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2023 (5) TMI 219 - AT - Income TaxRevision u/s 263 by CIT - claim of rent expenses - HELD THAT:- We find the assessee explained that it has multiple offices and warehouses in multiple cities and all these offices and warehouses were obtained on rental from third parties on which assessee had deducted TDS u/s. 194I - As noted that the assessee furnished copies of rental contracts in soft copy format - it is also contended all these rental agreements were produced for verification during the course of scrutiny proceedings and the AO made verification, but due to multiple number of contracts, the AO did not refer the same in the record. It is pertinent to note that the AO verified the deduction of TDS on rental expenses and found nothing adverse to the details submitted in the soft copy format in Annexure-4 and also in respect of TDS of all quarters. Having entire details regarding the rent expenses vide Annexure-4, the Pr. CIT did not venture to examine the same, but however, simply directed the AO to conduct inquiries, in our opinion, is not justified as when the details are submitted in response to the show cause notice u/s. 263 - it is incumbent upon the Pr. CIT to examine such details and give specific direction. The order of Pr. CIT in revising the order of AO in respect of allowance of deduction under rent expenses is not maintainable for the reason the order of AO cannot be held to be erroneous, thus, it is not prejudicial to the interest of Revenue. Freight outward expenses - We note that a provision is made by an assessee as obligation to pay as a result of past event. To meet the said expenditure the assessee can make provision to settle the obligation basing on a reasonable estimation of amount to meet that payment of obligation. In the present case,we find no details of payment were furnished before us. Therefore, we find force in the arguments of DR in supporting the order of Pr. CIT in restoring the said issue to the file of AO for his fresh verification. No infirmity in the order of Pr. CIT in revising the original assessment order as erroneous and prejudicial to the interest of Revenue to the extent of freight outward expenses - Accordingly, the order of Pr. CIT is upheld in this aspect. Appeal of assessee is partly allowed.
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