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2015 (5) TMI 1032

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..... n 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 has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. In our opinion, the view taken by the assessing officer cannot be considered to be unsustainable in law. Hence, we are of the view that the impugned revision order could not be sustained and accordingly we set aside the same. - Decided in favour of assessee. - I.T.A. No. 118/Coch/2013 - - - Dated:- 14-5-2015 - <!--[if gte mso 9]> <![endif]--> S/SHRI V.DURGA RAO, JM and B.R.BASKARAN, AM For the Appellant : Shri Philip Joseph, CA For the Respondent : Shri M. Anil Kumar, CIT(DR) O R D E R Per B.R.BASKARAN, Accountant Member: The assessee has filed this appeal challenging the revision order dated 31.12.2012 passed by Ld CIT, Kozhikode u/s 263 of the Act and it relates to the assessment year 2004-05. The assessee is challenging the validity of rev .....

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..... he main contention of the Ld A.R was that the assessing officer, during the course of assessment proceedings, called for working of Book Profit u/s 115JB of the Act and after satisfying himself, the AO has computed the book profit accordingly. The Ld A.R, accordingly, contended that there was application of mind by the AO and he has adopted one of the plausible views and hence the impugned revision order lacks jurisdiction. On the other hand, the Ld D.R placed strong reliance on the order of Ld CIT. 5. With regard to the principles governing the revision proceeding u/s 263 of the Act, a gainful reference may be made to the decision of Hon ble Supreme Court in the case of Malabar Industrial Co. Vs. CIT (243 ITR 83). We feel it pertinent to refer to the decision rendered by the Hon'ble Bombay High Court in the case of Grasim Industries Ltd. V CIT (321 ITR 92), wherein the court has discussed about the scope of provisions of section 263 as under after considering the decision of Hon ble Supreme Court referred above: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that .....

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..... that the revision proceeding shall not lie on the issues on which the Assessing Officer has taken a plausible view after examining and applying his mind on it. 6. Now we shall analyse the facts prevailing in the instant case. The issue revolves around the interpretation of the provisions of clause (vii) of Explanation 1 to sec. 115JB of the Act. For the sake of convenience, at the cost of repetition, we extract below the above said provision:- (vii) the amount of Profits of Sick Industrial Company for the assessment year commencing on and from the asst year relevant to the previous year in which the said Company has become a Sick Industrial Company and ending with the asst year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. According to Ld CIT, the deduction prescribed in the above said provision shall be available only for the assessment years falling between the years mentioned in clause (vii), i.e., the assessment year in which the company has become a Sick Industrial Company and the year in which the net worth of such company becomes equal to or exceeds the accumulated losses. 7. However, according to Ld A.R, .....

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..... CIT, the provisions of clause (vii) provides for deduction of the profit earned in a specific year falling within the periods mentioned in clause (vii), referred above. Accordingly, the Ld CIT held that the assessment year under consideration, being a year falling after the expiry of the period mentioned in clause (vii), the assessee is not eligible for any deduction under clause (vii) of Explanation 1 to sec. 115JB of the Act. The Ld CIT has also relied upon the decision rendered by ITAT Hyderabad bench in the case of Singareni Collaries Co. Ltd (no reference given). 10. On a careful perusal of the contentions of the assessee as well as the Ld D.R, we are of the view that both the views are possible views, i.e., the issue under consideration is debatable issue, where two views are possible. Since the assessing officer has passed the assessment order by accepting the view of the assessee, it has to be held that the assessing officer has adopted one of the plausible views. In the case of Malabar Industrial Co. (supra), the Hon ble Supreme Court has 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 .....

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