Rohit Grover Vs PCIT (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT) considered an appeal filed by the assessee against an order passed by the Principal Commissioner of Income Tax (PCIT), Chandigarh-1 dated 28.03.2024 under Section 263 of the Income Tax Act, 1961 for Assessment Year 2013–14.
The assessee had filed a return declaring total income of ₹55,11,460. Subsequently, the assessment was reopened under Section 147 based on information that the assessee had received ₹3,98,00,000 from a company towards transfer of the “right to carry the business” during the relevant year. The assessment was completed under Sections 147 read with 144/144B, accepting the returned income.
On examination of the assessment records, the PCIT observed that the Assessing Officer (AO) had failed to properly examine the nature and taxability of the amount received. The assessee had treated the receipt as a capital receipt not chargeable to tax, claiming it represented goodwill of a medical profession. However, the PCIT noted that the agreement with the company involved transfer of business along with infrastructure, equipment, client base, approvals, and other commercial rights.
The PCIT further observed that the AO had issued notices under Sections 148 and 142(1), and the assessee had submitted replies and certain details. Despite this, the AO completed the assessment without conducting detailed verification or inquiry into the nature of the receipt or its taxability. The assessment order did not reflect any meaningful examination of the agreement or the basis for treating the receipt as non-taxable.
