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2018 (4) TMI 1207 - AT - Income TaxRevision u/s 263 - Deduction wrongly allowed in respect of provisions for nonperforming assets, even though it was a mere contingent liability - deduction towards loss of interest rate swap was incorrectly allowed - Held that:- For provisions for nonperforming assets as out of total provision of ₹ 1114.68 lacs, a sum of ₹ 7,60,76,105/- was suo moto added back in the computation of income and a further sum of ₹ 73,46,160- was disallowed by the AO in the original assessment order dated 30.3.2005. Therefore, out of ₹ 1114.68 lacs, ₹ 834.22 lacs already stood disallowed in the original assessment order. The balance amount represented actual write off which was palpably clear from page 2 of the impugned order itself. No deduction on account of any such provision was, therefore, allowed to the assessee. Hence, there is no error or prejudice to the interest of revenue. For interest rate swap as an actual loss and only the net loss of ₹ 114.05 lacs after setting of gain of interest rate swap was claimed as deduction. However, we find that both these issues were duly examined by the AO vide Questionnaire dated 2.11.2004 to which replies dated 9.12.2004, 20.12.2004 and 6.1.2005 were furnished and, therefore, the finding of the Ld. CIT that the issues were not examined properly was not correct. CIT has not pointed out the definite and specific error in the original assessment order and observed that the inquiry made by the AO was inadequate or improper without first pointing out the error in the original assessment order passed by the AO, particularly because both the aforesaid issues were duly examined at the stage of the original assessment proceedings, hence, the impugned order is beyond jurisdiction, bad in law and void-ab-initio. - Decided in favour of assessee.
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