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2013 (1) TMI 370 - AT - Income TaxJurisdiction power u/s 263 by CIT(A) - disallowing depreciation granted by the A.O. consequent to R&D expenses being assessed as being capital in nature - Held that:- The assessee had claimed this expenditure as revenue expenditure however, the A.O. added it being treated this expenditure as capital expenditure on which depreciation @ 25% was allowed. The appellant has carried this matter before the CIT(A), which is pending. Thus, the order of the A.O. had been merged with CIT(A). Therefore, CIT does not have any jurisdiction to consider this aspect. The ld. A.O. has inquired and gone through the details of expenses which has been found by him as enduring nature on which even depreciation @ 25% has been allowed by him. Therefore, it is tantamount to change of opinion. The addition made in original order by A.O. had been disputed by the assessee before the CIT(A). The order of A.O. had been merged with CIT(A) on these issues. Thus, we set aside the order of CIT-III, Baroda. It is clarified that we have not expressed any view on nature of expenses whether it is capital or revenue and also whether depreciation is allowable or not. Therefore, the lower authorities are free to take decision as per law.
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