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2019 (9) TMI 230 - ITAT CHENNAIRevision u/s 263 - expenditure allowable as deduction u/s. 48 (i) - exgratia payment made to employee directors towards the consideration for service rendered in connection with the sale of shares of Prizm Payment Services Pvt Ltd - HELD THAT:- It is settled position of law that there must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. In the present case, the ld. PCIT had not referred to any material which indicates that the exgratia payment made to employee directors towards the consideration for service rendered in connection with the sale of shares of Prizm Payment Services Pvt Ltd held by it is not an allowable expenditure u/s.48(1) of the Act. As apparent that though the assessment order does not patently indicate that the issue in question had been considered by the AO, the material on record could show that the Assessing Officer had applied his mind on the issue. The fact the PCIT has sought to revise the issue which is not subject matter of deduction i.e. loss on account of foreign exchange fluctuation on receivables would suggest that there was no proper application of mind on the part of PCIT. Thus, considered opinion that the material on record would establish application of mind on the part of the Assessing Officer while allowing the claim during the assessment proceedings. Once such application of mind is discernible from the record, the proceedings under section 263 of the Act would fall into the area of the ld. PCIT having a different opinion and it is settled proposition of law that an assessment order cannot be treated as erroneous and prejudicial to the interests of the Revenue simply because in the opinion of the ld. PCIT some other views are possible as held by the Hon’ble Supreme Court in the case of CIT vs. Max India Ltd [2007 (11) TMI 12 - SUPREME COURT] . PCIT does not satisfy the prerequisite condition of assessment order being erroneous and prejudicial to the interest of the Revenue. Therefore the order of the ld. PCIT cannot be sustained in the eyes of law. Accordingly, we set aside the order passed u/s.263 by the ld. PCIT and allow the appeal filed by the assessee company. - Decided in favour of assessee.
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