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2012 (8) TMI 770 - AT - Income TaxValidity of revisionary order passed u/s 263 - proceedings initiated on ground that assessee had claimed a sum of Rs. 3.47 crores towards “loss of fixed assets sold, written off, discarded, etc under the head “Manufacturing and other expenses” - though the said amount was added back, depreciation on same was wrongly allowed even though they were not put to use - CIT(A) alleged non-allowability of depreciation on ground that assets are not used and non-verification by AO - assessee claimed that once an asset become part of the block of assets then it loses its individual identity and depreciation is allowable on the entire block Held that:- It is found that proper enquiry was made by AO during assessment proceedings. So far as issue of depreciation allowed on assets which have entered into the block of assets but not used during the year is concerned, the same in our opinion is a debatable issue. Allegation of CIT of inadmissible depreciation on assets not used in the business in our opinion is a possible view. For assuming jurisdiction u/s.263 the twin conditions namely (i) the order is erroneous and (ii) the order is prejudicial to the interest of the revenue must be satisfied. In the instant case the order may be prejudicial to the interest of the revenue because of higher allowance of depreciation but cannot be said to be erroneous since the AO has taken a possible view. See Malabar Industrial Company Ltd. (2000 (2) TMI 10 - SUPREME COURT ). Therefore, CIT in our opinion is not justified in assuming jurisdiction u/s 263 - Decided against Revenue
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