TMI Blog2022 (4) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT was right in invoking his jurisdiction u/s 263 of the Act and directing the A.O to make disallowance of interest u/s 40(a)(ia) of the Act on account of non-deduction of TDS and also in directing the Assessing Officer to make disallowance of the claim of deduction u/s 54EC of the Act with respect to such STDR with SBI. - Decided against assessee. - ITA No.230/PUN/2016 - - - Dated:- 1-4-2022 - Shri Inturi Rama Rao, AM And Shri Sonjoy Sarma, JM For the Assessee : Shri M.K. Kulkarni For the Revenue : Shri J.P. Chandraker ORDER PER SHRI SONJOY SARMA, JM: This is an appeal filed by the Assessee directed against the order of ld. Pr. Commissioner of Income-tax-I, Nagpur dated 22-01-2016 for A.Y. 2011-12 on the following grounds of appeal. I. The Order u/s 263 of the I.T. Act, 1961 passed by the Ld. CIT-I, Nagpur may be held erroneous both in facts and law. a) Disallowance of Interest Paid ₹ 2,85,632/- u/s 40(a)(ia) The Ld. CIT-I, Nagpur erred in considering the facts of the case as per the records: i) That the interest paid to each one of the two deductee's / payee's does not exceed the prescribed Taxable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , amend, alter, substitute, and modify the above grounds of appeal, if necessary on the basis of written submissions and personal presentation to be made at the time of hearing. 2. The assessee has also raised the following additional grounds of appeal. 1) On the facts and circumstances of the case and in law the Ld. CIT-I, Nagpur was not justified in not considering the factual matrix in its proper perspective as what was sold was not an capital asset but stock-in-trade resulting into any long term capital and the provisions of S. 54EC were not applicable. The Ld. CIT-1 Nagpur ought to have considered the legal position that capital asset was not sold but only stock-in-trade was sold not giving any rise to Long term capital Gain. The order of the Ld. CIT passed under S. 263 be set aside as the same is not sustainable in law. 2) On the facts and circumstances of the case and in law and in view of Ground No. 1 above all the factual matrix and legal position and placing reliance on S. 45(2) suggest that there was no Long Term Capital Gain. In order to give complete justice to the assessee the order of the CIT-Nagpur be set aside with proper directions In the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also erred in not making a disallowance of the same u/s 40(a)(ia) of the I.T. Act, 1961. (ii) The assessee has sold plots amounting to ₹ 15,46,000/-. The long term capital gain from this transaction was shown of ₹ 14,68,380/-. However, the same was claimed as exempt u/s 54EC of the Act. In support of the claim of exemption, copy of STDR with SBI for An amount of ₹ 15,46,000/- was furnished. However, the same is not a long term specified asset within the meaning of sec. 54EC. The A.O allowed the claim of exemption which is clearly erroneous. 6. Accordingly, the ld. Pr. CIT issued a show cause notice u/s 263 of the Act vide notice dated 28-10-02015, in response to which the assessee himself had filed written submissions on 19-1-2016 as under 3. Regarding the first issue of non-taxation of TDS on interest of ₹ 2,85,632/-the assessee submitted that the interest was paid to the following persons. a) Yadav Prabhakar Thakre (HUF) - ₹ 1,42,816/- b) Rarnprasad Prabhakar Thakre (HUF) - ₹ 1,42,816/- He submitted that as they did not have taxable income, the TDS was not deducted on interest paid to them. Regarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly held that the assessment order is erroneous and prejudicial to the interest of the revenue and set aside the issue to the file of the A.O for fresh adjudication making the disallowance of interest paid ₹ 2,85,632/- u/s 40(a)(ia) of the Act and claim of deduction u/s 54EC of the Act. 9. Being aggrieved by the above order of the ld. Pr. CIT the appellant is in appeal before us. 10. At the time of hearing, the ld. A.R submits that long term capital gain did not arise to the asessee in the year under appeal and hence there was no question of claim of exemption under section 54EC of the Act and as such the order passed by the A.O is not erroneous and prejudicial to the interest of revenue. 11. The ld. A.R further submits that the ld. Pr. CIT was also not justified in his finding that the assessment was erroneous and prejudicial to the interest of revenue as no tax was deducted u/s 40(a)(ia) of the Act, since deductee had no taxable income therefore, provisions of sec. 40(a)(ia) of the Act is not applicable. 12. We have heard the rival submissions and perused the material available on record. Before going through the facts of the case, we would like to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order is held to be valid. [S. 10B] Court held that there was no consideration whatsoever of the information provided by the assessee in the context of its claim. This was a case of no consideration as opposed to mere inadequate consideration. This was a clear case of non-application of mind to the material on record, without even going into the issue whether the material supplied by the assessee was adequate or inadequate to determine its claim for deduction under section 10B. The circumstance that for certain subsequent assessment years the claim of the assessee for deduction under section 10B of the Act was allowed by the Tribunal was not strictly speaking relevant to determining whether the revision jurisdiction was correctly invoked. Firstly, the view taken by the Tribunal had till date, not attained finality. Secondly, the view was in the context of the subsequent assessment years. It was possible that for a given assessment year the assessee did not fulfill the prerequisites for claiming the deduction under section 10B. From the material on record, it was not possible to say that the Commissioner, in this case, had acted under dictation from any extraneous authority. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking one of the possible view by giving reasons. In this case no examination of the claim under Section 80HHC of the Act has been done by the Assessing Officer. Therefore, the exercise of jurisdiction by the Commissioner of Income Tax under Section 263 of the Act was valid. 14. The decision of the Apex Court in Max India Ltd. (supra) relied upon by the respondent-assessee to our mind would not come to its rescue for the reason that in the present facts the statement of the case does not .indicate that the view taken to allow the claim under Section 80 J !IIC of the Act was after examination/inquiry. Mere taking of a view by the Assessing Officer without having subjected the claim to examination would not make it a view of the Assessing Officer. A view has necessarily to be preceded by examination of the claim and opting to choose one of the possible results. In the absence of view being taken, merely because the issue itself is debatable, would not absolve the Assessing Officer of applying his mind to the claim made by the assessee and allowing the claim only on satisfaction after verification/enquiry on his part. A view in the absence of examination is no view but only a cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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