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| The Tax Publishers2020 TaxPub(DT) 3265 (Rkt-Trib) INCOME TAX ACT, 1961
Section 263
AO having taken one of the possible views by treating concerned incentive as capital receipt not chargeable to tax, order of AO could not be held as erroneous insofar prejudicial to the interest of revenue.
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Revision under section 263 - Erroneous and prejudicial order - AO having taken one of the possible views on taxability of incentive being refund of VAT -
Assessee received incentive of Rs. 73,24,821 being refund of VAT under the scheme of Government of Gujarat. AO treated such receipt as capital receipt not chargeable to tax. As per Pr. CIT, such incentive was disbursed towards meeting running expenses and operating the business, therefore, same had to be treated as revenue in nature and accordingly assessment order was erroneous insofar prejudicial to the interest of revenue. Held: Different views existed on the issue on day when Pr. CIT passed his order and on account of AO having taken one of the possible views by treating concerned incentive as capital receipt not chargeable to tax, order of AO could not be held as erroneous insofar prejudicial to the interest of revenue.
Relied:CIT v. Max India Ltd. (2007) 295 ITR 282 (SC) : 2007 TaxPub(DT) 1548 (SC). Relied:Malabar Industries Co Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, RAJKOT BENCH
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