TaxTMI 
TaxTMI 
2014 (2) TMI 191
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....aside the assessment order as the Assessing Officer in his opinion, during the course of assessment proceedings, has not examined the issue regarding the taxing of interest subsidy amount on accrual basis even though the assessee was following the mercantile system of accounting and accordingly, he was of the view that the assessment is erroneous and prejudicial to the interest of revenue. He set aside the assessment and directed the AO to pass order after taking into account all relevant facts and decision of superior courts and giving opportunity to the assessee. From the order of CIT it is apparent that CIT has not given any finding on merit, whether the interest subsidy has to be assessed during the impugned assessment order or not. In ....
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....as consistently following this accounting practice. During the year, the assessee has offered Rs.15.57 lac which is received from WBIDC. It was further stated that the sum of Rs.6.86 lac was ultimately offered in the AY 2009-10. The CIT was not satisfied with the reply of the assessee. He, therefore, set aside the assessment and directed the AO to pass the order after taking into account all relevant facts and decision of the Supreme Court and giving opportunity to the assessee. Before us, the Ld. AR drew our attention to para 4 of the assessment order, which states that it was found that during the year other income of Rs.23,08,820/- in the forms of interest, interest subsidy, miscellaneous income was earned, which should not be considered....
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.... of the AO was merged with the order of the CIT(A) on the same issue. 4. The Ld. DR on the other hand, contended that the view taken by the AO is unsustainable in law. According to section 145 of the Act, income from the business had to be computed either on mercantile basis or cash basis, mixed basis of accounting is not permissible. Therefore, the view taken by the AO, even if consistently followed and accepted, is unsustainable in law and, therefore, there was an error in the order passed by the AO u/s. 143(3) of the Act. 5. We have heard rival submissions and carefully considered the facts and circumstances of the case along with the orders of the taxing authorities below. The jurisdiction u/s. 263 of the Act can be invoked by the....
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....sessee has adopted regularly a system of accounting which is not permissible in law, in our opinion, this system is not permissible legally to be adopted by the assesee u/s. 145 of the Act on the basis that the assessee has regularly employed the same system of accounting in respect of that particular income in the earlier year also. Thus, we noted that there is an error in the order of the AO. However, Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 has clearly laid down that "when a taxing officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not a....
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....order passed by the AO with the order of CIT(A). We have gone through the order of CIT(A) for the impugned assessment year especially page 10 as has been contended by the Ld. AR. We noted that the issue before the CIT(A) was whether the interest subsidy from WBIDC is scheme has of direct link with the export business of the assessee so that the income may be eligible for deduction u/s. 10A of the Act. In this context, the CIT(A) allowed the deduction to the assessee u/s. 10A of the Act on interest subsidy. The issue before the CIT(A) was not whether the interest subsidy is chargeable to tax under the head "Income from business or profession" while computing income under the head "Incom from business or profession" on the basis of cash syste....