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Case Law Details

Case Name : PCIT Vs Britannia Industries Limited (Calcutta High Court)
Appeal Number : ITAT/216/2017
Date of Judgement/Order : 25/08/2022
Related Assessment Year : 2009-10
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PCIT Vs Britannia Industries Limited (Calcutta High Court)

The short issue involved in this case is whether the Commissioner could have invoked his power under Section 263 of the Act on the ground that the Assessing Officer did not conduct proper enquiry. We need not labour much to decide this issue as the learned Tribunal has elaborately discussed the factual position and brought out as to how the Assessing Officer had conducted an enquiry into the aspect as to how the amount received by the assessee from foreign entity towards settlement of a civil dispute pertaining to a trademark has to be treated.

The AO made enquiries, called for details of such income and having considered the submissions of the assessee in respect of all the three probable views i.e. capital receipt, business income and capital gain, the AO for the reasons recorded in his order at page nos. 7 to 10, came to the conclusion that the income in dispute has to be charged as capital gain but not as capital receipt or business income. In this factual context, we are called upon to examine the question whether the CIT is justified in terming the order of AO as erroneous and without proper enquiry or on wrong assumption of the facts

From the above, we see that it is not a case where the Assessing Officer failed to conduct an enquiry rather it is the case where the Assessing Officer has conducted an elaborate enquiry and adopted one of the three views which was the plausible view.

When an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue ; or where two views are possible and the Income-tax Officer has taken one view which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law.

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July 2024