Vmobi Solutions Pvt. Ltd. Vs PCIT (Central) (ITAT Mumbai)
ITAT Mumbai held that expenditure of filing fee in respect of increased in share capital duly examined during the assessment proceedings hence initiation of proceedings u/s. 263 of the Income Tax Act unjustified. Order of PCIT u/s. 263 quashed.
Facts- The assessee had filed return declaring nil income on 30.10.2017 and the assessment was completed u/s 143(3). Subsequently, PCIT issued an order u/s 263 of the Act dated 26.02.2024 on the ground that the order of the AO was erroneous and prejudicial to the interest of the revenue as an amount of Rs. 22,10,336/- claimed as filing fee in respect of increased in share capital was wrongly allowed as revenue expenditure. PCIT proceeded to pass an order u/s 263 setting aside the assessment order passed by the AO u/s 143(3) of the Act with the direction to pass afresh assessment order.
Conclusion- Held that the expenditure of filing fee of Rs. 22,07,836/- was allowed by the AO after requisite examination and, therefore, it cannot be said that the order of the AO was erroneous and/or prejudicial to the interest of the revenue.
Held that the AO had already allowed the claim of the assessee regarding filing expenses of Rs. 22,07,836/- being revenue expenditure and the deduction u/s 35ABB after due examination during the assessment proceedings. As such the order of the PCIT u/s 263 holding that order of the AO was erroneous and prejudicial to the revenue is not justified, the same is accordingly quashed.
