TULJABHAVANI HOUSING DEVELOPMENT PRIVATE LIMITED,MUMBAI vs. MUMBAI ITO WARD 4(3)-1, AAYAKAR BHAWAN,MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “E” MUMBAI
Before: SHRI OM PRAKASH KANT () & SHRI RAHUL CHAUDHARY ()
PER OM PRAKASH KANT, AM
The captioned appeals by the assessee are directed against two separate revision orders, both dated 28.02.2024, passed by the Ld. Principal Commissioner of Income-tax-4, Mumbai ( in short the ‘PCIT’) for assessment years 2016-17 and 2017-18 respectively.
As facts and ci both the parties agre as a lead case and Therefore, same were consolidated order. T are reproduced as un 1. The Ld and s the As satisfy Errone Reven 2. The L an or involve law; u applic revisio verific an o interes 3. Briefly stated fa income was filed by therefore, the Assess that income of Rs.4 received by way of in TDS was also deduc Act,1961( in short reassessment procee Tu Dev ircumstances of both appeals eed to take appeal for assessmen d follow the result of same i e heard together and disposed o The grounds raised in assessmen nder: d. PCIT has erred in passing an Orde etting aside the assessment Order fr ssessing Officer, although he was u y the twin conditions of the AO's ord eous and Prejudicial to the interes nue. d. PCIT failed to take into considera rder is erroneous and prejudicial o es an error; deviates from law; is co upon mistaken view of law or upon e ation of legal principle. Merely bec onary authority feels and opin ation was not correctly made, does n order, erroneous and prejudicial st of Revenue. facts of case are that as no re the assessee for the year unde sing Officer after recording rea 46,76,240/- escaped assessme nterest other than the interest cted, issued notice u/s 148 of t the Act) on 27.03.2021 edings, the Assessing Officer iss ITA Nos. 2249 & 2248/MUM/2024 2 uljabhavani Housing velopment Pvt. Ltd. being identical, nt year 2016-17 in AY 2017-18. ff by way of this nt year 2016-17 er Us 263 ramed by unable to der being, st of the ation that only if, it ontrary to erroneous ause the nes that not make to the egular return of r consideration, asons to believe ent, which was on security and the Income-tax 1. During the sued notice u/s 142(1) of the Act d assessee on 25.02.2 the reassessment o income. 3.1 Subsequent to records and after exa Rs.47,67,775/- was r deducted u/s 194A o as part of business r debited in profit and to him the interest in ‘income from other s and loss account ha not allowable. He fu without making inqu after considering sub passed by the Assess to the interest of the order giveing directi making necessary inq 4. Before us, the L Book containing pa referred to paper boo Tu Dev dated 22.11.2021 which was 022. Thereafter, the Assessing order on 24.03.2022 accepting the assessment, the Ld. PCIT amination, and observed that in received by the assessee, on wh of the Act, but the assessee cla receipts and deducted all busin d loss against said interest inco ncome was required to be asses sources’ and the expenses debit aving no nexus with said inter urther noted that assessment w uiry or verification in this rega bmission of the assessee, he tr sing Officer as erroneous in so fa e Revenue and cancelled the s ion to pass a fresh assessm quiry in the matter. Ld. Counsel for the assessee h ages 1 to 50. The ld Couns ok page 27 which is part of th ITA Nos. 2249 & 2248/MUM/2024 3 uljabhavani Housing velopment Pvt. Ltd. replied by the g Officer passed g the returned T called for the terest income of ich tax was also aimed the same ness expenditure me. According ssee under head ted in the profit rest income was was made when rd. Accordingly, reated the order ar as prejudicial said assessment ment order after as filed a Paper sel for assessee he questionnaire issued by the Assess Ld. counsel for the as “19. Please f (including ca interest char of interest exclusively professiona disallowance made in yo 4.1 Further, the Ld respect of queries rai For ready reference s “19. A. Details of In - Details of loans - Interest receive 1. Interest Receive 2. Interest on Inco - Interest on Inco 1. Assessment yea 2. Assessment yea 3. Assessment yea Total Rs. 91536 B. No interest paid Tu Dev ing Officer. The question No. 19 ssessee is reproduced as under: furnish the details of all the loans & apital asset in progress) given with the rged on the same. Please justify th paid and claimed in P & L acc for the purpose of busin al. Also furnish the explanation a e u/s 36(iii) should our case.” ( emphasis supplied externa d. counsel referred to reply of ised, which is available on Pape said reply is also reproduced as u nterest earned on loans & advances g s & advances given are shown in Bala ed details : ed on loans Rs. 46762397- ome Tax Refund Rs. 915367- Total Rs. 47677757- ome Tax refund are as under. ar-2011-2012 16790 ar-2014-2015 32158 ar-2013-2014 42588 d during the year. ITA Nos. 2249 & 2248/MUM/2024 4 uljabhavani Housing velopment Pvt. Ltd. 9 referred by the advances e details of e amount count are ness and as to why not be ally) the assessee in er Book page 32. under: given ance sheet.
