SMT. USHA PANDURANG KULKARNI,AURANGABAD vs. PRINCIPAL COMMISSIONER OF INCOME-TAX : 2,

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ITA 530/PUN/2016Status: DisposedITAT Pune23 January 2019AY 2011-125 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Principal CIT was not justified in invoking Section 263 powers as the Assessing Officer's view was not impermissible in law and no material was placed to demonstrate otherwise. The Tribunal followed its own precedent for earlier assessment years.

What were the facts?

The assessee advanced interest-free loans to sister concerns while having borrowed interest-bearing funds. The Principal CIT invoked revisionary powers under Section 263, deeming the assessment order erroneous and prejudicial to the revenue.

What were the issues?

Whether the Principal CIT was justified in revising the assessment order under Section 263 when the Assessing Officer's view was not contrary to law and no prejudice was caused to the revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Charuhas D. Upasani
For Respondent: Shri Amol Kamat

आदेश / ORDER

PER R.S.SYAL, VP : This appeal by the assessee is directed against the order dated 10.02.2016 passed by the Pr. CIT-2, Aurangabad u/s.263 of the Income-tax Act, 1961 (hereinafter also called `the Act’) in relation to the assessment year 2011-12.

2 ITA No.530/PUN/2016 Smt. Usha P. Kulkarni

2.

Briefly stated, the facts of the case are that, the assessee, an

individual, is a proprietor of M/s. Sharda Earth Movers. She is

engaged in the business as Civil Contractor along with hiring of

equipments for construction activity. Assessment in this case was

completed u/s.143(3) of the Act on 03-01-2014 determining total

income at Rs.14,90,355/- as against the returned income of

Rs.8,51,000/-. In exercise of power u/s.263, the ld. Pr. CIT noticed

that the AO, while finalizing the assessment, failed to examine the

purpose for which certain interest free loans were advanced to

sister concerns. It was further observed that the assessee had

borrowed certain loans from banks. In this hue of the matter, he

opined that the advancing of interest free loans by the assessee to

sister concerns caused prejudice to the interest of the Revenue and

rendered the assessment order erroneous. The assessee is

aggrieved by such a decision.

3.

We have heard both the sides and gone through the relevant

material on record. It is observed that the ld. Pr. CIT exercised

similar power u/s.263 in respect of A.Yrs. 2003-04, 2004-05 and

2006-07. The assessee challenged such orders before the Tribunal.

Vide order dated 31-10-2017, the Tribunal in ITA Nos.849 to

851/PUN/2015 has allowed the appeals filed by the assessee. It

3 ITA No.530/PUN/2016 Smt. Usha P. Kulkarni

can be seen from the order passed by the Tribunal, a copy of which

has been placed on record, that the assessment order was revised, inter alia, on a similar ground that the assessee advanced interest

free loans while she had borrowed interest bearing funds. The

Tribunal apart from others noticed on page 8 of its order that

“…..In the present case, before us Revenue has not placed any

material on record to demonstrate as to how the order passed by

the AO was not in accordance with law or the view adopted by the

AO was impermissible in law. In the present facts, we are

therefore of the view that the ld. Pr. CIT was not justified in

invoking the revisionary powers u/s.263 of the Act more so as the

provisions of section do not visualize the case of substitution of

judgment of the ld. CIT for that of AO who passed the order unless

the view adopted by the AO was not in accordance with law and

for which we also draw support from the decisions cited herein

above.”

4.

It is apparent from the order passed by the Tribunal that the

factor considered by the ld. Pr. CIT calling for invocation of the

provisions of section 263 of the Act for the instant year is a similar

to the one considered by him for the preceding years, which view

has been set aside by the Tribunal. No material has been placed on

4 ITA No.530/PUN/2016 Smt. Usha P. Kulkarni

record to demonstrate that the said order of Tribunal has been reversed or modified in any manner. Respectfully following the precedent, we set-aside the impugned order.

5.

In the result, the appeal is allowed.

Order pronounced in the Open Court on 23rd January, 2019.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 23rd January, 2019 सतीश आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत आदेश आदेश आदेश 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The Pr.CIT -2, Aurangabad िवभागीय �ितिनिध, आयकर अपीलीय 4. अिधकरण, पुणे “बी” / DR ‘B’, ITAT, Pune; 5. गाड� फाईल / Guard file. // True copy // आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

ITA No.530/PUN/2016 Smt. Usha P. Kulkarni

Date 1. Draft dictated on 22-01-2019 Sr.PS 2. Draft placed before author 22-01-2019 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.

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