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2006 (3) TMI 255 - AT - Income TaxValidity of revisionary order passed u/s 263 - Erroneous And Prejudicial Order - HELD THAT:- The words 'prejudicial to the interest of the Revenue', have not been defined but legally it is well settled that they only mean that order should not have been passed in accordance with the provisions of law, in consequence thereof the lawful revenue, due to the state, has not been realised or cannot be realised. Likewise, the expression "erroneous" has not been defined in the Act. But its plain meaning is that the term 'erroneous' involves error or deviation from law. Therefore, an assessment order made by complying the provision of law cannot be branded as erroneous by the CIT simply because according to him the same should have been passed or framed in a different manner. The assessee was purchasing goods on behalf of the parties and also sending goods to them after purchasing from his own account. The transaction of sale and purchase of wheat from M/s Vijay Trading from assessees own wheat account and appears in the copy of arath account of 1983-84. The assessee had purchased 110 bales of cotton for Rs. 7,12,280 from Oriental Cotton Traders, for and on behalf of the arathies and the same did not appear in the trading account of the assessee. The assessee had also filed datewise copies of arath account, which revealed datewise receipt of arath. The observation of the CIT that the assessee received arath of Rs. 6,90,738 while net income is Rs. 1,31,085 which was neither reflected in the audit report nor was enquired into by the AO, is not correct. The audit report contained P&L ale, copy of which is placed at p. 24 of the paper book and it shows total receipt of Rs. 9,30,58 (sic) from arath and GP in dealing in these commodities. Against this gross income, the assessee had shown the debit of Rs. 4,80,000 towards interest and Rs. 3,18,489 towards expenses like salary, telephone expenses, vehicle expenses and depreciation etc. Therefore, P&L a/c shows the net income of Rs. 1,31,085. The audit report contained all these details duly examined by the AO and, therefore, did not find any discrepancy therein. Thus, we come to conclusion that the ground taken by the learned CIT for revising the assessment order are not erroneous insofar as these are prejudicial to the interests of the Revenue. In the result, we quash the revisionary order passed u/s 263.
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