- (1.) THE present appeal is filed by the Department against the impugned order dated 2nd March, 2005 passed by the Income Tax Tribunal in I.T.A. No.387/LUC/2004 for the assessment year 2001 -02.
(2.) ON 12.9.2007, a coordinate Bench of this Court has admitted this appeal on the following substantial question of law: - "Whether the Tribunal was right in holding that the Commissioner has wrongly exercised its power to revise the assessment order under section 263 of the Income Tax Act, on the facts and circumstances of the present case."
(3.) THE brief facts of the case are that the assessee is a private limited company and during the year under consideration, was engaged in trading and processing of spices. As per audit report, huge interest of loan was taken from the persons as specified under section 40(A)(2)(b) and the interest paid thereupon has been claimed as a deduction. The A.O. has allowed the deduction of interest @ 21% following the earlier years. The C.I.T. passed an order under section 263 of the Act where it was observed that the market rate of interest was 15%, so he set aside the assessment order and remanded the matter back to the A.O. for fresh adjudication in the light of the observations made in the order. The said order was assailed before the Tribunal who has set asided the order passed by the C.I.T. Under section 263 of the Act. Being aggrieved, the Department has filed the present appeal. Heard Sri Dhananjay Awasthi, learned counsel for appellant/Department and Sri S. D. Singh, learned Senior Counsel assisted by Sri Krishna Dev Vyas, learned counsel for assessee/respondents.;