Rahul Cables Pvt.Ltd, Pune V. Pr. Commissioner of Income tax -3, Pune

ITA 1170/PUN/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7631 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 11-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU
• Assessee Lawyers: S N DOSHI
• Keywords: Bogus purchase; Reason to believe
• Section: 263; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1168 TO 1170/PUN/2017 / ASSESSMENT YEARS : 2009-10 TO 2011-12 RAHUL CABLES PVT. LTD., OFFICE NO.114-115, IST FLOOR, EAST WING, ARORA TOWER, M.G. ROAD, PUNE 411 001 PAN : AABCR4218B . /APPELLANT VS. PRINCIPAL COMMISSIONER OF INCOME TAX-3, PUNE . / RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI REVENUE BY : SMT. NIRUPAMA KOTRU, CIT-DR / DATE OF HEARING : 24.04.2018 / DATE OF PRONOUNCEMENT: 04.05.2018 / ORDER PER D. KARUNAKARA RAO, AM : THESE ARE THE 3 APPEALS FILED BY THE ASSESSEE UNDER CON SIDERATION INVOLVING ASSESSMENT YEARS 2009-10 TO 2011-12. THESE A PPEALS ARE FILED AGAINST THE REVISION ORDER OF PR.CIT-3, PUNE, PASSED U/S.263 OF THE ACT COMMONLY DATED 23-03-2017. 2. ASSESSEE HAS RAISED COMMON GROUNDS IN THESE THREE ASSESSMENT YEARS. FOR THE SAKE OF COMPLETENESS AND REFERENCE, GROUN DS FOR A.Y. 2009-10 ARE EXTRACTED HERE AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT HAS ERRED IN INVOKING PROVISION OF SEC.263 OVERLOOKING THE LEGAL POSITION THAT THE ORDER OF THE ASSESSING OFFICER CANNOT BE REGARD ED AS ERRONEOUS WITHIN THE MEANING OF EXPLANATION 2 TO SEC.263(1) OF THE I .T. ACT, 1961. 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE CIT HAS GROSSLY ERRED IN NOT APPRECIATING THE FACT THAT THERE IS NEITHER LACK OF INQUIRY NOR NON APPLICATION OF COMPETENT MIND BY AS SESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER. THE CONTENTS OF THE ASSESSMENT ORDER AND THE ASSESSMENT PROCEEDINGS CLE ARLY PROVES THAT ASSESSING OFFICER HAS CARRIED IN-DEPTH ENQUIRIES AN D APPLIED HIS MIND AND ADOPTED ONE OF THE PLAUSIBLE VIEW LEGALLY ALLOWABLE AND THEREFORE HIS ORDER SHOULD NOT HAVE BEEN REGARDED A S ERRONEOUS IN AS MUCH AS PREJUDICIAL TO THE INTEREST OF REVENUE. FROM THE ABOVE, AS PER THE ASSESSEE, THE REVISION ORDE R OF THE PR.CIT IS UNSUSTAINABLE AS THE PR. CIT INVOKED SECTION 26 3 OF THE ACT AGAINST THE AOS ORDER ADDING ONLY 20% OF THE BOGUS PU RCHASES IN THE REASSESSMENT. ASSESSEE ARGUES THAT AOS DECISION CONS TITUTES ONE OF THE PLAUSIBLE VIEWS IN THE MATTER AND A DEBATABLE ISSUE. FURTHER, GROUND NO.2 ALSO RAISES THE ISSUE OF AOS FAILURE IN CONDUC TING ENQUIRIES WITH REGARD TO THE CLAIM RELATING TO SUNDRY CRED ITORS BALANCES AND OTHER CLAIMS IN THE RETURN OF INCOME. 