Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2023 (4) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 295 - SUPREME COURTRevision u/s 263 by CIT - deduction claimed by the assessee as cost of improvement while computing long term capital gains - What can be said to be prejudicial to the interest of the Revenue? - According to the Commissioner, the expenses claimed by the assessee neither constituted expenditure that is capital in nature nor resulted in any additions or alterations that provide an enhanced value of an enduring nature to the capital asset - Whether order passed by the AO is erroneous as well as prejudicial to the interest of the Revenue? - HELD THAT:- As decided in the case of Malabar Industrial Co. Ltd [2000 (2) TMI 10 - SUPREME COURT] that the scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue - also observed that if due to an erroneous order of the ITO, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. Only in a case where two views are possible and the Assessing Officer has adopted one view, such a decision, which might be plausible and it has resulted in loss of Revenue, such an order is not revisable u/s 263. Applying the law laid down by this Court in the case of Malabar Industrial Co. Ltd. (supra) to the facts of the case on hand and even as observed by the Commissioner, the order passed by the Assessing Officer is erroneous as well as prejudicial to the interest of the Revenue. Assessment order was not only erroneous but prejudicial to the interest of the Revenue also. In the facts and circumstances of the case, it cannot be said that the Commissioner exercised the jurisdiction u/s 263 not vested in it. The erroneous assessment order has resulted into loss of the Revenue in the form of tax. High Court has committed a very serious error in setting aside the order passed by the Commissioner passed in exercise of powers under Section 263 of the Income Tax Act. Thus order passed by the High Court is hereby quashed and set aside and that the order passed by the Commissioner passed in exercise of powers under Section 263 of the Income Tax Act is hereby restored.
|