SPECTROCHEM PRIVATE LIMITED, MUMBAI V. PR.CIT-4, MUMBAI

ITA 3930/MUM/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7945 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 04-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY SINGH
• Assessee Lawyers: MEHULLE V CHOKSI
• Keywords: Bogus purchase; Search and seizure
• Section: 143(3); 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ' J ' BENCH, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 3930 /MUM/ 2018 (ASSESSMENT YEAR: 2010 - 11 ) M/S. SPECTROCH E M P.LTD. OFFICE NO. 2, FIRST FLOOR 384 - M, DABHOLKAR WADI KALBADEVI ROAD MUMBAI 400002 VS. PRINCIPAL CIT - 4 AAYAKAR BHAVAN M.K. ROAD MUMBAI 400020 , PAN AAACS5958G APPELLANT RESPONDENT APPELLANT BY: SHRI MEHULLE V. CHOKSI RESPONDENT BY: SHRI SANJAY SINGH ,CIT D.R DATE OF HEARING: 29 .08.2018 DATE OF PRONOUNCEMENT: 19 . 0 9 .2018 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX - 4, MUMBAI (PR. CIT), UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER 'THE ACT'), DATED 23.03.2018 FOR A.Y. 2010 - 11. 2. THE ASSESSEE ASSAILING THE ORDER OF THE PR. CIT HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: - 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED PR CIT ERRED IN ASSUMING JURISDICTION AND PASSING THE ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 ON THE GROUND THAT THE ORIGINAL REASSESSMENT ORDER DATED MARCH 21,2016 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE HAVING FAILED TO APPRECIATE THAT THE RE - ASSESSMENT WAS FRAMED BY THE AO AFTER MAKING DUE INQUIRIES AND ON THE BASIS OF EVIDENCES FILED AND AVAILABLE ON RECORD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THERE IS NO REQUISITE SATISFACTION BY THE LEARNED PR CIT ON THE ISSUE OR GROUND OF ADDITION OF ALLEGED BOGUS PURCHASES BY THE ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 2 LEARNED AO TO THE EXTENT OF 2,35,125/ - (BEING 12.5% OF ALLEGED BOGUS PURCHASES OF RS 18,80,996/ - ) RAISED BY HIM IN THE NOTICE U/S 263 OF THE INCOME TAX ACT TO JUSTIFY AND INVOKE ASSUMPTION OF JU RISDICTION 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELLANT SUBMITS THAT THE LEARNED PR CIT ERRED IN SUMMARILY REJECTING THE EXPLANATIONS FURNISHED BY THE APPELLANT DURING THE COURSE OF THE REVISION PROCEEDINGS CONTRARY TO WEL L - ESTABLISHED JUDICIAL PRINCIPLES ON THE ISSUE/GROUND FOR REVISION AND WITHOUT FURNISHING ANY COGENT REASONS FOR THE SAME. 5. THE APPELLANT SUBMITS THAT THE LEARNED PR CIT FAILED TO ESTABLISH THAT THE RE ASSESSMENT ORDER PASSED BY THE AO WAS EITHER ERRONEO US OR PREJUDICIAL TO THE INTEREST OF THE REVENUE IN TERMS OF SECTION 263 OF THE INCOME TAX ACT ON THE ISSUE AND GROUND SPECIFIED IN THE SHOW CAUSE NOTICE DATED MARCH 14, 2018 AND THEREFORE THE APPELLANT PRAYS THAT THE REVISION ORDER DATED MARCH 23, 2018 MA Y BE CANCELLED/SET ASIDE AND THE RE - ASSESSMENT ORDER DATED MARCH 21, 2016 MAY BE RESTORED. 