MANJU RAKESH JAIN,MUMBAI vs. PCIT, MUMBAI-20, MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT () & SHRI SANDEEP SINGH KARHAIL () Assessment Year: 2020-21
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against revision order dated 19.03.2025 passed by the Ld. Principal Commissioner of Income-tax, Mumbai – 20 [in short ‘the Ld. PCIT’] for assessment year 2020-21, raising following grounds:
1) On the facts and under the circumstances of the case and in law, the Hon'ble PCIT has erred in initiating proceedings under section 263 of the Income Tax Act, 1961 since all the submissions already made during the proceedings of scrutiny assessment have been duly ve order under s doing so are the law.
2) On the fac law, the Hon'
143(3) r.w.s.
submissions opportunity of are wrong an 2. The brief facts o filed her return of in of ₹1,78,02,520/-, c
'House Property', 'Ca
The return was sel completed under Se
Income-tax Act, 196
08.09.2022, wherein income in toto.
2.1 Subsequently,
(hereinafter "Ld. PC
Section 263 of the According to the Ld.
by the assessee und expenditure was err without due inquiry loan on which inte property, and was the ITA erified by the Assessing Officer before section 143(3) of the Act and the reasons wrong and contrary to the facts and the cts and under the circumstances of the 'ble PCIT has erred in passing an order u
263 of the Act without properly con made by the assessee on being f being heard and the reasons assigned d contrary to the facts and the provision of the case are that the assessee ncome on 05.01.2021, declaring comprising income under the apital Gains' and 'Income from lected for scrutiny and the a ection 143(3) read with Sectio
61 (hereinafter referred to as n the Assessing Officer accepte the Principal Commissioner
CIT") invoked revisionary juri
Act after examining the asse
PCIT, the deduction of ₹1,69,18
der Section 57(iii) of the Act t roneously allowed by the As or verification. The Ld. PCIT ob erest was paid was secured en allegedly advanced to M/s. S
Manju Rakesh Jain
2
A No. 2280/MUM/2025
passing an assigned for e provision of case and in under section nsidering the granted an for doing so of the law.
e, an individual, g a total income heads 'Salary',
Other Sources'.
assessment was on 144B of the s "the Act") on ed the returned of Income Tax i iction under essment record.
8,439/- claimed towards interest sessing Officer, bserved that the against house
Sanyam Realtors
Pvt. Ltd., a compa director. The Ld. PCI to demonstrate any the income earned, a be erroneous and pre of Explanation 2 to conclusion, the Ld.
Malabar Industrial C other decisions of th proposition that lac
Assessing Officer ren interest of the Rev juri iction under Se reproduced as under “DECISION:
6 It is noticed to Rs.17.25 C
Overdraft fa hasgiven loa assessee's hu savings bank while Rs. 21
interest of Rs
Realtors Pvt.
expenses of 7,32,392/- to the loans we
HDFC agains those parties if the same is Act. In this c
Sanyam
Rea
ITA any wherein the assessee's h
IT was of the view that the asse nexus between the expenditur and accordingly, held the asses ejudicial to the interest of the R o Section 263 of the Act. In PCIT relied upon several deci
Co. Ltd. v. CIT [(2000) 243 ITR he High Courts and Tribunals, ck of enquiry or inadequate nders an order erroneous and p venue, thereby justifying the ection 263. The relevant finding
:
d that the assessee had taken loan amou
Crores from Bajaj Housing Finance and cility. It is also noted that the ass n to M/s Sanyam Realtors (P) Ltd wh usband is director. The assessee has rec k interest of Rs. 16,712/- from HDFC
116/- from Central Bank of India. F s. 1,69,16,310/- was received from Sa
. Ltd. The assessee has claimed in Rs. 1,61,86,047/- to Bajaj Finance an o HDFC Overdraft account. It is also note ere received from Bajaj Housing Financ st house property. Therefore, interests p can be claimed against house property in s allowable under the relevant provisions case, interest income has been received altors
Pvt.
