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2019 (11) TMI 755 - AT - Income TaxRevision u/s 263 - applicability of provisions of section 115JB - appellant which is established under Banking (Companies Transfer Of Undertakings) Act, 1970 - the said issue was not in the show cause notice sent to appellant u/s 263 - whether CIT erred in invoking jurisdiction u/s 263 and directing AO to add back amounts in respect of bad and doubtful debts and investments which were written off and staff welfare expenses which were examined by AO and allowed in assessment? - HELD THAT:- If the assessment order was found to be erroneous as well as prejudicial to the interest of the revenue, the same would certainly become subject matter of revision u/s 263 as held by Hon’ble Supreme Court in Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] . The omissions on the part of AO, to carry out certain adjustments, as pointed out by Ld. Pr.CIT would certainly make the order erroneous as well as prejudicial to the interest of the revenue since Book Profits u/s 115JB has to be computed in accordance with the provisions of that Section. The failure to do so would render the order under consideration amenable to revisional jurisdiction u/s 263 read with Explanation-2 thereof. CIT, in our considered opinion, was clothed with ample supervisory powers to direct for redoing the assessment provided twin conditions as envisaged by Section 263 were fulfilled. Upon perusal of factual matrix as enumerated in preceding paragraphs, we find that the said conditions were duly fulfilled and the only recourse available to the revenue was revision u/s 263. Nothing on record would suggest that the stated issues were ever examined or verified by Ld. AO during assessment proceedings and a view was taken in the matter. Therefore, we decline to interfere in the directions given by Ld. Pr.CIT. Our adjudication as above, shall have no bearing on the issue of applicability of Section 115JB to the assessee, which is kept open since the same do not form subject matter of present appeal. Jurisdiction u/s 263 - assessee claimed deduction u/s 36(1)(viii) - HELD THAT:- Upon due consideration, we find that it was obligatory on the part of assessee to fulfil the conditions as envisaged by Sec. 36(1)(viii) before claiming deduction therein. Non-fulfillment of these conditions would certainly disentitle the assessee to claim the said deduction. The Ld. Pr.CIT has brought on record sufficient factual matrix to demonstrate that the assessee did not fulfil these conditions. Therefore, we are not impressed with the arguments of Ld.AR and find no infirmity in the directions issued by Ld. Pr. CIT. Accordingly, the appeal stands dismissed.
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