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TMI Blog2013 (6) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... as right in setting aside the order of the Commissioner of Income Tax under Section 263 of the Act?" 2. The Commissioner of Income Tax revised the assessment by issuing notice under Section 263 of the Income Tax Act, 1961, on the ground that the assessment made, particularly with reference to the claim under Section 14A of the Income Tax Act, was erroneous and prejudicial to the interest of the Revenue. 3. It is seen that the assessee had borrowed secured loans by issue of redeemable non-convertible debentures to the tune of Rs.60 crores, but utilized the same towards investment in shares. The assessee claimed interest and finance charges to the extent of Rs.4.46 crores to pay interest on the debentures issued. Alleging that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed the proposal, thereby rejected the contention of the assessee. He reasoned out that in Form 3CD report, the assessee had stated that it is a Non-Banking Financial Company without accepting public deposits; there was no details on the receipt of the income relating to Engineering and financial services and the other source of income was interest income; the major item of expenditure debited in the account was interest and finance charges of Rs.4,46,10,370/-, for which no details were available either in the letter dated 12.7.2006 or in any of the schedules. Thus, the Commissioner held that when there were no materials to show as to whether the deposits made had any correlation to the debentures raised and the purpose not being clear f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made by the assessee. The Tribunal further pointed out that the assessee had borrowed secured loans by issue of redeemable non-convertible debentures to the tune of Rs.60 crores and there were no materials to hold that the assessee made any investment from the date of issue of redeemable non-convertible debentures between 17.3.2004 and 31.3.2004. In the circumstances, the assumption that it was utilized for non-tax investments was not correct. Hence, the Tribunal allowed the appeal filed by the assessee, thereby set aside the order of the Commissioner of Income Tax. Aggrieved by this, the Revenue has filed the present appeal. 7. Learned Standing Counsel appearing for the Revenue contended that the Tribunal committed serious error in over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the Commissioner of Income Tax in invoking Section 263 of the Income Tax Act, certainly, the asssessee is entitled to raise the question of jurisdiction. Assumption of revisional jurisdiction can be justified only on the basis of materials indicating the order of assessment as erroneous and prejudicial to the interest of the Revenue. Thus, in the absence of materials, the Commissioner of Income Tax nevertheless seeks to set aside the assessment for fresh enquiry. However, it is obvious that the exercise of power is only for enquiry and not on facts existing. 9. As far as the present case is concerned, the Tribunal, as a matter of fact, found that the redeemable non-convertible debentures were issued between 17.3.2004 and 31.3.2004 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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