M/s. Shandar Interiors Pvt. Ld., Pune V. Pr. Commissioner of Income-tax : 3, Pune

ITA 908/PUN/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7686 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-03-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Reason to believe
• Section: 263

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKAR A RAO, AM . / ITA NOS.908 TO 910/PUN/2017 / ASSESSMENT YEARS : 2009-10 TO 2011-12 M/S. SHANDAR INTERIORS PRIVATE LIMITED, ANURADHA APARTMENT, 64, NAVI PETH, LAL BAHADUR SHASTRI ROAD, PUNE 411 030 PAN : AACCS9221Q . /APPELLANT VS. PR.CIT-3, PUNE . / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI RAJEEV KUMAR, JCIT / DATE OF HEARING : 22.03.2018 / DATE OF PRONOUNCEMENT: 09.05.2018 / 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 : WITHOUT PREJUDICE TO EACH OTHER) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. PR . CIT-3, PUNE WRONGLY ASSUMED THE JURISDICTION UNDER S. 263 OF THE ACT AS THE ISSUE IS NOT ONLY HIGHLY DEBATABLE BUT THE SAME HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY VARIOUS JUDICI AL VERDICTS OF HIGH COURT INCLUDING THE JURISDICTIONAL BOMBAY HIGH COUR T AND VARIOUS 2 BENCHES OF TRIBUNALS INCLUDING THE JURISDICTIONAL P UNE BENCH. SINCE THE ASSUMPTION OF JURISDICTION IS ILLEGAL AND WITHOUT J URISDICTION THE ORDER PASSED BY THE LD. PR. CIT-3, PUNE U/S 263 BE CANCEL LED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE QUITE ELABORATE SUBMISSIONS WERE MADE BEFORE PR. CI T-3, PUNE IN RESPONSE TO THE SHOW-CAUSE NOTICE U/S 263 OF THE AC T. POINTING OUT THAT ONE OF THE PLAUSIBLE VIEWS WAS TAKEN BY THE A.O. WHICH WAS SUSTAINABLE IN LAW. THE LD. PR. CIT-3 HIMSELF ADMIT TED IN HIS ORDER UNDER S. 263 THAT VARIOUS CONTRARY CONTENTIONS ARE AVAILA BLE. IN SUCH CIRCUMSTANCES AND SINCE THE ISSUE WAS HIGHLY DEBATA BLE THE SAME WAS BEYOND THE PURVIEW OF THE REVISIONAL POWERS OF THE LD. CIT UNDER S. 263 OF THE ACT. THE ACTION TAKEN U/S 263 TO SET ASIDE T HE ORDER OF ASSESSMENT BE CANCELLED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. PR . CIT - 3 WAS SUPPOSED TO PASS A FINAL ORDER UNDER S. 263 A ND NOT SIMPLY SET ASIDE THE ASSESSMENT TO THE FILE OF THE A.O. FOR FRAMING THE ASSESSMENT AFRESH. THE ACTION OF THE LD. CIT TAKEN UNDER S. 263 IS ILLEGAL AND BE NOT SUSTAINABLE AS IT IS NOT SUSTAINABLE IN LAW. IT BE SET ASIDE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. PR. CIT-3, PUNE ALSO WAS NOT JUSTIFIED IN SETTI NG ASIDE THE ORDER OF THE A. O. HOLDING IT AS ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF REVENUE BECAUSE A. O. HAD NOT EXAMINED THE SUNDRY CREDITORS BALANCES WITHOUT POINTING OUT THAT HOW THEY ARE ERRONEOUS AN D PREJUDICIAL TO THE INTERESTS OF REVENUE. O 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW APPELLANTS RESERVES HIS RIGHT TO RAISE ANY LEGAL GR OUND AT THE TIME OF HEARING. 6. THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL . FROM THE ABOVE, AS PER THE ASSESSEE, THE REVISION ORDE R OF THE PR.CIT IS UNSUSTAINABLE (1) AS THE ISSUE INVOLVED IS HIGHLY DEBATABLE ONE AND (2) THE DECISION OF AO IN MAKING ADDITION OF ONLY 20% ON ACCOUNT OF THE BOGUS PURCHASES IN THE REASSESSMENT CO NSTITUTES ONE OF THE PLAUSIBLE VIEW . FURTHER, ASSESSEE RAISED GROUND NO.4 MENTIONING THAT THE ORDER OF AO IS NOT ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE NOT ONLY ON ACCOUNT OF THE SAID BOGUS PURCH ASES BUT ALSO THE SUNDRY