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2013 (6) TMI 306 - HC - Income TaxRevision u/s 263 - change of opinion or not - trading additions - held that:- The concept of ‘prejudicial to the interest of revenue’ has to be correctly and soundly understood. It precisely means an order which has not been passed in consonance with the principles of law and which has in ultimate eventuate affected realization of lawful revenue. These two basic ingredients have to be satisfied as sine qua non for exercise of such power. We are in complete agreement with the finding of the Tribunal that since the credits appearing in the balance sheet of respondent did not relate to or were not availed in the previous year but was old balance of earlier years, no enquiry could have been validly undertaken by the AO regarding these credits. Further, with regard to the question of disallowance to be made under section 40A(2)(b) the Tribunal has held that CIT has not given any definite finding of error on this point in the order of AO and for this reason the order of AO also could not have been set aside under section 263 of the Act. - Decided against the revenue and in favor of assessee.
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