PCIT Cannot Rush u/s 263 Without Giving Assessee Adequate Opportunity

Muthyala Suryababu Vs PCIT (ITAT Bangalore) Assessee had sold an immovable property for ₹12.50 crore. While computing LTCG, he claimed deduction of ₹10,42,815/- towards arrears of property tax, treating it as part of cost of acquisition / improvement. AO, after assessment proceedings, accepted the claim. On examination of records, PCIT held that arrears of property tax do not fall within “cost of acquisition” or “cost of improvement” as per section 55 r.w.s. 48. Holding that AO failed to verify this aspect, PCIT invoked Explanation 2(a) to section 263, treating the assessment order...