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January 2016

Revision – Section 263 – A. Y. 2007-08 – Question whether total income for purposes of section 36(1)(viia)(c) should be computed after allowing deduction u/s. 36(1)(viii) – Two possible views – Debatable issue – Revision u/s. 263 not justified

By K. B. Bhujle Advocate
Reading Time 2 mins
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CIT vs. Power Finance Corporation Ltd.; 378 ITR 619 (Del):

For the A. Y. 2007-08, the Assessing Officer completed the assessment u/s. 143(3), allowing the deduction u/s. 36(1)(viia)(c) and u/s. 36(1)(viii). The Commissioner exercised the revisional powers u/s. 263 and held that the deduction u/s. 36(1)(viia)(c) should have been computed after allowing deduction u/s. 36(1)(viii). The Tribunal set aside the order of the Commissioner holding that on the question whether the total income for the purpose of section 36(1)(vii)(c) should be computed after allowing the deduction u/s. 36(1)(viii) there were at least two possible views as reflected in the orders of the Delhi and Chennai Benches of the Tribunal. On appeal by the Revenue, the Delhi High Court upheld the decision of the Tribunal and held as under:

“i) I ndependent of the two decisions, the stand of the Revenue as set out in its memorandum of appeal and that of the assessee that both deductions were independent of each other, gave rise to two further possible interpretations.

ii) The view taken by the Assessing Officer was a possible one and there was no occasion for the Commissioner to have exercised the jurisdiction u/s. 263.”

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