TMI Blog2008 (6) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the AO has erred in accepting the huge sundry credits. As far as the requirement of prejudicial to the interest of revenue is concerned if the amount shown on sundry credits is not found verified and becomes part of the taxable income, the interest of the revenue is certainly prejudicially affected. As such, in our opinion, both the conditions were fulfilled in the present case and the CIT had committed no error of law in passing the order. We do not agree with the reasons given by the ITAT for quashing the order passed by CIT that heavens would have not fallen if one more opportunity was given to the assessee before passing the order. The question of giving further opportunity would have arisen only when the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the CIT directing the Assessing Officer to make assessment de novo after giving the opportunity to the assessee. 4. Brief facts of the case are that M/s. Kwality Hardware Agencies (respondent/assessee) deals with hardware items. It submitted its return of income for the assessment year 2001-02, showing a total income of ₹ 5,67,479. However, the Assessing Officer, after giving notice completed the assessment under section 143(3) of the Act, on income of the assessee at ₹ 6,13,310. The CIT, Dehradun, while perusing the order of the assessment of the Assessing Officer found that sundry credits worth ₹ 74,15,976 were not proved to be genuine by the assessee. And also that the advances of ₹ 1,00,000 from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT has erred in law in quashing the order passed by CIT. 6. On the other hand Sri S.K. Posti, learned counsel for the respondent/assessee referring to the cases of CIT v. Smt.D. Valliammal [1998] 230 ITR 695 (Mad.) and CIT v. Gabrial India Ltd. [1993] 203 ITR 1081 (Bom.) argued that for invoking jurisdiction under section 263 of Income-tax Act, 1961, the following twin conditions must be satisfied: (i) the order passed by Assessing Officer is erroneous; (ii) and said order is prejudicial to the interest of the revenue. It is true that the abovementioned two conditions are required to be fulfilled in exercise of powers conferred on CIT under section 263 of the Act. In our opinion the word erroneous used in the section includes the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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