Income Tax

Revisional power under Section 263 of the Act cannot be exercised even if there is inadequate enquiry on the part of AO

By TG Team Income Tax Judiciary October 16, 2011

TaxGuru Citation: 2011 taxguru.in 1019
Case Name: Vodafone Essar South Ltd. Vs. Commissioner of Income Tax (ITAT Delhi)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2004- 05
Courts: ITAT Delhi

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Vodafone Essar South Ltd. Vs. Commissioner of Income Tax

ITAT Delhi

I.T.A. No. 3238/Del/2009

A.Y. : 2004- 05

ORDER

This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) dated 30.3.2009 pertaining to assessment year 2004-05.

2. The grounds raised read as under:-

“On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax-IV, New Delhi (hereinafter referred to as the Learned C.I.T.) erred in initiating proceedings under section 263 of Income Tax Act, 1961 (Act) by wrongly assuming jurisdiction under section 263 of the Act and hence, the order passed by the C.I.T. under section 263 of Act is bad in law and void ab-initio.

On the facts and circumstances of the case and in law, the C.I.T. erred in holding that the regulatory charges amounting to Rs. 358,130,408 are capital in nature and need to be amortized under section 35ABB of the Act and has, therefore, erred in directing the DCIT, Circle 12(1), New Delhi (hereinafter referred to as the Ld. A.O.) to compute allowance under section 35ABB of the Act.

On the facts and circumstances of the case and in law, the C.I.T. erred in holding that due enquiries in respect of loan arrangement fee and stamp duty charges were not conducted by the Assessing Officer and hence, has erred in remanding the matter back to the Ld. A.O.”

3. In this case Ld. Commissioner of Income Tax noted that from an examination of the income tax assessment records of the assessee it transpired that the assessee had claimed and was allowed the payment of Rs. 35,81,30,408/-, on account of regulatory fees, which is capital in nature and should have been disallowed. The assessee has had claimed and was allowed expenditure of 3,10,22,106/- towards product launches under advertising and publicity, which is capital in nature and should have been disallowed. The assessee had claimed and was allowed an expenditure of 34,92,168/- towards stamp duty under bank charges and guarantee commission, which is capital in nature and should have been disallowed.