The Income Tax Appellate Tribunal examined the revisionary powers u/s 263 regarding the allowability of...

The Income Tax Appellate Tribunal examined the revisionary powers u/s 263 regarding the allowability of deduction claimed u/s 36(1)(iii). The Assessing Officer (AO) called for information on interest expenses, loans, advances, and the accounting method followed. The Tribunal held that the AO applied their mind, verified the facts, and considered one of the possible views based on the information provided. Mere non-discussion of a query responded to by the assessee in the assessment order does not imply non-application of mind. The Tribunal concluded that the Principal Commissioner's order did not satisfy the twin conditions of being erroneous and prejudicial to revenue interests. Consequently, the Tribunal set aside the Principal Commissioner's order and allowed the assessee's appeal. .....

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