CREDITORS BALANCES/OTHER CLAIMS MADE 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 INTERIOR DECORATORS AND MANUFACTURING OF FURNITURE. ASSESSEE FILED T HE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.69,54,350/-. THERE IS NO SCRUTINY 3 ASSESSMENT IN THIS CASE U/S.143 OF THE ACT. ON RECEIPT O F INFORMATION FROM THE DG (INVESTIGATION), PUNE REGARDING HAWALA/BOGUS P URCHASES AS SUPPLIED BY THE SALES TAX DEPARTMENT, AO NOTICED THAT ASSESSEE IS ONE OF BENEFICIARY AND MADE PURCHASES OF GOODS FROM 4 OF THE PARTIES WHOSE NAME APPEAR IN THE LIST OF BOGUS PURCHASES. THE T OTAL OF SUCH PURCHASES WORKS OUT TO RS.33,60,731/- FOR THE A.Y. 2009-1 0. AS PER THE PROVISIONS OF SECTION 147/148 OF THE ACT, AO RECORDE D THE REASONS ON 06-09-2013 AND HELD THAT HE HAD REASON TO BELIEVE T HAT AN AMOUNT OF RS.33,60,731/- HAS ESCAPED ASSESSMENT FOR A.Y. 2009-10 . ACCORDINGLY, A NOTICE U/S.148 WAS ISSUED ON 28-10-2013. IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILED RETURN OF INCOME REPORTI NG THE SAME INCOME OF RS.69,54,350/- AS RETURNED IN THE ORIGINAL RETUR N OF INCOME U/S.139(1) OF THE ACT. SIMILARLY, AS PER THE AO, AN AMOUNT O F RS.14,46,461 AND RS.2,94,989/- FOR THE A.YRS. 2010-11 AND 20 11-12 RESPECTIVELY ESCAPED THE ASSESSMENTS AND RELEVANT ASS ESSMENTS WERE REOPENED. 4. DURING THE RE-ASSESSMENT PROCEEDINGS, THERE WAS THO ROUGH SCRUTINY INTO THE TRANSACTIONS OF ALLEGED BOGUS PURCHASE S OF RS.33,60,731/-. ASSESSEE FILED VARIOUS DOCUMENTS AND DETAILS DEMONSTRATING THE TRAIL OF GOODS AS WELL AS ON THE PAYME NTS INVOLVING THE BANKING CHANNELS. HOWEVER, IN RESPONSE TO THE AOS DEMAND FOR PRODUCING THE SELLERS OF THE GOODS, THE ASSESSEE COULD NO T DO THE SAME. FURTHER, THE AO PERUSED THE GOODS RECEIPT REGISTER AND HELD THAT THE ASSESSEE FAILED TO PRODUCE THE STOCK REGISTER. ON THIS IS SUE, ASSESSEE SUBMITTED THAT THERE IS NO NEED FOR HIM TO MAINTAIN THE S TOCK REGISTER. AO CONSIDERED THE ABOVE SUBMISSIONS, DOCUMENTS, REGISTERS FURNISHED BY THE ASSESSEE AND, RELYING ON VARIOUS DECISIONS INCLUDING THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF NIK UNJ EXIMP ENTERPRISES PVT. LTD. 216 TAXMANN 171 AND THE DECISION OF AHMEDABAD 4 BENCH OF THE TRIBUNAL IN THE CASE OF VIJAY PROTEINS LTD. VS. ACIT 58 ITD 428 (AHMEDABAD TRIBUNAL), HELD MAKING ENTIRE ADDITION OF RS.33,60,731/- IS NOT PROPER. HE ALSO ANALYSED THE GP RA TIOS OF THE ASSESSEE OVER THE YEARS AND HELD THAT MAKING ADDITION O F GP OF THE SAID BOGUS PURCHASES WOULD MEET THE ENDS OF JUSTICE. RELEVAN T LINES FROM PARA 7 & 8 OF THE ASSESSMENT ARE EXTRACTED HERE AS UNDER : 7 . . . . . . . . . . . . .NOW, TO ARRIVE AT THE R EASONABLE AND CORRECT PROFITABILITY, THE GP RATIO OF 20% IS TAKEN AS YARD STICK. THE ASSESSEE HAS ALSO SUBMITTED THAT THERE IS 20 TO 22% OF GP RATIO IN THEIR LINE. IN THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN GP RATI O OF 14.51%. THEREFORE, THE ASSESSEE HAS REDUCED GP RATIO BY BOG US PURCHASES. . . . . . . . . . . . . . . . . . . . . . . 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.33,60,761/-. THIS IS ALSO 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.9, 99,73,467/- WHICH COMES OUT TO BE RS.1,99,94,693/-. THIS IS NOT REAS ONABLE AS THE BOGUS PURCHASES ARE ONLY 3.3% OF THE TOTAL TURNOVER . C. THIRD METHOD IS CALCULATING 20% OF SUCH BOGUS PURCH ASES WHICH COMES OUT TO BE RS.6,72,146/-. 