RAJIV ARORA, Jaipur V. PCIT-3, Jaipur

ITA 375/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1872 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 15-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA CIT DHK
• Keywords: Bogus purchase; Unexplained investment; Revision of order; Business expenditure; Opportunity of being heard; Period of limitation; Time period of passing order
• Section: 143(3); 10B; 148; 6; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA- @ ITA NO. 375/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08. SH. RAJIV ARORA, F-62, GEMS & JEWELLERY ZONE, SITAPUR INDUSTRIAL AREA, JAIPUR. CUKE VS. THE PCIT - 3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAYPA 5720 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 01/12/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. PCIT (A)-3, JAIPUR DATED 14.03.2017 PERTAINING TO ASSESSMENT YE AR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THE ORDER PASSED BY THE LD. PCIT U/S 263 IS IL LEGAL AND BAD IN LAW. 1.1 THE LD. PCIT HAS ERRED ON FACTS AND IN LAW IN DIREC TING THE AO TO MAKE NECESSARY ENQUIRES WITH REFERENCE TO THE PURCHASES OF RS. 8,75,007/- MADE FROM VITGRAG JEWELLERS CONSIDERED TO BE AN ACC OMMODATION PARTY IGNORING THAT THE PURCHASES MADE FROM HIM IS LINKED TO EXPORT SALE AND SINCE THE ENTIRE INCOME OF THE ASSESSEE IS EXEMPT U /S 10B OF THE ACT, THERE IS NO TAX IMPACT EVEN IF THE PURCHASES ARE DI SALLOWED AND THUS THE ORDER PASSED BY AO IN NOT PREJUDICIAL TO THE IN TEREST OF THE REVENUE. 2. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 2 ITA NO. 375/JP/2017. SH. RAJIV ARORA. 3. THE APPROPRIATE COST BE AWARDED TO THE ASSESSEE. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSMENT WAS COMPLETED AT INCOME OF RS. 21,17,062/- THROUGH ORDER DATED 02.03.2015 PASS ED U/S 143(3) R.W.S. 147. SUBSEQUENTLY, THIS ORDER WAS REVISED BY THE LD. CIT (A) BY INVOKING THE PROVISION OF SECTION 263 ON THE BASIS THAT THE ASSESSING OFFICER FAILED TO MAKE ENQUIRY IN RESPECT OF M/S VITRAG JEWELS ACCOMMODATION, ENTRY OF RS. 8, 75,007/- TO THE ASSESSEE. THEREBY, THE ORDER DATED 02.03.2015 IS SET ASIDE FO R NECESSARY ACTION OF MAKING ENQUIRIES, VERIFICATION ETC. FROM VITRAG JEWELS. A GGRIEVED BY THIS, THE ASSESSEE HAS COME INTO APPEAL BEFORE THIS TRIBUNAL. 3. THE LD. COUNSEL FOR THE ASSESSEE SHRI. P.C. PARW AL VEHEMENTLY URGED THAT THERE IS NO GROUND FOR INVOKING THE PROVISIONS OF S ECTION 263. HE SUBMITTED THAT THE IMPUGNED ORDER IS UNJUSTIFIED AND CONTRARY TO THE P ROVISIONS OF LAW. HE FURTHER REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN S UBMISSIONS. THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE REPRODUCED AS UNDER:- SUBMISSION :- 1. AT THE OUTSET IT IS SUBMITTED THAT THE LD. CIT HAS JURISDICTION TO PASS ORDER U/S 263 ONLY WHEN THE TWIN CONDITION OF THE ASSESSM ENT ORDER BEING ERRONEOUS AS ALSO THE SAME BEING PREJUDICIAL TO THE INTERESTS OF THE REVENUE IS SATISFIED. THE SUPREME COURT IN CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT 243 ITR 83 HAS HELD THAT A BARE READIN G OF SECTION 263 OF THE