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2017 (1) TMI 1660 - AT - Income TaxRevision u/s 263 - allowability to the claim of leave encashment - HELD THAT:- We have noticed that while making the claim, the assessee has paid the tax in accordance with the direction of Hon’ble Apex Court in M/S EXIDE INDUSTRIES LTD. & ANR. [2009 (5) TMI 894 - SUPREME COURT]. AO examined the allowability to the claim of leave encashment. During the assessment, the assessee furnished the sufficient information vide reply dated 22.12.2011. The AO passed the order after considering the submission in reply dated 22.12.2011. As the assessee has already paid the tax before filing of the return of income. The order is not prejudicial to the interest of Revenue. The Hon’ble Apex Court in Malabar Industrial Company vs. CIT [2000 (2) TMI 10 - SUPREME COURT] held that Commissioner has jurisdiction to revise the assessment order if twin conditions as provided in section 263 are fulfilled i.e. the order is not only erroneous but prejudicial to the interest of Revenue, both twin conditions are essential perquisite. Order passed by AO is not prejudicial to the interest of Revenue, as the assessee has already paid the tax on the provisions for leave encashment. Thus, as per our considered opinion, the order passed by CIT was not warranted. Thus, we hold that the order passed by AO was in order. - Decided in favour of assessee.
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