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2020 (1) TMI 1669 - AT - Income TaxRevision u/s 263 by CIT - Estimation of income on bogus purchases - AO added 3% as possible profit on the alleged purchases over and above the GP rate 4.63% shown by the assessee - HELD THAT:- It is a settled position in law that provisions of sec. 263 of the Act do not permit substituting one opinion by another opinion. Therefore, the order of C.I.T. cannot be sustained on the principle of ‘erroneous’ nature of the order of the A.O., as it is not erroneous. Further, in the instant case, to reiterate, there was no allegation by the Ld. revenue authorities that the evidences produced were fictitious or invented, thus accepted the authenticity of the same. Such an order cannot be called erroneous and prejudicial to interests of revenue only because the A.O. made the assessment without discussing such details therein, as held by the Coordinate Bench of ITAT Kolkata in the case of Chroma Business Ltd. vs. DCIT [2003 (10) TMI 256 - ITAT CALCUTTA-C] The assessee produced all necessary details of purchases, sales, audited books of account, quantity details as mentioned above. The assessee books of accounts were audited by Chartered Accountant. Quantity details were given in respect of opening stock, purchases, sales, closing stock AO did estimate and further added 3% as possible profit on the alleged purchases over and above the GP rate 4.63% shown by the assessee in the audited books of account. The quantity details shown by assessee in the audit report reflects sales quantity 4,64,632 Kg and corresponding purchases 4,30,650 Kg. No discrepancy was found between purchase shown by assessee and the sales declared. Purchase cannot be rejected without disturbing the sales. Recognized principle of accountancy and tax jurisprudence hold that no sales can take place without purchase. AO has passed order consciously after applying his mind after conducting the enquiry and added further 3% on bogus purchase over and above GP rate 4.63% declared by the assessee inclusive of the said purchase. Thus we are of the view that revisionary jurisdiction exercised by the Ld. Pr. C.I.T. u/s. 263 of the Act was not in tune with the facts and evidences on record duly explained to the Ld. A.O. and verified by him and that being so the order passed u/s. 263 of the Act on such erroneous stand is liable to be quashed as per law - Decided in favour of assessee.
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