Ltd.
and it has not Manju Rakesh Jain
3
A No. 2280/MUM/2025
husband was a essee had failed re incurred and ssment order to evenue in terms support of his isions including
R 83 (SC)], and to reiterate the enquiry by the rejudicial to the e invocation of of the ld PCIT is unting
HDFC sessee herein ceived
Bank
Further anyam nterest nd Rs.
d that e and aid to ncome of the d from been substantiated out or expen making or e deduction u/s noticed that examine the l perusal of the not made enq made to exam
In view of the AO is deemed the interests o
7. As per the chargeable un be computed for earning th no co- relation to another bank/financia in the records deducting th income.In thi
Explanation 2
applicable in Explanation 2
declared that shall be deem to the interes
Principal Com
(a) the orde verification w
(b) the order i into the claim;
(c) the order order, directio section 119; o
(d) the order decision whic the juri ictio the assessee
ITA d by the assessee that any expense wa ded fully and exclusively for the purpo earning such interest income and ther s. 57(iii) of the Act was not allowable. It i this case was selected under scruti large deduction claimed u/s. 57 of the A e assessment order, it is noted that the A quiries and verification which should have mine the deduction claimed u/s. 57 of th e above, the assessment order passed b d to be erroneous in so far as it is prejudi of the revenue.
e provisions of section 57 of the Act, in nder the head income from other sources after giving deductions to expenses inc he income. Thus in individual capacity th n between earning income on loans forw company and receiving loan from al institutions for any personal nature (no s available to specify the nature of loan he interest as expenditure for earnin is regard, it is noted that the provisio
2 to the Section 263 of the Act are squ this case. The said provisions are as und
2.-For the purposes of this section, it is h t an order passed by the Assessing O med to be erroneous in so far as it is preju sts of the revenue, if, in the opinion o mmissioner or Commissioner, - er is passed without making inquiri which should have been made; is passed allowing any relief without inq
; has not been made in accordance with on or instruction issued by the Board or has not been passed in accordance wit ch is prejudicial to the assessee, render onal High Court or Supreme Court in the c or any other. person.
Manju Rakesh Jain
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A No. 2280/MUM/2025
as laid ose of refore, is also iny to Act. On AO has e been he Act.
by the icial to ncome s shall curred here is warded m the othing n) and ng the ons of uarely der:
hereby
Officer udicial of the ies or quiring h any under th any red by case of 8. Further, th regard-
1. Deniel M
2396/2017)
No.2158/DEL
Hon'ble ITAT demonstrated neither enqui
Officer once t and in form assessment o to the interest
ITA he following decisions are relied upon i
Merchants Pvt. Ltd. vs. ITO (Appea dated 29.11.2017. In this case, H urt has dismissed SLPs in cases where A y proper inquiry while making the asses g the explanation of the assessee(s) insof are application money is concerned. On mmissioner of Income Tax had, after s er of the Assessing Officer, simply directe ficer to carry thorough and detailed inquir llarpur Industries Ltd. [2017] 85 taxman l Hon'ble Bombay High Court held that w fficer allowed claim of deduction under s out examining said claim with referen depreciation and investment allowanc in sections
32
and 32A respec r was justified in invoking revision ajdhani Power Ltd. Vs PCIT [2017
m 25 (Delhi)/[2017] 399 ITR 228 (Delhi) H ourt held that non- consideration of larger
93 crores as depreciation and considerat f it being Rs. 6.45 crore by Assessing O go into issue with respect to whole am r, that could be corrected under section r has power to consider all aspects matter of Assessing Officer's order, if were erroneous, despite assessee's appe other aspect.
L/2017) ITAT
T Delhi held that the Pr. CIT has a d in his impugned order that this issue ired into nor was verified by the Asse the information and the material in hard of CD was made available to him. H order is not only erroneous but also preju t of revenue
Manju Rakesh Jain
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A No. 2280/MUM/2025
in this al No.