3. BRIEFLY STATED, THE ASSESSEE COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CHEMICALS HAD FILED ITS RETURN OF INCOME FOR A.Y. 2010 - 11 ON 20.09.2010 DECLARING TOTAL INCOME OF RS. 1,99,10,240/ - . THE ORIGINAL ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT ON 11.02.2013 , DETERMINING THE TOTAL INCOME AT RS. 1,99,10,240/ - . SUBSEQUENTLY, ON THE BASIS OF THE INFORMATION RECEIVED THAT THE ASSESSEE HAD TAKEN BOGUS BILLS FROM TWO PARTIES, VIZ. (I) M/S. G.R. TRADE LINK RS. 1,50,436/ - ; AND (II) M/S. M.R. CORPORATION RS. 17,30,560/ - , THE CASE OF THE ASSESSEE WAS REOPENED AND REASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT WAS PASSED ON 21.0 3.2016 DETERMINING THE TOTAL INCOME OF THE ASSESSEE COMPANY AT RS. 2,01,45,370/ - . 4. ON A PERUSAL OF THE RECORDS IT WAS OBSERVED BY THE PR. CIT THAT THOUGH THE AO WHILE FRAMING THE REASSESSMENT HAD CATEGORICALLY OBSERVED THAT THE ENTIRE PURCHASE S AGGREGATING TO RS. 18,80,996/ - CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES WERE BOGUS , BUT HOWEVER HAD RESTRICTED THE ADDITION ONLY TO THE EXTENT OF RS. 2,35,125/ - . BEING OF THE VIEW THAT THE REASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS TO THE EXTENT PREJUDICIAL TO THE INTERESTS OF THE R EVENUE, THE PR.CIT ISSUED A SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT , DATED ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 3 14.03.2018 AND CALLED UPON THE ASS ESSEE TO EXPLAIN AS TO WHY THE REASSESSMENT ORDER PASSED IN ITS CASE MAY NOT BE REVISED. THE PR. CIT, AFTER DELIBERATING ON THE CONTENTIONS ADVANCED BY THE ASSESSEE TO IMPRESS UPON HIM THAT THE ADDITION OF RS. 2,35,125/ - MADE BY THE AO WHILE FRAMING THE RE ASSESSMENT WAS WELL IN ORDER, HOWEVER, WAS NOT IMPRESSED WITH THE SAME. OBSERVING, THAT AS THE AO DESPITE STATING THAT THE PURCHASES AMOUNTING TO RS. 18,80,996/ - WERE FOUND TO BE BOGUS HAD HOWEVER WITHOUT ANY REASON RESTRICTED THE ADDITION ONLY TO THE EXTE NT OF RS. 2,35,125/ - , THE PR. CIT THUS WAS OF THE VIEW THAT THE REASSESSMENT ORDER PASSED BY THE AO WAS ERRONEOUS TO THE EXTENT PREJUDICIAL TO THE INTEREST OF R EVENUE. ON THE BASIS OF HIS AFORESAID OBSERVATION THE PR. CIT DIRECTED THE AO TO RECOMPUTE THE T OTAL INCOME OF THE ASSESSEE COMPANY BY DISALLOWING THE AFORESAID PURCHASES OF RS. 18,80,996/ - IN SUBSTITUTION OF THE DISALLOWANCE OF RS. 2,35,125/ - MADE BY HIM IN THE REASSESSMENT ORDER. IN ORDER TO FORTIFY HIS AFORESAID VIEW THE PR. CIT TOOK SUPPORT OF T HE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF N.K. PROTEINS LTD. VS. DCIT (2017) 84 TAXMANN.COM 195 (SC). 