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M/s. Siemens Building Technologies Pvt Ltd. C/o. Siemens Ltd. Versus The Commissioner of Income Tax I, Chennai and Vice-Versa

2016 (8) TMI 417 - ITAT CHENNAI

Revision u/s 263 - Expenditure incurred for raising the debenture - revenue or capital - Held that:- It is settled law that while making assessment on assessee, the ITO acts in a quasi-judicial capacity. An assessment order is amenable to appeal by the assessee and to revision by the Commissioner under Sections 263 and 264. Therefore, a reasoned order on a substantial issue is legally necessary. - If the Assessing Officers are allowed to make assessments in an arbitrary manner, as has been .....

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when an order is against the interests of the revenue. As a matter of fact such orders are prejudicial to the interests of both the parties, because even the assessee is deprived of the benefit of a positive finding in his favour, though he may have sufficiently established his case. - In view of the foregoing, it can safely be said that an order passed by the Assessing Officer becomes erroneous and prejudicial to the interests of the Revenue under Section 263. In view of this, exercising ju .....

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ture incurred for issue of such debentures are all held to be revenue expenditure, entitled to be spread over the period of debentures and consequently, allowable as deduction in a particular assessment year. - ITA No. 1186/Mds./2008, I.T.A. No. 285/Mds./2016 - Dated:- 29-6-2016 - Shri Chandra Poojari, Accountant Member And Shri Duvvuru RL Reddy, Judicial Member Appellant by : Mr.N.Devanathan,Advocate Respondent by : Mr.Vivekandan,CIT DR ORDER Per Chandra Poojari, Accountant Member The appeal of .....

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e s appeals are common in nature, these appeals are clubbed together, heard together, disposed off by this common order for the sake of convenience. 2. Originally, the AO while framing the assessment order u/s.143(3) of the Act vide order dated 31.03.2006 allowed professional charges incurred for the issue of optionally fully convertible debentures at 40 lakhs. According to CIT in his order dated 28.03.2008 passed u/s.263 of the Act observed that the said expenditure is a capital expenditure in .....

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ial order u/s.143(3) r.w.s263 of the Act on 26.12.2008. Against this consequential order, assessee carried this appeal before the CIT(A). The CIT(A) confirmed the action of the AO vide its order dated 18.11.2015. Against the order of CIT passed u/s.263 of the Act as well as order of CIT(A) passed consequent to the order under sec.263 of the Act, the assessee is in appeal before us. 3. We have heard both the parties and perused the material on record. The main plea of the ld.A.R is that the expen .....

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nt of Apex Court in the case of India Cements Ltd. Vs. CIT reported in 60 ITR 52 SC and the judgment of Madras High Court in the case of Commissioner of Income Tax (Appeals) Vs. L&T Infrastructure Development Projects Ltd. in TC No.87/2010 dated 03.06.2013. 3.1 Regarding invoking the provisions of the section 263 of the Act, in our opinion, this is covered against the assessee by judgment in the case of Siemens Engineering and Manufacturing Ltd Vs. UOI reported in AIR 1976 SC 1785. It is set .....

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garded as erroneous and prejudicial to the interests of the revenue. If the Assessing Officers are allowed to make assessments in an arbitrary manner, as has been done in the case before us, the administration of revenue is bound to suffer. If without discussing the nature of the transaction and materials on record, the Assessing Officer had made certain addition to the income of the assessee, the same would have been considered erroneous by any appellate authority as being violative of the prin .....

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that an order passed by the Assessing Officer becomes erroneous and prejudicial to the interests of the Revenue under Section 263 in the following cases: (i) The order sought to be revised contains error of reasoning or of law or of fact on the face of it. (ii) The order sought to be revised proceeds on incorrect assumption of facts or incorrect application of law. In the same category fall orders passed without applying the principles of natural justice or without application of mind. (iii) Th .....

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ase of CI Vs. FIRST LEASING CO. OF INDIA LTD. reported in [2007] 292 ITR 110 (Mad) wherein held as follows:- 12. A Division Bench of this court in the case of CIT v. Tube Investments of (India) Ltd. reported in [2003] 261 ITR 753, held that pro-rata annual allocation of premium payable on redemption of debentures allowed by the Tribunal is in accordance with the law laid down by the apex court in the case of Madras Industrial Investment Corporation Ltd. v. CIT reported in [1997] 225 ITR 802. 13. .....

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