In view of above y notice annexure.”
4.2 In light of the a submitted that the A interest income, w assessment. Accordin prejudicial to the Rev
Assessing Officer, aft taken a reasoned vie under the head "Bus
Principal Commission own view in place of of this argument, the Karan Polymers
(Kolkata),
PCIT v. Karan Po
CIT v. Lok Holdi
Bhikhabhai
R taxmann.com 4
4.3 On the other ha
(DR) contended tha escapement of intere
Tu
Dev your honor will find the above detai above query and response, the L
Assessing Officer had duly verif which formed the basis for ng to him, while the assessmen venue, it is not erroneous. He ter considering the assessee’s su ew that the interest income shou siness and Profession." Therefo ner of Income Tax (PCIT) canno f the Assessing Officer’s conclus e Learned Counsel relied on the s Pvt. Ltd. v. PCIT (2022) 97
olymers Pvt. Ltd., IA No. GA/2/2
ings [2010] 189 Taxman 452 (Bo ajabhai
Dhameliya v.
PCIT
93 (Surat-Trib.).
and, the Learned Departmental t the assessment was reopen st income. Therefore, the Asses
ITA Nos. 2249 &
2248/MUM/2024
5
uljabhavani Housing velopment Pvt. Ltd.
ils in order as per
Learned Counsel fied the issue of reopening the nt order may be argued that the ubmissions, had uld be assessed ore, the Learned ot substitute his sion. In support decisions in:
ITR (Trib.) 556
2023, ombay), and T
[2023]
151
l Representative ned due to the sing Officer was duty-bound to exam income was to be as Officer had issued o regarding interest i interest paid, if any Assessing Officer fai account, where the amounting to ₹33,5
expenses included depreciation, amortiz that, in the absence prudent
Assessing assessment order is interests of the Reven
Act. He also referred that the PCIT cannot due to insufficient ve light of Explanation ground itself becomes
4.3 We have cons examined the relevan
263 of the Income T
2015, stipulates tha
Tu
Dev ine the correct head under wh ssessed. The DR submitted tha nly a single query letter, in wh income/expenses was limited y, for earning interest income iled to examine the assessee's e assessee had claimed bus
54,309/- against the interest the cost of materials, emp zation, and other expenditures.
e of a proper inquiry or verifica
Officer ought to have deemed to be erroneous and pr nue under Explanation 2 to Sec d to Ground No. 2 of the appeal t deem an order erroneous or pr erification. However, the DR con
2 introduced with effect from 0
s infructuous.
sidered the rival submissions nt materials on record. Explanat
Tax Act, which came into effec at if the Assessing Officer fails
ITA Nos. 2249 &
2248/MUM/2024
6
uljabhavani Housing velopment Pvt. Ltd.
