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TMI Blog2020 (8) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... , excessive, contrary to evidences and bad in law. 2. That having regard to the facts and circumstances of the case, Pr. CIT has erred in law and on facts in assuming jurisdiction in passing the order u/s 263, more so when the assessment order passed under section 143(3) is neither erroneous nor prejudicial to the interest of Revenue. 3. That The Pr. CIT has failed to consider that the Assessing Officer had invoked section 14A of the Income Tax Act, 1961 and disallowed Rs. 5,53,606/- towards interest paid, which shows that assessment was framed after application of mind and considering the replies of the assessee filed on different dates. 4. That The Pr. CIT has not provided sufficient opportunity to the assessee to present its case with all evidences. 5. That on the facts and in the circumstances of the case The Pr. CIT has erred in making disallowance of expenditure amounting to Rs. 33,08,818/-towards interest paid U/s.l4A of the Income Tax Act, 1961. 6. That The Pr. CIT would not have assumed jurisdiction in issuing notice and passing the order U/s.263, as the assessment order passed under section 143(3) is neither erroneous nor prejudicial to the interest of Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owance u/s.14A of the Act was computed by the Pr. CIT of Rs. 33,80,818/- (Rs. 38,62,424 - 5,53,606). Ld. Pr.CIT found that the assessment order was erroneous as well as prejudicial to the interest of revenue and relied many judgments which has been calculated in his revisonary order as under :- i) CIT Vs. Walfort Stock Brokers Pvt. Ltd. (2010) 326 ITR 1 (SC); ii) CIT Vs. V.P.Gopinathan (2001) 248 ITR 449 (SC); iii) Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC); and iv) Dawjee Dadabhoy & Co. Vs. S.P.Jain (1957) 31 ITR 872 (Cal.) 5. Against the above order passed by the Pr. CIT, the assessee is in appeal before the Income Tax Appellate Tribunal. 6. Ld. AR at the outset of hearing he did not press on the legal ground raised by the assessee regarding challenging the reviosonary order passed by the Pr. CIT as per above quoted grounds of appeal. He further submitted on merits that the Pr.CIT can disallow the claim to the extent of exempt income received by the assessee. During the impugned year the assessee has received exempt income. To support his contention, ld.AR relied on the decision of Hon'ble Supreme Court in the case of Pr. CIT Vs. State Bank of Patiala [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid facts and circumstances, more particularly the fact that the assessee was already having its own surplus fund and that too to the extent of Rs. 2319,17 Crores against which investment was made of Rs. 111.09 Crores, there was no question of making any disallowance of expenditure in respect of interest and administrative expenses under Section 14A of the Act. " That SLP against the order filed with the Hon'ble Supreme Court was dismissed. c. Moreover, the appellant has earned exempted income of Rs. 1,56,881/- only during the relevant assessment year, but an amount of Rs. 38,62,424/-has been disallowed U/S.14A of the Income Tax Act, 1961. In this regard your honour's kind attention is drawn towards the decisions of Hon'ble Delhi High Court in the case of PCIT v. Caraf Builders & Constructions (P) Ltd (101 taxmann, com 167) and Joint Investments (P) Ltd v. CIT (372 ITR 694) wherein it was held that the amount of disallowance can not exceed the exempt income earned during the year. Similar view was taken by Hon'ble High Court of Punjab & Haryana in the case of PCIT v. State Bank ofPatiala (2018) 259 Taxman 315 (P& H) (HC), The SLP of Income Tax Department ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue on merits has been decided in favour of the assessee in State Bank of Patiala's case (supra) [(2017) 78 Taxman.com 3]. The amount of disallowance under Section 14A was restricted to the amount of exempt income only and not at a higher figure. Once that was so, we do not consider it appropriate to discuss the scope of Section 263 of the Act as the same has been rendered academic in view of the issue being answered in favour of the assessee on merits. Thus, no substantial question of law arises. Consequently, the appeal stands dismissed." Similar decision was taken by this Court in ITA No. 193 of 2017, Pr. CIT v. State Bank of Patiala decided on 22.05.2017." 5. In view of the above, no substantial question of law arises in the present appeal and consequently, the appeal stands dismissed. 10. Same view has also been upheld by the Hon'ble Supreme Court in the case of Maxopp Investment Ltd. Vs. CIT [2018] 91 taxmann.com 154 (SC), wherein the Hon'ble Supreme Court in para 40 has held as under :- "40. We note from the facts in the State Bank of Patiala cases that the AO, while passing the assessment order, had already restricted the disallowance to the amount which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice issued under section 263 by the Principal Commissioner of Income Tax, Sambalpur (hereinafter referred to as "Pr. CIT") and the order passed under section 263 is unjustified, arbitrary, excessive, contrary to evidences and bad in law. 2. That having regards to the facts and circumstances of the case, Pr. CIT has erred in law and in facts in assuming jurisdiction in passing the order u/s 263, more so when the assessment order passed under section 143(3) is neither erroneous nor prejudicial to the interest of Revenue. 3. That the Pr. CIT has failed to consider that the Assessing Officer had invoked section 14A of the Income Tax Act, 1961 and disallowed Rs. 7,79,433/- towards interest paid, which shows that assessment was framed after application of mind and considering the replies of the assessee filed on different dates. 4. That the Pr. CIT has not provided sufficient opportunity to the assessee to present its case with all evidences. 5. That on the facts and in the circumstances of the case The Pr. CIT has erred in making disallowance of expenditure amounting to Rs. 39,88,199/-towards interest paid U/s. 14A of the Income Tax Act, 1961. 6. That the Pr. CIT would not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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