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2016 (10) TMI 1063 - AT - Income TaxDisallowance of Network and other Equipment cost - Held that:- AO has alleged that such 'Network and Other Equipment Cost' was booked under the head 'Circuit Expenses'. Further, in the original assessment proceedings under Section 143(3), disallowance was primarily made in respect of such 'Circuit Expenses' only. After the assessment under Section 143(3), the matter travelled upto the ITAT, which gave relief to the assessee. The CIT(A) had also deleted the addition made by the AO, which was under section 40(a)(ia). The CIT(A) has all the powers of an Income Tax Authority and even while allowing original disallowance under section 40(a)(ia), the CIT(A) was fully empowered to determine such expenses as capital in nature and would have disallowed it accordingly. However, no such finding was given by the CIT(A). Moreover, the finding of the AO while recording the reasons, was based on factually incorrect facts. In view of the above, Ld. CIT(A) has rightly held that re-assessment order passed by the AO is bad in law, without jurisdiction, and is required to be quashed. On the merit of the case as well, no, addition is called for. Appeal of the Revenue is dismissed.
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