DLF MIDTOWN PRIVATE LIMITED,NEW DELHI V. PRINCIPAL COMMISSIONER OF INCOME TAX-DELHI-1, NEW DELHI

ITA 2601/DEL/2024

AI Insights

The case involves DLF Midtown Pvt. Ltd, which appealed against the order of the Principal Commissioner of Income Tax (PCIT) assuming revision jurisdiction under section 263 of the Income-tax Act, 1961. The PCIT had directed a re-examination of various issues including the arm's length price of interest on compulsorily convertible debentures (CCDs), security premium, and recognition of revenue under the Percentage of Completion Method (POCM). The Tribunal found that these issues had been adequately examined by the Assessing Officer (AO) and the Transfer Pricing Officer (TPO) during the original assessment proceedings, and thus, the revision jurisdiction was improperly assumed by the PCIT.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34773 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: Texport Overseas Pvt. Ltd vs. PCIT, Daniel Merchants Pvt. Ltd vs. ITO, Malabar Industrial Co. Ltd vs. CIT, Tara Devi Aggarwal vs. CIT, Rajmandir Estates (P.) Ltd vs. PCIT, Excel Industries Ltd vs. CIT, Infosys Technologies Ltd vs. CIT, Apollo Tyres Ltd vs. CIT, Perfetti Van Melle India Pvt. Ltd vs. CIT, Ramesh Kumar vs. CIT, Shankar Tradex Pvt. Ltd vs. PCIT, Surya Financial Services Ltd vs. PCIT, Ashok Logani vs. CIT, BSES Rajdhani Power Ltd vs. PCIT, Paville Projects (P.) Ltd vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: R.S. SINGHVI
• Keywords: Transfer pricing; International transaction; Valuation report; Revision of order
• Section: 143(3); 142(1); 143(2); 263; 22; 13; 92CA; 20

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA No. 2601/Del/2024 (Assessment Year: 2017-18) DLF Midtown Pvt. Ltd, 15-Shivaji Marg, Moti Nagar, New Delhi Vs. Pr. CIT-1, New Delhi (Appellant) (Respondent) PAN: AAFCD3015Q Assessee by : Shri R. S. Singhvi, CA Shri Satyejeet Goel, CA Shri Rajat Garg, CA Revenue by: Shri Surender Pal, CIT DR Date of Hearing 10/02/2025 Date of pronouncement 12/03/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.2601/Del/2024 for AY 2017-18, arises out of the order of the Pr. Commissioner of Income Tax-1, New Delhi [hereinafter referred to as „ld. Pr. CIT‟, in short] in Appeal No. ITBA/REV/F/REV1/2023- 24/1059224279(1) dated 30.12.2023 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) dated 16.04.2021 by the Assessing Officer, National e-Assessment Centre, Delhi (hereinafter referred to as „ld. AO‟). 2. The assessee has raised the following grounds of appeal:- “1(i) That on the facts and circumstances of the case, PCIT, Delhi-1 has wrongly assumed jurisdiction u/s. 263 of the Income tax Act, 1961 by treating the assessment order passed by Assessing Officer u/s. 143(3) as ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 2 erroneous and prejudicial to the interest of revenue without appreciating facts of the case or application of mind. (ii) That in the absence of any finding that order passed by the AO u/s. 143(3) is erroneous and prejudicial to the interest of revenue, it is not open to set-aside the same for re-verification and as such direction of PCIT, Delhi-1 are highly arbitrary and contrary to purpose, object and scope of sec. 263 of the Act. 2. That various issues raised by the PCIT, Delhi-1 in the notice u/s. 263 have already been examined by the Assessing Officer during assessment proceedings u/s. 143(3) and as such there is no case for treating the assessment order as erroneous and prejudicial to the interest of revenue. 3(i) That the direction to TPO for recalculating the ALP of interest rate is invalid and without jurisdiction as the order passed by TPO u/s 92CA was not the subject matter of proceedings u/s 263 of the Act and jurisdiction was only vis-à-vis the assessment order. (ii) That in any case, the direction to TPO for recalculating the ALP of interest rate on more robust and correct comparable is unjustified as the issue was considered in detail by the TPO during the proceedings and therefore, there is no case for restoring the matter back to the TPO for re- consideration. (iii) That the PCIT, Delhi-1 has ignored the submission of the Appellant that ALP of interest rate on CCD as adopted by the Appellant was upheld by the Ld. CIT(A) in the immediately preceding year i.c. AY 2016-17 and Income Tax Department has not preferred an appeal before Hon'ble ITAT and therefore, there is no justification for restoring it to TPO. (iv) That even otherwise, the claim of interest being reasonable and duly benchmarked, in the absence of any contrary finding, the direction to restore back the issue is highly arbitrary and unjustified. 4. That the direction by PCIT, Delhi-1 to investigate the entire issue of security premium is without any valid basis in the absence of any finding about any income or consequential tax implication, there is no justification for restoring the issue to the Assessing Officer. 