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2022 (11) TMI 117 - AT - Income TaxRevision u/s 263 by CIT - depreciation claimed by the assessee on the assets which are in finance lease - treatment of income from finance lease transactions only, owing to difference in its treatment in accounting which is governed by Accounting Standards and in computing the total income which is governed by the provisions of the Act - HELD THAT:- Assessee has leased out vehicles under the finance lease which is part and parcel of its business and the income therefrom has been offered to tax under the head “profits and gains from business or profession”. Evidently, both the conditions enumerated in Section 32 of the Act, has been complied with, entitling the assessee to claim depreciation on the assets financed under the finance lease agreement while computing the total income under the Act. As on the issue relating to the claim of depreciation on the assets financed under the finance lease agreements by the assessee, the principal component of finance lease rentals have been additionally offered in the computation of total income resulting into offering of additional sum of Rs.1053.80 Lakhs for taxation. Also, in respect of the issue relating to recognition of income of Rs.1290.58 lakhs in respect of securitization and assignment of loans, the same has been recognised in the subsequent assessment years as and when it was received by complying with the RBI guidelines, we find that there is no prejudice caused to the revenue and, therefore, the requirement of fulfilment of twin conditions of the order being erroneous insofar as it is prejudicial to the interest of the revenue, as held by the Hon’ble Supreme Court in the case of Malabar Industries [2000 (2) TMI 10 - SUPREME COURT] are not fulfilled. The impugned revision order passed by ld. PCIT u/s 263 of the Act holding the assessment order as erroneous in so far as it is prejudicial to the interest of revenue is not sustainable. Thus on both on facts and applicable law along with accounting norms and judicial precedents relating to the issues raised by the ld. Pr. CIT in invoking the revisionary proceedings, we have no hesitation in quashing the revision order passed by the ld. Pr. CIT u/s 263 of the Act. Accordingly, grounds raised by the assessee are allowed.
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