TaxTMI 
TaxTMI 
2019 (7) TMI 1589
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....cer while passing the assessment order made addition on account of bad-debts of Rs. 15.87 crore besides other additions and disallowances. The ld. PCIT revised the assessment order vide order dated 27.03.2012, The ld. PCIT while revising the assessment order noted that the assessee claimed deduction of Rs. 181,01,81,537/- on account of bad-debts written off during the previous year. The Assessing Officer while passing the assessment order allowed the claim except for an amount of Rs. 15,87,92,163/- which was disallowed on the ground that bad-debts pertains to the period prior to 01.04.2001 when the income of assessee was not chargeable to tax. The ld. PCIT further took his view that the assessee has not considered bad-debts allowed as deduction while arriving at the yearend balance. The debit balance in the provisions for bad-debts and doubtful debts account can only arise when bad-debts is more than the credit balance, the entire bad-debts was allowed as deduction to the assessee. The question of having a debit balance in the provisions of bad-debts and doubtful debts account does not arise at all. The ld. PCIT treated the order of Assessing Officer dated 30.12.2009 to be erroneou....
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....btful debts written off and explained as to why it should not be allowed vide notice dated 28.04.2009 under section 142(1). The assessee vide its reply dated 17.07.2009 furnished the justification for the claim of bad and doubtful debts written off along with the list of bad-debts written off, vouchers evidencing actual written off of such debts as well as its explanation to support the claim for deduction in respect of provision of bad and doubtful debts under section 36(1)(vii)(v) and bad debts written off under section 36(1)(vii). The Assessing Officer after examining the facts, applicability of the provision and proper application of mind allowed the bad-debts written off to the extent of Rs. 165,13,89,374/-. The Assessing Officer accepted the stand of assessee after examination and submission. Therefore, it cannot be said that the Assessing Officer has summarily accepted the claim of assessee. There is no error in the assessment order and no prejudice is caused to the revenue and hence, the provisions of section 263 are not applicable. As the Assessing Officer has taken judicial view, just because another views is possible it does not give jurisdiction for revision under....
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....st of revenue. The ld. PCIT also held that in the assessment order for Assessment Year 2006-07, the deduction of Rs. 17.91 crore was allowed under section 36(1)(vii)(a), which amount is not reduced by Assessing Officer while allowing deduction for bad debts in the Assessment Year under consideration. The ld. PCIT further concluded that Assessing Officer has not raised any special query to examine the claim, thus, assessment is erroneous and prejudicial to the interest of revenue within the meaning of section 263 and directed the Assessing Officer to make fresh assessment after detailed verification and submission of assessee. Aggrieved by the order of ld. PCIT, the assessee has filed the present appeal before us. The assessee has raised following concise grounds of appeals: (1) On the facts and in the circumstances of the case and in law, the ld Commissioner of Income tax erred in passing the order under section 263 of Income tax Act. The appellant prays that the order of learned CIT passed under section 263 of the Income Tax Act, may be cancelled being void ab initio and bad in law. (2) On the facts and in the circumstances of the case and in law, the ld Commissioner of Income....
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....on of the case. As the assessee has filed appeal before the ld. CIT(A) on similar issue, therefore, the ld. PCIT was precluded from revising the assessment order. The ld. AR submits that the Assessing Officer while passing the assessment order has taken one of the possible views. Therefore, the assessment order was not erroneous. The twin condition as provided under section 263 of the Act when the order is erroneous in so far as prejudicial to the interest of revenue are not satisfied. In support of his submission, the ld. AR of the assessee relied upon the decision of Malabar Industrial Company Ltd. (supra), decision of Hon'ble Mumbai High Court in CIT vs. Gabriel India Ltd. (supra). 8. On the principle of merger, the ld. AR of the assessee relied upon the decision of jurisdictional High Court in CIT vs. Paul Brothers (supra), CIT Vs K Sera Sera Productions Ltd ( 374 ITR 530 Bom) and Gujarat High Court in CIT Vs Nirma Chemicals works P. Ltd (309ITR 67 Guj). 9. On the other hand, the ld. Departmental Representative (DR) for the revenue supported the order of ld. PCIT. The ld. DR submits that the Assessing Officer has not discussed the issue in details while passing the assessment....
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....cided in such appeal." 12. A careful reading of the provisions of section 263 makes it clear that the Commissioner of Income-tax is entitled to revise an assessment order insofar as the order is erroneous and prejudicial to the interest of the revenue, however, Explanation (c) places an embargo on the Commissioner of Income-tax in case of subject-matter of any appeal which has been considered and decided in such appeal. In other words, before the Commissioner of Income-tax exercises the jurisdiction under section 263 of the Act, the Commissioner of Income-tax is required to ascertain whether the order referred to in sub-section (1) of section 263 of the Act had been the subject-matter of any appeal, and if yes, the revisional powers shall be available only if such subject-matter had not been considered and decided in such appeal 13. The Hon'ble Bombay High Court in CIT Vs K Sera Sera Productions Ltd ( 374 ITR 530 Bom) held where issues of income of assessee from production of film and deduction of cost of production there against had been considered and decided in appeal by first appellate authority, said issues could not be made subject matter of revision under section 263. The ....
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....something which was very much part and parcel of the appellate authority's order and dealt with extensively therein is now sought to be revised and revisited. Firstly, if the income of the Assessee from the film is Rs. 11,25,00,000/-, then, whether the explanation of the Assessee that it is not so deserves to be considered or not by the Assessing Officer is grievance No. 1/ground No. 1 before the first appellate authority. Secondly, if that is taken to be the income of the Assessee and without admitting it to be so the cost of production of the film needs to be deducted by applying Rule 9A of the Income Tax Rules. Thus, that is ground No. 2 in the memo of Appeal before the first appellate authority and in his order dated 12th October, 2011. Both these matters are very much part of the revisional authority's order dated 29th March, 2012. The attempt to reopen them cannot be saved as clause (c) of Explanation below sub-section (1) of section 263 of the Income Tax Act, 1961 had no application. 14. The Hon'ble Gujarat High Court in CIT Vs Nirma Chemicals works P. Ltd (309ITR 67 Guj) held that the Commissioner is entitled to revise an assessment order insofar as the order is er....