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2021 (2) TMI 232 - HC - Income TaxRevision u/s 263 - allowability of the expenditure and carry forward of the losses - ITAT quashed the order of CIt - HELD THAT:- According to us, this is not a case where the Commissioner has not concluded that the order of the AO in the aforesaid circumstance was not erroneous or that it was not prejudicial to the interest of the Revenue. The only reason the Commissioner has used the expression “prima facie” is that the Commissioner, intended to offer the assessee a reasonable opportunity of being heard by the AO, in the course of a detailed inquiry accompanied by due application of mind by the AO, in pursuance of a remand order. This is also not a case where the Commissioner failed to undertake inquiry in the course of the exercise of revisional jurisdiction. It is only in pursuance to such inquiry that the Commissioner recorded a categorical finding that the assessee had not even claimed any fees from M/s. Paradeep Phosphates Ltd. in respect of any alleged technical or management services rendered by it. This is not a case of some plausible view but this is a case where the decision was a result of non-application of mind to the materials on record. Taking into consideration the reasoning of the CIT, we feel that the ITAT was not justified in interfering with the CIT's order, since, the twin conditions prescribed under Section 263 of the said Act were fulfilled. Besides, the CIT, by the impugned order, had quite fairly, granted the assessee an opportunity of being heard whilst directing the AO to verify the claim of the assessee in respect of the allowability of the expenditure and carry forward of the loss of ₹ 1,78,57,950/- in accordance with law. In similar circumstances in the case of Daniel Merchants P. Ltd. [2017 (12) TMI 476 - SUPREME COURT] upheld that order of the Commissioner which had directed the AO to carry a thorough and detailed inquiry. Decided in favour of the Revenue and against the assessee.
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