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2022 (7) TMI 599 - HC - Income TaxRevision u/s 263 - disallowance of other expenses estimated at 5% as done by the AO was incorrect - Whether the Tribunal committed substantial error in law in holding that the “purchases” other than “other expenses”, were not disallowed by A.O. in original assessment and assessee had also not produced necessary evidence of purchases before Commissioner in 263 proceedings? - HELD THAT:- The tribunal noted that there was no dispute with regard to the assessee’s sale and purchase figures between the group concerns which has been accepted by the assessing officer who proceeded to disallow an estimated 5% of the inflated amount. Considering the factual position the tribunal held that the twin conditions required to be satisfied for invoking Section 263 of the Act was absent and, therefore, the assumption of jurisdiction by the PCIT was held to be bad in law. We note that the PCIT while invoking his power u/s 263 of the Act has proceeded based on conjecture and there is no finding recorded that the books of accounts of the assessee were rejected. Specific issue raised by the assessee that the documents and details were furnished before the assessing officer was not found to be incorrect. Therefore, we are of the view that the tribunal having taken note of the factual position had rightly interfered with the order passed by the PCIT. The learned standing counsel for the appellant placed reliance on the decision of the High Court of Gujarat at Ahmedabad in N.K. Industries Ltd. [2016 (6) TMI 1139 - GUJARAT HIGH COURT] This decision is referred to since the decision in Vijay Proteins Ltd. [2015 (1) TMI 828 - GUJARAT HIGH COURT] has been relied upon in the said case. We find that the decision in Vijay Proteins Ltd. is distinguishable on facts since in the said case it was conclusively found that the entire purchases were shown to be based on fictitious invoices and have been debited in trading account and the entire transaction was held to be bogus. As pointed out that the tribunal had come to a categorical conclusion that the amount of Rs.2,95,93,288/- representing alleged purchase from bogus suppliers and, therefore, it was held that the tribunal could not have restricted the disallowance only to Rs.73,23,32/-. Thus, there was a factual adjudication in the said case and the order passed by the tribunal was faulted for rejecting the disallowance. The decision is distinguishable on facts and cannot in any manner advance the case of the appellant before us. No substantial question of law arises
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