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TMI Blog2022 (2) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... uash the same. Accordingly, the appeal of the assessee is allowed. - I.T.A. No. 22/AGR/2021 - - - Dated:- 25-11-2021 - Laliet Kumar, Member (J) And Dr. Mitha Lal Meena, Member (A) For the Appellant : Rajendra Sharma, Adv. For the Respondents : Vandana Verma, CIT, DR ORDER Per Bench The present appeal was filed by the assessee feeling aggrieved by the order passed by the principal Commissioner of Income Tax under section 263 of the Act for the assessment year 2015 - 2016, on the following grounds:- 1. That order passed by PCIT Agra Dated 21.03.2021 passed U/s. 263 is passed without appreciating the provision of sec. 263 read with section 143(3) of Income Tax Act, The order passed by AO dated 08.05.2017 is not erroneous neither prejudicial to the interest of revenue. Order passed by PCIT U/s. 263 is liable to be set aside. 2. That while invoking the provisions of sec 263 of Income Tax Act , PCIT has not appreciated that the AO while passing the order U/s. 143(3) has examine the books of account, vouchers and also required details of the balance sheet with other relative documents, After that has pointed out the discrepancies therein, taking into con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be erroneous within the definition exp. 2 to the sec 263 of Income Tax Act, order passed by PCIT U/s. 263 dated 21.03.2021 ignoring the various decisions are being referred by appellant is bad in law liable to be cancelled. 1. At the outset the Ld. A.R. for the assessee had submitted that the order passed by the lower authority was required to be cancelled as the assessing officer while passing the original assessment order had examined the issue referred to him under limited scrutiny and for that purposes he had drawn our attention to the following paragraph of the assessment order. 2. That the Ld. A.R. had submitted that the order passed by the assessing officer was passed after due deliberation and considering the totality of circumstances. Here also submitted that before passing the order, the Ld. assessing Ofc. had considered whether the trade creditors were verifiable or not and he had also considered that in case the entire creditors are not verifiable then the corresponding profit percentage can be attributed to the amount. 3. The Ld. A.R. had also submitted that the gross profit percentage of the assessee is matching with the previous assessment years and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of the IT. Act and books of accounts are rejected, in that case the AO cannot go to check the entries of balance sheet particularly of sundry creditors, therefore, no addition could be made in respect of the creditors appearing in the balance sheet even if they found to be unexplained has no force. 6. The assessing Officer has failed to make any enquiry for the verification of the creditors and therefore the order passed by the assessing officer is erroneous. She had also submitted that there was increase of amount in respect to sundry creditor in comparison to the previous years and therefore the verification of the sundry creditors by the AO was essential. In the absence of no verification by the assessing officer, the order passed by the assessing officer had become erroneous in view of the Explanation 2 to Section 263 of the Act. 7. The Ld. DR, had further submitted that the order was passed within the period of limitation as provided by the Act. 8. We have considered the rival contention of the parties and perused the material available on record, including the judgments cited at bar during hearing by both the parties. 9. Before we deal with the legal submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the merits of the case. 11. In the present case the assessing officer in the assessment order recorded under: 3. The reply given by the assessee was duly considered. Various case laws quoted by assessee were also perused. During AY 2015-16 assessee has shown a net profit rate of 6%. However, a large number of purchases are made by the assessee from unregistered vendors. Large number of payments have been made in case with amounts of value below 20,000/-. Assessee has not been able to produce site wise details of purchases made. There are a number of creditors where address is unverifiable. In the light of facts and circumstances involved in the case, an addition of ₹ 5,00,000/- is being made to the total returned income in order to cover all possible leakage of revenue. 12. From the perusal of the finding recorded by the assessing officer it is abundantly clear that the assessing officer had made verification of the sundry creditors and thereafter had recorded the finding that There are a number of creditors where address is unverifiable . This clearly shows that verification of facts were made by the assessing officer during the assessment proceedings and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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