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2022 (9) TMI 1232 - AT - Income TaxRevision u/s 263 by CIT - a report from DDIT (Investigation) Kolkata with respect to price manipulation of penny stock but the AO did not consider the same - As per CIT, assessment order has been passed by AO without making inquiries or verification with respect to the deduction/exemption claimed under section 10(38) - HELD THAT:- Phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue. Now coming to the facts of the case before us, we note that the AO during the course of assessment proceedings, has made enquiries on this issue and after consideration of written submissions filed by the assessee and documents / evidence placed on record. Thereafter, the AO framed the assessment under section 143(3) of the Act accepting the return of income. It is not the case that the AO has not made enquiry. Indeed, the Pr. CIT initiated proceedings under section 263 of the Act on the ground that the AO has not made enquiries or verification which should have been made in respect of exemption claimed under section 10(38) of the Act. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts, the Ld. AO had made enquiries and after consideration of materials placed on record accepted the genuineness of the claim of the assessee. We thus find no error in the order of Ld. AO so as to justify the initiation of 263 proceedings by the Ld. Pr. CIT. assessee is thus allowed. No error in the assessment framed by the AO under section 143(3) causing prejudice to the interest of revenue. Thus, the revisional order passed by the learned principal CIT is not sustainable and therefore, we quash the same. Hence the ground of appeal of the assessee is allowed.
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