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TMI Blog2020 (10) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... n, the matter deserves to be remanded back to CIT for passing fresh orders, in accordance with law, under Section 263 of the Act, after giving a reasonable and adequate opportunity of hearing to the Assessee. Appeal of the Revenue is allowed without answering the question of law raised in the matter by setting aside the order as restored on the file of the learned Commissioner of Income Tax - I, Coimbatore, for deciding the proceedings under Section 263 of the Act afresh - T.C.A. No. 411 of 2013 - - - Dated:- 15-10-2020 - HONOURABLE DR. JUSTICE VINEET KOTHARI AND HONOURABLE MR. JUSTICE M.S. RAMESH For Appellant :: Ms. S. Premalatha Junior Standing Counsel For Respondent :: Mr. P.J. Sri Ganesh O R D E R (By DR. VIN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not covered by Sec-35D of the Act. But, such expenses are required to be capitalized with the block of depreciable assets. In view of such, the assessee s case merits the verification of the income of ₹ 3487.18 lakhs (as per the Schedule-6 to the audited P L a/c of the Annual General Report: 2006-2007) to ascertain its allowability or otherwise in computing the assessable income, for the AY: 07-08. The AO is directed accordingly. 5. Thus, the order under consideration [passed u/s-143(3) dt: 23-9-10] is, hereby, set-aside with directions to the Assessing Officer to re-do the assessment afresh, with reference to the observations inter alia, as per law and procedure, and after hearing the assessee. 3. The details and break-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Tribunal allowed the Appeal of the Assessee and held that the learned Commissioner of Income Tax could not invoke his powers under Section 263 of the Act for revising the original order. The relevant part of the order of the Income Tax Appellate Tribunal is also quoted below for ready reference: 5. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. In the instant case, original order of assessment u/s 143(3) was passed on 23.09.2009 assessing total income of the assessee at NIL. Thereafter the CIT issued a show cause notice u/s 263 of the Act dated 11.5.2011 and the relevant issue raised by the CIT in the said notice is extracted as under: 2.1. As per S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Sec-35D of the Act, and, therefore, are allowable wholly in computing the Total Income; and, therefore, the AO passing the order under consideration had allowed. Accordingly, there is no error within the meaning of the Sec-263 of the Act, order under consideration. 4.1 I agree with the AR that, the Pre-operative Expenses is/are the expenses) which are incurred by an assessee prior to commencement of its business are not covered by Sec-35D of the Act. But, such expenses are required to be capitalized with the block of depreciable assets. In view of such, the assessee s case merits the verification of the income of ₹ 3487.18 lakhs (as per the Schedule-6 to the audited P L a/c of the Annual General Report: 2006-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s was pointed out by the CIT. We, therefore, cancel the order of the CIT passed u/s 263 of the Act on 29.3.20112 and allow the appeal of the assessee. 9. In the result, the appeal of the assessee is allowed. 5. The learned counsel for the Revenue primarily submitted that the learned Tribunal has wrongly interpreted it to be a case of expenditure to the extent of ₹ 3487.18 lakhs whereas from the manual correction made in the order of the learned Commissioner of Income Tax, it was clear that it was a case of income in the hands of the Assessee and the taxability of the same was to be determined. 6. The learned counsel for the Assessee was also not able to explain the basic difference in the order of the learned Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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