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2008 (5) TMI 282 - HC - Income TaxIssue of debentures – commitment charges – deduction u/s 37(1) – held that - the appellate authorities have rightly examined the issue by appreciating as to whether the quantum of expenditure is substantial when compared to gross block of assets so as to suggest that there is a replacement of assets on capital account. It has been found on facts that the expenditure is not very high when compared to gross block of assets in light of the depreciation claimed and allowed during the year which comes to the tune of Rs. 2.82 crores - It has to be borne in mind that once statutory appeals are provided in hierarchy where the appellate authority is superior to the Assessing Authority the order of Assessing Authority merges, on the issue contested, in the order of the appellate authority. The powers of the first appellate authority are co-extensive and co-terminus with that of the Assessing Officer and hence, on facts, once the appellate authority finds that the facts recorded by the Assessing Officer are not correct, in the proposed questions, there should be no suggestion to the contrary.
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