TMI Blog2022 (10) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... having own funds, i.e., Capital balance of Rs. 75.74 crores as on 31.3.2017, whereas interest free loan given by the assessee was to the tune of the Rs. 16.42 crores only. Since own funds available with the assessee far exceeds amount of interest free loan, no interest disallowance under section 36(1)(iii) is called for, as per the decision rendered in the case of Reliance Utilities and Power Ltd [ 2009 (1) TMI 4 - BOMBAY HIGH COURT] Admittedly the learned PCIT has failed to examine these factual aspects and has also failed to follow binding decision of Hon'ble Jurisdictional High Court. When the case of the assessee is covered by the binding decision of the jurisdictional High Court, then there is no scope for holding the assessment order to be erroneous and prejudicial to the interest of revenue. Non-examination of these factual aspects and non-application of the binding decision of jurisdictional High Court on the issue sought to be revised by Ld. PCIT would make the impugned revision order unsustainable in law - Appeal filed by the assessee is allowed. - I. T. A. No. 1361/Mum/2022 - - - Dated:- 30-9-2022 - Shri B. R. Baskaran ( AM ) And Shri Pavan Kumar Gadale ( JM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Accordingly, he held that the assessment order is erroneous in so far as it is prejudicial to the interests of revenue. Accordingly, he set aside the assessment order and restored the same to the file of the AO for examining the above stated issue in detail. Aggrieved by the revision order so passed by Ld. PCIT, the assessee has filed this appeal before the Tribunal. 5. The Ld. A.R. submitted that the AO has raised queries with regard to the loans taken by the assessee as well as the loans given by the assessee during the course of assessment proceedings. In this regard, the Ld. A.R. invited our attention to the notice dated 03-05-2019 30-08-2019 issued by the AO u/s. 142(1) of the Act, wherein the AO has asked the assessee to furnish the details of loans taken by the assessee in a tabular format. In the said format, the AO has asked the assessee to furnish the details of Rate of interest charged . In the similar way, the AO has also asked the assessee to furnish the details of loans given by the assessee, wherein also the details of Rate of interest charged were asked. The Ld. A.R. submitted that the assessee furnished all relevant details before the AO, vide his letter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020) 113 taxman.com 4 (MP) and also the decision rendered by Hon'ble Bombay High Court in the case of Jeevan Investment Finance Ltd. (2017) 88 taxman.com 552 (Bom). In the instant case the Assessing Officer has merely called for the details from the assessee and it is not discernible from the assessment order that the Assessing Officer has actually applied his mind on this issue. Accordingly, the learned DR submitted that the impugned revision order passed by the learned PCIT does not call for any interference. 8. We have heard the rival contention and perused the record. The scope of revision proceedings initiated under section 263 of the Act was considered by Hon'ble Bombay High Court, in the case of Grasim Industries Ltd. V. CIT ( 321 ITR 92 ) by taking into account the law laid down by the Hon'ble Supreme Court. The relevant observations are extracted below: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, to pass an ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sec. 263 of the Act and the same has been extracted by the Delhi High court in the case of CIT Vs. Goetze (India) Ltd. (361 ITR 505) as under:- Thus, in cases of wrong opinion or finding on merits, the Commissioner of Income tax has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order is not sustainable in law and the said finding must be recorded. The Commissioner of Income tax cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the Commissioner of Income tax must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner of Income tax and he is able to establish and show the error or mistake made by the Assessing officer, making the order un-stainable in law. In some cases possibly though rarely, the Commissioner of Income tax can also show and establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind. Accordingly, the learned DR contended that it is not clear as to whether the Assessing Officer has actually applied his mind on this issue or not. However, the fact would remain that the Assessing Officer has called for the details of all loans given by the assessee and the assessee has also furnished those details. 12. We noticed that the Hon'ble High Courts have expressed the view that it is imperative on the part of the learned PCIT to examine record in order to find out as to whether the question raised by him on the issue of non-charging of interest is sustainable in the facts and circumstances of the case. It is further stated that, after examining the record, the learned PCIT has come to the conclusion that the assessment order passed erroneous and prejudicial to the interest of revenue. 13. In the instant case, a cursory glance of the Balance sheet as on 31.3.2017 of the assessee would show that the assessee is having own funds, i.e., Capital balance of Rs. 75.74 crores as on 31.3.2017, whereas interest free loan given by the assessee was to the tune of the Rs. 16.42 crores only. Since own funds available with the assessee far exceeds amount of interest free ..... X X X X Extracts X X X X X X X X Extracts X X X X
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