5(i) That the direction by PCIT to compute the taxable income from this project on the basis of POCM as apparently sufficient cost has already been gone into the project is unjustified and in total disregard to the fact that appellant is newly formed company and still in the process of obtaining project approvals / plans for the SIEL project. ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 3 (ii) That non-recognition of revenue during the year being in accordance with the Ind AS and guidance note, the direction of PCIT is misconceived and the assessment order cannot be termed as erroneous and prejudicial to the interest of revenue. (iii) In any case, in the absence of any finding that order of assessing officer is prejudicial to the interest of the revenue, there is no case for restoration of matter back to the assessing officer. 6. That the direction by PCIT to examine the complete details of borrowing cost including its purpose and its utilisation for the project related to inventories of Rs. 1820 Crore is without any valid basis in the absence of any finding about any income or consequential tax implication, for the year under consideration, there is no justification for restoring the issue to the Assessing Officer. 7. That the direction by PCIT to look into genuineness of financial liability of Rs. 187.7 Crore is without any valid basis in the absence of any finding about any income or consequential tax implication, there is no justification for restoring the issue to the Assessing Officer. 8. That the direction by PCIT to examine details of the foreign equity, valuation of the company and taxability of the same on sale of equity to non-resident are unjustified as the Appellant has issued equity to non- resident and has not sold the investment leading to capital gain tax and therefore, the contention of the PCIT is misplaced and therefore, there is no justification for restoring the issue to the Assessing Officer. 9. That the direction by PCIT to investigate the agreement with DLF Home Developers Limited for the grant of right in parcel of land is unjustified as the said transaction does not pertain to the year under consideration and in fact, the same pertains to last AY and therefore, there is no valid basis to treat the order of Assessing Officer as erroneous and prejudicial to the interest of revenue. 10. That the assessment order having been passed by the Assessing Officer after necessary verification of issues under consideration, the assessment order is neither erroneous nor prejudicial to the interest of the revenue. 11. That order passed by the PCIT, Delhi-1 is not justified on facts and same is bad in law. 12. That the appellant craves leave to add, alter, amend or forgo any of the grounds of appeal at the time of hearing.” ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 4 3. We have heard the rival submissions and perused the material available on record. At the outset, we find that the assessee has challenged the assumption of revision jurisdiction u/s 263 of the Act of the ld PCIT as well as on merits. The return of income for the AY 2017-18 was filed and assessment was completed u/s 143(3) of the Act on 16.04.2021. The assessee company is engaged in the business of construction, development and sale of integrated township and residential houses and apartments. In the AY 2017-18, the return of income was filed on 30.11.2017 declaring Nil income showing loss of Rs. 15,29,974/- . The case was selected for scrutiny vide issuance of notice u/s 143(2) of the Act on 09.08.2018 which was duly served on the assessee. Later notice u/s 142(1) of the Act was also issued on various dates. Considering the international transactions of the assessee, the case was referred to ld Transfer Pricing Officer (TPO) on 05.11.2019 by the ld Jurisdictional AO. The order u/s 92CA(3) of the Act stood passed by the ld TPO on 30.01.2021 suggesting TP adjustment of Rs. 63,85,93,941/- on account of interest paid by the assessee on CCDs issued to AE. 4. The assessee is a joint venture between DLF Housing Developers Ltd and Reco Moti Pte Ltd (RNPL). During FY 2015-16, assessee issued 9,60,29,164 Compulsorily Convertible Debentures (CCDs) @ Rs 140/CCD with coupon rate of 15% per annum. The total interest paid/ payable shown under the clause No. 14 of Form 3CEB was Rs. 201,66,12,444/-. The assessee in its Transfer Pricing Study Report (TPSR) benchmarked the transaction of interest on CCDs using Comparable Uncontrolled Price (CUP) method. Since, the interest paid by assessee @15% is within the Arm‟s Length range (35th to 65th percentile) of the interest rates of the comparable instruments by 15% (35the percentile) to 17% (65th percentile) per annum, the international transaction between assessee and its AE was considered to be at Arm‟s Length from an Indian transfer pricing perspective. ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 5 5. The ld TPO benchmarked the said transaction of interest paid/ payable to AE by adopting the average of 2 comparables @10.25% as against 15 % incurred by the assessee. 