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TMI Blog2022 (12) TMI 937X X X X Extracts X X X X X X X X Extracts X X X X ..... sionary proceedings u/s. 263 on merits. The assessee also raised additional grounds before us contending the issue on legal grounds. The ld. AR during the course of hearing submitted that if the legal issue contended in additional gorund No.2 is adjudicated, the rest of the grounds including the other additional grounds become academic. Accordingly we first proceed to adjudicate the additional ground No.2, which reads as follows;- "2. The learned Pr. Commissioner of Income Tax is not justified in assuming jurisdiction under section 263 of the Act in respect of issues which are not arising out of incriminating material found during the course of search, in as much as, the year for which the order passed under section 143(3) r.w.s 153A of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off of fixed assets due to closure of Jalandhar Restaurant. 2. Expenditure claimed as fees paid to Sayajji Hotels Ltd. on which tax was not deducted. 5. The PCIT issued show cause notice to the assessee in this regard for which the assessee made submissions. The PCIT did not accept the contentions of the assessee and to extent of the above two items the PCIT treated the order of assessment as erroneous and prejudicial to the interests of the revenue and therefore set aside the order of assessment passed by the AO by invoking clause (a) to Explanation 2 to section 263. The assessee is in appeals before the Tribunal aggrieved by the order of the PCIT. 6. Before us, the ld. AR submitted that as on the date of search the assessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined by the PCIT, the question of invoking the jurisdiction u/s. 263 does not arise. The issues examined by the PCIT are part of Profit & Loss Account as has been admitted by the PCIT in his order and are not arising out of incriminating material. Therefore, it is submitted that the order passed u/s. 263 of the Act is liable to be quashed. 9. The ld. DR relied on the order of the PCIT. 10. We have heard the rival submissions and perused the material on record. In the present case, the assessment in AYs 2012-13 and 2013- 14 have been completed u/s.143(3) is completed prior to the date of search i.e. 10.01.2018 and for AY 2014-15 the return filed by the Assessee was accepted and no notice u/s.143(2) of the Act was issued within the time li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted only to income that is not disclosed which is detected or which emanates from material found in the course of search which are incriminating. The impugned issue of assets written off and the expenditure claimed without TDS for which the PCIT has invoked the revisionary power are not arising out of incriminating material and have already been disclosed in the financials of the assessee. The AO therefore could not have made any addition towards the same. We therefore are of the considered view that treating the order of assessment passed u/s.143(3) r.w.s 153A as erroneous on this ground is not tenable and that the PCIT is not correct in invoking the revisionary powers u/s.263. Accordingly the order passed u/s.263 by the PCIT is quashed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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