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TMI Blog2017 (8) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... result in tax neutral position. We notice that the learned Principal CIT has failed to properly appreciate the facts surrounding the issue from these angles, which demonstrates that no prejudice is caused to the revenue. We are unable to sustain the order passed by learned Principal CIT on this issue. - Decided in favour of assessee. - ITA No.3792/Mum/2016 - - - Dated:- 23-6-2017 - Shri B R Baskaran, AM And C N Prasad, JM For The Appellant : Shri Vijay Mehta For The Respondent : Shri Alok Johari ORDER The assessee has filed this appeal challenging the validity of assessment order passed by the Principal CIT u/s. 263 of the Act for assessment year 2010-11. 2. The assessment for A.Y. 2010-11 was completed in the hands of the assessee by the Assessing Officer u/s. 143(3) of the Act on 06.03.2014. The learned Principal CIT, upon examination of the record, noticed that the Assessing Officer has not disallowed provision of 3.15 crores relating to redelivery of aircraft. Further, he has also noticed that the Assessing Officer has not initiated penalty proceedings u/s. 271E of the Act for repaying loans otherwise than by way of account payee cheques. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s offered this amount of ₹ 0.44 crores as its income during the year under consideration. These details have been tabulated as under:- Particulars Amount (in Rs.) Additional Provisions during the year (net) 3,15,02,264 Add : Adjustment on account of Exchange Fluctuation consequent to restatement of liabilities 3,93,86,671 Total 7,08,88,935 Less :- Amount of Provisions used during the year 7,52,93,463 Net Credit to Profit Loss Account ( 44,04,529) Since the claim of the assessee has been allowed by the Tribunal, the assessee has rightly offered the amount of ₹ 44 lacs as its income. He further submitted that the Hon ble Bombay High Court has held in the case of Bank of Baroda vs. H C Shrivatsava And Another (2002) 256 ITR 385 that the Assessing Officer is bound to follow the judgment of the Tribunal in its true letter and spirit. It is necessary for judicial unity and discipline t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount of 0.44 crores has not been shown in the credit side of the Profit and Loss account, but reduced from the expenses. He furnished a working sheet to support his contentions. He submitted that the assessing officer has also been disallowing only the net amount of provisions every year. During the year under consideration, the net amount of provisions has worked to a negative figure and, hence, the Assessing Officer did not consider the same. But as per the policy adopted by the Assessing Officer, this should have been excluded from the income. 10. We have heard rival contentions and perused the record. Before going into the merits of the issue, we would like to discuss about the legal position with regard to the power of Learned Principal CIT to invoke revision proceedings under section 263 of the Act. The scope of revision proceedings initiated under section 263 of the Act was considered by Hon'ble Bombay High Court, in the case of Grasim Industries Ltd. V CIT (321 ITR 92) by taking into account the law laid down by the Hon'ble Supreme Court. The relevant observations are extracted below: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Supreme Court in CIT v. Max India Ltd. [2007] 295 ITR 282. 11. We shall take up the first issue on which the revision order was passed. The learned Principal CIT has taken the view that the deduction claimed under the head provision for redelivery of aircraft is not allowable as deduction and, accordingly, passed the impugned revision order setting aside the assessment order and directing the Assessing Officer to pass the order de-nova. It is a well settled principle of law that, if the Assessing Officer has taken a possible view, then the assessment order cannot be considered to be prejudicial to the interest of the revenue. It is also well settled principle that, in order to invoke the provisions of sec. 263, the learned CIT is required to show that the order is not only erroneous but also prejudicial to the interests of the revenue. 12. The learned AR submitted that the assessing officer had made identical disallowance of the identical claim made in the earlier years. He further submitted that the said claim was allowed by the Tribunal in ITA Nos. 4087/Mum/2000, 3691/Mum/2002, 3201/Mum/2003, 6084/Mum/2003 and 7390/Mum/2004 relating to assessment years 1997-98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the interest of the revenue. If the provision is allowed, then the actual expenditure equal to the amount of the provision, if it has not been debited to Profit and loss account should be allowable as deduction. Hence, on this count also it would result in tax neutral position. We notice that the learned Principal CIT has failed to properly appreciate the facts surrounding the issue from these angles, which demonstrates that no prejudice is caused to the revenue. 16. The learned DR contended that the actual expenses incurred against the provision made by the Assessing Officer have not been examined by the Assessing Officer. This contention has to be rejected, since the impugned revision order passed by learned Principal CIT is not concerned about actual expenses. Further, we notice that the assessee has furnished the details of actual delivery charges incurred by the assessee for the last seven years. 17. In view of the foregoing discussions, we are unable to sustain the order passed by learned Principal CIT on this issue. 18. The next issue relates to the non-initiation of penalty proceedings u/s 271E of the Act. The learned AR submitted that the assessing officer did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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