6. The ld PCIT in his revision order observed that two comparables chosen by the ld TPO are to be rejected without assigning any reason thereon. The ld PCIT observed that the borrowing rate of interest was only 7.25% in India and hence, the order of the ld TPO was sought to be treated as erroneous as the arm‟s length price of interest was adopted @10.25%. 7. It is pertinent to note that this issue was duly examined by the ld TPO by issuance of various show cause notices during the TP assessment proceedings and infact a transfer pricing adjustment of Rs. 63.85 cr was indeed made by the ld TPO. Hence, it is not a case of no enquiry or even inadequate enquiry by the ld TPO. Merely because, the ld PCIT was of a different opinion that interest @7.25% should have been determined by the TPO to be arm‟s length price, the same cannot be done by exercising revision jurisdiction u/s 263 of the Act as ld PCIT is merely trying to substitute his view in place of the plausible view that have already been taken by the ld TPO. On perusal of the of the order of the ld PCIT, we find that up to page 36 of his order, he has merely reproduced the various show cause notices issued by him and the replies filed by the assessee and his finding starts only from page 37 for just 10 lines by merely stating that the comparables chosen by the ld TPO for benchmarking the rate of interest of CCDs to AEs are to be rejected. This observation of the ld PCIT has got absolutely no basis. The ld PCIT does not even state as to why and how the order of ld TPO is erroneous. Further, we find that this Tribunal in assessee‟s own case for AY 2016-17 in ITA No. 1963/Del/2022 and ITA No. 2859/Del/2024 dated 06.09.2024 had categorically held that no domestic transfer pricing adjustment is permissible in view of the decision of Hon‟ble ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 6 Karnataka High Court in the case of Texport Overseas Pvt. Ltd reported in 114 taxmann.com 568 (Kar) wherein, it was held that once the Section 92BA(i) of the Act is omitted w.e.f. 01.04.2017 from the statute, the resultant effect would be that it had never been passed to be considered as a law and never been existed in the statute. Hence, the Tribunal order had categorically held that no transfer pricing adjustment per se in respect of domestic transaction could be made. This fact was duly brought to the notice of the ld PCIT and despite that he has proceeded to treat the order of the ld TPO/ AO as erroneous (without stating as to why it is erroneous) and prejudicial to the interest of the revenue for calculating ALP of interest rate of selecting different robust and correct comparables. This action of the ld PCIT is clearly condemnable and not to be appreciated in the eyes of law. In view of aforesaid observations, revision jurisdiction u/s 263 of the Act of the ld PCIT deserves to be quashed for more than 1 reason i.e. a) adequate enquiry have already been made on the impugned issue by the ld TPO and even ALP adjustment has been proposed. b) No TP adjustment per se could be made in view of the decision of Hon‟ble Karnataka High Court in Texport Overseas Pvt. Ltd referred supra. c) The order of the ld PCIT does not even say as to how the order of the ld TPO is erroneous. 8. In view of the aforesaid observations, we have no hesitation to quash the assumption of revision jurisdiction u/s 263 of the Act by the ld PCIT on the impugned issue. 9. The next issue for which the ld PCIT has assumed revision jurisdiction is on the fact that the assessee has received certain security premium which ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 7 was not investigated by the ld AO thereby making his order erroneous and prejudicial to the interest of the revenue. The ld PCIT had also directed to the ld AO to consider the provisions of section 94B of the Act while addressing the said issue. 10. We have heard the rival submissions and perused the material available on record. As stated earlier, the assessee is a joint venture firm started in AY 2016-17 and the year under consideration is the second year of operation. Pursuant to the query raised by the ld AO in the notice u/s 142(1) of the Act dated 12.02.2021, wherein, specific details of fresh issue of share capital together with premium and justification for the share premium together with its genuineness were sought to be examined by the ld AO, the assessee furnished detailed reply dated 18.02.2021 along with complete justification for issuance of shares at premium duly supported by a valuation report in terms of Rule 11UA of the Income Tax Rules. This reply of the assessee is enclosed in pages 263 to 265 of the Paper Book filed before us. Further, we find that the ld PCIT had sought to direct the ld AO to apply provisions of section 94B of the Act for limiting the claim of interest. We find that the said provisions of section 