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2018 (7) TMI 1485 - HC - Income TaxRevision u/s 263 - incurring of trading loss - as per CIT-A AO has failed to make any enquiry as regards the huge duty drawback claimed by the assessee and the modus operandi of the assessee - Held that:- In this Court’s opinion, all findings and reasoning are clearly indefensible; they amount to putting a gloss over the AO’s glaring omissions. Repeated decisions have emphasized that the AO should – at least as regards what appears from the record, and what are issues inquired into, during scrutiny assessment, indicate the briefest of reasons, accepting or rejecting any argument. In this case, the mere fact that out of 80 debtors, particulars of 22 were furnished and that PAN particulars of most of them were not provided (for AY, cannot lead to the conclusion that the doubting of genuineness of those transactions was unwarranted, under Section 263) This Court’s opinion, the ITAT’s approach was entirely faulty; it overlooked that the explanation, if any, why interest deduction was necessary, given that it had advanced substantial amounts on interest free basis was not reflected in the AO’s order. Likewise, on the issue of purchases, the lack of any factual foundation and why despite verification only 37 out of 111 parties came forward, the expenses could be allowed, is absent. For the other years, the reasoning why 22 parties could have been taken into account, for a vast majority of others (58) is absent, for AY 2011-12. ITAT’s findings amount to supplying reasons in respect of the AO’s order, on aspects, which are not expressly reflected in the assessment order. It is no doubt the duty of the CIT to record why revision is warranted; however, the ITAT’s jurisdiction is not to rewrite the AO’s order and improve upon it, in a manner of speaking. Clearly, the orders of the ITAT cannot be sustained. They are set aside. Question of law is answered in favour of the Revenue and against the assessee
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