Binod Kumar Tekriwal HUF, Kolkata V. Principal CIT - 10, Kolkata , Kolkata

ITA 1134/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8281 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAMOD HIMAT SINGHKA
• Keywords: Bogus purchase; Unexplained expenditure; Business income; Question of law; Reassessment proceedings
• Section: 69C; 143(3); 142(1); 143(1); 205; 195; 143(2); 13; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1134/KOL/2018 ( / ASSESSMENT YEAR:2010-11) BINOD KUMAR TEKRIWAL HUF 110, SOUTHERN AVENUE, KOLKATA- 700029 VS. PCIT-10, KOLKATA ./ ./PAN/GIR NO.: AABHT 3573 Q (APPELLANT) .. (RESPONDENT) ./ITA NO.1135/KOL/2018 ( / ASSESSMENT YEAR: 2010-11) SANDIP KUMAR TEKRIWAL HUF 110, SOUTHERN AVENUE, KOLKATA- 700029 VS. PCIT-10, KOLKATA ./ ./PAN/GIR NO.: AAFHS 0739 F (APPELLANT) .. (RESPONDENT) ./ITA NO.1136/KOL/2018 ( / ASSESSMENT YEAR: 2010-11) PRAMOD KUMAR TEKRIWAL HUF 110, SOUTHERN AVENUE, KOLKATA- 700029 VS. PCIT-10, KOLKATA ./ ./PAN/GIR NO.: ABUPT 3079 K (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI PRAMOD HIMAT SINGHKA, FCA RESPONDENT BY :SHRI RADHEY SHYAM, CIT BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 2 22 2 / DATE OF HEARING : 18/12/2019 /DATE OF PRONOUNCEMENT : 22/01/2020 / O R D E R PER A. L. SAINI, AM: THE CAPTIONED THREE APPEALS FILED BY THE DIFFERE NT ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2010-11, ARE DIRECTED AGAINST THE S EPARATE ORDERS PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX KOLKATA,U/S 2 63 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2.ALL THESE APPEALS FILED BY THE DIFFERENT ASSESSEE S ARE BARRED BY LIMITATION BY 2 DAYS. ALL THESE THREE ASSESSEES HAVE MOVED PETITIO NS REQUESTING THE BENCH TO CONDONE THE DELAY. WE HEARD THESE PARTIES ON THIS P RELIMINARY ISSUE. HAVING REGARD TO THE REASONS GIVEN IN THE RESPECTIVE PETITIONS, W E CONDONE THE DELAY AND ADMIT THESE APPEALS FOR HEARING. 3. SINCE, THE ISSUES INVOLVED IN ALL THE APPEALS AR E COMMON AND IDENTICAL; THEREFORE, THESE APPEALS HAVE BEEN HEARD TOGETHER A ND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, TH E GROUNDS AS WELL AS THE FACTS NARRATED IN ITA NO.1134/KOL/2018 FOR A.Y. 2010-11, HAVE BEEN TAKEN INTO CONSIDERATION FOR DECIDING THE ABOVE APPEALS EN MASSE . 4. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN LEAD CASE IN ITA NO.1134/KOL/2018 FOR A.Y. 2010-11, ARE AS FOLLOWS: 1. FOR THAT THE ORDER PASSED BY THE LD. PR. CIT-10, KOLKATA IS BAD IN LAW AS WELL AS ON FACTS. 2. FOR THAT THE REASSESSMENT PROCEEDINGS ITSELF BEI NG BAD IN LAW, THE CONSEQUENTIAL PROCEEDINGS ARE ALSO BAD IN LAW. BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 3 33 3 3. FOR THAT THE LD. PR. CIT -10, KOLKATA ERRED IN S ETTING ASIDE THE REASSESSMENT ORDER PASSED BY THE LD. AO WHEREAS THE SAID ORDER I S NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. 4. FOR THAT THE REASSESSMENT ORDER HAVING BEEN PASS ED BY THE LD. AO AFTER DUE APPLICATION OF MIND WHEREBY THE LD. AO ACCEPTED THE SALE AND HELD THAT THERE CANNOT BE ANY SALES WITHOUT CORRESPONDING PURCHASE AND ULTIMATELY MADE ADDITION OF 3% OF THE PURCHASE AMOUNT AS INFLATED PURCHASES. THEREFORE, THE ORDER PASSED BY THE LD. AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 5. FOR THAT IN COURSE OF ASSESSMENT PROCEEDINGS, TH E BOOKS OF ACCOUNT INCLUDING STOCK REGISTER WHICH WERE DULY AUDITED AND NO DEFEC T HAS BEEN FOUND IN SUCH BOOKS OF ACCOUNT. 6. FOR THAT APPARENTLY THE REVISION PROCEEDINGS HAV ING BEEN INITIATED AT THE BEHEST OF THE LD. AO, THEREFORE THE ENTIRE REASSESSMENT PR OCEEDINGS ARE BAD IN LAW. 7. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES, THE ACTION OF DISALLOWANCE OF 3% OF THE PURCHASES BY THE LD. AO IMPLIES THAT THE LD. AO TOOK A CONSIDERED VIEW WHICH IS NOT AN IMPOSSIBLE VIEW AND THEREFORE THE ORDER P ASSED BY THE LD. AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 8. FOR THAT UNDER THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE REVISION ORDER PASSED BY THE LD. PCIT IS LIABLE TO BE QUASHED AND THE APP ELLANT BE GIVEN RELIEF AS PRAYED FOR. 9. FOR THAT THE APPELLANT CRAVES TO LEAVE, ADD, ALT ER OR WITHDRAW ANY GROUND(S) OF APPEAL ON OR BEFORE HEARING OF THE APPEAL. 