5. AGGRIEVED, THE ASSESSEE HAS ASSAILED BEFORE US THE ORDER PASSED BY THE PR. CIT UNDER SECTION 263 OF THE ACT . THE LEARNED AUTHORISED REPRESENTAT IVE (FOR SHORT A.R) FOR THE ASSESSEE , AT THE OUTSET OF HEARING OF THE APPEAL SUBMITTED THAT AS THE AO WHILE PASSING THE ASSESSMENT ORDER HAD TAKEN A POSSIBLE VIEW, HENCE THE PR. CIT HAD EXCEEDED HIS JURISDICTION AND WRONGLY REVISED THE SAID ORDER UNDER S ECTION 263 OF THE ACT. IT WAS THE CONTENTION OF THE LEARNED A.R. THAT IN RESPECT OF THE ISSUE OF BOGUS PURCHASE S TWO VIEWS ARE POSSIBLE VIZ. (I) ADDITION OF THE PROFIT ELEMENT INVOLVED IN MAKING OF SUCH PURCHASES FROM THE OPEN/GREY MARKET BE MADE ; OR (II) DISALLOWANCE OF THE ENTIRE AMOUNT OF BOGUS PURCHASES BE CARRIED OUT. IT WAS AVERRED BY THE LD. A.R THAT NOW WHEN THE AO BY RESTRICTING THE ADDITION TO THE EXTENT OF THE PROFIT ELEMENT INVOLVED IN MAKING OF PURCHASES FROM THE OPEN/GREY MARKET, HAD THUS TAKE N ONE OF THE POSSIBLE VIEW S , THEREFORE , THE REASSESSMENT ORDER PASSED BY HIM WAS NOT OPEN FOR REVISION UNDER SECTION 263 OF THE ACT. IN SUPPORT OF HIS AFORESAID CONTENTION THE ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 4 LEARNED A.R. RELIED ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KWALITY STEEL SUPPLIERS COMPLEX (2017) 395 ITR 1 (SC). IT WAS FURTHER AVERRED BY THE LEARNED A.R. THAT EVEN THE CA SE OF THE ASSESSEE WAS REOPENED ON THE GROUND THAT INCOME CHARGEABLE TO TAX IN RESPECT OF THE AFOREMENTIONED BOGUS PURCHASE HAD ESCAP ED ASSESSMENT. THE LEARNED A.R., IN ORDER TO BUTTRESS HIS CONTENTION THAT THE AO HAD RIGHTLY RESTRICTED THE ADDITION ONLY TO THE EXTENT OF PROFIT ELEMENT INVOLVED IN MAKING OF THE PURCHASES UNDER CONSIDERATION, SUBMITTED THAT IN CASE THE ASSESSEE WOULD NOT HAVE MADE ANY PURCHASE OF THE GOODS UNDER CONSIDERATION THEN THERE WOULD NOT HAVE BEEN ANY CORRESPONDING SALE AS HAD BEEN ACCOUNTED FOR BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. THE LEARNED A.R. IN HIS ATTEMPT TO DISLODGE THE RELIANCE PLACED BY THE PR. CIT ON THE JUDGEMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF N.K. PROTEINS LTD. (SUPRA) SUBMITTED THAT AS THE ORDER OF THE HON'BLE SUPREME COURT DISMISSING TH E SPECIAL LEAVE PETITION (SLP) OF THE ASSESSEE IN THE SAID CASE WAS NOT AVAILABLE AT THE TIME WHEN THE REASSESSMENT ORDER WAS PASSED BY THE AO, HENCE ON THE SAID COUNT ITSELF THE SAID ORDER COULD NOT BE CHARACTERISED AS ERRONEOUS. THE LEARNED A.R. FURTHER SUBMITTED T H AT AS THE FACTS INVOLVED IN THE CASE OF N.K. PROTEINS LTD. (SUPRA) WERE DISTINGUISHABLE AS AGAINST THOSE INVOLVED IN THE CASE OF THE PRESENT ASSESSEE, HENCE THE SAME COULD NOT BE APPLIED FOR DRAWING ADVERSE INFERENCE S IN THE HANDS OF THE ASSESS EE. IN SUPPORT OF HIS AFORESAID CONTENTION THE LEARNED A.R. DREW OUR ATTENTION TO THE ORDER PASSED BY A C OORDINATE BENCH OF THE TRIBUNAL VIZ. ITAT, F BENCH, MUMBAI IN THE CASE OF DCIT VS. M/S. FAGIOLI INDIA P. LTD. IN ITA NO. 4557 & 4558 /MUM/2015 ; DATED 28.07.2017 AND THE ORDER OF THE ITAT, I