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TMI Blog2019 (3) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer is prima-facie erroneous and prejudicial to the interests of the Revenue as pointed out by the Pr.CIT. We find that the Assessing Officer simply accepted the explanation of the assessee and assessment is completed. Therefore, the Pr.CIT has examined all the facts and gave a finding that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. We fully agree with the order passed by the Pr.CIT. No reason to interfere with the order passed by the Pr.CIT. Thus, this appeal filed by the assessee is dismissed. - ITA No. 206/VIZ/2018 - - - Dated:- 22-3-2019 - Shri V. Durga Rao, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon ble Accountant Member For the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of partner, filed his return of income by declaring total income of ₹ 4,14,550/-. The case of the assessee was selected for scrutiny under CASS. Subsequently, after following due procedure assessment was completed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act ) on 28/01/2016 by assessing total income of ₹ 4,79,080/-. Subsequently, Pr.CIT by exercising powers conferred under section 263 has examined the issue and noticed that the assessee has paid interest of ₹ 6,59,791/- to the firm M/s. Sree Tirumala Steels, in which assessee was a partner. The overdrawals made were utilized for personal purpose and has claimed as his business expenditure against remuneration received from M/s. Sree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der under section 143(3) dated 28/01/2016 should not be revised as per the above discussion. In response to the show-cause notice issued by the Pr.CIT, the assessee has filed written submissions before the Pr.CIT on 31/03/2008 which are reproduced as under:- 1) The interest of ₹ 6,59,971/- claimed by me against my taxable income is justified, as it is allowable expenditure. The amounts overdrawn by me were utilized for productive purposes only and not for personal purpose. This issue was thoroughly examined by the then learned assessing officer and allowed the same correctly. 2) The chit Loss of ₹ 6.65,217/- claimed by me against my taxable Income was also allowable expenditure. This issue was also thoroughly examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against my taxable Income and it is not justified to propose to allow part of the said Chit Loss in your above cited show cause notice. In view of the above facts, circumstances, objections and explanations the impugned assessment order dated 28/01/2016 pass u/s. 143(3) of the I.T. Act in my own case is not at all erroneous in law and prejudicial to the interests of the revenue in any view of the matter. I therefore earnestly pray your honour to kindly drop your proposal to revise the impugned assessment order dated 28/01/2016 in my own case for the Asst. Year 2013-14 in the interests of justice. 4. The above detailed submission has been considered by the Pr.CIT and directed the Assessing Officer to redo the assessment after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee's claim that the entire bid amount of ₹ 36 lakhs was invested in the firm and thereby entitled to the claim of entire chit loss before allowing the same. Therefore, as the AO has allowed the assessee's claim of interest of ₹ 6,59,971/- and the chit loss of ₹ 6,65,217/- without making proper verifications/ enquiries regarding business nexus of the interest expenditure claimed and the extent of admissibility of chit loss the assessment order passed is rendered erroneous and prejudicial to the interest of revenue in the light of the Explanation-2 to Sec. 263 of the IT Act. 4.2 From the foregoing discussion and the reasons mentioned in the show cause notice issued it is manifestly clear that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. 7. On the other hand, ld. Departmental Representative has strongly supported the order passed by the Pr.CIT. 8. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. 9. The case in hand is on two counts. The Pr.CIT has exercised the powers under section 263 of the Act. The first count is with regard to interest payment of ₹ 6,59,971/-. The Assessing Officer without making enquiry simply allowed the claim of the assessee. The second count is with regard to chit loss of ₹ 6,65,217/-. In the assessment order, the Assessing Officer has accepted the claim of the assessee without making any enquiry. The Pr.CIT has specifically pointed out in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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