5. BY WAY OF THESE APPEALS, THESE THREE ASSESSEES HAV E CHALLENGED CORRECTNESS OF THE ORDER PASSED BY THE LD PRINCIPAL COMMISSIONER OF INCOME T AX (PCIT) UNDER SECTION 263 OF THE INCOME TAX ACT. 6. THE FACTS OF THE CASE MAY BE STATED QUITE SHORTL Y AS FOLLOWS: THE ASSESSEE, IS AN INDIVIDUAL, AND FILED HIS RETURN OF INCOME FOR THE AY 2010-11 ON 09.10.2010, DECLARING TOTAL INCOME AT RS 3,82,968 /-. THE SAID RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, AT THE RETURNED I NCOME. SUBSEQUENTLY, INFORMATION WAS RECEIVED FROM THE OFFICE OF THE DGI T(INV), MUMBAI, THROUGH DIT(INV), WB & SIKKIM, THAT THE ASSESSEE HAD CLAIME D BOGUS PURCHASES TO THE TUNE OF RS 48,84,550 /- DURING THE RELEVANT AY 2010 -11, AS ALLOWABLE EXPENSES, HAVING DEBITED THE SAME TO THE PROFIT & LOSS ACCOUN T FOR THE YEAR ENDING 31.03.2009. THE ABOVE STATED INFORMATION WAS DEDUCE D OUT OF AN ENQUIRY CONDUCTED BY THE SALES TAX AUTHORITIES THAT MANY AS SESSEES HAVE AVAILED OF ENTRIES OF BOGUS PURCHASE FROM ENTRY OPERATORS OF MUMBAI AN D FROM THE STATEMENTS OF SUCH HAWALA OPERATORS WHO HAD PROVIDED ENTRIES OF B OGUS PURCHASES TO VARIOUS ASSESSEES. THEREFORE, ASSE 19.03.2015 AND REASSESSMENT U/S 147/143(3) OF THE A CT WAS COMPLETED ON 29.03.2016 RAISING A DEMAND OF ORDER, THE AO CONCLUDED THAT THE ASSESSEE HAD MADE BOGUS PURC RS 48,84,550 /- , AS REPORTED IN THE INVESTIGATION WINGS REPORT. H OWEVER, INSTEAD OF DISALLOWING THE WHOLE AMOUNT, THE AO DISALLOWED ONL Y 3% OF SUCH PURCHASES AND ACCORDINGLY ADDED BACK A SUM OF RS 1,46,537 / 7. SUBSEQUENTLY, THE ASSESSING OFFICER DETECTED ERROR IN THE ASSESSMENT ORDER AND SUBMITTED A PROPOSAL TO THE LD PCIT ORDER. THE LD. PCIT NOTICED THAT AO HAS FAILED TO TAKE A L OGICAL ACTION ON THE INFORMATION AVAILABLE WITH HIM THEREFORE, LD PCIT W AS OF THE VIEW THAT ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE LD. PCIT THEREFORE ISSUED SHOW CAUSE INITIATING PRO CEEDINGS U/S 263 OF THE ACT WHICH IS RE PRODUCED BELOW: BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS. 1134 ASSESSMENT OF BOGUS PURCHASE FROM ENTRY OPERATORS OF MUMBAI AN D FROM THE STATEMENTS OF SUCH HAWALA OPERATORS WHO HAD PROVIDED ENTRIES OF B OGUS PURCHASES TO VARIOUS ASSE SSEE`S CASE WAS REOPENED U/S 14 8 OF THE ACT, 19.03.2015 AND REASSESSMENT U/S 147/143(3) OF THE A CT WAS COMPLETED ON 29.03.2016 RAISING A DEMAND OF RS. 56,060/- . AS PER THE IMPUGNED ASSESSMENT ORDER, THE AO CONCLUDED THAT THE ASSESSEE HAD MADE BOGUS PURC HASES TO THE TUNE OF , AS REPORTED IN THE INVESTIGATION WINGS REPORT. H OWEVER, INSTEAD OF DISALLOWING THE WHOLE AMOUNT, THE AO DISALLOWED ONL Y 3% OF SUCH PURCHASES AND ACCORDINGLY ADDED BACK A SUM OF RS 1,46,537 / - TO THE TOTAL INCOME OF TH SUBSEQUENTLY, THE ASSESSING OFFICER DETECTED ERROR IN THE ASSESSMENT ORDER AND THE LD PCIT FOR REVIEW U/S 263 OF THE ACT OF THE IMPUGNED THE LD. PCIT NOTICED THAT AO HAS FAILED TO TAKE A L OGICAL ACTION ON THE INFORMATION AVAILABLE WITH HIM THEREFORE, LD PCIT W AS OF THE VIEW THAT ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. LD. PCIT THEREFORE ISSUED SHOW CAUSE INITIATING PRO CEEDINGS U/S 263 OF THE PRODUCED BELOW: BINOD KUMAR TEKRIWAL HUF &ORS. 1134 -1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 4 44 4 OF BOGUS PURCHASE FROM ENTRY OPERATORS OF MUMBAI AN D FROM THE STATEMENTS OF SUCH HAWALA OPERATORS WHO HAD PROVIDED ENTRIES OF B OGUS PURCHASES TO VARIOUS 8 OF THE ACT, ON 19.03.2015 AND REASSESSMENT U/S 147/143(3) OF THE A CT WAS COMPLETED ON . AS PER THE IMPUGNED ASSESSMENT HASES TO THE TUNE OF , AS REPORTED IN THE INVESTIGATION WINGS REPORT. H OWEVER, INSTEAD OF DISALLOWING THE WHOLE AMOUNT, THE AO DISALLOWED ONL Y 3% OF SUCH PURCHASES AND TO THE TOTAL INCOME OF TH E ASSESSEE. SUBSEQUENTLY, THE ASSESSING OFFICER DETECTED ERROR IN THE ASSESSMENT ORDER AND FOR REVIEW U/S 263 OF THE ACT OF THE IMPUGNED THE LD. PCIT NOTICED THAT AO HAS FAILED TO TAKE A L OGICAL ACTION ON THE INFORMATION AVAILABLE WITH HIM THEREFORE, LD PCIT W AS OF THE VIEW THAT ASSESSMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. LD. PCIT THEREFORE ISSUED SHOW CAUSE INITIATING PRO CEEDINGS U/S 263 OF THE BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 5 55 5 8. IN RESPONSE TO THE SHOW CAUSE NOTICE, NONE APPEA RED ON BEHALF OF THE ASSESSEE THEREFORE THE LD. PCIT AGAIN ISSUED A SHOW CAUSE NO TICE WHICH WAS SERVED ON THE ASSESSEE ON 22.02.2018. 