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2015 (9) TMI 693 - AT - Income TaxRevision u/s 263 - direction of the CIT to the AO to reframe the assessment to disallow the expenditure for payment of reinsurance premium to associated enterprises u/s. 40(a)(i) - Held that:- It can be safely concluded that the assessment order has not been made on an incorrect application of law. On facts, a perusal of the questionnaire issued alongwith the notice u/s. 142(1) of the Act dt. 18th August, 2008 shows that vide Question No. 29 the AO had sought details of all payments/expenses on which tax was deductible at source as per the provisions of the Act. Question No. 35 was with respect to details of amount remitted/sent abroad supported by RBI prescribed certificate issued by C.A u/s. 195 of the Act, 1961 and Question No. 37 was in connection with the transactions reported in the Form 3CEB. The assessee had filed a detailed reply in respect of these queries raised during the assessment proceedings. Thus the observation of the CIT that the payment to its associated enterprise has not been considered and examined by the AO for disallowance u/s. 40(a)(i) of the Act is incorrect in the light of the facts stated hereinabove. AO has taken a view which may be different from the view of the Ld. Commissioner and assuming that the view taken by the AO is a loss to the Revenue but the Hon’ble Supreme Court in Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME Court ) has held that “ every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of the Revenue,” for e.g. when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue or where two views are possible and the Income Tax Officer has taken one view with which the Ld. Commissioner does not agree, it cannot be treated as an order which is erroneous or prejudicial to the interest of Revenue unless the view taken by the Income Tax Officer is unsustainable in law. The Bombay High Court in CIT Vs Gabrial India Ltd., (1993 (4) TMI 55 - BOMBAY High Court) has held that “the decision of the Income Tax Officer could not be held to be erroneous simply because in his order, he did not make an elaborate discussion in that regard”. Thus the assessment order is neither erroneous nor prejudicial to the interest of the revenue. We, therefore, set aside the impugned order passed by the Ld. Commissioner u/s. 263 and restore that of the Assessing Officer passed u/s. 143(3) of the Act. - Decided in favour of assessee.
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