TaxTMI 
TaxTMI 
2018 (7) TMI 1173
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in sustaining the order of the Commissioner of Income Tax when it was accepted by the Tribunal that all the relevant details were before the assessing officer while completing the assessment under Section 143(3) of the Income Tax Act?" 2. The assessee purchased a premises with plant and machinery with an electricity connection in June, 2002. Subsequent to the purchase, in the year 2007-08 the assessee settled, pending electricity dues for the period prior to the purchase, under One Time Settlement Scheme as is seen from Annexure-D. The assessee claimed the sum as revenue expenditure, which was accepted as per the assessment order, but later suo motu revised under Section 263 of the Income Tax Act, 1961 ('Act', for short). The suo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e and affirmed the order of suo motu revision. It is further contended that the assessment order is erroneous and the expenditure for prior period electricity charges cannot be treated as a revenue expenditure; which if so treated causes prejudice to the Revenue. 5. Admittedly, the assessee purchased a plant and machinery for utilisation in its business, that too long before the electricity charges were demanded from the assessee. Obviously, the demand was settled by the assessee, since otherwise the same would be a charge created on the plant and machinery as also on the property. Only to avoid such distress on the property, the assessee settled the dues of the prior owner. According to us, this is the hidden cost of the plant and machine....
X X X X Extracts X X X X
X X X X Extracts X X X X
....C 718 [Malabar Industrial Co. Ltd. v. CIT] to find that for validly carrying out a suo motu revision, there should be, in conjunction, an erroneous decision and prejudice occasioned to the Revenue. Though each and every mistake or error cannot be deemed to be an erroneous finding, it was held that "an incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous." (sic para 9) 8. As noticed by the Tribunal, we do not see any discussion by the AO of having accepted the claim of the assessee that the remittance of prior electricity charges under One Time Settlement Scheme was a revenue expenditure. The learned counsel for the assessee has relied on Annexure-C reply submitted before....