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2017 (1) TMI 255 - AT - Income TaxRevision u/s 263 - debit on account of education fund and debit on account of contingency fund - Held that:- We find that the learned CIT has observed that apparently expenditure appeared to be capital in nature. On assessee’s not furnishing the necessary evidence of the expenditure being revenue in nature, learned CIT has remitted the matter to the file of the AO and directed the assessee to give his submissions and evidences before him. In our considered opinion, on the facts and circumstances of the issue there is no infirmity in the direction of learned CIT in this regard. Hence we uphold the order of learned CIT for the above issue. Debit in respect to interest capitalized on NPA account - Held that:- It is the assessee’s submission that the assessee has written off this amount of interest debited to the account of parties by writing off the same in profit and loss account and giving credit of same to the account of debtors. It has been submitted that the aforesaid claim is clearly allowable u/s 36(1)(vii) of I.T. Act. Learned counsel has further submitted that the issue is squarely covered in favour of the assessee by the decision of Hon’ble Apex Court in the case of CIT vs. TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT ] for the proposition that writing of the debt in the profit and loss account and the books of account is sufficient for allowance of bad debt. We find ourselves principally in agreement with this proposition. However, this aspect needs factual verification of the books and hence we remit this issue to the file of the AO to examine the issue Disallowance of provision on account of overdue interest - Held that:- No addition is required for overdue interest on NPA. Learned CIT has clearly erred in directing that the same be brought to tax. In our considered opinion, learned CIT was not justified in exercising his power of revision qua this issue. Firstly the issue is covered in favour of the assessee by the decision as above. Secondly even if there were two views possible, the AO has adopted one of the views which cannot be said to be malafide or non acceptable. In such situation, exercise of jurisdiction by the learned CIT is not valid. This is supported by the Hon’ble Apex Court exposition in the case of CIT vs. Max India Ltd. [2007 (11) TMI 12 - Supreme Court of India ] for the proposition that when two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as erroneous order prejudicial to the interest of Revenue unless the view taken by the ITO is unsustainable in law.
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