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TMI Blog2019 (7) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax, under section 263 of the Act. The assessee`s main grievance is that LdPr.CIT has not assumed a valid jurisdiction under section 263 of the Act to revise the assessment completed under section 143(3)/153A of the Act, dated 30.03.2015. 3. Brief facts qua the issue are that a search and survey operation was conducted on Bhutoria Group on 20th December, 2012 and subsequent dates and search operation was also conducted at the business premises of the assessee.Theassessee filed return of income for the Assessment year 2013-2014 on 01.10.2013, declaring total income of Rs. 11,87,23,300/-. Thereafter, the assessee`scase was selected for scrutiny u/s 143(2) of the Act and assessment was completed under section 143(3)r.w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. Therefore, Pr CIT noted that lack of enquiry, without application of mind, allowing the claim of the assessee in contravention to section 14A of the IT Act read with Rule 8D of the IT Rules, had rendered the impugned assessment order dated 30.03.2015, in the case of the assessee for the A.Y. 2013-14, erroneous in so far as it is prejudicial to the interest of the Revenue. Considering the above facts, notice under section 263 dated 22.11.2016 was issued to the assessee. 4. In response, the assessee submitted before the Pr CIT that as per provision of section 14A , the calculation under rule 8D is sought to be made only where the Assessing Officer is not satisfied about the disallowance made by the assesseew.r.t. Sec. 14A is the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld PCIT, under section 263 of the Act, the assessee is in appeal before us. 6. The assessee company has challenged in the first place, the very usurpation of jurisdiction by ld. Principal CIT to invoke his revisional powers enjoyed u/s 263 of the Act. Therefore, first we have to see whether the requisite jurisdiction necessary to assume revisional jurisdiction is there existing before the Pr. CIT to exercise his power. For that, we have to examine as to whether in the first place the order of the Assessing Officer found fault by the Principal CIT is erroneous as well as prejudicial to the interest of the Revenue. For that, let us take the guidance of judicial precedence laid down by the Hon'ble Apex Court in Malabar Industries Ltd. vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue "unless the view taken by the Assessing Officer is unsustainable in law". 7.Taking note of the aforesaid dictum of law laid down by the Hon'ble Apex Court, let us examine whether the order passed by the Assessing Officer u/s 153A/143(3) dated 30.03.2015 is erroneous as well as prejudicial to the interest of the revenue. We note that so far as the disallowance under Rule 8D(2) (i) is concerned, as it relates to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of Revenue. Coming to the third limb, that is, so far Rule 8D (2) (iii) is concerned, we note that the Co-ordinate Bench of ITAT Kolkata in the case of REI Agro Ltd. reported in 144 ITD 141 has held that it is only the investment which yields dividend during the previous year that has to be considered while adopting the average value of investment for the purpose of Rule 8D(2)(iii). The aforesaid view of the Tribunal has since been affirmed by the Hon'ble Calcutta High Court as correct in G.A. No. 3581 of 2013 in the appeal against the order of the Tribunal in the case of REI Agro Ltd (supra). Therefore, assessing officer is supposed to take dividend bearing investments for the purpose of disallowance under Rule 8D(2) (iii) of the Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
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