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TMI Blog2021 (9) TMI 1166X X X X Extracts X X X X X X X X Extracts X X X X ..... en out of the Covid-19 pandemic. They have relied upon the order passed by the Hon'ble Apex Court in Writ Petition (Civil) No. 3 of 2020 regarding the extension of limitation. Considering this aspect we condone the delay. 3. The Ld. PCIT is of the opinion that the order passed under Section 143(3) r.w.s. 147 of the Act dated 21.12.2017 was made without examining the provision of Section 57 of the Act in correct perspective and non-examination/verification of the aforesaid issues appropriately by the Ld. AO has made the order under Section 143(3) r.w.s. 147 of the Act erroneous in so far as prejudicial to the interest of revenue within the meaning of Section 263 of the Act. 4. The brief facts leading to the case is this that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 5. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. 6. It appears from the record that the original assessment order dated 13.03.2014, which is wrongly mentioned as 13.03.2015 passed under Section 143(3) of the Act has considered the issue under Section 57 of the Act. The relevant portion of the same is reproduced hereinbelow:- "5. Disallowance of deduction under section 57: 5.1 The assesses has shown income from other sources at Rs. 13,76,009/- and has claimed deduction of Rs. 15,00,000/- u/s. 57 and thereby loss under the head other sources was shown as Rs. 1,23,991/- and the same was set off by the assessee against income from salaries. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est income of Rs. 1376009/- on ad hoc basis, in view of the facts that part of interest expenses incurred for loans utilized for investment purpose and is not claimed as deduction u/s. 57 of the Act." 5.4 The following conditions should be satisfied for claiming deduction u/s.57; a. the expenditure should be incurred solely for earning such income i.e. to such deduction can be claimed only against the income taxable under the head of other sources b. it should not be in the nature of capital expenditure. c. it should not be in the nature of personal expense. d. it should be incurred in the relevant accounting year. Section 57(iii) is the residuary clause of sec. 57. Sec. 57(iii) states that the expenditure should not be in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly deduction claimed under section 57 is limited to Rs. 13,76,009/- and the excess deduction of Rs. 1,23,991/- (being Rs. 15,00,000 - Rs. 13,76,009) is disallowed and added to the total income of the assessee. Penalty proceedings are initiated for concealment of income and furnishing of inaccurate particulars of income. (Disallowance u/s. 57 of Rs. 1,23,991/-)" 7. The Ld. Advocate appearing for the assessee joints issue on this aspect that once the issue has been examined in the order passed under Section 143(3) in the order passed under Section 143(3) r.w.s. 147 of the Act the Ld. AO is not further required to revisit the same issue and, thus, the Ld. PCIT has wrongly passed order setting aside the order passed under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4607/Del/2019) which has been further considered by us. The relevant portion of the judgment is as follows:- "19. As in the present case before us, issues subject to revision were pertaining to original assessment and not the reopened assessment; the limitation should also start from the original assessment. In this case as original assessment order u/s. 143(3) of the act was passed on 16.01.2014, the revision thereof could have been taken up to 31.3.2016. Impugned order u/s. 263 of the act was passed on 26/2/2019, therefore it is clearly beyond the limitation prescribed u/s. 263 (2) of the act." 10. In view of the ratio laid down by the Hon'ble Delhi Bench and as per provision of law the re-opening under Section 263 of the Act cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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