Micromax Informatics Ltd. Vs PCIT (ITAT Delhi)
ITAT Delhi held that revision under section 263 of the Income Tax Act not justified as PCIT failed to demonstrate that assessment order was erroneous and prejudicial to the interest of revenue. Accordingly, revision order quashed.
Facts- The assessee is a trader of mobile phones, LED TV, air conditioners, washing machines, etc. The case was scrutinized and the consequential assessment order accepting the returned income was passed on 30.09.2021. Later, the Principal Commissioner of Income Tax (PCIT), vide impugned order u/s. 263 of the Income Tax Act, 1961 (Act) has held that the AO has not only failed to tax interest income of Rs.16,18,16,439/- on FDRs as evident from 26AS of the assessee but also failed to disallow expenditure of Rs.1,39,57,619/- u/s. 14A of the Act. Consequentially, the PCIT concluded that the assessment order was not only erroneous but also prejudicial to the interest of revenue.
Conclusion- Held that we find merit in the arguments/submissions/contentions of the Ld. AR that the AO is justified in holding that interest income on FDRs has been rightly taxed in the original assessment and no interest income on FDRs remined left out of the taxable income. In view of the above, we do not find any merit in the finding of the PCIT in this regard; the taxability of interest income on FDRs.
