TMI Blog2009 (7) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... 000 - TMI - 5786 - SUPREME Court) Revision - Held that:- when two views were inherently possible and that ITO has taken one view then even if the CIT doesn't agree with the view taken by the AO, the assessment order cannot be treated as erroneous order prejudicial to the interest of the Revenue, unless the view taken by the ITO is unsustainable in law. Unless an assessment order is both erroneous as well as prejudicial to the interest of the Revenue, the CIT doesn't have jurisdiction to revise the assessment order under section 263. order of the CIT under section 263 is not sustainable in law and accordingly set aside, appeal of the assessee is allowed. - ITA NOS. 2233 & 6161 (MUM.) OF 2006 - - - Dated:- 15-7-2009 - SHRI S.V. MEHROTRA, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly, he issued notice under section 263 and the assessee filed various replies and explanations on 18th Jan., 2006 and 22nd Feb., 2006. 3. The assessee inter alia submitted that the loss of Rs. 39,90,279 was allowed by the AO after discussion and due consideration of the facts submitted before him during the course of assessment proceedings. The AO had raised specific queries regarding debit and purchase of shares and debentures of Rs. 42.3 lakhs and the assessee had furnished all the details called for. The assessee relied on the decision of Bombay High Court in the case of CIT v. Gabriel India Ltd. [1993] 203 ITR 108. 4. After considering the reply of the assessee, the CIT concluded that the assessee himself had shown a profit on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is less as reflected in the balance sheet. In the circumstances the CIT erred in revising the assessment order. 6. We find that the assessee has clearly exhibited the purchase value of shares and stocks as a debit to the P L a/c. The closing stock has been valued at cost or market value. AO could have hardly ignored this and would certainly have applied his mind on this issue while making an assessment under section 143(3). The assessee has also pointed out that there was specific query from the AO regarding purchase of shares which has been answered by the assessee. Whatever may have been the treatment of shares by the assessee for the earlier years, the assessee has not claimed profit on sale of shares as capital gains for the current ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prejudicial to the interests of the Revenue. For example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the ITO is unsustainable in law." (p. 88) 8. This view has been reiterated by the Apex Court in the case of CIT v. Max India Ltd. [2007] 295 ITR 282, wherein the Apex Court held that when two views were inherently possible and that ITO has taken one view then even if the CIT doesn't agree with the view taken by the AO, the assessment order cannot be treated as erroneous order ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
