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TMI Blog2015 (7) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... eration i.e. AY 2007-08 was neither erroneous nor prejudicial to the interest of revenue. Moreover, the Ld. CIT in the impugned order has simply stated that the assessee furnished the written reply. However, he has not discussed the contents of the said reply and also did not bring on record how and in what manner the assessment order passed by AO was erroneous or prejudicial to the interest of revenue, he simply directed the AO to reexamine the issue after calling the lease documents and examining the same, which the AO had already considered and examined while passing the assessment order. - Decided in favour of assessee. - ITA No.892/Kol/2014 - - - Dated:- 23-1-2015 - N. K. Saini, AM And Mahavir Singh, JM,JJ. For the Appellant : Shri D S Damle, FCA For the Respondent : Shri Sanjay, ACIT ORDER Per: N K Saini,AM. This is an appeal by assessee against the order dated 17.03.2014 of Ld. CIT-IV, Kolkata. Following grounds have been raised in this appeal: 1. For that on the facts and in the circumstances of the case and in law, the Commissioner of Income (Ld. CIT) grossly erred in law and on facts in passing the order under Section 263 for the Assessment Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be cancelled and the order of the AO u/s 143(3)/144C be restored. 2. From the above grounds, it is gathered that only grievance of the assessee in this appeal relates to the action taken by the Ld. CIT u/s. 263 of the Income Tax Act, 1961 (hereinafter referred to as the Act in short). 3. Facts of the case in brief are that the assessee filed its return of income on 28.10.2007 showing total income at ₹ 308,72,50,100/-. The assessment, however, was framed u/s. 143(3) read with section 144(13) of the Act by the AO on 07.04.2011 determining the total income at ₹ 335,32,97,890/-. Thereafter, the Ld. CIT examined the assessment record and observed that the assessee had claimed a deduction of ₹ 4,01,65,333/- on account of lease rental paid for motor car taken on finance lease and the same was allowed in the assessment. He was of the view that the lease rentals paid for motor cars were required to be treated as capital expenditure. He, therefore, treated the assessment order as erroneous and prejudicial to the interest of the revenue. Accordingly, he issued a notice u/s. 263 of the act to the assessee. In response to the said notice, the assessee furnished a wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Projects Ltd. (2012) 343 ITR 329 (Del.) (iii) DIT Vs. Jyoti Foundation (2013) 357 ITR 388 (Del.) 5. In his rival submissions the Ld. Sr, DR supported the order of Ld. CIT and reiterated the observations made in the said order. 6. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, the whole controversy revolves around an issue which relates to the revisional power conferred on the Ld. CIT vide section 263 of the Act. 7. It is trite that an order can be revised only and only if twin conditions of 'error in the order' and 'prejudice caused to the Revenue co-exist. The subject of revision under section 263 of the Act has been vastly examined and analyzed by various Courts including the Hon'ble Apex Court. The revisional power conferred on the Ld. CIT under section 263 of the Act is of vide amplitude. It enables the Ld. CIT to call for and examine the records of any proceeding under the Act. It also empowers the Ld. CIT to make or cause to be made such an enquiry as he deems necessary in order to find out if any order passed by Assessing Officer is erroneous in so far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interest of the revenue and if the Assessing Officer has adopted one of the courses permissible under law or where two views are possible and the Assessing Officer has taken one view for which the Ld. CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the Assessing Officer is unsustainable under the law. (vi) If while making the assessment, the Assessing Officer examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income, the Ld. CIT, while exercising his power under section 263 of the Act, is not permitted to substitute his estimate of income in place of the income determined by the Assessing Officer. (vii) The Assessing Officer is required to exercise quasi-judicial power vested in him and if he exercise such power in accordance with law and arrives at a conclusion, such conclusion cannot be termed to be erroneous simply because the Ld. CIT does not feel satisfied wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the possible view, therefore, the assessment order passed by him for the year under consideration i.e. AY 2007-08 was neither erroneous nor prejudicial to the interest of revenue. Moreover, the Ld. CIT in the impugned order has simply stated that the assessee furnished the written reply. However, he has not discussed the contents of the said reply and also did not bring on record how and in what manner the assessment order passed by AO was erroneous or prejudicial to the interest of revenue, he simply directed the AO to reexamine the issue after calling the lease documents and examining the same, which the AO had already considered and examined while passing the assessment order. We are, therefore, considering the totality of the facts as discussed hereinabove are of the view that the Ld. CIT was not justified in setting aside the assessment order dated 07.04.2011 passed by AO u/s. 143(3) of the Act read with section 144(13) of the Act. Accordingly, the impugned order is set aside and the assessment order dated 07.04.2011 passed by AO is restored. 11. In the result, appeal of assessee is allowed. 12. Order is pronounced in the open court on 23.01.2015. - - TaxTMI - T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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