9. THE LD. PCIT NOTED THAT ONLY ISSUE UNDER CONSID ERATION IN THIS CASE IS AS TO WHETHER THE IMPUGNED PURCHASES WERE BOGUS IN NATURE AND AS TO WHETHER THE ENTIRE AMOUNT OF SUCH PURCHASES SHOULD HAVE BEEN DISALLOWE D. THEREFORE LD PCIT RELIED ON THE JUDICIAL PRONOUNCEMENT OF THE APEX COURT IN THE CASE OF N. K. PROTEINS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX SPECIAL LEAVE TO APPEAL (C ) NO. 769 OF 2017 JANUARY 16,2017, AS REPORTED IN [2017] 84 TAXM ANN.COM 195 (SC), WHEREIN THE HIGH COURTS DECISION TO ADD BACK THE ENTIRE B OGUS PURCHASE AS PER THE FICTITIOUS INVOICES DEBITED TO TRADING ACCOUNT HOL DING THAT PERCENTAGE DISALLOWANCE OF BOGUS PURCHASES GOES AGAINST PRINCIPLE OF SEC 68 AND 69C OF THE ACT, WAS UPHELD BY THE APEX COURT. SINCE THE AO FAILED TO MA KE ADDITION OF ENTIRE BOGUS PURCHASES THEREFORE LD PCIT HELD THAT ASSESSMENT O RDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E.ACCORDINGLY THE LD. PCIT DIRECTED THE ASSESSING OFFICER TO RE-ASSESS THE IN COME OF THE ASSESSEE FOR THE RELEVANT A.Y. 2010-11 ON THE ISSUE AS DISCUSSED ABO VE. 10. AGGRIEVED BY ORDER OF LD. PCIT, THE ASSESSEE IS IN APPEAL BEFORE US. 11. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFO RE THE BENCH THAT THESE ASSESSEE`S WERE ENGAGED IN TRADING ACTIVITIES AS W ELL AS MANUFACTURING ACTIVITIES THE LD PCIT RELIED ON THE JUDGMENT OF APEX COURT IN THE CASE OF N. K. PROTEINS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, SPECIAL LEAVE TO APPEAL (C ) NO. 769 OF 2017 JANUARY 16,2017, AS REPORTED IN [2017] 84 TAXMANN.COM 195 (SC), WHICH IS DISTINGUISHABLE ON FACTS. IN THE CASE OF N . K. PROTEINS LTD, THERE WAS ONLY TRADING ACTIVITY WHEREAS THE ASSESSEES UNDER CONSID ERATION ARE ENGAGED IN TRADING ACTIVITIES AS WELL AS MANUFACTURING ACTIVITIES. THE ASSESSEES UNDER CONSIDERATION WERE MAINTAINING QUANTITY DETAILS, SUCH AS OPENING STOCK, QUANTITY MANUFACTURED, PURCHASED AND SOLD. THE ASSESSEE ALSO FILED OTHER N ECESSARY DETAILS AS REQUIRED BY ASSESSING OFFICER. THE ASSESSEE ALSO FILED THE LIST OF PURCHASE/SUNDRY CREDITORS BEFORE THE AO AND IF THESE PROCEEDINGS THEN AO OUGHT TO WRITE A LETTER TO THE AO OF THESE CREDITORS TO DIG THE INFORMATION, WHICH HE FAILED TO DO SO. THE ASSESSEE DECLARED AT THE RATE OF 4.63% AND AO ALSO MADE ADDIT CASE OF ASSESSEE THE PROFIT RATE @ 7.63% RATE TAKING INTO ACCOUNT TRADING ACTIVITIES AS WELL AS MANUFACTURING ACTIVITIES. THEREFORE, ASSESSMENT ORDER PASSED BY THE AO IS NEI THER ERR TO THE INTEREST OF REVENUE. 12. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS P RIMARILY REITERATED THE STAND TAKEN BY THE LD PCIT THE SAME IS NOT BEING REPEATED FOR THE SAKE OF 13. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUG H THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD AND OTHER MATERIALS BROUGHT ON RECORD. BEFORE US THE QUANTITY DETAILS OF GOODS ALONG WITH QUANTITY RECONCILIATION FOR EACH A SSESSEE BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS. 1134 ASSESSMENT THE ASSESSEE ALSO FILED THE LIST OF PURCHASE/SUNDRY CREDITORS BEFORE THE AO AND IF THESE CREDITORS DO NOT COOPERATE IN THE ASSESSMENT PROCEEDINGS THEN AO OUGHT TO WRITE A LETTER TO THE AO OF THESE CREDITORS TO DIG THE INFORMATION, WHICH HE FAILED TO DO SO. THE ASSESSEE DECLARED SUO MOTO AT THE RATE OF 4.63% AND AO ALSO MADE ADDIT ION @ 3%, WHICH COMES TO 7.63%. IN CASE OF ASSESSEE THE PROFIT RATE @ 7.63% SHOULD BE CONSIDERED NORMAL ACCEPTABLE RATE TAKING INTO ACCOUNT TRADING ACTIVITIES AS WELL AS MANUFACTURING ACTIVITIES. THEREFORE, ASSESSMENT ORDER PASSED BY THE AO IS NEI THER ERR ONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS P RIMARILY REITERATED THE LD PCIT , WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA A ND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUG H THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD AND OTHER MATERIALS BROUGHT ON RECORD. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THE QUANTITY DETAILS OF TRADING GOODS (MS PLATE) AND MANUFACTURED GOODS ALONG WITH QUANTITY RECONCILIATION FOR EACH A SSESSEE WHICH ARE BINOD KUMAR TEKRIWAL HUF &ORS. 1134 -1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 6 66 6 THE ASSESSEE ALSO FILED THE LIST OF PURCHASE/SUNDRY CREDITORS CREDITORS DO NOT COOPERATE IN THE ASSESSMENT PROCEEDINGS THEN AO OUGHT TO WRITE A LETTER TO THE AO OF THESE CREDITORS TO DIG THE SUO MOTO , GROSS PROFIT ION @ 3%, WHICH COMES TO 7.63%. IN SHOULD BE CONSIDERED NORMAL ACCEPTABLE RATE TAKING INTO ACCOUNT TRADING ACTIVITIES AS WELL AS MANUFACTURING ACTIVITIES. ONEOUS NOR PREJUDICIAL ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS P RIMARILY REITERATED THE , WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA A ND WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUG H THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD PCIT COUNSEL FOR THE ASSESSEE SUBMITTED AND MANUFACTURED ARE GIVEN BELOW: BINOD KUMAR TEKRIWAL ITA NO.1134/KOL/2018 BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS. 1134 ASSESSMENT BINOD KUMAR TEKRIWAL ITA NO.1134/KOL/2018 BINOD KUMAR TEKRIWAL HUF &ORS. 1134 -1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 7 77 7 BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 8 88 8 FOR EXAMPLE IN CASE OF PRAMOD KUMAR TEKRIWAL HUF, T HE ASSESSEE SUBMITTED BEFORE ASSESSING OFFICER PURCHASE VALUE, PURCHASE Q UANTITY, COST OF PURCHASE, CONSUMPTION OF QUANTITY BECAUSE ASSESSEE IS PARTLY DOING MANUFACTURING ACTIVITY. TOTAL QUANTITY SOLD AND COST OF GOODS SOLD WERE ALS O MENTIONED. TAKING INTO ACCOUNT TOTAL SALES REFLECTED IN AUDITED PROFIT AND LOSS ACCOUNT, THE ASSESSEE COMPUTED GROSS PROFIT RATE @ 5.84%. IN THIS RECONCI LIATION, THE ASSESSEE WORKED OUT ALLEGED PURCHASE QUANTITY AS PER PCIT AT 25,07, 205 KG.; WHICH IS NOT POSSIBLE AGAINST SALE / QUANTITY CONSUMED AT 38,29,322 KG; T HEREFORE, STAND TAKEN BY THE LD. PCIT IS NOT CORRECT. LIKEWISE IN CASE OF BINOD KUMAR TEKRIWAL HUF THE AL LEGED PURCHASE QUANTITY AS PER CIT IS 2,77,000 KG., WHICH IS NOT POSSIBLE AGAI NST SALE QUANTITY CONSUMED AT 4,64,032 KG; THEREFORE, STAND TAKEN BY LD. PCIT IS NOT CORRECT. COMING TO SANDEEP KUMAR TEKRIWAL HUF, WE NOTE THAT ASSESSEE SUBMITTED QUANTITY DETAILS OF TRADING GOODS OF MS PLATE. ASSE SSEE SUBMITTED OPENING STOCK IN QUANTITY, THEN HE ADDED PURCHASE QUANTITY, THEN AFTER HE DEDUCTED SALES QUANTITY AND SHORTAGE QUANTITY AND THEN RESULTED CLOSING STO CK AT 36,8955 KG WAS DISCLOSED. THE ASSESSEE COMPUTED GROSS PROFIT RATIO @ 6.37%. THE ASSESSEE EXPLAINED THAT PURCHASE QUANTITY AS PER CIT IS 13,50,420 KG WHICH IS NOT POSSIBLE AGAINST SALES QUANTITY OF 19,05,276 KG. THEREFORE, IN THE LIGHT O F THE FACTUAL POSITION NARRATED BY LD. COUNSEL AND TAKING INTO ACCOUNT RECONCILIATION OF QUANTITY FILED BY THE ASSESSEE BEFORE ASSESSING OFFICER, THE STAND TAKEN BY THE LD . PCIT, IS NOT TENABLE. WE NOTE THAT ASSESSING OFFICER AFTER TAKING INTO AC COUNT, THE QUANTITY RECONCILIATION AND OTHER DETAILED FILED BY THE ASSE SSEE MADE ADDITION @ 3% ON ACCOUNT OF BOGUS PURCHASES WHICH IS QUITE REASONABL E, HENCE ORDER PASSED BY ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDI CIAL TO THE INTEREST OF REVENUE. WE NOTE THAT JUST TO GATHER MORE MATERIAL TO PROVE THE CLAIM OF THE ASSESSEE WRONG, IS NOT THE OBJECT OF SECTION 263 OF THE ACT, THE LD PCIT HAS TO PROVE THE PATENT ERROR IN THE ASSESSMENT ORDER PASSED BY AO AND HAS TO PRO VE TWIN CONDITIONS THAT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 9 99 9 14. WE NOTE THAT CONSIDERING THE RETURN U/S 148, TH E LD AO ISSUED NOTICE U/S 143(2) AND 142(1) OF THE ACT. IN RESPONSE TO THESE NOTICES, THE ASSESSEE PROVIDED LIST OF PURCHASES / CREDITORS AND THE AO RANDOMLY S ELECTED FEW PARTIES AND ISSUED VERIFICATION LETTER. LD AO SOUGHT EXPLANATION FROM ASSESSEE THAT WHY NOT GP RATE FOR CURRENT YEAR OF 4.63% WILL NOT BE APPLIED ON TH E SAID AMOUNT OF BOGUS PURCHASES AND ADDED TO THE TOTAL INCOME OF THE ASSE SSEE. THE ASSESSEE PRODUCED ALL NECESSARY DETAILS OF PURCHASES, SALES, AUDITED BOOK S OF ACCOUNT, QUANTITY DETAILS AS MENTIONED ABOVE. THE ASSESSEE BOOKS OF ACCOUNTS WER E AUDITED BY CHARTERED ACCOUNTANT. QUANTITY DETAILS WERE GIVEN IN RESPECT OF OPENING STOCK, PURCHASES, SALES, CLOSING STOCK (VIDE PAGE 29 OF PAPER BOOK). THE LD AO DID ESTIMATE AND FURTHER ADDED 3% AS POSSIBLE PROFIT ON THE ALLEGED PURCHASES OF RS. 