2013 (10) TMI 830

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....d in brief. According to the assessment order, the assessee is a cooperative bank and is engaged in the business of banking, trading in fertilizers and running a shop. The assessment in the hands of the assessee for the year under consideration was completed by the Assessing Officer u/s. 143(3) of the Act, wherein the Assessing Officer allowed deduction u/s. 80P of the Act claimed by the assessee except for interest income of Rs.6,30,000/- received from Treasury deposits. 3. On scrutiny of record, the Ld. CIT noticed that the activities carried on by the assessee assume the character and meaning of a co-operative bank. Accordingly, the Ld CIT noticed the assessee was not eligible for deduction under sec. 80P of the Act in view of sub-sec (....

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....ility of the provisions of sec. 80P(4) of the Act, the Ld. CIT was justified in initiating the revision proceedings. 6. We have heard the rival contentions. Admittedly, the assessing officer did not examine about the applicability of provisions of sec. 80P(4) of the Act to the assessee. We feel it pertinent to refer to the decision rendered by the Hon'ble Bombay High Court in the case of Grasim Industries Ltd. V CIT (321 ITR 92), wherein the court has discussed about the scope of provisions of section 263 as under: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in ....

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....d by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law." The principle which has been laid down in Malabar Industrial Co. Ltd. [2000] 243 ITR 83 (SC) has been followed and explained in a subsequent judgment of the Supreme Cour....