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2014 (2) TMI 191 - AT - Income TaxJurisdiction to entertain the petition - Held that:- CIT has not given any finding on merit, whether the interest subsidy has to be assessed during the impugned assessment order or not – the Tribunal does not have any jurisdiction to examine the issue in an appeal filed against the order passed u/s. 263 of the Act. Method of accounting - Held that:- the assessee has adopted mercantile system of accounting method for computation of the income under the head "Income from business or profession". But for computing the income under the same head of income from interest subsidy, the assessee has adopted the cash system, which is not permissible or sustainable. In our opinion, under the law there cannot be even two views possible that the assessee can adopt different system of accounting for bringing to tax the interest subsidy under the head "Income from business or profession". Doctrine of Merger - merger of the issues - Revision u/s 263 of the Act – Held that:- if we look into Explanation (c) of section 263 of the Act, it is apparent that Explanation (c) empowers the CIT to execute power u/s. 263 of the Act on such matter as has not been considered and decided in appeal. The issue relating to whether the interest subsidy is chargeable on receipt basis or on accrual basis has not been decided by the CIT(A). - the submission made by the Ld. AR does not have any legs to stand. In view of this - the CIT has rightly exercised his jurisdiction u/s. 263 of the Act. - order of CIT confirmed - Decided against the assessee.
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