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2014 (2) TMI 741 - AT - Income TaxAllowability of deduction u/s 36(1)(vii) of the Act – Bad debts written off – Held that:- If the bad debts and advances written off are only provisions but are not actually written off in the books of accounts then no deduction can be allowed - assessee contended that the bad debts and advances are actually written off in the books of accounts of the assessee - the matter remitted back to the file of the Assessing Officer for verification as to whether the bad debts and advances were actually written off in the accounts of the debtors appearing in the books of account of the assessee - If on verification, it is found to be actually written off and it is not simply a provision made then the deduction u/s 36(1)(vii) can be allowed – Decided in favour of Assessee. Jurisdiction u/s 263 of the Act to revise the order – Held that:- Though the CIT (A) has issued a show cause notice for enhancement of income in respect of deduction claimed with regard to Redundant Animation Projects WIP and Redundant Software WIP but the same was not decided by the CIT (A) when the CIT invoked jurisdiction u/s 263 and finally passed the order - the CIT was competent to invoke the jurisdiction u/s 263 of the Act - The restriction for invoking the jurisdiction u/s 263 of the Act would only apply to such issues which were subject matter of appeal before the CIT (A) and decided in appeal order – here, the assessee has not been able to prove that the issue in dispute was decided by the CIT (A) before the revision order was passed. Survey u/s 133A of the Act - Non consideration of claim - Deduction on account of Redundant Animation Projects WIP and Redundant Software WIP – Applicability of time-limit for filing return of income u/s 139(5) of the Act – Held that:- The claim made in the revised return should not have been considered by the Assessing Officer as it was filed beyond the time prescribed u/s 139(5) does not hold much water – Relying upon Malabar Industries vs. CIT [2000 (2) TMI 10 - SUPREME Court] any loss of revenue as a consequence of an order passed by the Assessing Officer cannot be treated as prejudicial to the interests of revenue - the Assessing Officer has taken the decision in compliance with the directions of the Income-tax Appellate Tribunal with regard to the claim made in the revised return in respect of Redundant Animation Projects WIP and Redundant Software WIP by holding it to be a revenue expenditure - Only because the view adopted by the Assessing Officer is not acceptable to the CIT, according to whom it is capital in nature, it cannot be said that the assessment order is erroneous and prejudicial to the interests of revenue – it cannot be said to be erroneous and prejudicial to the interests of revenue - exercise of jurisdiction u/s 263 of the Act cannot be sustained – Decided in favour of Assessee.
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