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2015 (9) TMI 236 - HC - Income TaxRevision u/s 263 - Assessing Officer had allowed the assessee's claim of deduction on account of premium paid on buyback of shares by merely assuming the facts, without applying his mind as per CIT(A) - Held that:- Assessing Officer as well as the Tribunal were satisfied that the amount paid by the Respondent-Assessee to buy-back shares of one group of share holders was only for the purpose of ensuring that it can run its business smoothly and more profitably. This is essentially a finding of fact. It would be pertinent to point out that the impugned order of the Tribunal also relies upon its order in Chemosyn Ltd. (2012 (9) TMI 804 - ITAT MUMBAI) arising on an identical facts. The Revenue carried the above order. This Court by order [2015 (2) TMI 863 - BOMBAY HIGH COURT] dismissed the Revenue's appeal holding that expenditure so incurred by the Respondent-Assessee for purchase of shares and subsequent cancellation thereof was only for the purpose of enabling smooth running of its business. It was further held that the aforesaid finding is essentially a finding of fact and the Revenue was not able to show that the finding is in any manner perverse and/or arbitrary. The above observation applies with equal force to the present facts. Decision of the Apex Court in the case of Brooke Bond [1997 (2) TMI 11 - SUPREME Court] is inapplicable to the present facts. In view of the above, it cannot be said that the order of the Assessing Officer is erroneous for the purpose of exercising of power under Section 263 of the Act. In any event, at the very highest, the issue would be a debatable issue and in these circumstances, the exercise of power by the Commissioner of Income Tax under Section 263 of the Act is not valid. - Decided in favour of assessee.
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