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2023 (11) TMI 753 - AT - Income TaxRevision u/s 263 by CIT - difference between the claim made by the assessee under the head General Expenses and disallowance made by the Ld. AO.- HELD THAT:- Case selected for complete scrutiny and assessment is completed after issue of notice u/s 143(2) and 142(1) of the Act along with questionnaire and after duly examining the submissions of the assessee. If that be so, it is rather naive to assume that it is a case in which assessment order is passed without making enquiries or verification which should have been made. The import of the Ld. PCIT’s order is that cent percent general expenses claimed by the assessee be disallowed as against 20% thereof as per the decision of the Ld. AO for the reason that complete details were not filed and that veracity thereof could not be verified. By no stretch of imagination, the decision of the Ld. AO to disallow 20% out of the claim of the assessee can be termed as “erroneous”. This is because the Ld. AO has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion. Such a conclusion cannot be termed to be erroneous because the Ld. PCIT does not feel satisfied with the conclusion as held by the Hon’ble Bombay High Court in CIT vs. Gabriel India Ltd. [1993 (4) TMI 55 - BOMBAY HIGH COURT] Erroneous order does not mean an order with which the Ld. PCIT is unable to agree as observed in Smt. Lila Chaudhary[2006 (3) TMI 112 - GAUHATI HIGH COURT]. Prejudicial to the interest of Revenue would mean an erroneous order which goes against the interest of revenue collection. Both the conditions i.e. erroneous as also prejudicial to the interest of revenue must pre-exist to enable the Ld. PCIT to exercise the power under section 263. The revisional power under section 263 of the Act is a quasi-judicial power hedged in with limitations and has to be exercised subject to the same and within its scope and ambit. The impugned order of the Ld. PCIT is not sustainable both on facts and in law. It is hereby vacated. Decided in favour of assessee.
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