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, THE AO RESTRICTED THE ADDITION TO 20% OF T HE SAID PURCHASES AFTER DUE SCRUTINY OF DETAILS AND THE JUDGMENT AL LAWS. 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 ISSUED A SHOW CAUSE NO TICE DATED 03-03-2017 TO THE ASSESSEE CALLING FOR EXPLANATION AS TO WHY THE PROVISIONS OF SECTION 263 OF THE ACT SHOULD NOT BE INVOKED AND WHY THE 5 ASSESSMENT MAY BE SET ASIDE. ASSESSEE FILED A LETTER DAT ED NIL GIVING WRITTEN SUBMISSIONS CONTESTING THE SAID PROPOSAL OF THE P R.CIT. IN SUPPORT, ASSESSEE RELIED ON VARIOUS DECISIONS IN THIS REGAR D. SUBSEQUENTLY, THE PR.CIT-3, PUNE ANALYSED THE DETAILS FU RNISHED BY THE ASSESSEE IN RESPONSE TO THE SAME AND HELD SOME OF THE DETAILS WERE NOT FILED BY THE ASSESSEE AND HELD THAT AO COMPLETED THE RE -ASSESSMENT WITHOUT FINALLY OBTAINING THE DETAILS FROM THE ASSESSEE. FUR THER, THE PR.CIT HELD THAT AO FAILED TO VERIFY THE GENUINENESS OF TH E PURCHASES AND FAILED TO MAKE ENTIRE ADDITION OF RS.33,60,731/- OF THE PU RCHASES. HE ALSO FOUND FAULT WITH THE AO IN RESTRICTING THE ADDITION T O RS.6,72,146/-, I.E. 20% OF THE SAID BOGUS PURCHASES. 6. FURTHER, IN PARA 6 OF THE REVISION ORDER, PR.CIT DEALT WITH THE SCOPE 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 PR.CIT H ELD THAT THE AO HAS NOT VERIFIED ALL THE RELEVANT ISSUES LEADING TO REDUC TION IN THE CORRECT TAXABLE INCOME. THEREFORE, AS PER THE PR.CIT, TH E ORDER PASSED BY THE AO IS PRIMA-FACIE ERRONEOUS IN SO FAR AS IT IS PREJU DICIAL TO THE INTEREST OF REVENUE. 7. FURTHER, ON THE ISSUE OF SUNDRY CREDITORS, PR.CIT HELD THAT THE AO FAILED TO EXAMINE SUNDRY CREDITORS, OTHER PURCHASES, VALUAT ION OF STOCK, VARIOUS CLAIMS OF EXPENSES DEBITED TO THE PROFIT AND LOSS A CCOUNT, MAKING THE ORDER OF THE AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDINGLY, THE PR.CIT RESTORED THE M ATTER TO THE AO FOR PROPER VERIFICATION OF THE SAID ISSUES AND PASS A FRESH ASSESSMENT ORDER IN ACCORDANCE WITH LAW. 8. AGGRIEVED WITH THE SAID REVISION ORDER OF THE PR.CIT, A SSESSEE FILED THE PRESENT APPEAL WITH THE GROUNDS MENTIONED ABOVE. 6 9. 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 ATTENTION TO VARIOUS PARAGRAPHS OF THE ASSESSMENT ORDE R, 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.33,60,731/-. IN THE PR OCESS, AO RELIED ON VARIOUS DECISIONS TO SUPPORT THE GP ADDITIONS ON LY AND NOT THE ENTIRE SUCH PURCHASES. THEREFORE, ACCORDING TO LD. AR FOR THE ASSE SSEE, THE VIEW TAKEN BY THE AO IS ONE PLAUSIBLE VIEW. 10. FURTHER, MENTIONING THAT THE ISSUE OF MAKING ENTIRE A DDITION 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. 11. FURTHER, ON THE ISSUE OF SUNDRY CREDITORS, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SUNDRY CREDITOR BALANCES ARE B EING CARRIED 7 FORWARD AND NO ADDITION IS CALLED FOR ON THIS ACCOUNT AS T HE PR.CIT DID NOT MAKE OUT A CASE OF CESSATION OF LIABILITIES. LD. AR SUBMIT TED THAT THE SAID BALANCES ARE GENUINE. THE PROVISIONS U/S.41(1) OF T HE ACT DID NOT ALLOW MAKING OF ANY ADDITIONS WHEN THERE IS NO CESSA TION OF LIABILITY. IF THE REVENUES CASE IS CESSATION OF LIABILITIES, THE O NUS IS ON THE AO TO DEMONSTRATE THE SAME. AO CANNOT MAKE ADDIT ION ON THIS ACCOUNT IN THE FRESH ASSESSMENT AS THE ASSESSEE COMPLI ED WITH THE PROVISIONS OF THE ACT. FURTHER, HE MENTIONED THAT AO IS N OT UNDER ANY OBLIGATION TO EXAMINE THE SUNDRY CREDITORS ACCOUNT OR TH E CLAIMS/DEDUCTIONS IN THE RETURN OF INCOME. MAKING THE RE- ASSESSMENT ON THE SAID ISSUE WAS NEVER THE ISSUE AS PER THE REASO NS RECORDED BY THE AO AT THE TIME OF REOPENING OF THE ASSESSMENT. THER EFORE, IT IS NOT THE CASE OF THE REVENUE THAT AO PICKED UP THE ISSUE AN D CONCLUDED THE ISSUE WITHOUT ENQUIRIES OR VERIFICATION WHICH HE SHOULD HAVE BEEN DONE. 