Legal expenses claim of Salman Khan allowed in set aside proceedings by revisionary order of CIT u/s 263.

Legal expenses claim of Salman Khan allowed in set aside proceedings by order of Commissioner of Income Tax under Revision u/s 263

The Hindustan Times in 2015, quoting Salim Khan, father of Salman Khan had reported that Bollywood actor had spent more than Rs 25 crore in the 2002 hit-and-run case. It appears that Income Tax Department was also concerned about the legal and professional expenses claimed by Salman Khan as the Commissioner of Income Tax ordered Revision of income tax assessment orders for three years under section 263.

It is notable that under section 263 of the Income tax Act, 1961, the Commissioner of Income tax may examine the record of any proceedings and if he finds that the order passed is erroneous in so far as it is prejudicial to the interest of the Revenue, he may after giving an opportunity of being heard, cancel an assessment made and direct fresh assessment.

ABCAUS Case Law Citation:
ABCAUS 1132 (2017) (02) ITAT

Brief Facts of the Case:
The Principal Commissioner of Income Tax, Mumbai had passed the revision orders under section 263 of the Income Tax Act, 1961 (“the Act”) directing the Assessing Officer to examine the issue relating to legal & professional expenses incurred by the assessee during the AY 2011-12 to 2013-14.

The assessee, had challenged those orders before ITAT.

However, before ITAT it was submitted that pending the appeal, the Assessing Officer in pursuance of the revision orders, had examined the issue in the set aside proceedings and he has allowed the claim of the assessee with respect to expenditure claimed on account of legal & professional expenses.

It was submitted to the ITAT that the in view of the assessment orders passed by the Assessing Officer giving effect to the revision orders, present appeals had become infructuous.

Observations made by the Tribunal:
The ITAT noticed that the assessee was not interested in prosecuting these appeals since he was not having any grievance in the assessment orders passed by the Assessing Officer giving effect to the revision order. The Departmental Representative did not object the factual aspects.

Held:
The Tribunal dismissed the appeals filed by the assessee. 

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