Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 91 - ITAT HYDERABADRevision u/s 263 - AO failed to disallow the interest debited to the P&L a/c as as there was no income from business, the expenditure debited for ₹ 40,33,313 needs to be disallowed - Held that:- The issue has been subjected to scrutiny by the AO as it is part of the reasons recorded for reopening the completed assessment u/s 143(3) of the Act. The AO had come to the conclusion and gave the finding for the set off of interest payment of ₹ 40,33,313 from out of the interest income of ₹ 46,28,979 based on the facts examined by him in the course of assessment/reassessment proceedings. Explanation was submitted before the AO and the AO had applied his mind on the issue. It is only when there is non-application of mind to relevant material or incorrect assumption of fact or an incorrect application of law that the CIT can assume jurisdiction u/s 263 as held in the case of CIT vs. Jawahar Bhattacharjee (2012 (4) TMI 222 - GAUHATI HIGH COURT). Further, when two views are possible and when the AO takes one of the two views permissible in law to which the Commissioner does not agree with, it cannot be treated as erroneous and prejudicial to the interests of the Revenue as held by the decisions (i) CIT vs. Max India Ltd (2007 (11) TMI 12 - Supreme Court of India) and (ii) Malabar Industries Company Ltd (2000 (2) TMI 10 - SUPREME Court). Hence, the revisionary jurisdiction assumed by the CIT (A) is invalid. The facts in the present case was that the assessee borrowed funds on interests, the same was kept in fixed deposit. Out of the interest received from FD’s, assessee paid interests on borrowed funds, which was allowable u/s 57(iii). AO after examining this has allowed the same. It is CIT who wrongly considered the expenditure as business expenditure. See CIT vs. Taj International Jewellers (2010 (12) TMI 451 - Delhi High Court) - Decided in favour of assesse.
|