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2022 (4) TMI 1395 - HC - Income TaxRevision u/s 263 - CIT directing the AO to redo the assessment after verifying the valuation, made by the Assessee, of the Work in Progress ( WIP) disclosed in its return of income and further, the profit element contained therein - HELD THAT:- When the Assessee appeared before the CIT, the Assessee contradicted this assumption and contended that it had in fact accounted for the profit element in the WIP. There is nothing in the order of the CIT that indicates that the CIT formed a view that the above contention of the Assessee was erroneous by examining the order of the AO. As rightly pointed out by the ITAT in the impugned order, the AO had in fact called for the details of the closing WIP which had been furnished by the Assessee and had examined it. If the CIT was of the view that the AO had not examined this issue at all, it could then led to the conclusion that the order of assessment was erroneous. That is not, however, the case here. The CIT simply decided that even for verification of the correctness of the submission of the Assessee, the matter had to be remanded to the AO. Section 263 of the Act requires the CIT, after hearing the Assessee, to pass an order by making “such enquiry as he deems necessary”. The purpose of such an enquiry would be to arrive at a subjective view that the order of the AO was erroneous in so far as it is prejudicial to the interest of Revenue. Even if such enquiry may not be mandatory, there has to be some basis on which the CIT can form such a view. In the present case, the basis for forming a view that the profit element in the WIP was not accounted for by the Assessee is absent in the order of the CIT. Consequently, the Court is unable to find any error having been committed by the ITAT in interfering with the said order and setting it aside. No substantial question of law.
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