Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (2) TMI 784 - AT - Income TaxRevision u/s 263 - reference to the re-assessment order in respect of the issues raised on the premise that the alleged error were not subject matter of reassessment proceedings at all - wrongful set off of unabsorbed depreciation while computing the business income - eligibility of incremental subsidy for the determination of deduction u/s 10B - Held that:- We find that the set off was duly claimed in the original assessment order was admitted in full. Similar set off was granted in repetition while making the revised computation under section 147 of the Act. The reasons recorded also do not cast any aspersions on the correctness of the allowability of set off of unabsorbed depreciation claimed. There is no discussion on the point in the reassessment order either. Besides, as noted, the set off of unabsorbed depreciation has been duly accepted in the original proceedings. Thus, the set off of unabsorbed depreciation claimed rightly or wrongly was not subject matter of reassessment at all. Hence, it is manifest that cause of action under section 263 of the Act will arise, if any, with reference to original assessment proceedings only. The subsequent re-assessment proceedings will not obviate the bar of limitation prescribed under section 263(2) of the Act on an unconnected issue. Thus so far as alleged wrong set off of unabsorbed depreciation against the business income of the current year is concerned, the issue is clearly time barred due to lapse of statutory time limit with reference to the original assessment order Hence, we are of the firm of opinion that the jurisdiction of CIT to invoke the revisional power in respect of claim of set off is time barred and cannot be sustained.- Decided in favour of assessee Wrongly acceptance of eligibility of incremental subsidy for the determination of deduction under section 10B - Held that:- AO has denied the incremental subsidy under section 10B of the Act in the re-assessment proceedings which was reversed in section 154 of the Act. Both these orders have been subjected to revision under section 263 of the Act. When the issue of eligibility of incremental subsidy for the purpose of deduction under section 10B is seen in the light of the CBDT Circular No.39/2016, wherein it has been noted that subsidy is part and parcel of profit and gains of business for the purpose of deduction we find it difficult to hold that the AO committed “error” per se in accepting the stand of the assessee. In the absence of error, the CIT could not have proceeded under section 263 of the Act. Thus, the action of the CIT under section 263 is without authority of law in so far as the second issue is concerned. - Decided in favour of assessee
|