TaxTMI 
TaxTMI 
2026 (7) TMI 610
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....ision of an assessment as framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s. 260 r.w.s. 144B of the Act on 16-02-2024 after making quantum addition of Rs. 10.06 Lacs. 2. The Ld. AR advanced arguments supporting the assessment order and made out a case of one of the possible views as taken by Ld. AO during the course of regular assessment proceedings. The Ld. AR contended that sufficient explanations and documents were already furnished by the assessee during the course of regular assessment proceedings itself. It has further been contended that the assessment was framed on best judgment basis and therefore, the revision was unjustified. The Ld. CIT-DR, on the other hand, advanced arguments supporting the impugned revisionary order. Hav....
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....copies & various other documents to bolster its claim about genuineness of these transactions. After considering the submission of the assessee, Ld. AO proposed rejection of books and estimation of Gross Profit (GP) Rate of 8% on impugned sales of Rs. 261.33 Lacs as against regular GP rate of 4.14% as reflected by the assessee on these sales. The same was in the background of the fact that notices issues u/s 133(6) to the stated three parties were non-responsive and the three parties were not existing at the given address and these three entities were not having active GST number. Finally, Ld. AO rejected the claim of the assessee and proceeded to estimate the income of the assessee. The Ld. AO rejected the books and applied normal GP rate ....
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....ted that the assessment order was passed pursuant to the directions of Hon'ble High Court and therefore, jurisdiction u/s 263 could not be exercised. Once AO formed a view after due enquiry and adopted a rational GP estimation methodology, the order could not be subjected to revision u/s 263. All material necessary for assessment were already examined by Ld. AO and estimation of GP was factual domain of assessment. However, the said arguments stood rejected and Ld. Pr. CIT maintained his own view in the matter. Finally, the impugned order was set aside for fresh assessment by Ld. AO after conducting requisite enquiries in accordance with law and also examine the applicability of penalties u/s 271AAC and 271AAD. Aggrieved as aforesaid, the a....
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....n of income to the best of his judgment by estimating higher GP on alleged bogus sales transactions. The assessee, vide reply dated 20.01.2024, refuted the allegation of Ld. AO which ultimately stood rejected by Ld. AO. Finally, the Ld. AO made best judgment assessment after rejecting the books u/s 145(3) and made estimation of higher GP on impugned transactions. In the light of all these facts, it could be well said that the impugned issue was extensively examined / verified by Ld. AO during the course of assessment proceedings itself. The view of Ld. AO was one of the possible views. When the purchase as well as sales transactions are alleged to be non-genuine, it would be a strong case for estimation of profit element on these transactio....
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....at the AO has not applied his mind on the issue. All the circumstances have to be seen. A case of lack of enquiry would by itself render the order being erroneous and prejudicial to the interest of the revenue. In a case where there is inquiry by the AO, even if inadequate, the CIT would not be entitled to revise u/s 263 on the ground that he has a different opinion in the matter. The ratio of this decision squarely applies to the facts of present case before us and duly supports the case of the assessee. 9. The Hon'ble High Court of Punjab & Haryana in the case of CIT vs. M/s Jain Uday Fabrics Pvt. Ltd. (ITA 221-2011 (O&M) dated 16.07.2024) concurred that every loss of revenue as a consequence of the order of AO could not be treated as ....