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2020 (2) TMI 931 - AT - Income TaxRevision u/s 263 - expenditure claimed for incurred but not reported (IBNR) and incurred but not enough reported (IBNER) - HELD THAT:- Adverting to the scope of section 263 of the Act. The prerequisite of the exercise of jurisdiction of section 263 by PCIT or CIT is that order of AO is erroneous in so far as prejudicial to the interest of revenue. The twin condition that order is erroneous and it is prejudicial to the interest of revenue must be fulfilled together. If anyone of them is absent- the recourse cannot be had to section 263. Further, if the Assessing Officer has adopted one of the courses permissible under the law and pass the assessment order, the same cannot be branded as erroneous unless the order passed by Assessing Officer is unsustainable in law. Thus, the twin conditions of section 263 are not fulfilled in the present case. We may reiterate here that though there is no reference in the assessment order about the examination of issues related with provisions for IBNR and IBNER. The assessee during the assessment furnished the relevant extract of IBNR and IBNER report for the year ended 31st March 2014 duly certified by the appointed actuary and copy of which was again furnished to the ld. PCIT. The ld. PCIT has not commented on the detailed reply furnished by assessee. Assessee while making submission has vehemently submitted that issue is debatable and when two views are possible, the revision of assessment order is not permissible. The Hon'ble Supreme Court in Max India Ltd.'s case 2007 (11) TMI 12 - SUPREME COURT] held that when two views are inherently possible, the provision of section 263 would not attract. Order passed by ld. PCIT under section 263 is set-aside. - Decided in favour of assessee.
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