Adani Wilmar Limited Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that invocation of revisionary jurisdiction under section 263 of the Income Tax Act not justified as view taken by PCIT was second view and the same is not permissible u/s. 263.
Facts- The return of income for AY 2018-19 was filed on 26.11.2018 declaring total income of Rs.7,29,10,574/-. Assessment order u/s.143(3) r.w.s 144B of the Income-tax Act, 1961 was passed on 07.06.2021 at the assessed income of Rs.569,46,59,915/-. The Assessing Officer has made addition of Rs.7,32,417/-on account of disallowance u/s.14A of the Act. The Ld.PCIT has observed that the assessee has declared Guarantee income of Rs.99,72,600/- in note 28, as “other income”. However, the assessee claimed such income as notional income and reduced the same from total income. The Ld.PCIT therefore issued notice u/s.263 of the Act. Invocation of jurisdiction u/s. 263 is contested vide the present appeal.
Conclusion- Held that the aspect of Guarantee income as mentioned in note 28 has been enquired by the Assessing Officer during the assessment proceedings and after taking the cognizance of the same, the same was allowed by the Assessing Officer. The Observation of the Ld.PCIT that the same was not examined properly is not justifiable on the part of the Ld.PCIT. The Notional Guarantee Income charged from joint venture of the investment and hence investment cost has been increased by the said amount cannot be treated as actual income incurred by the assessee. The Ld.PCIT while invoking the provision of section 263 of the Act has totally ignored the aspect that the Assessing Officer has verify the same and in fact Notional Guarantee Income has not resulted into any loss of the Revenue. Thus, in the present case the Assessing Officer has not passed the assessment order which will result into prejudicial to the interest of the Revenue or erroneous to the interest of Revenue. Thus, the view taken by the Ld.PCIT is in fact a second view which is not permissible as per the section 263 of the Act which is revisionary provision. Hence, the appeal of the assessee is allowed.
