9911796707
TMI Blog2013 (1) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... fit. The assessee’s argument that such kind of changes is permissible may also be right. However, the scope of tribunal while dealing appeals filed against revision orders passed u/s 263 is limited. It was not shown as the AO did make enquiry on this issue and has taken a plausible view by duly applying his mind. Also no discussion was find on the impugned issue in the assessment order. It was also not shown that the view entertained by the CIT is not sustainable in law. In fact, the CIT has only pointed out that the AO has not made proper verification of the impugned issue and the administrative Commissioner has not expressed any opinion or given any direction about specific treatment of the impugned issue. He has only directed the AO t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year under consideration, the assessee valued the rejected castings at the value of raw materials only, i.e., the estimated over heads cost was not added to the value. The Ld CIT noticed that the change in the method of valuation has resulted in the reduction of profit by Rs.74,15,785/-. Since the AO did not examine the tax implications on the change in the method of valuation of rejected castings, the Ld CIT initiated revision proceedings u/s 263 of the Act. 3. Before Ld CIT, the assessee contended that the AO has applied his mind on the impugned issue. The Ld CIT did not accept the said contentions and opined that the failure on the part of the AO to make necessary enquiries would render the assessment order erroneous. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licy which has a material effect in the previous year or in the years subsequent to the previous year shall be disclosed. The impact of, and the adjustments resulting from, such change, if material shall be shown in the financial statements of the period in which such change is made to reflect the effect of such change. Where the effect of such change is not ascertainable, wholly or in part, the fact shall be indicated. If a change is made in the accounting policies which has no material effect on the financial statements for the previous year but which is reasonably expected to have a material effect in any year subsequent to previous year, the fact of such change shall be appropriately disclosed in the previous year in which the change is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the total income, would render the assessment order erroneous and prejudicial to the interest of the revenue. The Ld D.R drew our attention to the various case law relied upon by the Ld CIT in the revision order. 6. We have heard the rival contentions and also perused the record. Before proceeding further, we feel it pertinent to discuss on the legal position relating to the revision proceedings carried out under section 263 of the Act. The Hon'ble Bombay High Court, in the case of Grasim Industries Ltd. V CIT (321 ITR 92) has discussed about the scope of provisions of section 263 as under: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interests of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. The principle which has been laid down in Malabar Industrial Co. Ltd. [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch kind of changes is permissible may also be right. However, the scope of tribunal while dealing appeals filed against revision orders passed u/s 263 of the Act is limited. It was not shown to us that the AO did make enquiry on this issue and has taken a plausible view by duly appliying his mind. We also do not find any discussion on the impugned issue in the assessment order. It was also not shown to us that the view entertained by the Ld CIT is not sustainable in law. In fact, the Ld CIT has only pointed out that the AO has not made proper verification of the impugned issue and the administrative Commissioner has not expressed any opinion or given any direction about specific treatment of the impugned issue. He has only directed the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