48,84,550/- OVER AND ABOVE THE GP RATE 4.63% SHOWN BY THE ASSES SEE IN THE AUDITED BOOKS OF ACCOUNT. THE QUANTITY DETAILS SHOWN BY ASSESSEE IN THE AUDIT REPORT REFLECTS SALES QUANTITY 4,64,632 KG AND CORRESPONDING PURCHASES 4, 30,650 KG (PAGE 29 OF PAPER BOOK). NO DISCREPANCY WAS FOUND BETWEEN PURCHASE SH OWN BY ASSESSEE AND THE SALES DECLARED. PURCHASE CANNOT BE REJECTED WITHOUT DISTURBING THE SALES. RECOGNIZED PRINCIPLE OF ACCOUNTANCY AND TAX JURISPR UDENCE HOLD THAT NO SALES CAN TAKE PLACE WITHOUT PURCHASE. THE AO HAS PASSED ORDE R CONSCIOUSLY AFTER APPLYING HIS MIND AFTER CONDUCTING THE ENQUIRY AND ADDED FUR THER 3% ON BOGUS PURCHASE OVER AND ABOVE GP RATE 4.63% DECLARED BY THE ASSESS EE INCLUSIVE OF THE SAID PURCHASE. WE NOTE THAT LD PCIT EXERCISED HIS JURISD ICTION U/S 263 OF THE ACT SOLELY BY RELYING ON THE JUDGMENT OF APEX COURT IN THE CAS E OF N. K. PROTEINS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX, REPORTED IN [201 7] 84 TAXMANN.COM 195 (SC), WHICH IS DISTINGUISHABLE ON FACTS, AS NARRATE D ABOVE. IN THE ASSESSEE`S CASE, THE ASSESSEE SUBMITTED BEFORE THE AO AUDITED BOOKS OF ACCOUNTS, DETAILS OF PURCHASES, DETAILS OF SALES, DETAIL OF QUANTITY PUR CHASED, USED IN MANUFACTURING ACTIVITY ( IN CASE OF ONE ASSESSEE), OPENING STOCK, CLOSING STOCK DETAIL AND RECONCILIATION OF QUANTITY, AS MENTIONED ABOVE, THE SE FACTS WERE NOT THERE IN CASE OF N. K. PROTEINS LTD (SUPRA), THUS DISTINGUISHABLE ON FACTS. THEREFORE, CONSIDERING THESE PECULIAR FACTS THE AO APPLIED HIS MIND AND MA DE 3% MORE ADDITION, BASED ON HIS BEST ESTIMATE, OVER AND ABOVE THE GP RATE DE CLARED BY THE ASSESSEE. BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 THEREFORE, IN THESE CIRCUMSTANCES, ORDER PASSED BY THE AO CAN NOT BE TERMED ERRONEOUS. 15. WE NOTE THAT HON`BLE HIGH COURT OF CALCUTTA I N THE CASE OF SUBARNA RICE MILL,[2018] 96 TAXMANN.COM 286 (CALCUTTA) HELD THA T IN CASE OF UNEXPLAINED EXPENDITURE ON PURCHASES, ONLY PROFIT EMBEDDED IN T RANSACTION WHICH CAN BE ADDED TO TOTAL INCOME. FINDINGS OF THE HON`BLE COURT IS G IVEN BELOW: 9. ACCORDING TO THE APPELLATE TRIBUNAL THE VALUE OF T HE ENTIRE QUANTITY OF ADDITIONAL STOCKS THAT WERE DISCOVERED IN COURSE OF THE SURVEY OPERATION COULD NOT BE REGARDED AS THE ADDITIONAL INCOME OF THE ASSESSEE AND AMENABLE TO TAX. THERE WAS A SPECIFIC GROUND TAKEN BEFORE THE APPELLATE TRIBUNAL, WHICH WAS A LE GAL QUESTION, AS TO WHETHER THE UNDISCLOSED PURCHASE COULD BE TAKEN AS THE ADDITION AL INCOME WITHOUT REFERENCE TO THE POSSIBLE SALE OF THE PADDY WHEN CONVERTED. 10. THE ASSESSEE REFERS TO A JUDGMENT OF THE GUJARAT H IGH COURT VIJAY TRADING V. ITO [2016] 388 ITR 377/76 TAXMANN.COM 366 . THE PRINCIPLE ENUNCIATED IN SUCH JUDGMENT IS THAT WHEN UNDISCLOSED PURCHASES OF SUCH NATURE ARE DISCOVERED, IT IS ONLY THE PROFIT EMBEDDED IN THE TRANSACTION WHICH CAN BE ADDED TO T HE TOTAL INCOME. THE GUJARAT HIGH COURT RELIED ON SOME OF ITS PREVIOUS JUDGMENTS TO H OLD THAT 'NOT THE ENTIRE PURCHASE PRICE BUT ONLY THE PROFIT ELEMENT EMBEDDED IN SUCH PURCHA SES CAN BE ADDED TO THE INCOME OF THE ASSESSEE.' 11. IN THE CIRCUMSTANCES AND PARTICULARLY SINCE THE FA CTUAL FINDINGS RENDERED BY THE COMMISSIONER (APPEALS) AS TO THE QUANTUM OF ADDITIO NAL STOCKS HAVE NOW BEEN RESTORED, THE ORDER IMPUGNED ON THE METHODOLOGY FOR THE ASCER TAINMENT OF THE INCOME WHICH ESCAPED ASSESSMENT WOULD PASS MUSTER. THE APPELLATE TRIBUNAL MERELY DIRECTED THE GROSS PROFIT THAT THE ADDITIONAL PURCHASE WAS CAPABLE OF GENERATING TO BE REGARDED AS THE ADDITIONAL INCOME FOR TAX TO BE ASSESSED ON SUCH BA SIS. SUCH VIEW OF THE APPELLATE TRIBUNAL DOES NOT CALL FOR ANY INTERFERENCE. WE NOTE THAT HON`BLE HIGH COURT OF GUJARAT IN THE C ASE OF TEJUA ROHIT KUMAR KAPADIA,[2018] 94 TAXMANN.COM 324 (GUJARAT) HELD TH AT WHERE PURCHASES MADE BY ASSESSEE-TRADER WERE DULY SUPPORTED BY BILLS AND PA YMENTS WERE MADE BY ACCOUNT PAYEE CHEQUE, SELLER ALSO CONFIRMED TRANSACTION AND THERE WAS NO EVIDENCE TO SHOW THAT AMOUNT WAS RECYCLED BACK TO ASSESSEE, ASSESSING OFFICER WA S NOT JUSTIFIED IN TREATING SAID PURCHASES AS BOGUS UNDER SECTION 69C. IN THE ASSESS EE`S CASE UNDER CONSIDERATION THE AO HAS FAILED TO PROVE THAT AMOUNT WAS RECYCLED BACK T O ASSESSEE, THEREFORE ORDER PASSED