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| The Tax Publishers2020 TaxPub(DT) 4414 (Mad-HC) INCOME TAX ACT, 1961
Section 263 Section 35D
Where CIT passed order under section 263 by holding that pre-operative expenses claimed by assessee were not covered by section 35D and expenses were required to be capitalized with the block of depreciable assets, considering fact as to whether it was an income, taxable or not, or whether it was an expenditure, to be capitalized or not, were entirely two different fields and therefore, lower authorities proceeded on a wholly wrong premise or under a confusion in matter, accordingly, matter was remanded back to CIT for reconsideration afresh.
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Revision under section 263 - Validity of order - Pre-operative expenses claimed by assessee allegedly not covered by section 35D -
Issue was as regards validity of order passed by CIT under section 263, wherein it was held that pre-operative expenses as per audited profit and loss account was not covered by section 35D and expenses were required to be capitalized with the block of depreciable assets. Held: Whether it was an income, taxable or not, or whether it was an expenditure, to be capitalized or not, are entirely two different fields and therefore, both authorities proceeded on a wholly wrong premise or under a confusion in matter. Orders were passed in a casual manner without proper enquiry into the facts by both fact finding authorities. Therefore, matter was remanded back to CIT for passing fresh orders, in accordance with law, under section 263 after giving a reasonable and adequate opportunity of hearing to the assessee.
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2007-08
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