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2017 (4) TMI 237 - AT - Income TaxRevision u/s 263 - disallowance u/s. 40(a)(ia) - Held that:- Assessee had given two separate categories of the expenses. Any prudent Assessing Officer would have been prodded to make further enquiries since a part of the expenses was claimed to be for the benefit of the employees and part of the expenses was claimed to be for corporate advertisement. Whether these expenses would fall in the category of corporate social responsibility, was an issue which should have been looked into by the Assessing Officer before completing the assessment. What he did was only to verify advertisement expenses and make a disallowance u/s. 40(a)(ia) of the Act for want of deduction of tax at source. In our opinion, not making enquiries which was required to be done on the face of the reply given by an assessee, was as good as not making any enquiry. It is trite law that failure to make any enquiry which is required to be done under law by the Assessing Officer in an assessment proceedings, would render the assessment order erroneous and prejudicial to the interests of Revenue. Coming to the question of interest expenditure, nothing has been asked by the Assessing Officer nor any reply given by the assessee during the original assessment, despite the fact that assessee did not show any secured loans or unsecured loans in its balance sheet for the two preceding years. Such circumstances also would clearly indicate that the claim of interest expenditure requires verification. Assessing Officer failed to do this also. Thus lack of enquiry is pregnant in the assessment order on the two aspects mentioned by Ld. PCIT. As held by Hon’ble Apex Court in the case of Toyota Motor Corporation (2008 (8) TMI 56 - SUPREME COURT ), a cryptic order given by the Assessing Officer would be erroneous and prejudicial to the interests of Revenue where the issues require clear reasonings for accepting the claims of the assessee - Decided against assessee.
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