TMI Blog2018 (5) TMI 1490X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion between two quasi judicial authorities of the same rank. - Decision in the case of Nirma Chemicals Works P. Ltd. (2008 (2) TMI 373 - GUJARAT HIGH COURT) followed. When we therefore hold that the Commissioner had no jurisdiction to exercise revisional powers, asking the petitioner to submit to said impugned notice does not arise. - notice is therefore set aside - decided in favor of assessee. - R/Special Civil Application No. 2818 of 2018 - - - Dated:- 16-4-2018 - MR. AKIL KURESHI AND MR. B.N. KARIA, JJ. For The Petitioner : Ms Vaibhavi K Parikh (3238) For The Respondent : Mrs Mauna M Bhatt (174) ORAL ORDER ( PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged a notice dated 22.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e name of the assessee, delivery was made directly to the ultimate purchaser of the goods from the assessee. Assessing Officer was therefore, of the opinion that the assessee had not incurred any expenditure of transportation in such dealings. He therefore proposed addition of ₹ 17.33 lacs (rounded off) and called upon the assessee to respond. The assessee objected to such addition raising several contentions. In the alternative, the assessee pointed out that it had already disclosed profit @ 1.79% from such trading of goods purchased from M/s. Tarini Trading Pvt. Ltd. If the Assessing Officer was of the opinion that the assessee's profit from such dealings should be at the rate of 4 % of the turnover, the profit already shown sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stimating the G.P @ 4% on the purchase of ₹ 4,33,31,886/- made from M/s. Tarinin Trading Pvt. Ltd. The AO has reopened assessment on the basis of information from Sales Tax Department that appellant has purchased goods from M/s. Tarini Trading Pvt. Ltd. who is indulged in issuing bills without transaction of goods. The AO during the course of reassessment examined the accounts of the appellant and summoned the director of M/s. Tarini Trading Pvt. Ltd and held that the purchase from M/s. Tarini Trading Pvt. Ltd as genuine. However, the AO found that the purchase made from above concern has been directly sold and delivered to third party on the instruction of appellant. In view of this, AO held that appellant has not incurred any expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 309 ITR 67 . 8. On the other hand, learned counsel Ms. Bhatt opposed the petition contending that the petitioner has approached at a stage where the Commissioner has merely issued a show-cause notice. Prima facie it emerges from the record that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue. She lastly contended that the issue of the purchases made by the petitioner from M/s. Tarini Trading Pvt. Ltd. being bogus, was not part of the proceedings before the Appellate Commissioner. 9. We have recorded the broad controversy and the different stages through which the matter proceeded. To recapitulate, relevant facts, in the reassessment proceedings the assessee's purchases fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alings would be higher than normal. 11.The Commissioner in the impugned show-cause notice thus committed an error in recording that the Assessing Officer had held that the purchases were bogus. This very foundation for issuance of the notice was incorrect. His further observations were merely consequential in nature. In his opinion, when the Assessing Officer had found the purchases to be bogus, there was no question of limiting the addition on the basis of GP ratio. When we find that the Commissioner was wrong in its very foundational fact, the consequential observations, which are more in the nature of corollary, cannot survive. 12.Equally importantly, the issue itself had travelled before the Appellate Commissioner at the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. Clause (c) of Explanation 1 of subsection (1) provides that for removal of doubts it is hereby declared that, for the purpose of the said sub-section,- ( c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal [filed on or before or after the 1st day of June, 1988], the powers of the [Principal Commissioner or] Commissioner under this sub-section shall extend [and shall be deemed always to have extended] to such matters as had not been considered and decided in such appeal.] 13. Clause (c) of Explanation 1 may be worded in a manner as suggesting the extent of the powers of the Commissioner for taking an order in revision, its effect is of circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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