ARYAN ARCADE LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner has challenged a notice dated 23.11.2015 issued by the Commissioner of Incometax seeking to take the petitioner's assessment for the assessment year 2011-2012 in revision.

(2.) Brief facts are as under. The petitioner is a company registered under the Companies Act and is engaged in the business of developing and renting the immovable property including shopping complex and malls. For the assessment year 2011-2012, the petitioner had filed return of income declaring loss of Rs.5.08 crores (rounded off). The petitioner's case was taken in scrutiny. One of the issues discussed during the assessment was with respect to the petitioner's claim of deduction for interest paid on Optionally Fully Convertible Debentures ("OFCD" for short) in terms of section 24(b) of the Income Tax Act, 1961 ("the Act" for short). In the order of assessment dated 21.3.2014, the Assessing Officer did not disturb this claim of the petitioner. To take such order in revision in exercise of powers under section 263 of the Act, the Commissioner issued impugned notice which reads as under :

(3.) The petitioner opposed the said show cause notice under a detailed communication (AnnexureD) in which the petitioner contended interalia that during the scrutiny assessment, the Assessing Officer had examined the entire claim minutely, made necessary inquiries and taken a view which is plausible and, therefore, cannot be disturbed in exercise of revisional powers. They have also contended that the claim of deduction under section 24(b) of the Act was clearly allowable. The amount raised through debentures were utilised for repaying the old loans obtained for the purpose of construction of building and the interest paid on such debentures were therefore, well within the purview of section 24(b) of the Act. Reference was made to various decisions of this Court as well as Supreme Court. When the Commissioner did drop the revisional proceedings, the petitioner filed this petition.