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2012 (6) TMI 629 - AT - Income TaxValidity of revisionary order passed u/s 263 - Asset Management Company - initial issue/launch expenses - revenue expenditure or capital expenditure - Held that:- It is found that SCN u/s 263 was specific and related to the question as to whether the expenditure was capital or revenue. However, while passing the order u/s.263, the CIT proceeded on a totally different directions by treating the expenditure as revenue expenditure and further examined the question as to whether the they can be claimed in one year or have to be amortized as contemplated by the SEBI Regulations and decision in case of Madras Industrial Investment Corporation. No opportunity being given to assessee to explain its stand on amortization of initiation expenses. The action of the CIT in revising the order of the AO on this basis cannot be sustained. Further, as to whether the decision in case of Madras Industrial Investment Corporation (1997 (4) TMI 5 (SC)) will be relevant in the context of an AMC which manage funds on behalf of mutual fund companies and derives income from managing a fund in the form of fee for managing the fund, is again debatable. On such debatable issues where two views are possible jurisdiction u/s.263 is not to be exercised. We accordingly hold that exercise of jurisdiction u/s.263 could not have been made. In the result the order u/s. 263 of the Act, in so far as it relates to the initial issue expenses, are hereby quashed - Decided in favor of assessee.
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