independent addition for which he had not recorded reason to believe for issuing notice u/s 148. No error in the action of AO in not travelling to other issues for making addition once no addition was made on the issue for which assessment was reopened. The PCIT clearly erred in invoking revisional jurisdiction on an issue, which the Assessing Officer could not have examined in reassessment proceedings. Appeal of assessee is allowed.
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