INCOME-TAX ACT, 1961 MAKES IT CLEAR THAT THE PREREQ UISITE FOR THE EXERCISE OF JURISDICTION BY THE COMMISSIONER SUO MOTU UNDER IT, IS THAT THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO B E SATISFIED OF TWIN 3 ITA NO. 375/JP/2017. SH. RAJIV ARORA. CONDITIONS, NAMELY, (I) THE ORDER OF THE ASSESSING OFFICER SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENT I.E. IF THE ORDER OF THE INCOME-TAX OFFICER IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVENUE, RECOUR SE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. 2. IN THE PRESENT CASE, EVEN IF THE PURCHASES MADE FROM M/S VITRAG JEWELS IS HELD TO BE BOGUS AND DISALLOWED IN COMPUTING THE INCOME FROM BUSINESS, THE SAME WOULD INCREASE THE PROFIT OF THE ASSESSEE TO THAT EXTENT AND SUCH INCREASED PROFIT IS ELIGIBLE FOR DE DUCTION U/S 10B. THUS, NO PREJUDICE IS CAUSED TO THE REVENUE EVEN WHEN THE DISALLOWANCE OF THIS AMOUNT IS NOT MADE BY THE AO IN COMPUTING THE BUSIN ESS INCOME. THE BOMBAY HIGH COURT IN CASE OF CIT VS. GABRIAL INDIA LTD. 203 ITR 108 HAS HELD THAT UNLESS THERE IS LOSS OF REVENUE, THE ORDER CANNOT BE SAID TO BE PREJUDICIAL. THE CBDT IN CIRCULAR NO.37 OF 2016 DT. 2'D NOV., 2016 HAS CLARIFIED THAT WHERE SPECIFIC DISALLOWANCE S, RELATED TO THE BUSINESS ACTIVITY AGAINST WHICH CHAPTER VI-A DEDUCT ION HAS BEEN CLAIMED, RESULT IN ENHANCEMENT OF THE PROFITS OF THE ELIGIBL E BUSINESS, THEN DEDUCTION UNDER CHAPTER VI-A IS ADMISSIBLE ON THE P ROFITS SO ENHANCED BY THE DISALLOWANCES. THIS CIRCULAR IS EQUALLY APPLICA BLE WHERE THE DEDUCTION IS ALLOWABLE U/S 10B AS HELD BY MUMBAI ITAT IN CASE OF ITO VS. ANTHELO BUSINESS TECHNOLOGIES (P) LTD. (2017) 149 D TR 161. IN THIS CIRCUMSTANCES, THE ORDER OF THE AO EVEN IF HEL D ERRONEOUS IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE AND THEREFOR E, THE ORDER PASSED BY LD. CIT U/S 263 IS ILLEGAL AND BAD IN LAW. 3. IT IS FURTHER SUBMITTED THAT IN THIS CASE, ON A N EARLIER OCCASION, ORDER U/S 263 PASSED BY THE CIT WHICH IS SET ASIDE BY THE HON 'BLE ITAT. THEREAFTER, THE AO PASSED ORDER U/S 143(3)/148 ON 02.03.2015 WH ERE ADDITION ON ACCOUNT OF ALLEGED BOGUS PURCHASES MADE FROM M/S JP K TRADING INDIA PVT. LTD. OF RS.18,53,480/- WAS MADE (PB 45-51). PR IOR TO THE DATE OF THIS 4 ITA NO. 375/JP/2017. SH. RAJIV ARORA. ORDER, AO HAS THE INFORMATION ABOUT THE PURCHASES M ADE FROM M/S VITRANG TRADERS. IN APPEAL AGAINST THE ORDER U/S 14 3(3)/148 DT. 02.03.2015, THE LD. CIT(A) IN ITS ORDER DT. 19.11.2 015 (PB 52-74) HAS HELD THAT THE PURCHASES SO DISALLOWED ARE ENTITLED TO DEDUCTION U/S 10B. THIS ORDER WAS BEFORE THE LD. CIT WHEN HE PASSED TH E ORDER U/S 263 DT. 14.03.2017. THUS, WHEN THIS ISSUE IS ALREADY DECIDE D BY THE LD. CIT(A), NO JURISDICTION VEST WITH LD. CIT TO ADJUDICATE THE SAME U/S 263. IN THIS CONNECTION REFERENCE CAN BE MADE TO THE DECISION OF SUPREME COURT IN CASE OF CIT VS. SH. ARBUDA MILLS LTD. 231 ITR 50 AN D CIT VS. JAYKUMAR B. PATEL 236 ITR 469. IN THESE FACTS ALSO, THE ORDER P ASSED BY LD. CIT IS ILLEGAL AND BAD IN LAW. 4. WITHOUT PREJUDICE TO ABOVE, THE ORDER PASSED U/ S 263 IS BARRED BY