Section 263 – CIT is empowered to modify the assessment order passed by AO in case, the order is found to be erroneous and prejudicial to the interest of revenue

Advertisement SBS Clothing (P) Ltd. Vs. DCIT (ITAT Mumbai) – In this case, there was 5-fold increase on account of payment of salary when there was no substantial increase in the turnover. The AO vide note dated 25.10.2007 had asked for reasons for exorbitant rise in salary to which assessee filed letter dated 19.11.2003 replied that the same was because of payment made to job workers in the earlier years whereas in the current year job workers had been taken on salary basis and salary had been paid to them. The order of assessment shows that the AO accepted the said claim of the ass...