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2022 (5) TMI 440 - AT - Income TaxRevision u/s 263 by CIT - assessee has claimed expenses on income from dividend and interest on FD in Banks - HELD THAT:- There is no res-judicata applicable to income tax proceeding. Hence, if in earlier years something has not been examined and allowed as such, it cannot act as estoppel for the revenue on the issue. As regards the assessee’s plea that AO has examined the issue and has given notice on the matter and thereafter taken a view, we are of the considered opinion that we cannot agree with the above proposition as there is no whisper in the order of the AO in this regard. It is settled law that if the AO just keeps the assessee’s papers on record without any application of mind on the same, the same cannot act as estopple for the ld.CIT to exercise power u/s. 263. CIT has duly examined the nature of expenses. The expenses are related to medical grants and other grants and J&K flood affected employees - CIT is correct in holding that these expenses cannot be said to be expense wholly and exclusively incurred for the purpose of earning income on dividend and interest income from banks. Provision u/s. 57(iii) are duly applicable on the facts of the case. Though AO has not made any observation, whatsoever, even for arguments sake if it is accepted that AO had adopted a view, the same is patently in contravention of the sanguine provision of law in this regard. So it cannot be said that AO has adopted one of the possible views. CIT has also given a finding that for AY 2017-18 facts are similar and in this case, assessee opted for VSV Scheme to settle the dispute. Subsequent year also, the assessee did not claim these expenses and filed return of income disclosing total income under other sources. We find that above findings have not been disputed by the assessee. The crux of the assessee’s submission that since in the past this wrong system had not been objected, the same should be allowed to be continued is thus rejected. Furthermore, the system adopted by the assessee is in contravention of laws and as we have noted the fact that assessee itself has subsequently discontinued this system of claiming the expenses which are totally unrelated to the earning of interest income and exempt dividend income - Decided against assessee.
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