Magan Mercantile Pvt Ltd vs PCIT-4, Mumbai

Parties Involved

Facts Summary

The assessee, Magan Mercantile Pvt Ltd, filed an appeal against the order of the Principal Commissioner of Income Tax (PCIT), Mumbai, which set aside the assessment order passed by the Faceless Assessing Officer (FAO) under section 143(3) of the Income-tax Act, 1961. The FAO had made an addition of Rs.65,96,040/- on account of unexplained loans and advances under section 68 of the Act. The PCIT, invoking jurisdiction under section 263 of the Act, treated the assessment order as erroneous and prejudicial to the interest of the revenue for not implementing section 115BBE related addition under section 68 of the Act. The assessee argued that the FAO wrongly made the addition and that the PCIT acted beyond jurisdiction. The Tribunal considered the arguments and found that the PCIT correctly invoked section 263 of the Act for levying a higher rate of tax as applicable under section 115BBE of the Act instead of the normal rate of tax.…

Legal Issues

• 1. Whether the order u/s 263 of the Act passed by Ld. PCIT is bad in law and is passed in contravention of prevailing law as well as facts of the case?
• 2. Whether the Ld. Pr. CIT, Mumbai erred in law as well as on the facts of the case in assuming jurisdiction u/s 263 of the Act?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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