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2011 (4) TMI 1016 - ITAT, CHENNAIMAT- Computation of book profit u/s 115JB - Electricity tax - tax audit report of the assessee clearly mentioned the amount to be contingent in nature - for this reason that the A.O. held it as not allowable while computing the total income under the normal provisions of the Act - held that:- Assessing Officer never made any effort to make a book profit computation as mandated under Section 115JB of the Act - Non consideration of law and not making a computation prescribed under law would definitely render the order of the A.O. erroneous and prejudicial to the interest of the Revenue - direction of the CIT to disallow the above items under Section 115JB of the Act, no doubt, such a direction to do an assessment in a particular manner would be beyond the powers of a CIT under Section 263 - assessment order was erroneous in so far as it was prejudicial to the interest of the Revenue is correct - order of the CIT would thus stand modified to the effect that the Assessing Officer shall examine each of the above issue. Disallowance of depreciation - disallowance of depreciation Rs.6,40,000/- on let out property made by the A.O - A.O. had not examined the claim of depreciation of the assessee vis-à-vis each of the let out property owned by it - nothing in the assessment order which gives a break-up of the disallowance made by the A.O - omission by the A.O. in making a scrutiny of each of the claim of depreciation of the assessee - no error in the order of the CIT in considering such non-application of mind to be erroneous and prejudicial to the interest of the Revenue - order of CIT that the A.O. shall disallow the claim of the assessee cannot be accepted. Hence, vis-à-vis the depreciation claim, order of CIT modified and direct the A.O. to verify the claim of the assessee and deal with it in accordance with law. Deduction of bad debts – power of Tribunal under section 254 - double deduction - as mentioned by the learned CIT, nothing was produced by the assessee to prove that it consistently followed an accounting practice whereby provision made in one year was reversed it to the extent debts were considered bad, in a subsequent year and a write-off effected for such bad debts - arguments taken by the learned A.R. that this Tribunal did not have any power under Section 254 of the Act to modify an order of CIT under Section 263 of the Act - where the order of the A.O. was palpably erroneous and prejudicial to the interest of the Revenue, just because the CIT slightly overstepped his powers, would not be a sufficient reason to quash his order in toto, but it is the duty of the Tribunal to properly modify it so as to effectuate the purpose of Section 263 - no merit in this appeal of the assessee against the order of the CIT under Section 263 of the Act - order of CIT shall stand modified to the extent that the A.O. can consider each of the issue raised by the CIT in his order, in accordance with law after giving the assessee an opportunity to represent its case.
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