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TMI Blog2020 (1) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.03.2019 and restore the assessment framed by the A.O Sec. 143(3) r.w.s 144C(13), dated 24.02.2017. As we have quashed the order passed by the Pr. CIT under Sec. 263 of the Act, dated 28.03.2019, therefore, we refrain from adverting to the other contentions advanced by the ld. A.R on the basis of which the validity of the impugned order has been assailed before us. Appeal filed by the assessee is allowed - ITA No.2847/Mum/2019 (Assessment Year: 2015-16) - - - Dated:- 8-1-2020 - Shri Pramod Kumar, Vice President And Shri Ravish Sood, Judicial Member Appellant by: Shri Kiri t Kamdar, A.R Respondent by: Shri R. Manjunatha Swamy, CIT D.R ORDER PER RAVISH SOOD, JM The captioned appeal filed by the assessee is directed against the order passed by the Principal Commissioner of Income Tax-2, Mumbai (for short Pr.CIT ) under Sec. 263 of the Income Tax Act, 1961 (for short Act ) dated 28.03.2019 for A.Y 2012-13. The assessee has assailed the impugned order on the following grounds of appeal before us:- Sr. No. Ground ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the Assessment Order without enquiry and examination is manifestly perverse and unsustainable, also for the reason that the ld. A.O had allowed the netting off of interest after consideration of the Assessee s detailed submission made vide the Assessee s letter dated 2nd December, 2015 (v) In any event, since a regular assessment had been made under Section 143(3) and that, too, in pursuance of the directions of the DRP, a presumption arises that the assessment order has been made upon application of mind {CIT Vs. Honda Siel Power Products Ltd. [2011] 333 ITR 547 (Del)}. Accordingly, the ld. A.O having, after application of mind, taken one of two views available to him, his assessment order cannot be said to be erroneous and much less prejudicial to the interests of the revenue within the meaning of Sec.263, and the Commissioner s purported revision of that order under Sec.263 is without jurisdiction. (vi) The ld. PCIT erred in following the CIT(A) s Order in the case of Tata Sons, in preference to the following 5 decisions of the jurisdictional Bombay High Court and the Jurisdictional Mumbai Bench of the Appellate Tribunal, which decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal. (iii) He erred in holding that the interest charged under income tax Act assumes the character of tax , which determination flies in the face of the following judicial precedents which were binding on him: (a) Harshad Shantial Mehta V. Custodian Others [1998] 231 ITR 871 (SC) (b) CIT Vs. P.S. Hathiramani [1994] 207 ITR 483 (Bom) (c) CIT v. Oryx Finance and Investment Pvt. Ltd. [2017] 395 ITR 745 (Bom) ₹ 41,70,51,091 (tax Effect ₹ 13,53,12,226) 2. Briefly stated, the assessee company which is engaged in the business of manufacturing of iron and steel bearings, ferro alloys, excavating minerals and sale of power etc. had e-filed its return of income on 29.11.2012, declaring a total income of ₹ 9598,20,66,309/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the assessee had on 31.03.2016 entered into an Advance Pricing Agreement (for short APA ) with the CBDT in terms of Sec. 92CC of the Act. As the APA had a bearing on the year under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest paid against the interest received on income tax refund had rendered his order passed under Sec. 143(3) r.w.s 144C(13), dated 24.02.2017 as erroneous insofar it was prejudicial to the interest of the revenue. Also, the Pr. CIT did not find favour with the assesses claim that the assessment order passed by the A.O under Sec. 143(3) r.w.s 144C(13), dated 24.02.2017, having been passed pursuant to the directions of the DRP would fall beyond the realm of his revisional jurisdiction under Sec. 263 of the Act. Accordingly, on the basis of his aforesaid observations, the Pr. CIT in exercise of the powers vested with him under Sec. 263, directed the A.O to re-compute the income of the assessee after disallowing the aforesaid claim of deduction of interest paid u/ss. 234B and 234C of ₹ 41,70,51,091/-. 4. Aggrieved, the assessee had assailed before us the order passed by the Pr. CIT under Sec. 263 of the Act. The ld. Authorised representative (for shot A.R ) for the assessee took us through the facts of the case. The ld. A.R took us through the relevant pages of the assesses Paper book (for short APB ) which revealed the basis for arriving at the net incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute the income of the assessee after disallowing the aforesaid claim of deduction. 6. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. As is discernible from the orders of the lower authorities, the assessee company after netting off the interest received on income tax refund of ₹ 44,24,14,839/- against the interest paid U/ss. 234B and 234C of ₹ 41,7,51,091/-, had offered the balance amount of interest on income tax refund of ₹ 2,53,63,748/- as its income from Other sources . The A.O vide his assessment order passed under Sec. 143(3) r.w.s 144C(13), dated 24.02.2017, had allowed the aforesaid claim of netting off the interest received on income-tax refund against the interest paid by the assessee U/ss. 234B and 234C. Observing, that the aforesaid claim of deduction/netting of the interest paid was not as per the provisions of the Act, the Pr. CIT was of the view that the failure on the part of the A.O to disallow the said claim of deduction had rendered the assessment framed by him vide h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenditure and this should have been allowed. The Assessee has received the interest of ₹ 1,07,57,930/-. It was submitted that the amount of interest paid by the Assessee should have been allowed to be set off against the interest deposited with the Department and taxed in the hands of the Assessee. The argument was that the interest paid to and received from is the same party i.e. Government of India and therefore, both transactions should be taken together. Apart from that, we find that the aforesaid issue is also squarely covered by the orders of the coordinate benches of the Tribunal viz. (ii).Superplaza Mercantile Co. P. Ltd. Vs. ACIT [ITA 2100/Mum /2012] (Mum); and (iii). Credit Agricole Corporate Investment Bank Vs. ADIT [ITA 724/Mum /2011](Mum). In fact, we find that the aforesaid judgment of the Hon ble High Court of jurisdiction and also the above mentioned orders of the coordinate benches of the Tribunal were available at the time when the A.O had framed the assessment, vide his order passed under Sec. 143(3) r.w.s 144C(13), dated 24.02.2017. Also, a similar view had been taken by the jurisdictional tribunal in its subsequent orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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