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2023 (4) TMI 798 - AT - Income TaxRevision u/s 263 by CIT - manner and determination of the debitable royalty was required to be analysed thoroughly by the AO - provision created in respect of claim of royalty expenses has to be examined with reference to the liability for the year, CIT thus, observed that Ld. AO erred in not examining the discrepancy in respect of debit towards royalty expenses while disposing the case and accepting the assessee’s claim without any application of mind or query - HELD THAT:- Pr. CIT has invoked the revisionary proceedings by merely observing a variation in the amount of royalty expenses debited in the profit and loss account and the amount of provision reported in the balance sheet towards royalty. The extent of enquiry undertaken and replies filed in the assessment proceedings as well as those furnished before him in the revisionary proceedings, forms part of the records of the case on which Pr. CIT ought to have applied his mind before embarking upon the journey of initiating the revisionary proceedings. We find that the issue in the present case is purely on facts which are verifiable from the records of the assessee placed on record. Examination and verification of the audited financial statement i.e. Balance sheet and Profit and Loss Account of the assessee together with notes to accounts and significant accounting policies, perusal of the ledger accounts and the details made by the assessee in the paper book for the data maintained by it, reveals the correct state of affairs in respect of the issue raised in the impugned revisionary proceeding. Accordingly, action u/s. 263 is not justifiable which in our considered view cannot be sustained under the facts and circumstances of the present case. - Decided in favour of assessee.
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