3. BRIEFLY STATED RELEVANT FACTS FOR THE A.Y. 2009-10 ARE THAT THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINESS OF CABLES, ELECTRICAL, ELECTRONIC AND TELEPHONIC GOODS AS A DEALER. AS SESSEE FILED THE ORIGINAL RETURN OF INCOME ON 31-10-2009 DECLARING TOTA L INCOME OF RS.2,51,15,300/-. THERE IS NO SCRUTINY ASSESSMENT IN THIS CASE U/S.143 OF THE ACT. ON RECEIPT OF INFORMATION FROM THE DG (INVESTIGATION), PUNE REGARDING HAWALA/BOGUS PURCHASES AS SUPPLIED BY THE SALES TAX DEPARTMENT, AO NOTICED THAT THE ASSESSEE IS ONE OF BENEFICIARY OF THE SAME AND MADE PURCHASES OF GOODS FROM 19 OF THE PARTIES WHOSE NAME APPEAR IN THE LIST OF BOGUS PURCHASE S. THE TOTAL OF SUCH PURCHASES WORKS OUT TO RS.3,47,78,546/- FOR THE A.Y. 2009-1 0. AS PER PROCEDURE LAID DOWN IN THE PROVISIONS OF SECTION 147/1 48 OF THE ACT, AO RECORDED THE REASONS ON 06-09-2013 AND HELD THAT HE HAD REASON TO BELIEVE THAT, OUT OF THE ABOVE, AN AMOUNT OF RS.69,55,709/ - HAS ESCAPED ASSESSMENT FOR A.Y. 2009-10. ACCORDINGLY, A NOTIC E U/S.148 3 WAS ISSUED ON 06-09-2013. IN RESPONSE TO THE SAID NOT ICE, ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED ON 31-10-2009 U/S .139(1) OF THE ACT DECLARING TOTAL INCOME OF RS.2,51,15,300/- MAY BE TREAT ED AS RETURN FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT. SIMILARLY, AS PER THE AO, AN AMOUNT OF RS.42,09,223/- AND RS.22,20,410/- FOR THE A.YRS. 2010-11 AND 2011-12 RESPECT IVELY ESCAPED THE ASSESSMENTS AND RELEVANT ASSESSMENTS WERE REO PENED 4. DURING THE RE-ASSESSMENT PROCEEDINGS, THERE WAS SCR UTINY INTO THE TRANSACTIONS OF ALLEGED BOGUS PURCHASES OF RS.3,47,78,5 46/-. ASSESSEE FILED VARIOUS DOCUMENTS AND DETAILS DEMONSTRATING THE TRAIL OF GOODS AS WELL AS THE PAYMENTS INVOLVING THE BANKING CHANN ELS. HOWEVER, IN RESPONSE TO THE AOS DEMAND FOR PRODUCING T HE SELLERS OF THE GOODS, THE ASSESSEE COULD NOT COMPLY WITH THE SAME AS THE SAME IS OUTSIDE HIS SCOPE. FURTHER, THE AO PERUSED THE GOODS R ECEIPT REGISTER AND HELD THAT THE ASSESSEE FAILED TO PRODUCE THE STOCK REGISTER. ON THIS ISSUE, ASSESSEE SUBMITTED THAT THERE IS NO NEED FOR HIM T O MAINTAIN THE STOCK REGISTER. AO CONSIDERED THE ABOVE SUBMISSIONS, DOC UMENTS, REGISTERS FURNISHED BY THE ASSESSEE AND, RELYING ON VARIO US DECISIONS INCLUDING THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN TH E CASE OF NIKUNJ EXIMP ENTERPRISES PVT. LTD. 216 TAXMANN 171 AND T HE DECISION OF AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF VIJAY P ROTEINS LTD. VS. ACIT 58 ITD 428 (AHMEDABAD TRIBUNAL), HELD THAT MAKING ENTIRE ADDITION OF RS.3,47,78,546/-IS NOT PROPER. HE ALSO ANALYSE D THE GP RATIOS OF THE ASSESSEE OVER THE YEARS AND HELD MAKING A DDITION OF GP OF THE SAID BOGUS PURCHASES WOULD MEET THE ENDS OF JUSTICE . RELEVANT LINES FROM PARA 7 & 8 OF THE ASSESSMENT ARE EXTRACTED HERE AS UNDER : 7 . . . . . . . . . . . . .NOW, TO ARRIVE AT THE C ONCLUSION FOR AMOUNT OF RS.3,47,78,546/-, THE FINANCIALS OF THE ASSESSEE WE RE EXAMINED FOR THE PERIOD RELEVANT TO A.Y. 2008-09 TO 2011-12. 4 . . . . . . . . . . . . . . . . . . . . . . 08. NOW, TO CALCULATE THE REASONABLE AMOUNT OF ADDI TION ON ACCOUNT OF THESE BOGUS PURCHASES, THERE ARE VARIOUS METHODS WH ICH ARE DISCUSSED. A. FIRST METHOD IS ADDING THE WHOLE AMOUNT OF SUCH BOG US PURCHASES WHICH COMES OUT TO BE RS.3,47,48,546/-. THIS IS AL SO UNREASONABLE BECAUSE BOGUS PURCHASE IS NOTHING BUT INFLATED PURC HASE SHOWN IN THE ACCOUNTS TO REDUCE THE ACTUAL PROFIT EARNED. B. SECOND METHOD IS CALCULATING 20% OF THE TOTAL TURNO VER OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, I.E. 20% OF RS.1, 21,31,76,927/- WHICH COMES OUT TO BE RS.24,26,35,385/-. THIS IS N OT REASONABLE AS THE BOGUS PURCHASES ARE ONLY 2.8% OF THE TOTAL TURN OVER. C. THIRD METHOD IS CALCULATING 20% OF SUCH BOGUS PURCH ASES WHICH COMES OUT TO BE RS.69,55,709/-. I AM OF THE OPINION THAT 20% OF THE TOTAL PURCHASES MADE FROM SUCH ALLEGED PARTIES IS NEEDED TO BE ADDED BACK TO THE I NCOME AS IT IS THE MOST REASONABLE AMOUNT AMONGST ALL. ACCORDINGLY, AFTER DUE VERIFICATION OF FACTS AND THE JUDGME NTAL LAWS, THE AO RESTRICTED THE ADDITION TO 20% OF THE SAID P URCHASES. THUS, THE ASSESSMENT ATTAINED THE FINALITY. 5. SUBSEQUENTLY, THE PR.CIT-3, PUNE VERIFIED THE ASSESSM ENT RECORDS OF THE ASSESSEE AND ANALYSED THE ABOVE NARRATED FACTS OF THE CASE RELATING TO BOGUS PURCHASES AND A ISSUED SHOW CAUSE NO TICE DATED 23-02-2017 TO THE ASSESSEE CALLING FOR EXPLANATION AS TO WHY THE PROVISIONS OF SECTION 263 OF THE ACT SHOULD NOT BE INVOKED AND WHY THE ASSESSMENT MAY BE SET ASIDE. ASSESSEE FILED A LETTER DAT ED NIL GIVING WRITTEN SUBMISSIONS CONTESTING AGAINST THE SAID PROPOSAL O F THE PR.CIT. IN SUPPORT, ASSESSEE RELIED ON VARIOUS DECISIONS IN THIS RE GARD. SUBSEQUENTLY, THE PR.CIT ANALYSED THE DETAILS FURNISHED BY THE ASSESSEE AND HELD THAT AO COMPLETED THESE ASSESSMENTS WITHOUT FU LLY OBTAINING THE DETAILS FROM THE ASSESSEE. FURTHER, THE PR.CIT HELD T HAT AO FAILED TO VERIFY THE GENUINENESS OF THE