M/S. HYUNDAI MOTOR INDIA LTD.,KANCHIPURAM vs. PCIT-4, , CHENNAI

ITA 434/CHNY/2025Status: DisposedITAT Chennai11 February 2026AY 2012-13Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI S. R. RAGHUNATHA (Accountant Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the AO conducted a due and proper inquiry, and the assessment order was neither erroneous nor prejudicial to the revenue. Therefore, the conditions for invoking Section 263 were not satisfied.

What were the facts?

The assessee received an Investment Promotion Subsidy (IPS) which the Assessing Officer (AO) initially treated as a revenue receipt. Following a Tribunal order, the AO, after further inquiry, accepted the IPS as a capital receipt. The Principal Commissioner of Income Tax (PCIT) invoked Section 263, holding the AO's order erroneous and prejudicial to revenue.

What were the issues?

Whether the PCIT was justified in invoking Section 263 when the AO had conducted due inquiry and accepted the assessee's claim as a capital receipt. Whether the Investment Promotion Subsidy was a capital receipt not chargeable to tax.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 254,Section 43(1)

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S. R. RAGHUNATHA

For Respondent: Ms. E. Pavuna Sundari, C.I.T
Hearing: 06.01.2026Pronounced: 11.02.2026

PER S. R. RAGHUNATHA, AM:

This appeal is filed by the assessee against the order dated 09.12.2024 passed by the learned Principal Commissioner of Income Tax–1, Chennai (“Ld. PCIT”) under section 263 of the Income-tax Act, 1961 (“the Act”), whereby the order passed by the Assessing Officer (AO) u/s.143(3) read with section 254 of the Act dated 20.02.2024 was held to be

The order continues below.

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