TMI Blog2010 (3) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned CIT, by invoking power under s. 263 of the Act, directed the AO to revise the income computed under s. 115JA of the Act by making certain additions. Aggrieved against the order of the learned CIT, the assessee is in appeal before us. 3. The facts of the case are stated in brief. The assessee company, a public sector undertaking, is engaged in the business of ship building and ship repairs. The company had borrowed loans from Government of India for the purposes of its business in earlier years. During the year relevant to the asst. yr. 1999-2000 the assessee company received waiver order vide Ministry's letter No. SY11018/34/90-IISL(Vol. III), dt. 21st March, 1999 in respect of those loans. As per the said order the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k profit under s. 115JA of the Act by including the sum of ₹ 158.25 crores cited above. 3.1 Consequent to the order passed under s. 263 for the asst. yr. 1999-2000, learned CIT felt that the addition of above said sum of ₹ 158.25 crores will considerably reduce the amount of unabsorbed depreciation to be carried over in the next succeeding year, i.e., asst. yr. 2000-01. Consequently, the learned CIT-I also directed the AO, by invoking revision proceedings under s. 263 of the Act, to recompute the book profit for the asst. yr. 2000-01 also. Aggrieved by both the orders of learned CIT, the assessee is in appeal before us. 4. We have heard the parties and carefully perused the record. The power of learned CIT to revise the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout application of mind, would be an order falling in that category. The expression 'prejudicial to the interests of the Revenue', the Supreme Court held, it is of wide import and is not confined to a loss of tax. What is prejudicial to the interest of the Revenue is explained in the judgment of the Supreme Court (head-note) : 'The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated 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 po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and hence did not add the said waiver of principal portion while computing the book profit under s. 115JA of the Act. Hence the view taken by the AO is one of the possible views only. As held by Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 159 CTR (SC) 1: (2000) 243 ITR 83(SC), the order of AO in that kind of situation cannot be termed as erroneous. Hence the order passed by learned CIT under s. 263 of the Act for the asst. yr. 1999-2000 is liable to be quashed and we order accordingly. Since the revision order passed for the asst. yr. 2000-01 is a fallout of the revision order passed for asst. yr. 1999-2000 and the situation contemplated by learned CIT in the asst. yr. 2000-01 having been nul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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