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TMI Blog2020 (8) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance and Company Affairs. CIT(A) rightly held that the artificial and hypothetical income created by mere general entries which were subsequently reverse cannot be brought to tax. Besides that the assessee made the statement before us that the income derived from the said project in subsequent Assessment Years has been offered to tax by the assessee. Thus, the Revenue is not at loss at any point of time and hence the treatment given by the CIT(A) by directing the Assessing Officer to allow the claim of ₹ 9,00,00,000/- on account of revision of financial accounts is just and correct. - Decided in favour of assessee. - I.T.A. No. 3336/DEL/2011 - - - Dated:- 24-8-2020 - Shri N. K. Billaiya, Accountant Member And Ms Suchitra Kam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase and in law the Ld. CIT(A) erred in ignoring the fact that as per the section 139(5) of IT Act, the return of income can only be revised within one year from the end of the relevant Assessment Year or before the completion of the assessment, whichever is earlier. In the present case, therefore giving effect to Ld. CIT(A) s directions would amount to violating the provisions of Section 139(5) of the Income Tax Act, 1961. 3. The assessee company entered into an agreement with M/s Ansal Properties and Infrastructures Ltd. for development and industrial and residential township on companies land at Ludhiana. The assessee filed its return of income on 30/10/2007 declaring total income of ₹ 1,00,800/-. During the year under scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2008-09, the Company was advised that the cancellation effect in respect of the above transactions should be effected in the year of assessment only and not at the time when actual cancellation took place. Accordingly, the Company redrafted its financial statements as if the transaction for sale has not occurred at all. Consequently, during the year under consideration, sales had been reduced by ₹ 9,00,00,000/- and revised financial statements were prepared and got in audited and were duly approved by the Board of Directors of the Company. In view of the amendment to the financial statements of the Company for the financial year ended on 31st March, 2007, giving effect to the above-mentioned cancellation of transaction, company. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has actually correctly notified in the original accounts. In-fact, even the auditor himself was not agreeing with the decision of the management to revise their accounts once adopted in AGM. Thus, the treatment given by the Assessing Officer were just and proper and the CIT(A) erred in directing the Assessing Officer to consider the revised computation filed by the assessee company claim a deduction of ₹ 9,00,00,000/- on account of revision of financial accounts by taking wrong interpretation of Circular No. 1/2003 dated 13/1/2003 issued by the Ministry of Finance and Company Affairs. The Ld. DR further submitted that as per Section 139(5) of the Income Tax Act, 1961, the return of income can only be revised within one year from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as per the guidelines issued by the Ministry of Finance and Company Affairs. Thus, the CIT(A) rightly held that the artificial and hypothetical income created by mere general entries which were subsequently reverse cannot be brought to tax. Besides that the assessee made the statement before us that the income derived from the said project in subsequent Assessment Years has been offered to tax by the assessee. Thus, the Revenue is not at loss at any point of time and hence the treatment given by the CIT(A) by directing the Assessing Officer to allow the claim of ₹ 9,00,00,000/- on account of revision of financial accounts is just and correct. The appeal of the Revenue is dismissed. 8. In result, the appeal of the Revenue is di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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