This case involves an appeal by the DCIT against the order dated 22.07.2022 by NFAC Delhi for the assessment year 2013-14, where the primary issue was the addition related to Served From India Scheme Scrips amounting to Rs.149,63,00,000.
The grievance of the revenue was about the deletion of the addition concerning Served From India Scheme (SFIS) Scrips, which were argued as revenue receipts utilized by the assessee to enhance profitability. This deletion had a substantial tax effect of Rs.50,85,92,370.
The Tribunal noted that the assessment was originally framed under the direction of Pr. CIT-2, Delhi pursuant to an order under section 263 of the Act. However, this direction was later quashed by the Tribunal, emphasizing that the Assessing Officer had made a plausible and legally sustainable decision regarding the SFIS Scrips, following proper inquiry and consistent with earlier years’ treatments accepted by the Revenue.
The Tribunal’s decision highlights the importance of consistent treatment in tax assessments and the necessity for the Commissioner to not substitute their views for a legally sustainable view taken by the Assessing Officer. The ruling supports the principle that if an Assessing Officer’s decision is one of the possible views and is legally sustainable, it cannot be deemed erroneous and prejudicial to the interests of the revenue.
The appeal by the revenue was dismissed, affirming the decision of the NFAC and the principles of consistency and legal sustainability in tax assessments. This case underscores the judiciary’s role in safeguarding fair administrative actions in tax assessments.
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