Judgment ( 1. ) THIS is an income-tax reference made at the instance of assessee under Section 256 (1) of the IT Act by the Tribunal by an order passed in RA No. 83/85/ind/1997, dt. 13th Nov. , 1999 which in turn arise out of an order passed by Tribunal on 23rd May, 1997 in Interest-tax Appeal Nos. 1 and 2/ind/1991 to answer following question of law is said to arise out of the aforesaid appellate order : Whether, on the facts and the circumstances of the case, Tribunal was justified in holding that the order of assessment under Section 8 (2) of the Interest-tax Act, 1974, dt. 6th Jan. , 1989, is erroneous and prejudicial to the interests of the Revenue and the CIT has properly exercised his jurisdiction under Section 19 of the Interest-tax Act, 1974 ? ( 2. ) HEARD Shri R. T. Thanevala, learned Counsel for the applicant/assessee, and Shri R. L. Jain, learned senior counsel with Ku. V. Mandlik, learned Counsel for the non-applicant/revenue. ( 3. ) IN short, the question that arises for consideration in this reference is, whether CIT was justified in invoking his suo motu revisional powers conferred under Section 19 of the Interest-tax Act for setting aside of the assessment order dt. 6th Jan. , 1989 on the ground that it is not only erroneous but equally prejudicial to the interest of the Revenue. It is on the basis of this categorical finding having been recorded by the CIT which alone was called for and/or necessary for invoking the jurisdiction under Section 19 of the Interest-tax Act (akin to Section 263 of the IT Act ). The assessment order passed by AO came to be set aside, giving rise to making of this reference at the instance of assessee under Section 256 (1) of the Act to answer the question quoted supra. ( 4. ) THE case arises out of asst. yrs. 1985-86 and 1986-87. It is in these two years, the AO had granted benefit to assessee on two issues namely, interest on dead and doubtful sticky loans and on export subsidy received from Reserve Bank of India. In the opinion of CIT, both the issues ought not to have been decided in favour of assessee and since the claim on them was not only noticed to be erroneous, it was noticed to be prejudicial in the interest of Revenue. In the opinion of CIT, both the issues ought not to have been decided in favour of assessee and since the claim on them was not only noticed to be erroneous, it was noticed to be prejudicial in the interest of Revenue. It is on this basis, the CIT considered in the interest of Revenue to invoke his revisionary powers under Section 19 of the Act and after granting an opportunity to assessee, recalled the order of AO insofar as it related to the aforementioned issues. This is how and the manner in which the Tribunal decided the issue in question, in para 9 of their appellate order while upholding the order of CIT when challenged unsuccessfully by the assessee in appeal: Para 9-We have heard the rival submissions of the parties and carefully perused the orders of the authorities below and the documents placed on record. The judgments quoted by the assessee were also carefully perused by us and we agreed with the contentions of the assessee that for invoking the revisional jurisdiction under Section 19 of the Act, the AO (assessment order) was erroneous and prejudicial to the interests of Revenue. The contention of the assessee is also acceptable to us that the AO is not supposed to discuss each and every claim of the assessee but each and every case should be examined on its own facts and circumstances in the light of the available judicial pronouncements and the relevant provisions of law. In the instant case, there is no dispute that since 1960-61 the assessee has been adopting hybrid system and crediting the interest on sticky loan to suspense account and the said treatment was accepted by the Revenue. After relying upon the Tribunals order for the asst. yr. 1961-62 the assessee has filed the return under the Interest-tax Act for asst. yr. 1985-86 in which he did not offer the export subsidy and interest on sticky loans to tax nor did it furnish any note to this effect, but for the asst. yr. 1986-87 the assessee has furnished a note to the return and a covering letter in which the reasons of non-offering the interest on sticky loan to tax were given. The return for the asst. yr. yr. 1986-87 the assessee has furnished a note to the return and a covering letter in which the reasons of non-offering the interest on sticky loan to tax were given. The return for the asst. yr. 1986-87 was filed on 18th June, 1986 after the delivery of the landmark judgment of the Supreme Court in the case of State Bank of Travancore (supra) in which their Lordships have held that the interest on sticky loans is exigible to tax if the assessee