Sharada Erectors Private Limited Vs PCIT (ITAT Pune)
Plausible View Adopted by AO Cannot Be Revised – Pune ITAT on 263 Jurisdiction
Assessee, engaged in construction, leasing of premises & generation of wind power, filed return declaring loss of ₹1.62 crore for AY 2020-21. Scrutiny was completed u/s 143(3) accepting returned loss after examining details. PCIT, Pune-3 invoked revision u/s 263 alleging that AO had failed to properly enquire into multiple issues, rendering order erroneous & prejudicial to Revenue.
The disputed issues included disallowance u/s 14A, gratuity provision u/s 40A(7), unpaid bonus u/s 43B, TDS disallowance u/s 40(a)(ia) on interest to PNB Housing Finance & compensation to flat buyers, debit/credit balances written off, advances of ₹82.64 crore for property purchase, & interest-free advances of ₹11.60 lakh to sister concern. PCIT held that AO merely reproduced submissions without proper verification & restored entire matter for fresh assessment.
Before Tribunal, Assessee argued that AO had raised detailed queries u/s 142(1), obtained submissions, verified evidences & taken a plausible view on each issue. Reliance was placed on judicial precedents including SC in Malabar Industrial Co. Ltd. v. CIT & Kolkata HC in West Bengal Housing Infrastructure Development Corp. contending that revision cannot be used to substitute AO’s plausible view.
