2023 (2) TMI 1340 - HC - Income Tax

Revision u/s 263 in respect of the capital expenditure - such issue not addressed in reassessment proceedings u/s 147 - HELD THAT - On facts, the Tribunal found that the issue of loss/expenditure incurred in respect of newly undertaken software product development project as capital loss/expenditure was not touched by the assessing officer in the reassessment proceedings u/s 147 of the Act. Therefore, Tribunal found that the CIT(A) was not justified in invoking the provisions of Section 263 on an issue which was not the subject-matter of the reassessment of the proceedings. The decision rendered by the Tribunal takes note of the correct legal position and, therefore, does not call for any interference. Appeal filed by the revenue stands dismissed and the substantial question of law is answered against the revenue.

Summary

The High Court of Calcutta dismissed the revenue's appeal under Section 260A of the Income Tax Act against the Income Tax Appellate Tribunal's order. The Tribunal found that the Commissioner of Income Tax could not invoke Section 263 for capital expenditure not addressed in reassessment proceedings under Section 147. The appeal was dismissed, and the substantial question of law was answered against the revenue.