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2018 (11) TMI 1549 - ITAT BANGALORERevision u/s 263 - correctness of gross losses claimed and discrepancies in purchases made from Basma Jewellers - Held that:- In the assessment order passed under section 143(3) r.w.s. 153A, the AO has again examined year wise and unit wise details of the exports while dealing with the claim of deduction under section 10B of the Act. The business income of these units were also examined by the AO while dealing with the issue of set-off of brought forward losses before computing the income under section 10AA of the Act. In the original assessment order passed on 30.12.2010 and 30.12.2011, the AO has discussed the issue in detail with regard to income and losses of different units after obtaining information from the assessee. Since the issue of income and losses of different units were thoroughly examined by the AO in the original assessment proceedings, there was no need to readjudicate or to re-examine all these evidences in subsequent proceedings. Therefore, the AO has not discussed these issues in detail in subsequent proceedings framed consequent to the search. CIT may not agree with the conclusion of the AO but if the AO has applied his mind and adjudicated the issue in the light of legal provisions, the CIT cannot set aside the order of the AO simply by holding that the order of the AO is erroneous and prejudicial to the interest of the Revenue. It has been repeatedly held that for setting aside the order under section 263 of the Act, the CIT is required to establish that the assessment order is not only erroneous but also prejudicial to the interest of the Revenue. In the instant case, when the AO has examined the issue in detail after calling all requisite information from the assessee, the assessment framed cannot be called to be erroneous and prejudicial to the interest of the Revenue. We are therefore, of the view that the Revision Order passed by the CIT on this issue is without assuming the proper jurisdiction and we accordingly set aside his order on this issue. So far as the other issue regarding import made from Basma Jewellers is concerned, we find that this issue was not examined either by the AO or by the CIT(A). The assessee has raised the claim to have purchased the gold bar from Basma Jewellers and AO intended to make verification but could not get the report from the concerned authorities before the conclusion of the assessment. According to us, the right course would have been for the AO to make a necessary verification of the detailed evidences filed and thereafter to adjudicate the issue and submit the report to the CIT(A) and then CIT(A) should have adjudicated the issue by passing a detailed order. But unfortunately, the AO has not discharged his duties and recommended the matter for revision under section 263 to the CIT (Administration). In any case, though the action of the AO may not be proper but for this reason, the order of CIT passed under section 263 on this issue cannot be sustained as the issue was never examined either by the AO or the CIT(A).
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