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2015 (6) TMI 675 - AT - Income TaxRevision u/s 263 - claim for expenditure towards payment of Excise Duty has been allowed by AO despite not being disclosed in the regular books of accounts - Held that:- The only view possible in view of the specific provisions of section 43B(a) is that the excise duty has to be allowed in the year in which it is actually paid. It is not denied by the revenue that the assessee has paid the excise duty during the impugned assessment year. Since dictum of law on this count does not require any other interpretation, therefore, we are of the view that the order passed by the Assessing Officer cannot be regarded to be erroneous coupled with the errors. For invocation of the provisions of section 263 both the conditions that the order passed by the Assessing Officer is erroneous as well as prejudicial to the interest of the revenue must be satisfied. Since, in our opinion, there was no error in the order of the Assessing Officer allowing the deduction to the assessee in the original assessment passed under section 143(3) in respect of the excise duty amounting to ₹ 29,17,01,515/- in respect of which the proceeding under section 263 has been carried out by the CIT, we, therefore, on this basis itself, set aside the order of the CIT passed under section 263. Interest paid allowed by AO despite not being disclosed in the regular books of accounts - Held that:- Assessing officer has after examining the submissions of the assessee as well as making the enquiry on this issue taken a conscious decision. Thus it is a case where the Assessing Officer has examined the issue by making enquiry on the basis of which the CIT invoked jurisdiction under section 263. It is not a case of lack of enquiry on the part of Assessing Officer the Assessing Officer after making enquiries allowed the claim of the assessee on that issue. It is not necessary that the Assessing Officer should discuss in detail the finding in his order, although the Assessing Officer has given clear-cut finding in this regard. Thus it is a case where due inquiry was conducted by the Assessing Officer as is apparent from assessment order on this issue on which CIT invoked jurisdiction under section 263. Once the order passed under section 143(3) is rectified under section 154, the order passed under section 143(3) get merged with the order passed under section 154 and the natural consequence will be that the order passed by the CIT(Appeals) will also get merged with the order passed by the Assessing Officer. It is not denied that both the issues in respect of which the proceeding under section 263 has been initiated were duly considered and decided by the CIT(Appeals) before issuing show-cause notice by the CIT. In view of this fact, we, therefore, on this basis quash the order of CIT passed under section 263. - Decided in favour of assessee.
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