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2022 (7) TMI 1082 - AT - Income TaxRevision u/s 263 by CIT - appellant had made purchases which is nearly 45% of the total purchases and no form 3CEB was obtained, to examine the arm’s length price - HELD THAT:- As it is clear that the show cause notice issued in this regard was incorrect on facts, and there was only a suspicion that there is requirement of TPO was required, and even after all details being provided, there is no conclusion about requirement of such reference to TPO. On the contrary the PCIT had also himself stated that if there is no such transaction with associated enterprises no reference to TPO is required to determine Arms Length Price. The proceedings u/s 263 cannot be initiated just to make any fishing or roving enquiries - selection of the case of the appellant was not on the basis of TP risk parameters, and therefore even in a case where there are international transactions with the associated enterprises, and no reference was made to TPO, the proceedings u/s 263 cannot be initiated simply on this reasons unless there are material facts to indicate that the transactions were not at arms length price. As in the present case, there are no transactions with the associated enterprises, and therefore on this ground of reference to TPO, valid jurisdiction u/s 263 cannot be invoked. Verification of the sundry creditors - In the order u/s 263, nothing adverse has been pointed out in relation to any of the creditors or any irregularities in the account. Simply on the basis of suspicion the order cannot be said to be erroneous when proper enquiry was duly made. It the view taken by the AO after verification is a plausible and permissible view, the CIT cannot exercise the powers under s. 263. Even from the impunged order it is seen that various past assessments had been also made under scrutiny and some of the creditors which are regular creditors, nothing adverse had been stated in relation to these creditors. Even from Glory Exports confirmation from the said party was submitted during the assessment. In the present issue the AO has made proper enquiry on this issue and it is not denied that notices u/s 133(6) had been issued to certain creditors, the nature of assessment order does not bring the case of the revenue within the purview of s.263 and cannot be said to be prejudicial to the interest of revenue. Payment of commission and assortment charges - Nothing material has been pointed out in the impunged order about the inadmissibility of any of the expenditure being incurred by the appellant. All payments are also through banking channel, and due tax deduction at source on such payments had also been made by the appellant, which was also submitted during the assessment proceedings. Thus the issues stands duly examined at the time of assessment, and nothing material has been placed on record to show the error in such judgment. Disallowance out of expenses made - PCIT himself in his order u/s 263 stated that the submissions of the assessee on this issue is found to be acceptable and the adhoc disallowance as made by the AO in the assessment order u/s 143(3) of the Act for A.Y. 2016-17 is not disturb and the same will remain as it is. Thus on this issue the contention of the appellant was accepted by the PCIT, and therefore would not be the subject matter of 263. Even in the case of JR Industries [2022 (5) TMI 351 - ITAT JAIPUR] it was held by Bench that if an issue is decided by CIT(A) in an appeal against the assessment order passed by the AO, then, that issue cannot be subject-matter of proceedings under s. 263. Thus we find that there was no lack of proper enquiry and the original assessment was made after due verification, and PCIT was not justified in invoking the powers under s. 263. The Hon’ble Rajasthan High Court also in the case of Laxmi Narayan [2017 (11) TMI 1622 - RAJASTHAN HIGH COURT, JAIPUR] following the decision of Malabar Industrial Corporation [2000 (2) TMI 10 - SUPREME COURT] had held that if the enquiry has been duly made, the revision proceeding cannot be initiated. In view of the same the order u/s 263 is quashed. Appeal of assessee allowed.
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