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2016 (3) TMI 1287 - AT - Income TaxRevision u/s 263 - scope of revision orders - rejection of books of accounts - profit estimation by AO - Held that:- Provisions of section 263 cannot be invoked to correct each and every type of mistake or error committed by the AO. It is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the case of Malabar Industial Co. Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME Court] has also made clear that the phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interest of the Revenue. Stated that 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 the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law. In the present case, we find that AO offered various opportunities to the assessee the various opportunities listed in the assessment order are dated 6.6.2012, 11.09.2012 and 19.03.2013, however, the assessee did not submit the full details required by AO and further the documents submitted by assessee were unconfirmed copies of accounts of the parties from whom purchase were made, therefore, AO had no option but to reject the books of accounts of assessee and to estimate the income of assessee by applying net profit rate. We do not find the order of Assessing Officer to be erroneous and prejudicial to the interest of Revenue - Decided in favour of assessee.
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