2017 (2) TMI 864

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....der of the Tribunal dated 16.10.2009 for the assessment year 2003-04. The questions of law sought to be answered are hereunder:- "(1) Whether the Hon'ble ITAT was legally correct in holding that the revisional order passed by the CIT u/s 263 of the Act is unsustainable in the law ignoring the legal aspect of the case that the present case fulfills twin conditions i.e. assessment order passed by the AO was without proper enquiries and held as erroneous as well as the prejudicial to the interest of revenue ? (2) Whether the Hon'ble ITAT was legally correct in holding that estimation of the income made by the AO sustainable in law was erroneous since the learned CIT had estimated the income at a higher figure ignoring....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....(3) as the latter attracts no tax liability. Undisputedly, the A.O. had estimated the income at Rs. 5 Crores, hence the submission of the ld. A.R. in this regard that disallowance on account of depreciation was taken care of by the A.O. and thus further disallowance cannot be directed by the ld. CIT, cannot be brushed." Insofar as the unsecured loans and squared up accounts of the assessee are concerned, the Tribunal also noted in its order that the CIT in his revisional order was not justified in directing the A.O. to obtain confirmations of all the unsecured loans taken since the last scrutiny assessment, i.e. A.Y. 1998-99. The Tribunal comes to the conclusion as under:- "In view of all these facts and circumstances, it cannot....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... has relied on a decision of Hon'ble Apext Court in the case of Malabar Industrial Co. Ltd v. Commissioner of Income Tax reported in (2000) 109 Taxman 66 (SC). He has relied on the contents of paragraph no.9 of the said decision, which reads as under :- "The phrase 'prejudicial' to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of 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 ha....