Hon'ble
AO did sment far as n that setting ed the ry.
nn.com where section nce to ce as ctively.
under 7] 88
Hon'ble r claim tion of Officer, mount, n 263. which in his eal on (I.T.A.
amply e was essing d copy
Hence, udicial
Surya F No.2158/DEL Hon'ble ITAT adequate enq the name of provisions of assessment 6. Malabar In (SC)/[2000] 2 Hon'ble Supre had accepted assessee, in making any Commissione 7. Rajmandir (Calcutta)/[20 ITR 162 (Calc Where Hon'b assessee with raised a huge go in for inc avoid payme passed asses enquiry into received by treating asse interest of rev 8. Rajmand taxmann.com Hon'ble Supr Court's ruling authorised sh premium, exe opining that t justified 9. Swarup V 175 (Allahaba L/2017) ITAT Delhi T Delhi held that when AO fails to carr quiry about alleged accommodation entr f the assessee, the Pr. CIT rightly in f section 263 of the Act to reopen ndustrial Co. Ltd. Vs CIT [2000] 109 Taxm 243 ITR 83 (SC)/[2000] 159 CTR 1 (SC) W eme Court held that where Assessing O d entry in statement of account file absence of any supporting material w y enquiry, exercise of juri iction r under section 263(1) was justified Estates (P.) Ltd. Vs PCIT [70 taxmann.com 016] 240 Taxman 306 (Calcutta)/[2016 cutta)/[2016] 287 CTR 512] ble Calcutta High Court held that w h a small amount of authorised share ca e sum on account of premium and chose crease of authorised share capital mer ent of statutory fees and Assessing O ssment order without carrying out req increase of share capital including pre assessee, Commissioner was justifie ssment order as erroneous and prejudic venue dir Estates (P.) Ltd. Vs PCIT[2017 m 285 (SC)/[2017] 245 Taxman 127 (SC) reme Court has dismissed SLP against g that where assessee with a small amo hare capital, raised huge sum on accou ercise of revisionary powers by Commis this could be a case of money laundering Vegetable Products Vs CIT [1991] 54 Ta ad)/[1991] 187 ITR 412 (Allahabad)/[199 ahabad) Manju Rakesh Jain 6 A No. 2280/MUM/2025 (Ι.Τ.Α. ry out ries in nvoked n the man 66 Where Officer ed by without n by m 124 6] 386 where apital, not to rely to Officer quisite emium ed in cial to 7] 77 t High ount of unt of sioner g was axman 90] 90
Assessee rec excise duty a suspense acc claimed by on G in this rega amount did assessee's
Commissione assessment o and also pr assessee wa directed ITO t enquiries and 10. Lakshmi V
IT)
Hon'ble Madr not mandated revisional ord
11. CIT Vs A Taxman 221,
Hon'ble Supr require any grounds on tentatively be absence ther himself to ter any other iss exercise his facts, provide assessee to exercised revi
12. Shree Ma
(SC)/[1997] 1
Hon'ble Supr section 263(1
examination b order passed already come assessment
Commissione
ITA ceived certain amount by way of refu and claimed that he had placed this amo count as a large part of this amount ne G and a suit and also a writ petition fi ard were pending before Courts and, thus not constitute his income. ITO acc claim without making proper enq r acting under section 263, set order on ground that it was clearly erro rejudicial to revenue inasmuch as cla as accepted without proper enquiries to make fresh assessment after making p d recording a finding. Order upheld
Vilas Bank Vs JCIT (2018-TIOL-2284-HC ras High Court held that a show cause no d to be issued by CIT prior to passing der u/s 263
Amitabh Bachhan (69 taxmann.com 170
384 ITR 200, 286 CTR 113
reme Court held that Section 263 doe specific show cause notice detailing sp which revision of assessment ord eing proposed affecting initiation of exerc reof or to require commissioner to c rms of notice and foreclosing considerat ue or question of fact; Commissioner is f juri iction on consideration of all re ed an opportunity of hearing is afford contest facts on basis of which he isional juri iction anjunathesware Packing Products & Cam
T [1998] 96 Taxman 1 (SC)/[1998] 231 I
43 CTR 406 (SC) reme Court held that word 'record' us
) would mean records as it stands at ti by Commissioner but not as it stands at t d by Assessing Officer. Material which e on record though subsequently to mak could be taken into consideration r. Commissioner was justified in inv
Manju Rakesh Jain
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A No. 2280/MUM/2025
und of ount in t was led by s, this cepted uiries.
