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TMI Blog2008 (3) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue. The CIT ought not to have withdrawn the set off granted for unabsorbed depreciation of Rs. 2,00,987 against business income. 3. The brief facts of the case are that the original assessment for the year under consideration was completed under section 143(3) read with section 147 on 10-2-2003. On perusal of record the CIT noticed that during the previous year relevant to 2000-01, the assessee had two units - one unit was eligible for deduction under section 80-IA and the other unit was not eligible for deduction under section 80-IA. The assessee computed its total income as under:- Rs. Rs. Business and Profession 80,88,094 Less: Deduction under Chapter VI-A Donation to PM's Fund 9 Under section 80-IA 78,87,107 Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80G - 5,009 5,009 Total Income Nil 1,95,978 1,95,978 5. The CIT accordingly noticed that the Assessing Officer has allowed deduction of Rs. 18,66,621 instead of correct deduction of Rs. 16,65,634 under section 80-IA. The CIT found that the order passed by the Assessing Officer dated 10-2-2003 was erroneous insofar as it is prejudicial to the interest of the Revenue. The CIT after considering the assessee's submission revised the Assessing Officer's order passed under section 143(3) read with section 147 on 10-2-2003 and directed the Assessing Officer to assess income of the assessee at Rs. 1,95,978 under the normal provisions of the Act and subjected the same to tax instead of Rs. 60,711 under section 115JA. 6. The ld. A.R. su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 9. From plain reading of sub-section (1) of section 263, it is clear that the power of suo moto revision can be exercised by the Commissioner only if, on examination of records of any proceedings under this Act, he considers that any order passed by the Assessing Officer is "erroneous insofar 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 interest of the Revenue. If one of them is absent section 263 cannot be invoked. The said provision cannot be invoked to correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written or is to be calculated in a different manner. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, to pass the order, unless the decision is held to be erroneous. Cases may be visualized where Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of records, may be of the opinion that the estimate made by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration we find that original completed assessment was reopened under section 147 on the reasons that the assessee-company did not adjust unabsorbed depreciation during the year, in view of the judgment of Hon'ble Bombay High Court in the case of CIT v. Gannon Dunkerley & Co. Ltd. [1995] 216 ITR 708 . In the reassessment proceeding the Assessing Officer also asked the assessee to explain why the unabsorbed depreciation should not be adjusted against profit before allowing deduction under section 80-IA in view of the judgment of Hon'ble Supreme Court in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 . The Assessing Officer has gone through both the above judgments and noticed that the judgment of Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion than the one of the Assessing Officer but under the same set of facts in such cases, the order of the Assessing Officer cannot be booked as erroneous. The Assessing Officer has passed the original order after necessary examination and after considering the relevant provisions and judicial decisions such judicial order of the Assessing Officer cannot be held to be erroneous order. When the order of the Assessing Officer is not erroneous order the CIT is not empowered to invoke section 263 as out of the twin conditions laid down in section 263 one of the conditions, that the order of the Assessing Officer is erroneous is missing. In the light of the above discussion we are of the considered view that the order of the CIT is not sustainabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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