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TMI Blog2015 (4) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal is filed by the assessee against the order of CIT(A), Panaji, dtd. 06.03.2014 for assessment year 2009-10 by taking the following effective grounds of appeal:- "1. The Commissioner of Income-tax, Panaji - Goa (hereinafter referred to as the („CIT‟) erred in invoking jurisdiction under section 263 of the Income Tax Act, 1961 („Act‟), without appreciating that the assessment order under section 143(3) passed by the Assessing Officer ('AO') was neither erroneous nor prejudicial to the interest of the revenue. 2. The CIT erred in directing the AO to decide whether the expenses, aggregating to ₹ 1,78,57,950/- are allowable as business explanation/ contention of the appellant, verifying the Memorandum and Articles of Association of the Company and nature of receipts and expenses, ignoring the fact that AO made detailed inquiries during the course of the assessment proceedings and only after due satisfaction to the enquiries, allowed various expenses while computing the income from business or profession. 3. Without prejudice to the above, in an unlikely situation of upholding the disallowance of expenses on the alleged ground that the expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g cases:- (1) Malabar Industrial Co. Ltd. [(2000) 243 ITR 83] (SC) (2) CIT vs Vikas Polymers [(2012) 341 ITR 537 (Delhi)] (3) S.Murugan vs.ITO[(2012)135 ITD 527(ChennaiTribunal] (SC) (4) Gabriel India Ltd. [(1993) 203 ITR 108 (Bom)] (5) Hero Briggs & Stratton Auto Ltd vs CIT [(2007) 161 Taxman 127 (Delhi Tribunal)] (SC) (6) Pratap Footwear vs ACIT [(2003) 1 SOT 638 (Jabalpur Tribunal (SC). 4. It was submitted that the assessing officer has asked for various details / information and documents vide various notices dated 24.8.2010 and 13.6.2011 which were duly furnished. The assessee has duly submitted the note in respect of expenses claimed by him under the head 'income from business or profession' amounting to ₹ 1808896000/-. The assessing officer concluded that these expenses have been incurred to keep the company in operation and after elaborate discussion in the assessment order, the assessing officer allowed the said expenditure which appears to be one of the possible view in law. Thus the assessment was completed after considering all facts and information. This is not a case of lack of inquiry. There is no requirement to pass a detail assessment order. The CIT ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment, or cancelling the assessment and directing a fresh assessment. Explanation.-For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, - (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include - (i) an order of assessment made by the Assistant Commissioner or Deputy Director or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the power or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o cause or make such enquiries as he deems necessary. Fourthly the C.I.T. u/s 263 can enhance or modify the assessment. 8. It is a settled law that for invoking the provisions of section 263 the CIT must satisfy both the conditions that the order passed by the Assessing Officer is erroneous and also that it is prejudicial to the interest of the revenue. If one of the conditions is absent, the order passed by the CIT by invoking the provisions of section 263 will not be legal. The term 'erroneous' has not been defined under the Income-tax Act but it is well settled that each and every type of mistake or error committed by the Assessing Officer cannot be said to be an error. An order can be said to be erroneous if there is an incorrect assumption of fact or incorrect application of law in the order passed by the Assessing Officer. If the Assessing Officer after making the enquiries and examining the records, taken one of the possible views, it cannot be said that the order passed by the Assessing Officer is erroneous. 9. It is also apparently clear that the power of the CIT are three fold. One, prior to the initiation of the proceedings u/s 263. Second, at the time of initiation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome, query was raised at point no.11. The assessee submitted about the legitimacy of the expenses claim as well as about the remuneration of the Director of subsidiary company amounting to ₹ 134.08 lakhs. The nature of the expenses claimed by the assessee and the expenses were not allowed against the interest on fixed deposits amounting to ₹ 2,31,010/-.The assessing officer at page 2 of the order has clearly stated that the assessee is engaged to carry on the business as investment company and to acquire, hold and otherwise deal in shares, stocks, debentures, bonds and other securities. The assessee has not earned income being exempt. The expenses incurred by the assessee were duly explained relating to the business of the assessee. The assessing officer duly treated all the expenses to be the business expenditure and thus computed the loss. It is not a case where the expenses allowed by the assessing officer were attributable to the income arises from the investment. Jurisdiction u/s 263 has been exercised on the basis that all expenses charged to the profit and loss account is attributable to the investment in shares. Once the assessing officer has examined the nature ..... 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