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TMI Blog2017 (8) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... me at Rs. 16,44,453/-. Subsequently, the case was taken for revision u/s 263 by CIT Rajahmundry for incorrect set off of business loss of Rs. 10,11,822/- against the property income. For ready reference, we extract para 3 and 4 of notice issued u/s 263. "3. It is seen from the computation of total income and copies of profit & loss account annexed to the original return of income filed on 29.09.2009 that the assessee has received an amount of Rs. 40,41,399/- towards rent from godowns and arrived at 'income from house property' at Rs. 27,51,775/- after claiming deduction of Rs. 11,79,332/- u/s 24 and Rs. 1,10,292/- towards municipal taxes. Further, under the head 'income from business' it claimed loss of (-)Rs.10,11,822/- and the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee vide show cause notice since there was no business carried on by HUF. However, the assessee replied vide letter dated 20.10.2011 explaining that he was carrying on the business and the loss was due to the payment of interest to firms, in which the assessee was a partner and hence resulting loss was business loss which was claimed as set off against the other sources. The assessing officer after considering the reply dropped the proposed disallowance in the assessment order without making any addition. Therefore, the Ld. A.R submitted that assessing officer has considered the issue and taken a conscious decision not to make any addition, hence the action u/s 263 is not Services, Sri Ventaka Padmavathi Raw & Boiled Rice Mill etc... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coming from the notice, hence the Ld.CIT has no jurisdiction to direct the assessing officer to examine this issue. 5. On the other hand, the Ld.DR argued that though assessing officer has called for the details, with regard to the interest paid and the business loss, the assessing officer has not examined the issue with regard to the investments made in various companies and the disallowance required to be made u/s14A r.w. Rule 8D of Income Tax Rules. During the course of 263 proceedings, it has come to the notice of Ld.CIT that the assessee had made investments but did not make any disallowance towards the earning of Dividend Income as required by Rule 8D. The Ld.CIT has given an opportunity to the assessee and after considering the obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be upheld. 6. We have heard the rival submissions and perused the material on record. The assessee has rental income from godowns and the business loss. The assessing officer has completed the assessment u/s 143(3) by order dated 04.11.2011. The Ld.CIT has called for the record u/s 263 and issued the notice for revision for incorrect set off of business loss against the rental income. After verification of the material on record, the Ld.CIT has dropped the issue with regard to incorrect set off of business loss against the income from property which was examined by the assessing officer. During the course of revision proceedings, it has come to the notice of Ld.CIT that the assessee has made investments in shares and bonds and did not make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pressed by the decision of Hon'ble Madras High Court in Redington (India) Ltd. Vs. Addl.CIT, 77 taxman.com 257, Hon'ble Delhi High Court in Chem Investments Vs. CIT, 61 taxman.com 118 and the Hon'ble Gujarat High Court in Principal CIT Vs. Sintex Industries Ltd., 82 taxman.com 171 held that no disallowance is called for when assessee makes small investment from the surplus funds. There was no dividend income earned by the assessee and the case was taken for revision to disallow the business loss claimed against the property income which was examined by the AO and dropped the assessment proceedings and the Ld. CIT also satisfied that there is no case for revision on account of incorrect set off of business loss. With regard to the issue of d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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