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[2008] 305 ITR 332 (GUJ.) HIGH COURT OF GUJARAT Commissioner of Income-tax v. Pankaj Dhirajlal Dhruve D.A. MEHTA AND Z.K. SAIYED, JJ. IT REFERENCE NO. 18 OF 1997 FEBRUARY 19, 2008 Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue Where there were two circulars of Central Board of Direct Taxes dated 22-9- 1965, and 6-1-1984, about limit of expenses to be allowed as deduction in respect of commission earned by an agent of Life Insurance Corporation who does not keep books of account and two different Commissioners having jurisdiction over same range, had recorded two different opinions in relation to two circulars, Tribunal was justified in coming to conclusion that assessment order could not be treated to be erroneous and prejudicial to interests of revenue where Assessing Officer had adopted one of aforesaid two view of matter While finalizing the assessment under section 143(3) on 9-10-1991, the Assessing Officer computed the total income of the assessee, an LIC agent, at a sum of Rs. 2,51,332. In the process the Assessing Officer allowed deduction of 40 per cent on the commission for the first year and Rs. 22,793 at 15 per cent on renewal commission from gross commission received by the assessee from the LIC. The Commissioner, however, set aside the assessment and directed the Assessing Officer to grant deduction to the assessee pegged at a sum of Rs. 10,000 on the basis of the circular issued by the CBDT as the assessee was not maintaining the books of account though the total receipts were more than Rs. 60,000. The Tribunal set aside the Commissioner's order of the Tribunal. Held that there were two circulars of the Central Board of Direct Taxes dated 22-9-1965, and 6-1-1984, about the limit of expenses to be allowed as deduction in respect of commission earned by an agent of the Life Insurance Corporation who does not keep the books of account. The Tribunal found that two different Commissioners having jurisdiction over the same range, had recorded two different opinions in relation to the two circulars, and the Assessing Officer had adopted one view of the matter and, therefore, the Tribunal was justified in…

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