1990 (10) TMI 169

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....d capitalising interest of Rs. 1,00,410 and bank guarantee of Rs. 3,155 for that purpose was erroneous and prejudicial to the interest of revenue. According to the CIT interest was payable over a period of six years and the ITO was not correct in capitalising the entire amount for the purpose of granting the aforesaid loans. This made the order erroneous insofar as it was prejudical to the interest of revenue, inasmuch as the allowances to the extent of Rs. 56,983 were excessively allowed by the ITO. After observing due process of law and rejecting all the contentions raised by the assessee in this behalf, the CIT concluded that the order passed by the ITO was erroneous insofar as it was prejudicial to the interest of revenue and therefore,....

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....of the appellate authority and such order could not be revised by the CIT u/s. 263 of the Income-tax Act, 1961. Referring to the amendment made to section 263 especially insertion of Explanation thereto, the learned counsel for the assessee submitted that the amendment cannot be retrospective with effect from a date earlier to the date on which the provision sought to be amended itself was brought on the Statute Book. For this proposition, he relied on the decision of the Bombay High Court in the case of Ritz Ltd. v. Union of India [1990] 184 ITR 599. 3. The learned departmental representative, on the other hand, supported the revisional order of the CIT. 4. After due consideration, we are of the opinion that in view of the harmonious con....