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COMMISSIONER OF INCOME TAX, KOL-4, KOLKATA Versus M/s PHILIPS INDIA LTD

2016 (1) TMI 318 - CALCUTTA HIGH COURT

Revision u/s 263 - Held that:- In the case in hand, as we find, the Income Tax Officer, pursuant to the directions of DRP, had adopted one of the courses permissible in law and as we find that the factors relevant for exercise of power under section 263 were absent and the order passed by the Commissioner does not deal with the contentions of the assessee and does not record how and in what manner the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interests .....

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.P.Bag, Advocate The Court : This application has been filed by the appellant under section 260A of the Income Tax Act, 1961 for admitting the appealpreferred from the order dated 23rd January, 2015 passed by the Income Tax Appellate Tribunal A Bench, Kolkata in ITA No.892/Kol/2014 for the assessment year 2007-08 on the following substantial questions of law : 2 (a) Whether on the facts and circumstances of the case the Learned Income Tax Appellate Tribunal, A Bench Kolkata erred in law as well .....

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ed order was made mechanically without considering the materials on record ? Heard Mr.R.N.Bandyopadhyay, learned advocate for the appellant and Mr.J.P.Khaitan, learned Senior Advocate for the respondent. It is evident from the facts that the respondent/assessee filed its return for the assessment year 2007-08 on 28th October, 2007 declaring a total income of ₹ 3,08,72,50,100/-. The case was selected for scrutiny and notice under section 143(2) of the Act was issued and served on the assess .....

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65333/- on account of lease rental paid for motor car taken on finance lease and the same was allowed in the assessment. Further scrutiny revealed that the assessee company, as an accounting practice, treated the motor cars taken on lease as fixed assets in its books of accounts but claimed the lease payment as revenue expenditure for income tax purposes. It is pertinent to mention here that the assessing officer had disallowed the assessee s claim in the A.Y. 2003-04 and treated the same as cap .....

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or Motor cars were the regular expenditure of the assessee ad it is to be treated in revenue expenditure for the year. 4. I have considered written submissions of the assessee. The issue raised by the assessing officer requires proper examination of the fact of the case. The assessing officer is directed to call the lease document and examine the same in the light of departments stands on the issue and adjudicate the matter afresh. The Assessing Officer is required to take up the assessment proc .....

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ed the order passed by the Assessing Officer. The relevant portion of the said order is set out hereunder: 8. Reverting to the facts of the present case, it is noticed that the AO before allowing the claim of the assessee on account of lease rental issued a questionnaire along with notice u/s.142(1) of the Act. The assessee furnished the requisite details and evidences to the AO, who on being satisfied allowed the claim of the assessee is also noticed that for AY 2006-07 the similar issue was be .....

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llip;………………………………………… 10. In the present case, as we have already pointed out in the former part of the order that the view taken by the AO was one of the possible view, therefore, the assessment order passed by him for the year under consideration i.e.AY 2007-08 was neither erroneous nor prejudicial to the interest of revenue. Moreover, the Ld.CIT in the impugned order has simply stat .....

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facts as discussed hereinabove are of the view that the Ld.CIT was not justified in setting aside the assessment order dated 07.04.2011 passed by AO u/s.143(3) of the Act read with section 144(13) of the Act. Accordingly, the impugned order is set aside and the assessment order dated 07.04.2011 passed by AO is restored.. It appears that similar issue with regard to the same assessee arose in the assessment years 2004-05, 2005-06 and 2006-07. Under the provisions of Section 144(C) of the Act it .....

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venue. It had simply directed the Assessing Officer to examine the matter after calling the lease document which had already been considered and examined by the Assessing Officer. In this regard it is pertinent to mention that Supreme Court in Commissioner of Income-Tax v. Max India Ltd : (2007) 295 ITR 282 (SC), had held that when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer .....

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