Black Rock Financial Services Pvt Ltd Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that invocation of provisions of section 263 of the Income Tax Act by PCIT impermissible as exercise of such provisions amounts to second opinion/ view which is unsustainable in law.
Facts- PCIT observed that the assessee accepted short term borrowing of Rs.1,72,76,00,000/- from Fortune Broking Intermediary Pvt. Ltd. However, the assessee did not show any interest income in Profit & Loss Account and, therefore, the proportionate disallowance of interest expenditure should have been made u/s. 36(1)(iii) of the Act for advancing loans and advances to related parties without interest by the Assessing Officer. The PCIT further observed that from note 2.6 of Balance Sheet the assessee had noncurrent investments of Rs.25,00,00,000/- (same closing and opening balance) in shares and the assessee earned exempt income of Rs.2,11,807/-. However, the disallowance u/s. 14A read with Rule 8D was made during the current Assessment Year to the extent of exempt income i.e. Rs.2,11,807/- and, therefore, the Assessing Officer should have applied the amended provisions of Section 14A read with Rule 8D. Thus, the PCIT issued notice u/s. 263 of the Act dated 07.03.2023 which was subsequently replied by the assessee.
