TMI Blog2016 (2) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... would make the assessment erroneous and pre-judicial to the interest of the revenue. Further, in our considered opinion Rule 8D cannot be invoked mechanically. It can be invoked only when the A.O is not satisfied with the computation of disallowance made by the assessee. In the case in hand, we find that the A.O was satisfied as similar disallowances were accepted in earlier years. Considering these facts in totality, the action of the ld. CIT on this issue is not justified. Claim of set off of brought forward business loss/unabsorbed depreciation of earlier years when there was no loss available - Held that:- While filing the return of income for A.Y. 2008-09, the assessee has reduced the book profit by ₹ 21,77,733/- being adjust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 1. This appeal by the assessee is preferred against the order of Ld. CIT-2, Surat dated 23.03.2015 made u/s. 263 of the Act. 2. The assessee has challenged the jurisdiction of the ld. CIT alleging that the assessment order made u/s. 143(3) of the Act dated 20.03.2013 is neither erroneous nor pre-judicial to the interest of the revenue. The ld. counsel took us to the relevant documentary evidences which are placed in the paper book stating that the issues raised by the ld. CIT in his order considering them as erroneous in as much as pre-judicial to the interest of the revenue are baseless, since the A.O has examined all the issues in the assessment order made u/s. 143(3) of the Act. 3. The D.R. strongly relied upon the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner has rightly assumed the power u/s. 263 of the Act. The Hon ble Supreme Court in Malabar Industrial Co. Ltd. 243 ITR 83 has laid down the following ratio:- A bare reading of section. 263 of the Income-tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suo motu under ii, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the Income-tax Officer is erroneous but is not prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed opinion Rule 8D cannot be invoked mechanically. It can be invoked only when the A.O is not satisfied with the computation of disallowance made by the assessee. In the case in hand, we find that the A.O was satisfied as similar disallowances were accepted in earlier years. Considering these facts in totality, the action of the ld. CIT on this issue is not justified. 7. Coming to the second contention of the Commissioner which relates to the claim of set off of brought forward business loss/unabsorbed depreciation of earlier years when there was no loss available. 8. In assessment year 2007-08, the assessee became a sick company and went to the BIFR and as per the scheme of arrangement, the BIFR directed the assessee to write off of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with the One Time Settlement (OTS) terms, the Company has paid off ₹ 40.83 crores to the secured lenders towards the aggregate liability (principal and interest) amounting to ₹ 81.77 crores. As per the approved rehabilitation scheme the dues of the secured creditors have been completely settled and the secured creditors have waived off the aggregate balance ₹ 40.94 crores of principal, interest, penal interest and other charges upon repayment of OTS amount. The promoters have contributed ₹ 3.67 crores towards additional working capital. In accordance with the rehabilitation scheme the Company has issued 155000000 fresh equity shares of ₹ 1/- each fully paid up on a preferential basis in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich can be found at page 200 of the paper book. 13. We fail to understand how a similar adjustment made during the year under consideration can be considered as erroneous and prejudicial to the interest of Revenue. In our considered opinion, the action of the Commissioner is without jurisdiction. As discussed hereinabove, we do not find any error in the assessment order which could make it erroneous and pre-judicial to the interest of the Revenue. 14. The AO has taken a view which may be different from the view of the Ld. Commissioner and assuming that the view taken by the AO is a loss to the Revenue but the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. (supra) has held that every loss of revenue as a consequence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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