BENCH , MUMBAI IN THE CASE OF M/S. BATLIBOI ENVIRONMENTAL ENGINEERING LTD. VS. DCIT IN ITA NO. 2 8 40/MUM/2015 ; DATED 15.03.2017. IT WAS FURTHER SUBMITTED BY THE LEARNED A.R. THAT AS A SUBSEQUENT REVERSAL OF THE LEGAL POSITION BY THE HON'BLE SUPREME COURT WOULD NOT AUTHORISE THE DEPARTMENT TO RECTIFY OR REOPEN A CONCLUDED ASSESSMENT WHICH WAS FRAMED ON THE BASIS OF EXTANT LAW, THUS THE PR. CIT IN THE PRESENT CASE HAD CLEARLY TRAVERSED BEYOND THE SCOPE OF HIS JURISDICTIO N. IN ORDER TO FORTIFY HIS AFORESAID CLAIM RELIANCE WAS PLACED BY THE LEARNED A.R ON THE JUDGEMENTS ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 5 OF THE HON'BLE SUPREME COURT IN THE CASE OF (I) DCIT VS. SIMPLEX INDIA LTD. (2013) 358 ITR 129 (SC) AND (II) MAPCO INDUSTRIES LTD. VS. CIT (2009) 319 ITR 20 8 (SC). FURTHER , IT WAS CLAIMED BY THE LEARNED A.R. THAT AS THE AO , AFTER NECESSARY DELIBERATIONS IN RESPECT OF THE ISSUE OF IMPUGNED BOGUS PURCHASES OF RS. 18,80,996/ - HAD RESTRICTED THE ADDITION ONLY TO THE EXTENT OF THE PROFIT ELEMENT OF 12.5%, THUS THE VERY EXERCISE OF REVISIONAL JURISDICTION BY THE PR. CIT WAS CLEARLY IN TRANSGRESSION OF THE SCOPE OF HIS JURISDICTION. LASTLY, TAKING US TO THE SHOW CAUSE NOTICE DATED 14.03.2016 ISSUED BY THE PR. CIT UNDER SECTION 263 OF THE ACT, IT WAS AVERRED BY THE LE ARNED A.R. THAT THE SAME WAS ABSOLUTELY VAGUE. 6. PER CONTRA, THE LEARNED D.R. TOOK US THROUGH THE REASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S. 147 OF THE ACT , DATED 21.03.2016. THE LEARNED D.R. DRAWING OUR ATTENTION TO THE OBSERVATIONS OF THE AO SUBMITTED THAT HE HAD CATEGORICALLY STATED THAT NOT ONLY THE ASSESSEE HAD FAILED TO PLACE ON RECORD ANY IRREFUTABLE DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE GENUINENESS AND VERACITY OF THE BOGUS PURCHASE TRANSACTIONS, BUT RATHER NO EVIDENCE OF RESA LE/UTILISATION OF THE GOODS COULD ALSO BE PROVED. THE LEARNED D.R. SUBMITTED THAT THE AO, DESPITE OBSERVING THAT THE ASSESSEE HAD FAILED TO ESTABLISH ANY DETAILS OF THE USAGE OF MATERIAL IN ITS BUSINESS, THUS INSTEAD OF MAKING DISALLOWANCE OF THE ENTIRE PU RCHASE OF RS. 18,80,996/ - HAD RATHER WHIMSICALLY IN CONTRADICTION OF HIS OWN OBSERVATIONS RESTRICTED THE ADDITION ONLY TO THE EXTENT OF RS. 2,35,125/ - . THE LEARNED D.R. REBUTTING THE CONTENTION OF THE ASSESSEE THAT THE ADDITION WAS MADE ONLY TO THE EXTENT OF THE PROFIT ELEMENT INVOLVED IN MAKING OF THE AFOREMENTIONED PURCHASES SUBMITTED THAT THE SAID AVERMENT SO RAISED WAS ABSOLUTELY IN THE THIN AIR AS THERE WAS NO MENTION OF THE SAID FACT BY THE AO IN THE REASSE SS MENT ORDER. STILL FURTHER , PO INTING OUT THE INFIRMITY IN THE ORDER OF THE AO , IT WAS SUBMITTED BY THE LEARNED D.R. THAT THOUGH THE ASSESSEE HAD MADE PURCHASES OF RS. 18,80,996/ - FROM THE AFOREMENTIONED PARTIES, HOWEVER, THE SAME WAS STATED BY THE