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2010 (10) TMI 867 - AT - Income TaxJurisdiction u/s 263 for making further disallowance in respect of labour charges - Held that:- CITs calculation that labour charges is to be disallowed at Rs. 8,27,726 is totally based on his assumptions and presumptions and cannot be made a basis invoking his jurisdiction under section 263 of the Act. Merely because the AO has decided to disallow sum of Rs. 1 lac on ad hoc basis after making necessary enquiry, that by itself, cannot be a ground to invoke powers under section 263 conferred upon CIT. It is well settled that section 263 does not visualize a case of substitution of the judgment of the CIT for that of the AO, who passed the assessment order unless the decision is held to be erroneous. CIT on perusal of the records opined that the estimate made by the concerned officer was on the lower side and left to the CIT, he would have estimated the income at a higher figure than the One determined by the ITO. That would not vest the CIT with powers to re-examine the accounts and determine the income himself at a higher figure. This is because the ITO has exercised the quasi judicial power vested with him in accordance with law and arrived at a conclusion and such a conclusion cannot be termed to be erroneous simply because the CIT does not fully satisfy with the conclusion, therefore, quash the order passed by CIT, the appeal filed by the assessee is allowed.
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