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2020 (5) TMI 408 - AT - Income TaxRevision u/s 263 - claim allowed by the AO u/s 57 - PCIT held that for allowing the deduction u/s 57, nexus between the income earned and the expenditure incurred to earn this income is a mandatory requirement and this requirement has not been established during the assessment proceedings - HELD THAT:- Loan has been an ongoing financial transaction with the assessee for a minimum period of three years. Confirmation has also been obtained the AO along with details of the cheques issued on account of interest payment. The details of TDS have also been filed before the AO. Assessee has also received salary & bonus from BHL Forex & Finlease Ltd. which has been duly offered to tax. Regarding the payment of interest, the details of opening balance, closing balance of the loans received have also been filed and examined by the AO. The opening balance with Multiplex Fincap Ltd. was ₹ 1,50,00,000/-. The interest received during the year is ₹ 12,00,000/- and the closing balance of ₹ 1,62,000/- has been reflected in the details filed by the assessee as examined by the AO. Thus, we find that this is also an ongoing transaction between the assessee and loanee. Both the parties are having regular transactions with the assessee over a period of time. Hence, the clause (a) of the Explanation II to Section 263 finds no application to the facts of the case. PCIT has not brought anything on record as to how the action of the Assessing Officer culminated in treating the assessment order as erroneous and prejudicial to the interest of the revenue. We find that the order of the AO is neither erroneous as it did not violate any provisions of Explanation II to Section 263 nor it is prejudicial to the interest of the revenue as no loss of revenue could be brought to light by the ld. PCIT in the revisionary proceedings - Decided in favour of assessee.
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