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2013 (2) TMI 423 - ITAT CHENNAIInterest on loan for ESOP – Employee of the assessee availed bank loan to acquire ESOP shares – Assessee paid this interest - Employees at the first instance opted for ESOP, later on, the employees declined to subscribe to the ESOP therefore, the loan had to be repaid along with interest – Whether this interest should be allowed as expenditure – Held that:- CIT was of the view that the loan was not availed for the purpose of business of the assessee and, therefore, such interest could not be allowed as a deduction - However he has remitted the matter back to AO - order of CIT remanding back the issue to AO sustained - Decided against assessee. Revision u/s 263 - The contention of the assessee was that CIT has not dealt with any issue that was subject matter of adjudication and exceeded his jurisdiction – Held that:- Section 263 authorises a Commissioner of Income-tax to revise any order passed by any subordinate authority, which is found to be erroneous and prejudicial to the interests of the Revenue. The order passed by the assessing authority to give effect to the orders of the Tribunal is “any order” passed by an assessing authority, who is subordinate to the Commissioner of Income-tax - In that way the Commissioner of Income-tax has not exceeded his jurisdiction available to him under section 263 of the Act – Against the assessee.
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