LIMITATION. THIS IS FOR THE REASON THAT THE ORDER U /S 263 CAN BE PASSED WITHIN 2 YEARS FROM THE END OF THE FY IN WHICH THE ORDER SOUGHT TO BE REVISED WAS MADE. WHERE THE ISSUE IS NOT SUBJECT MA TTER OF REASSESSMENT, THE PERIOD OF LIMITATION COMMENCES FR OM THE DATE OF ORDER OF ASSESSMENT AND NOT FROM THE DATE ON WHICH THE OR DER OF REASSESSMENT HAS BEEN PASSED. FOR THIS PURPOSE, RELIANCE IS PLAC ED ON THE DECISION OF SUPREME COURT IN CASE OF CIT VS. ALAGENDRAN FINANCE LTD. 293 ITR 1 AND BOMBAY HIGH COURT IN CASE OF ASHOK BUILDC ON LTD. VS. ACIT & ANR. 325 ITR 574. IN THE PRESENT CASE ALSO, THE ISSUE OF PURCHASES FROM M/S VITRAG JEWELS WAS NOT A SUBJECT MATTER OF REASSESSMENT AND THEREFORE, THE LIMITATION PERIOD C OMMENCES FROM THE DATE OF THE ORIGINAL ASSESSMENT ORDER AND NOT FROM THE DATE OF REASSESSMENT ORDER. IN VIEW OF ABOVE, ORDER PASSED BY LD. CIT U/S 263 I S ILLEGAL & BAD IN LAW AND THE SAME BE QUASHED . 5 ITA NO. 375/JP/2017. SH. RAJIV ARORA. 4. LD. D/R OPPOSED THE SUBMISSIONS AND SUPPORTED TH E ORDER OF THE AUTHORITIES BELOW. HE SUBMITTED THAT BY NOT MAKING ENQUIRY, TH E IMPUGNED ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN REJOINDER THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO PREJUDICE IS CAUSED TO T HE REVENUE AS THERE WOULD NOT BE ANY LOSS OF REVENUE AS THE ASSESSEE BEING 100% E XPORT ORIENTED UNDERTAKING AND THE ENTITLED TO DEDUCTION U/S 10B OF THE ACT. EVEN IN THE PURCHASES TREATED TO BE BOGUS NO LOSS OF REVENUE WOULD BE CAUSED. HE FU RTHER CONTENDED THAT THE REVENUE CANNOT BE GIVEN INDEFINITE INNINGS TO DISTU RBED THE CONCLUDED ASSESSMENT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FAC T THAT TWIN CONDITIONS ARE TO BE SATISFIED FOR INVOKING THE PROVISIONS OF SECTION 26 3 OF THE ACT. FOR THE SAKE OF CLARITY SECTION 263 IS REPRODUCED AS UNDER:- 263. REVISION OF ORDERS PREJUDICIAL TO REVENUE (1) THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY CA LL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE [ASSESSING] OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE M AY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MA KING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORD ER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSM ENT AND DIRECTING A FRESH ASSESSMENT. [EXPLANATION (1) FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, FOR THE PURPOSE OF THIS SUB-SECTION,- 6 ITA NO. 375/JP/2017. SH. RAJIV ARORA. (A) AN ORDER PASSED [ ON OR BEFORE OR AFTER THE 1 ST DAY OF JUNE, 1988] BY THE ASSESSING OFFICER SHALL INCLUDE-; (I) AN ORDER OR ASSESSMENT MADE BY THE ASSISTANT COMMIS SIONER [OR DEPUTY COMMISSIONER] OR THE INCOME-TAX OFFICER ON T HE BASIS OF THE DIRECTIONS ISSUED BY THE [JOINT] COMMISSIONER U NDER SECTION 144A; (II) AN ORDER MADE BY THE [JOINT] COMMISSIONER IN EXERCI SE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON, OR ASSIGNED TO, HIM UNDER THE ORDERS OR DIRECTION ISSUED BY THE BOARD OR BY THE [PRINCIPAL DIRECTOR GENERAL OR] DIRECTOR GENERAL OR [PRINCIPAL COMMISSI ONER OR] COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120; (B) RECORD[SHALL