BY ASSESSING OFFICER IS NOT ERRONEOUS. WE ALSO NOTE THAT HON`BLE BOMBAY HIGH COURT IN THE CASE OF M/S MOHOMMAD HAJI ADMAN & CO. INCOME TAX APPEAL NO.1004 OF 2016, HELD THAT IF SALES ARE ACCEPTED THEN PURCHASES CANNOT BE DISALLOWED. THE FINDINGS OF THE HON`BLE COURT IS GIVEN BELOW: BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 8 IN THE PRESENT CASE, AS NOTED ABOVE, THE ASSESSE E WAS A TRADER OF FABRICS. THE A.O. FOUND THREE ENTITIES WHO WERE INDULGING IN BOGUS BILLING ACTIVI TIES. A.O. FOUND THAT THE PURCHASES MADE BY THE ASSESSEE FROM THESE ENTITIES WERE BOGUS. THIS BEING A FINDING OF FACT, WE HAVE PROCEEDED ON SUCH BASIS. DESPITE THIS, THE QUESTION ARISES WHETHER TH E REVENUE IS CORRECT IN CONTENDING THAT THE ENTIRE PURCHASE AMOUNT SHOULD BE ADDED BY WAY OF AS SESSEE'S ADDITIONAL INCOME OR THE ASSESSEE IS CORRECT IN CONTENDING THAT SUCH LOGIC CANNOT BE APP LIED. THE FINDING OF THE CIT(A) AND THE TRIBUNAL WOULD SUGGEST THAT THE DEPARTMENT HAD NOT DISPUTED THE ASSESSEE'S SALES. THERE WAS NO DISCREPANCY BETWEEN THE PURCHASES SHOWN BY THE ASSE SSEE AND THE SALES DECLARED. THAT BEING THE POSITION, THE TRIBUNAL WAS CORRECT IN COMING TO THE CONCLUSION THAT THE PURCHASES CANNOT BE REJECTED WITHOUT DISTURBING THE SALES IN CASE OF A TRADER. THE TRIBUNAL, THEREFORE, CORRECTLY RESTRICTED THE ADDITIONS LIMITED TO THE EXTENT OF B RINGING THE G.P. RATE ON PURCHASES AT THE SAME RATE OF OTHER GENUINE PURCHASES. THE DECISION OF TH E GUJARAT HIGH COURT IN THE CASE OF N.K. INDUSTRIES LTD. (SUPRA) CANNOT BE APPLIED WITHOUT R EFERENCE TO THE FACTS. IN FACT IN PARAGRAPH 8 OF THE SAME JUDGMENT THE COURT HELD AND OBSERVED AS UN DER- ' SO FAR AS THE QUESTION REGARDING ADDITION OF RS.3 ,70,78,125/- AS GROSS PROFIT ON SALES OF RS.37.08 CRORES MADE BY THE ASSESSING OFFICER DESPI TE THE FACT THAT THE SAID SALES HAD ADMITTEDLY BEEN RECORDED IN THE REGULAR BOOKS DURING FINANCIAL YEAR 1997-98 IS CONCERNED, WE ARE OF THE VIEW THAT THE ASSESSEE CANNOT BE PUNISHED SINCE SAL E PRICE IS ACCEPTED BY THE REVENUE. THEREFORE, EVEN IF 6 % GROSS PROFIT IS TAKEN INTO ACCOUNT, THE CORRESPONDING COST PRICE IS REQUIRED TO BE DEDUCTED AND TAX CANNOT BE LEVIED ON THE SAME PRICE . WE HAVE TO REDUCE THE SELLING PRICE ACCORDINGLY AS A RESULT OF WHICH PROFIT COMES TO 5. 66 %. THEREFORE, CONSIDERING 5.66 % OF RS.3,70,78,125/- WHICH COMES TO RS.20,98,621.88 WE THINK IT FIT TO DIRECT THE REVENUE TO ADD RS.20,98,621.88 AS GROSS 9 IN THESE CIRCUMSTANCES, NO QUESTION OF LAW, THERE FORE, ARISES. WE NOTE THAT DURING THE ASSESSMENT STAGE THE ASSESS EE SUBMITTED BEFORE ASSESSING OFFICER, THE BALANCE SHEET , PROFIT AND LOSS ACCOUN T, TAX AUDIT REPORT, QUANTITY DETAILS SUCH AS OPENING STOCK, PURCHASES, CLOSING S TOCK. SOME OF THE ASSESSEES WERE IN BOTH SEGMENT, THAT IS, TRADING AND MANUFACT URING ACTIVITIES THEREFORE THERE GROSS PROFIT RATE WILL DIFFER FROM THOSE WHO ENGAGE D IN TRADING ACTIVITY. THE ASSESSEE SUBMITTED QUANTITY RECONCILIATION WHEREIN WE NOTICED IN CASE OF PRAMOD KUMAR TEKRIWAL-HUF, THAT PURCHASE QUANTITY AS PER L D PCIT IS AT 25,87,205 KG WHICH IS NOT POSSIBLE AGAINST QUANTITY SOLD/ CONSUM ED AT 38,29,322/-. WE NOTE THAT THESE FACTS WERE NOT THERE IN THE CASE OF N.K. PROT EINS LTD (2017) 292 CTR 354 (SC), THEREFORE ASSESSEE`S CASE IS DISTINGUISHABLE ON THESE FACTS NARRATED ABOVE. THUS, IN ASSESSEE`S CASE THE FACTS ARE DIFFERENT TH EREFORE, THE JUDGMENT OF THE HON`BLE SUPREME COURT IN THE CASE OF N.K.PROTEINS L TD (SUPRA) DOES NOT SQUARELY APPLICABLE TO THE ASSESSEE. 16. IT IS A SETTLED POSITION IN LAW THAT THE PROCEEDING S U/S. 263 CANNOT BE INITIATED BY THE LD. PR. C.I.T. MERELY IN HIS SUPERVISORY CAP ACITY. BEFORE INVOKING THE BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 POWERS U/S 263 OF THE ACT, IT IS NECESSARY FOR HIM TO DEMONSTRATE THAT THE A.O. HAD COMMITTED A PATENT ERROR WHICH RESULTED IN PREJUDIC E TO THE REVENUE. ON THE CONTRARY, WHERE THE LD. A.O. HAS CONDUCTED ENQUIRIE S AND AFTER DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE BACKED B Y RELEVANT DETAILS/DOCUMENTS HE COMES TO A CONCLUSION, THEN IT IS NOT OPEN TO THE L D. PR. C.I.T. TO INVOKE REVISIONARY JURISDICTION. THE POWER ENVISAGED U/S. 263 OF THE ACT IN SETTING ASIDE AN ASSESSMENT IS