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2021 (10) TMI 668 - ITAT PUNERevision u/s 263 by CIT - Disallowance u/s 14A - HELD THAT:- It is an undisputed fact that the assessee was holding investments in mutual funds in Dividend Option Scheme up to 30-09-2014 and thereafter switched over to Growth Funds. The amount of exempt dividend income up to 30-09-2014 stood at ₹ 21.93 crore. The only dispute is on computation of disallowance under clause (iii) of Rule 8D(2). Whereas the AO computed the disallowance at 0.25% by taking the average value of investment as on 01-04-2014 and 30-09-2014, the ld. PCIT has canvassed a view that the disallowance has to be made at 0.50% irrespective of the period during which the investments yielded exempt income. The calculation put forth before the Tribunal for demonstrating that the assessment order was not prejudicial to the interest of the Revenue has neither been vetted by the AO or the ld. CIT. We refrain from making any comment on its correctness without considering the corresponding details. It would be in the fitness of the things if the impugned order is set-aside and the matter is restored to the file of ld. CIT for ascertaining if the order passed by the AO is also prejudicial to the interest of the Revenue in the manner in which the assessee is trying to make out so as to clothe him with the jurisdiction to take action under section 263 of the Act. If the calculation of the assessee is found to be flawed and the assessment order also remains prejudicial to the interest of the revenue, then the impugned order revising the original order has to be upheld. In the otherwise scenario, the power of the ld. PCIT for revising the assessment order would be lacking if the assessment order is found to be only erroneous but not prejudicial to the interest of the Revenue. Needless to say, the assessee will be allowed a reasonable opportunity of hearing by the ld. CIT before embarking upon the above fresh exercise. Assessee appeal is allowed for statistical purposes.
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