AO IN THE REASSESSMENT AS RS. 41,002/ - . IN THE BACKDROP OF HIS AFORESAID CONTENTION IT WAS CLAIMED BY THE LEARNED D.R. THAT PURSUANT ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 6 TO THE INSERTION OF EXPLANATION 2 TO SECTION 2 63 THE PR. CIT BEING OF THE OPINION THAT THE ASSESSMENT ORDER WAS PASSED BY THE A.O WITHOUT MAKING ENQUIRIES OR VER IFICATION WHICH SHOULD HAVE BEEN MADE, WAS THUS WELL WITHIN HIS RIGHT TO REVISE THE ORDER UNDER CONSIDERATION . THE LEARNED D.R. FURTHER SUBMITTED THAT AS PER THE SETTLED POSITION OF LAW IN CASE ANY DOUBT O R SUSPICION ARISES IN THE MIND OF AN AO IN THE COUR SE OF THE ASSESSMENT PROCEEDINGS , THEN IT IS OBLIGATORY ON HIS PART TO MAKE AN ENQUIRY AND CALL FOR THE MATERIAL IN ORDER TO DISPEL THE SAME. IT WAS THE CLAIM OF THE LEARNED D.R. THAT AS THE REASSESSMENT ORDER WAS PASSED WITHOUT MAKING PROPER ENQUIRIES AND DETAILED EXAMINATION OF THE FACTS AND MATERIAL AVAILABLE ON RECORD , HENCE THE SAME HAD RIGHTLY BEEN REVISED BY THE PR. CIT UNDER SECTION 263 OF THE ACT. THE LD. D.R RELIED ON THE JUDGEMENT OF THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF CIT VS. ABAD C ONSTRUCTION P. LTD. (2014) 363 ITR 372 (KER). THE LEARNED D.R. WHILE CULMINAT ING HIS SUBMISSION S AVERR ED THAT AS THE APPEAL OF THE ASSESSEE WAS DEVOID OF ANY MERIT, HENCE THE SAME WAS LIABLE TO BE DISMISSED . 7. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE ORDER S OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. A DMITTEDLY , IT IS A MATTER OF FACT APPARENT FROM THE RECORD THAT THE ASSESSEE HAD MADE BOGUS PURCHASES AGGREGATING TO RS. 18,8 0, 996/ - FROM THE AFOREMENTION ED PARTIES VIZ. (I) M/S. G.R. TRADE LINK RS. 1,50,436/ - ; AND (II) M/S. M.R. CORPORATION RS. 17,30,560/ - . WE FIND THAT THE CONCLUDED ASSESSMENT OF THE ASSESSEE COMPANY WAS REOPENED UNDER SECTION 147 ON THE BASIS OF INFORMATION RECEIVED BY THE AO FROM T HE DIT(INV), MUMBAI THAT THE ASSESSEE HAD MADE THE AFORESAID BOGUS PURCHASES. ON A PERUSAL OF THE REASSESSMENT ORDER , IT EMERGES THAT THOUGH THE AO HAD CATEGORICALLY OBSERVED THAT NOT ONLY THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE GENUINENESS AND VERACIT Y OF THE PURCHASES CLAIMED TO HAVE BEEN MADE FROM THE AFOREMENTIONED PARTIES, BUT RATHER EVEN THE UTILIZATION /CONSUMPTION OF THE MATERIAL CLAIMED TO HAVE BEEN PURCHASED FROM THE AFOREMENTIONED BOGUS SUPPLIE R S ALSO COULD NOT BE PROVED . IN THE BACKDROP OF TH E AFORESAID FACTS THE AO, AFTER BEING SATISFIED THAT NO ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 7 GENUINE PURCHASES WERE MADE BY THE ASSESSEE FROM THE AFOREMENTIONED PARTIES, THOUGH SPECIFICALLY OBSERVED THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE USAGE OF THE MATERIAL CLAIMED TO HAVE BEEN PURCH ASED IN ITS BUSINESS , BUT THEREAFTER HAD RESTRICTED THE ADDITION ONLY TO