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2019 (10) TMI 1435 - ITAT MUMBAIRevision u/s 263 - income earned from the Govt. of Maharashtra as an agent - HELD THAT:- When the AO accepted the assessee is an agent and completed the assessment u/s 143(3) over the years, it means that the AO completed the assessment with one particular view, whereas Pr. CIT intends to correct the above view and presumed that the case of assessee falls under Article 289(1) and come to a conclusion that assessee is not comes under Article 289 and subjected to tax under Income Tax Act, therefore, in our view, this is another view in the case of assessee. Pr. CIT has adopted one possible view in the present case and the order passed by Pr. CIT u/s 263 of the Act is accordingly dismissed as assessment order may be prejudicial but not erroneous. Further, the main dispute arouse due to whether assessee is an agent or not. In the civil appeal, Hon’ble high court held that assessee is an agent as per Section 113(3A) of MRTP Act. PCIT refused to consider this decision as it is not adjudicated under Income Tax Act. We cannot neglect the Hon’ble high court findings, we have to accept the definition/ meanings by higher court and most of the time, meanings and definitions are adopted from other law or from wisdoms of higher courts in Income Tax proceedings. PCIT has taken a strange stand not to follow the Judicial precedents in order to defend his proceedings u/s 263. Accordingly order u/s 263 is set aside. When we observed from the submissions made by Ld. Sr. Counsel and the order passed by revenue authorities, we notice that remuneration for the assessee was fixed when the company was incorporated in 1970 and as per the resolution, the revenue was fixed for the first year at ₹ 3 lakhs and increased to ₹ 5 lakhs over next two years. The revenue was frozen at ₹ 5 lakhs and was fixed in the initial years and the same revenue was continued till date without any revision. This will definitely make any authority to raise their apprehension as the income offered by the assessee are not practical but legal. Therefore, assessee should take this issue with the Govt. of Maharashtra to revise the remuneration- Appeal filed by the assessee stands allowed.
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