LARGE AND WIDE, BUT THAT CANNOT BE EXERCISED TO ALLOW THE A.O. TO MAKE UP THE DEFICIENCY OF HIS CASE. WE NOTE THAT CO ORDINATE BENCH OF I.T.A.T., KOLKATA IN THE CASE OF PLASTIC CONCERN VS. ACIT [61 TTJ 87 (CAL) HAS HELD THAT MERE POSSIBILITY OF GATHERING MORE MATERIAL TO PROV E THE CLAIM OF THE ASSESSEE WRONG WOULD NOT MAKE THE CONCLUDED ASSESSMENT ERRON EOUS SO LONG AS THE LD. A.O. HAD ACTED JUDICIOUSLY AND CONDUCTED ENQUIRIES IN TH E COURSE OF ASSESSMENT PROCEEDINGS. WE NOTE THAT AO AFTER TAKING INTO ACC OUNT ALL THE QUANTITY DETAILS, AS MENTIONED ABOVE TOOK A DECISION THAT OVER AND ABOVE THE GROSS PROFIT RATE SHOWN BY THE ASSESSEE, A GROSS PROFIT @3% MAY BE ADDED, W HICH IS LOGICAL AND REASONABLE CONSIDERING THE FACTS OF THE CASE THAT SOME OF THE ASSESSEE`S WERE DOING MANUFACTURING ACTIVITIES ALSO. WE NOTE THAT LD. PR. C.I.T. ON ANALYSIS OF ASSESSME NT RECORDS DERIVED SATISFACTION FOR ISSUING THE IMPUGNED SHOW-CAUSE NOTICE U/S. 263 OF THE ACT. THE EXPRESSION RECORD AS USED IN SECTION 263 OF THE ACT IS COMPREHENSI VE ENOUGH TO INCLUDE THE WHOLE RECORD OF EVIDENCE ON WHICH THE ORIGINAL ASSE SSMENT ORDER IS BASED. AT THE SAME TIME, IF ANY INFORMATION ASKED FOR BY THE ASSE SSING AUTHORITY FROM THE ASSESSEE OR FROM OTHERS TO WHOM HE REFERRED THE MAT TER DURING THE COURSE OF ASSESSMENT PROCEEDING WAS NOT RECEIVED BUT RECEIVED SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT, IN THAT SITUATION THE ASSESSMENT ORDER PASSED WITHOUT RECEIVING SUCH REPORT MAY APPEAR TO BE ERRONEOUS WITHIN THE M EANING OF SEC.263 OF THE ACT. IN THE CASE OF THE ASSESSEE, THERE IS NO DENYING TH E FACT, AS DETAILED ABOVE IN THIS SUBMISSION AND ACKNOWLEDGED IN THE ASSESSMENT ORDER U/S. 143(3) DATED 28.03.2016, THAT IN RESPONSE TO NOTICES U/S. 143(2) /142(1) AND FURTHER REQUISITIONS MADE DURING THE COURSE OF ASSESSMENT PROCEEDING, TH E A/R OF THE ASSESSEE APPEARED FROM TIME TO TIME AND PRODUCED/ SUBMITTED NECESSARY DETAILS/DOCUMENTS BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 13 33 3 AS PER REQUISITIONS IN RELATION TO THE ISSUES RAISE D BY THE LD. PR. C.I.T., WHICH WERE EXAMINED. THEREFORE, IT IS THE APPRAISAL OF THE SAM E RECORDS WHICH ARE ALREADY WITH THE LD. A.O. AND THE LD. PR. C.I.T. TOOK A DIFFEREN T VIEW THAN ADOPTED BY THE A.O. ON THE SAME SET OF FACTS, WHICH IS NOT PERMISSIBLE U/S. 263 OF THE ACT. IN THE ABOVE CIRCUMSTANCES, THE VIEW TAKEN BY THE A.O. WAS ONE O F THE POSSIBLE VIEWS AND THE ASSESSMENT ORDER PASSED BY HIM COULD NOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. FOR THAT WE RELY ON TH E DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SUNBEAM AUTO LTD. [(2010) 189 TAXMAN 436 (D EL)] .FURTHER, IT WAS SETTLED BY HON`BLE SUPREME COURT I N THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT [(2000) 243 ITR 83 (SC) ] WHEREIN IT WAS HELD THAT IF THE A.O. ADOPTS ONE OF THE POSSIBLE COURSES AVAILAB LE IN THE SCHEME OF THE I.T. ACT WHICH RESULTS IN ANY LOSS OF REVENUE OR WHEN TWO VI EWS ARE POSSIBLE AND THE A.O. ADOPTS ONE OF THEM WITH WHICH THE C.I.T. DOES NOT A GREE, THEN IT WOULD NOT BE AN ORDER PREJUDICIAL TO THE INTEREST OF REVENUE FOR IN VOKING THE JURISDICTION U/S. 263 OF THE ACT. IN OTHER WORDS, THE LD. PR. C.I.T. ON THE SAME SET OF FACTS AND EVIDENCES ON RECORD WAS OF THE OPINION THAT THE A.O. SHOULD H AVE REJECTED THE REGROUPING OF DEBIT AND CREDIT ENTRIES AS EXPLAINED ABOVE AND HE SHOULD HAVE TAKEN THE STAND WHICH THE LD. PR. C.I.T. HINTED IN THE IMPUGNED OR DER U/S 263 OF THE ACT. THIS IS NOT PERMISSIBLE UNDER LAW. FOR BETTER APPRECIATION, THE RELEVANT PORTION OF THE JUDGMENT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT (SUPRA) IS QUOTED BELOW : THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE RE VENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFF ICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER, C ANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, FOR EXAMPLE, WHEN AN INCO ME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN L OSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE V IEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOU S ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. 