Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (12) TMI 104 - AT - Income TaxRevision u/s 263 - AO did not verify whether the assessee has complied with the Guidelines issued by RBI or not - A.O. did not call for any details as to what are the Guidelines issued by RBI which are applicable to the NBFC and failed to verify whether all the conditions stipulated therein have been made - A.O. has not done the assessment in a proper manner and that was the short point which was being emphasized in the show cause notice - HELD THAT:- As we note that there is no presumption that non-following of RBI guidelines in an assessment will result in an order which is prejudicial to the interest of revenue. The RBI guidelines and the prudential norms are not designed to pluck revenue leakage from income tax point of view. These are mandate to ensure that the assessee follows proper Banking norms. Hence, learned CIT’s inference that non examination of adherence to RBI guidelines by the Assessing Officer has resulted in a order which is erroneous in so far as it is prejudice to the interest of revenue is liable to be set aside. Moreover as we have already noted the Explanation (2) in section 263 has been added from 1.6.2015 and the same is not operative in the period under consideration. Broken period interest and mark to market loss - on the touchstone of above Hon'ble Bombay High Court decision in State bank of India [2018 (6) TMI 1326 - BOMBAY HIGH COURT] when the issues were given in note in the computation of income and case laws were referred, it cannot be said that Assessing Officer has not examined the issues and applied his mind. Assessee has duly explained the quantum of broken period interest being claimed and the basis for the same has been explained in the case of American Express Bank [2002 (9) TMI 96 - BOMBAY HIGH COURT].- CIT’s view is that AO has not enquired and applied his mind in as much as the same is not dealt with in the assessment order. On the touchstone of Hon'ble Bombay High Court decision in the case of State Bank of India Vs. ACIT (supra) it cannot be said that the Assessing Officer has not applied his mind on this issue. Once it is held that the Assessing Officer has after application of mind taken a view, learned CIT cannot exercise his jurisdiction u/s. 263 of the Act unless the view is ex facie not tenable. As held in the case of M/s. Malabar Industrial Company Ltd [2000 (2) TMI 10 - SUPREME COURT] if two views are possible and one view is adopted by the Assessing Officer with which learned CIT(A) does not agree with, the assessment cannot be held to be prejudicial and erroneous to the interest of the revenue. Broken period interest have to be allowed as revenue expense in the year. Mark to market loss - As computation of income the assessee has explained the accounting policy adopted for recognising mark to market loss and the assessee has quantified the amount also. On the touchstone of the Hon'ble Bombay High Court decision referred above State Bank of India Vs. ACIT (supra) it cannot be held that the Assessing Officer has not applied his mind or made enquiry on the issue. As held above once it is held that the Assessing Officer has applied his mind and has taken one of the possible view, learned CIT cannot invoke its jurisdiction u/s. 263 of the Act. Moreover, in the order u/s. 263 learned CIT(A) has nowhere dislodged the detail submission on this issue by the assessee. - Decided in favour of assessee.
|