The Income Tax Appellate Tribunal (ITAT), Mumbai Bench while granting the Relief to Grasim Industries ruled that the PCIT not justified in invoking revisionary jurisdiction merely on the basis of different opinion.
The assessee, Grasim Industries is engaged in the business of manufacturing diversified products such as viscose filament yarn, carbon black, insulators, branded apparels and readymade garments.
The assessee had filed its original return of income for the AY 2013-14 which was later revised declaring total income of Rs 283,15,81,630/- under normal provisions of the Act and Rs 411,70,32,063/- u/s 115JB of the Act.
The AO completed the assessment u/s 143(3) of the Act determining total income at Rs 366,01,24,600/- under normal provisions of the Act and Rs 440,88,34,676 u/s 115JB of the Act. In the said computation of income in the assessment order, the AO had specifically mentioned that a sum of Rs 267,17,80,899/- for the AY 2013-14 would be eligible to be carried forward for set off in subsequent years in bold letters. The assessee challenged the assessment by preferring an appeal before the Commissioner of Income Tax (Appeals) on the aggrieved issues.
Later the assessment framed by the AO was sought to be revised by the PCIT on the ground that the AO had allowed the claim of Long Term Capital Loss (LTCL) of Rs 267,17,80,899/- which ought not to have been allowed.
The Coram of Mahavir Singh and M.Balaganesh held that adequate enquiries were indeed carried out by the ld AO in the original assessment proceedings and hence the ld PCIT was not justified in invoking revisionary jurisdiction u/s 263 of the Act.
The ITAT further added that A possible view has been taken by the ld AO on the issue of LTCL on the facts of the case and also by placing reliance on the available case laws on the subject and hence the ld PCIT was not justified in invoking revisionary jurisdiction u/s 263 of the Act merely because he is of a completely different view and opinion on the issue of allowability of LTCL to be carried forward to subsequent years.
“It could be safely concluded that the revision proceedings u/s 263 of the Act had been apparently triggered only based on borrowed satisfaction i.e Audit Objection and not based on independent application of mind by the ld PCIT. In Fact the show cause notice issued by the ld PCIT u/s 263 of the Act also uses the same language used by the Revenue Audit Party in its Audit Objection. Hence revision proceedings could not be invoked by the ld PCIT based on borrowed satisfaction,” the ITAT said.
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