Section 263 revision fails where scrutiny assessment properly examined 80IA deduction for toll-road weighbridge infrastructure.

Section 263 revision was held unwarranted where the Assessing Officer had examined the eligibility of deduction under section 80IA(4), called for details, reviewed the concession agreement, and accepted the claim after enquiry. The revisionary view that the motor vehicle weighbridge and connected road were not part of the infrastructure facility was rejected because the facility was constructed under the toll-road concession and used to regulate heavy vehicles and collect tolls as part of the highway project. On those facts, the assessment was not erroneous, and the direction for de novo assessment could not stand.

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Issues: Whether the Principal Commissioner was justified in invoking revisionary jurisdiction under section 263 of the Income-tax Act, 1961 and setting aside the assessment on the ground that deduction under section 80IA(4) was wrongly allowed in respect of the motor vehicle weighbridge and connected toll-road infrastructure.

Analysis: The assessee's return was selected for scrutiny on the limited question of eligibility for deduction under section 80IA. The assessment records showed that the Assessing Officer had called for details, examined the concession agreement and the nature of the project, and accepted the claim after enquiry. The revision order proceeded on the view that the weighbridge was not an infrastructure facility and was not an integral part of the highway project. The Tribunal found that the weighbridge and the connecting road were constructed as part of the toll-road arrangement under the concession, and that the facility was used to regulate heavy vehicles and collect toll charges as part of the highway project. On these facts, the assessment could not be said to be erroneous.

Conclusion: The invocation of section 263 was not justified, and the direction for de novo assessment was unsustainable.

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