Judgment:
1. These appeals by the assesses are directed against the orders of the CIT passed under Section 263 of the IT Act, 1961 (hereinafter referred to as 'the Act') for the asst. yr. 1992-93. Since common issue is involved, these appeals were heard together and are being disposed of by this consolidated order for the sake of convenience.
2. ITA No. 1225/Ind./1996 : In this appeal the assessee has assailed the order of the CIT on the substantive ground that he has erred in setting aside the assessment order on the ground that the deduction allowed for deferment of sales-tax was erroneous and prejudicial to the interests of the Revenue.
3. We have heard the rival submissions and carefully perused the orders of the authorities below and the documents placed on record.
4. The facts emerging out of the orders of the authorities below in narrow compass are that the assessee has claimed deduction on account of deferment of payment of sales-tax to the tune of Rs. 3,42,749 which was initially disallowed by the AO while issuing intimation under Section 143(1)(a) of the Act but the same was later on allowed through its order passed under Section 154 of the Act on the application of the assessee. Subsequently, regular assessment under Section 143 was framed and the AO allowed the deduction on account of deferment of payment of sales-tax to the assessee vide assessment order dt. 15th Jan., 1995.
5. On scrutiny, the CIT noticed that according to the provisions of Section 22(3B) of the M.P. General ST Act, (hereinafter referred to as 'MPGST Act') when the sales-tax liability is convened into loan liability in accordance with the relevant provisions of MPGST Act, such sales-tax shall be deemed to have been paid in accordance with the ST Act of the State- The conversion of the sales-tax liability into loan liability by a specified agency i.e. M.P. Audhyogik Vikas Nigam is a prime condition to treat the sales-tax deferment as deemed payment under Section 43B of the Act. It was also observed by him that in the instant case the specified agency had not issued any certificate to the effect that the loan liability under the sales-tax deferment scheme has been created in the assessee's case and as such the AO's action of allowing the deduction of sales-tax to the tune of Rs. 3,42,749 under Section 43B of the Act was not correct and in accordance with the provisions of the Act. Considering the order of the AO as erroneous and prejudicial to the interests of the Revenue, CIT issued a show-cause notice to the assessee to explain as to why the assessment order should not be set aside being erroneous and prejudicial to the interests of the Revenue. In response to the show-cause notice, the assessee has furnished the explanation before the CIT contending that the detailed enquiry was made by the AO before allowing the claim of the assessee.
It was also contended that the eligibility certificate dt. 11th March, 1994, issued by the Government of Madhya Pradesh (hereinafter referred to as 'the State Govt.') to the effect that the dealer has opted for the scheme of deferment of payment of sales-tax and the unit is eligible for availing the facility of deferment, was placed before the AO to justify its claim. A reference to the CBDT Circular No. 497, dt.
4th Sept., 1987, was also made to the CIT. Having not satisfied with the explanations of the assessee, the CIT treated the assessment order as erroneous and prejudicial to the interests of the Revenue and set aside the assessment order with the direction to make the assessment afresh after affording an opportunity of being heard to the assessee.
6. Aggrieved with the order of the CIT the assessee has carried the matter before us and raised its arguments in two-folds. Mr. Deshpande, the learned counsel for the assessee, has strenuously argued that since the AO has applied its mind to the claim of the assessee and after making a detailed enquiry the claim of the assessee was allowed, the assessment-order cannot be revised by the CIT by resorting to the provisions of Section 263 of the Act. In support of his contention, Mr.
