TMI Blog2021 (3) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... mputing the income from business. The revenue has not disputed that the assessee was following the mercantile system. Therefore, the assessee was well within his right to claim the whole of the sum mentioned in agreement as part of the cost of acquisition. AO had called for the relevant agreement during the course of original assessment proceedings and the assessee also submitted the same before the AO. AO during the course of original assessment proceedings, considered the issues and gave the allowances to the assessee. Revisionary powers were invoked by the Commissioner of Income Tax based on letter of the Assessing Officer and not based on an independent assimilation of facts. The Tribunal has rightly observed that the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(2) was issued on 25.8.2009. The assessment was completed on 29.12.2009 under section 143(3) read with section 147 determining the total income at ₹ 8,85,425/-. The assessee has claimed ₹ 35 lakhs towards cost of acquisition of a film, but has paid only ₹ 2 lakhs towards cost of acquisition of the film. Since the Assessing Officer did not examine the issue in the light of the scrutiny proceedings, the Commissioner of Income Tax has invoked proceedings under section 263 to examine the issue. 2.2. At the time of revision proceedings under section 263, the Commissioner of Income Tax held that the order of the Assessing Officer was erroneous and prejudicial to the interest of revenue on this issue, since the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the method of accounting upon the basis of which the profits or gains are computed under the head Profits and Gains of Business or Profession . In these circumstances, the Tribunal held that the order of the Assessing Officer is not erroneous and prejudicial to the interest of revenue warranting invocation of revisionary powers vested on Commissioner of Income Tax under section 263 of the Act and allowed the appeal filed by the assessee. Aggrieved over the said order, the Revenue has filed the above appeal. 3. The above appeal was admitted on the following substantial questions of law: (i) Whether the Tribunal erred in relying upon section 43(2) of the Act to allow the deduction on account of expenditure towards acquisition of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer and not based on an independent assimilation of facts. The Tribunal has rightly observed that the Commissioner of Income Tax was only trying to stamp his approval to a change of opinion of the Assessing Officer. The Tribunal has rightly came to the conclusion that the original order of the Assessing Officer did not suffer from any error which was prejudicial to the interests of revenue, warranting invocation of revisionary powers vested on the Commissioner of Income Tax under section 263 of the Act. 5. For the reasons stated above, we do not find any merits in the Appeal. The substantial questions are decided against the Revenue and in favour of the assessee. Hence, the Tax Case Appeal is liable to be dismissed. Accordingly, the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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