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| The Tax Publishers2020 TaxPub(DT) 0294 (Mum-Trib) INCOME TAX ACT, 1961
Section 263
Insofar as, disallowances of expenditure related to foreign currency convertible notes, assessee had made all the disclosure in statutory documents, including return of income and notes thereto given in statement of total income. Further, assessee had specifically drawn attention of AO to aforesaid claim of expenditure by way of notes to computation of income, wherein it had been explained that said expenditure was incurred on discharge of loan liability and it was written off against securities premium account in books of accounts in accordance with section 78 and 79 of the Companies Act, 1956 and for the purpose of income tax, these expenses incurred in connection with discharge of loan liability had been claimed as deduction. All these facts were brought to notice of AO and pursuant thereto AO allowed deduction for the same by accepting claim of assessee, accordingly, assessment order could not be treated as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - Invocation of jurisdiction on the ground of AO not having disallowed expenditure incurred for raising debt through Foreign currency Convertible Notes ('FCCN') -
CIT held order passed by AO as erroneous and prejudicial to the interest of revenue on the ground of AO not having disallowed expenditure incurred for raising debt through Foreign Currency Convertible Notes ('FCCN') being of capital in nature.Held: Insofar as, disallowances of expenditure related to foreign currency convertible notes, assessee had made all the disclosure in statutory documents, including return of income and notes thereto given in statement of total income. Further, the assessee had specifically drawn attention of AO to aforesaid claim of expenditure by way of notes to computation of income, wherein it had been explained that said expenditure was incurred on discharge of loan liability and it was written off against securities premium account in books of accounts in accordance with section 78 and 79 of the Companies Act, 1956 and for the purpose of income tax, these expenses incurred in connection with discharge of loan liability had been claimed as deduction. All these facts were brought to notice of AO and pursuant thereto AO allowed deduction for the same by accepting claim of assessee, accordingly, assessment order could not be treated as erroneous and prejudicial.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 263
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