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2019 (7) TMI 989 - HC - Income TaxRevision u/s 263 - failure of AO to not referring the matter to the DVO for valuation of construction work - HELD THAT:- It was not a case of complete lack of enquiry on the part of the AO rather the AO has conducted a detailed enquiry on this issue and called for all the relevant records from the bank for the purpose of examining the cost of construction of the hotel building. It could be a case of inadequate enquiry so far as not referring the matter to the DVO, however, it was not mandatory for the assessing officer to refer the valuation to the DVO once the AO was satisfied with the cost of construction and cost of fixed assets as recorded in the books of account. Tribunal further held that even if the Pr. CIT found that the decision of the AO accepting the cost of construction/cost of fixed assets is contrary to the facts or otherwise not permissible as per the provisions of the IT Act, then the order of the AO could have been reversed by giving a concluding finding on the issue. Pr. CIT has set aside the impugned order only for the purpose of referring the same to the DVO. It is thus evident that the Pr. CIT was not sure about the correctness of the cost of construction or cost of fixed assets either shown in the project report or recorded in the books of account. When the AO has taken a broad view by accepting the cost of fixed assets as recorded in the books of account which were also supported by the valuation report, then the order of the AO cannot be held to be erroneous on the ground of lack of enquiry. It is settled position of law that when the AO has taken one of the possible views then the Pr. CIT cannot be permitted to invoke the provisions of Section 263 simply because he does not agree with the view taken by the AO. On examination of the reasoning given by the Tribunal, we do not find that there was any justification for the Pr. CIT to invoke the provisions of Section 263 on the specific plea that the order of the AO was prejudicial to the interest of the revenue. Every loss of the revenue as a consequence of the order of the AO cannot be treated prejudicial to the interest of the revenue. Where two views are possible and the AO has taken one view with which the Pr. CIT did not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the AO was not at all possible in law. - Decided in favour of assessee.
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