2007 (6) TMI 185

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ising the following substantial questions of law: 1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the Commissioner was not justified in revising the assessment order under section 263, as the order was not erroneous and prejudicial to the interest of the revenue? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that where a provision is capable of one interpretation, the order of the assessing officer cannot be said to be erroneous? 2. The facts leading to the above substantial questions of law are as under: The assessee is a company incorporated under the Companies Act. The assessee-company is registered with Software Technology Pa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e order of the Commissioner of Income-tax. Hence the present appeal by the Revenue. 3. Learned Standing Counsel appearing for the Revenue submitted that the export turnover so arrived, has to be divided by the total turnover of the business carried on by the Undertaking and this ratio is to be multiplied by the profits of the business of the Undertaking. This formula has not been applied by the Assessing Officer while working out the deduction available under Section 10B of the Act. Hence the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Hence the Commissioner of Income-tax is right in setting aside the order of assessment under Section 263 of the Act. 4. Heard the counsel. Section....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....r from the statute, viz. (a) the excess above 25% should not be treated as export profits or (b) the entire profits from domestic sales have to be ignored. 6. The analysis made by the CIT shows that the provision is capable of more than one interpretation. Ex consequenti, the view adopted by the AO could be construed to be a possible view. Once this finding is arrived at, the matter can be decided in the light of the ratio laid down in the case of CIT v. Max (India) Ltd. (268 ITR 128) (P&H). In this case Hon'ble High Court has held that the view expressed by the AO was a possible view and since the AO had taken a possible view, CIT had no jurisdiction to interfere by exercising his power under section 263 of the Act. In decidin....