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2022 (12) TMI 584 - ITAT GUWAHATIRevision u/s 263 by CIT - accrual of income - accounting of delayed payment surcharge (‘LPS’) on cash basis - assessee was declaring LPS on outstanding credit receivables on accrual basis - hybrid system of accounting - HELD THAT:- AO has conducted the necessary enquiry on the said issue referred in the show-cause notice u/s 263 called for the details, made proper applcation of mind on the said details, considering the fact that the said treatment of LPS on cash basis is consistently being followed from AY 2003-04 onwards and accepted by predecessors and financial statements are duly audited by three auditors including CAG and the assessee has followed the directions of Ministry of Power dated 19.08.2003 and also considering the fact that in the past also huge amount of outstanding LPS are waived of and there is no certainity of receiving LPS charges from the Government companies and also considering the fact that similar views of accepting such treatment of LPS charges on cash basis even when the books of account are maintained on mercantile system have been taken by judicial forums, the view taken by the ld. AO was permissible in the law and not unsustainable and, therefore, in our considered view, the order of the ld. AO is neither erroneous nor prejudicial to the interest of revenue. We accordingly quash the revisionary proceedings carried out under section 263 by ld. PCIT and allow the grounds of appeal raised by the assessee.
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