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2024 (2) TMI 224 - AT - Income TaxRevision u/s 263 - Incorrect allowance of additional depreciation and Wrong claim of Bad Debts - HELD THAT:- With respect to the issue of allowance of additional depreciation, assessee has fairly conceded that he has no case since an identical issue of incorrect allowance on additional depreciation in identical set of facts, and on which revisionary jurisdiction was exercised u/s 263 of the Act, was upheld by the ITAT in the case of Dakshin Gujarat Vij Co. Ltd [2022 (4) TMI 98 - ITAT AHMEDABAD] Therefore, we have no hesitation in holding that with respect to the finding of error by the Ld. PCIT in the assessment order on account of incorrect allowance of claim of additional depreciation, the same is confirmed. Claim of bad debts allegedly wrongly allowed by the AO - PCIT reveals that the assessee submitted explanation to him during revisionary proceedings , and noted the claim of the assessee to be in order, but still went on to hold the assessment order erroneous since the AO had not examined the case. PCIT goes on to hold the assessment order erroneous merely for the reason that these explanations and documents were not filed to the Assessing Officer during assessment proceedings and therefore, the Assessing Officer did not make proper inquiries on this issue. It is clearly evident from the findings of the Ld. PCIT, as noted above by us, that in very clear terms he stated to be satisfied with the explanation of the assessee regarding the irregularities noted by him in the assessment order and for which purpose he assumed jurisdiction u/s 263 of the Act for revision of the assessment order. It is but obvious that as per ld. PCIT himself there was no error in the assessment order in allowing the above claims to the assessee. PCIT was satisfied that these claims had been rightly allowed to the assessee on the basis of the assessee’s explanation and the documents filed before him. When the ld. PCIT himself was satisfied that there was no error in the order of the Assessing Officer vis-à-vis irregularities noted by him initially, there can be no case for exercising any revisionary power u/s 263 of the Act. The provisions of the section are very clear. The concerned authorities can exercise revisionary powers only on fulfillment of the essential conditions of finding error in the order sought to be revised and the error being such as causing prejudice to the Revenue. Merely because the AO had not examined these issues during assessment proceedings does not make the assessment order erroneous particularly when the ld. PCIT finds, on the basis of explanation and documents furnished to him, that the assessee’s claim was eligible as per law. We have no hesitation in holding that the order passed by the ld. PCIT u/s 263 of the Act is not sustainable in law in the absence of any error noted by him in the assessment order passed the issue of allowance of claim of bad debts. Decided partly in favour of assessee.
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