TaxTMI 
TaxTMI 
TaxTMI 
2017 (2) TMI 987
X X X X Extracts X X X X
X X X X Extracts X X X X
....and Science Technology and Research Academy (SASTRA) for the purchase of hostel buildings. The hostels were being managed by the appellant pending finalization of sale and depreciation claimed thereupon in respect of Assessment Years 2003-04, 2004-05 and 2005-06. The transaction could not be completed and upon cancellation of the agreement of sale the hostels reverted to SASTRA and the appellant received back only a sum of Rs. 8,63,70,652/- as against the consideration of Rs. 9,79,44,847/- paid by it originally. The cancellation as well as the handing back of the buildings was in December 2005. Accordingly, no depreciation was claimed by the appellant in respect of assessment year 2006-07. SASTRA appears to have sought directions from the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment would thus result in the reduction of the returned income, impermissible in the light of the judgment of the Supreme Court in Sun Engineering Works (P) Ltd V. Commissioner of Income Tax (198 ITR 297). The appellant was thus faced with a situation where, notwithstanding the admitted position that it was eligible for the deduction of lease rentals in the computation of tax for AY 2006-07, it was unable to obtain the relief on the basis of a technicality. The appellant had thus to seek a remedy other than re-assessment to avail of the benefit. A petition for revision under section 264 of the Act was filed by the appellant on 12.3.2009 before the Commissioner of Income Tax seeking the benefit of deduction of lease rentals in respect o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....een given to the directions in the order under section 144A of the Act in the assessments of SASTRA as well as in the assessments of this very appellant in respect of AY's 2003-04, 2004-05 and 2005-06. It therefore does not stand to reason that a different conclusion is taken for the 4th year i.e., assessment year 2006-07, when the transaction, the facts, the circumstances and the law remain identical and unchanged throughout. 6. The language of section 264 provides ample powers to the Commissioner of Income Tax to make or cause such inquiry to be made as he thinks fit in dealing with an application for Revision under section 264. This would include taking into consideration relevant material that would have a bearing on the issue for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... make it afresh. The provisions as presently worded have given rise to two areas of controversy. The first is relating to the interpretation of the word record and the second is regarding the issue relating to merger of the order of the Assessing Officer with the order of the appellate authority. Courts have held in some cases that the word record occurring in section 263 could not mean the record as it stood at the time of examination by the CIT but the record as it stood at the time when the order was passed by the Assessing Officer. Limiting the power of the CIT only to the situation that was existing at the time of making the assessment is to make the provision too restrictive, as many times information comes on record from various sour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the effect that what constitutes 'record' cannot be limited to the return of income or order of assessment, but should be extended to include information from other sources that would impact the issue in question. 9. Mr.Swaminathan would refer to the judgment of the Division Bench of the Andhra Pradesh High Court in M.S.Raju Vs. Deputy Commissioner of Income Tax (298 ITR 373) which has expressed a view to the effect that the import of the word 'record' as set out in the Circular (supra) would be restricted to the power under section 263 only and not section 264. The distinction noted by the Division Bench in that case was that the power of revision under section 263 of the Act was intended to be exercised in cases where t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment orders. Thus even applying the principles of consistency the treatment accorded to an issue arising in a continuing transaction should be consistent for the entire period in question. 11. The Supreme Court, in the case of Goetze India Ltd has clarified the position that the embargo placed on an assessing officer in considering a new claim would not impinge on the power of the appellate authorities or, in this case, the revisional authority. Thus even on this score, we are of the view that the order under section 144A ought to have been take into consideration and applied. 12. Mr. Swaminathan would submit that the appellant ought to have filed a revised return under section 139(5) since there was sufficient time available and no....