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2016 (9) TMI 554 - BOMBAY HIGH COURT

2016 (9) TMI 554 - BOMBAY HIGH COURT - TMI - Revision u/s 263 - Held that:- It is a settled position of law that the Commissioner of Income Tax can exercise his power under Section 263 of the Act only on satisfaction of twin conditions i.e. the order being erroneous and also prejudicial to the interest of the Revenue. In the present facts, the view taken by the Assessing Officer on detailed examination of the issues, as is evident from the questionnaire posed to the respondent assessee and the r .....

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October, 2009. Thus, it is not a case of no enquiry which could make the order erroneous. An inadequate enquiry would not make the assessment order vulnerable as being erroneous. The view taken by the Assessing Officer is a possible view and nothing has been shown to us which would even remotely suggest that the conclusion reached by the Assessing Officer was perverse and / or arbitrary on the basis of the evidence available before him. No substantial question of law - Income Tax Appeal No. 408 .....

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he facts and in the circumstances of the case and in law, the Tribunal was justified in setting aside the order u/s 263 of the I.T. Act, 1961? 3. The respondent assessee is engaged in the activity of an Insurance Advisor and derives income from Insurance Commission. During the previous year relevant to the subject assessment year, the respondent assessee disclosed receipt of commission at ₹ 73.55 lakhs and showed an amount of ₹ 52.50 lakhs as Commission paid. Thus, crediting an amoun .....

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tal income at ₹ 6.67 lakhs. 4. The Commissioner of Income Tax, in exercise of his powers under Section 263 of the Act by order dated 28th February, 2011, revised the assessment order dated 28th October, 2009 on the aforementioned two issues viz. amount of ₹ 52.50 lakhs paid as commission and also conveyance expenses, on the ground that the same was erroneous and prejudicial to the interest of the Revenue. The order dated 28th February, 2011 proceeded on the basis that the assessment .....

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both the issues regarding commission of ₹ 52.50 lakhs as well as the expenses claimed as conveyance allowance were subject matter of examination and consideration by the Assessing Officer during the course of the assessment proceedings leading to assessment order dated 28th October, 2003. Thus, the Tribunal notes that it is evident from the order of the CIT(A) dated 28th August, 2011 wherein he records the inquiry conducted by the Assessing Officer. Thus, the impugned order holds that the .....

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rder of the Tribunal. The order dated 28th August, 2011 of the Commissioner of Income Tax is reiterated to impugn the order of the Tribunal. 7. It is a settled position of law that the Commissioner of Income Tax can exercise his power under Section 263 of the Act only on satisfaction of twin conditions i.e. the order being erroneous and also prejudicial to the interest of the Revenue. In the present facts, the view taken by the Assessing Officer on detailed examination of the issues, as is evide .....

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r Section 263 of the Act inter alia observed as under : From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissi .....

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