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 O RDER THAT MAKES THE ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 12. 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.33,60,731/- CONSTITUTES THE ORDER E RRONEOUS AND AOS FAILURE TO CONDUCT INVESTIGATION TO SUNDRY CREDITORS ALSO MAKES THE ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTER EST OF THE REVENUE. HOWEVER, ON DEBATABILITY OF THE ISSUE RELATING T O BOGUS PURCHASES, LD. DR HAS NOTHING TO MENTION. 13. WE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE ON THE ISSUE OF BOGUS PURCHASES AND THE NEED FOR MAKING ADDITION OF ENTIRE SUCH PURCHASES, COPIES OF DECISIONS ETC. WE HAVE ALSO 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 ASSESSEE ON THE CLAIMS RELATING TO BOGUS PURCHASES AND THE SUNDRY C REDITOR BALANCES. WE SHALL TAKE UP ALL THE ISSUES IN THE SUBSEQUENT PARAS. 14. 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.6,72,146/-. 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 A DDITION OF ENTIRE SUCH PURCHASES. IN THIS PROCESS, PR.CIT IGNORED THE FACT RELATING TO EXISTENCE OF VARIOUS VIEWS ON THIS ISSUE. WE HAVE ALS O NOTICED ON THE ISSUE OF BOGUS PURCHASES, THERE ARE VARIOUS VIEWS INV ITING DEBATES ON THE REQUIREMENT OF MAKING ENTIRE ADDITIONS OR GP ADDITIO NS OF VARIOUS RATES OR VARIOUS GP RATES ETC. THEREFORE, MAKING ADDITION ON ACCOUNT OF BOGUS PURCHASES CONSTITUTES A DEBATABLE ONE . AS SUCH, THE AO HAS TAKEN ONE PREVAILING VIEW IN THIS MATTER. THEREFORE , THRUSTING ANOTHER VIEW BY THE PR.CIT IN HIS REVISION ORDER IN OUR V IEW IS OUTSIDE THE SCOPE OF PROVISIONS OF SECTION 263 OF THE ACT. THERE FORE, IT IS NOT A CLEAR CUT CASE OF ERRONEOUS ASSUMPTION OF LAW AS MADE OU T BY THE PR.CIT. HENCE, THE REVISION ORDER ON THIS ISSUE IS UNSUSTA INABLE IN LAW. 9 ACCORDINGLY, RELEVANT GROUNDS RAISED BY THE ASSESSEE O N THIS ASPECT ARE ALLOWED. 15. 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 UNDER CASS ETC. IN THIS REGARD, WE ALSO PERUSED THE RELEVANT LINES FROM PARA NO.6.2 AND THE SAME IS EXTRAC TED 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 MANDATE TO EXAMINE SUNDRY CREDITORS ACCOUNT. FURTHER, IT IS ALSO NO T THE CASE OF THE PR.CIT THAT THERE IS SOMETHING ERRONEOUS ABOUT TH E SUNDRY CREDITORS 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 RELATING TO LOSS OF REVENUE, THE FINDING OF THE PR.CIT IS NOT SUSTAINABLE. THEREFORE, WE ARE OF THE 10 OPINION THAT THE DIRECTION GIVEN BY THE PR.CIT IS QUASHED . ACCORDINGLY, THE RE-ASSESSMENT ORDER OF THE AO IS RESTORED. THE GR OUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ITA NOS. 909 & 910/PUN/2017 A.YRS. 2010-11 & 2011-12 17. SINCE THE FACTS, ISSUES, DECISION OF THE AO/PR.CIT, ARGUM ENTS AND COUNTER ARGUMENTS ARE SAME AS THAT OF APPEAL ITA NO. 908/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. 18. TO SUM UP, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MAY, 2018. SD/- SD/- (SUSHMA CHOWLA) (D.KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; DATED : 09 TH MAY, 2018. SATISH / 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. CIT-3, PUNE 4. , , A BENCH PUNE; 5. / GUARD FILE.