has been maintaining the books of account by accepting the mercantile system. It appears to us that this judgment prompted the assessee to give a note about his treatment to the interest on sticky loans. Besides, the assessee has also filed two letters in which he has justified his claim of non-offering the export subsidy and interest on sticky loans to tax. The assessment order was passed on 6th Jan. , 1989 after the assessment order passed under the IT Act for the asst. yr. 1985-86 in which the claim of the assessee with regard to the interest on sticky loans was rejected by the AO. This fact cannot be ignored that the assessment orders under the IT Act and under the Interest-tax Act for the asst. yr. 1986-87 were passed by the same AO, Mr. Swatantra Kumar. In the assessment order under the IT Act the claim of the assessee was rejected, but in the assessment order under the Interest-tax Act the claim of the assessee was allowed. No reasons are available on record as to why the same AO has taken a contrary view at the interval of two months in two assessment orders under different Acts for the same assessment year. This factor cannot be ignored that in the earlier asst. yrs. 1983-84 and 1984-85 the CIT (A) had disallowed the claim of the assesses with regard to interest on sticky loans vide its order dt. 16th March, 1988 against which the appeal of the assessee was pending before the Tribunal at the time when the assessment order was passed by the AO under the Interest-tax Act. When there is overwhelming evidence on record that the allow ability of the claim of interest on sticky loans is a debatable issue, the claim of the assessee should not have been allowed without making any discussion in the assessment order by the AO. When there is overwhelming evidence on record that the allow ability of the claim of interest on sticky loans is a debatable issue, the claim of the assessee should not have been allowed without making any discussion in the assessment order by the AO. No doubt the AO is not supposed to discuss each and every claim of the assessee in detail but he cannot shut his eyes over the surrounding evidence and circumstances and the material on record while passing an assessment order. It is also brought to our notice that the set aside assessment order has been passed in which the claim of the assessee was rejected which was confirmed by the CIT (A) and is still pending before us for disposal. The facts and circumstances of the case lead us to deduce that the AO has not applied his mind and we are, therefore, of the view that the order of assessment is erroneous and prejudicial to the interest of the Revenue and the CIT has properly exercised his jurisdiction. Accordingly, we uphold the order of the CIT and dismiss the appeals of the assessee. ( 5. ) IN our considered opinion, the CIT seems to be right in invoking the powers of revision under Section 19 ibid. The Tribunal has gone into the question as to whether AOs order was erroneous and prejudicial to the interest of Revenue and has come to a definite conclusion on facts that it was. It was then the Tribunal upheld the order of CIT as being in accordance with law. ( 6. ) IN our opinion, the manner in which the Tribunal has examined the question on facts which was equally necessary for the purpose of satisfying the legality and proprietary of the order of CIT cannot be faulted with in our reference jurisdiction on legal side. We have examined the issue in our limited reference jurisdiction as a reference Court rather than the appellate Court and we find no error in the approach of the Tribunal while deciding the issue against the assessee and in favour of Revenue. Once the finding of an order being erroneous and prejudicial for the interest of Revenue is recorded by the CIT on facts of case, then it is the duty of appellate Court i. e. , Tribunal to examine the said question as an appellate Court and further record its finding. Once the finding of an order being erroneous and prejudicial for the interest of Revenue is recorded by the CIT on facts of case, then it is the duty of appellate Court i. e. , Tribunal to examine the said question as an appellate Court and further record its finding. ( 7. ) WE are thus, unable to hold in favour of assessee on the question referred to this Court. ( 8. ) IN view of aforesaid, we answer the question against the assessee and in favour of Revenue (CIT ). In other words, we answer the question by answering that Tribunal was justified in holding that the order of assessment framed under Section 8 (2) of the, Interest-tax Act, dt. 6th Jan. , 1989, is erroneous and prejudicial to the interest of Revenue and CIT has properly exercised his jurisdiction under Section 19 of the Act. No costs.