TMI Blog2018 (12) TMI 1491X X X X Extracts X X X X X X X X Extracts X X X X ..... y we reject the same. Since in the instant case originally, the assessment under section 143(3) of the Act was already completed and in the proceedings under section 153A of the Act, there is no mention of any incriminating material particularly on the issues on which the Ld. CIT has held that the Assessing Officer has not made any enquiries. If as per the law laid down by the Hon’ble Delhi High Court, the Assessing Officer is not empowered to make any addition, then he is not required to carry out any enquiry or verification in respect of those issues. In such a scenario, the order passed by the Assessing Officer cannot be held as erroneous insofar as prejudicial to the interest of the Revenue. We are of the opinion that CIT has exceeded his jurisdiction provided under section 263 of the Act and accordingly, we set-aside the order passed by the Ld. CIT under section 263 of the Act. Since we have already held that the Ld. CIT was not correct in revising the assessment order in view of the decision in the case of Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] - Decided in favour of assessee - ITA No.3088/Del/2015 - - - Dated:- 23-10-2018 - Sh. Amit Shukla, Judicial Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(3) of the Act was completed on 28/02/2013. The Ld. Commissioner of Income-tax (In short the CIT ) called for and examined the assessment record. He formed the opinion that the order dated 28/02/2013 passed by Assessing Officer was erroneous insofar as prejudicial to the interest of the Revenue and accordingly, he issued notice under section 263 of the Act. In response, the assessee objected the proceedings under section 263 of the Act on the ground that the CIT was not empowered to revise the assessment order which was passed by the Assessing Officer with prior approval of the Additional Commissioner of Income Tax. This contention of the assessee was rejected by the Ld. CIT and he found that the Assessing Officer did not carry out enquiry on the two issues. The first issue being of disallowance of interest proportionate to the borrowed fund not utilized for the purpose of business. The second issue, being not examination of various conditions of section 10B of the Act while allowing the said deduction. The Ld. CIT after taking into consideration submission of the assessee, passed the impugned order under section 263 of the Act setting aside the order passed by the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. The first issue being disallowance of proportionate interest paid in relation to borrowed funds for funds diverted for non-business purposes. The second issue relates to deduction under section 10B of the Act. The Ld. counsel pointed out that no incriminating material or document was found during the course of the search in relation to the above two issues. He submitted that in view of the decision of the Hon ble Delhi High Court in the case of Kabul Chawla (supra) no addition could be made in proceeding under section 153A of the Act without any incriminating material, where the assessment proceedings are not abated. In view of the above, the Ld. counsel submitted that there was no error in the order of the Assessing Officer in not making enquiry on above two issues. On the merit of the additions, the Ld. counsel submitted that the Ld. CIT has not pointed out any error or established any prejudice on the issue of disallowance of proportionate interest paid towards borrowed funds. He also submitted that on the issue of deduction under section 10B of the Act, the AO duly examined the apportionment of expenses for eligible and non-eligible unit, and thus it cannot be said that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 263(2) of the Act, the time limit for passing order under section 263 has been provided as before expiry of two years from the end of the financial year in which the order sought to be revised was passed. Since the impugned order dated 12/03/2015 passed by the CIT under section 263 of the Act is within the period of two years from the end of the financial year in which the order under section 153A was passed, i.e., 31/03/2015, we do not find any force in the arguments of the Ld. counsel on this issue and accordingly we reject the same. 9. The another issue is whether the CIT could invoke the provisions of 263 of the Act in view of the decision of the jurisdictional High Court in the case of Kabul Chawla (supra) and thus whether any further verification/enquiry was required to be made by the Assessing Officer in a case where no incriminating material was found during the course of search. On this issue, we do not agree with the arguments made by the Ld. DR. First of all, as far as legal grounds are concerned, the assessee can make any arguments in support thereof and there is no bar to make the argument supporting the ground. Secondly, the Delhi benches of the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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