Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2023 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 756 - HC - Income TaxRevision u/s 263 - Allowability of provisions of construction expenditures - As per CIT provision for construction expenditure is an un-ascertainable liability and is not allowable u/s. 37(1) above expenditure allowed by the AO in the assessment order is not in order - HELD THAT:- As during the assessment proceedings, these expenses have been examined and scrutinized and question was asked by the Assessing Officer and the assessee has replied to the AO. The assessee has submitted its reply stating that provision for construction expenditures (Flat Sale) represent the proportionate expenditure apportioned to the units sold and this expenditure has been really paid in the subsequent financial year 2017-18. Therefore, these are the real expenses for which the assessee has made the provision and Ao examined the issue and took a possible view and completed the assessment. Therefore, such assessment order should not be considered as erroneous and prejudicial to the interest of revenue. When the Assessing Officer adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Assessing Officer has taken one view with which the Ld. PCIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of revenue “unless the view taken by the Assessing Officer is unsustainable in law.” Herein, AO has conducted sufficient inquiry, as noted above. Besides, the Ld. PCIT has not set out as to why this item of provision for expenditure need to be investigated and as to what type of inquiry ought to have conducted by the AO - A mere observation that no proper details have been obtained, cannot be sufficient to come to a conclusion that the Assessing Officer did not make proper and adequate inquiries which he ought to have made in the given facts and circumstances of this case. - Decided in favour of assessee.
|