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2022 (10) TMI 969 - AT - Income TaxRevision u/s 263 - interest disallowance u/s 36(1)(iii) - PCIT took the view that the AO has not examined the issue of non-charging of interest on the loan given by the assessee - HELD THAT:- Pr. CIT, before holding an order to be erroneous, should conduct necessary enquiries or verification in order to show that the finding given by the assessing officer is erroneous or the Ld. Pr. CIT should show that the view taken by the AO is unsustainable in law. In the instant case, we noticed that the Assessing Officer has called for the details of loan taken by the assessee as well as given by the assessee in a particular format which included a specific column for mentioning rate of interest charged. The Ld. A.R. submitted that the details called for by the Assessing Officer were duly furnished before him and hence the Assessing Officer is very much aware of the fact that the assessee has not charged interest on certain loans aggregating to Rs. 16.42 crores. In the instant case, a cursory glance of the Balance sheet as on 31.3.2017 of the assessee would show that the assessee is having own funds, i.e., Capital balance of Rs. 75.74 crores as on 31.3.2017, whereas interest free loan given by the assessee was to the tune of the Rs. 16.42 crores only. Since own funds available with the assessee far exceeds amount of interest free loan, no interest disallowance under section 36(1)(iii) is called for, as per the decision rendered in the case of Reliance Utilities and Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] Admittedly the learned PCIT has failed to examine these factual aspects and has also failed to follow binding decision of Hon'ble Jurisdictional High Court. When the case of the assessee is covered by the binding decision of the jurisdictional High Court, then there is no scope for holding the assessment order to be erroneous and prejudicial to the interest of revenue. Non-examination of these factual aspects and non-application of the binding decision of jurisdictional High Court on the issue sought to be revised by Ld. PCIT would make the impugned revision order unsustainable in law - Appeal filed by the assessee is allowed.
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