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2014 (12) TMI 352 - ITAT KOLKATAJurisdiction of CIT u/s 263 – Whether the TDS on reimbursement of freight charges to the suppliers had already been considered by the AO after due application of mind in the original order passed u/s 143(3) or not – Held that:- Assessee contended that the assessee had not made any freight payment to the transporters – in Malabar Industries vs CIT [2000 (2) TMI 10 - SUPREME Court] - it has been held that the CIT has to satisfy twin conditions, the order of the AO sought to be revised is erroneous and it is prejudicial to the interests of the Revenue - If any one of them is absent CIT cannot exercise jurisdiction u/s 263(1) - every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of the Revenue – the amount of freight was included in the bills for supplies received from suppliers - assessee has only reimbursed the freight payment made by the suppliers of the goods - AO has decided that no disallowance u/s 40(a)(ia) of the Act is called for - reimbursement of expenses cannot be said to be payment of freight which may call for deduction of TDS u/s 40(a)(ia) - the view adopted by the AO cannot be said to be unsustainable in law – thus, the exercise of jurisdiction by the CIT u/s 263 is not sustainable - AO has done proper enquiry and thereafter he has formed an opinion which cannot be said to be prima facie unsustainable - CIT’s conclusion that AO has not applied his mind is also not sustainable – thus, the order of the CIT passed u/s 263 is set aside – Decided in favour of assessee.
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