INCLUDE AND SHALL BE DEEMED ALWAYS T O HAVE INCLUDED ALL] RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT A VAILABLE AT THE TIME OR EXAMINATION BY THE [PRINCIPAL COMMISSIONER OR] C OMMISSIONER; (C) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION AND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF ANY APPEAL, [FILED ON OR BEFORE OR AFTER THE 1 ST DAY OF JUNE, 1988] THE POWERS OF THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER UNDER THIS SUB-SECTION SHALL EXTEND [AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED ] TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN S UCH APPEAL.] [EXPLANATION 2.- FOR THE PURPOSE OF THIS SECTION, I T IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COM MISSIONER;- 7 ITA NO. 375/JP/2017. SH. RAJIV ARORA. (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VER IFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQ UIRING INTO THE CLAIM, (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH AN Y DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, REND ERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE C ASE OF THE ASSESSEE OR ANY OTHER PERSON.] [(2) NO ORDER SHALL BE MADE UNDER SUB-SECTION 91) A FTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH T HE ORDER SOUGHT TO BE REVISED WAS PASSED.] (2) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION ( 2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF ANY ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, THE HIGH COURT OR THE SUPREME COURT. [EXPLANATION.- IN COMPUTING THE PERIOD OF LIMITATIO N FOR THE PURPOSES OF SUB-SECTION (2), THE TIME TAKEN IN GIVI NG AN OPPORTUNITY TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS S TAYED BY AN ORDER OR INJUNCTION OF ANY COURT SHALL BE EXCLUDED. 8 ITA NO. 375/JP/2017. SH. RAJIV ARORA. FIRST, WE WILL ADVERT TO THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE IMPUGNED ORDER IS BARRED BY LIMITATION. THERE IS N OT DISPUTE WITH REGARD TO THE FACT THAT AS PER SECTION 263 THE (PRINCIPAL COMMISSIONER OR) COMMISSIONER MAY CALL FOR AND EXAMINE ANY PROCEEDING UNDER THE ACT, AND IF HE CONSIDERERS THAT ANY ORDER PASSED THEREIN BY THE [ASSESSING] OFFICER IS ERRONE OUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY, AFTER GIVING T HE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTA NCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSES SMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. NOW, COMING TO THE FACTS OF THE PRESENT CASE ARE TH AT THIS IS SECOND ROUND OF LITIGATION AN EARLIER OCCASION LD. CIT REVISED ORIG INAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. THIS ORDER WAS CHALLENGED BEFOR E THE TRIBUNAL AND THE TRIBUNAL WAS PLEASED TO SET ASIDE THE SAME. THEREAFTER, THE AO PROCEEDED TO RE-OPEN THE ASSESSMENT PROCEEDINGS AND ASSESSMENT U/S 143(3) RE AD WITH SECTION 148 OF THE ACT WAS PASSED. LD. CIT(A) PROCEEDED TO REVISE THIS OR DER ON THE GROUND THAT THE AO FAILED TO MAKE ENQUIRY IN RESPECT OF PURCHASES MADE FROM M/S VITRAG JEWELS (SURAT). IT IS PERTINENT TO MENTION HERE THAT