The Tribunal held that The phrase “prejudicial to the interests of the Revenue” has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. If an ITO acting in accordance with law makes a certain assessment, the assessment cannot be branded as “erroneous” by the Commissioner simply because, according to him, the order should have been written differently or more elaborately. The section does not visualise the substitution of the judgment of the Commissioner for that of the ITO who passed the order unless the decision is not in accordance with law. There is a fine though subtle distinction between “lack of inquiry” and “inadequate inquiry”. It is only in cases of “lack of inquiry” that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. When a  specific query had been raised by the Assessing Officer regarding the chargeability of the interest. The assessee stated that the moneys were advanced in order to reduce financial losses and the interest on tax refund was rightly offered as business income. The loans were stated to be granted out of funds borrowed for business purposes for the reason that projects had not started. It could not be said that the submissions had not been considered by the Assessing Officer while passing the quantum assessment order. There was due application of mind to the issue by the Assessing Officer and the claim was accepted after due consideration of the factual matrix rather than by merely relying upon the appellate order for the assessment year 2011-12.  ( Referred , CIT v. Amitabh Bachchan  (2016) 384 ITR 200 (SC)  Malabar Industrial Co. Ltd  v. CIT (2000) 243 ITR 83 (SC), CIT v. Vikas Polymers [2012 341 ITR 537 (Delhi)(HC) , CIT v. Max India Ltd. [2007 295 ITR 282 (SC) and Grasim Industries Ltd. v. CIT [2010 321 ITR 92 (Bom) (HC). Tribunal also held that  , Explanation 2 has been inserted by the Finance Act, 2015 in section 263 with effect from June 1, 2015 to declare that an order shall be deemed to be erroneous in so far as it is prejudicial to the interests of the Revenue, if in the opinion of appropriate authority, (1) the order was passed without making inquiries or verifications which should have been made ; (ii) the order is passed allowing any relief without inquiring into the claim ; (iii) the order is not in accordance with any direction or instructions, etc., issued by the Board under section 119 ; or (iv) the order was not in accordance with the binding judicial precedent. However, the Explanation would come into play only if the primary conditions, i. e., the order being erroneous and prejudicial to interests of the Revenue are fulfilled.( AY.2013-14)