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TMI Blog2025 (2) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT have been verified the evidence and sufficient material placed on record and gone through by the assessing officer during scrutiny assessment. Therefore, Assessment Order was neither erroneous nor prejudicial to the interest of the revenue. 2. The Learned Principal Commissioner of Income Tax has erred in law to invoke the provision u/s 68 of the Act in respect of credit entries made in the books of accounts of assessee for the sales made to M/s. Yug Tradelink Pvt. Ltd. Further commission U/s 131 (1) (d) was issued to DDIT, Investigation Wing, Vadodara to verify the genuineness transactions. So, of in present case there is double verification by highest legal authorities. Also, suo motu revision by Principal Commissioner of Income Tax even otherwise will be face a big question mark on investigation done by investigation wing, Also enquiry report has already been submitted by Investigation Wing on 29-12- 2017. 3. Also on face of Assessment order, there is nothing to point "prejudicial to interest of revenue" just merely Assessee did not elaborate the material on records or did not cross verify cannot be held prejudicial to interest in revenue. While Assessing officer received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponding sales to M/s Yug Tradelink Pvt. Ltd.; and in the entire transactions of purchase and sales, the assessee had deliberately booked loss from trading of steel scrap. The PCIT was of the view that since the assessee-company has admitted to have entered into sham transactions of purchase and sale of steel scrap (as agreed vide order-sheet entry dated 29.12.2017), then the Assessing Officer had erred in restricting the issue to the extent of disallowance of loss of Rs. 3,47,446/- without verifying of the entries of purchase and sales, and the outstanding dues as reflected in the balance-sheet. The PCIT was of the view that when the sales made to M/s Yug Tradelink Pvt. Ltd., Vadodara were held to be bogus, then all the debit entries made in the ledger account, as appearing in the books of accounts, were required to be treated as unexplained cash credits in the hands of the assessee. The PCIT was of the view that, in the instant facts of the case, the Assessing Officer has erred in making due inquiries regarding the genuineness of purchases made by the assessee, once the sales were held to be bogus in nature. Accordingly, the PCIT held that since the Assessing Officer had not mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order can be erroneous if the Assessing Officer fails to apply the law rightly on the facts of the case. As far as adequacy of inquiry is considered, there is no law which provides the extent of inquiries to be made by the Assessing Officer. It is Assessing Officer's prerogative to make inquiry to the extent he feels proper. The Commissioner of Income Tax by invoking revisionary powers under section 263 of the Act cannot impose his own understanding of the extent of inquiry. There are a number of judgments by various High Courts in this regard. 9. The Hon'ble Delhi High Court in the case of CIT Vs. Sunbeam Auto 332 ITR 167 (Del.), made a distinction between lack of inquiry and inadequate inquiry. The Hon'ble court held that where the AO has made inquiry prior to the completion of assessment, the same cannot be set aside u/s 263 on the ground of inadequate inquiry:- "12...... There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the assessment order. The grievance of the Commissioner was that the Assessing Officer should have made further inquires rather than accepting the explanation. Therefore, it cannot be said that it is a case of 'lack of inquiry'." 10. In Gabriel India Ltd. [1993] 203 ITR 108 (Bom), law on this aspect was discussed in the following manner (page 113) :- "The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no enquiry has been made by the Assessing Officer during the course of assessment proceedings. It is also not the case of the PCIT that the Ld. AO failed to apply his mind to the issues on hand or he had omitted to make enquiries altogether or had taken a view which was not legally plausible in the instant facts. As held by various Courts, PCIT cannot, in 263 proceedings, set aside an assessment order merely because he has different opinion in the matter. In our view, Section 263 of the Act does not visualise a case of substitution of the judgment of the PCIT for that of the Assessing Officer who passed the order unless the decision is held to be wholly erroneous. As noted in various judicial precedents highlighted above, the PCIT, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-visit the entire assessment and determine the income himself at a higher figure. 14. Accordingly, in our considered view, we find no infirmity in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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