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TMI Blog2021 (12) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the assessee is against the revisionary order of Ld. PCIT passed under section 263 of the Act whereby ld PCIT has set aside the order of Dy. Commissioner of Income Tax, Circle 5(3)(1), Mumbai by directing to examine the purchases of Rs. 1,05,98,219/- made from M/s. Apex Ferromate Pvt. Ltd as the impugned order is erroneous and prejudicial to the interest of the revenue. 3. The facts in brief are that the assessee has filed the return of income on 28.09.2011 declaring total income of Rs. 50,44,880/-. The case of the assessee was reopened under section 147 of the Act by issuing notice under section 148 of the Act after the AO received information from DGIT (Inv.) Mumbai that assessee is beneficiary of hawala purchase bills and accomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the assessee was reopened under section 147 of the Act. Thereafter, the AO called for detailed explanation from the assessee which was complied with by the assessee by furnishing various documents such as purchase bills, bank statements, challans etc. The AO finally, after following the decision of Hon'ble Gujarat High Court in the case of CIT vs. Bolanath Polyfab Pvt. Ltd. (2013) 355 ITR 390 (Guj.) and also another decision in the case of CIT vs. Simit P. Sheth - 356 ITR 451 (Guj.), applied a rate of 12.5% on the bogus purchases of Rs. 1,05,98,219/- and thus added a sum of Rs. 13,24,777/- to the income of the assessee in the assessment framed under section 143(3) read with section 147 of the Act vide order dated 18.03.2016. The Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings by the AO and after following the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Bolanath Polyfab Pvt. Ltd. (supra) and CIT vs. Simit P. Sheth (supra), the AO has taken a view of 12.5% of the bogus purchases to be added to income. Thus the issue has been examined in detail in the reassessment proceedings and a reasonable view has been taken. However, according to the Ld. PCIT the assessment order is contrary as on the one hand the AO is holding that purchases are bogus whereas on the other hand the AO is applying a rate of 12.5% to tax the bogus purchases and thus came to the conclusion that the assessment order is erroneous and prejudicial to the interest of the revenue and thus set aside the assessment. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the said purchases. At the end of the scrutiny or investigation, AO came to the conclusion of making GP addition of the bogus purchases @20% would meet the ends of justice. AO relied on various decisions for arriving at this decision. Accordingly, AO made addition @20% amounting to Rs. 69,55,709/-. Therefore, in our view, it is a case of taking plausible view by the AO on the issue under consideration. In the revision order, the Pr.CIT did not agree with the said view and restored the issue to the file of AO for fresh assessment implying in favour of making addition of entire such purchases. In this process, Pr.CIT ignored the fact relating to existence of various views on this issue. We have also noticed on the issue of bogus purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her purchases, valuation of stock and various expenses as claimed by the assessee company in its profit and loss account, which makes the order not only erroneous but prejudicial to the interest of revenue.. . . . . " Therefore, we find the issues above narrated by the Pr.CIT are general and casual. It is not the case of the Pr.CIT that the above issues were allowed by the AO after due process of verification of scrutiny of the account. As such, AO is not under any mandate to examine sundry creditor account. Further, it is also not the case of the Pr.CIT that there is something erroneous about the sundry creditor account and therefore, the AO failed to make proper/adequate enquiries on this issue. In our opinion, the Pr.CIT's finding is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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