17. IT IS A SETTLED POSITION IN LAW THAT PROVISION S OF SEC. 263 OF THE ACT DO NOT PERMIT SUBSTITUTING ONE OPINION BY ANOTHER OPINION. THEREFORE, THE ORDER OF THE LD. PR. C.I.T. CANNOT BE SUSTAINED ON THE PRINCIPLE OF ERRONEOUS NATURE OF THE ORDER OF THE A.O., AS IT IS NOT ERRONEOUS. FURTHER, IN THE I NSTANT CASE, TO REITERATE, THERE WAS NO ALLEGATION BY THE LD. REVENUE AUTHORITIES THAT T HE EVIDENCES PRODUCED WERE BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 14 44 4 FICTITIOUS OR INVENTED, THUS ACCEPTED THE AUTHENTIC ITY OF THE SAME. SUCH AN ORDER CANNOT BE CALLED ERRONEOUS AND PREJUDICIAL TO INTER ESTS OF REVENUE ONLY BECAUSE THE A.O. MADE THE ASSESSMENT WITHOUT DISCUSSING SUCH DE TAILS THEREIN, AS HELD BY THE COORDINATE BENCH OF ITAT KOLKATA IN THE CASE OF CHR OMA BUSINESS LTD. VS. DCIT (2004) 82 TTJ 540 (CAL).FURTHER SUPPORT IN THIS CON NECTION IS TAKEN FROM THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIKAS POLYMERS (2012) 341 ITR 537 (DEL). RELEVANT PART OF THE OBSERVATION IN THIS REGARD REA DS AS UNDER : ' THIS IS FOR THE REASON THAT IF A QUERY IS RAISED DU RING THE COURSE OF SCRUTINY BY THE ASSESSING OFFICER, WHICH WAS ANSWERED TO THE SATISF ACTION OF THE ASSESSING OFFICER, BUT NEITHER THE QUERY NOR THE ANSWER WAS REFLECTED IN T HE ASSESSMENT ORDER, THAT WOULD NOT BY ITSELF LEAD TO THE CONCLUSION THAT THE ORDER OF THE ASSESSING OFFICER CALLED FOR INTERFERENCE AND REVISION.' [EMPHASIS SUPPLIED] FURTHER, ACCORDING TO THE DECISION OF COORDINATE BE NCH OF I.T.A.T., HYDERABAD IN THE CASE OF MANISHA AGRI BIOTECH P. LTD. VS. CIT (2 014) 36 ITR (TRIB.) 42 -, WHEREIN IT WAS HELD AS FOLLOWS: THE RESPONDENT HAD NO DIFFERENT OR NEW MATERIAL TO TAKE A DIFFERENT VIEW FROM THE ONE TAKEN BY THE ASSESSING OFFICER AND THE REASONS GIVE N BY HIM TO REOPEN THE ASSESSMENT AND SUSTAIN THE REVISION ARE TOTALLY UNACCEPTABLE. THE RESPONDENT IS NOT VESTED WITH ANY POWER UNDER SECTION 263 TO INITIATE PROCEEDINGS FOR REVISION IN EVERY CASE AND START RE- EXAMINATION AND FRESH ENQUIRIES IN MATTERS WHICH HA VE ALREADY BEEN CONCLUDED UNDER THE LAW. THE ASSESSEE PRODUCED ALL NECESSARY DETAILS OF PURC HASES, SALES, AUDITED BOOKS OF ACCOUNT, QUANTITY DETAILS AS MENTIONED ABOVE. THE A SSESSEE BOOKS OF ACCOUNTS WERE AUDITED BY CHARTERED ACCOUNTANT. QUANTITY DETAILS W ERE GIVEN IN RESPECT OF OPENING STOCK, PURCHASES, SALES, CLOSING STOCK (VID E PAGE 29 OF PAPER BOOK). THE LD AO DID ESTIMATE AND FURTHER ADDED 3% AS POSSIBL E PROFIT ON THE ALLEGED PURCHASES OF RS. 48,84,550/- OVER AND ABOVE THE GP RATE 4.63% SHOWN BY THE ASSESSEE IN THE AUDITED BOOKS OF ACCOUNT. THE QUANT ITY DETAILS SHOWN BY ASSESSEE IN THE AUDIT REPORT REFLECTS SALES QUANTITY 4,64,63 2 KG AND CORRESPONDING PURCHASES 4,30,650 KG (PAGE 29 OF PAPER BOOK). NO DISCREPANCY WAS FOUND BETWEEN PURCHASE SHOWN BY ASSESSEE AND THE SALES DECLARED. PURCHASE CANNOT BE REJECTED WITHOUT DISTURBING THE SALES. RECOGNIZED PRINCIPLE OF ACCOUNTANCY AND TAX JURISPRUDENCE HOLD THAT NO SALES CAN TAKE PLACE WIT HOUT PURCHASE.THE AO HAS PASSED ORDER CONSCIOUSLY AFTER APPLYING HIS MIND AF TER CONDUCTING THE ENQUIRY AND BINOD KUMAR TEKRIWAL HUF &ORS. ITA NOS.1134-1136/KOL/2018 ASSESSMENT YEAR:2010-11 P PP PA AA AG GG GE EE E | || | 1 11 15 55 5 ADDED FURTHER 3% ON BOGUS PURCHASE OVER AND ABOVE G P RATE 4.63% DECLARED BY THE ASSESSEE INCLUSIVE OF THE SAID PURCHASE. BASED ON THE ABOVE DISCUSSION ON ASSESSEE`S FACTS AS WELL AS ON VARIOUS PRECEDENTS A PPLICABLE TO FACTS, WE ARE OF THE VIEW THAT REVISIONARY JURISDICTION EXERCISED BY THE LD. PR. C.I.T. U/S. 263 OF THE ACT WAS NOT IN TUNE WITH THE FACTS AND EVIDENCES ON RECORD DULY EXPLAINED TO THE LD. A.O. AND VERIFIED BY HIM AND THAT BEING SO THE ORDER PASSED U/S. 263 OF THE ACT ON SUCH ERRONEOUS STAND IS LIABLE TO BE QUASHED AS PER LAW, SETTLED BY VARIOUS JUDICIAL PRONOUNCEMENTS (SUPRA). THEREFORE, WE QUAS H THE ORDER OF THE LD. PCIT U/S 263 OF THE ACT. 18. IN THE RESULT, THESE THREE APPEALS OF THREE A SSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22.01.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 22/01/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. I) BINOD KUMAR TEKRIWAL HUF II) SANDIP KUMAR TEKRIWAL HUF III) PRAMOD KUMAR TEKRIWAL HUF 2. PCIT-10, KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES