TMI Blog2007 (4) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order, the Commissioner has invoked his jurisdiction under section 263 on the ground ( a ) that the Assessing Officer has not examined whether or not the assessee has claimed any deductions under sections 28 to 44AC and section 57 of the Act, which are forbidden by the virtue of section 115A; and ( b ) that the Assessing Officer has not examined correctness of assessee s claim that the interest income is offered for taxation in terms of the provisions of articles 11 and 12 of the India-UK Double Taxation Avoidance Agreement. No findings, however, are given about any error in the order of the Assessing Officer. 3. The backdrop of this revision order is that the following observation made by the Commissioner in his impugned order : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 263 of the Act. 4. In response to the aforesaid show-cause notice, it was explained by the assessee that the correct facts of the case are like this. The assessee-company holds 51 per cent shares of an Indian company by the name of Hindustan Lever Limited (HLL, in short). As another Indian company by the names of the Tata Oil Mills Co. Ltd. (TOMCO, in short) merged with HLL, the capital base of HLL increased. The assessee-company, however, wanted to continue holding 51 per cent of shares of HLL and, therefore, HLL had, in its annual general meeting, resolved to allot 29,84,347 shares at Rs. 105 per share (including Rs. 95 per share as premium). This issue price was based on the applicable guidelines, but, during the pendency of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of assessee s share of net amount earned by share premium suspense account, as per the directions of the Hon ble Bombay High Court. It was also pointed out by the assessee that so far as the assessee is concerned, the assessee has not claimed any interest payment out of amount received, but offered its entire share of income, as allocated from the share premium account. The assessee thus contended that the entire income earned by the assessee has been offered to tax, that no deductions are claimed by the assessee, and that the assessee has computed the income and paid tax thereon in terms of the provisions of Articles 11 and 12 of the India-UK tax treaty. It was also pointed out that section 115A(3) has no application in the matter si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r will pass a fresh order on this point." 6. The assessee is aggrieved by the revision order so passed by the Commissioner, and is in appeal before us on the following grounds : 1.The learned CIT erred in partly setting aside the assessment order, passed by the Joint Commissioner of Income-tax, under section 143(3) of the Income-tax Act. 2.The learned CIT erred in holding that the appellant had claimed deduction of Rs. 94,30,665 as interest paid against interest income. 3.The learned CIT failed to appreciate that the appellant had neither incurred or claimed any expenditure from the amount received by the appellant from share premium suspense account. 4.He also failed to appreciate that the appellant had offered its entire shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be said to reasons good enough to exercise revision powers. As held by the Hon ble Bombay High Court in the case of CIT v. Gabrial India Ltd. [1993] 203 ITR 108 in the garb of exercising powers under section 263 "Commissioner cannot initiate proceedings with a view to start fishing and roving enquiries in matters or orders which are already concluded" and that "an order cannot be termed as erroneous unless it is not in accordance with the law". As held by the Hon ble Punjab Haryana High Court, in the case of CIT v. R.K. Metal Works [1978] 112 ITR 445, the Commissioner must give reasons and basis for his conclusion that the order sought to be revised is erroneous. There is no finding whatsoever as to how is it erroneous in law. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee adjustment for accrued interest is to be made when interest yield securities are purchased- cum -interest. 9. We have also noted that admittedly the assessee-company was a tax resident of the United Kingdom and this information was categorically given in the return of income. It was also stated in the return of income that dividend and interest income have been offered to tax at the rate of 15 per cent in terms of Article 11(3) and Article 12(2) of the India-UK tax treaty. There is no dispute that in terms of the said provisions the interest and dividend income was to be taxed at the rate of 15 per cent only. Under these circumstances, it is difficult to comprehend as to on what basis the Assessing Officer allegedly fail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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