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2019 (11) TMI 877 - HC - Income TaxRevision u/s 263 - computation of deduction under Section 80-HHC - 90% of the interest was excluded from the business profits - AO had not applied his mind as to the nature of the interest received to see if it is to be taxed as income from business or income from other sources - HELD THAT:- Section 263 of the Income Tax Act, 1961 is not intended to be invoked for every type of mistake or error committed by the Assessing Officer. It is only when an order is erroneous, it is attracted. Though the phrase “prejudicial to the interests of the revenue” in Section 263 is of wide import and is not confined to loss of tax, it has been held by the Honourable Supreme Court in Malabar Industries Co Ltd [2000 (2) TMI 10 - SUPREME COURT] that every loss of revenue as a consequence often order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue. The scheme of computing of total income under various heads in Chapter IV of the Income Tax Act, 1961 reveals that “Income from Other Sources” is only those income which cannot be brought to tax under any of the specific heads of income in the provisions preceding Section 56 in chapter IV of the Income Tax Act, 1961. An income received in the ordinary course of business is an integral part of the regular income of the assessee. Since there is no infirmity in the calculations made by the Assessing Officer while computing the deductions in view of the above decisions cited on behalf of the assessee, the view of the Commissioner of Income Tax that the Assessing Officer committed an error while passing the respective Assessment Orders which resulted in loss of revenue prejudicial to interest of revenue cannot be sustained. Assessing Officer to compute deduction under Section 80 HHC in the order of the Commissioner of Income Tax is without any basis. We are therefore of the view that the Commissioner of Income Tax erred in invoking the revisional powers under Section 263 of the Income Tax Act, 1961 in the facts of the present cases.- Decided in favour of assessee
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