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TMI Blog2022 (6) TMI 1107X X X X Extracts X X X X X X X X Extracts X X X X ..... n law and on facts of the case in passing an order u/s 263 of the I. T. Act, 1961 on 21.02.2020 for AY 2015-16. 2. The action of Id/Principle CIT is wholly bad in law because when AO passed the order under section 143 (3) on a limited scrutiny basis, there could be no justification on the part of the Principle CIT to invoke revisional jurisdiction on issues not covered by limited scrutiny. 3. Ld. Principle CIT has erred in law and on facts in passing an order u/s 263 of the Act by not considering the interest expense against the claim of interest income. 4. Ld. Principle CIT has erred in giving other direction as to interest and alleged disallowance u/s 14A without any basis in law or in facts. 5. Your appellant craves leave to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial to the interests of the revenue. While passing the order Ld. Pr. CIT made the following observations/directions: "3.4 The overall discussion as made above clearly reflects that the Assessing Officer did not verify the nexus between the interest bearing borrowed funds obtained in earlier years and during the year under consideration and the interest bearing loans & advances were given including the advances on which no interest has been charged. This omission on the part of the Assessing Officer has resulted into passing an erroneous assessment order passed u/s 143(3) of the Act. Further, the A.O. has also ignored the provisions of section 14 read with Rule 8D as the assessee has credited huge' amount of dividend of Rs.3,25,00,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to be taxed as "income from other sources". 3) To work out the disallowance u/s 14A of the Act in respect of exempt dividend income, agricultural income and share of profit from the partnership firm and make such disallowance. 4.1 The revisionary proceedings u/s 263 of the Act are accordingly concluded by passing the aforesaid order and after considering the facts and circumstances of the case as discussed above. The assessment order passed u/s 143(3) of the Act dated 30.10.2017 is held to be erroneous and prejudicial to the interests of the revenue. Therefore, the A.O. is directed to carry out thorough inquiries as mentioned above and other issues which may be noticed during the course of assessment proceedings in pursuant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the assessee drew attention to pages 19, 21 and 22 (para 9) of the paper book to show that the assessment was opened on "limited scrutiny" basis to specifically examine the aspect of "deductions made against income from other sources" under section 57 of the Act. The counsel for the assessee then drew our attention to pages 23-24 of the paper book to point out that the assessee vide submission dated 08-08-2017 filed before the Assessing Officer had specifically given clarification on deduction of Rs. 1,44,83,261/- under section 57 of the Act claimed by the assessee and had also provided a copy of interest expenses ledger along with ledgers of unsecured loan provided by the assessee. He further drew attention to pages 26 and 27 (para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of assessment proceedings and hence the assessment order is not erroneous and prejudicial to the interest of the revenue. Accordingly, the order passed under section 263 of the Act is liable to be set aside. The Ld. Departmental Representative in response has placed reliance on the observations of the Ld. Pr. CIT made in the 263 order. 6. We have heard the rival contentions and perused the material on record. We note that the assessment proceedings were reopened on "limited scrutiny basis" to analyse (a) Interest income mismatch and (b) deduction from income from other sources. During the course of assessment, the AO made detailed enquiries with respect to the above issues under consideration as can be seen from various notices issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxman 183 (Gujarat) held that when the assessing officer after making due enquiries had adopted one view and granted partial relief, merely because the Commissioner took a different view of the matter, it would not be sufficient to permit Commissioner to exercise powers under section 263 of the Act. The Gujarat High Court in the case of CIT v. Kamal Galani 95 Taxman.com 261 (Gujarat) has held that once assessing officer carried out detailed enquiries, it was not open for the Commissioner to reopen issues on mere apprehensions and surmises. Para 19 of the aforesaid order reads as below: 19. In the context of the present case, applying the ratio of the above noted decision, the scope of the Commissioner's power of revision under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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