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2023 (6) TMI 812 - AT - Income TaxRevision u/s 263 - assessment as framed by AO u/s 143(3) - as per CIT claim made by the assessee was not in accordance with the provisions of Sec.36(1)(vii) since the claims includes items like TDS payable, advance premium deposit, unpaid wages, salary and wages payable, loan given to various parties, prepaid expenses, DEPB receivable, duty drawback receivable, electricity deposit, provision for bad and doubtful debts etc. - HELD THAT:- This was a case of no-enquiry / no-verification by AO. We are not inclined to accept this argument on the face of the assessment order. A specific query was raised by AO during the course of assessment proceedings and the same was duly responded to by the assessee. Assessment order also takes note of the fact that the requisite details were furnished by the assessee and no comments have been made on the conduct of the assessee in the assessment order, in this regard. The plea raised by Ld. CIT-DR could not be accepted. Another line of argument is that certain items as pointed out in the revisional order could not be allowed u/s 36(1)(vii). As submitted that the assessee had explained that the debts arose as a result of debit note raised on purchase due to quality issues. The argument that, AO failed to carry out enquiries regarding the debit notes. AO did not enquire when the assessee had sold the entire stock purchased and he did not enquire as to how the purchases were accounted for in the earlier years & how the stock was adjusted. This argument would stand negated by the fact that no discrepancy has been pointed out either by AO or by Pr. CIT in the purchases made by the assessee or stock maintained by the assessee. The only allegation in the revisionary order is that certain items claimed by the assessee could not be held to be revenue in nature since this would be allowed only when the assessee is a going concern. No other doubt, whatsoever, has been raised against the claim so made by the assessee. Allegation that the amounts were written-off so as to avoid capital gains on slum sale is bereft of any concrete material on record. Therefore, this argument also could not be accepted. CIT-DR also referred to the recent decision in the case of Khyati Realtors Pvt. Ltd. [2022 (8) TMI 1141 - SUPREME COURT] for the submission that the item of expenditure falling u/s 30 to 36 will not be covered by Section 37. We find that the assessee had made a claim u/s 36(1)(vii) and considering the nature of certain items, made partial claim u/s 28 r.w.s. 37 which was accepted by AO. The subsequent decision of Hon’ble Supreme Court could have never been considered by AO while framing the assessment. No apprehension has been raised by AO against the claim so made by the assessee. It was a case of adoption of one of the possible views which is not contrary to any law. Revision of the order was no sustainable in the eyes of law and hence, liable to be quashed. Decided in favour of assessee.
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