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TMI Blog2018 (12) TMI 1491X X X X Extracts X X X X X X X X Extracts X X X X ..... see are reproduced as under: 1. That the order of the learned Commissioner of Income Tax (Central), Gurgaon is bad both on law and facts. 2. That the learned Commissioner of Income Tax (Central), Gurgaon erred in arbitrarily initiating the impugned proceedings under section 263 of the Income Tax Act, 196. 3. That the learned Commissioner of Income Tax (Central), Gurgaon had no jurisdiction, whatsoever, to initiate the impugned proceedings under section 263 of the Act and/ or to passed the impugned order 12/03/2015. 4. That without prejudice to the above, the learned Commissioner of Income Tax failed to appreciate that the conditions precedent for initiation of the impugned proceedings u/s 263 of the Act, were neither present nor sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 263 of the Act on the ground that the CIT was not empowered to revise the assessment order which was passed by the Assessing Officer with prior approval of the Additional Commissioner of Income Tax. This contention of the assessee was rejected by the Ld. CIT and he found that the Assessing Officer did not carry out enquiry on the two issues. The first issue being of disallowance of interest proportionate to the borrowed fund not utilized for the purpose of business. The second issue, being not examination of various conditions of section 10B of the Act while allowing the said deduction. The Ld. CIT after taking into consideration submission of the assessee, passed the impugned order under section 263 of the Act setting aside the order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla, 380 ITR 573, in the assessment completed under section 153A of the Act, the jurisdiction of the Assessing Officer was limited to make addition in respect of incriminating materials found only. He further submitted that Ld. CIT in his impugned order has observed that the Assessing Officer has not made any enquiry on two issues. The first issue being disallowance of proportionate interest paid in relation to borrowed funds for funds diverted for non-business purposes. The second issue relates to deduction under section 10B of the Act. The Ld. counsel pointed out that no incriminating material or document was found during the course of the search in relation to the above tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Delhi High Court in the case of Kabul Chawla (supra) has not attained finality as the Revenue is in appeal against the said order and, therefore, it was not fair to apply above decision while invoking revisionary powers by the CIT. She also pointed out that there are number of decisions of the other high courts wherein the Assessing Officer is empowered to assess the total income including undisclosed income and, therefore, the CIT was justified in holding the assessment order passed by the Assessing Officer as erroneous insofar as prejudicial to the interest of the Revenue. 7. On the issue of allegation of order being beyond the limitation period, the Ld. DR submitted that arguments of the Ld. counsel are on the wrong premise that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accordingly we reject the same. 9. The another issue is whether the CIT could invoke the provisions of 263 of the Act in view of the decision of the jurisdictional High Court in the case of Kabul Chawla (supra) and thus whether any further verification/enquiry was required to be made by the Assessing Officer in a case where no incriminating material was found during the course of search. On this issue, we do not agree with the arguments made by the Ld. DR. First of all, as far as legal grounds are concerned, the assessee can make any arguments in support thereof and there is no bar to make the argument supporting the ground. Secondly, the Delhi benches of the Tribunal are within the jurisdiction of the Hon'ble Delhi High Court and bound ..... X X X X Extracts X X X X X X X X Extracts X X X X
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