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2015 (9) TMI 697 - AT - Income TaxAddition of Preliminary expenses written off as deferred revenue expenses - treating the expenses are of capital nature - Held that:- In view of the fact that the CIT(A) has admittedly given a finding to the effect that the bad debt claim is admissible in the year of actual write off, which is previous year relevant to the asst. yr. 2002-03, coupled with the fact that the AO has the powers to do assessment, reassessment or recomputation on the assessee in consequence of, or to give effect to, such a finding contained in an order passed by the CIT(A), the AO should have passed the order recomputing and correctly assessing the taxable income of the assessee for the asst. yr. 2002-03. By not doing so, the AO has not given effect to the ‘finding’ contained in the CIT(A)’s order for the asst. yr. 2001-02, and, to that extent, the AO’s inertia is clearly a mistake apparent from record. This inaction is clearly contrary to the scheme of the Act which permits any assessment, reassessments and recomputation orders to give effect to, or in consequence of, any findings or directions not only in the CIT(A)’s order but also orders of the Tribunal, Hon’ble High Courts, Hon’ble Supreme Court as well as of "any Court" in a proceeding otherwise than in appeal. An AO, as indeed any other authority in the IT Act, cannot turn to the assessee and say that although he has authority to do something for the good of the assessee, it is not necessary that he must exercise that authority. The inaction of the AO, therefore, is a mistake apparent from the record, and there cannot be any two reasonable opinions on whether or not the AO should give effect to the finding of the CIT(A). It is also important to bear in mind that any other view of the matter will result in a double jeopardy to the assessee which will constitute ‘absurdity’ besides being grossly inequitable and patently unfair. An interpretation which leads to such absurdities, as is the settled law, is to be avoided. In view of this legal position, and having noted that the Assessing Officer has accepted the CIT(A)’s order deleting similar disallowance for the assessment year 2007-08 by not challenging the same in further appeal, we are of the considered view that the impugned disallowances in each of the assessment years before us, indeed deserves to be deleted. - Decided in favour of assessee.
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