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TMI Blog2019 (7) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT has set aside the impugned order only for the purpose of referring the same to the DVO. It is thus evident that the Pr. CIT was not sure about the correctness of the cost of construction or cost of fixed assets either shown in the project report or recorded in the books of account. When the AO has taken a broad view by accepting the cost of fixed assets as recorded in the books of account which were also supported by the valuation report, then the order of the AO cannot be held to be erroneous on the ground of lack of enquiry. It is settled position of law that when the AO has taken one of the possible views then the Pr. CIT cannot be permitted to invoke the provisions of Section 263 simply because he does not agree with the view taken by the AO. On examination of the reasoning given by the Tribunal, we do not find that there was any justification for the Pr. CIT to invoke the provisions of Section 263 on the specific plea that the order of the AO was prejudicial to the interest of the revenue. Every loss of the revenue as a consequence of the order of the AO cannot be treated prejudicial to the interest of the revenue. Where two views are possible and the AO has take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 3.52 crores. The same value including land cost was to be taken as full value of investment in fixed assets at ₹ 4,01,22,931/- which was neither taken by the assessee nor by the assessing officer. The said certificate was available on record while completing the assessment proceedings. However, the assessing officer had not taken proper cognizance on it and the assessing officer failed to deal with entire material on record including the valuation certificate of the surveyor-cum-valuer appointed by the bank. He did not give specific reasons why the valuation done by the surveyor-cum-valuer was not acceptable. There was a huge difference in the valuation done by the two valuers. Thus, the CIT was of the view that in such a situation the correct course of action would have been to refer the matter to the Departmental Valuation Officer (for short, the DVO ) under Section 142A of the IT Act. Ms. Parinitoo Jain, learned counsel for the revenue, has submitted that the Tribunal was not justified in setting aside the order passed under Section 263 of the IT Act because the project report, which was filed at the time of getting the loan, was prepared on 28.05.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the revenue and perused the impugned judgment as also the material on record, we find that the Tribunal has analytically examined all the arguments which were advanced on behalf of the revenue. The Tribunal has noted that the assessing officer during the course of assessment proceedings had issued a query letter dated 03.03.2015 wherein various queries were raised including the details of additions of ₹ 2,20,03,275/- as per the schedule of fixed assets of the audit report and copies of supporting books and vouchers for acquisition of the fixed assets were also called from the assessee. The assessing officer also asked the assessee to furnish the valuation report of the cost of construction as shown in the books of accounts. In response thereto, the assessee produced the valuation report dated 14.05.2013. The assessing officer also called for relevant documents submitted with the Baroda Rajasthan Gramin Bank including application form and other record in the shape of project report for availing the term loan for construction of the hotel building. All these records were supplied by the bank to the assessing officer along with the sanction letter dated 26.07.2011, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that even if the Principal Commissioner found that the decision of the assessing officer accepting the cost of construction/cost of fixed assets is contrary to the facts or otherwise not permissible as per the provisions of the IT Act, then the order of the assessing officer could have been reversed by giving a concluding finding on the issue. The Principal Commissioner has set aside the impugned order only for the purpose of referring the same to the DVO. It is thus evident that the Principal Commissioner was not sure about the correctness of the cost of construction or cost of fixed assets either shown in the project report or recorded in the books of account. In the facts of the case, when the assessing officer has taken a broad view by accepting the cost of fixed assets as recorded in the books of account which were also supported by the valuation report, then the order of the assessing officer cannot be held to be erroneous on the ground of lack of enquiry. It is settled position of law that when the assessing officer has taken one of the possible views then the Principal Commissioner cannot be permitted to invoke the provisions of Section 263 simply because he does not agre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of revenue. There must be some grievous error in the order passed by the Income Tax Officer, which might set a bad trend or pattern for similar assessments, which on a broad reckoning, the Commissioner might think to be prejudicial to the interests of Revenue Administration . In our view this interpretation is too narrow to merit acceptance. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income Tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. 10. The phrase prejudicial to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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