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2008 (8) TMI 601 - AT - Income TaxRevision u/s 263 - Double taxation relief - Orders of AO are erroneous and prejudicial to the interests of the revenue - ‘erroneous’, ‘erroneous assessment’ and ‘erroneous judgment’ - Income in Bhutan - AO, allowing credit for tax paid in foreign country by minimum alternate tax determined as payable u/s 115JB, the intention of Legislature in introducing the section gets violated as the same was introduced with the intention that the company must pay at least 7.5 per cent of its book profit as taxes - HELD THAT:- We find that the expressions ‘erroneous’, ‘erroneous assessment’ and ‘erroneous judgment’ have been defined in Black’s Law Dictionary. According to the definition, ‘erroneous’ means ‘involving error; deviating from the law’. "Erroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid, and is defect that is jurisdictional in its nature, similarly, ‘erroneous judgment’ means one rendered according to course and practice of court, but contrary to law, upon mistaken view of law, or upon erroneous application of legal principles. An order cannot be termed as erroneous unless it is not in accordance with law. Section 91 provides for unilateral double taxation relief in respect of income arising in countries with which the Central Government has not entered into the agreement u/s 90. The object of section 91 is with the amount of Indian income-tax paid or the amount of tax paid in foreign country whichever is lower is allowed as deduction from the tax payable under the Act on such doubly taxed income. No dispute that the assessee is entitled to relief u/s 91 of the Act. The scheme of the Act is that section 115JB is applicable wherein the case of an assessee, being a company, the income-tax payable on the total income as computed under this Act in respect of any previous year is less than 7.5 per cent of its book profit, 7.5 per cent book profit shall be deemed to be the total income of the assessee. On consideration of guidelines laid down by the Apex Court in the decisions of CIT v. Carew & Co. Ltd.[1979 (9) TMI 4 - SUPREME COURT], K.V. AL.M. Ramanathan Chettiar v. CIT [1972 (10) TMI 6 - SUPREME COURT] and the ratio laid down in the case of Jeewanlal [1969 (6) TMI 17 - CALCUTTA HIGH COURT], we find that income in Bhutan has been considered while invoking section 115JB, once Bhutan income has been considered for the purpose of this Act, the assessee is entitled to deduction u/s 91. We are, therefore, of the considered view that the assessee is entitled to deduction u/s 91 of the Act even on merit. The orders of the AO are neither erroneous nor prejudicial to the interests of the revenue, therefore, the CIT is not correct in invoking section 263. The order of the CIT is, thus, quashed. Since on merit we quashed the order of CIT, therefore, this legal ground that action of the CIT is barred by limitation, raised by the assessee becomes academic and, therefore, we do not think it necessary to express our opinion on this issue. In the result, the appeals filed by the assessee for the assessment years 2001-02 and 2002-03 are allowed.
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