TMI Blog2023 (8) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... oper lease deed and would have remained the same irrespective of the period of lease as long as it was more than one year. Further the period of lease itself could not be decisive of the question whether the asset was enduring nature. On these facts, the impugned expenditure was revenue in nature. In the present case of the assessee was selected for scrutiny on few issues it cannot be said that there was lack of enquiry on the part of AO on this issue. It is a settled law by now that where the AO has exercised the quasi judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be considered erroneous simply because the ld. PCIT does not feel satisfied with the conclusion - extent of enquiry cannot be stretched to any level by forcing the AO to go through the assessment process again and again. Thus the assessment order passed by the AO was after full enquiry and, therefore, the case does not fall within the clause (a) and (b) of Explanation 2 to Section 263 - Decided in favour of assessee. - SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, JUDICIAL MEMBER For the Assessee Shri Anil Kochar, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment in so far as it was prejudicial to the interests of the revenue. Show cause notice u/s.263 of the Act was issued vide this office letter ITBA/COM/F/17/2021-22/957) dated 30.11.2022 which was also sent through the available email id as well as by post. The assessee was requested to file an explanation as to why the provisions of section-263 of the Act should not be invoked in this case and the assessment completed by the Assessing Officer should not be Revised/modified or set-aside. 3. In response to show cause notice dated 30.11.2022, assessee filed its submission which is as under: 5: In this connection, assessee's submission may kindly be noted as under: (a) An amount of Rs. 1,28,95,728/- has been debited in the accounts under the nomenclature 'Registration Expenses for Pataka House. The assessee is the owner of the building called Pataka House situated at 57B, Mirza Ghalib Street Police Station- Park Street, Post Office- Park Street, Kolkata 700 016. The building comprises of Ground + 5 Floors. During the year, the assessee made out a Lease Deed in favour of M/s Trent LId, a company within the meaning of the Companies Act 2013, having its regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Considering the nature of expenditure in the light of the judicial decisions, legal expenses have to be allowed u/s 37(1) of the Act. We order accordingly. In view of the aforesaid, it is submitted that there is as such no irregularity in so far as the claim of the assessee made u/s 37(1) of the Act which consequently has been allowed by the A.O. Proceeding so initiated may kindly be dropped and for which the assessee company shall be highly obliged. 4. During the course of hearing, ld. AR has prayed before us that while passing the revisionary order, ld. PCIT erred in exercising jurisdiction by initiating proceeding u/s 263 of the Act since the order of AO is neither erroneous nor prejudicial to the interest of revenue. The ld. AR submitted that an amount of Rs. 1,28,95,728/- has been debited in the assessee s books of account under the nomenclature of registration expenses for Pataka House and the assessee is the owner of the said building. During the year under consideration, assessee made out a lease deed in favour of M/s. Trent Ltd. and under the provision of transfer of Property Act for which lease deed was registered and for this purpose an amount of Rs. 2,47,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revisionary jurisdiction u/s 263 is very specific, limited and also different from appellate jurisdiction. Law contained in section 263 does not allow ld. PCIT to impose his view over judicious view adopted by the ld. AO unless the view adopted by the ld. AO is established to be not at all sustainable in law. The ld. AO in the present case on appreciation of the facts and using his judicial wisdom allowed sum of Rs. 1,28,95,729/- borne by the assessee towards registration of lease deed by debiting in the profit and loss account u/s 37(1) of the Act. The view of the AO in present case is also supported by The Hon ble Bombay High Court in the case of Cinecita Pvt. Ltd. 137 ITR 652 has held. The impugned expenditure did not involve any element of premium in the amount claimed as expenditure. It was incurred only to draw up and get registered an effective and proper lease deed and would have remained the same irrespective of the period of lease as long as it was more than one year. Further the period of lease itself could not be decisive of the question whether the asset was enduring nature. On these facts, the impugned expenditure was revenue in nature. In the present case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry. Unless there is an established case of total lack of enquiry; It is pertinent to mention here that assessment in the present case of the assessee firm for the year under consideration was carried out in the faceless manner by NFAC. It is a fact that any faceless assessment is carried out through a teamwork of assessment unit, technical unit, review unit, verification unit etc. Since different units are headed by Principal Commissioner of Income Tax, therefore, in a faceless regime, normally there cannot be a case of prejudice of lack of enquiry for the reason that there is application of mind by multiple officers of Department and not by a single officer and thus at the end of our discussion, we are of the view that the assessee firm had furnished the requisite information and the NFAC has completed the assessment after considering all the facts, therefore, the order passed by the AO cannot be termed as erroneous. 8. Therefore, after considering the totality of the facts of the case and keeping in view the legal position as discussed herein above, it is clear that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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