TMI Blog2016 (3) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... onjunction with an erroneous order passed by the AO. Every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interest of the Revenue. Stated that when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law. In the present case, we find that AO offered various opportunities to the assessee the various opportunities listed in the assessment order are dated 6.6.2012, 11.09.2012 and 19.03.2013, however, the assessee did not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the order u/s 144 has been passed by the AO after due application of mind. (iii) The Ld. Principal Commissioner of Income Tax, Bathinda erred on fact and law while setting aside the order of the AO to give him a direction that instead of rejecting the books of account and applying N.P. rate he should have invoked the provisions of section 40A(3) to disallow the payments made exceeding ₹ 20,000/-. In doing so the Principal Commissioner has tried to bypass the binding precedent of Punjab Haryana High Court in the case of CIT vs. Smt. Santosh Jain in which it has been held that once the books of account has been rejected the provisions of section 40A(3) cannot be invoked. 3. The brief facts of the case as noted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to decide the issue afresh, keeping in view, the violation of provisions of section 40A(3) of the Act. 6. Aggrieved the assessee is in appeal before us. 7. At the outset, the learned AR submitted that Assessing Officer had rejected the books of accounts and therefore, had applied 5% as net profit of gross receipts and it was an established law that once the books of accounts are rejected and addition is made on the basis of net profit ratio the violations u/s 40A(3) are not required to be looked into. 8. The learned AR, in this respect submitted that Hon ble Punjab Haryana High Court in the case of CIT (Central) vs. Smt. Santosh Jain 159 Taxman 392 has held that if the Assessing Officer made an addition by rejecting books of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is an undisputed fact that the matter as regards factual position of the case had attained its finality with the order of Tribunal dated 28.11.2014 by which it had dismissed the appeal filed by Revenue and learned DR had not placed any material suggesting stay of above said Tribunal order. The Commissioner of Income Tax has assumed jurisdiction to issue notice u/s 263 after order passed by the Tribunal. Before issue of notice u/s 263 the learned Commissioner should have considered the order passed by Tribunal also as there is no point in continuing the litigation on a point which has been decided by a higher authority. The learned CIT in his notice u/s 263 had observed that if the Assessing Officer had made disallowance u/s 40A(3) it woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CTT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the ITO is unsustainable in law. 12. In the present case, we find that AO offered various opportunities to the assessee the various opportunities listed in the assessment order are dated 6.6.2012, 11.09.2012 and 19.03.2013, however, the assesse did not submit the full details required by Assessing Officer and further the documents submitted by assessee were unconfirmed copies of accounts of the parties from whom purchase were made, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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