https://www.taxtmi.com/caselaws?id=16213 The dominant issue was whether the CIT validly exercised revisionary jurisdiction under s. 263 to cancel assessments that allowed reimbursement payments to a holding company without scrutiny under s. 40A(2)(a)/(b). The HC held that s. 40A(2)(a) requires the AO to examine whether related-party expenditure is excessive or unreasonable having regard to fair market value, business needs, and benefit derived; the AO's failure to perform this statutory duty rendered the assessments erroneous and prejudicial to the Revenue, justifying s. 263 intervention. The HC also rejected reliance on precedent limiting appellate/revisional powers under s. 264, holding it inapplicable to s. 263. Consequently, the Tribunal's confirmation of the CIT's s. 263 order directing fresh assessments was upheld against the assessee. en-us Fri, 27 Mar 1998 00:00:00 +0530 Wed, 31 Dec 2025 11:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=16213 The dominant issue was whether the CIT validly exercised revisionary jurisdiction under s. 263 to cancel assessments that allowed reimbursement payments to a holding company without scrutiny under s. 40A(2)(a)/(b). The HC held that s. 40A(2)(a) requires the AO to examine whether related-party expenditure is excessive or unreasonable having regard to fair market value, business needs, and benefit derived; the AO's failure to perform this statutory duty rendered the assessments erroneous and prejudicial to the Revenue, justifying s. 263 intervention. The HC also rejected reliance on precedent limiting appellate/revisional powers under s. 264, holding it inapplicable to s. 263. Consequently, the Tribunal's confirmation of the CIT's s. 263 order directing fresh assessments was upheld against the assessee. Case-Laws Income Tax Fri, 27 Mar 1998 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=16213