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TMI Blog2020 (11) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of section 263 even the Hon ble Supreme Court has dismissed the SLP filed by the Revenue against this decision in CIT vs. Nirav Modi [ 2016 (12) TMI 1596 - SC ORDER] - Therefore, we are not in concurrence with the conclusion of the Ld. PCIT on this issue - Decided in favour of assessee. - ITA No.2370/M/2018 (Assessment Year: 2009-10) - - - Dated:- 28-9-2020 - SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER Assessee by: Shri K. Shivram, A.R. And Shri Rahul Hakani, A.R. Revenue by : Shri Sushil Kumar Poddar, D.R. ORDER Per Rajesh Kumar, Accountant Member: The present appeal has been preferred by the assessee against the order dated 28.03.2018 of the Principal Commissioner of Income Tax [hereinafter referred to as the PCIT relevant to assessment year 2009-10. 2. The grounds raised by the assessee are as under: Order passed u/s. 263 is bad-in-law liable to be quashed 1. The Ld. Pr. CIT erred in issuing notice u/s.263 of the Act based upon the proposal received from ITO / Jt. CIT and not by suo-moto examination of records application of mind and thus, the revision proceedings u/s 263 of the Act are car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce, the order passed u/s.263 of the Act is bad in law and liable to be quashed. 6. The appellant craves leave to add, amend, alter or delete all or any of the aforesaid grounds of appeal 3. The only issue raised by the assessee is against the order of revisionary proceedings under section 263 and order passed by Ld. PCIT being without any valid jurisdiction. 4. The facts in brief are that the assessment in this case was framed under section 143(3) vide order dated 27.10.2011 assessing the income at ₹ 8,78,350/- as against the declared income of ₹ 7,55,103/-. Later on the case of the assessee was reopened under section 147 of the Act and assessment was framed under section 143(3) read with section 147 of the Act vide order dated 09.03.2016 assessing the income at ₹ 48,88,440/-. Thereafter, the Ld. PCIT exercised revisionary jurisdiction by issuing show cause notice under section 263 on 16.03.2018 for the following reason: 2. The assessment u/s,143(3) } r.w.s.147 of the I.T. Act, 1961 was completed on 09.03.2016 in your case assessing your income at ₹ 48,88,440/- in view of the information from DGIT(Inv) that you were a beneficiary of Bogus bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once it comes to a categorical finding that the amount represents alleged bogus purchases from bogus suppliers it is not incumbent to restrict the disallowance, and thereby directed to make the addition of 100%. In the present case before us the ld. AR argued that the conclusion of the ld. PCIT that assessment framed under section 143(3) read with section 147 of the Act dated 09.03.2016 being erroneous and prejudicial to the interest of the Revenue, is wrong and against the facts of the case and case law. The Ld. A.R. submitted that it is only on this basis that the Ld. PCIT has set aside the reassessment order passed under section 143(3) read with section 147. The Ld. A.R. submitted that the revision on the basis of alleged bogus purchases is bad in law as the reassessment order is neither erroneous nor prejudicial to the interest of the Revenue as AO has passed the order after making enquiries and after due application of mind after calling for specific information/details from the assessee and that too after disallowing and adding to the income of the assessee at the rate of 1.5% of the alleged bogus purchases. Thus it is apparently clear that the issue on which the assessment i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no merger of High Court decision with the Hon ble Supreme Court. For this proposition, the Ld. Counsel relied on the decision of Hon ble Supreme Court in the case of Kunhayammed vs. State of Kerala (2000) 245 ITR 360 (SC). Similarly, SLP against the decision of Hon ble Gujarat High Court, confirming the order of Tribunal in the case of Vijay Proteins Ltd. vs. ACIT (1996) 58 ITD 428 Ahmedabad sustaining of 25% of the alleged bogus purchases, has been dismissed in Vijay Protein Ltd. vs. CIT SLP No.8956/2015 dated 06.04.2015. Therefore, the observations and opinion of Ld. PCIT that the law mandates to tax the entire bogus purchases can not be accepted. Finally, the Ld. A.R. prayed that in view of the aforesaid legal position the revisionary jurisdiction exercised by the Ld. PCIT may kindly be quashed along with the consequent order passed under section 263 of the Act. 6. The Ld. D.R., on the other hand, relied heavily on the order of Ld. PCIT by submitting that the AO has just applied 1.5% of the alleged bogus purchases made from grey market and thus the order of the AO is erroneous in so far as prejudicial to the interest of the Revenue. The ld DR argued that once it is es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been held by the Hon ble Bombay High Court that a possible view taken by the AO can not be regarded as unsustainable in law and the revisionary jurisdiction under section 263 can not be exercised. It was also held that a debatable issue on which more than one plausible views are reasonably possible and if the AO has taken one possible views it can not be said that assessment is erroneous and prejudicial to the interest of the Revenue. In the case of CIT vs. Nirav Modi (supra) which has been passed after considering the decision of the Hon'ble Apex Court in the case of Malabar Industries Company Ltd. vs. CIT (supra) wherein it has been held that in order to invoke the revisionary jurisdiction the twin conditions have to be satisfied namely (i) the assessment order should be erroneous and (ii) also prejudicial to the Revenue. The Hon ble Court has held that where two views are possible and AO has taken one of the possible views there is no occasion to invoke the provision of section 263 even the Hon ble Supreme Court has dismissed the SLP filed by the Revenue against this decision in CIT vs. Nirav Modi (2017) 77 taxmann.com 78 SC. Therefore, we are not in concurrence with t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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