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2016 (6) TMI 1076 - AT - Income TaxRevision u/s 263 - non-inclusion of MODVAT credit to the closing stock - Held that:- AO had raised specific query in the notice issued u/s.142(1) of the Act. The queries raised by the AO were replied by the assessee and these details also formed part of the tax Audit Report that were filed by the assessee before AO. Thus, it can be seen that after making the necessary queries with respect to the issues under consideration and on receiving replies from the assessee, the AO was satisfied with the submission of Assessee and, therefore no additions were made by the AO. We find that the Hon’ble Apex Court in the case of CIT vs. Max India Ltd. reported at (2007 (11) TMI 12 - Supreme Court of India ) has held that where two views are possible and the ITO has taken one view with which CIT does not agree, the order of the AO cannot be treated as erroneous order prejudicial to the interests of the Revenue, unless the view taken by the ITO is sustainable in law. Further on the issue of considering MODVAT credit as income, we find that the Hon’ble Apex Court in the case of CIT vs. Indo Nippon Chemicals Co.Ltd.(2003 (1) TMI 8 - SUPREME Court ) has held that unavailed MODVAT credit cannot be construed as income and there is no liability to pay tax on such MODVAT credit. Before us, Revenue has not brought any material record to demonstrate that the view taken by the AO was an impermissible view and was contrary to law or was upon erroneous applications of legal principles necessitating the exercising of revisionary power u/s.263 of the Act. In view of the aforesaid facts, we are of the view that in the present case Ld.CIT was not justified in resorting to revisionary powers u/s.263 of the Act - Decided in favour of assessee
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