94B of the Act were introduced by the Finance Act 2017 w.e.f. 01.04.2018 and hence, applicable only for AY 2018-19 onwards and the same cannot be made applicable for the year under consideration at all. Hence, the direction of the ld PCIT is against the statute. From the query raised by the ld AO and the detailed replies given by the assessee in the assessment proceedings, it is very clear that the issue of shares and security premium were examined in detail by the ld AO. Even on merits, we find that the equity shares have been issued by the assessee only to its joint venture partners at a premium of Rs. 130 and no external or 3rd party is involved thereon. The share valuation report is enclosed in pages 277 to 285 of the Paper Book. The initial allotment of ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 8 shares was done at the same premium in AY 2016-17 which was accepted by the revenue. Hence, there is absolutely no reason for the ld AO to even doubt the genuineness, creditworthiness of the investors with regard to issue of shares at premium during the year under consideration. Hence, his order cannot be treated as erroneous much less prejudicial to the interest of the revenue. Further, as stated supra, adequate enquiries were indeed made by the ld AO. Hence, this is not a fit case for assumption of revision jurisdiction u/s 263 of the Act on the impugned issue and hence, the assumption of jurisdiction is hereby quashed on this issue. 11. The next issue for which the ld PCIT has assumed revision jurisdiction is for the fact that assessee had disclosed inventories to the tune of Rs. 1820 crores whereas no revenue has been disclosed. Since, the assessee has been adopting Percentage Of Completion Method (POCM) for recognition of its revenue, the ld PCIT had directed the ld AO to verify and examine the details of the project including the cost of the project, its time line and as to what percentage of project value has been achieved till 31.03.2017 and compute the taxable income from the project accordingly. 12. We have heard the rival submissions and perused the material available on record. The assessee is following POCM for recognition of its revenue on which fact there is no dispute. Since, the execution of the project was not commenced in the year under consideration, no revenue was recognized as per POCM. The inventories shown in the value of Rs. 1820 crores represent land cost, approval cost, borrowing cost. Primary basis of the ld PCIT drawing adverse inference on the assessee on this issue was disclosure of inventories in the sum of Rs. 1820 croes. We find that the ld AO vide notice u/s 142(1) dated 12.02.2021 specifically sought a query on the inventories together with method of accounting adopted by the assessee for valuation of stock and recognition of revenue. This query was ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 9 duly responded by the assessee vide letter dated 18.02.2021 wherein, it was specifically brought to the knowledge of the ld AO that project activity had not started and hence, there is no scope for recognition or revenue as per POCM during the year. The ld AO having been satisfied with the said reply did not chose to make any addition towards recognition of revenue. Before us, it was also pointed out by the ld AR that assessee is following POCM as per IND-AS 18 which is mandatory, wherein, revenue from a project could be recognized only when a certain threshold of construction work has been completed. The ld AR also drew our attention to page 321 of the Paper Book containing the notes of accounts wherein, clear disclosure for real estate transaction and adoption of AS had been mentioned qua the recognition of revenue. It was also submitted that no revenue has been actually realized by the revenue. This fact was also brought to the knowledge of the ld PCIT in response to reply given to the show cause issued u/s 263 of the Act. Ld PCIT summarily ignored the entire contentions of the assessee and without any basis known to law, directed the ld AO to examine the issue afresh. It is pertinent to note as stated earlier, the ld AO had already examined the issue of inventories shown in the balance sheet vis-a-vis the recognition of revenue from the project and had taken a plausible view after considering the plausible explanation given by the assessee. The ld PCIT had merely made a general and vague observation by directing the ld AO to examine the issue in order to make fishing and roving enquiry which is not legally permitted while assuming revision jurisdiction u/s 263 of the Act. Further, it would be relevant to note at this point of time that recognition of revenue under POCM even if deferred by the assessee (though factually that is not the case of the assessee herein), still there would be no loss of tax to the exchequer as ultimately the same would only result in revenue neutral mechanism as it is only timing difference of recognition of revenue. Hence, it cannot be said that the order passed by ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 10 the ld AO would be prejudicial to the interest of the revenue. