BSES Rajdhani Power Ltd. Vs PCIT (Delhi High Court)
BSES Rajdhani Power Ltd. filed an appeal concerning the exercise of revisional jurisdiction under Section 263 of the Income-tax Act for AY 2010-11.
The assessee had filed a return declaring Nil income, later revised on 30.03.2012. The return was selected for scrutiny, and the Assessing Officer (AO) initiated proceedings under Section 143(2). A special audit under Section 142(2A) was directed on 05.03.2013. The special auditor’s report dated 30.08.2013 dealt, among other matters, with reconciliation of fixed assets and depreciation, arm’s length transactions with related parties, and compliance with Chapter XVII-B concerning tax deduction at source.
Read SC Judgment in this case: SC Upholds Section 263 Remand but Leaves Revision Jurisdiction Open for Fresh Pleas
The AO completed the assessment under Section 143(3) on 29.10.2013, assessing total income at ₹838,38,00,790. The assessment included, among other adjustments, disallowance of ₹66,27,782 towards depreciation on ₹6,44,81,091 capitalised for reinstalling fixed assets, disallowance of ₹94,20,842 concerning related-party transactions, addition of ₹38,58,60,000 regarding arm’s length pricing of related-party transactions, and disallowance of ₹2,58,28,863 under Section 40(a)(ia).
On appeal, the CIT (A) decided the depreciation disallowance and disallowance concerning transactions with group concerns in favour of the assessee and granted partial relief regarding the Section 40(a)(ia) disallowance.
