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2015 (8) TMI 599 - ITAT CHENNAIDisallowance of cost of 339 units of yarn clearers - revenue v/s capital expenditure - AO treated the cost of two comber machines and one auto coner as capital expenditure as against the claim of the assessee as revenue expenditure confirmed by CIT(A) and also adjudicated that cost of 339 units of yarn clearers is also capital expenditure - Held that:- Commissioner of Income-tax (Appeals) probably by overlooking the fact that the issue to be decided pursuant to the direction of the hon'ble Supreme Court in the case of CIT v. Sri Mangayarkarasi Mills P. Ltd. [2009 (7) TMI 17 - SUPREME COURT ] is only the disallowance of the cost of two comber machines and one auto coner, proceeded to adjudicate that even the cost of 339 units of yarn clearers is capital expenditure, even though the said issue was not before the hon'ble Supreme Court. Since the issue is not arising out of the orders of any of the lower authorities originally is decided by the Commissioner of Income-tax (Appeals) which is not only incorrect but also beyond his jurisdiction. It is a mistake apparent from record also. Thus we modify the order of the Commissioner of Income-tax (Appeals) restricting the disallowance only to cost of two comber machines and one auto coner. Ground No. (ii) raised by the assessee is allowed. Since the Commissioner of Income-tax (Appeals) has no jurisdiction to decide the issue which is not before the lower authorities at any stage originally, he could have rectified his order on the application filed by the assessee. The assessee preferred an appeal against the order of the Commissioner of Income-tax (Appeals) in rejecting the petition filed under section 154 of the Act. In view of our above findings, we allow the appeal of the assessee filed against the order under section 154 of the Commissioner of Income-tax (Appeals). - Decided in favour of assessee.
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