PURCHASES AND FAILED TO MAK E ENTIRE ADDITION OF RS.3,47,78,546/- OF THE PURCHASES. HE ALSO FOUND FAULT WITH 5 THE AO IN RESTRICTING THE ADDITION TO RS.69,55,709/-, I.E. 20% OF THE SAID BOGUS PURCHASES. FURTHER, IN THE REVISION ORDER, PR.CIT DEALT WITH THE SCO PE RELATING TO INCORRECT ASSUMPTION OF LAW AND FACT AND HELD THAT IT IS A CASE OF INCORRECT APPLICATION OF LAW AND IN SUPPORT, PR. CIT RELIED ON VARIOUS DECISIONS IN THIS REGARD. EVENTUALLY, THE CIT HELD THAT T HE AO HAS NOT VERIFIED ALL THE RELEVANT ISSUES LEADING TO REDUCTION IN THE CO RRECT TAXABLE INCOME. THEREFORE, AS PER THE PR.CIT, THE ORDER PASSED BY THE AO IS PRIMA-FACIE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER, ON THE ISSUE OF SUNDRY CREDITORS TOO, PR.CIT HE LD THAT THE AO FAILED TO EXAMINE SUNDRY CREDITORS, VALUATION OF STOCK, OT HER PURCHASES AND VARIOUS CLAIMS OF EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT, MAKING THE ORDER OF THE AO AS ERRONEOUS AND P REJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, THE PR.CIT RESTOR ED THE MATTER TO THE AO FOR PROPER VERIFICATION OF THE SAID ISSUES AND PASS A FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW. 6. AGGRIEVED WITH THE SAID REVISION ORDER OF THE PR.CIT, ASSESSEE FILED THE PRESENT APPEAL WITH THE GROUNDS MENTIONED ABOVE. 7. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE MAIN ISSUE EXAMINED BY THE AO IN THE REASSESSMENT PROCEEDING S REVOLVES AROUND THE SAID ISSUE OF BOGUS PURCHASES ONLY. THE REA SONS RECORDED BY THE AO BEFORE ISSUING THE SAID NOTICE U/S.148 OF THE A CT ALSO EVIDENCES THE ABOVE. FURTHER, BRINGING OUR ATTENTION TO THE VARIOUS PAGES OF THE PAPER BOOK, LD. COUNSEL FOR THE ASSESSEE DE MONSTRATED THE FACT RELATING TO FURNISHING OF RELEVANT PURCHASE BILLS FROM THE ALLEGED SUPPLIERS FOR THE YEARS UNDER CONSIDERATION. FURTHER, BRIN GING OUR 6 ATTENTION TO VARIOUS PARAGRAPHS OF THE RE-ASSESSMENT O RDER, LD. COUNSEL SUBMITTED THAT EVERY ASPECT OF THE ISSUE OF BOGUS PURCH ASES WAS THOROUGHLY EXAMINED BY THE AO BEFORE MAKING AN ADHOC A DDITION OF 20% OF THE BOGUS PURCHASES OF RS.69,55,709/-. IN DOING SO, AO RELIED ON VARIOUS DECISIONS TO SUPPORT THE GP ADDITIONS ONLY AN D NOT THE ENTIRE SUCH PURCHASES. THEREFORE, ACCORDING TO LD. AR FOR THE AS SESSEE, THE VIEW TAKEN BY THE AO IS ONE PLAUSIBLE VIEW. FURTHER, MENTIONING THAT THE ISSUE OF MAKING ENTIRE ADDITIO N IS AGAIN A DEBATABLE ISSUE, LD. AR SUBMITTED THAT MAKING ADD ITION ON ACCOUNT OF GP RATIO IS ALSO A MATTER OF HUGE DEBATE AND RELIED ON VARIOUS DECISIONS ON THE