TMI Blog2022 (5) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... ve made by the assessee, during the course of assessment proceedings and after considering necessary facts has taken one of the possible view and has estimated gross profit @ 7.5% on total sales. The view taken by the AO is a possible view and thus, we are of the considered view that the PCIT cannot assume jurisdiction to revise the assessment order on very same issue by holding that the AO ought to have made further enquiries on the issue. Thus assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue and thus, we quashed the order passed by the PCIT u/s.263 - Decided in favour of assessee. - ITA No.150/Chny/2021 - - - Dated:- 13-5-2022 - Shri Mahavir Singh, Hon ble Vice President And Shri G. Manjunatha, Hon ble Accountant Member For the Appellant : Mr.S.Sundararaman, ACA For the Respondent : Mr.R.N.Siddappaji, CIT ORDER PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Principal Commissioner of Income Tax, Coimbatore, dated 09.03.2021 passed u/s.263 of the Act, for the assessment year 2017-18. 2. The assessee has raised the following grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee amounting to Rs.8.65 Crs. According to the PCIT, although, the AO had examined purchases by issuing notices to the parties, but the assessee could file evidences to the extent of Rs.3.07 Crs. only. Although, the assessee could not justify remaining purchases with necessary evidences, the AO had simply estimated income of the assessee on total sales which rendered the assessment order to be erroneous and prejudicial to the interest of the Revenue. In response, the assessee submitted that the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue, because the very purpose of scrutiny assessment for the impugned assessment year is to verify purchases made by the assessee. The assessee had furnished all evidences, including name and address of parties from whom purchases are made. The AO had called for necessary details from the parties, for which, certain parties replied and filed all details. In some cases, the parties did not respond to notices. Therefore, in the absence of proper evidences, the AO has rejected the books of accounts and estimated gross profit @ 7.5% on total sales and completed the assessment. Therefore, once, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to prove that it is not taxable because it falls within exemption provided by the Act, lies upon the assessee. In the case of Durgaprasad More (Supra), the Hon ble Court went on to add that a party who relies on a recital in a Deed has to establish the trust of this recital, otherwise it will be very easy to make self-serving statements in documents either executed or taken by a party who relied on those recitals. If all that an assessee who wants to evade tax has to have some recitals made in a document either executed by him or executed in his favour then the door will be left wide open to evade tax. 11. The Courts have clearly cast the burden of proof on the assessee to establish that the purchases were all genuine. Some of the ways and means in which a purchase could be proven to be genuine and thereby help an assessee to discharge his onus are; Producing the books of accounts, bills, stock register, payment etc., filing confirmation and producing parties. Some indirect evidence could be production of delivery challans, lorry receipts, octroi payment proofs, confirmation from broker, etc. 12. Notwithstanding the fact that the assessee has not met its part of the obl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment order and their order should be upheld. 7. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The provisions of Sec.263 of the Act, empowers the PCIT to revise the assessment order passed by the AO, in case, the PCIT satisfies that assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue. In order to invoke jurisdiction u/s.263 of the Act, twin conditions must be satisfied. The first condition must be the assessment order passed by the AO should be erroneous and the second condition must be assessment order passed by the AO should also be prejudicial to the interest of the Revenue. Unless two conditions are satisfied, the PCIT cannot revise the assessment order. In this legal back ground, if you examine the facts of the present case, one has to understand whether the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue. In this case, the PCIT assumed jurisdiction u/s.263 of the Act, on the issue of unverified purchases claims to have made by the assessee. The assessee has made purchases of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