THE ASSESSMENT WAS RE-OPENED ON THE BASIS THAT THE PURCHASES MADE FROM M/S JPK TRADING (INDIA) PVT . LTD. WAS BOGUS. IN OUR VIEW WHEN THE ISSUE RELATED TO BOGUS PURCHAS ES IS RE-OPENED, THE AO SHOULD NOT CONFINE ITSELF TO A SINGLE PARTY. IN RE-OPENED PROCEEDINGS AS THE ISSUE OF PURCHASES WAS RE-OPENED AND THIS ISSUE WAS ALSO SUB JECT MATTER OF ORIGINAL PROCEEDINGS. HENCE, THE ISSUE RELATED TO VERIFICAT ION OF PURCHASES MERGED WITH THE 9 ITA NO. 375/JP/2017. SH. RAJIV ARORA. RE-OPENED PROCEEDINGS, WHERE ADMITTEDLY ISSUE OF BO GUS PURCHASES WAS THE BASIS FOR RE-OPENING. THUS, THE FACTS IN THE PRESENT CASE A RE DISTINGUISHABLE FROM THE FACTS OF THE JUDGMENT OF THE HONBLE SUPREME COURT RENDERED IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD. 293 ITR 001. IN THE INSTAN T CASE THUS THE LIMITATION FOR REVISING OF THE ORDER U/S 263 WOULD START FROM THE ORDER PASSED U/S 143(3) READ WITH SECTION 148 OF THE ACT BUT NOT FROM THE DATE WHEN T HE ORIGINAL ASSESSMENT ORDER WAS PASSED U/S 143(3) OF THE ACT. THUS, THIS GROUND OF THE ASSESSEES APPEAL IS DISMISSED. 6. NOW, COMING TO THE OTHER GROUNDS OF THE ASSESSEE THAT THE ORDER SOUGHT TO BE REVISED IS NOT PREJUDICIAL TO THE INTEREST OF TH E REVENUE. THE MAIN THRUST OF THE ASSESSEE IS THE CONTENTION IS THAT ASSESSEE BEING 1 00% EXPORT ORIENTED UNDERTAKING IS ENTITLED FOR DEDUCTION U/S 10B. IT IS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT EVEN IF IT IS ASSUMED THAT PURCHASES ARE NOT GENUINE IN THAT EVENT ALSO IT WOULD ONLY INFLATE PROFIT AND SUCH PROFIT IS ELI GIBLE FOR DEDUCTION CONSEQUENTLY THERE WOULD BE NO LOSS OF REVENUE. 6.1 LD. D/R OPPOSED THE SUBMISSION AND VEHEMENTLY A RGUED THAT THERE IS ANOTHER FACET TO THIS TRANSACTION I.E. GENUINENESS OF THE I NVESTMENT. 6.2 AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE CAN NOT BE ALLOWED TO TAKE ADVANTAGE O F ITS OWN WRONG. BY CLAIMING THE BOGUS EXPENDITURE THE ASSESSEE HAS CERTAINLY CA USED PREJUDICE TO THE INTEREST OF THE REVENUE. THE COMPONENT OF INVESTMENT WHICH IS CLAIMED AS BUSINESS EXPENDITURE MAY BE UNEXPLAINED INVESTMENT, WHICH IS CLAIM UNDER THE GARB OF TRADING EXPENDITURE. KEEPING THIS IN VIEW, WE DO N OT SEE ANY REASON TO INTERFERE 10 ITA NO. 375/JP/2017. SH. RAJIV ARORA. INTO THE ACTION OF THE LD. CIT(A), SAME IS HEREBY A FFIRMED. THIS GROUND OF ASSESSEES APPEAL IS DISMISSED. BEFORE PARTING WE MAY ALSO HOLD THAT EVEN IF THE LD. CIT(A) HAS DECIDED THE ISSUE THAT THE PROFIT ARISIN G OUT OF THE BOGUS PURCHASES WOULD BE ELIGIBLE FOR DEDUCTION U/S 10B EVEN THEN T HE REVENUE CANNOT BE PRECLUDED TO EXAMINE THE ISSUE FROM THE STAND POINT OF GENUIN ENESS OF INVESTMENT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 01 ST DAY OF DECEMBER 2017. SD/- SD/- ( HKKXPUN] ( DQY HKKJR ) (BHAG CHAND ) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 01/12/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SH. RAJIV ARORA, JAIPUR. 2. THE RESPONDENT THE PCIT-3, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 375/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 11 ITA NO. 375/JP/2017. SH. RAJIV ARORA.