HBS View Private Ltd. Vs PCIT-8 (ITAT Mumbai)
In the matter abovementioned ITAT upheld the jurisdiction u/s 263 exercised by PCIT, is right as twin condition of section 263 are fulfilled.
The only issue involved pertains to question whether jurisdiction u/s 263 exercised by PCIT is correct and fulfilled twin conditions of the section. During the year under consideration assessee claimed to have spent huge amount of Rs. 6.65 cr. towards displacement compensation to Society Members, consultancy fees of Rs. 44.47 lakhs, paid lease rent of Rs. 1.79 cr. The genuineness of those expenditure, whether TDS was deducted on these payments were not examined by AO.
It was submitted that assessee has not claimed the deduction of expenses under the year. AO can examine the deductibility of the expenses in the year of claim. The twin conditions of “error” and “prejudicial to the interest of Revenue” were not fulfilled and the exercise of jurisdiction by ld. PCIT u/s 263 is incorrect. Reliance was placed on the decision of M/s Jewel of India 325 ITR 92 (Bombay). On the other hand, revenue argued that order of PCIT is a very detailed one and which mentions that no enquiries were made by AO and several instances of “Prejudice to the interest of Revenue”
were pointed out.