ISSUE. FURTHER, JUSTIFYING THE AD DITION @20% OF THE BOGUS PURCHASES MADE BY THE AO IN THE RE-ASSESSM ENT, LD. COUNSEL SUBMITTED THAT THERE ARE VARIOUS DECISIONS TO SUPPORT T HE ADDITION MADE BY THE AO. THEREFORE, THERE IS NO ERRONEOUS ASSUMPTION OF LAW IN THIS CASE. FURTHER, HE SUBMITTED THAT WHEN THE TRAIL OF GOODS ARE SATISFACTORILY EXPLAINED ALONG WITH THE TRANSACTIONS OF PAYM ENT FOR THE PURCHASE OF GOODS, THE ASSESSEE CANNOT BE FOUND FAULT ON THESE BOGUS PURCHASE OF GOODS. IN SUPPORT OF HIS SUBMISSIONS, LD. COUN SEL RELIED ON THE FOLLOWING CASE LAWS AND FILED THE COPIES OF THE SAME : 1. M/S. MUDHRA STEEL & ALLOY PVT. LTD. VS. CIT-1, PUNE ITA NOS. 1079 & 1710/PN/2011, DATED 20-09-2013. 2. MUDHOL LAND HOLDING COMPANY PVT. LTD. VS. CIT 57 TA XMANN.COM 213 (PUNE-TRIB.) 3. CIT VS. DESIGN & AUTOMATION ENGINEERS (BOMBAY) PVT. LTD. 177 TAXMAN 9 (BOMBAY) 4. CIT VS. NIRAV MODI 71 TAXMANN.COM 272 (BOMBAY) 5. CIT VS. NIRAV MODI 77 TAXMANN.COM 78 (SC) 6. M/S. FORTUNE METALS VS. CIT ITA NO.962/PN/2014, D ATED 21-03-2016 8. FURTHER, ON THE ISSUE OF SUNDRY CREDITORS, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SUNDRY CREDITOR BALANCES ARE B EING CARRIED FORWARD AND NO ADDITION IS CALLED FOR ON THIS ACCOUNT AS T HE CIT DID NOT 7 MAKE OUT A CASE OF CESSATION OF LIABILITIES. LD. COUNSEL SUBMIT TED THAT THE SAID BALANCES ARE GENUINE. THERE IS NO CESSATION OF LIA BILITIES. THERE IS NO SCOPE FOR APPLICATION OF PROVISIONS U/S.41(1) OF TH E ACT FOR MAKING OF ADDITIONS AS IMPLIED BY THE PR.CIT AS THERE IS NO CASE OF CESSATION OF LIABILITY ON ANY OF THE LIABILITIES. IF THE REVENUE S CASE IS CESSATION OF LIABILITIES, THE ONUS IS ON THE AO TO DEMONSTRAT E THE SAME. AO CANNOT MAKE ADDITION ON THIS ACCOUNT IN THE FRESH ASS ESSMENT AS THE ASSESSEE COMPLIED WITH THE PROVISIONS OF THE ACT. FU RTHER, HE MENTIONED THAT AO IS NOT UNDER ANY OBLIGATION TO EXAMINE THE SUNDRY CREDITORS ACCOUNT OR THE CLAIMS/DEDUCTIONS IN THE RETURN OF INCOME. MAKING THE RE-ASSESSMENT ON THE SAID ISSUE WAS NEVER T HE ISSUE AS PER THE REASONS RECORDED BY THE AO AT THE TIME OF REOPENIN G OF THE ASSESSMENT. THEREFORE, IT IS NOT THE CASE OF THE REVENU E THAT AO PICKED UP THE ISSUE AND CONCLUDED THE ISSUE WITHOUT ENQUIRIES OR VERIFICATION WHICH HE SHOULD HAVE BEEN DONE BY THE AO. FURTHER ALSO , ON THE OTHER ISSUES LISTED IN PARA 6.2 OF HIS ORDER, LD. AR SUBMITTED THAT THERE IS NO ERROR IN THE REASSESSMENT ORDER THAT MAKES THE ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 9. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAV ILY ON THE ORDER OF THE PR.CIT. AOS FAILURE TO MAKE ADDITION OF 100% OF ENTIRE BOGUS PURCHASE OF RS.3,47,78,546/- CONSTITUTES THE ORDER ERRONEOUS AND AOS FAILURE TO CONDUCT INVESTIGATION TO SUNDRY CREDIT ORS ALSO MAKES THE ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HOWEVER, ON DEBATABILITY OF THE ISSUE RELATING TO BOGUS PURCHASES, LD. DR HAS NOTHING TO MENTION. 10. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE ON THE ISSUE OF BOGUS PURCHASES AND THE NEED FOR MAKIN G ADDITION OF ENTIRE SUCH PURCHASES, COPIES OF DECISIONS ETC. WE HAVE A LSO GONE 8 THROUGH THE PURCHASE BILLS, OTHER DOCUMENTS FILED IN THE FOR M OF PAPER BOOK BY THE ASSESSEE. THE CASE OF THE PR.CIT IN THE R EVISION ORDER IS THAT THE AO FAILED TO MAKE ENQUIRIES BEFORE COMPLETING THE ASSESSMENT ON THE CLAIMS RELATING TO BOGUS PURCHASES AND THE SUNDR Y CREDITOR BALANCES. WE SHALL TAKE UP ALL THE ISSUES IN THE SUBSEQUENT PARAS. 11. REGARDING THE ALLEGATION OF THE PR.CIT RELATING TO BOGUS PURCHASES , WE FIND THE AO HAS TAKEN UP THIS ISSUE IN THE RE-ASSESSMENT PROCEEDINGS U/S.148 OF THE ACT AND CALLED FOR DETAILS RELATIN G TO THE PURCHASE OF GOODS, DELIVERY OF GOODS AND PAYMENT DETAILS F OR THE SAID PURCHASES. AT THE END OF THE SCRUTINY OR INVESTIGATION, A O CAME TO THE CONCLUSION OF MAKING GP ADDITION OF THE BOGUS PURCHASES @2 0% WOULD MEET THE ENDS OF JUSTICE. AO RELIED ON VARIOUS DECISIONS FO R ARRIVING AT THIS DECISION. ACCORDINGLY, AO MADE ADDITION @20% AMOUNTING TO RS.69,55,709/-. THEREFORE, IN OUR VIEW, IT IS A CASE OF TAKING PLAUSIBLE VIEW BY THE AO ON THE ISSUE UNDER CONSIDERATION. IN THE REVISION ORDER, THE PR.CIT DID NOT AGREE WITH THE SAID VIEW AND RESTOR ED 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 ADDITIO N ON ACCOUNT OF BOGUS PURCHASES CONSTITUTES A DEBATABLE ONE. AS SUCH, THE AO HAS TAKEN ONE PREVAILING VIEW IN THIS MATTER. THEREFORE, THRUST ING ANOTHER VIEW BY THE PR.CIT IN HIS REVISION ORDER IN OUR VIEW IS OU TSIDE THE SCOPE OF PROVISIONS OF SECTION 263 OF THE ACT. THEREFORE, IT IS NOT A CLEAR CUT CASE OF ERRONEOUS ASSUMPTION OF LAW AS MADE OUT BY THE PR.CIT. HENCE, 9 THE REVISION ORDER ON THIS ISSUE IS UNSUSTAINABLE IN LAW. AC CORDINGLY, RELEVANT GROUNDS RAISED BY THE ASSESSEE ON THIS ASPECT ARE ALLOWED . 