TaxTMI 
TaxTMI 
2025 (10) TMI 1485
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....the respondent assessee. 2. Tax Appeal is filed by the Revenue under section 260A of the Income Tax Act, 1961 (For short "the Act") against the judgment and order dated 12.02.2025 passed by the Income Tax Appellate Tribunal, "C" Bench, Ahmedabad (For short "the Tribunal") in ITA No. 328/Ahd/2020 for Assessment Year 2015-2016 proposing the following questions of law: "(i) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT erred in quashing the order passed u/s 263 of the Act by the PCIT on the issue of the genuineness of the purchases made and error in restricting the addition only to the bogus losses claimed by the assessee of the year under consideration, not appreciating that the assessment ord....
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....cer regarding the bogus nature of the underlying purchases and the corresponding debit entries in the books of the assessee. The audit objection was accepted by the Department and proceedings under section 263 of the Act were initiated by the Principal Commissioner of Income Tax (PCIT) who found the original assessment order to be erroneous and prejudicial to the interest of the Revenue. 6. PCIT observed that the Assessing Officer made disallowance of loss of Rs.3,47,446/- arising out of scrap purchased from M/s. Global Metals and sold to M/s Yug Tradelink Pvt. Ltd and the additions were made on the basis of report of DDIT(Investigations), Vadodara to inquire into the genuineness of the sales made to M/s. Yug Tradelink Pvt. Ltd. As per t....
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....enuineness of purchases made by the assessee, once the sales were held to be bogus in nature. Accordingly, the PCIT held that since the Assessing Officer had not made adequate inquiry into the genuineness of the purchases made, there was an error in restricting the addition only to the bogus losses claimed by the assessee. Accordingly, the PCIT held that the assessment order was erroneous and prejudicial to the interest of the Revenue and accordingly directed to set aside the same. 7. The Tribunal after considering the case records held that there was no lack of inquiry by the Assessing Officer and the Assessing Officer has disallowed loss of Rs. 3,47,466/- on account of sales to M/s.Yug Tradelink Pvt. Ltd. as bogus loss on the basis of ....
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....ue.-(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 6. A bare reading of this provision makes it clear that the pre- requisite to exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the IT....