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2022 (10) TMI 21 - ITAT RAJKOTRevision u/s 263 - As per CIT-A assessee has diverted interest-bearing fund to non-commercial purposes without charging any interest thereon - HELD THAT:- There was no question with respect to the diversion of interest-bearing loan for noncommercial purposes. Thus, in the absence of any query, assessment order can be held as erroneous insofar prejudicial to the interest of revenue. It is also significant to note that, the assessee before us is a partnership firm and whatever capital is owned by the partnership firm belongs to the partners on which the firm generally bears the interest expenses. Thus, we are of the view that generally the partnership firm does not have any interest free fund with it. Therefore, it appears to us that the assessee cannot be given the benefit that it (the assessee) has given advances out of its own interest free funds and reserves. Thus to our understanding, this aspect as pointed out by the learned PCIT was supposed to be verified by the AO during the assessment proceedings. But the same has not been done by the AO, accordingly we do not find any infirmity in the observation of the learned PCIT. Differences in the import purchases, payment of custom duty and ITS data/CBES - Assessee before the learned PCIT has categorically submitted that the information provided in ITS data/CBES data was not pertaining to the year under consideration and therefore based on that no adverse inference can be drawn against the assessee. The submission of the assessee has not been controverted by the learned PCIT. From the finding of the Ld. PCIT, reproduced above, we find that there was no tangible material referred by the PCIT highlighting the differences between the value of purchases and the custom duty as discussed above. Based on this we hold that the learned PCIT has assumed the jurisdiction on this issue on wrong assumption of facts. Thus on this count, the assessment order framed under section 143(3) of the Act cannot be categorized as erroneous insofar prejudicial to the interest of revenue. No verification of the contribution made by the assessee towards the Provident fund - There was no query raised by the AO during the assessment proceedings with respect to the delay in the payment of the contribution towards the PF which is subject to the conditions of section 36(1)(v)/36(1)(va) read with section 43B of the Act. Thus, on this count as well, we are of the view that the order framed under section 143(3) of the Act suffers from infirmity so far the necessary facts were not verified by the AO during the assessment proceedings. In view of the above, after considering the facts in totality we confirm the order of the learned PCIT in part as discussed above. Hence, the ground of appeal of the assessee is allowed in part.
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