TMI Blog2020 (12) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer has verified and investigated the matter in detail. Therefore, even in this issue, the provisions of Section 263 of the Act cannot be invoked - Decided in favour of assessee. - ITA No. 3473/Mum/2019 - - - Dated:- 8-12-2020 - SHRI M. BALAGANESH, AM And SHRI RAVISH SOOD, JM Assessee by : Shri C. Naresh Revenue by : Shri Rahul Raman, CIT DR ORDER PER M. BALAGANESH (A.M) This appeal in ITA No.3473/Mum/2019 for A.Y.2015-16 preferred by the order against the revision order of the ld. Pr. Commissioner of Income Tax (Appeals)-2, Mumbai u/s.263 of the Act dated 15/03/2019 for A.Y.2015-16. 2. The only issue to be decided in this appeal is as to whether the ld. Pr. Commissioner of Income Tax (PCIT) was justified in invoking his revisionary jurisdiction u/s.263 of the Act in the facts and circumstances of the instant case with regard to provision for bad and doubtful debts u/s. 36(1)(viia) of the Act. 3. We have heard rival submissions. We find that the ld. DR placed reliance on the order of the ld. Pr.CIT u/s.263 of the Act. We find that assessee had filed its return of income for A.Y.2015-16 on 30/11/2015 declaring total income of ₹ 1124 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.36(1)(vii) and 36(1)(viia) of the Act, allowed the deduction to the assessee and completed the assessment. 3.2. We find that the ld. PCIT wanted to impose another view on the same subject matter in the revision proceedings u/s.263 of the Act. Infact, the same reply which was already filed before the ld. Assessing Officer was again filed before the ld. PCIT. We find that ld. PCIT held in his order passed u/s.263 as under:- 5.3 In view of the above discussion, the assessee's claim of debit balance in PBDD account and the computation given is not correct and the same is reworked as under. Opening balance for A.Y. 2013-14 is the amount of deduction allowed to bank u/s 36(1)(viia) in A.Y. 2012-13. A.Y. OPENING BALANCE CLAIM U/S 36(1)(viia) Bad Debts written off Deduction allowable u/s 36(1)(vii) Closing balance A B C D E 2013-14 1141.34 2039.28 4550.5 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1795.01 2015-16 2926.41 540.93 Total 7044.39 5745.1 12789.49 Therefore, against the actual bad debt written off of ₹ 11004.42 crores, correct computation comes out to be ₹ 12789.49 crores allowable u/s 36(l)(vii) and 36(1)(viia). Thus, the correct computation rightly removes the double deductions claimed by the assessee and keeps the total deduction available within correct range of actual bad debt written off. 3.3. Accordingly, the ld. PCIT had held that the assessee had claimed excess bad debts u/s.36(1)(vii) of ₹ 2619,63,00,000/- without reducing the opening credit balance of ₹ 2078,70,00,000/- (that is the amount of deduction allowed u/s.36(1)(viia) in the A.Y.2014-15) and the same was wrongly allowed by the Assessing Officer. The ld. PCIT further proceeded to hold that actually deduction allowable u/s.36(1)(vii) works out to ₹ 540,93,00,000/- (₹ 2619,63,00,000 2078,70,00,000). Accordingly, he held assessment order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the remaining PBDD is allowed under Section 36(1)(vii) of the Act. He observed that the amount of PBDD claimed under Section 36(1)(viia) of the Act will remain as closing balance even when the whole opening balance is reduced to Nil on account of debit of PBDD during the assessment year 2013-14 and the unadjusted or excess PBDD will be allowed under Section 36(1)(vii) of the Act. Thus, for the assessment year under consideration, i.e. assessment year 2014- 15, the minimum opening balance shall be ₹ 2039.28 crores which has been Bank of India claimed as deduction under Section 36(1)(viia) of the Act during the preceding assessment year, i.e. 2013-14. Thus, excess claim of PBDD to the extent of ₹ 2039.28 crores has been allowed. This has rendered the assessment order erroneous insofar as it is prejudicial to the interests of the Revenue. 8. Further, he observed that the contention of the assessee is that the Assessing Officer passed the assessment order after examining the details of the aforesaid issues and such order cannot be revised. In this regard, the ld. PCIT observed that the assessment order is found to be erroneous insofar as it is prejudicial to the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs, ld. PCIT issued a show cause notice on the issue of reference to the TPO. He submitted that an issue which does not form part of show cause notice under Section 263 of the Act cannot be a matter which can be decided in order under Section 263 of the Act. For this purpose, he relied on the decision of Hon'ble Bombay High Court in the case of Maharashtra Hybrid Seeds Co. Ltd.,[2019] 102 taxmann.com 48 (Bombay). 20. With regard to disallowance of deduction under Section 36(1)(vii) of the Act, he submitted that ld. PCIT erred in concluding that deduction allowed under Section 36(1)(viia) of the Act for the preceding assessment year has to be considered as opening credit balance in provision for bad and doubtful debts opened under Section 36(1)(viia) of the Act. Ld. PCIT failed to appreciate that there is no such provision in the Income Tax Act which deems the deduction allowed under Section 36(1)(viia) of the Act for the preceding assessment year as opening credit balance. He submitted that assessee has computed the opening credit balance by considering the deduction allowed under Section 36(1)(viia) of the Act and bad debts written off in each of the assessment years in w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Now, in the show cause notice, similar issue was raised by ld. PCIT and passed an order on 27.03.2018, therefore, in our considered view, ld. PCIT cannot invoke the provisions of Section 263 of the Act in this matter. With regard to issue of deduction claimed under Section 36(1)(vii) and 36(1)(viia) of the Act, assessee has filed detailed submissions before the Assessing Officer and the Assessing Officer has considered the submissions even though he has not discussed it in his order under Section 143(3) of the Act. The material submitted before us clearly indicate that assessee has made elaborate submissions on this issue and the Assessing Officer has satisfied himself that assessee is eligible to claim deduction under Section 36(1)(vii) and 36(1)(viia) of the Act and, therefore, in our considered view, ld. PCIT cannot form another view on the same issue in which the Assessing Officer has already satisfied himself and passed an order which clearly indicates that the Assessing Officer has verified and investigated the matter in detail. Therefore, even in this issue, the provisions of Section 263 of the Act cannot be invoked. (emphasis supplied by us herein). With regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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