TaxTMI 
TaxTMI 
2019 (11) TMI 1303
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....ne of Rs. 3,48,11,357. Thereafter, order was passed under Section 263 by the CIT, Indore, which was challenged by the Assessee before the Income Tax Appellate Tribunal, Indore. The Tribunal has allowed the appeal of the Assessee by quashing the order passed under Section 263 of the Income Tax Act, 1961. The Income Tax Appellate Tribunal, Indore upon examination of the record has arrived at a conclusion that the Assessing Officer has wrongly allowed the rebate and the compounding fee to the M.P. Financial Corporation Ltd. This order of the Tribunal has been challenged by the Department under Section 260-A of the Income Tax Act, 1961. Paragraph 4 of the order passed by the Income Tax Appellate Tribunal, Indore, reads as under :- "4. We have....
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....bunal has preferred this present appeal under Section 260-A of the Income Tax Act, 1961. The appeal has been admitted on the following substantial question of law :- "Whether on the facts and the circumstances of the case and in law, the ITAT was justified in holding that the assessment order on the issue of allowance of rebate, de-compounding fee etc. to the tune of Rs. 3,48,11,357/- is not erroneous and prejudicial to the interest of Revenue and thereby quashing the order u/S. 263 of the Act, 1961". 4. Learned counsel appearing for the M.P. Financial Corporation Ltd has argued before this court that the controversy involved in the present case stands concluded on account of the judgment delivered in another Income Tax Appeal, ie., Comm....
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....e. Though the amount is recoverable on the settlement or under an agreement and as such it is allowable in both the circumstances either expenditure or bad debts. The learned Commissioner of Income-tax (Appeals) has rightly observed that the liability of rebate, decompounding and waiver of interest, etc., has arisen due to the agreements executed by the assessee with its clients and this is certainly allowable liability as the assessee duly claimed the same and the Assessing Officer was not justified in rejecting the claim of the assessee that he is now following the cash system of accounting and the rebate on interest, etc., related to the period when the assessee was following the mercantile system of accounting. 4. We have heard learne....