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2015 (1) TMI 241 - HC - Income TaxCancellation of order of CIT u/s 263 by Tribunal – Held that:- Assessee maintains its books of accounts on the basis of mercantile system of accounting and that export incentives are linked to and springs from the exports made by the assessee - the assessee was justified in including the amount of export incentive and licence premium in the A.Y. 1993-94 and the AO was justified in accepting the revised return filed by the assessee wherein, the sum of ₹ 17,45,430/was included as income of the A.Y. 1993-94 on the basis of assessee having followed the mercantile system of accounting. Calculation of deduction u/s 80HHC – Held that:- Since the deduction claimed by the assessee and accepted by the AO is in accordance with the interpretation of Section 80HHC, the CIT was not justified in setting aside the order of the AO – in Commissioner of Income Tax v. Max India Ltd. [2007 (11) TMI 12 - Supreme Court of India] it has been held that the phrase “prejudicial to the interests of the Revenue” in section 263 of the Act has to be read in conjunction with the expression “erroneous” order passed by the AO every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interests of the Revenue – thus, the CIT committed serious error in law in cancelling the order of the A.O u/s.263 – thus, the order of the Tribunal is upheld – Decided against revenue.
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