IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “B” BENCH: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT &

SHRI MANISH AGARWAL, ACCOUNTANT MEMBER [Assessment Year : 2017-18]

Hotspot Sales & Solutions vs Pr.CIT, Pvt. Ltd., C/o- 19A-19B, Noida S Global Knowledge Park, Sector-125, Noida-201301 PAN-AADCH8839A APPELLANT RESPONDENT Appellant by Shri Parikshit Aggarwal, CA Respondent by Shri Surender Pal, CIT DR Date of Hearing 18.03.2025 Date of 29.04.2025 Pronouncement ORDER PER MANISH AGARWAL, AM :

The present appeal has been filed by the assessee seeking to assail the order u/s 263 of the Income Tax Act, 1961 [“the Act”] dated 27.03.2022 of Ld. Pr. Commissioner of Income Tax, Noida [“Ld. Pr. CIT”] arising from the assessment order dated 20.12.2019 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18.

2. Brief facts of the case are that the assessee is a Private Limited Company and return for year under appeal was filed on 07.11.2017 declaring loss of INR 34,95,88,004/-. The case was selected for complete scrutiny under CASS and the order was passed under section 143(3) of the Act by making addition under section 68 of the Act at INR 1,49,35,290/- on account of cash deposits during demonetization period and allowed the loss so assessed to be carried forward for next year.

3. Thereafter, the Ld. Pr.CIT in terms of notice issued on 25.02.2022 invoked the provision of section 263 of the Act and asked the assessee to show cause as to why the assessment order be not cancelled/modified as it is erroneous and pre-judicial to the interest of the Revenue as the AO has allowed the claim of depreciation of INR 21,53,41,062/- without making any enquiries in this regard. After considering the submissions of the assessee, the Ld. Pr. CIT vide impugned order has held that the assessment order passed on 20.12.2019 is erroneous in so far it is prejudicial to the interest of revenue and disallowed the depreciation claimed at INR 21,53,41,062/- on goodwill being intangible asset and direct the AO to pass a consequential effect order.

4. Against such order, the assessee is in appeal before the Tribunal by taking the following grounds of appeal:-

1. “That on law, facts & circumstances of the case, the Worthy Pr. CIT has grossly erred in assuming jurisdiction u/s 263 even when:

1.1. The original assessment order passed u/s 143(3) does not satisfy the twin conditions of being an 'erroneous order' and 'prejudicial to the interest of revenue'.

1.2. The Worthy Pr. CIT has erred in setting aside the assessment order u/s 143(3) and in directing the AO to make assessment afresh on the ground that the assessment order was passed under inadequate enquiry.

1.3. The Worthy Pr. CIT has erred in holding that the assessment order requires to be revised u/s 263 since the depreciation of Rs. 21,53,41,062/- on intangible assets claimed by the assessee is allegedly on assets under development and not put to use even when the said view of the Worthy Pr. CIT is factually incorrect and the said factually incorrectness was pointed out to him in proceedings u/s 263 also.

1.4. The Worthy Pr. CIT has erred in making addition on his own in the impugned order u/s 263 on account of disallowance of depreciation of Rs. 21,53,41,062/- allegedly on intangible assets under development and not put to use even when the said view of the Worthy Pr. CIT is factually incorrect and the said factually incorrectness was pointed out to him in proceedings u/s 263 also and no addition on correct facts is warranted in this case.

1.5. The Worthy Pr. CIT failed to appreciate that in proceedings u/s 263, he cannot substitute the views of AO unless the view of AO is totally unsustainable.

1.6. The Worthy Pr. CIT has conducted the impugned proceedings u/s 263 in extreme haste and without affording reasonable opportunity of being heard to the appellant.

2. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same.”

5. Since all