INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Detailed inquiries regarding assessee's claim made by AO -

Assessee submitted that it had filed all the requisite details and information regarding the nature and source of capital gains and AO had reached a conclusion after verifying and examining the same, therefore, the action of AO could not be the basis for initiating revisionary proceedings under section 263. PCIT opined that since the AO had not carried out the investigation/inquiry that he should have, the order was to be deemed to be erroneous inasmuch as it is prejudicial to the interest of the revenue. Held: In view of the documentary evidences as called for and examined by AO, it was evident that AO had applied his mind to the issue of long-term capital gains and it was only after having been satisfied with the correctness of claim that he accepted the return filed by the assessee. Therefore, it could be concluded that proper inquiries were made by AO while accepting assessee's claim and, hence, the contention of the PCIT that no inquiry was made by AO was factually incorrect. Further, merely because PCIT felt that further inquiry should have been made did not make the order of AO erroneous and prejudicial to the interest of the revenue. Accordingly, PCIT had wrongly invoked the revisionary powers under section 263.

Followed: Pr. CIT v. Delhi Airport Metro Express Pvt. Ltd. in ITA No. 705/2017 : 2017 TaxPub(DT) 4058 (Del-HC), Pr. CIT v. Modicare Ltd. [ITA No. 759/2016, dt. 14-9-2017] : 2017 TaxPub(DT) 4212 (Del-HC), Commissioner of Income Tax v. Sunbeam Auto Ltd. (2010) 332 ITR 167 (Delhi) : 2011 TaxPub(DT) 0088 (Del-HC)

REFERRED : Narayan Tatu Rane v. ITO (2016) 70 taxman.com 227 (Mum-Trib) : 2016 TaxPub(DT) 2516 (Mum-Trib) , Indus Best Hospitality & Realtors Pvt. Ltd. in ITA No. 3125/Mum/2017 vide Order, dated 19-1-2018, AV Industries v. ACIT [ITA No. 3469/Mum/2010, dt. 6-11-2015],Metacaps Engineering and Mahendra Constructions Co. (JV) v. CIT [ITA No. 2895/Mum/2014, dt. 11-9-2017] : 2017 TaxPub(DT) 4600 (Mum-Trib),Reliance Money Infrastructure Ltd. v. PCIT [ITA No. 3259/Mum/2017, dt. 6-10-2017],Shantikrupa Estate Pvt. Ltd. [ITA No. 1252/Ahd/2015, dt. 9-9-2016],Amira Pure Foods Pvt. Ltd. v. PCIT [ITA No. 451/Del/2017, dt. 29-11-2017] : 2017 TaxPub(DT) 5413 (Del-Trib), Malabar Industrial Co. Ltd. v. CIT (2000) 109 Taxman 66 (SC) : 2000 TaxPub(DT) 1227 (SC), CIT v. Goetze (India) Ltd. (2014) 361 ITR 505 (Del) : 2014 TaxPub(DT) 0416 (Del-HC), CIT v. Ashok Logani (2011) 11 taxmann.com 208 (Delhi) : 2012 TaxPub(DT) 0244 (Del-HC), Surya Financial Services Ltd. v. Pr. CIT [I.T.A. No. 2915/Del/2017, dt. 8-1-2018], Surya Jyoti Software (P) Ltd. v. Pr. CIT [I.T.A. No. 2158/DEL/2017, dt. 25-10-2017]

FAVOUR : In assessee's favour

A.Y. : 2013-14

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