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2015 (10) TMI 159 - AT - Income TaxRevision u/s 263 - allowance of royalty expenditure - CIT(A) annulling the order u/s. 143(3)/147 while holding invalid the reopening u/s. 147 - Held that:- It is an admitted fact that decision of the Hon’ble Supreme Court in the case of Sourthern Switchgear Ltd. v. CIT [1997 (12) TMI 105 - SUPREME Court] was very much available at the time of assessment. The decision of the Hon’ble Supreme Court of India is a Law of Land in which it is clearly held that royalty expenditure is not allowable expenditure. But the AO has escaped overlook the aforesaid judgments and has not considered the same while completing the original assessment. But later on as and when it came to the notice of the AO, he adopted the prescribed procedure under the law for reopening of case of the assessee and has rightly reopened the case of the assesee and completed the assessment under section 147 w.e.f. 143(3) of the Act vide order dated 30.11.2009. But the Ld. First Appellate Authority has not appreciated this version of the AO while cancelling the assessment made by the AO on 30.11.2009. In our considered opinion, Ld. First Appellate Authority has cancelled the order dated 30.11.2009 passed by the AO and held that the case of the assessee has been reopened by the AO on the basis of change of opinion, in view of the decision of the CIT vs. Kelvinator India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA). In our view the finding of the Ld. First Appellate Authority is contrary to the facts of the case, because the decision of the Hon’ble Supreme Court in Sourthern Switchgear Ltd. v. CIT was very much available, but the same has been escaped/ overlooked by the AO while completing the original assessment. Therefore, later on the AO has rightly reopened the assessment u/s. 147. In our considered opinion, the impugned order is not sustainable in the eyes of law and hence, we cancel the impugned order dated 02.7.2010 passed by the Ld. CIT(A) as the Ld. CIT(A) has not decided the case of the assessee on merits. She has only declared the assessment anulled and which we have cancelled as mentioned in the forging paragraph. Ld. CIT(A) is also directed to decide the case of the assessee on merits, after giving adequate opportunity of being heard the parties. - Decided in favour of revenue for statistical purposes
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