TaxTMI 
TaxTMI 
2017 (1) TMI 1635
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....263 of the Income Tax Act. Whether on the facts and in the circumstances of the case the tribunal was right in holding that the CIT had merely set aside the orders of the assessment without any adverse finding about the claims of the assessee without appreciating the fact that the CIT had clearly given adverse findings holding that the assessee's claims were allowed in the assessment without proper verifications about the nature of expenditure and without application of mind?' 2. The facts in issue are as follows: The assessee/respondent is a company that owns and manages a four star hotel. In respect of assessment year 2010-11, an order of assessment in terms of the Income tax Act 1961 (in short 'Act') was passed under s....
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....sessee to show cause why the expenditures incurred on renovation as well as deferred revenue expenditure not be disallowed and proposing to set aside the order of assessment for re-computation of the total income of the assessee. Despite the assessee bringing to the notice of the CIT the details filed before the Assessing Officer in regard to the claim of expenditures, the proposal was confirmed and the assessment set aside to be re-done after proper verification of the claims by order of revision dated 02.03.15. 5. The order of the CIT was assailed before the Income Tax Appellate Tribunal, (in short 'Tribunal') which, vide order dated 11.11.2015, allowed the appeal. The order of revision u/s 263 of the Act was set aside, as being bereft....
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....s without examining each expense item wise thus committing an error as well as resulting in prejudice being caused to the revenue. The assessment order was thus set aside with a direction to verify the claims item wise again in the light of the material filed by the assessee. We note that the CIT, in his conclusion, admits to the position that the assessee had filed details in support of the claims. 10. A perusal of the details brought on record at the time of assessment indicate that explanations as well as materials to substantiate the claim of the assessee were produced before the assessing officer. The claims form part of the return of income and are duly reflected in the accompanying financial statements. This has not escaped the at....
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.... distinction between the two and the bifurcation was made for the purpose of administrative convenience for better control in maintaining the asset. The renovation expenses are exactly the same of 'repairs & maintenance which are incurred wholly and exclusively for the purpose of maintaining the assets for running the business. It is the legitimate claim in accordance with the principles of accountancy and established commercial practice. Such expenditure must be taken into account to assess profit and gain in business. It is the well settled law that Renovation expenses are to be treated as revenue expenditure unless new asset is created. The enclosed court decision clearly establish and support our above mentioned cl....
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....so please produce the pass book/bank statements issued by the bankers. Please produce vouchers towards expenses claimed for verification. Books of accounts produced herewith for your reference. 12. The power under section 263 is a precise power that has to be exercised by the Commissioner only in appropriate cases where an error arises in the order of assessment that causes prejudice to the revenue. In the present case, the assessing officer, having noticed the claims, calls for material in support thereof. The decision to allow the claims is made after due verification by the officer and is a plausible view in law. In exercising power of revision u/s 263, the CIT essentially seeks to substitute his own conclusions upon the view....