TaxTMI 
TaxTMI 
2014 (3) TMI 1089
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....the A.O. which were issued by Bank of India appears to have been manipulated by assessee thereby, invoices issued in the name of M/s. MBB Transactions were struck and the name of assessee ie, M/s. Sujana Universal Industries Ltd.( former name) was written in hand. As the details of advances given, their implications were not examined by the A.O., proceedings under section 263 are initiated by CIT. After considering the submissions of assessee, Ld. CIT set aside the order under section 143(3) with a direction to A.O. to examine all the aspects relating to genuineness and relief of the claim of finance charges made by assessee and pass fresh assessment order, after affording a reasonable opportunity to assessee. Assessee is aggrieved by the o....
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....examination. 5. Learned D.R. further relied on the orders of the CIT. 6. After considering the rival contentions and examining the record, we are of the opinion that order of the CIT cannot be justified. The A.O. in the course of assessment specifically examined the claim of finance charges to an extent of Rs. 1,59,94,969/-. Para 3 pertaining to this issue is as under: "3. In the P & L account, under the head 'Finance Charges' assessee company debited an amount of Rs. 1,59,94,969/-. During the course of assessment proceedings, assessee company was required to furnish complete details in this regard. In response, assessee furnished relevant details and it is observed that majority of these finance charges are incurred towards discounting....
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....bar Industries Company Ltd. vs. CIT (supra) on the issue. Hon'ble Supreme Court in the case of Malabar Industries Company Limited vs. CIT 243 ITR 83 (SC) has held as under : "A bare reading of provisions of s. 263 makes it clear that the prerequisite to exercise of jurisdiction by the CIT suo motu under it, is that the order of the ITO is erroneous insofar as it is prejudicial to the interests of the Revenue. The 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-....