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2017 (6) TMI 1364 - AT - Income TaxRevision u/s 263 - valuation of work-in-progress (WIP) and profit element contained therein - HELD THAT:- We find that in the instant case, it is not in dispute that during the course of assessment, the AO called for details of closing work-in-progress, which was furnished by the assessee and was also examined by the AO. It is not the case of the ld Commissioner of Income Tax that the Assessing Officer has not examined the valuation of closing work in progress. That being so, in our considered view, CIT could have interfered with the order of the Assessing Officer u/s.263 only when it finds that the conclusion of the Assessing Officer is either erroneous in fact or erroneous in law. Without returning a clear finding that the order of the Assessing Officer was erroneous, the ld Commissioner of Income Tax could not interfere with such an order u/s.263 for making a fishing or roving enquiry. In the instant case, we find that CIT has simply observed that the submission of the assessee needs verification. As per the provisions of section 263, CIT could have either himself verified the submission of the assessee or could have got the submission of the assessee verified by other agencies and thereafter if he would have come to the conclusion that the order passed by the Assessing Officer in respect of the issue was actually erroneous then only he could have interfered with the order of the Assessing Officer. In the circumstances, we find that the order of the ld Commissioner of Income Tax in respect of this issue is bad in law and untenable. We, therefore, set aside the order of the Commissioner of Income Tax in respect of this issue. As per revised computation furnished by the assessee, its total income was ₹ 11,58,84,250/-, which was mistakenly taken by the Assessing Officer at ₹ 1,58,48,250/- and short levy of interest u/s.234C - In respect of second and third issue, mentioned herein above before us, ld A.R. of the assessee has candidly conceded that there was mistake in the order of the Assessing Officer. The only submission is that the error in the assessment order in respect of the said two issues could have been rectified by the Assessing Officer u/s.154 of the Act and, therefore, exercise of power u/s.263 of the Act was excessive. We find that as per provisions of section 263 of the Act, the ld Commissioner of Income Tax can exercise the jurisdiction when he finds that the order of the Assessing officer is erroneous and prejudicial to the interests of the revenue. Nowhere, the said section provides that if the error is apparent then powers conferred u/s.263 upon the Commissioner of Income Tax cannot be exercised. Hence, we do not find any force in the above submission of the assessee. Therefore, the order of the Commissioner of Income Tax in respect of above two issues are confirmed and the related grounds of appeal of the assessee are dismissed.
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