PCIT Vs American Spring & Pressing Works Pvt. Ltd. (Bombay High Court)
The Bombay High Court considered the Revenue’s appeal against the order of the ITAT concerning revision proceedings under Section 263 of the Income Tax Act, 1961. The assessee had challenged the order dated 22 March 2016 passed by the Principal Commissioner of Income Tax-12, Mumbai, revising the assessment order passed under Section 143(3) for AY 2011-12. The assessee was engaged in manufacture and sale of agricultural equipment and development of real estate and hotel business. Its assessment was completed on 13 March 2014, determining total income at Rs. 3.29 crores. The Principal CIT held that the assessment order was erroneous and prejudicial to the interests of Revenue.
The ITAT held that the Principal CIT could not invoke jurisdiction under Section 263. It found that the Assessing Officer had taken a possible view and that there was nothing to indicate that the provisions had been incorrectly applied. Before the High Court, substantial questions were proposed concerning the retention of 49% of the saleable area by the developer, the assessee’s entitlement to 51% of the saleable area, whether such entitlement represented consideration for transfer of stock-in-trade, and whether the development agreement determined the manner of receiving consideration or established that transfer of stock-in-trade had taken place. The Court noted that the ITAT’s finding that the Principal CIT could not exercise Section 263 jurisdiction had not been challenged.