hich the interest at the Assessing hich the inquiry d to details of e. However, the profit and loss iness expenses income. These ployee benefits,
The DR argued ation— which a conducted—the rejudicial to the ction 263 of the l, which asserts rejudicial merely ntended that, in 01.06.2015, this s and carefully tion 2 to Section ct from June 1, to conduct the necessary inquiry or during the assessm shall be deemed erro
Revenue. The releva below:
“263. Revisi
[Explanation 2.—For the p passed by the Assessing O shall be deemed to be err revenue, if, in the opinion o or Principal] Commissioner
(a) the order is pas have been made6
(b) the order is passe
(c) the order has n instruction issued
(d) the order has no prejudicial to the Supreme Court in 5. Therefore, in th whether the Assessin regarding the interes income as "Other Inc declare any revenu claimed total busines this "Other Income."
Tu
Dev verification that ought to have b ment process, the resulting as oneous and prejudicial to the ant provision of Section 263
on of orders prejudicial to revenue.
purposes of this section, it is hereby dec
Officer 64[or the Transfer Pricing Officer, a roneous in so far as it is prejudicial to of the Principal 65[Chief Commissioner or r or Commissioner,—
ssed without making inquiries or verifica
60; ed allowing any relief without inquiring in ot been made in accordance with any d by the Board under section 119; or ot been passed in accordance with any e assessee, rendered by the juri ictio n the case of the assessee or any other pe he present case, it is essentia ng Officer conducted the necess st income. The assessee report come" in the profit and loss acco ue from operations. However ss expenses amounting to ₹33,5
" The relevant portion of the ITA Nos. 2249 &
2248/MUM/2024
7
uljabhavani Housing velopment Pvt. Ltd.
been carried out sessment order interests of the 3 is reproduced clared that an order as the case may be,]
the interests of the Chief Commissioner ation which should nto the claim; order, direction or y decision which is onal High Court or erson.]
al to determine sary verification ted the interest ount and did not , the assessee
54,309/- against profit and loss account, as available below:
5.1 Thus, given the the Assessing Office income qualified for Profession." He also constituted the asses was incidental to the which interest was e activity. However, no were any responses the considered opinio the necessary inqui undertaken during
Tu
Dev e on Page 9 of the Paper Book e facts and circumstances of th er was required to examine h r assessment under the head o needed to determine whether ssee's business activity or if the assessee’s business operations earned were made for furtheran o such inquiries or verification provided by the assessee. Ther on that the Assessing Officer fa iry or verification that ought the assessment proceedings. A ITA Nos. 2249 &
2248/MUM/2024
8
uljabhavani Housing velopment Pvt. Ltd.
k, is reproduced he present case, ow the interest d "Business or earning interest interest income s or advances on nce of business were made, nor refore, we are of ailed to conduct t to have been Accordingly, we concur with the fin decision. The case la considered, however they are not applicab of appeal for AY 2016
6. The facts and c for assessment year 2
assessment year 201
7. In the result, bo
Order pronoun (RAHUL CHA
JUDICIAL M
Mumbai;
Dated: 24/02/2025
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.
////
Tu
Dev ndings of the Learned PCIT a aws relied upon by the assessee
, given the differing facts and ble to the present case. As a resu
6-17 stand dismissed.
circumstances for the year unde
2017-18 being identical all the g
7-18 are also dismissed.
oth the appeals of the assessee a ced in the open Court on 24/0
/-
AUDHARY)
(OM PRAK
MEMBER
ACCOUNTA ded to :
BY ORDER
(Assistant Re
ITAT, Mu
ITA Nos. 2249 &
2248/MUM/2024
9
uljabhavani Housing velopment Pvt. Ltd.
and uphold his have been duly circumstances, ult, the grounds er consideration ground raised in are dismissed.
02/2025. KASH KANT)
ANT MEMBER
R, gistrar) umbai