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TMI Blog2024 (10) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... dings for AY 2016-17, the said expenses had been allowed as revenue expenditure. In support of the contention that expenditure incurred in raising share capital is revenue in nature, the assessee has placed reliance inter alia on the decision of Navi Mumbai SEZ Private Ltd. [ 2015 (3) TMI 314 - ITAT MUMBAI] - Thus it is held that the expenditure of filing fee was allowed by the AO after requisite examination and , therefore, it cannot be said that the order of the AO was erroneous and/or prejudicial to the interest of the revenue. Assessee had submitted a revised computation showing income which was not examined by the AO - After making requisite inquiry and due application of mind, the AO passed the assessment order at income of Rs. 14,370 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evision is based on the audit objection, fundamentally PCIT has no jurisdiction to pass the revision order under section 263 of the Income Tax Act, 1961 ('the Act') 2. On the facts and circumstances of the case and in law, the revision initiated is prima facie bad and unsustainable since revision is based on audit objection and hence bad in law. 3. On the facts and circumstances of the case and in law, the revision cannot be sustained as the PCIT exercised power of revision based on suggestion made by audit department and therefore the SCN and Order of revision under section 263 of the Act deserve to be quashed. ON INCREASE IN AUTHORISED SHARE CAPITAL FOR MEETING WORKING CAPITAL NEEDS 4. On the facts and circumstances of the case an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome on 30.10.2017 and the assessment was completed u/s 143(3) of the Act at assessed income of Rs. 14,371/- under normal provisions and tax was levied at total income of Rs. 18,88,457/- computed u/s 115JB of the Act. Subsequently, PCIT issued an order u/s 263 of the Act dated 26.02.2024 on the ground that the order of the AO was erroneous and prejudicial to the interest of the revenue as an amount of Rs. 22,10,336/- claimed as filing fee in respect of increased in share capital was wrongly allowed as revenue expenditure. Further, during the course of assessment proceedings the assessee had submitted a revised computation declaring total income of Rs. 31,24,660/-, whereas the assessment was completed on 23.09.2021 without considering the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the PCIT. He has also pointed out that vide CBDT circular dated 16.02.2023 the remedial action in respect of audit objection was very much permissible rather it was required to be taken as has rightly been done by the PCIT. He further pointed out that since the return has been revised to show an income of Rs. 31,24,660/- as against the original return of Rs. 14,370/-, and therefore, AO s order assessing the income at Rs. 14,370/- was erroneous as well as prejudicial to the revenue. 7. We have heard the rival submissions and perused material available before us. It is seen that during the course of assessment proceedings, the AO vide notice u/s 143(2) dated 21.08.2018 has intimated the assessee that the case had been selected for limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete details relating to the issue of filing fee of Rs. 2,10,336/- were furnished and examined by the AO during the course of assessment proceedings. 9. During the course of 263 proceedings before the PCIT also, the assessee, vide letter dated 08.02.2024, explained that the issue had been examined by the AO and therefore it cannot be said that the order was erroneous and prejudicial to the revenue. 10. During the course of proceedings before us, the assessee has also furnished audited financial statement for AY 2016-17 during which share capital of Rs. 10,00,00,000/- was raised and the expenses of Rs. 18,18,066/- in respect of share capital had been debited to the P L account under the caption filing fees . During the scrutiny assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground on which the Ld. PCIT has treated the assessment as erroneous is that during the course of assessment proceedings, the assessee had submitted a revised computation showing income of Rs. 31,24,660/- (as against the original return of income at 14,370/-) which was not examined by the AO. Subsequently, the assessee had also filed a revised return on 13.03.2019 showing total income of Rs. 31,24,660/-. However, the assessment was completed by the AO on 23.09.2021 assessing the total income at Rs. 14,370/- without considering the revised computation and the revised return filed by the assessee. Ld. AR, in this regard, has pointed out that the revised return was very much in the knowledge of the AO who had raised query in this regard vide n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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