aside oneous aim of s and proper
-MAD- otice is of his
0, 240
Hon'ble Delhi found that the Officer to issu too in a case most of which of search, th afterward, it properly adju should have explanation d was a proper
Considering judicial pron passed by th to the interest Act. Hence, th to the AO for discussion ab and verificatio the assessee 3. Before us, the proper inquiry on the 57(3) of the Act wa therefore, Explanatio invoked by the Ld. paper book page 60, dated 29.06.2021, w respect of deduction Further, the Ld. Cou ITA on basis of valuation report submitted by o assessment order. Ashok Logani (11 taxmann.com 208, 347 ITR 22) i High Court held that when, on facts, i ere was no proper consideration by Asse ue at hand and he left many loose ends e where huge cash was found during s h was surrendered by giving statement a hough retracted and sought to be exp t was necessary for Assessing Offic udicate upon that issue and assessment at least reflected that he was satisfied disclosing source of cash found; and that and valid retraction. g the facts mentioned above and relying o ouncements, I am satisfied that the e AO is erroneous in so far as it is preju ts of the revenue in terms of Section 263 he assessment order is cancelled and set r making fresh assessment in the light bove. The AO shall make necessary in on and shall give opportunity of being he before passing necessary order.” Ld. Counsel for the assessee e issue of the claim of deduction as carried out by the Assessi on 2 below section 263 has b PCIT. The Ld. Counsel referre which is a copy of notice u/s 1 wherein the assessee was ask n under the head ‘income from unsel referred to Paper Book pa Manju Rakesh Jain 8 A No. 2280/MUM/2025 y DVO , 202 it was essing s, that search at time lained cer to t order d with t there on the order udicial of the -aside of the nquiry eard to submitted that n of interest u/s ing Officer and been incorrectly ed to assessee’s 43(2) of the Act ed to clarify in other sources’. ages 18 and 19, which is a copy of no Ld. Counsel referred No. 3. For ready refer “3. In the ret refer to the S Deductions u chargeable a Deductions (in Rs. 1,69,18,4 under section 3.a. Furnish 1,69,18,439/ 3.6. 3.b. Sub to the specific Further, plea 142(1) would 1961 which is Providing inco lead to drawi Please Note: F all the quest annexure ther 3.1 Thereafter, the L 24, which contained by the Assessing Off reply, the assessee p the head ‘income f claimed deduction u income and deductio Manju Rakesh Jain A.Y. 2020-21 ITA otice issued u/s 142(1) dated 1 to the queries raised in the an rence, said query is reproduced turn of income for the A.Y.2020-21 filed Schedule OS: Income from other source co under section 57:- (other than those rela at special rates under 2a, 2b & 2d) I. n case of other than family pension) you 439/-, Please provide the details of expen n 57, if any, along with documentary proof the bifurcation of the expenditure c - with evidences stantiate the allowability of expenditure c subsection of sec 57 with evidences. se note that failure to provide informat d attract penalty u/s 272A(1)(d) of the I s Rs.10,000/- for each such default or fai omplete information or not furnishing in ng of adverse inference on the issue. For better communication, please make tions; to do page numbering to your reof and to provide Index for the same.” Ld. Counsel referred to Paper B reply of the assessee in respect ficer vide notice dated 05.11.20 provided the details of the gros from other sources’ and deta /s 57 of the Act. The said deta n claimed are reproduced as un Manju Rakesh Jain 9 A No. 2280/MUM/2025 15.11.2011. The nnexure at serial as under: by you please olumn No.3. a(i) ating to income .e. Expenses / u have claimed nditure claimed f. claimed of Rs. e with reference tion asked u/s Income-tax Act, ilure. nformation may sure to answer reply letter & ” Book pages 21 to t of query raised 021. In the said s income under ail of deduction ails of the gross nder:
Details of Gross Income und
Particulars
Saving Bank Interest from HD
Saving Bank Interest from Ce
Interest Received on Loan adv
Realtors Private Limited
TOTAL
Manju Rakesh Jain
A.Y. 2020-21
Details of Deductions claim
Particulars
Interest paid to Bajaj Finance interest paid to HDFC Overdr
TOTAL
3.2 Thereafter, the account of the HDFC been received on 1
amount Rs.1,70,00,0
Realtors Pvt. Ltd. o
Counsel for the asse
Bajaj Housing Finan
Sanyam Realtors Pvt notice u/s 142(1) dat
Paper Book pages 3
asked specific justific
The relevant query ra
ITA der the head Income from Other Sources
Amount in Rs.
