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2017 (1) TMI 733 - AT - Income TaxRevision u/s 263 - disallowance of depreciation - addition u/s 40(a)(ia) - Held that:- There was no lack of enquiry on part of the AO and he had taken an informed decision. Therefore, it cannot be said that no proper enquiry was made. We find that the issue of disallowance of depreciation was discussed and deliberated upon by the Tribunal in assessee’s own case for the year under consideration. Therefore, the consequential disallowance with respect to forex loss capitalised cannot be upheld. As per the settled principle of taxation once forex loss being capitalised , then no disallowance u/s. 40(a) (ia) can be made. In the case under consideration the AO had taken one of the possible views and the view taken by him is not against the provisions of law. Therefore, his order would not fall under the category of an erroneous order. As far as contingent sales tax deposit are concerned, it is found that the AO had passed a rectification order and taxed the disputed amount. By that time the order of CIT was passed. Thus there was no justification for the CIT to direct the AO to initiate penalty proceedings. It is found that the CIT had further directed the AO to make further verification of consumption of containers. We find that assessee had filed all necessary details before the AO during assessment proceedings and he had passed the order after considering the available material. Thus we are of the opinion that, the order passed by the AO was neither erroneous nor prejudicial to the interest of revenue. Thus we hold that the CIT was not justified in invoking the provisions of section 263 of the Act. - Decided in favour of the assessee.
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