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2016 (2) TMI 1281 - AT - Income TaxRevision u/s 263 - Bogus purchases - no inquiry v/s inadequate inquiry - According to CIT AO has not made any enquiry with Sales Tax authorities whether the concerns were registered with them or obtained copy of their Sales Tax Returns to verify the transactions shown therein - Departmental Representative submitted that in Gujarat VAT/ST is 4% and the amount of VAT/ST shown to be debited in their profit and loss account by the concerns casts doubt about the genuineness of the transactions undertaken by these concerns - HELD THAT:- So-called bogus purchase in show-cause notice wherein there was no such finding/show cause notice in reference to the seized material found and survey taken place as well as various finding given by the CIT in a finding portion of the order. In the show-cause notice paragraph 4 regarding Avadhesh International and Harsh Fashion, in reference to non-filing of invoices, it was said that no such invoices was asked for because the payment has been made by account payee cheques as per assessee’s bank account submitted and as per the confirmation and address filed during the course of original assessment. Regarding the CIT order with regard to the advances from debtors/creditors, there was no such showcause notice in reference to this finding. In view of the above, the order passed by the CIT u/s 263 is prejudicial to the interest of assessee, more particularly, when CIT has given contradictory finding in the order passed in comparison to the show-cause notice issued. Various evidences and seized materials have not been relied upon in the show-cause notice. In such situation, action u/s 263 is not justified. The enquiry has been made by the Assessing Officer at the relevant point of time. It is not the case of no enquiry but it is a case of insufficient enquiry. In the absence of any adverse material, except a statement recorded under s. 133A(3)(iii) the view taken by the Assessing Officer could not be said to be a view impermissible in law and hence, it could not also be said that the order passed by the Assessing Officer was prejudicial to the interest of the Revenue. All details with regard to the purchases were filed before the lower authorities, as held by the Hon’ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd, [2009 (9) TMI 633 - DELHI HIGH COURT]. Since all the parties are assessed to tax, inquiries were made, confirmations were filed and the order was passed u/s 143(3) after considering the survey report and other material; in such situation invoking provisions of Section 263 of the Act are not justified. - Decided in favour of assessee.
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