Case Law Details
PCIT Vs R.K. Jain Infra Projects Pvt. Ltd. (Delhi High Court)
Delhi High Court held that for exercise jurisdiction under section 263 of the Income Tax Act, twin conditions i.e. order being erroneous and prejudicial to the interest of revenue needs to be satisfied. PCIT order not satisfying the same needs to be quashed.
Facts- AO carried out a limited scrutiny under CASS. AO, having satisfied himself with regard to the various queries raised by him, framed an assessment order u/s. 143(3) of the Act on 12.10.2017.
The Principal Commissioner of Income Tax [“PCIT”], however, took umbrage to the assessment order dated 12.10.2017 passed under Section 143(3) of the Act. Consequently, queries were raised in the matter, with regard to the heads i.e. Large ‘other expenses’ claimed in profit and loss account; payments made to related parties under Section 40(A)(2)(b) of the Act; current liabilities; payments made to the contractors; and payment made towards stamp duty.
What is not in dispute, and something which emerges from the record, is that out of the five heads, only two heads, ultimately, became the subject matter of the PCIT‟s order passed under Section 143(3) of the Act. These two heads were: “large other expenses claimed in profit and loss account”, and “payment made to contractors”.
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