West Bengal Industrial Infrastructure Development Corporation vs. PCIT, Kolkata

Parties Involved

Facts Summary

The assessee, West Bengal Industrial Infrastructure Development Corporation, appealed against the revision order dated 27.03.2019 passed by the Principal Commissioner of Income Tax-2, Kolkata. The assessee argued that the alleged investment in shares was not an actual investment but a balance of loan outstanding towards Haldia Petrochemical Ltd. The Principal Commissioner of Income Tax held that the assessee had an investment in preference shares amounting to Rs.58,97,80,820/- during the year and therefore, disallowance as per Rule 8D(2)(iii) was attracted. The assessee argued that no new investments were made during the year under consideration and that the order of the Assessing Officer was not erroneous. The Tribunal quashed the impugned order of the Principal Commissioner of Income Tax and allowed the appeal of the assessee.…

Legal Issues

• 1. Whether the assessee incurred expenditure in making the investment?
• 2. Whether the order of the Assessing Officer was erroneous?

Judgment Outcome

Decided in favour of Assessee.

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