The PCIT, during the examination of assessment records u/s. 263, found that the assessee had claimed deduction of capital expenditure, which the AO had allegedly failed to verify during the assessment proceedings.

Held that the PCIT himself noted that the expenses in dispute were already capitalized by the assessee in its books of account. The assessee had not claimed the deduction of these expenses in its profit and loss account. Since the expenses were capitalized and did not reduce the taxable income, there was no loss of revenue. Therefore, the PCIT’s revisionary order was invalid and quashed.  (AY. 2017-18)