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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
M. S. Sonak, Jitendra Jain, JJ.
Kec International Limited – Appellant
Versus
Deputy Commissioner Of Incometax – Respondent
JUDGMENT :
Jitendra Jain, J.
1. This Income Tax Appeal is filed, under Section 260A of the Income Tax Act, 1961, by the Appellant-Assessee for the assessment year 1988-1989 challenging an order of the Income Tax Appellate Tribunal (Tribunal) dated 8 October 2002, whereby the Appellant-Assessee’s appeal challenging jurisdiction of the Commissioner of Income Tax to invoke revisional power under Section 263 of the Income Tax Act, 1961 (“the IT Act”) was dismissed.
2. This appeal was admitted on 25 October 2004 on the following substantial question of law:-
“Whether on the facts and in the circumstances of the case and in law, the Tribunal erred in holding that the deduction of the decapitalised interest of Rs.317.63 lacs (Rs.396.94 lacs minus Rs.79.21 lacs) pertaining to earlier years while computing book profits under Section 115J had not assumed finality.”
3. By consent of both the parties, the substantial question of law is reframed to bring out the exact controversy:
"Whether the Tribunal was justified in upholding exercise of revisional power by the CIT u/s 263 of the Act and further was Justified in holding that observations made by the CIT in his order u/s 263 on the issue of Section
The Commissioner of Income Tax can exercise revisional powers under Section 263 if the assessment order is found to be erroneous and prejudicial to the revenue, necessitating a fresh examination of k....
The Commissioner of Income Tax can exercise revisional powers under Section 263 only if the assessment order is both erroneous and prejudicial to the revenue, requiring a thorough examination of the ....
The main legal point established in the judgment is the requirement for the AO to apply his mind to the explanation furnished by the assessee and to conduct a thorough inquiry before allowing the ass....
Assessment order under section 153A with prior section 153D approval cannot be revised under section 263 unless approval held erroneous and prejudicial to revenue.
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