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TMI Blog2023 (11) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... and therefore, order cannot be revised on that count . In absence of any opportunity provided by the Ld. PCIT on the second issue, the assessment order cannot be revised on the second issue also therefore, on both these counts, order of the Ld. PCIT cannot be sustained. Accordingly, we quash the order passed u/s 263 of the Act by the Ld. PCIT. Assessee appeal allowed. - SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND MS. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) For the Appellant : Mr. Hariom Tulsiyan For the Respondent : Mr. Ankush Kapoor, CIT-DR ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 08.03.2023 passed by the Ld. Principal Commissioner of Income-tax-5, Mumbai (in short the Ld. PCIT ) for assessment year 2018-19, raising following grounds: 1. On the facts of laws and in the circumstances of the case, the Ld. Pr. CIT erred in passing the order u/s 263 of the Income Tax Act, 1961 as the order passed u/s 143(3) by the Ld. A.O. was neither erroneous nor prejudicial to the interests of the revenue as in the assessment order, the Ld. A.O. has already disallowed the expenditure of Rs 73,54,549/- claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2 Subsequently, the Ld. PCIT called for the assessment record and after examination observed that assessee has shown long term borrowing of Rs. 58,12,53,048/- and also shown loans given to related and other parties amounting to Rs. 80,87,69,177/- but no interest income from said loans and advances was shown as against the interest expenses of Rs. 73,18,356/- claimed in the profit and loss account. According to the Ld. PCIT said interest expenses of Rs. 73,18,356/- was required to be disallowed as no interest income was offered by the assessee against loans and advances given. Accordingly, the Ld. PCIT issued notice u/s 263 of the Act on 04.01.2023 proposing as why the assessment order passed u/s 143(3) of the Act by the Assessing Officer not be held as erroneous in so far as prejudicial to the interest of the revenue within the meaning of section 263 of the Act. The assessee responded that entire interest amounting to Rs. 73,18,356/- stands disallowed in total expenses of Rs. 73,54,549/- disallowed by the Assessing Officer in the assessment order u/s 143(3) of the Act and therefore, no separate disallowance on this account was required. The Ld. PCIT however rejected the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perused the relevant material on record. Before us, the Ld. Counsel of the assessee has submitted that as far as first issue of disallowance of interest amounting to Rs. 73,18,356/- is concerned, the Assessing Officer has already disallowed the entire expenses claimed in the profit and loss account amounting to Rs. 73,54,549/- which include interest amounting to Rs. 73,18,356/- and therefore, no further disallowance could be made in the case of the assessee. Thus, order of the Assessing Officer is not prejudicial to the interest of the revenue to this extent. As regard to the second issue for proposing revision u/s 263 of the Act, the Ld. Counsel of the assessee submitted that for examining genuineness and creditworthiness of the borrowed fund, no show cause notice or any opportunity has been granted by the Ld. PCIT and therefore revision order passed on issue without providing due opportunity to the assessee is invalid. The Ld. Counsel of the assessee in support of claim relied on the decision of the Hon ble Supreme Court in the case of CIT v. Amitabh Bachchan [2016] 69 taxmann.com 170 (SC). 4.1 The Ld. DR on the other hand submitted that there is no requirement of issuing spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation in support of the issues involved (as mentioned below). If you wish that the Revision proceeding be concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your submission from the e-filing portal using the link: incometaxindiaefiling.gov.in Sub: Show-cause Notice under section 263 of the Income-tax Act, 1961 in your case for A.Y. 2018-19 reg. In this case the assessee has filed return of income on 30.10.2018 declaring to total income of Rs. (-) 73,54,549/-. The case was selected for scrutiny under CASS. The assessment was completed under section 143(3) r.w.s. 143(3A) 143(3B) of the Income Tax Act dated 05.03.2021 assessing income at Rs. Nil. 2. On perusal of the assessment records, it is observed that, the assessee has shown revenue from operation as Nil and claimed expenses of Rs. 73,54,549/-which was accepted and allowed by the AO. It is seen from the Balance Sheet that the assessee had shown total Long term borrowings of Rs. 58,12,53,036/ and shown loans to related and other parties amounting to Rs. 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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