9911796707
TMI Blog2023 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... aimed under Section 57, higher turnover reported in Service Tax Return as compared to ITR . Accordingly, the very purpose of initiating assessment proceedings under limited scrutiny assessment was with a view to examine large deduction claimed u/s 57. Notice was issued by the AO on 04.03.2019 u/s 142(1) in which a specific query was put forth to the assessee regarding the claim of deduction u/s 57 asking for details of expenditure claimed u/s 57 against the head income from other sources . Assessee had filed reply in which he had given details of interest expenditure claimed by the assessee during the year under consideration. Therefore, it cannot be stated that there was any lack of enquiry or non-application of mind by the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor prejudicial to the interest of revenue and therefore, the provisions of Section 263 of the Act were not applicable to the case of the appellant. 3. The learned Pr. CIT has erred in law as well as on facts in setting aside the assessment order passed by the ld. A.O. u/s. 143(3) of the Act and directing de-novo assessment regarding verification with regard to the allowability of claim of deduction u/s. 57(iii) of the Act. The appellant craves leave to add, alter, amend, delete or withdraw one or more grounds of appeal. 3. The brief facts of the case are that the Pr. CIT observed that assessee had taken unsecured loans from various persons amounting to Rs. 6.59 crores out of which loan and advances were to the tune of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that during the course of assessment the Assessing Officer has simply accepted the submission of the assessee without going into the detailed verification and hence this amounted to a lack of enquiry by the Assessing Officer. Accordingly, the PCIT held that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue. 4. The assessee is in appeal before us against the aforesaid order passed by the PCIT. Before us, the Counsel for the assessee drew our attention to Page 4 5 of the Paper Book (Copy of Show Cause Notice U/s. 263 of the Act). The Counsel for the assessee pointed out that notice under Section 263 of the Act was issued on the ground that the Assessing Officer has not verifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Paper Book and submitted that by way of the reply dated 24.06.2019, the assessee had filed detailed reply in response to this query wherein the assessee had submitted that the assessee incurred interest expenditure of Rs. 85.40 lakhs on unsecured loans during the year under consideration. The said unsecured loans were utilized for the purpose of meeting with the day-to-day working capital requirements of the business and other business purposes. Therefore, the said interest expenditure is allowable under Section 36(1)(iii) of the Act. However, in the return of income the assessee has inadvertently claimed interest of Rs. 85.40 lakhs on unsecured loans under the head income from other sources under Section 57 of the Act. He further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that in the instant set of facts the order passed by the Ld. AO is not erroneous and prejudicial to the interest of Revenue. We observe that the assessment of the assessee was taken up under limited scrutiny under CASS for verifying the following CASS reasons large deduction claimed under Section 57, higher turnover reported in Service Tax Return as compared to ITR . Accordingly, the very purpose of initiating assessment proceedings under limited scrutiny assessment was with a view to examine large deduction claimed under Section 57 of the Act. We further observe that notice was issued by the Ld. AO on 04.03.2019 under Section 142(1) of the Act in which a specific query was put forth to the assessee regarding the claim of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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