Kitty Industries Private Limited Vs PCIT (ITAT Chandigarh)
Section 263 Is Not a Licence for a Second Investigation: Trademark Depreciation Allowed After AO’s Enquiry Cannot Be Reopened on Mere Suspicion
The Chandigarh Bench of the ITAT has quashed revisionary proceedings u/s 263 concerning depreciation claimed on the acquisition of a trademark for ₹50.37 crore. The Tribunal held that once the AO had raised queries, examined the relevant documents and adopted a legally possible view, the assessment could not be branded erroneous merely because the Pr. CIT believed that some further or differently worded enquiries should have been conducted.
The power u/s 263 cannot be used for a fishing or roving enquiry, nor can the Pr. CIT simply remit an issue to the AO without himself demonstrating how the assessment order is erroneous and prejudicial to the Revenue.
₹50.37 Crore Trademark Acquired From HUF
Kitty Industries Private Limited was engaged in manufacturing bread & bakery products. It filed its return declaring income of ₹24.74 crore for AY 2022-23. The case was selected for complete scrutiny and multiple notices u/s 142(1) were issued. After considering the replies, the AO accepted the returned income in an assessment framed u/s 143(3) read with section 144B.
