IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER &

SHRI NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER आयकर अपील सं./

ITA No. 646/Ahd/2024 ((cid:467)नधा(cid:91)रण वष (cid:91) / Assessment Year: 2018-19)

Munir Mahendrakumar PCIT, बनाम/

Shah Ahmedabad-1, Ahmedabad Vs.

27D, Maharashtra Society, Anmol Mithakali Owners Association, Ellisbridge, Ahmedabad 380006, Gujarat èथायी लेखा सं./जीआइआर सं./PAN/GIR No. : ALXPS5757N (Appellant) .. (Respondent अपीलाथ(cid:568) ओर से /Appellant by :

Shri Sulabh Padshah, AR (cid:292)×यथ(cid:568) क(cid:551) ओर से/Respondent by :

Shri Prathvi Raj Meena, CIT.DR Date of Hearing 24/12/2024 Date of Pronouncement 10/01/2025

O R D E R

PER SHRI NARENDRA PRASAD SINHA, AM:

This appeal is filed by the assessee against the order of Principal Commissioner of Income Tax, Ahmedabad-1, (in short ‘the PCIT’) dated 16.03.2024 passed in his revisional jurisdiction under Section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year 2018-19.

2. The brief facts of the case are that the return of income for A.Y. 2018- 19 was filed by the assessee on 30.10.2018 declaring total income of Rs.67,67,450/-. The case was selected for complete scrutiny under CASS.

The assessment was completed under Section 143(3) r.w.s. 144B of the Act on 27.04.2021 at total income of Rs.1,07,43,621/-. In the course of assessment, the AO had made addition of Rs.39,76,171/- in respect of wrong deduction of interest claimed by the assessee u/s.57 of the Act. Subsequently, the case record was called for and examined by the Ld. PCIT who found that the assessee had claimed deduction of interest expenses of Rs.68,95,778/- against the income/receipts of the assessee in the capacity of partner of the firm. According to the Ld. PCIT, the interest expenditure was not an allowable deduction against remuneration and interest on capital received in the capacity of partner of the firm. Therefore, he initiated proceeding u/s.263 of the Act and passed the impugned order directing the AO to verify the set off of interest expense against the income of the assessee in the form of remuneration and interest from partnership firm.

3. Aggrieved with the order of the Ld. PCIT, the assessee has filed the present appeal. The following grounds have been taken in this appeal:

“1. The learned Pr. CIT. has erred in passing Order u/s 263 without jurisdiction and appropriate powers available under the Act. It is submitted that the order passed us. 263 is bad in law and void ab initio.

2. The learned Pr. CIT. has erred in invoking the provisions of Section 263 of the Income Tax Act on the ground that order passed by the A.O. u/s 143(3) of the Act for A.Y: 2018. 19 is erroneous and prejudicial to the interest of revenue. It is submitted that the order passed by the learned A.O. is neither erroneous nor prejudicial to the interest of revenue. On facts and circumstances of the case, the order passed by Pr. CIT. u/s 263 of the Act is completely incorrect on facts and on law and the same be quashed and set aside accordingly.

3. The learned Pr. C.IT. has erred in holding that the Assessing Officer has not verified the issue of set off of interest expense of Rs 68,95,778/- against taxable income received from partnership firm. It is submitted that the complete justification along with documentary evidences were duly filled for total interest expense claimed Rs. 1,58,76,232/- and only after careful examination and application of mind, the Ld. AO has disallowed interest expenditures of Rs 39,76,171/- and allowed remaining expenditures including Rs 68,95,778/-, It is therefore submitted that is no question of any lack of inquiry or verification on the part of assessing officer and further under assessment of income. In view of this, order passed u/s 263 being totally illegal and unjustifiable be set aside and Original Assessment Order passed u/s 143(3) r.w.s 144B of the Act be restored. The same please be held