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2012 (11) TMI 579 - ITAT HYDERABADCIT's revisionary powers u/s 263 - disallowance of privilege fee, Special privilege fee and special privilege fee as allowed by AO - Held that:- The amount of privilege fee is a balancing charge on the P&L account being variable and not based on quid pro quo. Also, only the amount that remains out of margins after deducing expenditure including income tax would be the sum to be paid as privilege fee. The amendments passed by the Andhra Pradesh Legislature on 16-04-2012 to the Andhra Pradesh Excise and Andhra Pradesh (Regulation of trade in Indian made foreign liquor, Foreign Liquor) Acts, (Amendment) Act, 2012(Andhra Pradesh Act No. 5 of 2012), has to be examined and analyzed with respect to newly inserted section 4C, it only reaffirms the fact that it is the profit that is sought to be appropriated. The new amendment to Excise Act, clearly establishes the fact that the entire income of the assessee is not that of the State and only the amounts specified as privilege fees is income of the State. With respect to newly inserted section 4A, the invoices raised by the assessee do not indicate separate amounts as privilege fee or special privilege fee or sports privilege fee. And with respect to the newly inserted section 4B, the manner of computation is not specified under 4B and the computation needs to be made u/s 23A and the implication of AS-22 is to be examined. As the CIT has no occasion to consider the amendments passed by the Andhra Pradesh Legislature on 16-04-2012 as the said amendments came after the CIT passed the order u/s 263 on 29/03/2011 the order of the CIT is to be set aside and restore the issue back to his file with a direction to decide the issue de-novo after examining the said amendments and in accordance with law - in favour of assessee for statistical purposes.
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