Case Law Details
Nipro India Corporation Pvt. Ltd. Vs PCIT (ITAT Pune)
ITAT Pune held that the conclusion arrived by AO on his satisfaction of details furnished by the assessee, cannot be found to be erroneous simply because Pr. CIT does not feel satisfied with the said conclusion. Accordingly, invocation of revisionary jurisdiction u/s 263 unjustified.
Facts- The short point arises for our consideration in respect of Rent and Freight expenses is as to whether the Pr. CIT justified in setting aside the assessment order dated 06-12-2017 passed u/s. 143(3) of the Act by holding the same as erroneous and prejudicial to the interest of Revenue without appreciating the fact that the AO completed assessment in detail, and without giving specific direction on the issues raised in the show caused notice.
Conclusion- We find the action of AO is neither mistake on facts nor deviated from law. The said conclusion arrived by the AO on his satisfaction of details furnished by the assessment cannot be found to be erroneous simply because Pr. CIT does not feel satisfied with the said conclusion. The power of Pr. CIT u/s. 263 of the Act is to find out whether the AO committed any mistake on facts or ignored application of legal principles. Therefore, the order of Pr. CIT in revising the order of AO in respect of allowance of deduction under rent expenses is not maintainable for the reason the order of AO cannot be held to be erroneous, thus, it is not prejudicial to the interest of Revenue.
We note that a provision is made by an assessee as obligation to pay as a result of past event. To meet the said expenditure the assessee can make provision to settle the obligation basing on a reasonable estimation of amount to meet that payment of obligation. In the present case, as discussed above, we find no details of payment were furnished before us. Thus, we find no infirmity in the order of Pr. CIT in revising the original assessment order as erroneous and prejudicial to the interest of Revenue to the extent of freight outward expenses of Rs.26,35,415/-. Accordingly, the order of Pr. CIT is upheld in this aspect.
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