ITAT Visakhapatnam Judgments — November 2020

The Tribunal held that the Pr.CIT cannot invoke revision powers under Section 263 merely on a difference of opinion with the Assessing Officer, especially when the AO had made enquiries and taken a conscious decision. The assessment order was found to be neither erroneous nor prejudicial to the interest of the revenue.

The Tribunal held that when there are two possible views on the tax treatment of excess stock, and the Assessing Officer has taken a conscious decision, the Principal Commissioner cannot invoke revisionary powers under Section 263 merely due to a difference of opinion. The excess stock was considered business income.

The Tribunal held that since two views were possible regarding the treatment of excess stock (business income vs. unexplained investment) and the AO had taken a plausible view after due enquiry, the Pr.CIT could not invoke Section 263 to substitute his own view. The Pr.CIT's order was set aside.

The Tribunal held that the AO had applied their mind and made a conscious decision to treat the excess stock and cash as business income after considering the assessee's explanation. Therefore, the Pr.CIT's revision under Section 263 was not permissible as it was based on a difference of opinion.

The Tribunal held that the AO had applied his mind and taken a conscious decision regarding the other income, which was explained as write-off of paddy creditors and considered as business income. The revision by the Pr.CIT was based on a difference of opinion, which is not permissible under Section 263.