The power of CIT under sec 263 subject to the condition that the order passed by the AO is erroneous and prejudicial to the interest of Revenue

Last updated: 10 April 2012

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Court :
HIGH COURT OF DELHI

Brief :
The CIT thereafter issued notice dated 24.2.2009 under Section 263 of the Income Tax Act, 1961 (“Act” for short) recording the following reasons: “From the computation of income filed with the return, it appears that this profit on sale of property has neither been assessed as capital gain nor as income from business. The profit on the sale of property is reduced from the business income of the assessee company in the computation of income for separate consideration but it is not considered as income by the assessee in the computation of income. Therefore, the assessee company has not offered this profit either as business income or as capital gains. In the absence of any business, the expenses have also been incorrectly allowed. Since the assessee company was deriving income from property only, no separate deduction, except the deduction u/s 24, was admissible in respect of the expenses incurred by the assessee company for the maintenance of property or otherwise. Accordingly, notice u/s 263dated (sic) 24.2.2009 was issued the assessee.” The respondent-assessee furnished reply and attended hearings on 24th March, 2009 and 26th March, 2009.

Citation :
INCOME TAX OFFICER ..... Appellant Through Mr. Kamal Sawhney, sr. standing counsel with Mr. Amit Shrivastava, Adv. Versus DG HOUSING PROJECTS LTD ..... Respondent Through Mr. Kapil Goel, Adv.

Daily Limit Reached