DFC Bank
16,712.00
entral Bank of India
2,116.00
vanced to Sanyam
1,69,16,310.00
1,69,35,138.00
med u/s. 57 of the Act
Amount in Rs.
e
1,61,86,047.00
raft A/cs
7,32,392.00
1,69,18,439.00
Ld. Counsel referred to the C Bank, wherein the loan of Rs.1
9.12.2018 from Bajaj Housin
000/- had been transferred t on 19.12.2018, i.e. Same day ssee submitted that the loan re nce Pvt. Ltd. was directly exp t. Ltd. Further, the Ld. Counsel ted 30.06.2022, a copy of which 5 to 37. In said query, the A cation for the claim of the deduc aised is reproduced as under:
Manju Rakesh Jain
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A No. 2280/MUM/2025
overdraft bank
16,59,000/- had ng Finance and o M/s Sanyam y, thus the Ld.
eceived from the panded to M/s l referred to the h is available on ssessing Officer ction of interest.
“1. In res
ITBA/AST/F/
08.03.2022 y stating that Rs.1,69,16,31
Private Limite are requested a. Furnish y amount of in Sanyam Real
2. Furnish fin to M/s Sanya
3.a. You have been given a Limited during
Furnish your of Rs.3,52,96
Realtors Priva
3.b. You have been received during the statement(s) received back the F.Y. 2019
3.c. Furnish
Private Limite the F.Y. 2019
3.d. Furnish
Sanyam Real
3.e. Kindly fu
Realtors Priva
4. As per y furnished de reproduced be Details of Bank
Sr. Mo.
Name of Ba
ITA sponse to the notice u/s 142
/142(1)/2021-
22/1040464233(1) you have uploaded your reply on 15
t the assessee has received int
10/- on Loan advanced to M/s Sanyam ed during the F.Y. 2019-20. In this conne d to provide the following:
your bank account statement(s) highlig nterest of Rs. 1,69,16,310/- received f ltors Private Limited during the F.Y. 2019- nancial year wise break-up of loan/adva am Realtors Private Limited.
e stated that an amount of Rs.3,52,96,9
as loan/advance to M/s Sanyam Realto g the F.Y. 2019-20. bank account statement(s) highlighting th
6,965/- given as loan/advance to M/s ate Limited during the F.Y. 2019- 20. e stated that an amount of Rs.7,20,32,9
d back from M/s Sanyam Realtors Priva
F.Y.
2019-20. Furnish your bank highlighting the amount of Rs.7,20
k from M/s Sanyam Realtors Private Limit
9-20. Form 16A provided by M/s Sanyam ed for the TDS deducted of Rs. 16,91,631
9-20. the copy of loan agreement made ltors Private Limited.
urnish the rate of interest paid by the M/
ate Limited to the assessee.
your reply uploaded on 22.11.2021 y etails of bank account statements elow:
k Accounts ank
Branch Details Type of Account Accoun
Manju Rakesh Jain
11
A No. 2280/MUM/2025
2(1) vide dated
5.03.2022
terest of m Realtors ection you ghting the from M/s
-20. ance given
965/- has ors Private he amount s Sanyam
900/- has ate Limited k account
0,32,900/- ted during m Realtors
1/- during with M/s s Sanyam you have which is nt No,
1
Central ban
2
HDFC Bank
3
HDFC Bank
4
HDFC Bank
5
Indusind B
You are reque the above acc
5. As per y furnished Loa limited where
Rakesh Brijla connection yo
Shri. Rakesh
6. You are he
& L of the ass
Further, pleas u/s 142(1) w tax Act, 1961
failure.
