2014 (11) TMI 884

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....ebts. 2. By virtue of the power conferred under Section 263 of the Act, the Commissioner of Income Tax by order dated 07.03.2007 held that the order passed by the assessing authority is erroneous and prejudicial to the interest of the revenue as he has failed to add back the provisions of Rs. 3,20,99,996/- representing the provision for diminution in value of investment as per Clause (c) of the Explanation to Section 115JB(2) of the Act. The said order was challenged by the assessee before the tribunal. The tribunal following the judgment of the Apex Court in Malabar Industrial Co. Ltd. Vs. CIT (2000) reported in 243 ITR 83 and also in the judgment of Calcutta High Court in the case of Russell Properties (P.) Ltd. v. A. Chowdhury, Addl. ....

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....Max India Ltd reported in [2008] 166 TAXMAN 188 (SC) in para No.2 while dealing with the retrospective operation of amendments and the exercise of powers under Section 263 of the Act, has referred to the case in Malabar Industrial Co. Ltd. Vs. CIT (2000) reported in 243 ITR 83. In para No.2 of the said judgment it has held as under: "2. At this stage we may clarify that under para 10 of the judgment in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 this Court has taken the view that the phrase "prejudicial to the interests of the revenue" under Section 263 has to be read in conjunction with the expression "erroneous" order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessi....