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TMI Blog2021 (12) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... to income. Thus the issue has been examined in detail in the reassessment proceedings and a reasonable view has been taken. According to the Ld. PCIT the assessment order is contrary as on the one hand the AO is holding that purchases are bogus whereas on the other hand the AO is applying a rate of 12.5% to tax the bogus purchases and thus came to the conclusion that the assessment order is erroneous and prejudicial to the interest of the revenue and thus set aside the assessment. In our considered opinion the revisionary proceedings initiated by Ld. PCIT appears to be not correct as he has tried to unsettle a settled position by setting aside the assessment order which is otherwise not erroneous and is in accordance with law and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 28.09.2011 declaring total income of ₹ 50,44,880/-. The case of the assessee was reopened under section 147 of the Act by issuing notice under section 148 of the Act after the AO received information from DGIT (Inv.) Mumbai that assessee is beneficiary of hawala purchase bills and accommodation entries to the tune of ₹ 1,05,98,219/-. The assessment was framed under section 143(3) read with section 147 of the Act on 18.03.2016 by assessing the income at ₹ 63,69,650/- by making an addition of ₹ 13,24,777/- towards profit on bogus purchases at the rate of 12.5% on alleged bogus purchases of ₹ 1,05,98,219/-. Upon going through the assessment record, the Ld. PCIT observed that the order passed by the AO is erron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in the case of CIT vs. Simit P. Sheth 356 ITR 451 (Guj.), applied a rate of 12.5% on the bogus purchases of ₹ 1,05,98,219/- and thus added a sum of ₹ 13,24,777/- to the income of the assessee in the assessment framed under section 143(3) read with section 147 of the Act vide order dated 18.03.2016. The Ld. A.R. submitted that the AO has taken a reasonable possible view of the matter after taking into account the decisions of the Hon ble Gujarat High Court and also decisions of the co-ordinate Benches of the Tribunal where consistent view of applying 3% to 12.5% on the bogus purchases is taken. Under these circumstances the ld AR prayed that the revisionary order of Ld. PCIT holding that assessment framed as erroneous a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order is contrary as on the one hand the AO is holding that purchases are bogus whereas on the other hand the AO is applying a rate of 12.5% to tax the bogus purchases and thus came to the conclusion that the assessment order is erroneous and prejudicial to the interest of the revenue and thus set aside the assessment. In our considered opinion the revisionary proceedings initiated by Ld. PCIT appears to be not correct as he has tried to unsettle a settled position by setting aside the assessment order which is otherwise not erroneous and is in accordance with law and also in consonance with the decisions of High Court and co-ordinate Benches of the Tribunal. The case of the assessee is squarely covered by the decision of the co-ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the revision order, the Pr.CIT did not agree with the said view and restored the issue to the file of AO for fresh assessment implying in favour of making addition of entire such purchases. In this process, Pr.CIT ignored the fact relating to existence of various views on this issue. We have also noticed on the issue of bogus purchases, there are various views inviting debates on the requirement of making entire additions or GP additions of various rates or various GP rates etc. Therefore, making addition on account of bogus purchases constitutes a debatable one. As such, the AO has taken one prevailing view in this matter. Therefore, thrusting another view by the Pr.CIT in his revision order in our view is outside the scope of provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of verification of scrutiny of the account. As such, AO is not under any mandate to examine sundry creditor account. Further, it is also not the case of the Pr.CIT that there is something erroneous about the sundry creditor account and therefore, the AO failed to make proper/adequate enquiries on this issue. In our opinion, the Pr.CIT s finding is too general and the same is unsustainable. He failed to make out a case that allowing claims of the assessee on this issue amounts to erroneous order of the AO in so far as it is prejudicial to the revenue. In the absence of any categorical finding on erroneous assumption of law/fact leading to loss of revenue, the finding of the Pr.CIT is not sustainable. Therefore, we are of the opinion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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