TaxTMI 
TaxTMI 
2020 (11) TMI 167
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.... 2. The Ld. Pr. CIT erred in passing revision order u/s. 263 of the Act without appreciating that the reassessment order passed by the Ld. AO was neither erroneous nor prejudicial to the interest of the revenue and hence, the order passed under section 263 of the Act is bad-in-law and liable to be quashed. 3. The Ld. Pr. CIT failed to appreciate that the original assessment was completed u/s.143(3) of the Act and thereafter the assessment was reopened u/s. 148 of the Act based upon the information received and reasons recorded regarding alleged bogus purchases made from certain concerns operated by one Shri Bhanwarlal Jain and all the related details were called for, enquiries were made by the AO and after verifying and examination of the records and facts and circumstances of the case, made certain estimated addition, it cannot be said that the order of the AO is erroneous and thereby prejudicial to the interest of the revenue and hence, the order passed u/s.263 of the Act is bad in law and liable to be quashed. 4. The Ld. Pr. CIT failed to appreciate that directions given to the AO in para 6 of 263 order are already carried out by the AO in the reassessment proceedings and....
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....thout any justification or reason stated in the order. Hence this assessment was erroneously completed under 143(3) ) r.w.s. 147. 4. The AO did not examine all the reasons for which the case was selected in scrutiny, thus leading to income of the assessee being under assessed. As such the assessment order passed by Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue on this issue and therefore need to be revised under the provision of Sec.263 of the I.T act. 5. In this regard, an opportunity is being accorded to you to show cause as to why proceedings u/s.263 of the I.T. Act should riot be initiated against you and assessment order passed be revised to as mentioned above. 6. Your reply must reach this office on or before 21-03-2018. If you want to be heard personally, you may appear before the undersigned on 22-03-2018 at 11.30 A.M. at R.No. 516 Aayakar Bhavan, Marine Lines, Mumbai-400020. In case of failure to comply with the terms of the show-cause notice, the assessment will be revised as per the materials available on the record and in accordance with the Law." 5. The assessee replied the said notice by submitting that there is no....
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....ed that even during the reassessment proceedings he made specific enquiry about the alleged bogus purchases by issuing notice under section 133(6) of the Act which were duly responded by the suppliers. The Ld. A.R. submitted that the reassessment as framed by the AO in accordance with the various judicial precedents of the jurisdictional High Court in the case of CIT vs. Nikunj Exim Enterprises Pvt. Ltd. (2015) 372 ITR 619 (Bom.) and Babulal C. Bhurana vs. ITO (2006) 282 ITR 251(Bom). The Ld. A.R. also referred to the decision of CIT vs. Simit P. Sheth (2013) 356 ITR 451 (Guj) wherein it has been held that additions on the basis of estimation are to be made where purchases were held to be made from the grey market. The Ld. A.R. submitted that unless the view taken by the AO is unsustainable in law or against the facts of the case, the revisionary proceedings under section 263 by the Ld. PCIT is invalid and without jurisdiction. The Ld. A.R. relied on the decision of Grasim Industries Ltd. vs. CIT (2010) 321 ITR 92 (Bom.) and CIT vs. Nirav Modi (2017) 390 ITR 292 (Bom.). The Ld. A.R. also submitted that SLP filed by the Revenue before the Hon'ble Supreme Court also stands dismissed ....
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....Vijay Proteins Ltd. vs. CIT (2015) 58 taxmann.com 44 (Guj). Besides the ld DR relied on a series of decision to prove his arguments namely i)Bhagirath Aggarwal Vs CIT (2013)31 taxmann.com 274(Delhi), and ii) Raoyal Rich Developers Pvt Ltd Vs PCIT (2019) 108taxmann.com382 (Bom). 7. After hearing both the parties and perusing the material on record, we note that in this case the assessment was framed under section 143(3) of the Act vide order dated 27.10.2011 thereafter the case of the assessment was reopened under section 147 of the Act after a communication was received by the AO from DIT (Inv.)-2, Mumbai to the effect that assessee is beneficiary of bogus hawala purchases from 9 parties aggregating to Rs. 26,73,39,615/- and thus the income has escaped assessment. Thereafter, the assessment was framed under section 143(3) read with section 147 of the Act assessing the total income at Rs. 48,88,440/- wherein an addition of Rs. 40,10,094/- was made towards assessing the profit element in the bogus purchases of Rs. 26,73,39,615/- calculated at 1.5% of the total alleged bogus purchases. The Ld. PCIT has exercised the revisionary jurisdiction on the ground that AO has not correctly ass....