Deshpande has invited our attention to the intimation issued under Section 143(1)(a) of the Act, rectification order allowing the claim of the assessee and the queries raised in this regard while framing the assessment under Section 143(3) of the Act. It was further argued by him that once the AO takes a particular view after due application of mind on a particular issue, the view taken by the AO cannot be revised by the CIT under Section 263 of the Act though he may not agree with the AO's view. In support of his contention, Mr. Deshpande has relied upon the following judgments : (v) CIT v. Shri Govindram Seksariya Chanty Trust (1987) 166 ITR 580 (MP) 7. On merit, Mr. Deshpande has vehemently argued that the issue involved relating to the claim of deduction of sales-tax paid under the deferment payment scheme is covered by the judgment of the jurisdictional High Court in the case of CIT v. K.N. Oil Industries Ltd. (1997) 226 ITR 547 (MP). He further urged that necessary amendments with regard to the deferment of sales-tax liability were brought through Act No. 14 of 1988 in MPGST Act by inserting Sub-section (3B) to Section 22 with retrospective effect from 1st April, 1981. By virtue of the amended provision, if a registered dealer who belongs to any of the categories specified in Section 22-D and has been granted the facility of deferment of payment of sales-tax, is liable to pay tax under the provisions of Sub-section (2) or Sub-section (3) or Sub-section (4) and where a loan liability equal to the amount of tax payable by the dealer, as aforesaid, for the period of eligibility to avail of the said facility, has been created by any agency or agencies, as the State Government may, by general or special order, specify, then such tax shall be deemed to have been paid in accordance with the provisions of Sub-section (2) or Sub-section (4) as the case may be. To overcome the difficulty created by the provisions of Section 43B of the Act, according to which the payment of statutory liability is to be allowed in that previous year, in which the same is actually paid irrespective of the previous year in which the liability accrues, a Circular No. 496 dt. 25th Sept., 1987 was issued by the CBDT and the relief given by the State Government was duly recognised by the Board. Through this circular the Board has clarified that if the State Government makes an amendment in the ST Act to the effect that the sales-tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of Section 43B of the Act and the statutory liability shall be treated to have been discharged for the purpose of Section 43B of the Act. He further invited our attention to the Circular No. 674 dt. 29th Dec., 1993 issued by the CBDT with the submission that this circular was issued to give effect to those deferral a scheme notified by the State Government through the Government orders instead of bringing the amendment to the statute. Though in this circular it was clarified that the amount of sales-tax liability converted into loans may be allowed as deduction in the assessments for the previous years in which such conversion has been permitted by or under the Government orders but it was contended that this condition is applicable only in those cases where the claim has been raised under those deferral schemes which were notified by the State Governments through the Government orders. This condition is not applicable to those deferral schemes which were brought into effect by virtue of an amendment in the ST Act. Mr. Deshpande further urged that as per the provisions of Section 22(3B) of the MPGST Act, the assessee is entitled to claim deduction of sales-tax liability on account of deferment of sales-tax scheme as soon as the specified agency issued an eligibility certificate to the assessee.
8. The learned Departmental Representative, on the other hand, has submitted that if the AO does not apply his mind in view of the relevant provisions of law and takes a decision which is contrary to the existing provisions of law and his order is erroneous and prejudicial to the interests of the Revenue, the CIT has jurisdiction to revise the assessment order passed. The application of mind by the AO means the AO should adjudicate the issue in the light of the existing provisions of law and prevailing judicial pronouncements of the higher authorities. In the entire assessment order there is no discussion about the impugned issue. The AO has simply raised a query in this regard in a general questionnaire issued to the assessee but from that questionnaire no inference can be drawn that the AO has applied his mind. Moreover, the amendment in the ST Act and the circulars issued by the CBDT were available before the AO and he should have adjudicated the issue in the light of the same. Since the action of the AO is against the existing guidelines and the relevant provisions of law, the CIT was justified in holding that the assessment order is erroneous and prejudicial to the interests of the Revenue.
9. Mr. Brijesh Gupta, learned senior Departmental Representative, further argued on merits that as per the provisions of Section 43B of the Act, statutory liabilities are allowed to be deducted only in those previous years in which they are paid irrespective of the previous year in which they have accrued. With the intent to give a fillip to certain industries, the State Government has introduced a deeming provision as Sub-section (3-B) to Section 22 of the MPGST Act, according to which if a registered dealer who belongs to a particular category and has been granted the facility of deferment of sales-tax, is liable to pay sales-tax and where a loan liability equal to the amount of tax payable by the dealer has been created by a specified agency, then such tax shall be deemed to have been paid in accordance with the provisions of this Act. By virtue of this amendment, deferment of sales-tax was allowed to the assessee but the problem with regard to its allowability in computation of income and the previous year in which the claim is to be raised, arose because as per the provisions of Section 43B, the statutory liabilities can only be allowed to be deducted in those previous years in which it was paid irrespective of the previous years in which they have accrued. To overcome this difficulty, the CBDT has issued a Circular No. 497, dt. 25th Sept., 1987 through which they have recognised the deferment of sales-tax scheme launched by various State Governments by making amendments in their ST Acts. With intent to give a full benefit to the assessee, the Board has decided through this circular that where amendments are made in the sales-tax laws on these lines, the statutory liabilities shall be treated to have been discharged for the purpose of Section 43B of the Act. Again, a further controversy was raised with regard to the previous year in which the statutory liability shall be treated to have been discharged for the purpose of Section 43B of the Act. For removing this confusion, further Circular No. 674 dt. 29th Dec., 1993 was issued by the CBDT clarifying that the deferral scheme can also be launched by the State Government through Government orders instead of making the amendment in the ST Act. It was also clarified through this circular that the Board has decided that the amount of sales-tax liability converted into the loans may be allowed as deduction in the assessment year for the previous year in which such conversion has been permitted under the Government orders. Since it has been clarified by the Board that the deduction of deferment of sales-tax liability can only be allowed on the conversion of the sales-tax liability into a loan liability, it cannot be allowed on issuance of the eligibility certificate by a specified agency. It was further contended by Mr. Brijesh Gupta that the Government has laid down a procedure by introducing a scheme containing rules and regulations for giving effect to the new amendment brought by Act, No.14 of 1988. As per this scheme, the assessee has to undergo various stages before obtaining the conversion certificate from the competent authority. Only after obtaining the conversion certificate, the assessee can claim the deeming payment of sales-tax and deduction of the same can only be allowed in those previous years in which conversion was granted. Mere grant of the provisional eligibility certificate would not entitle the assessee to claim the deduction under the amended provisions on account of deeming payment of deferred sales-tax. In the instant case, till date nothing has been placed on record on behalf of the assessee that the sales-tax liability has in fact converted into the loan liability and a certificate to this effect has been issued by the competent authority. Mr. Gupta further invited our attention to the judgment of the jurisdictional High Court in the case of CIT v. K.N. Oil Industries Ltd. (supra) and contended that in this case their Lordships have simply examined the allowability of a claim under the deferment payment scheme. The eligibility criteria of the assessee for availing the benefit of deferment of sales-tax scheme was not raised before their Lordships. As such, they had no occasion to adjudicate the controversy raised in this appeal. Hence, the aforesaid judgment is not applicable to the present case.
10. On consideration of the rival submissions and from a careful perusal of record it is noticed that the claim of deduction on account of deferment of sales-tax was initially disallowed by the AO while issuing intimation under Section 143(1)(a) of the Act. On the rectification application of the assessee, the AO has allowed the claim of the assessee vide its rectification order, dt. 19th Sept., 1994, but the issue whether the assessee is entitled to the aforesaid deduction was not examined by the AO in the fight of the relevant provisions of the MPGST Act, the scheme announced by the State Government for this purpose and the circulars issued by the CBDT in this regard. Likewise, while framing the regular assessment the AO has allowed the claim of the assessee without examining the issue of entitlement of the assessee in the light of the aforesaid provisions of laws and the Board circulars, though a formal query in this regard was raised from the assessee in the general questionnaire. In response to the query, the assessee has simply filed a letter from the Government and the copy of the sales-tax account. From a careful perusal of the assessment order in the light of the reply to the queries furnished by the assessee. we are of the view that the issue of entitlement of deduction on account of deferment of sales-tax was not examined by the AO in the light of circulars of the Board and the scheme pertaining to the rules for granting conversion certificate and the AO has allowed the claim of the assessee without making any discussion on this issue in the assessment order. Though the circulars issued by the CBDT and the scheme launched by the State Government in this regard were in force and the AO is governed by the circulars issued by the CBDT, the AO has not adjudicated the issue in the light of above provisions. However, the CIT has examined the assessment order in the light of the relevant provisions of the MPGST Act, the scheme launched by the State Government in this regard, the Circular No. 496, dt. 25th Sept., 1987 and the Circular No. 674, dt. 29th Dec., 1993 before holding that the assessee was not entitled to the deduction claimed by it on account of deferment of sales-tax.
11. Before dwelling upon the impugned issue whether the assessee is entitled to the deduction on account of deferment of sales-tax, in view of Section 22(3B) of the MPGST Act, it is all the more necessary for us to examine the object of the new camendment and other consequential steps taken by the State Government and the CBDT to give proper effect to the newly amended provisions.
12. With the intent to give a fillip the State Government has introduced Sub-section (3B) of Section 22 of the MPGST Act vide Act No.14 of 1988 with retrospective effect from 1st April, 1981. According to the new provision, a registered dealer who belongs to any of the specified categories and had been granted the facility of deferment of payment of sales-tax, is liable to pay tax under other Sub-sections of Section 22 and where a loan liability equal to the amount of tax payable by the dealer has been created by any specified agency, then such tax shall be deemed to have been paid in accordance with the provisions of other Sub sections of Section 22 of the MPGST Act. For ready reference, we reproduce Sub-section (3B) of Section 22 of the MPGST Act as under: "(3B) Notwithstanding anything contained in any other provision of this Act, but subject to such conditions as may be prescribed, a registered dealer who belongs to any of the categories specified in Section 22D and has been granted the facility of the deferment of payment of tax, is liable to pay tax under the provisions of Sub-section (2) or Sub-section (3) or Sub-section (4) and where a loan liability equal to the amount of tax payable by the dealer as aforesaid for the period of eligibility to avail of the said facility has been created by any agency or agencies as the State Government may, by general or special order, specify then such tax shall be deemed to have been paid in accordance with the provisions of Sub-section (2) or Sub-section (3) or Sub-section (4), as the case may be." 13. After this amendment, the State Government has laid down a scheme for conversion of deferred sales-tax into the loan vide Notification No. 16-16-86-XI-B(89) dt. 30th Dec., 1989. In this scheme a detailed procedure for conversion of deferred tax into the loan liability has been given. As per rule 3 of this scheme an eligible unit shall apply in Form-A to the competent authority for conversion into a provisional loan liability of the deferred tax payable by it according to the returns of every year or part thereof covered by the period of the eligibility. Such applications accompanied with other documents i.e.
copies of returns under the State and Central ST Acts and the certified copy of the eligibility certificate issued by the competent authority, shall be made within 60 days of the date of expiry of the year or part thereof covered by the period of eligibility.
14. On receipt of the application in Form-A and the certificate in Form-B from the appropriate STO, the competent authority shall verify the contents and if on verification the competent authority is satisfied, it shall pass an order in Form-D converting the amount of deferred tax into the provisional loan liability. A copy of the order sheet is sent by the competent authority to the eligible unit and the appropriate STO. Thereafter, again the eligible unit shall make further application in Form-A to the competent authority to convert the total tax assessed into the final loan liability within 60 days from the final sales-tax assessment order and such application shall be accompanied by the copy of the final assessment order. On receipt of this application in Form-A and certificate in Form-B from the appropriate STO, the competent authority shall verify the contents of the application and if on verification the competent authority is satisfied with the contents, it shall direct the eligible unit in writing to execute an agreement in Form-C within 60 days of the receipt of such direction. On execution of the agreement by the eligible unit the competent authority shall pass an order in Form-D converting the amount of tax assessed by the AO representing the deferred tax into the final loan liability. As per this scheme, the eligible unit has to undergo the entire process for obtaining the conversion certificate of its deferred tax into the loan liability. If the scheme is read in view of the amended Sub-section (3-B) of Section 22 of the MPGST Act, one would find that the deferred tax shall only be deemed to have been paid in accordance with the provisions of Sub-section (2) or Sub-section (3) or Sub-section (4) of Section 22 of the MPGST Act when the deferred sales-tax has been converted into the final loan liability and an order in Form-D is passed by the competent authority as per Rule 3(2)(c) of the scheme for conversion of deferred tax into the loan liability. In this scheme, as specific provision has also been made for modification in the conversion certificate if the assessed tax is modified by an order in reassessment, appeal, revision or by order of any Court. For ready reference, we reproduce the relevant provisions of the aforesaid scheme governing the procedure for conversion of deferred Sales-tax into the loan liability.
"3. Application for conversion of deferred tax into a loan liability: (1)(a)(i) An eligible unit shall apply in Form 'A' to the Competent Authority for the conversion into a provisional loan liability of the deferred tax payable by it according to the returns for every year or part thereof covered by the period of eligibility. Such an application shall be made within 60 days of the date of expiry of the year or part thereof covered by the period of eligibility.
(1)(a)(ii) Such eligible units that have gone into production, on or after 1st April, 1981, and upto the date of publication of this scheme and have opted for the deferment of payment of sales-tax under M.P. Deferment of Payment of Tax Rules, 1983 or the M.P. Deferment of Payment of Tax Rules, 1986, as the case may be, will also be eligible to apply for the conversion of the deferred tax payable by them into a provisional loan liability according to the returns for every year or part thereof, covered by the period of eligibility, within 60 days of publication of this scheme.
(i) Copies of the returns under the State Act and/or the Central Act, as the case may be, relating to the year or part thereof, the tax relating to which is sought to be converted into a loan liability.
(ii) A certified copy of the eligibility certificate issued by the Competent Authority.
(1)(c) On receipt of the application in Form 'A' and the certificate in Form 'B' from the appropriate STO, the Competent Authority shall verify the contents of the application and satisfy itself that the particulars furnished therein are correct, and complete and that the amount of deferred tax sought to be converted into a provisional loan liability is the same as indicated by the appropriate STO in his certificate in Form 'B'. If on verification the competent authority finds that the application is incomplete, it shall require the eligible unit to furnish the relevant particulars. On furnishing such particulars by the eligible unit the competent authority shall pass an order in Form 'D' converting the amount of deferred tax into a provisional loan liability.
(1)(d) A copy of the order passed under cl. (c) shall be sent by the Competent Authority to the eligible unit and the appropriate STO. (2)(a) An eligible unit whose assessment under the ST Act and/or Central Act for any year or part thereof covered by the period of eligibility has been completed by the assessing authority, shall within 60 days of date of receipt of the order of assessment, make a further application in Form 'A' to the competent authority to convert the total tax assessed into a final loan liability.
(2)(b) Every such application shall be accompanied by a copy of the assessment order passed by the assessing authority.
(2)(c) On receipt of the application in Form 'A' and the certificate in Form 'B' from the appropriate STO, the Competent Authority shall verify the contents in the application in the manner stated in Clause (c) of Sub-rule (2) and having satisfied itself that the application is correct and complete and that the deferred tax sought to be converted into final loan liability is the same as indicated in the certificate in Form 'B' received from the appropriate STO, the Competent Authority shall direct the eligible unit, in writing, to execute an agreement in Form 'C' within 60 days of the date of receipt of such directions. On execution of the agreement by the eligible unit the Competent Authority shall pass an order in Form 'D' converting the amount of tax assessed by the assessing authority representing the deferred tax into a final loan liability.
(2)(d) A copy of the order passed under Clause (c) shall be sent by the Competent Authority to the eligible unit and appropriate STO. (3)(a) Where an eligible unit has obtained an eligibility certificate under the Deferment Rules before the date of publication of these rules in the "Madhya Pradesh Gazette" it shall make an application in Form 'A' for each year or part thereof covered by the period of eligibility preceding such date within 60 days of that date for conversion of the deferred tax into : (i) a provisional loan liability, if the assessment for the year or part thereof has not been made by the assessing authority; or (ii) a final loan liability, if the assessment for the year or part thereof has been made by the assessing authority.
(i) copies of the returns under the State Act and/or Central Act, a copy of the order of assessment; (ii) a certified copy of the eligibility certificate issued by the competent authority.
(3)(c) On receipt of the application in Form 'A' from the eligible unit and the certificate in Form 'B' from the appropriate STO, the Competent Authority shall verify the contents of the application and pass an order converting the deferred tax into a provisional or final loan liability in the manner specified in Clause (e) of Sub-rule (1) of Clause (c) of Sub-rule (2), as the case may be.
(4)(a) Where any deferred tax relating to any year or part thereof covered by the period of eligibility and converted into a final loan liability is modified by an order in reassessment, appeal, revision or by order of any Court, the eligible unit shall make an application in Form 'E' to the Competent Authority within 60 days of the date of receipt of such order to modify the amount of the final loan liability." 15. Realising the difficulty in giving effect to the amended provisions in the IT Act, the CBDT has issued Circular No. 496 dt. 25th Sept., 1987 and clarified that if the State Government makes an amendment in the ST Act to this effect, the sales-tax deferred under the scheme shall be treated as actually paid and the statutory liability shall be treated to have been discharged for the purpose of Section 43B of the Act. Necessary directions were also issued to all CITs for giving proper effect to the scheme of deferment of sales-tax launched by various State Governments. Later on, the CBDT has issued another circular No. 674 dt. 29th Dec., 1993 clarifying therein that the deferral scheme notified by the State Government through the Government orders would also meet the requirements of the Board Circular No. 496, dt. 25th Sept., 1987, though the aforesaid scheme was not brought by amending the ST Act. The Board has also clarified through this circular that the amount of sales-tax liability converted into the loans may be allowed as deduction in the assessment for the previous year in which such conversion has been permitted by or under the Government orders.
If the amendments brought by the State Government in the MPGST Act, the scheme launched by the Government for giving effect to the amendment and the aforesaid circulars issued by the CBDT are read together, only one and one inference would be drawn that they are inextricably, connected with each other None of them can be read in isolation. The contention of the assessee that Circular No. 674, dt. 29th Dec., 1993 should not be considered in those cases in which the deferment of sales-tax scheme was launched by the State Government by bringing an amendment in the ST Act, is not acceptable to us inasmuch as this was issued to overcome certain difficulties faced by the assessee and the Department in given proper effect to the aforesaid schemes. A careful perusal of the relevant provisions of ST Act, scheme and the Board circulars would lead to only one inference that the deduction of deferment of sales-tax can only be allowed in the assessment for the previous year in which the sales-tax liability was converted into the loan liability and the necessary orders were issued by the competent authority in Form-D as per r. 3(2)(c) of scheme for conversion of deferred tax into loan. Until and unless the deferred sales-tax is converted into the final loan liability, the assessee is not entitled to claim deduction for the same in view of Section 22(3B) of the MPGST Act and the aforesaid circulars issued by the CBDT. An eligibility certificate issued by the competent authority to the eligible unit for making the application in Form-A to the competent authority for the conversion into a provisional loan liability of the deferred tax as per Rule (3)(1)(a) would not entitle the eligible unit to claim the deduction of deferment of sales-tax in view of the provisions of Section 22(3B) and the aforesaid circulars of the CBDT because before issuing a final conversion certificate the authorities concerned have to make detailed verification. We are, therefore, of the view that the deduction of deferment of sales-tax can only be claimed by the assessee after the order was passed by the competent authority in Form-D converting the amount of sales-tax assessed by the AO representing the deferred tax into a final loan liability and the claim of deduction can only be raised in those previous years in which the deferred sales-tax was converted into a final loan liability.
16. Turning to the case in hand in the light of foregoing discussion, we find that though the unambiguous scheme, circular issued by the CBDT and the amended provisions of ST Act were in force when the AO has framed the assessment but the AO did not examine the claim of the assessee in the light of the aforesaid legal provisions whether the assessee was entitled to the claim raised in its return of income. In the instant case, despite our specified queries with regard to the conversion certificate, nothing has been placed before us that the assessee has raised the claim of deduction of deferment of sales-tax after getting the deferred tax liability converted into a final loan liability as per Rule 3(2)(c) of the aforesaid scheme. Since the AO has allowed the claim of deduction of deferment of sales-tax though the assessee was not entitled to the same, the assessment order on this count is erroneous and prejudicial to the interests of the Revenue. We have also carefully perused the various judgments referred to by the assessee in support of its claim that whenever the AO has applied its mind and takes a particular view, his view cannot be revised by the CIT by resorting to the provisions of Section 263 of the Act. No doubt, it has been held by various High Courts that if two views are possible by construing a particular provision of law and one view was adopted by the AO, the same cannot by revised by the CIT though he did not agree with that view because he cannot thrust his wisdom upon the AO. But it has never been held by any of the High Courts that if the AO takes a view contrary to the existing provisions though after due application of mind, the CIT is debarred from resorting to Section 263 of the Act for setting aside the order of the AO. In the instant case, in the given facts and circumstances of the case, the assessee was not entitled to the claim of deduction on account of deferment of sales-tax in view of the existing provisions of law and the AO has allowed the claim to the assessee even without making any discussion on this subject in its order. An oblique reference in a questionnaire issued to the assessee with regard to the impugned issue is not sufficient to say that the impugned issue has been examined by the AO after application of mind in accordance with the existing provisions of law.
17. Keeping in view the totality of the facts and circumstances of the case in the light of the existing legal provisions, we are of the considered opinion that the CIT was justified in holding that the order of assessment on this count was erroneous and prejudicial to the interests of the Revenue. We, therefore, uphold the order of the CIT.18. ITA No. 1228/Ind./1996 : In this appeal the assessee has raised various grounds but all the grounds relate to the setting aside of the assessment order by the CIT by invoking the provisions of Section 263 of the Act by holding that the assessment order is erroneous and prejudicial to the interests of the Revenue because the AO had wrongly allowed the claim of deduction of deferment of sales-tax to the assessee.
19. An identical issue has already been adjudicated by us in the foregoing appeal and for the reasons discussed therein, we hold that the CIT was justified in holding that the assessment order is erroneous and prejudicial to the interests of the Revenue. We, therefore, uphold the order of the CIT.