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| The Tax Publishers2019 TaxPub(DT) 3631 (Bom-HC) INCOME TAX ACT, 1961
Section 263
Where assessee had purchased CDs on Jain Religion by expending substantial sum and claimed loss on the same resulting from reduction in the value of stock and AO had allowed the loss as revenue loss, CIT could not interfere in terms of section 263 as AO had taken a plausible view after detailed enquiry.
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Revision under section 263 - Loss arising from dimunition in stock value - Capital or revenue loss - Validity of revision order
Assessee-individual had purchased CD's on Jain Religion by expending an amount of Rs. 10.4 crores. However, assessee ran into lossess since due to multiple reasons, the CD's could not be sold in the market. AO during the scrutiny assessment examined the entire transaction and accepted the assessee's treatment to such expenditure. CIT under section 263 alleged that AO had not carried out any enquiries as to the nature of expenditure being capital or not. Held: CIT can exercise revisional powers under section 263 only when it is found that the order passed by the AO is erroneous and prejudicial to the interest of Revenue. In the present case, it was observed that Jain Munis do not advocate spread of religion through use of computers, source of electronic media is usually shunned, very small section of the community uses computer technology for religious purposes as plenty of printed literature is available in the market. Therefore, it was on account of these reasons, assessee had incurred substantial loss arising out of reduction in the value of stock lying at the year end. Since AO had carried out detailed enquiries and taken a plausible view, therefore, revision order was unjustified.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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