TaxTMI 
TaxTMI 
2025 (2) TMI 1605
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...., erred in alleging that the order u/s. 147 r.w.s 144 of the Act is not only erroneous but also prejudicial to the interest of the revenue as the Assessing Officer has failed to conduct any inquiry and verification which is patently incorrect. 3. That on the facts and in the circumstances of the case and in law, the Ld. PCIT erred in treating the order passed by the Id. AO as erroneous simply because he harbored a different view than that of the Id. AO. The view adopted by the Id. AO was one of the possible views duly fortified by decisions of Hon'ble ITAT, duly quoted in the order itself. The exercise of revisionary jurisdiction under the facts of the case, by the Ld. PCIT, is thus not legal and proper. Thus, the impugned order is bad in law and needs to be quashed. 4. The appellant craves leave to add, amend, modify, or withdraw any of the grounds of appeals at the time of hearing." 2. The background facts leading to present appeal are such that the assessee filed its original return of income of relevant AY 2017-18 declaring a total income of Rs. 34,91,432/- which was subjected to scrutiny assessment and the AO completed assessment u/s 143(3) vide order ....
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....erest of revenue. The PCIT has also observed that since the section 263 has been amended and Explanation 2 as reproduced below had been introduced therein, the assessment-order is deemed to be erroneous-cum-prejudicial to the interest of revenue if the same had been passed without inquiries or verification which should have been made: "Explanation 2 - For the purpose of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interest of revenue, if in the opinion of the Principal Commissioner or Commissioner - (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into the claim; (c) the order has not been made in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person." 5. Having explained the ba....
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.... 3. The Ld. PCIT failed to conduct any independent enquiry on his part to demonstrate the error in the judgement of the Id. AO. He simply tried to brush aside the view taken by the Id. AO and set aside the case for de-novo proceeding which is impermissible in law." 6. Ld. AR for assessee carried us to Pages 1 to 16 of assessment-order to show that that the case was re-opened on the basis of allegation of bogus purchase of Rs. 1,55,00,000/- having been made by assessee from M/s N.S. Jewellers & Bullion and the AO after considering entire factual gamut of assessee's case including the survey report, the bank statements of assessee and the purchase and sales transactions done by assessee, etc. and taking into account the decisions of ITAT, Mumbai in Shri Madhukant B. Gandhi Vs. ITO, ITA No. 1950/Mum/2009 dated 23.02.2010 and Hon'ble Gujrat High Court in CIT Vs. Bholanath Ply Fab. Pvt. Ltd. (2013) 355 ITR 290, made addition of 12.50% profit qua the alleged bogus purchases of Rs. 1,55,00,000/-. Therefore, there is nothing like absence of enquiry or inadequate enquiry by AO, in fact the AO has considered entire material and thereafter framed assessment. Therefore, the PCIT is very muc....
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....tion 263(1), the provisions of section 263 can be invoked in this case. In view of the above, this contention of the assessee is not tenable and cannot be accepted." 8. Ld. AR submitted that the Ld. PCIT has rejected assessee's claim for the frivolous reason that the assessee's appeal was not decided, by that time, and was pending before CIT(A) instead of considering the logic of 'doctrine of merger' as captured in aforesaid Explanation to section 263(1). 9. Ld. AR relied upon a decision of Co-ordinate Bench of ITAT, Indore in Shri Chandmal Hukumchand Jain Vs. PCIT (2024) 36 ITJ Online 221 (Trib. - Indore) wherein the assessing authority made addition of Rs. 4,00,000/- being 10% of the unsecured loan of Rs. 40,00,000/- taken by assessee and the PCIT invoked revisionary jurisdiction on the footing that the AO ought to have made 100% addition of Rs. 40,00,000/-. The assessee, however, went in first-appeal before CIT(A) contesting the addition of Rs. 4,00,000/- made by AO. In this set of facts, the ITAT held that when the issue was a subject-matter of appeal pending before CIT(A), the PCIT ought to have not taken up the said issue u/s 263 of the Act. 10. When these deliberati....
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....0/-) as the estimated profit. The appellant denied any bogus transactions with M/s N.S. Jewellers & Bullion and argued that the addition was made on an estimated basis without proper justification. The appellant submitted that the purchases were genuine, supported by invoices, bank statements, and VAT payments. The survey report indicated that M/s N.S. Jewellers & Bullion was involved in providing accommodation entries. The appellant's payment of Rs. 1,55,00,000/- to M/s N.S. Jewellers & Bullion, followed by a significant cash deposit the previous day, aligns with the modus operandi described in the survey report. While the appellant submitted certain documents, they failed to provide conclusive evidence to substantiate the genuineness of the transactions. The AO's reliance on the survey report and other materials to conclude the transactions as bogus is reasonable. The addition of Rs. 19,37,500/- as estimated profit is consistent with judicial precedents, such as the Gujarat High Court's decision in CIT Vs Bholanath Ply Fab. Pvt. Ltd. (2013) 355 ITR 290." 12. Thus, the issue of issue of bogus purchase of Rs. 1,55,00,000/- has been duly considered a....