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TMI Blog2017 (8) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the very foundation of the Commissioner to embark on the exercise of invoking section 263 becomes susceptible to error. Admittedly, the Commissioner has proceeded to show cause the assessee on the ground that the expenses relate to ‘Income of house property’ and, ostensibly, such ground is not compliant with the fact-situation. Also in the show cause notice issued to the assessee by the Commissioner the charge posed against the assessee was that the expenditure of ₹ 2,23,92,358/- related to income from house property and thus, should not have been allowed as a deduction u/s 57 of the Act and, thus, it was a case of excess deduction of expenses. Pertinently, after going through the submissions furnished by the assessee, the Commissioner has changed the course while concluding that the assessment order was erroneous. In his order, Commissioner concludes that the assessment order is erroneous and prejudicial for the reason that the Assessing Officer had not gone into the whole aspect of the case and not analysed the things properly and, moreover, not brought on record all the relevant facts and documents to arrive at a proper conclusion on the issue of allowability of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or The Appellant : Shri Arvind Sonde For The Respondent : Shri N P Singh ORDER Per G S Pannu, Accountant Member This appeal by the assessee is directed against the order of the CIT(Exemption), Mumbai (in short the Commissioner ), dated 28.03.2016, u/s. 263 of the Income Tax Act, 1961 (in short the Act ) for A.Y. 2011-12, whereby the assessment order passed by the Assessing Officer, dated 29.03.2014 (wrongly mentioned as 11.03.2013 by the CIT(E)), u/s. 143(3) has been held to be erroneous in so far as it is prejudicial to the interests of the Revenue on account of excess deduction of expenses amounting to ₹ 2,23,92,358/-. 2. In this context, the relevant facts can be summarized as follows. The assessee is a registered trust and engaged in the promotion of cricket. For the year under consideration, it filed return of income declaring income at nil after claiming exemption u/s. 11 12 of the Act. The Assessing Officer made assessment u/s. 143(3) of the Act determining the total income at ₹ 7,05,47,380/- after denying exemptions u/s. 11 12 of the Act. The Commissioner examined the record of proceedings and show caused the assessee as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the Income from business , whereas the same has been allowed by the Assessing Officer while computing income under the head Income from other sources , that in any case, this error would not impact the determination of total income and, therefore, the assessment order could not be considered to be prejudicial to the interests of the Revenue within the meaning of section 263 of the Act. However, the Commissioner was not satisfied with the explanation furnished by the assessee though it is noticeable that none of the factual assertions made by the assessee have been controverted by him. The Commissioner has considered the assessment order dated 29.03.2014 (supra), as erroneous in so far as prejudicial to the interests of the Revenue and directed the Assessing Officer to examine the claim of the assessee with respect to the expenditure of ₹ 2,23,92,358/- afresh after making necessary inquiries. Against such a decision of the Commissioner, the assessee is in further appeal before us. 4. Before us, the learned representative for the assessee vehemently pointed out that the Commissioner erred on facts and in law in assuming the jurisdiction u/s. 263 of the Act, in as much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself shows that the power of the Commissioner is contingent on fulfilment of two conditions prescribed therein, namely, that the order is erroneous and that it is prejudicial to the interests of the Revenue. The Hon ble Supreme Court in the case of Malabar Industrial Co. Ltd. [243 ITR 83] held that the two conditions have to be cumulatively satisfied. In this context, the Commissioner notes in para 6 of his order that the two conditions have been satisfied in as much as the Assessing Officer allowed the claim of deduction of expenses u/s. 57 of the Act whereas these expenses were related to Income from house property and deduction of 30% was already allowed u/s. 24(a) of the Act. Factually speaking, the assessee has joined issues with the Commissioner on this aspect by pointing out that the expenses in question do not relate to the property whose income has been assessed under the head Income from house property . In order to appreciate the said plea of the assessee, we may briefly touch upon the relevant facts. Notably, in the assessment order, the Assessing Officer has determined the total income at ₹ 7,05,47,380/- under three heads of income, viz. Income from house pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nual Accounts which are reflected at page 26 of the Paper Book, and the same has indeed been assessed by the AO under the head Income from business ; it was pointed out that such an infirmity in the assessment did not affect the total income and, therefore, the assessee made no grievance on this aspect. It has also been stated, that even in the earlier assessment years 2009-10 and 2010-11 in the assessments finalized u/s. 143(3) of the Act such expenses were allowed u/s. 57 of the Act. Be that as it may, in our considered opinion, the aforesaid does not really turn much for our purpose in as much as the point to be addressed by us is whether the expense of ₹ 2,23,92,358/- related to the properties whose income has been assessee under the head Income from house property or not. At the time of hearing, the learned representative for the assessee has also referred to the schedule of fixed assets, which brings out the various properties, inter-alia, including the stadium building, Wankhede stadium, cricket ground and other properties including the properties from which the income earned has been assessed under the head Income from house property . Considering the factual matr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,92,358/-. At the time of hearing, the learned representative assailed such conclusion of the Commissioner by referring to the content of the assessment proceedings. Our attention was invited to an annexure to notice u/s. 142(1) of the Act, copy of which is placed at page 3 of the Paper Book, which contains queries raised by the Assessing Officer, which, inter alia, include calling for details along with supporting evidences in respect of expenditure incurred on the property. Reference was also invited to the reply furnished by the assessee, copies of which have also been placed on record. A tabulation has also been filed showing that similar claim was allowed in assessment years 2009-10 and 2010-11 also, in assessments made u/s. 143(3) of the Act. In our considered opinion, whether or not an inquiry or verification of an aspect has been carried out is matter of factual appreciation and in the present case, it is quite evident that the Assessing Officer has called for the relevant material. In fact, the manner in which the Assessing Officer has drawn up the total income in para 6 of the assessment order also reflects that he has considered the matter appropriately. If one looks at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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