Providing inco may lead to d
Please Note:
answer all th letter & annex
3.3 The assessee fi which is available on 3.4 In view of the assessee submitted assessment order aft further referred to th
Officer wherein also ITA nk of India Juhu, Vile
Parle
Saving Account 118193
k
Vile Parle West Saving Account 102718
k
Vile Parle West Overdraft
502000
k
Vile Parle West Overdraft
502000
ank
Nariman Point Saving Account 002355
ested to furnish the bank account statem count(s) held by you during the F.Y. 2019- your reply uploaded on 22.11.2021 y an Sanction Letter from M/s Bajaj Housin re it is mentioned the co-borrowers as al Jain and (ii) Shri Akshay Rakesh Jai ou are requested to provide PAN and e-
Brijlal Jain and (ii) Shri Akshay Rakesh J ereby requested to furnish the Balance sh sessee for the F.Y.2017-18 and F.Y.2018- se note that failure to provide informati would attract penalty u/s 272A(1)(d) of th
1 which is Rs.10,000/- for each such omplete information or not furnishing in drawing of adverse inference on the issue
For better communication, please mak he questions; to do page numbering to y xure thereof and to provide Index for the filed detailed submission in re
Paper Book pages 40 and 41. above submissions, the Ld. C that the Assessing Officer h er thorough inquiry on the issu he assessment order passed by the Assessing Officer has men
Manju Rakesh Jain
12
A No. 2280/MUM/2025
32620
870000323
022439652
029134409
565624
ment(s) for -20. you have ng Finance s (i) Shri.
in. In this -mail of (i)
Jain.
heet and P
-19. ion asked he Income- default or nformation
.
ke sure to your reply e same.”
espect of query,
Counsel for the has passed the ue in dispute. He y the Assessing ntioned the fact and thorough inquir the assessee. For re
Officer is reproduced
“On verification interest incom interest income bank account m breakup of the Particulars
Saving Bank Interest f
Saving Bank Interest f
Interest Received on L
Private Limited
TOTAL
Assessee claim tax Act, 1961
reproduced from Particulars
Interest paid to Bajaj
Interest paid to HDFC
TOTAL
On perusal of t
Rs. 17.25 Cror and the same w loan given to M as under:
Copy of Form attached herew
No specific loa
M/s. Sayman R
The assessee h at rate of intere
ITA ry and thereafter accepted the eady reference said finding of as under:
n of the return filed it was found that assess me of Rs.1,69,35,138.00/- during the FY.
e was earned from M/s. Sanyam Realtors (P) maintained with HDFC Bank and Central Ban same is reproduced as under:
Am from HDFC Bank
16,7
from Central Bank of India
2,11
Loan advanced to Sanyam Realtors .
1,69
1,6
0
med the expense of Rs. 1,69,18,439/- u/s 57
for interest income earned. The breakup o m assessee reply.
Amoun j Finance
1,61,86,
C Overdraft A/cs
7,32,392
1,69,18
the submissions, it was seen that assessee a res from Bajaj Housing Financeand HDFC O was given to M/s Sanyam Realtors (P) Ltd.Th
M/s Sanyam Realtors (P) Ltds was furnished b
16A provided by M/s. Sayman Realtors Pri with in “Exhibit-D".
n agreement has been executed between the Realtors Private Limited and hence, not provid had given the loan to M/s. Sayman Realtors est of 10% p.a.
Manju Rakesh Jain
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A No. 2280/MUM/2025
submissions of f the Assessing see has earned
2019-20. The ) ltd and saving nk of India. The ount in Rs.
712.00
16.00
9,16,310.00
9,35,138.0
7 of the Income of the same is nt in Rs.
047.00
2.00
8,439.00
acquired loan of Overdraft facility he details of the by the assessee ivate Limited is e assessee and ded.
Private Limited
Assessee paid
Finance throug
Rs.7,32,392/- the loan amou rate for the lo is9.25%.
For the F.Y.2
Rs.1,69,16,310
Form 26AS, M u/s 194A of R assessee. The of Rs. 1,69,16,3
The assessee system of acco
'paid' or 'payab whether 'receiv are made on system recogni it's consequenc
On perusal of an amount of Rs.1,69,16,310
is found to be c
4. On the contrar submitted that the A the facts of the ca
According to him, th of the personal natu loan to the related p loan was sanctioned loan was not eligibl earned. He accordin might be upheld.
