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2019 (1) TMI 2039 - AT - Income TaxValidity of revision u/s 263 - Period of limitation - as per CIT provisions of sec. 115JB do not provide for reduction of Debenture Redemption Reserve from the Net Profit - Debenture Redemption Reserve was merely an appropriation from such net profit and was a transaction on Capital Account and hence the same is not allowable as deduction under the provisions of the Income tax Act - Whether revision order as barred by limitation? - HELD THAT:- There is merit in the contentions of Ld A.R, i.e., since the issue of DRR sought to be revised by CIT is covered by the original assessment order dated 30-12-2011, the time limit available to revise the original order is 31.3.2014, whereas the CIT has passed the impugned order on 26-03-2018. Hence we find merit in the contention of the assessee that the impugned revision order is barred by limitation. Debenture Redemption Reserve deductibility in computation of book profit u/s 115JA - In the case of Raymond Ltd [2012 (4) TMI 127 - BOMBAY HIGH COURT] has held that the Debenture Redemption Reserve is an ascertained liability and is deductible from Net profit for the purpose of computing Book Profit u/s 115JA of the Act. The claim made by the assessee as well as allowed by the AO gets support from the decision rendered by the jurisdictional High Court. CIT has taken the view that the Hon’ble Bombay High Court has not considered the decision rendered by Hon’ble Supreme Court in the case of National Rayon corporation [1997 (7) TMI 113 - SUPREME COURT] in proper perspective and further observed that the Hon’ble Bombay High Court did not consider the fact that the Debenture Redemption Reserve operates in Capital field and hence appropriation of profit is not deductible for tax purposes. Accordingly, the Ld Pr. CIT has taken the view that the decision rendered by Hon’ble Bombay High Court is per incurium. Whatever may be the reasoning given by Ld Pr. CIT, it cannot be denied that the Ld Pr. CIT has taken different view in the matter, without noticing that the decision rendered by jurisdictional High Court is binding on him also. On the contrary, the claim made by the assessee as well as allowed by the AO gets support from the decision rendered by the jurisdictional High Court, meaning thereby, the AO has followed binding decision of the jurisdictional High Court, which cannot be found fault with. It is well settled proposition of law that merely because the Ld Pr. CIT is holding a different view in the matter, the assessment order cannot be termed as erroneous and prejudicial to the interests of revenue, unless it is shown by him that the view taken by the AO is not in accordance with the law or against the binding precedents. In this regard, we may refer to the decision rendered in the case of Grasim Industries Ltd. [2010 (2) TMI 4 - BOMBAY HIGH COURT] by taking into account the law laid down by the Hon'ble Supreme Court in the case of Malabar Industrial Co Ltd. [2000 (2) TMI 10 - SUPREME COURT] Decided in favour of assessee.
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