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of Excel Industries Ltd reported in 358 ITR 295. Hence, direction of the ld PCIT, being vague and mechanical and the impact not being prejudicial to the interest of the revenue, become fatal to the assumption of revision jurisdiction u/s 263 of the Act qua the issue of recognition of revenue under the POCM. Hence, the action of the ld PCIT in this regard is hereby quashed. 13. The next issue for which the ld PCIT has assumed revision jurisdiction is only by directing the ld AO to examine the complete details of the borrowing cost, including its purpose and utilization for the project. 14. We have heard the rival submissions and perused the material available on record. The direction given by the ld PCIT in para 4 in page 38 of the order is very vague without bringing on record as to why the order of the ld AO was erroneous. Hence, the primary assumption of revision jurisdiction u/s 263 of the Act by the ld PCIT is only to make fishing and roving enquiries by giving direction to ld AO to examine an issue which is not a issue at all. On merits, the borrowing cost incurred by the assessee arises out of fund raised by the assessee from its joint venture partners vide issuance of CCDs and OCDs. The fact of interest paid by CCDs and OCDs was subject matter of detailed examination by the ld TPO and a sum of Rs. 63.95 crores was even proposed as a transfer pricing adjustment by the ld TPO. Hence, this is not a case where no enquiry has been made by the lower authorities. Further, it is relevant to note that the borrowing cost has been capitalized by the assessee under inventories and the ld AO had already examined the entire inventories in the earlier ground. Hence, it could be safely concluded that the ld PCIT had merely given a vague and general direction without any legal basis and without pointing out any error ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 11 in the order of assessment of the ld AO. Hence, revision jurisdiction u/s 263 of the Act is hereby quashed qua this issue. 15. The next issue for which the ld PCIT had assumed revision jurisdiction was only by way of giving direction to the ld AO to examine the genuineness of the financial liability of Rs. 187.70 and examine the details of foreign equity, valuation of the assessee company and selling of equity to non residents and taxability of the same as per the Act. 16. We have heard the rival submissions and perused the material available on record. As stated in earlier grounds, the ld PCIT had merely given vague directions in order to make fishing and roving enquiries which is not permissible u/s 263 of the Act. The ld PCIT had not pointed out any error in the order of the assessment by the ld AO. On merits, the financial liability of Rs. 187.70 crores which is reflected in Note No. 11 in the balance sheet represents interest accrued but not due arising out of a consequential entry representing unpaid borrowing cost which had already been disclosed in the earlier issue supra. This interest accrued but not due is in respect of CCDs and OCDs issued to joint venture partners which had already been examined by the ld AO and ld TPO in the original assessment proceedings wherein, they were convinced that it merely represent unpaid portion of borrowing cost. It is pertinent to note that the said item has been duly subjected to deduction of tax at source also. These facts were duly brought to the notice of the ld PCIT vide reply dated 15.03.2024 in response to show case notice u/s 263 of the Act which was completely ignored by the ld PCIT for reasons best known to him with a preconceived notion in order to reach pre meditated destination. Hence, assumption of revision jurisdiction u/s 263 of the Act by the ld PCIT is not permissible and deserves to be quashed on this issue. ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 12 17. Similar was the direction given by the ld PCIT to the ld AO to examine details of foreign equity valuation of the company and selling of flats to non residents etc. In this regard, the assessee only issued equity shares to its non resident joint venture partners which has already been duly examined by the ld AO. Hence, assumption of revision jurisdiction u/s 263 of the Act by the ld PCIT is not permissible and deserves to be quashed on this issue. 18. The last issue for which the ld PCIT had assumed revision jurisdiction u/s 263 of the Act was by giving direction to the ld AO to investigate the transaction of purchase of rights in land parcel from M/s. DLF Home Developers Ltd for consideration of Rs. 1387.50 crores. 