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TMI Blog2020 (9) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... give detailed reasoning in respect of each and every item of deduction and therefore, the question whether there has been an application of mind before allowing expenditure has to be examined from the record of the case. The question of lack of enquiry / inadequate enquiry is also required to be kept in mind and mere inadequacy of the enquiry would not confer jurisdiction on the CIT u/s 263. In the instant case, the Commissioner of Income Tax has held that the enquiry conducted by the Assessing Officer is inadequate and has assumed the revisional jurisdiction. The assessee has filed all the details before the AO who accepted the contention of the assessee that no expenditure is attributable to the exempt income during the relevant Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f filtration, equipment and spares and service. The assessee filed the return of income on 26.10.2007 for Assessment Year 2007-08 and declared a total income of ₹ 80,93,859/-. The Assessing Officer by an order dated 30.09.2009, without considering the expenditure which was not allowable under Section 14A of the Act proceeded to complete the assessment. The Commissioner of Income Tax, on examination of the records, found that the assessee had earned dividend income, which was exempt from tax. The Assessing Officer without examining the quantum of expenditure incurred by the assessee for earning the exempt income, proceeded to complete the assessment. It was further noticed that expenditure incurred for earning exempt income has to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as required under Section 14A of the Act. On the other hand, learned counsel for the assessee has supported the order passed by the Tribunal. 5. We have considered the submissions made by learned counsel for the parties and have perused the record. Before proceeding further, it is apposite to take note of the relevant extract of Section 263 of the Act, which reads as under: 263. Revision of orders prejudicial to revenue (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he, may, after giving the assessee an opportunity of being heard and after making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.', CIVIL APPEAL NO.2773/2020 DECIDED ON 17.07.2020. 8. In the backdrop of aforesaid well settled legal principles, we may examine the facts of the case in hand. In 'CIT VS. SUNBEAM AUTO LTD.', 332 ITR 167, it has been held by Delhi High Court that Assessing Officer in the order of assessment is not required to give detailed reasoning in respect of each and every item of deduction and therefore, the question whether there has been an application of mind before allowing expenditure has to be examined from the record of the case. The question of lack of enquiry / inadequate enquiry is also required to be kept in mind and mere inadequacy of the enquiry would not confer jurisdiction on the Commissioner of Income Tax under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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