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TMI Blog2015 (10) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... p International (P.) Ltd. [2011 (5) TMI 700 - ITAT CHENNAI]. We find that the above circular and the Tribunal decisions support the case of the assessee on merit that the assessee was not under an obligation to deduct tax on freight charges paid to shipping agencies. - Decided in favour of assessee. Expenditure towards machinery spare parts was a capital expenditure - Held that:- In the show cause notice, the observation of the Commissioner of Income-tax is that the said expenditure would be of capital nature. But in the revision order passed by him, the Commissioner of Income-tax has disallowed the said expenditure under sec.40(a)(ia). Because of this contradiction, this objection made by the Commissioner of Income-tax cannot survive. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that ground also disallowance is not justified.- Decided in favour of assessee. Quarry development expenses would have been treated as a capital expenditure. That is also a case of divided opinion. Therefore, the Commissioner cannot take it as a ground to revise the assessment. - Decided in favour of the assessee. - ITA No. 753/Mds/2013 - - - Dated:- 23-9-2014 - Dr. O.K.NARAYANAN AND SHRI V.DURGA RAO, JJ. For The Appellant : Shri R. Srinivasan, Advocate For The Respondent : Shri Durgesh Sumrott, IRS, CIT ORDER PER Dr.O.K.NARAYANAN, VICE-PRESIDENT This appeal is filed by the assessee. The relevant assessment year is 2008-09. The appeal is directed against the revision order passed by the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. (v) There are debits of ₹ 30,48,420 towards Royalty paid and ₹ 18,58,239 towards Royalty paid for Quarry Permit. These are capital in nature. (vi) The amount of ₹ 8,09,86,594 exhibited in the Balance Sheet towards Trade Debtors which interalia included ₹ 15,30,500 relating to Archean Granites Mines Division, the assessee being the proprietor of Archean Granites, the amount is to be treated as income in the hands of the assessee. 3. In the light of the above observation, the Commissioner of Income-tax proposed to treat the assessment order as erroneous and prejudicial to the interests of the Revenue and as such, noticed the assessee, his intention to revise the assessment under sec.263. The assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the points raised during assessment proceedings and after considering the detailed reply filed by the Appellant before him and therefore the Commissioner has no jurisdiction to invoke the revisionary powers under section 263 of the Income-tax Act, 1961. 5. The Commissioner also failed to note that the Assessing Officer has after examining the details has adopted a possible opinion on the several points raised in the show cause notice issued by him and therefore the Commissioner lacks jurisdiction to invoke section 263 and he cannot seek to impose his own erroneous opinion on those facts to pass such an order. 6. The Commissioner also erred in passing the order under section 263 even after perusing the detailed reply filed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stics Ltd. v. ACIT, 53 SOT 313, has considered the impact of sec.172 on matters relating to TDS. The Tribunal held that sec.172 being a special scheme to levy tax on ships leaving Indian ports, which is calculated at a presumptive rate, discharges the tax liability as a whole before leaving Indian ports. In such cases, no question of further tax liability arises and as such, TDS provisions do not apply. In view of the above, we find that the objection made by the Commissioner regarding TDS is not sustainable in law. 8. The second objection raised by the Commissioner of Income-tax is that a sum of ₹ 8,17,258/- debited by the assessee towards machinery spare parts was a capital expenditure. In the show cause notice, the observation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the question of disallowance should apply only those amounts remained payable. But what is shown as payable in the balance sheet, has already been paid by the assessee before the due date of filing of return. Therefore, that portion of TDS amount does not remain as payable. On that ground also disallowance is not justified. 11. Another objection pointed out by the Commissioner is that quarry development expenses would have been treated as a capital expenditure. That is also a case of divided opinion. Therefore, the Commissioner cannot take it as a ground to revise the assessment. 12. The Commissioner of Income-tax has mentioned various other items in his notice, like trade debtors etc., whereas in his revision order, such items we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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