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2021 (12) TMI 935 - AT - Income TaxRevision u/s 263 - Profit on unaccounted sales - estimation of the gross profit at 0.7% without ascertaining profit from unaccounted purchases and unaccounted sales is erroneous and prejudicial to the interests of revenue - As per CIT A.O. should have ascertained the profit by considering unaccounted purchases and unaccounted sales noted down in the seized materials and that the A.O. has made the addition without making any enquiry or verification regarding the source of unaccounted purchases - HELD THAT:- We notice that it is nobody’s case that the cash payment represents unaccounted purchases as presumed by Ld PCIT. In that case, the AO could not have computed gross profit on the basis of entries noted in the seized materials. Under these set of facts, one of the courses of action available with the AO is to estimate profit from the unaccounted sales. Since the assessee could not have sold materials without purchasing them, only profit element may be assessed. Thus, the AO has estimated the income and assessed the same in the hands of the assessee in all the three years. Thus, we notice that the AO has adopted one of the possible views in this matter. As held by Hon’ble Supreme Court in the case of Malabar Industrial Company (supra), if the AO has taken one of the possible views, then the same would not make the assessment order prejudicial to the interests of revenue. PCIT has held the assessment orders to be erroneous for the reason that the AO should have estimated income from unaccounted sales at a higher figure, thus it is case where Ld PCIT is having a different view on the manner of estimation of income from unaccounted sales. As held by Hon’ble Bombay High Court in the case of Gabriel India Ltd (supra), the view so entertained by Ld PCIT would not give him power u/s 263 of the Act to initiate revision proceedings, since the view of the AO cannot be termed as erroneous. We are of the view that the impugned assessment orders cannot be termed as erroneous and prejudicial to the interests of revenue. Accordingly, Ld PCIT was not justified in invoking revision proceedings in all the three years under consideration - Decided in favour of assessee.
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