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2020 (7) TMI 150 - ITAT DELHIRevision u/s 263 - bogus purchases - AO had not examined the genuineness of the purchase transaction - whether the PCIT is justified in setting aside the assessment order and directing the learned Assessing Officer to pass the assessment order de novo by calling relevant details, applying the relevant law in an objective manner? - HELD THAT:- PCIT perused the assessment order and assessment records and found that the assessment order dated 21/12/2017, passed by the learned Assessing Officer under section 147/143(3) was erroneous insofar as prejudicial to the interest of the revenue. The impugned order does not show that the review of the assessment order dated, 21/12/2017 by the JCIT is the sole basis for exercise of jurisdiction under section 263 of the Act by the ld. PCIT. Forward of the case by the JCIT is only triggered the process of the ld. PCIT perusing the assessment order and assessment records to reach a conclusion that the order passed under section 147/143(3) of the Act was erroneous, insofar as it is prejudicial to the interest of the revenue. PCIT reached an independent conclusion as to the nature of the assessment order after perusal of the assessment order and assessment record, and consequently cannot it be said that the action was taken by the learned PCIT was on the borrowed satisfaction. We expressed our opinion that the assessment order does not indicate that AO had examined the genuineness of the purchase transaction in the light of the audited accounts of the assessee. More particularly the fact that out of the alleged purchasers of ₹ 69,75,369/- , there was payment to the suppliers only to the extent of ₹ 14 lakhs and the balance amount of rupees. 55,75,369/- was shown to have been outstanding goes unverified and the assessment order is silent on this aspect. Order passed under section 263 of the Act clearly shows that the learned PCIT had examined the record and reached a reasonable conclusion that this non-examination of the genuineness of the purchases to apply the law laid down by the Hon’ble Gujarat High Court in the case of NK Proteins 2016 (6) TMI 1139 - GUJARAT HIGH COURT renders the impugned assessment order as erroneous insofar as it is prejudicial to the interest of revenue. It cannot, therefore, be said that the learned PCIT did not conduct any independent enquiry to reach a conclusion that the assessment order is also prejudicial to the interest of the revenue. Learned PCIT is right in his observation that the examination of the genuineness of the purchases is necessary in this case. PCIT rightly assumed jurisdiction and it is only after perusal of the assessment order and assessment record, he rejected the contentions of the assessee that the view taken by the learned Assessing Officer is also one of the plausible views.- Decided against revenue. Acceptance of trading results - Assessee submitted procedure for assessment in the case of the persons engaged in the diamond manufacturing and/or trading, and this instruction says that if such an assessee had shown a sum equal to or higher than 6% of his total turnover from such business, as is income under the header “Profit and Gains of Business or Profession” for a particular assessment year, the learned Assessing Officer shall accept his trading result - HELD THAT:- While declining to quash the impugned order’ section 263 of the Act, we direct the learned Assessing Officer to examine the books of accounts of the assessee in the light of the observations made by the learned PCIT, and also to consider the CBDT instruction bearing number 2 of 2008 dated 22/2/2008 and to take a plausible view to pass the fresh assessment order. Apeal of the assessee is allowed in part.
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