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TMI Blog2025 (4) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. When the assessee was asked to submit the above specific details, the assessee in its reply submitted that there are no investments in listed, unlisted or any kind of shares made by the assessee during the year under consideration. The investments shown in the Balance Sheet are for purchase of property and are part of the business of the Company. No specific finance cost was incurred in relation to the said property. The investments are made in the earlier years and the same are assessed to tax, the relevant investments are highlighted in the bank statement. It was also submitted that AYs 2012-13 and 2014-15 are selected for regular scrutiny and relevant orders were passed u/s 143(3) of the Act, copy filed before the AO. It was also submitted that the provisions of section 14A are not applicable to the assessee as there is not investment made which yield exempt income. After considering the reply of the assessee, the AO completed the assessment by accepting the returned income. 4. On verification of the assessment records and audit scrutiny of the assessment order, Ld. PCIT, Delhi-7 observed that the AO has not verified the issues on the basis of which the limited scrutiny w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 263 can be invoked only if the assessment order is 'erroneous in so far as it is prejudicial to the interests of the revenue. * In the present case, Section 263 is not invocable at all as the assessment order is neither erroneous nor prejudicial to the interests of revenue. The same is discussed as below: a) The assessment order is not erroneous * The assessment order is not erroneous as none of the conditions specified in Explanation 2 to Section 263 are satisfied. * The assessment order has been passed after full verification of facts and application of mind by the Ld AO who has then taken a considered view regarding the allowability of interest expenses. * The case was selected for limited scrutiny specifically on the issues of increase in investments and deductibility of interest expenses. It had been mistakenly assumed by the AO that the investments related to unlisted equity shares. The assessee provided all details related to the investments and interest expenses. It was demonstrated with evidence that the investments were made in properties out of own funds and were related to the core business of the company. It was also demonstrated with evidence that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand TolamalGouti - [2019]111 taxmann.com 287 (SC) * Delhi Tribunal in the case of Braham Dev Gupta v. PCIT - {2017]88 taxmann.com 831 * Bombay High Court in the case of CIT v. NiravModi - {2016] 71 taxmann.com 272 (Bombay) [Revenue's SLP dismissed by SC] Further, in the case of CIT vs Gabriel India Limited [1993] 203 ITR 108, the Hon'ble Bombay HC held that the Ld CIT cannot invoke Section 263 and substitute his opinion for that of the AO. Where the AO has made sufficient enquiries, the assessee has replied to the same and the AO has taken a considered view, the order cannot be said to be erroneous for the purpose of Section 263 merely because the Ld CITIPCIT has a different opinion regarding the issue. Further, in the case of PCIT vs. V. Dhana Reddy & Co. - [2018] 100 taxmann.com 358 (SC), the Hon'ble Supreme Court has held that if AO had adopted a plausible view, revision uls 263 not sustainable. Similarly, in the case of CIT vs. International Society For Krishna Consciousness - [2020] 117 taxmann. com 799 (SC), the Karnataka High Court held that "where Assessing Officer after making due enquiries found assessee's claim for exemption of income as correc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn. * Further Hon'ble Delhi Bench in the case of Perfetti Van Melle India Pvt. Ltd., ITA No. 3046/Del/2016 for A.Y. 2009-10 order dated 11.01.2019 has taken a similar view by observing that where the Assessing Officer has not properly adjudicated the issue of claim u/s 80IC before allowing the same to the assessee company, the Pr. CIT has rightly invoked Section 263 of the Act and passed the order." 8. After considering the assessee response, Ld PCIT was of the view that there were no enquiries conducted by the AO on the issues under consideration, accordingly he invoked the explanation 2 of section 263 of the Act. He rejected the submissions of the assessee that the AO has made full verification before passing the order by observing that the AO has merely accepted the submissions of the assessee without making proper verification, the order is cryptic and non-speaking. By relying on the case law on the issue of cryptic order, further he rejected the argument of the assessee on the issue of not availed any loan for purchase of house property, assessee has sufficient funds for making investments and there is no direct next between interest bearing funds and investment in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the income earned by the assessee whether in the business or income from house property, the same are taxable in the hands of the assessee. All the investments and financial cost are incurred for the purpose of the business. He objected to the findings of the Ld PCIT that there was no verification, he submitted that the assessee has already submitted all the information during the assessment proceedings relating to the queries raised by the AO for the selection criteria and AO has taken one of the possible view and Ld PCIT cannot take another possible view and also the proceedings were initiated on the basis of non-verification, he submitted that Explanation 2 to section 263 cannot be invoked in case of improper verification. 12. On the other hand, Ld DR of the Revenue submitted that no doubt the case was selected for limited scrutiny, the AO has not asked for right details from the assessee, he brought to our notice page 66 of the paper book, he highlighted the point 10 and submitted that he has asked complete details of investment made/held/sold during the year. He supported the findings of the Ld. PCIT and he elaborately discussed the issue under consideration in his ord ..... 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