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2015 (9) TMI 1351 - AT - Income TaxRevision u/s 263 - Claim of deduction in accordance with the provision of section 36 (1)(viia) - Held that:- Now a settled position of law that if the assessment order is passed by the A.O. without enquiry or without application of mind, the assessment order is erroneous and prejudicial to the interest of the revenue and in that situation; the CIT gets the jurisdiction to pass revisionary order u/s 263. Learned CIT has observed that it would be factually incorrect to hold that the AO made the assessment after enquiry and the order of the AO is found to have been passed without enquiry. In the written submissions of the assessee there is no objection raised regarding this specific finding of CIT and hence, we find no infirmity in the order of the CIT because if the assessment order has been passed by the A.O. without enquiry, the same is erroneous. Regarding this aspect that it is prejudicial to the interest of revenue or not, we find that the AO has allowed deduction of ₹ 2.84 Crores claimed by the assessee in the revised return of income as business loss and as per written submissions of the learned AR of the assessee as reproduced above, the assessee has not debited the same in the Profit & Loss Account but the same was partly out of Statutory Reserves and partly out of Opening Credit balance of Profit & Loss Account. Generally business loss is adjusted against profit of the present year and Capital Loss is adjusted against Reserves and/or Opening Balance of Profit & Loss Account. When this position is seen in the light of this fact that no enquiry was made by the A.O., there remains no doubt that the action of the A.O. in allowing deduction is prejudicial to the interest of revenue also. Learned CIT has not decided the issue either way and he has directed the A.O. to pass the assessment order de novo after proper examination of the issue and after affording a fair and reasonable opportunity of being heard to the assessee. No infirmity in the impugned order of the CIT and hence, we decline to interfere therein - Decided against assessee.
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