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2017 (11) TMI 675 - AT - Income TaxValidity of revision order u/s 263 - absence of any scientific basis for fixing the percentage to make the provision for slow moving inventories of spares - Held that:- As the non-satisfaction of the Commissioner about the scientific basis of creating the provision, has not been referred to in the notice, dated 26.02.2016, at all, whose relevant portion has been reproduced by us in the earlier part of the order. Therefore, the preliminary point which is sought to be raised by the assessee based on the judgment of Hon’ble Supreme Court in the case of Amitabh Bachchan (2016 (5) TMI 493 - SUPREME COURT) is very much applicable in the given facts of the present case. Notably, section 263(1) of the Act obligates the Commissioner to give the assessee an opportunity of being heard before passing of his order. as the non-satisfaction of the Commissioner about the scientific basis of creating the provision, has not been referred to in the notice, dated 26.02.2016, at all, whose relevant portion has been reproduced by us in the earlier part of the order. Therefore, the preliminary point which is sought to be raised by the assessee based on the judgment of Hon’ble Supreme Court in the case of Amitabh Bachchan (supra) is very much applicable in the given facts of the present case. Notably, section 263(1) of the Act obligates the Commissioner to give the assessee an opportunity of being heard before passing of his order. The relevant discussion in the order of the Commissioner reveals that he has not disputed the factual matrix brought out by the assessee but has sought to deny the deduction only because, in his opinion, there was no scientific basis for fixing the percentage of provision. The objection of the Commissioner, in our view, is quite untenable in as much as the basis for making the provision was explained by the assessee to be the aging analysis of the spares lying in the inventory. Why and how the Commissioner does not find it to be a scientific basis is not elaborated. - Decided in favour of assessee.
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