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2022 (10) TMI 1088 - AT - Income TaxRevision u/s 263 by CIT - direction to reassess the loan outstanding as on 31/03/2011 - disallowance u/s 40(a)(i) of interest paid on loan - HELD THAT:- We find substance in the claim of the Ld. AR, that now when the AO while framing the re-assessment u/s. 143(3) r.w.s 147 of the Act, dated 23.11.2018 had not made any addition as regards the very “reason” on the basis of which the case of the assessee was reopened i.e., source of cash deposits in the assessee’s Saving bank account with State Bank of Bikaner & Jaipur, therefore, in absence of any addition on the said count, it was not permissible for him to have made any independent verifications and/or additions/disallowances in the hands of the assessee. Now when in absence of any addition having been made as regards the issue on the basis of which the case of the assessee was reopened, the AO stood divested of his jurisdiction of making any independent additions/disallowances, therefore, no infirmity could be related to the order passed by him under Sec. 143(3) r.w.s 147 for the reason, that he had failed to have carried out verifications as regards the unsecured loans that were raised by the assessee during the year from seven parties, and also failed to disallow under Sec. 40(a)(ia) her claim for deduction of interest that was paid to the aforesaid lenders i.e, without deduction of tax at source, as both of the said issues were independent issues that were unconnected with the “reason” on the basis of which her case was reopened under Section 147. In sum and substance, as the view taken by the AO i.e., not making of any independent addition/disallowance in the absence of any addition as regards the issue on the basis of which the case of the assessee was re-opened, is found to be in conformity with the judgment in the case of Jet Airways (I) Ltd. [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] therefore, we are unable to concur with the view taken by the Pr. CIT that the failure on the part of the AO to carry out verifications and/or make addition/disallowance as regards such independent and unconnected issues would render the order passed by him under Sec. 143(3) r.w.s 147, dated 23.11.2018 as erroneous in so far as it was prejudicial to the interest of the revenue under Sec. 263 - We, thus, in terms of our aforesaid observations set-aside the order passed by the Pr. CIT u/s 263 of the Act, dated 22.02.2021 and restore the order passed by the Assessing Officer u/s.143(3) r.w.s.147, dated 23.11.2018. Thus, the appeal filed by the assessee is allowed in terms of our aforesaid observations.
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