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TMI Blog2023 (12) TMI 394X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. PCIT in passing the order u/sec. 263 of the Income Tax Act, 1961 (for short, 'the Act'). 3. The relevant facts of the case are that assessee is a partnership firm engaged in the business of real-estate development and construction, filed its return of income declaring total income of Rs. 5,81,64,270/-. The assessment was completed u/sec. 143(3) by accepting the returned income. During the course of 263 proceedings, the PCIT observed that assessee had claimed expenses of Rs. 37,665/- on account of interest on TDS. However, the assessee has not added back the same while computing its total income nor the Assessing Officer (AO) has disallowed the same in the assessment order. Since, the interest on TDS is not allowable as deduction u/sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any enquiry with regard to taxability of deemed rental income on this issue. Hence, deemed rental income of the assessee firm to the tune of Rs. 97.50 lakhs was not at all considered during the assessment proceedings for the year under consideration. It was further held by the PCIT, after considering the detailed submissions of the assessee as well as assessment order that in fact the AO has not at all carried out verification/enquiry in the course of the assessment proceedings. The AO has failed to call for the relevant details in respect of disallowance of interest paid on TDS and applicability of deemed rent on unsold flats. There is a categorical mention in the order of the PCIT that as per the record, it is obvious that no examination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the A.Y. 2020-21, if there is unsold stock of the C, D & E wing for the year end 31/03/2020. Therefore, in the relevant year, there is no deemed rental income on unsold stock and the same would be applicable on from A.Y. 2020-21. The second limb of argument of ld.AR that the PCIT has not arrived at any satisfaction regarding the arguments put-forth before him during the proceedings u/sec. 263, and hence, without such satisfaction, revisionary jurisdiction cannot be invoked. 5. We have considered the submissions of the parties, assessment order as well as order passed u/sec. 263 of the Act. 5.1 That, upon examining the facts and circumstances involved in this case as enshrined in the aforesaid paras, we agree with the order of the PCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment was just erroneous and not prejudicial to the interest of the Revenue or just prejudicial to the interest of the Revenue but not erroneous. This interplay application of the provision becomes irrelevant when the said deeming provision is applied. The case-laws relied on by the ld.AR are substantially different on facts and are not applicable to the facts of the present case. We must also mention here that if the AO had conducted enquiry regarding the disputed issues, then the argument of the ld.AR would have carried some weight as to whether the assessment order was just erroneous and not prejudicial to the interest of the Revenue. In such scenario also, the issue of satisfaction by the PCIT would have been relevant, but in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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