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2022 (6) TMI 1107 - AT - Income TaxRevision u/s 263 by CIT - assessment proceedings were reopened on “limited scrutiny basis” to analyse (a) Interest income mismatch and (b) deduction from income from other sources - HELD THAT:- As in our considered view, Pr. CIT has erred in facts in observing that the assessing officer did not verify the nexus between interest-bearing borrowed funds obtained and the interest-bearing loans and advances given by the assessee. In fact, it is observed that while setting aside the assessment order, the Pr. CIT has asked the AO to also examine the issue of disproportionate credit of dividend income with reference to investments in shares and also directed the AO to work out the disallowance u/s 14A in respect of dividend income, though the same did not form part of either the show cause notice issued u/s 263 and also it was beyond the scope of original assessment proceedings which were opened on “limited scrutiny basis” to examine issues specified above. During the course of assessment proceedings, we note that the Ld. AO made detailed enquiries on these issues and after consideration of time-to-time written submissions filed by the assessee and documents / evidence placed on record, the Ld. AO accepted the return of income filed by the assessee. The Gujarat High Court in the case of CIT v. Nirma Chemical Works [2008 (2) TMI 373 - GUJARAT HIGH COURT] held that when the assessing officer after making due enquiries had adopted one view and granted partial relief, merely because the Commissioner took a different view of the matter, it would not be sufficient to permit Commissioner to exercise powers under section 263 of the Act. The Gujarat High Court in the case of CIT v. Kamal Galani [2018 (6) TMI 1052 - GUJARAT HIGH COURT] has held that once assessing officer carried out detailed enquiries, it was not open for the Commissioner to reopen issues on mere apprehensions and surmises. In the instant case, detailed enquiries were made during the course of assessment proceedings by the Ld. Assessing Officer to enquire about the claim of expenses u/s 57 of the Act, to which the assessee filed time to time replies. Hence, in the instant facts, we are of the considered view that the assessment order was not erroneous or prejudicial to the interest of the revenue. In the result, the appeal of the assessee is allowed.
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