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Issues:
1. Whether the assessment order under section 263 of the Income-tax Act, 1961 was erroneous. 2. Whether the income from the transaction accrued in the previous year ended 31-3-1979. 3. Whether the Commissioner had jurisdiction to revise the assessment. Analysis: 1. The appeal was against an order made under section 263 of the Income-tax Act, 1961. The Commissioner directed a fresh assessment after reviewing the proceedings, as he believed the assessment was prejudicial to revenue. The Commissioner disagreed with the ITO's acceptance that the agreements did not give rise to income in the previous year. The order was challenged on the grounds of lack of clear finding by the Commissioner and the need to determine if the income accrued in the relevant year. 2. The dispute centered on whether the income accrued in the previous year ended 31-3-1979. The assessee argued that the agreements stipulated property transfer post-censorship, hence no income accrued in the previous year. The revenue contended that since agreements were executed and amounts paid within the year, income accrued. The Tribunal found in favor of the assessee, stating that income could not accrue until the asset subject to the transfer came into existence, following established law and revenue rules. 3. The Tribunal concluded that the income from the transactions accrued in the previous year ended 31-3-1980, not in 1979. The agreements were deemed executory until the film was certified for release, as per the Income-tax Rules. The film was certified and released in 1979, indicating that the income accrued in the subsequent year. The assessment made by the ITO was deemed correct in law, and the Commissioner's order under section 263 was canceled. The Tribunal allowed the appeal, emphasizing the legal principles governing income accrual from such transactions.
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