https://www.taxtmi.com/caselaws?id=776391 The ITAT Mumbai held that the AO's assessment order was neither erroneous nor prejudicial to the revenue, thus Section 263 could not be invoked. The AO had conducted a detailed inquiry into the interest on loans to subsidiaries and made appropriate additions for deferred interest recognition due to uncertainties in collection. The assessee demonstrated sufficient own funds for the loans, and charging interest was not mandatory under business expediency principles. Prior acceptance of lower interest rates by the department and disputes over loans to the Indian subsidiary further supported the AO's considered view. Since both conditions for revision under Section 263 were not met, the revision was disallowed and the assessee's appeal was allowed. en-us Fri, 03 Jan 2025 00:00:00 +0530 Tue, 05 Aug 2025 18:37:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=776391 The ITAT Mumbai held that the AO's assessment order was neither erroneous nor prejudicial to the revenue, thus Section 263 could not be invoked. The AO had conducted a detailed inquiry into the interest on loans to subsidiaries and made appropriate additions for deferred interest recognition due to uncertainties in collection. The assessee demonstrated sufficient own funds for the loans, and charging interest was not mandatory under business expediency principles. Prior acceptance of lower interest rates by the department and disputes over loans to the Indian subsidiary further supported the AO's considered view. Since both conditions for revision under Section 263 were not met, the revision was disallowed and the assessee's appeal was allowed. Case-Laws Income Tax Fri, 03 Jan 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=776391