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TMI Blog2024 (9) TMI 1100X X X X Extracts X X X X X X X X Extracts X X X X ..... see - HELD THAT:- Book treatment would not dictate the allowance or otherwise of an expenditure, where it is otherwise of revenue nature, which, however, would require a finding by the AO, absent, validating the finding by the competent authority of lack of proper inquiry, resulting in lack of due application of mind by the AO in framing the assessment. For instance, capitalization of an expenditure in accounts may not be fatal to its claim as revenue, but the contradiction, which is clear, would need to be explained, and which has as much as not been inquired into. An asset, even if intangible, is liable for depreciation, and cannot be claimed as an expense under the Act, which has no concept of deferred revenue expenditure. As regards com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment Year (AY) 2016-17. 2.1 Opening the arguments for and on behalf of the assessee, it was submitted by Shri Bhatt, it s learned counsel, that even as the impugned order makes several interventions to the assessee s assessment, i.e., on which the ld. Pr. CIT, the competent authority, found it as deficient on the ground that the Assessing Officer (AO) had not verified the assessee s claims, and accepted the same as such, rejecting the assessee s explanation that due enquiry in the matter had been made by the AO, inasmuch as the assessment stands since modified in appellate proceedings, he would restrict his arguments only to the three surviving the first appeal. The first, he would, adverting to para 6.3 of the impugned order, continue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted non-deduction of TDS, even the nature of services rendered by the foreign parties remains to be specified by the assessee. 3. We have heard the parties, and perused the material on record. 3.1 It would be, to begin with, relevant to visit, even if in brief, the law in the matter. Lack of enquiry would by itself result in the ensuing assessment being erroneous and prejudicial to the interest of the Revenue, liable for revision, toward which the ld. Pr. CIT cites Malabar Industrial Co. Ltd. vs. CIT [2000] 243 ITR 83 (SC) and Raja Co. vs. CIT [2011] 335 ITR 381 (Ker). Non-application of mind, as explained by the Apex Court in Malabar Industrial Co. Ltd. (supra), is one of the ingredients that renders an order as prejudicial and errone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an enquiry. This represents trite law, since co-opted on the Statute vide Explanation 2(a) to s. 263(1). 3.2 With reference to the facts of the case, without doubt, book treatment would not dictate the allowance or otherwise of an expenditure, where it is otherwise of revenue nature, which, however, would require a finding by the AO, absent, validating the finding by the competent authority of lack of proper inquiry, resulting in lack of due application of mind by the AO in framing the assessment. For instance, capitalization of an expenditure in accounts may not be fatal to its claim as revenue, but the contradictio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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