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2017 (11) TMI 175 - AT - Income TaxRevision u/s 263 - allowability of expenditure towards management fee - Held that:- In this case, the assessee is filing regular income tax returns and claiming the expenditure with regard to the management consultancy fee payable to DPW right from assessment year 2004-05 to 2009-10 The assessee has filed the returns of income and there was no dispute. The assessee has claimed the expenditure and added back to the income in the respective years with a clear noting at the end of statement of computation. The assessment records are available to the assessing officer at the time of giving effect to the CIT(A)’s order. The A.O. also has given a finding in the assessment order passed u/s 143(3) of the Act in the assessment year 2010-11 that the above expenses are allowable in the respective assessment years but not in the assessment year 2010-11. Therefore, merely because there was no detailed discussion by the A.O. in the consequential order, it is not correct to hold that the A.O. has taken the decision to allow the expenditure without verification and with misunderstanding. The entire material was placed before the A.O. and after considering the available material, the A.O. allowed the deduction hence we hold that the A.O. has allowed the expenditure correctly as per law. Also, there is no dispute with regard to the genuineness of expenditure. The assessee has debited the expenditure and added back to the income. While giving effect to the CIT(A) order, the A.O. has allowed the expenses pertaining to the respective assessment years correctly. The A.O. has not allowed any excess expenditure or any bogus claim. Therefore, we hold that the order passed by the A.O. giving effect to the CIT(A) is neither erroneous nor prejudicial to the interest of the revenue - Decided in favour of assessee Incorrect assumption of jurisdiction by the CIT u/s 263 against the consequential order of CIT(A) - A.R. argued that the assessing officer passed order giving effect to the appellate order of the Ld. CIT(A) u/s 251 of the Act, and the Principal CIT has no jurisdiction to revise the CIT(A)’s order - Held that:- CIT(A) has passed the order u/s 251 of the Act with a direction to the A.O. to allow the deduction ‘in accordance with law’. Consequent to the direction of the CIT(A), the A.O. has passed the consequential order, which involves verification also. As per the provisions of section 263 of the Act, the Principal CIT is vested with the powers to take up the orders passed by the A.O. for revision. From perusal of the sub section (1) of section 263 of the Act, the Principal CIT is entitled to call for the record and examine the record of any proceeding under this Act in the case of order passed by the A.O. Thus, the Principal CIT has power to examine whether the consequential order passed by the A.O. is in accordance with the direction of the CIT(A) or not. The Ld. Principal CIT has not tinkered with the order of CIT(A). Therefore, we hold that the Principal CIT has rightly assumed the jurisdiction and passed the revision orders and there is no error in assumption of jurisdiction. The assessee’s appeal on this ground is dismissed.
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