TMI Blog2021 (4) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... le only on 15.03.2015 and he has not claimed any interest on auto loan and vehicle maintenance expenses for the impugned assessment year and therefore, the question of disallowance of the same doesn t arise. In light of the aforesaid discussions, we are of the considered view that there is no basis to hold that the order so passed by the AO is based on mistaken view of law/erroneous application of the provisions of the Act and is erroneous in so far as prejudicial to the interest of the Revenue. The order so passed by the ld Pr CIT is thus set-aside and the order of the AO is restored. - ITA No. 239/JP/2020 - - - Dated:- 8-4-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Sh. Surendra Shah (CA) For the Revenue : Shri Amrish Bedi (CIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. Pr. CIT, Alwar dated 05.02.2020 passed u/s 263 of the Act pertaining to A.Y 2015-16. 2. Briefly stated, the facts of the case are that the assessee filed his return of income on 30.09.2015 declaring total income of ₹ 2,58,75,800/- which was selected under CASS for limited scrutiny ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Para no. 1, it is stated that an amount of ₹ 1,20,480/- has been invested in M/s Oro Trade Network India Ltd., Jaipur vide cheque No. 048628 dt. 26.09.2008 drawn on Bank of Baroda, Udyog Bhawan Branch, Jaipur. The amount was for the purpose of investment and getting returns for the same. That the said company was involved in fraud and stopped conduction of their business. There are several news articles that were published in this regard and the Company Directors were also found guilty. The Enforcement Directorate (Government) has also attached properties of said the company. The invested amount has thus become irrecoverable from the said company and as such, we have transferred the said amount of ₹ 1,20,480/- in Bad debts account. 2. With regard to the content stated in Para No. 2 we would like to apprise that the amount paid to the tune of ₹ 6,91,000/- is towards expenses of MIS and Software Updation Charges during the financial year 2014-15. That the said amount has been paid towards the Updation of Internal Software and data feeding in Excel as well as the Software. The said information is used for providing MIS and other information facility service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the Revenue, if, in the opinion of the Principal Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.] A perusal of above clarifies that order passed by Assessing officer shall be deemed to be erroneous and prejudicial to the interest of the Revenue only if AO has passed such order without making inquiries or verification which should have been made. It is worthwhile to note here that the phrase which should have been made here in no way means that enquiries should have been made in manner as desired by CIT. (A) The Order of Ld. AO is not erroneous: Complete details as aske ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of revenue , This submission of assessee is fortified from the observations of Hon ble Supreme Court in the case of CIT Vs. Max India (supra) wherein it was held as under: The phrase prejudicial to the interests of the Revenue in section 263 of the Income-tax Act, 1961, has to be read in conjunction with the expression erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. Thus, it is submitted without admitting that the defect (if any) does not in anyway lead to supply the foundation for revising an otherwise valid order which can neither be said erroneous nor prejudicial to invoke section 263 of the Income Tax Act, 1961, which section cannot be permitted to be brought into play unless both the conditions i.e. the order has to be prejudicial as well as erroneous both, meaning thereby that the twin conditions are to be cumulatively satisfied before proceeding to revise an assessment order. In light of the facts / circumstances of the case, submissions made above, and the case laws relied upon, it is submitted that the impugned revision or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting to ₹ 691,000/- are recurring charges paid on regular basis for updation of software from time to time and are thus for usage of the software and cannot be held as providing any enduring benefit to the assessee or for that matter, has resulted in creation of any ownership rights over such software and are more in the nature of usage/licence fees for usage of the software and has thus rightly been claimed and allowed as revenue expenditure. Lastly, it is an admitted position that the assessee has purchased the vehicle only on 15.03.2015 and he has not claimed any interest on auto loan and vehicle maintenance expenses for the impugned assessment year and therefore, the question of disallowance of the same doesn t arise. In light of the aforesaid discussions, we are of the considered view that there is no basis to hold that the order so passed by the AO is based on mistaken view of law/erroneous application of the provisions of the Act and is erroneous in so far as prejudicial to the interest of the Revenue. The order so passed by the ld Pr CIT is thus set-aside and the order of the AO is restored. In the result, appeal of the assessee is allowed. Order pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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