The pre‑closure premium represented additional interest charged by the bank for pre‑closure of the loan and, on the facts, was rightly treated as allowable revenue expenditure. The Assessing Officer had applied his mind to the audit objection, called for details, and considered the assessee’s explanations prior to passing the assessment order; therefore, the Commissioner erred in invoking section 263. The Tribunal was not justified in affirming the revision order. (AY. 2005–06)