THE EXTENT OF AN AMOUNT OF RS. 2,35,125/ - . WE FIND FROM A PERUSAL OF THE REASSESSMENT ORDER THAT NOT ONLY THE AO HAD FAILED TO RECORD ANY REASONING FOR RESTRICTING THE ADDITION TO THE EXTENT OF THE AMOUNT OF RS. 2,35,125/ - , BUT RATHER EVEN THE SUSTAINING OF THE ADDITION ONLY TO THE SAID EXTENT CLEARLY MILITATES AGAINST HIS OWN OBSERVATION THAT NO SUCH MATERIAL WAS PURCHASED AND CONSUMED IN THE BUSINESS OF THE ASSESSEE. WE, THUS, IN TER MS OF OUR AFORESAID OBSERVATIONS ARE OF THE CONSIDERED VIEW THAT AS THE REASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S. 147 OF THE ACT WAS BLATANTLY ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE R EVENUE, THUS THE PR. CIT REMAIN ING WELL W ITHIN THE SCOPE OF HIS JURISDICTION HAD VALIDLY REVIS ED THE ORDER UNDER SECTION 263 OF THE ACT. 8. WE SHALL NOW DELIBERATE ON THE JUDICIAL PRONOUNCEMENTS WHICH HAD BEEN PRESSED INTO SERVICE BY THE LEARNED A.R. IN ORDER TO DRIVE HOME HIS CONTENTION THAT THE ORDER PASSED UNDER SECTION 263 WAS IN CLEAR TRAN SGRESSION OF JURISDICTION ON THE PART OF PR. CIT. WE FIND OURSELVES TO BE IN AGREEMENT WITH THE CLAIM OF THE LEARNED A.R. THAT AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. KWALITY STEEL SUPPLIERS COMPLEX (2017) 395 ITR 1 (SC) WHERE TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE POSSIBLE VIEW THEN THE JURISDICTION TO REVISE THE ORDER IN EXERCISE OF POWERS VESTED UNDER SECTION 263 OF THE ACT IS CLEARLY OUSTED. HOWEVER, IN THE CASE BEFORE US, AS OBSERVED HEREINABOVE , AS THE VIEW TAKEN BY THE AO CAN SAFELY OR RATHER INESCAPABL Y BE HELD AS BEING IN CONTRADICTION OF HIS OWN OBSERVATION RECORDED THEREIN, THUS, THE AFORESAID JUDICIAL PRONOUNCEMENT WOULD NOT ASSIST THE CASE OF TH E ASSESSEE BEFORE US. WE SHALL NOW ADVERT TO THE RELIANCE PLACED BY THE LEARNED A.R. ON THE JUDGEMENT S OF THE HON'BLE SUPREME COURT IN THE CASE OF DCIT VS. SIMPLEX INDIA LTD. (2013) 358 ITR 129 (SC) AND MAPCO INDUSTRIES LTD. VS. CIT (2009) 319 ITR 208 (S C), TO CANVAS BEFORE US THAT A SUBSEQUENT REVERSAL OF ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 8 THE LEGAL POSITION BY A JUDGMENT OF THE HON'BLE SUPREME COURT WOULD NOT AUTHORISE THE DEPARTMENT TO RECTIFY OR REOPEN A CONCLUDED ASSESSMENT WHICH HAD BEEN FRAMED ON THE BASIS OF EXTANT LAW. IN THE BACK DROP OF THE AFORESAID SETTLED POSITION OF LAW I T IS THE CONTENTION OF THE LEARNED A.R. THAT AS THE DISMISSAL BY THE HON'BLE SUPREME COURT OF THE SLP IN THE CASE OF N.K. PROTEINS LTD. VS. DCIT (2017) 84 TAXMANN.COM 195 (SC) , WHICH HAD FORMED THE BASIS OF TH E REVISION OF THE REASSESSMENT ORDER WAS NOT AVAILABLE ON THE DATE ON WHICH THE REASSESSMENT ORDER WAS PASSED BY THE A.O , THEREFORE , THERE COULD BE NO VALID ASSUMPTION OF JURISDICTION BY THE PR. CIT BY REFERRING TO THE SAID ORDER OF THE HONLE APEX COURT. WE ARE AFRAID THAT