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2020 (3) TMI 627 - AT - Income TaxRevision u/s 263 - Default in computation of amount eligible for deduction u/s 80IA - assessee company had set off interest on Bank Overdraft account against FD interest income and the resultant interest income had been shown as other income chargeable to tax - HELD THAT:- AO has examined the issue of deduction claimed u/s 80IA for the power unit of the company. AO had examined the documents and explanations submitted before him.Thereafter the AO had taken one of the plausible view of netting up of interest expenses with interest income in view of the Supreme Court judgment in the case of ACG Associated Capsules (P) Ltd [2012 (2) TMI 101 - SUPREME COURT].Therefore, under these circumstances it cannot be said that the order of the AO is erroneous. There is an application of mind and a decision has been taken by the A.O., the assessment order cannot be said to be erroneous unless the same is potentially wrong or unlawful. For that we rely on the judgment of M/s. Malabar Industrial Co. Ltd. Vs CIT [2000 (2) TMI 10 - SUPREME COURT] Hon'ble Delhi High Court in the case of CIT Vs. Sunbeam Auto Ltd. [2009 (9) TMI 633 - DELHI HIGH COURT] drew the thin line of difference between "lack of inquiry" and "inadequate inquiry" and held that in the case of inadequate inquiry there cannot be 263 order. Therefore, without prejudice, even it is held that the AO had made inadequate inquiry then also powers under section 263 of the Act cannot be invoked under the facts and circumstances of the case. It is well established that the impugned order passed u/s. 143(3) dated 07.01.2016 was passed after calling for relevant information and after detailed examination of the same. The AO has passed the assessment order after calling for details on the issue and after considering the reply and documents after verification of the same and after due application of mind passed the assessment order, so it cannot be termed as erroneous and prejudicial to the interest of the revenue. So, the Ld. CIT’s finding fault with the order of the AO is erroneous as well as prejudicial to the interest of revenue on account of lack of inquiry has to fail. AO has adopted one of the courses permissible in law and even if it has resulted in loss to the revenue, the said decision of the AO cannot be treated as erroneous and prejudicial to the interest of the revenue as held by Hon’ble Supreme Court in Malabar Industries Ltd. vs. CIT [2000 (2) TMI 10 - SUPREME COURT] . Since the order of the Assessing Officer cannot be held to be erroneous as well as prejudicial to the interest of the revenue, in the facts and circumstances narrated above, the usurpation of jurisdiction exercising revisional jurisdiction by the Principal CIT is not sustaining in the eyes of law and, therefore, we are inclined to quash the very assumption of jurisdiction to invoke revisional jurisdiction u/s 263 by the Principal CIT. Therefore, we quash the order of the Principal CIT dated 06.03.2018, being ab initio void. - Decided in favour of assessee.
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