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2016 (7) TMI 819 - AT - Income TaxRevision u/s 263 - the assessee had not offered any income in terms of section 36(2) of the Act out of these advances and accordingly not entitled for deduction u/s 36(1)(vii) of the Act on the write off of the same - Held that:- AO had duly appreciated the stand of the assessee during the course of original assessment proceedings and had allowed the deduction to assessee by taking one of the possible views in the matter. When one possible view has been taken, the same cannot be substituted by another view of the Learned CIT. We also find that the Learned CIT had initiated the revisionary proceedings on the pretext that the claim of deduction made by the assessee is not allowable u/s 36(1)(vii) of the Act as no income was offered by the assessee in terms of section 36(2) of the Act. But from the records, we find that the assessee had not made any claim towards bad debts warranting invocation of section 36(1)(vii) read with section 36(2) of the Act. Hence the initiation of section 263 proceedings by the Learned CIT on the wrong assumption of facts is to be declared as bad in law. With regard to the argument advanced by the Learned DR that the loss arising on account of advances written off should be construed as capital loss for which certain case laws were relied upon by him, in view of our aforesaid findings and judicial precedents relied upon hereinabove, we don’t deem it fit and appropriate to get into the aspect of whether the loss arising on account of write off is a capital loss or not. Thus the revisionary jurisdiction invoked by the Learned CIT u/s 263 is to be quashed. - Decided in favour of assessee
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