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2014 (3) TMI 502 - AT - Income TaxExercise of Jurisdiction u/s 263 of the Act - disallowance of expenditure debited to profit and loss account - Held that:- The assessment order does not reveal whether the Assessing Officer has made any enquiry either with regard to the expenditure claimed under various heads or in respect of purchase of film - The documents submitted also do not establish any enquiry to have been conducted by the Assessing Officer on the issue pointed out by the CIT - the Assessing Officer has completed the assessment in a mechanical and casual manner without proper application of mind or even a semblance enquiry - The assessee could not demonstrate or submit any material, except a letter which could show that enquiry in any manner was conducted by the Assessing Officer to find out the true intent of agreement with Adlabs Limited or verifying the allowability of the expenditure claimed by the assessee since the property was handed over to Adlabs Limited on lease during the financial year under dispute - Neither the assessment order, nor any other material on record show even a hint of enquiry by the Assessing Officer by issuing any questionnaire etc., to the assessee on the issues pointed out by the CIT – thus, the assessment order passed is certainly erroneous since it causes prejudice to the interest of revenue – thus, the exercise of jurisdiction u/s 263 of the Act by the CIT (A) to revise such an order is permissible in accordance with the provisions of the Act. The order of the CIT is modified to the extent by directing the Assessing Officer to redo the assessment after examining all aspects of the matter and after conducting necessary enquiry as may be deemed fit without being influenced by the observations of the CIT that the rent from machinery and plant should be treated as income from other sources - The Assessing Officer shall take an independent decision on the issue of taxability of conducting charges under an appropriate head – Decided partly in favour of Assessee.
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