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2019 (3) TMI 812

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..... eld that the interest computed as taxable income has to be deducted. It was therefore found that no error had crept in the assessment order. The Income from the relevant transactions, when they were treated as non securitized were spread over the assessment years from 2005-2006 to 2011-2012, whereas the income from the very same transactions had been offered in full for the assessment year 2005-2006. It was clear that there was no reduction of income in view of the fact that though the income reduces in the return year, it goes to increase the income of the Assessee in the subsequent years. As there was neither any new income nor any fresh expenditure and it was only computation of income from the same set of transactions in two ways, na .....

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..... s such is contrary to the Judgement of the Supreme court in the case of Goetz India Limited., reported in 284 ITR 323? 3. Heard Mr.T.R.Senthilkumar, learned Senior Standing counsel for the appellant and Mr.R.Sivaraman, learned counsel for the respondent. 4. The facts leading to this Appeal are that the Commissioner of Income Tax, Chennai -III had invoked the provisions of Section 263 of the Income Tax Act to revise the Assessment Order dated 31.12.2007 passed for the Assessment Year 2005-2006. A show cause notice had been issued under Section 263 of the Act dated 02.03.2010 to the respondent Assessee. 5. In the said show cause notice, it had been claimed that on a perusal of the Assessment Order dated 31.12.2007 passed unde .....

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..... espect to the securitization aspect, it was claimed that the income from securitization had been wrongly offered to tax in the year under consideration. The said income was spread over the assessment years from 2005-2006 to 2011-2012. This has been allowed by the Assessing Officer. 7 . The Commissioner of Income Tax however set aside the assessment order on the following issues:- (i) Verification to be made regarding the extent of income arising to the assessee in respect of NPAs?; and (ii) Claim for deduction of ₹ 1,83,16,468/- on account of securitization income made during the course of assessment proceedings and allowed by the Assessing Officer. 8. Aggrieved by the same, the respondent Assessee filed an .....

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..... ection 263 of the Income Tax Act 1961. Section 263 of Income Tax Act 1961 is as follows:- Revision of order prejudicial to revenue: 263(1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. 1 .....

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..... cted the Assessing Officer to delete the said interest from the computation of taxable income. The interest from such non-performing assets would be taxed in the appropriate assessment years on the basis of actual receipt. It has transpired during arguments that this decision was challenged before the Hon'ble Supreme Court but the Special Leave Petition filed by Revenue was dismissed. 15 . With respect to the second substantial question of law, Goetze (India) Limited., Vs. Commissioner of Income Tax reported in (2006) 284 IT R 323 (SC), related to a case where for the assessment year 1995-96 the Assessee filed its return on November 30, 1995 and on January 12, 1998 sought to claim a deduction by way of a letter addressed to t .....

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..... ion 263 were not satisfied namely, an error and a prejudice caused to the Revenue. 18 . We therefore hold that the Appeal of Revenue does not have any merit and consequently, the substantial questions of law are answered in favour of Assessee and the Tribunal was right in quashing the revisional order passed by the CIT under Section 263 of the Income Tax Act and the Tribunal was also right in holding that the claim for deduction on securitization income from return income. The Judgement of the Hon'ble Supreme Court in the case of Goetze (India) Limited., Vs. Commissioner of Income Tax reported in (2006) 284 IT R 323 (SC) would not apply to the facts of this case. 19. The Tax Case Appeal filed by Revenue is dismissed. No .....

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