12. REGARDING THE OTHER ISSUE OF SUNDRY CREDITORS, WE FIND THIS ISSUE WAS DISCUSSED BY THE PR.CIT IN PARA 6.2 OF HIS ORDER. THIS ISSUE WAS NOT AT ALL TAKEN UP IN THE RE-ASSESSMENT PROCEEDINGS. THE RE ASONS RECORDED BY THE AO SUPPORTS THE SAME. NORMALLY, SUCH ISSUES ARE TAKEN UP IN THE REGULAR ASSESSMENT U/S.143(3) OF THE ACT. IN THIS CAS E, THERE IS NO SUCH ORDER PASSED BY THE AO AT THE RELEVANT POINT OF T IME. FURTHER, IT IS NOT THE CASE OF THE REVENUE THAT THE ISSUE OF SUNDRY C REDITORS WAS NOT EXAMINED BY THE AO. IN THIS REGARD, WE ALSO PERUSED THE RELEVANT LINES FROM PARA NO.6.2 AND THE SAME IS EXTRACTED HERE AS UNDER : 6.2 FURTHER, PERUSAL OF THE RECORDS SHOWS THAT T HE ASSESSING OFFICER IN THE RE-ASSESSMENT PROCEEDINGS FAILED TO EXAMINE SUN DRY CREDITORS SHOWN BY THE ASSESSEE COMPANY, THE DETAILS OF OTHER PURCH ASES, VALUATION OF STOCK AND VARIOUS EXPENSES AS CLAIMED BY THE ASSESS EE COMPANY IN ITS PROFIT AND LOSS ACCOUNT, WHICH MAKES THE ORDER NOT ONLY ERRONEOUS BUT PREJUDICIAL TO THE INTEREST OF REVENUE.. . . . . THEREFORE, WE FIND THE ISSUES ABOVE NARRATED BY THE PR.C IT ARE GENERAL AND CASUAL. IT IS NOT THE CASE OF THE PR.CIT TH AT THE ABOVE ISSUES WERE ALLOWED BY THE AO AFTER DUE PROCESS OF VERIFIC ATION OF SCRUTINY OF THE ACCOUNT. AS SUCH, AO IS NOT UNDER ANY M ANDATE TO EXAMINE SUNDRY CREDITOR ACCOUNT. FURTHER, IT IS ALSO NOT THE CASE OF THE PR.CIT THAT THERE IS SOMETHING ERRONEOUS ABOUT THE SU NDRY CREDITOR ACCOUNT AND THEREFORE, THE AO FAILED TO MAKE PROPER/ADEQU ATE ENQUIRIES ON THIS ISSUE. IN OUR OPINION, THE PR.CITS FINDING IS TOO G ENERAL AND THE SAME IS UNSUSTAINABLE. HE FAILED TO MAKE OUT A CASE THAT ALLOWING CLAIMS OF THE ASSESSEE ON THIS ISSUE AMOUNTS TO ERRONEOU S ORDER OF THE AO IN SO FAR AS IT IS PREJUDICIAL TO THE REVENUE. IN THE A BSENCE OF ANY CATEGORICAL FINDING ON ERRONEOUS ASSUMPTION OF LAW/FACT LEADIN G TO LOSS OF REVENUE, THE FINDING OF THE PR.CIT IS NOT SUSTAINABLE. TH EREFORE, WE 10 ARE OF THE OPINION THAT THE DIRECTIONS GIVEN BY THE PR.CI T ARE LIABLE TO BE QUASHED. ACCORDINGLY, THE RE-ASSESSMENT ORDER OF THE A O IS RESTORED. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NOS. 1169 & 1170/PUN/2017 A.YRS. 2010-11 & 2011-12 14. SINCE THE FACTS, ISSUES, DECISION OF THE AO/PR.CIT, ARGUM ENTS AND COUNTER ARGUMENTS ARE SAME AS THAT OF APPEAL ITA NO.1 168/PUN/2017 FOR A.Y. 2009-10, THE DECISION GIVEN IN THE SAID A.Y. 2009-10 APPLIES TO THESE ASSESSMENT YEARS TOO. THEREFORE, WITH SIMILAR REASO NING, WE ALLOW THE GROUNDS RAISED BY THE ASSESSEE FOR THE A.YRS. 2010- 11 & 2011-12 TOO. 15. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 04 TH DAY OF MAY, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 04 TH MAY, 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. PR.CIT-3, PUNE 4. , , B BENCH PUNE; 5. / GUARD FILE.