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2012 (8) TMI 336 - AT - Income TaxChallenge to revision proceedings initiated by Commissioner u/s. 263 - Income from sale of old rubber trees - CIT(A) took the view that on said income Rule 7A will apply - Held that:- On a careful perusal of Rule 7A the said rule talks about computation of income derived from sale of centrifuged latex or cenex or latex based crepes (such as pale latex crepe) or brown crepes etc & said rule does not talk about the taxability of income from sale of old rubber trees - CIT has placed incorrect interpretation on Rule 7A and it cannot be said that there is incorrect application of law on the part of the AO, thus the CIT was not correct in assuming jurisdiction over this issue by making incorrect interpretation of law. Indexation benefit allowed in the case of the sale proceeds of Grevillea trees - Held that:- CIT(A) took the view that the AO had converted the capital loss claimed in respect of Grevillea trees into long term capital gain of equivalent amount and was not justified in treating the above said amount as capital gain. The Revenue challenged the said decision of the CIT(A) before the ITAT who dismissed the ground raised by the Revenue. All these discussions show that the issue of the taxability of income on sale of Grevillea trees has been considered and decided by the CIT(A) as well as the Tribunal. Hence as per specific provisions in Clause (c) of Explanation to sec. 263(1), the said issue falls outside the scope of revisionary proceedings u/s. 263. Disallowance of proportionate interest relatable to investments made in subsidiary companies - Held that:- It is not a case that the AO has completely failed to examine the issue of applicability of provisions of sec. 14A to the case of the assessee as he had considered the application of Sec. 14A in respect of re-plantation expenses, which means that the AO has examined the applicability of sec. 14A to the case of the assessee - It is a well settled proposition of law that if the AO has taken one plausible view, with which the CIT does not agree revisionary proceedings u/s. 263 shall not lie in respect of the same. Disallowance of share transfer expenses - Held that:- As the said expenses have been incurred in connection with the maintenance of share holders register, considering the CBDT Instruction No. F. No. 10/25/63-IT(A.a) dated 18-06-1964 that the remuneration paid by the Company to its Registrar for performing duties in connection with the company's legal obligations to be discharged under the Company Law, should be regarded as revenue expenditure. Hence the CIT has entertained the view in respect of share transfer expenses without properly appreciating the facts relating to the same - no ground to initiate revision proceedings - decided in favour of assessee.
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