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TMI Blog2023 (8) TMI 502X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted by the ITO, Ward-1 (2), Ghaziabad, on total income of Rs. 82,73,520/-, vide his order dt. 30.12.2016, passed u/s 143(3) of the I.T. Act, 1961. The A.O. added Rs. 82,41,726/- as per provisions of section 68 of the I.T. Act, 1961 (N.P. rate of 8% applied on total turnover of cotton fabric) after considering impugned sale-purchase shown by the assessee as bogus. 2.1 The Revisional Authority gathered from record of the company, for the year under consideration, that there are some omissions in the assessment order passed by the A.O. Therefore, a show cause notice u/s 263 of the I.T. Act, 1961 was issued to the assessee on 28.06.2018, by the then Principal Commissioner of Income-tax, after considering assessment order passed by the A.O. to be erroneous and prejudicial to the interest of revenue. Relevant portion of the same is reproduced below:- i) "The case of the assessee company was selected for scrutiny for the reason "Suspicious Transaction relating to short term capital loss/long term capital gains on shares (inputs from investigation wing)". From ITS Data for A.Y. 2014-15, it is gathered that during the year under consideration, the assessee company purchased 232004 sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT completely misdirected herself in invoking provisions of S.263 because, a) as even in case of rejection of share transactions only amount of short terms loss will increase hence there is no possibility of any loss to revenue. b) appeal against Order cancelled u/s 263, was pending before Id. CIT(A) and is still pending before Hon'ble ITAT and said action is not only against s.263(l)(C ) but is against the scheme of Act which will make pending appeal infructuous. c) notice is issued on the basis that i) difference in qty/value of total share sale/purchase etc. not examined, though difference in qty/value etc. is found duly reconciled and transactions duly examined and ii) notice is issued as Sales/purchase are bogus hence total cash credit u/s 68/69 should be added against 8% rate applied by AO , though directions is to enquire / verify sales-purchases from parties to ascertain payment of transportation charges. d) order is also violating the settled principle that "where the AO adopted one of the courses possible in law or where two views are possible and he has taken one view with which the Commissioner does not agree, it cannot be treated that the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue does not justify invoking powers u/s 263 of the Act. It was submitted that based on the inquiries raised, learned AO has taken one of the possible views. The order cannot be considered to be erroneous. It was submitted that no addition could be made u/s 68/69 of the Act in regard to sales/purchases by applying 8% rate of net profit on turnover, which was separately challenged by the assessee by way of appeal u/s 250 of the Act. Learned counsel for the assessee relied on the following judgments: - CIT V NTPC Ltd. (2017) 88 taxmann.com 561 (SC) - Kwality Steel Suppliers Complex (2017) 84 taxmann.com 234 (SC) - Malabar Industrial Co. Ltd. (2000) 243 ITR 83 (SC) - CIT V Krishna Capbox (P) Ltd. (2015) 60 taxmann.com 243 (All) - D.G. Housing Projects Ltd. (2012) 20 taxmann.com 587 (All.) - CIT V Vam Resorts & Hotels (P) Ltd. (2019) 111 taxmann.com 62 (Allahabad) - Ranka Jewellers V Addl. CIT 328 ITR 148 (Bom) - S.K. Jain V CIT (2010) 127 ITD 217 (Agra)(TM) - Punjab State Civil Suppliers Corn. Ltd. Vs. CIT 200 ITR (P& H) 6. On the other hand, learned DR submitted that there is no error in the findings of learned Pr. CIT. 7. Appreciating the material on record i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /mutual funds etc. for the year under consideration and last year i.e. A.Y. 2013-14 & 2014- 15." 10.1 The assessee has given a detailed reply to the aforesaid questionnaire and the paper book filed on behalf of the assessee brings forth that copy of reconciliation of shares available at page no. 44-45, copy of D-Mat account available at page no. 46-47, copy of ledger account of laws from shares available at page no. 48, contract note of job / enter day trading available at page no. 58 to 60, copy of order u/s 143(3) of the CCL International Ltd. for corresponding A.Y. 2014-15 available at page no. 124-125 were before Ld. AO who must examined the same. 10.2 Rather, the Bench is of considered opinion that when the scrutiny assessment was for the reason "suspicious transaction relating to short term capital loss / long term capital gain on shares (inputs from Investigation Wing)" then if the aforesaid documents and evidence were before Ld. AO in response to the aforesaid questionnaire and he had not made any adverse remark upon the same and Ld. PCIT was also satisfied with regard to the discrepancy which was made foundation for issuance of notice u/s 263, then the impugned assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l by CIT(A). The impugned order u/s 263 was passed on 30.03.2019. 14.1 The issues examined by Ld. CIT(A) pertains to both the facts. Ld. CIT(A) in order dated 02.02.2018 had taken note of the fact, the scrutiny assessment was made on the specific issue of suspicious transaction relating to short term capital loss/ long term capital gain on shares (inputs from Investigation division) and had upheld the order of ld. AO of the addition made only with regard to bogus sales and purchase. In that order dated 02.02.2018 in para 5.2.1 Ld. CIT(A) had observed ; "5.2.1 Examination of facts reveals that appellant claim to engaged in trading fabrics and declared loss of Rs. 18,697/-. The AO found difference in quantitative details filed during assessment proceedings and as given in the audit report. It is noted that even during assessment proceedings the appellant did not furnish any details to support the fact that appellant has undertaken the business activity of purchase and sale of shares. The AO also noted that there was no opening stock, no closing stock and no expenses regarding cartage or freight was debited to the P&L account and sales made to the parties namely M/s Sybly Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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