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2016 (3) TMI 684 - MADRAS HIGH COURTRevision u/s 263 - expenditure disallowed as assessee did not carry the business as per CIT(A) - Held that:- In the case on hand, both the Assessing Officer as well as the Commissioner were ad idem on one thing namely that the business operations of the assessee came to a stand still during the accounting year ending 31.3.1999. In paragraph 6 of the order dated 12.4.2005 passed under Section 263, the Commissioner concurred with the finding of the Assessing Officer that the assessee did not carry on business during the year under consideration. Once, on facts, it is found by the Assessing Officer and by the Commissioner that the assessee did not carry on business during the year under consideration, then it follows as a corollary that the assessee could not have claimed expenses under the heading 'business expenditure'. The error committed by the Assessing Officer in allowing business expenditure, was clearly an error of law, which satisfied the first condition. This error of law consequently became prejudicial to the interests of the Revenue, as seen from the computation made by the Deputy Commissioner in the proceedings for giving effect to the order of the Commissioner. In such circumstances, the first question of law on the scope of Section 263 has to be answered against the appellant/assessee.
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