19. We have heard the rival submissions and perused the material available on record. As stated earlier supra, this is also a vague direction without narrating the facts of the case and only to enable the ld AO to make fishing and roving enquiries on the subject mentioned issue. The transaction of purchase of rights in land parcel pertain to AY 2016-17 and is already disclosed in the balance sheet by way of Note No. 20 in page 320 of the Paper Book. Even this primary basic fact was not looked into by the ld PCIT or sought to be understood from the reply given by the assessee. Either way, it does not pertain to the year under consideration. Further in AY 2016-17, the ld TPO/ AO made upward TP adjustment in respect of the issue of purchase of rights in land parcel which was deleted by this Tribunal in ITA No. 1963/Del/2022 dated 06.09.2024. Hence, the assumption of revision jurisdiction u/s 263 of the Act was purely mechanical with vague direction and without understanding even the primary facts and without even understanding the fact that it does not pertain to the year under ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 13 consideration. Hence, we have no hesitation to quash the assumption of revision jurisdiction u/s 263 of the Act on this issue. 20. For all the grounds, the ld DR vehemently relied upon the following decisions:- a) Decision of the Hon'ble Delhi High Court in the case of PCIT vs Paramount Propbuild (P.) Ltd. reported in 161 taxmann.com 85 (Delhi HC) b) Decision of Hon'ble Supreme Court in the case of Daniel Merchants Pvt. Ltd. vs. ITO in Appeal No. 2396/2017 dated 29.11.2017. c) Decision of Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs CIT reported in 243 ITR 83 (SC) d) Decision of Hon'ble Supreme Court in the case of Tara Devi Aggarwal v. CIT reported in 88 ITR 323 (SC) e) Decision of Hon‟ble Calcutta High Court in the case of Rajmandir Estates (P.) Ltd. Vs PCIT reported in 386 ITR 162 (Cal) f) Decision of Hon‟ble Supreme Court in the case of Rajmandir Estates (P.) Ltd. Vs PCIT reported in 77 taxmann.com 285 (SC) g) Order of ITAT Delhi Bench in the case of PTC Impex (India) Pvt. Ltd. Vs CIT in ITA No. 2860/Del/2010 dated 03.04.2018 h) Order of Hon'ble Karnataka High Court in the case of CIT vs. Infosys Technologies Ltd. reported in 341 ITR 293 dated 04.01.2012 i) Order of Delhi ITAT in the case of CIT vs. Apollo Tyres Ltd reported in 65 ITD 263 j) Order of the Delhi ITAT in the case of Perfetti Van melle India Pvt. Ltd in ITA No. 3046/Del/2016 dated 11.01.2019 k) Order of the Delhi ITAT in the case of Ramesh Kumar in ITA No. 1982/Del/2018 dated 25.01.2019 ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 14 l) Order for the Delhi ITAT in the case of Shankar Tradex Pvt. Ltd Vs. PCIT in ITA No. 2999/Del/2017 dated 16.04.2018 m) Order of Delhi ITAT in the case of Surya Financial Services Ltd Vs. PCIT dated 08.01.2018 n) Decision of Hon‟ble Delhi High Court in the case of CIT Vs. Ashok Logani reported in 347 ITR 22 o) Order of the Delhi ITAT in the case of Pooja Gupta in ITA No 4057/Del/ 2018 dated 31.01.2019 p) Decision of Hon'ble Delhi High Court in the case of BSES Rajdhani Power Ltd. vs Pr. CIT, Delhi reported in 88 taxmann.com 25 (Delhi) q) Decision of Hon'ble Supreme Court in the case of CIT vs Paville Projects (P.) Ltd. reported in 149 taxmann.com 115 (SC) 21. In all these cases, no enquiries were made by the ld AO at the time of assessment proceedings and hence the Hon‟ble Courts and Tribunal held that ld PCIT was justified in assuming revision jurisdiction u/s 263 of the Act. Whereas in the instant case before us, in all the issues, adequate enquires had already been made by the ld AO in the assessment proceedings as narrated supra. Hence, all the case laws relied upon by the ld CIT DR are factually distinguishable and not applicable to the case before us. The ld DR also relied on Explanation 2 to Section 263 of the Act to support the action of the ld PCIT. On perusal of the Explanation 2 to section 263 of the Act, we find that it is a deeming fiction and applicable only if the assessment order has been passed without making any enquiry or verification by the ld AO. In the instant case, adequate enquiry had already been made in all the issues by the ld AO. ITA No. 2601/Del/2024 DLF Midtown Pvt. Ltd Page | 15 22. In view of the aforesaid observations, we have no hesitation to conclude that the very assumption of revision jurisdiction u/s 263 of the Act of the ld PCIT is completely flawed and deserves to be quashed and void ab initio. Even on merits, there is no mistake committed by the assessee on these impugned issues as assessee had given proper explanation for the acts carried out by it qua those issues. Hence, we hold that the order of the ld AO is neither erroneous nor prejudicial to the interest of the revenue warranting any revision u/s 263 of the Act. Accordingly, grounds raised by the assessee are hereby allowed. 23. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 12/03/2025. -Sd/- -Sd/- (SUDHIR KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:12/03/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "