Sec. 263 of Income Tax Act, 1961— Revision—“i) The assessee company has deducted prior period income of Rs. 11,04,19,703/- (as income already offered before Settlement Commission) to arrive at the book profit which is not admissible as per provisions of section 115JB. Therefore, the above mentioned irregularity has resulted in underassessment of income of Rs. 11,04,19,703/- having potential tax effect of Rs. 2,78,89,308/-

ii) It is observed that the assessee deducted an amount of Rs. 6,28,68,798/- from income as “Payment of excise Duty in respect of earlier years now allowable”. Deduction of Excise duty of Rs. 6,28,68,798/- on payment basis instead of available unpaid excise duty of Rs. 3,00,50,738/- has resulted in underassessment of income of Rs. 3,28,18,060/- having potential undercharge of tax of Rs. 1,0647,819/- (under normal provision).
Held that:- We therefore conclude in these clinching factual aspects as well that the Assessing Officer’s action in not disallowing / adding the impugned excise duty claim could neither be termed as erroneous nor prejudicial to the interest of the Revenue so as to set sec. 263 revision mechanism in motion as per PCIT’s directions. We accordingly accept the assessee’s foregoing arguments challenging correctness of the impugned revision action. The same stands reversed.MAITHAN STEEL & POWER LTD. vs. Pr. CIT.[2020] 78 ITR (TRIB) 532 (ITAT-KOLKATA)