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2014 (4) TMI 1053 - JAMMU AND KASHMIR HIGH COURTRevision u/s 263 - whether "deferred revenue expenditure" should be allowed fully in one year or be deferred according to entries made by assessee in this regard? - whether the loss claimed by assessee was a genuine loss ? - whether it was revenue or capital loss? - Tribunal set aside the revision - Held that:- CIT Amritsar in its notice dated 24th January 2000 sought response from respondent companies on the issues highlighted in the notice namely that loss claimed to have suffered on account of purchase and sale of non-convertible debentures was in fact "deferred expenditure" disentitling respondent company from any allowance on such loss in one year and that whether the loss claimed was revenue or capital loss. CIT Amritsar referred to Madras Industrial Investment Corpn. Ltd. case (1997 (4) TMI 5 - SUPREME Court ) in support of his opinion as regards deferred loss. Respondent companies submitted a detailed reply to the notice issued, controverting all factual aspects of the case reflected in the notice emphasizing that Madras Industrial Investment Corpn. Ltd. case (supra) was distinguishable on facts and not applicable to the controversy raised in notice. CIT Amritsar surprisingly in its order dated 21st March 2000, did not deal with detailed reply supported by reasons, submitted by respondent companies. Least that was expected of CIT Amritsar was to make reasonable and fair discussion of the reply, and material referred to in such reply and given reasons for recording disagreement with stand taken in the reply. Otherwise granting an opportunity to assessee as required under Section 263 of the Act would be reduced to an idle formality. This is what has been exactly done by CIT Amritsar. The mode and manner in which the matter has been dealt with is in gross violation of mandate of Section 263 of the Act. Tribunal (ITAT Amritsar) was right in holding that there were no compelling reasons for interference for the CIT Amritsar under Section 263, Income Tax Act - Decided in favour of assessee.
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