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2023 (4) TMI 336 - ITAT AHMEDABADRevision u/s 263 - bad debt on account of supply to the government department - Principal CIT held the assessment framed u/s 143(3) as erroneous insofar prejudicial to the interest of Revenue - As the assessee was merely an agent working on commission and therefore in terms of section 36(2) assessee was not entitled for such deduction on account of bad debts - HELD THAT:- As it is not the case that the AO has not made any enquiry. Indeed, the Pr. CIT initiated proceedings under section 263 of the Act on the ground that the AO has not made enquiries or verification which should have been made in respect of bad debts. It is not the case of the Pr. CIT that the Ld. AO did not apply his mind to the issue on hand or he had omitted to make enquiries altogether. In the instant set of facts, the AO had made enquiries and after consideration of material placed on record accepted the genuineness of the claim of the assessee. As per CIT there were certain necessary enquiries which should have been made by the AO during the assessment proceedings but not conducted by him, thus making the order of the AO erroneous insofar prejudicial to the interest of revenue - We make our observation that the learned PCIT has not invoked the explanation 2 of section 263 of the Act in the show cause notice about the same. Therefore, the opportunity with respect to the explanation 2 of section 263 of the Act was not afforded to the assessee. Thus, on this count the learned PCIT erred in taking the course of such provisions while deciding the issue against the assessee. Secondly, the learned PCIT has also not specified the nature and the manner in which the enquiries which should have been conducted by the AO in the assessment proceedings. Thus, in the absence of any specific finding of the learned PCIT with respect to the enquiries which should have been made, we are not convinced by his order passed under section 263 - Decided in favour of assessee.
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