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2021 (1) TMI 579 - AT - Income TaxRevision u/s 263 - low net profit or loss shown from large gross receipts - VAT liability tantamount to violation of provisions of section 43B and the same should have disallowed by the Auditor himself from the calculation of net profit of business of the assessee - HELD THAT:- It was the duty of the id. Pr. CIT to at least verify, prima facie as to whether the input and output entries have been routed through the profit and loss account or not, as certified by the tax auditor. Without doing so, he could not have come to the conclusion that there was an error in the assessment order passed by the AO and that this error is prejudicial to the interest of the revenue. When VAT is not routed through the profit and loss account, the assessee could not have claimed this amount it as a deduction. VAT is not debited to the profit and loss account. When VAT is not claimed as a deduction, while computing the income, the question of disallowing the same u/s 44AB of the Act, does not arise. Thus, in our considered view, the id. Pr. CIT has committed an error in not examining the issue by himself before coming to the conclusion that there is an error which is prejudicial to the interest of the revenue, which requires revision, by invocation of powers u/s 263 - Decided in favour of assessee.
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