THE AFORESAID VIEW OF THE LEARNED A.R. IS ABSOLUTELY MISCONCEIVED. ON A PERUSAL OF THE ORDER PASSED BY THE PR.CIT UNDER SECTION 263, WE FIND THAT THE REASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S. 147 WAS REVISED BY THE PR. CIT AFTER TAKING COGNISANCE OF THE FACT THAT THOUGH THE AO HAD CATEGORICALLY OBSERVED THAT NOT ONLY THE PURCHASES OF RS. 18,80,966/ - CLAIMED BY THE ASSESSEE TO HAVE BEEN MADE FROM THE AFOREMENTIONED HAVALA PARTIES WERE FOUND TO BE BOGUS AND IT WAS EVID ENT FROM RECORD THAT THE MATERIAL CLAIMED TO HAVE BEEN PURCHASED FROM THE SAID PARTIES HAD NOT BEEN CONSUMED IN THE BUSINESS OF THE ASSESSEE , HOWEVER, THE ADDITION WAS RESTRICTED BY HIM ONLY TO THE EXTENT OF RS. 2,35,125/ - . WE FIND THAT THE RELIANCE PLACED BY THE PR. CIT ON THE ORDER PASSED BY T HE HON'BLE SUPREME COURT WHILE DISMISSING THE SLP IN THE CASE OF N.K. PROTEINS LTD. VS. DCIT (2017) 84 TAXMANN.COM 195 (SC), WAS ONLY TO SUPPORT HIS AFORESAID VIEW THAT WHERE THE PURCHASES ARE FOUND TO BE BOGUS, THEN THE DISALLOWANCE OF THE ENTIRE AMOUNT OF SUCH PURCHASES WAS LIABLE TO BE MADE IN THE HANDS OF THE ASSESSEE. WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE CLAIM OF THE LEARNED A.R. THAT ON THE AFORESAID COUNT INFIRMITY EMERGES IN THE ASSUMPTION O F JURISDICTION ON THE PART OF THE PR.CIT TO REVISE THE ORDER UNDER SECTION 263. WE, THUS, IN TERMS OF OUR AFORESAID OBSERVATION S ARE OF THE CONSIDERED VIEW THAT AS THE REASSESSMENT ORDER PASSED BY THE AO RESTRICTING THE DISALLOWANCE PERTAINING TO BOGUS PUR CHASES ONLY TO THE EXTENT OF RS. 2,35,125/ - CLEARLY MILITATE D AGAINST HIS OWN OBSERVATIONS, THUS THE PR.CIT REMAIN ING WELL ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 9 WITHIN THE REALM OF HIS JURISDICTION HAD VALIDLY REVISED THE REASSESSMENT ORDER UNDER SECTION 263 OF THE ACT. 9. BEFORE PARTING, WE MAY HEREIN OBSERVE THAT THE VALIDITY OF THE ASS UMPTION OF JURISDICTION BY THE PR. CIT FOR REVISING THE ORDER PASSED BY THE AO UNDER SECTION 143(3) R.W.S. 147 CAN ALSO SAFELY BE RELATED TO P ARA (A) OF EXPLANATION 2 TO SECTION 263 OF THE ACT, AS PER WHICH IF, IN THE OPINION OF THE PR.CIT OR CIT, THE ORDER IS PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE BY THE AO, THE SAME SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE R EVENUE. WE, THUS, BEING OF THE CONSIDERED VIEW THAT AS NO INFIRMITY DOES EMERGE FROM THE ORDER PASSED BY THE PR.CIT UNDER SECTION 263 OF THE ACT, UPHOLD THE SAME. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 19 TH SEPTEMBER , 2018 . SD/ - SD/ - ( G.S. PANNU ) ( RAVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 19 TH SEPTEMBER , 2018 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. PR. CIT - 4 , MUMBAI 4. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P. ITA NO. 3930 /MUM/ 2018 M/S. SPECTROCHM P. LTD. 10