| The Tax Publishers2020 TaxPub(DT) 5050 (Visakhapatnam-Trib) INCOME TAX ACT, 1961
Section 263
Where AO framed assessment of assessee on estimated basis but Pr. CIT directed de novo assessment by invoking provisions of section 263 on allegation that AO failed to consider certain other incomes (interest on bank deposits, etc.,), which were required to be brought to tax separately, considering the fact that assessee explained that other income represented interest on deposits made by assessee firm as margin money for obtaining bank guarantee and AO took a conscious decision that no separate addition on the same, revision under section 263 was not permitted on difference of opinion.
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Revision under section 263 - Erroneous and prejudicial order - Allegation that AO failed to consider certain other incomes (interest on bank deposits, etc.,), which were required to be brought to tax separately -
Assessee was engaged in business of running a rice mill. Assessment of assessee was completed under section 143(3). Assessee had filed petition before Jt. CIT under section 144A and pursuant to directions of Joint Commissioner, assessee produced books of account, bills, etc. After verification, AO rejected books of account and estimated the income of assessee on allegation that bills were not properly supported. Thereafter, CIT initiated revisionary proceedings under section 263 on allegation that certain other incomes (interest on bank deposits, etc.), were required to be brought to tax separately. Accordingly, CIT held the assessment order to be erroneous and prejudicial to interest of the revenue and directed AO to complete the assessment de novo.Held: Assessee explained that other income represented interest on deposits made by assessee firm as margin money for obtaining bank guarantee. Therefore, assessee argued that the other income mentioned in profit and loss account was part of business income, which was considered by AO, and took a conscious decision that no separate addition was warranted on account of other income. Since it was apparent from the assessment record that the assessee had explained that the other income represented business income, which was accepted by AO and he did not make any addition, after examining the issue in detail. AO applied his mind and took a conscious decision holding that the other income was business income and estimation of income done by AO met ends of justice. Revision was on difference of opinion which Principal Commissioner intended to substitute as his opinion in place of decision taken by AO, and revision under section 263 was not permitted on difference of opinion.
Followed:Spectra Shares & Scrips (P) Ltd. v. CIT-III (2013) 36 Taxmann.com 348 (AP-HC) : 2013 TaxPub(DT) 1603 (AP-HC) and G.V.R. Associates v. ITO (2017) 88 Taxmann.com 716 (Visakha-Trib.) : 2017 TaxPub(DT) 0613 (Visakha-Trib)
REFERRED : ABC Engineering Works v. Asst. CIT Dy. CIT, Circle-3 (1), Vijayawada & Vice-Versa. [I.T.A. No. 112/Viz/2013, dated 28-8-2019].
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, VISAKHAPATNAM BENCH
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