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| The Tax Publishers2022 TaxPub(DT) 4515 (Del-Trib) INCOME TAX ACT, 1961
Section 263
Pr. CIT's inference that AO should make further unspecified enquiries so that assessee should not be allowed expenditure and the depreciation because assessee had not earned any revenue after commencement of business, was not based upon any material whatsoever. Except for an endeavour to embark upon a fishing and roving enquiry, there was no merit in the order passed by Pr. CIT, the basic premise on which Pr. CIT had invoked his jurisdiction under section 263 was legally not sustainable. Hence, the order of Pr. CIT was set aside.
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Revision under section 263 - Erroneous and prejudicial order - Pr. CIT endeavour to embark upon a fishing and roving enquiry -
Pr. CIT was of the opinion that since assessee had not earned any revenue even after few years of commencement of business, AO had not made enquiry before allowing the said expenditure. Pr. CIT invoked jurisdiction under section 263 directing AO to make further enquiry on the admissibility of expenditure, major portion of which was depreciation of software obtained by the assessee. Held: Pr. CIT's inference that AO should make further unspecified enquiries so that assessee should not be allowed expenditure and the depreciation because assessee had not earned any revenue was not based upon any material, whatsoever. Except for an endeavour to embark upon a fishing and roving enquiry, there was no merit in the order passed by Pr. CIT, the basic premise on which Pr. CIT has invoked his jurisdiction under section 263 was legally not sustainable. Hence, the order of Pr. CIT was set aside.
Relied:Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC) and CIT v. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del-HC) : 2011 TaxPub(DT) 88 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
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