ITA d the interest of Rs. 1,61,86,047/- to the gh Indusind Bank account maintained by the debited by the HDFC Bank for the overdraft unt given to M/s Sanyam Realtors Private Lt oan availed by the assessee from Bajaj Ho
2019-20, the assessee has accrued inter
0/- from M/s. Sanyam Realtors (P) Ltd. On ve
M/s Sanyam Realtors Private Limited has de
Rs.16,91,631/-same was verified from Form assessee submitted the following for the acc
310/- follows mercantile system of accounting.
ounting. expenses are accounted on accrual ble'. Likewise, the income is also accounted o ved' or 'receivable'. It is a system in which acc the basis of amount having become due fo ises the fact that if a transaction or an even ces cannot be avoided and should be brought the above facts, it is seen that the assessee f Rs.1,69,18.439 in order to earn the inte
0/- Hence the deduction claimed by the asse correct and acceptable.”
ry, the Ld. Departmental Repr
Assessing Officer has not appli ase and no proper inquiry w e loan was granted for investm ure, whereas same had been ut party, which is against the pur d and therefore, the interest pa le to be allowed against the ngly prayed that the order of t
Manju Rakesh Jain
14
A No. 2280/MUM/2025
Bajaj Housing e assessee and facilitytowards td. The interest
Housing Finance rest income of erification in the educted the tax m 26AS of the crual of interest
In mercantile basis whether on accrual basis counting entries for receipt. This nt has occurred, into books.
e has expended erest income of essee u/s 57(iii) resentative (DR) ied his mind to was conducted.
ment in the asset tilized for giving rpose for which aid in respect of interest income the Ld. PCIT to 5. We have heard the relevant material the Assessing Officer interest of the Revenu had not carried out out in the facts
Explanation 2 to s assessment record specifically raised qu
Section 57(iii) of th detailed replies expla and the income earn itself that the Assess facts, examined th transactions, and wa been incurred wholly interest income off
Sources'. The princip
Section 263 by the L the factual record reflects that inquiri documents were fur having considered th of the assessee. Me drawn by the Assess
ITA rival submissions of the parti s on record. The Ld. PCIT has h r as erroneous in so far as pr ue mainly for the reason that A the inquiry, which ought to ha and circumstances of the section 263 of the Act. A reveals that the Assessin ueries on the allowability of th he Act. In response, the asse aining the nexus between the ned. It is evident from the as ing Officer had taken into accou he interest payments, verif as satisfied that the interest e y and exclusively for the purpos fered under the head 'Incom pal basis for the invocation of ju
Ld. PCIT is the alleged lack of in demonstrates otherwise. The es were made, and replies w rnished and examined. The As he same, formed a view and acc ere difference of opinion with sing Officer does not confer jur
Manju Rakesh Jain
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A No. 2280/MUM/2025
ies and perused held the order of rejudicial to the Assessing Officer ave been carried case, invoking perusal of the g Officer had he claim under essee submitted borrowed funds ssessment order unt the relevant fied the bank expenditure had se of earning the me from Other ri iction under nquiry. However, record clearly with supporting ssessing Officer, cepted the claim the conclusion ri iction under Section 263. It is we
Assessing Officer is and after due applic
263 cannot be invok different view. We a recorded his satisfac assessee had incurre from loans advanced documentary eviden
Revenue’s contention or that the assessmen
5.1 In light of the f view that the condi under Section 263 of The assessment ord erroneous nor prej
Accordingly, the impu under Section 263 o order dated 08.09.20
ITA ll settled that so long as the vie a plausible one, based on ma cation of mind, the juri iction ked merely because the Commi also find that the Assessing O ction in the assessment order, ed interest expenditure against d, and that the nexus stood su nce. Therefore, we are unable n that there was no proper app nt order suffered from any juris foregoing discussion, we are of itions precedent for invoking f the Act were not satisfied in th der, on the issue in questio ejudicial to the interest of ugned revisionary order passed of the Act is hereby set aside. T
022 is restored.
Manju Rakesh Jain
16
A No. 2280/MUM/2025
ew taken by the terial on record n under Section issioner holds a Officer had duly stating that the t income earned ubstantiated by e to accept the lication of mind dictional defect.
f the considered the juri iction he present case.
n, was neither the Revenue.
by the Ld. PCIT
The assessment
The grounds rai
6. In the result, th
Order pronoun (SANDEEP SING
JUDICIAL M
Mumbai;
Dated: 31/07/2025
Rahul Sharma, Sr. P.S.
Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
////
ITA ised by the assessee are accordi he appeal of the assessee is allow ced in the open Court on 31/0
d/- GH KARHAIL)
(OM PRAK
MEMBER
ACCOUNTA ded to :
BY ORDER
(Assistant Re
ITAT, Mu
Manju Rakesh Jain
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A No. 2280/MUM/2025
ingly.
wed.
07/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai