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2015 (10) TMI 1515 - AT - Income TaxRevision u/s 263 - unaccounted receipt of compensation - addition on accrual basis - Held that:- The Assessee received only ₹ 2,50,00,000 towards compensation from M/s Charm India Pvt. Ltd. during the year under consideration and as the Appellant was following cash system of accounting, as is apparent from clause (11a) of tax audit report i.e. Form 3CD the Appellant rightly accounted for the actual amount of receipt of compensation on receipt basis and therefore, there was no justification on the part of the Id. CIT to make addition of ₹ 38,48,050/- to the income of the Assessee on accrual basis. Keeping in view of the above, the impugned order u/s 263 is also illegal as the Ld. CIT has not conducted any independent enquiry/verification before making addition of ₹ 38,48,050/- on account of compensation. In this regard, we draw our support from case of ACIT vs. Manas Salt Iodisation Industries (P) Ltd. (2015 (5) TMI 674 - ITAT GAUHATI ) in which the Hon'ble ITAT had endorsed the view taken in the case of Bharat Petroleum Corporation Ltd vs. Jt CIT (2004 (4) TMI 516 - ITAT MUMBAI) wherein held as under: "The CIT by deciding the fate of the issues himself has pre-empted the assessee company in agitating the matter before the various authorities right from the assessment onwards in a systematic and consistent manner. Therefore, that part of the conclusion of the revision order is not sustainable". Thus the assessment framed by the Assessing Officer was not erroneous and prejudicial to the interests of revenue so as to attract the proceedings u/s. 263 - Decided in favour of assessee.
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