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2019 (6) TMI 741 - AT - Income TaxRevision u/s 263 - as per CIT order passed by the AO in not adding “Provision for doubtful debts” debited to the profit and loss account to the Net profit while computing book profit u/s 115JB is erroneous and prejudicial to the interests of revenue - CIT took the view that the provision for doubtful debts is only a “prudential write off” and the same cannot be equated with “irrevocable write off” as envisaged in sec. 36(1)(vii) - HELD THAT:- As in the case of Grasim Industries Ltd. V CIT [2010 (2) TMI 4 - BOMBAY HIGH COURT] by taking into account the law laid down in Malabar Industrial Co Ltd [2000 (2) TMI 10 - SUPREME COURT] existence of twin conditions, viz., the assessment order should be erroneous and it should be prejudicial to the interests of revenue, should be shown in the revision order passed u/s 263 - 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 Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. In the instant case, the view taken by the AO in not adding the Provision for doubtful debts is supported by the binding decision rendered by Hon’ble Karnataka High Court in the case of Kirloskar Systems Ltd [2013 (12) TMI 9 - KARNATAKA HIGH COURT] . The order passed by Hon’ble Karnataka High Court is binding on the authorities below it. Accordingly, the view taken by the AO cannot be termed as erroneous and prejudicial to the interests of revenue. We are unable to sustain the revision order passed by Ld CIT. Accordingly we set aside the same. - Decided in favour of assessee.
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