TMI Blog2023 (2) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... dings. Even no addition was made in the reassessment proceedings and the Assessing Officer time and again wrote letters to the CCIT to settle the audit objection. However, since the ITO(Audit) did not agree to settle the objection, the ld. PCIT initiated the revision proceedings u/s 263 of the Act stating that the expenditure pertained to the earlier year as against earlier objection that the 2/3 of the total expenditure booked on account of the municipal fees was not allowable being deferred revenue expenditure. Even, since the assessee had to litigate as the agreement did not mature and arbitration award has been passed, about which the assessee has claimed that the award amount will be offered for taxation. Any expenditure incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der dated 30.03.2022 of the Principal Commissioner of Income Tax, Panchkula [hereinafter referred to as PCIT ] agitating the action of the PCIT in passing the impugned order u/s 263 of the Income Tax Act (hereinafter referred to as the Act ) exercising his revision jurisdiction. 2. The brief facts of the case are that the assessee had filed his income tax return for the assessment year 2012-13 on 17.09.2012 declaring business income of Rs.77,44,480/- along with the agricultural income of Rs.10.89,264/-. The case of the assessee was selected for scrutiny through CASS for the reason Large other expenses claimed in the P L A/c . The assessment u/s 143(3) of the Act was completed by the Assessing Officer (in short the A.O ) on 30.03.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. The assessee had claimed the license fee payment amounting to Rs.1,23,42,000/- during the year under consideration out of which licence fee to the tune of Rs.56,10,000/- pertained to the preceding previous year 2010-11. He observed that the assessing officer had not at all examined the said claim of the assessee even though, it was clearly mentioned in the reasons recorded u/s 148 that the license fee to the tune of Rs. 56,10,000/- pertained to the preceding year 2010- 11. The assessee however explained that the agreement with the Municipal Corporation was executed on 28.02.2011 and that no work could be executed in Financial year 2010-11. That the amount of Rs.56,10,000/-, in fact, pertained to the financial year relevant to assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s claim for award of cost along with interest before the Arbitral Tribunal unequivocally endorses this position. Thus it is apparent that the assessment order was passed by the assessing officer, by mechanically placing on records all the documents submitted by the assessee during the course of reassessment proceedings, without examining the same, and without a correct appreciation of facts and law. The ld. PCIT dealing with the submissions of the assessee held that the order passed by the Assessing Officer 143(3) read with section 147 of the Act dated 29.08.2019 was erroneous and prejudicial to the interest of the Revenue and set aside the said assessment for de novo assessment. 5. Being aggrieved, the assessee has come in appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settle audit objection vide letter dated 04.03.2021. However, ITO(Audit) wrote letter dated 06.10.2021 to CCIT declining to settle the objection. Thereafter, the Assessing Officer again wrote letter to CCIT dated 08.03.2022 to settle audit objections as no further action survived in the case. However, the PCIT, in view of the said objection, again issued notice u/s 263 of the Act and passed the impugned revision order u/s 263 of the Act. 9. The only contention raised in the revision order is that the amount of Rs.56,10,000/- pertained to the prior year expenses, whereas, the claim of the assessee is that the said amount pertained to the year under consideration as the agreement with the municipal corporation was executed only on 28.02.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r objection that the 2/3 of the total expenditure booked on account of the municipal fees was not allowable being deferred revenue expenditure. Even, since the assessee had to litigate as the agreement did not mature and arbitration award has been passed, about which the assessee has claimed that the award amount will be offered for taxation. Under the circumstances, any expenditure incurred by the assessee has also to be deducted and to be allowed. The assessee explained that the agreement with municipal corporation was entered on 28.02.2011 and that no amount was incurred in the financial year 2010-11 and the expenditure was rightly booked in the year 2011-12, therefore, we do not find justification on the part of the ld. PCIT in exercisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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