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TMI Blog2017 (5) TMI 1803X X X X Extracts X X X X X X X X Extracts X X X X ..... t disallowance by filing an appeal which is still pending as on date. From the records, it is also reflected that the AO has examined all the aspects including source and utilization of funds for land transaction and in this respect, the AO had issued summons u/s 133(6) of I.T. Act to Americorp which was duly responded with all details. Therefore, in the light of above facts and circumstances, it cannot be concluded by Ld. Pr.CIT that no inquiry was done or enquiry done was inadequate. However as per the facts of the present case, it is a case of detailed inquiry by partly disallowing and partly allowing the same. It is a settled law that the power conferred u/s 263 of the I.T. Act, upon the Commissioner cannot be invoked for reactivating s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer to disallow interest expenditure claimed by the Appellant under section 36(1)(iii) of the Act amounting to Rs. 74,08,219/- and further erred in directing to capitalise the same as work-in-progress in respect of land at Pali (Raj). 4. The learned PCIT erred in placing reliance on proviso to section 36(1)(iii) of the Act for aforesaid direction, which is not applicable to the facts of the Appellant and further misconstrued capitalisation of other expenses for giving aforesaid direction. The Appellant craves leave to add, alter and/or amend any of the above grounds of appeal with the leave of the Hon'ble Tribunal. The Appellant, therefore, prays for following relief's: (a) The Hon'ble Tribunal be pleased to hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest of the revenue. Ld. AR further submitted that the Ld. PCIT erred in holding that there has been inadequate enquiry, on allowability of interest under section 36(1)(iii) of the Act, falling within category of "no enquiry" and hence the order is erroneous and prejudicial to the interest of the revenue . The Ld. PCIT failed to appreciate that there has been complete application of mind by AO while conducting detailed enquiry in the course of the regular assessment proceedings and the view by the Assessing Officer was supported by the decision of jurisdictional High Court. 7. On the other hand Ld. DR appearing on behalf of the revenue relied upon the orders passed by the revenue authorities. 8. We have heard the counsel for bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased a land at village Pali for a consideration of Rs. 33.80 Crore. The said land was purchased from M/s Varun Industries and sold out by the assessee to Americorp Business Services P. Ltd (Americorp) and since the deal between the assessee and Americorp could not materilised, therefore the amount received from the said company ie. Americrop Business Services Pvt. Ltd was returned after terminating the MOU dated 12.04.12 entered between the parties and the said refund was made by taking by the assessee loan from Indiabull. Ld. AR further submitted that allowability of interest u/s 36(1) (iii) and 14A was exhaustively examined in the course of regular assessment proceedings including issue of capitalization and revenue expenditure and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) (d) CIT Vs Fine Jewellery55 TM.Com 514 (Born) (e) Narayan Rane Vs ITO 70 TM.Com 227 (Mum) (f) CIT Vs Gera Developments 71 TM.Com 65 (Born) (g) Harihar Housing Agency 45 CCH 541 (Nagpur) (h) Vodafone Essar South ltd. 141 TTJ 84 (Del) After hearing the arguments of both the parties at length and after perusing the material place on record, we find that Ld. Pr.CIT has revised the order of assement u/s 143(3) of I.T Act on the ground that assessee company is engaged in the business of developing and maintaining industrial and commercial infrastructure and during the relevant year, the assessee had earned dividend income and capital gain. In this respect our attention was drawn to page no. 119 of the paper book which is memorandum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowability of interest u/s 36(1) (iii) and 14A was exhaustively examined in the course of regular assessment proceedings including issue of capitalization and revenue expenditure and the AO after examining in detailed all the aspects disallowed part of interest expenditure u/s 14A and in computing capital gains and allowed balance expenditure u/s 36(1)(iii) of the Act. It is an undisputed fact that the assessee has already challenged the interest disallowance by filing an appeal which is still pending as on date. From the records, it is also reflected that the AO has examined all the aspects including source and utilization of funds for land transaction and in this respect, the AO had issued summons u/s 133(6) of I.T. Act to Americorp whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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