TMI Blog2017 (11) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... all the facts of the case and in the light of various decisions as cited by both the parties, we are not in agreement with the ld. PCIT that the order of the AO is erroneous and prejudicial to the interest of revenue as the AO after calling for information from the assessee on the issue of disallowance u/s 14A r.w.r 8D has taken a conscious view which is a possible view out of two views and applied the decision of the Tribunal in assessee‟s own case in the earlier years. The mere fact that the revenue has challenged the decision of the Tribunal in assessee‟s own case for the assessment years 2010-11 and 2011-12 is not rendered the decision of the AO as erroneous and prejudicial to the interest of revenue as the AO has taken a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the interest of Revenue as the disallowance was not as per the provisions of section 14A of the Act r.w.r.8D and accordingly issued a show cause notice dated 14.2.2017 u/s 263 of the Act which is reproduced below : On verification, certain discrepancies were found in the assessment order dated 29.03.2016, which are as under: The disallowance made u/ s. 14A was @ 5% of the dividend of ₹ 44,22,416/ - received and the same was not in accordance with rule 8D of the I. T. Rules 1962. On perusal it was observed that the said disallowance was made in view of the decision of the Hon‟ble ITAT in assessee's own case for. AY. 2010-11 and 2011-12 wherein the Hon'ble ITAT had directed to AO to restrict the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a case of complete non-application of mind by the AO as the inquiry conducted is exceedingly inadequate and hence fall in the category of no-inquiry‟ conducted by the AO thereby resulting into incorrect assumption of facts makes the order erroneous and prejudicial to the interest of the revenue. 5. The ld. AR vehemently submitted that the revisionary jurisdiction u/s 263 of the Act was wrongly assumed by the PCIT as the twin conditions of erroneous and prejudicial to the interest of revenue were not satisfied concurrently as the AO has taken conscious decision by following the decision of the Tribunal in assessee‟s own case for the assessment year 2010-11 and 2011-12. The AO specifically raised the queries qua the disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al with such type of disallowances. The ld. DR relied on the following decisions : a) Rajrnandir Estates Pvt Ltd -386 ITR 162 b) Subhlakshmi Vanijya Pvt. Ltd -155 ITD 171 c) Kalwa Devadattam Ors-49 ITR 165 d) K.S.N. Bhatt -37 CTR 273 e) Sir Kikabhai Premchand -24 ITR 506 7. We have carefully considered the rival contentions, perused the material placed before us during the course of hearing including the decisions of authorities below and also the decisions relied upon by the parties. We find in the instant case, the revisionary jurisdiction has been exercised by the ld.PCIT setting aside the assessment order u/s 143(3) of the Act on the ground that the AO has passed the order without application of mind and also by foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in assessee‟s own case in the earlier years. The mere fact that the revenue has challenged the decision of the Tribunal in assessee‟s own case for the assessment years 2010-11 and 2011-12 is not rendered the decision of the AO as erroneous and prejudicial to the interest of revenue as the AO has taken a possible view after examining and considering the reply and arguments of the assessee as rendered during the course of assessment proceedings. While concluding our findings, we take a shelter of following decisions : * In the case of Seimens India Ltd (supra) it has been observed and held as under : So far as the legal position is concerned, the ITO would be bound by a decision of the Supreme Court as also by a decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay consider that such a decision of the appellate authority or the Tribunal is not in accordance with law and may also find that such a decision is the subject-matter of further appeal or revision as the case may be. He may expect that the higher court or authority may decide in favour of the Revenue, but that may take a number of years. He may be of the view that by the time of decision of the higher court or authority arrives, a number of years may elapse by which time the exercise of the power under section 263 may become barred. In view of the above discussion, we are of the view that the assessment order passed by the AO after considering of all the facts is neither erroneous nor prejudicial to the interest of revenue. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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