TaxTMI 
TaxTMI 
2016 (6) TMI 1076
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....to be engaged in the business of manufacturing of Dyes and Pigments and filed its return of income for AY 2010-11 on 28/09/2010 declaring total income at Rs.NIL. The case was selected for scrutiny assessment and thereafter the AO framed assessment order u/s.143(3) vide order dated 01/03/2013 and the total taxable income was determined at Rs.NIL. Subsequently, on examining the records of assessment, the ld.CIT noticed that the assessee had unutilized balance of CENVAT credits in the balance-sheet under the 'loans and advances' which according to him should have been included in the closing stock u/s.145A of the I.T.Act, 1961. He also noted that assessee had incurred expenditure by way of interest which was not disallowed as per section 14A o....
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.... accordingly cancelled the assessment order passed u/s.143(3) dated 01/02/2013 and directed the AO to make afresh assessment. Aggrieved by the aforesaid order of the ld.CIT, assessee is now in appeal before us and has raised the following grounds:- 1. The learned Pr. C.I.T. has erred in passing order u/s 263 without jurisdiction and appropriate powers available under the Act. It is submitted that the order passed u/s 263 is bad in law, void ab initio and the same be deleted. 2. Without prejudice to the above, it is submitted that the order passed u/s 263 of the I.T. Act is not correct on facts and in law inasmuch as the original order passed u/s 143(3) was neither prejudiced to the interest of revenue nor it was erroneous. It is submitte....
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....d facts. It is submitted that the same be held so now. 6. Your appellant craves leave to add, alter and/or to amend all or any of the grounds before the final hearing. 3. Before us, ld.AR at the outset submitted that the issue in the present appeal is invoking of revisionary proceedings u/s.263 of the Act as the required conditions are not fulfilled. Before us, ld.AR reiterated the submissions made before the ld.CIT and submitted that in the present case the pre-requisite conditions specified u/s.263 of the Act were not fulfilled and, therefore, the proceedings u/s.263 of the Act lacks jurisdiction and are bad in law. With respect to the non-inclusion of unutilized balance of CENVAT credit u/s.145A of the Act, he submitted that the asse....
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....ther of facts or of a law and when two views are possible and AO has taken one view with which CIT does not agree, the order of the AO cannot be treated as erroneous and to the prejudicial to the interests of Revenue unless the view taken by the AO is unsustainable in law and for this proposition he relied on the decision of Hon'ble Apex Court in the case of Malabar Industrial Co.Ltd. vs. CIT reported at (2000) 243 ITR 83 (SC). He also placed reliance on the decision of the Coordinate Bench in the case of Cadila Healthcare Ltd. and placed on record the copy of the aforesaid decision. He therefore submitted that order passed by CIT u/s.263 of the Act be quashed. On the other hand, ld.CIT-DR supported the order of the AO and submitted that wh....
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.... case of Malabar Industrial Co Ltd Vs CIT (2000) 243 ITR 83 (SC) has held that CIT has to be satisfied of twin conditions, namely, (i) the order of the AO sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the ITO is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue- recourse cannot be had to s. 263(1). It was further held that the provision cannot be invoked to correct each and every type of mistake or error committed by the AO; when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which t....
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.... termed as erroneous unless it is not in accordance with law. If an ITO acting in accordance with law makes certain assessment, the same cannot be branded as erroneous by the Commissioner simply because according to him the order should have been written more elaborately. This section does not visualise a case of substitution of judgment of the Commissioner for that of the ITO, who passed the order, unless the decision is held to be erroneous. Cases may be visualised where ITO while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimates himself. The Commissioner, on perusal of the records, ....