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| The Tax Publishers2020 TaxPub(DT) 4652 (Mum-Trib) INCOME TAX ACT, 1961
Section 263
A possible view taken by AO cannot be regarded as unsustainable in law and revisionary jurisdiction under section 263 cannot be exercised. In instant case, a possible view had been taken while framing the assessment and hence, proceedings under section 263 and the consequent order, were liable to be set aside.
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Revision under section 263 - Erroneous and prejudicial order - Possible view taken by AO -
AO received information that assessee was beneficiary of bogus Hawala purchases and thus the income of the assessee had escaped assessment. Accordingly, the assessment was reopened under section 147, wherein an addition was made towards assessing the profit element in the bogus purchases calculated at 1.5% of the total alleged bogus purchases. Subsequently, CIT exercised the revisionary jurisdiction under section 263 on the ground that the AO had not correctly assessed the income from the bogus purchases. Held: It was undisputed that issue relating to bogus purchases had been examined by AO during reassessment proceedings as the assessment was reopened only to examine the issue of escapement of income resulting from bogus purchases. Thus, the CIT proposed to exercise the revisionary jurisdiction only qua the same issue, which was incorrect and fallacious. It is settled legal position that a possible view taken by AO cannot be regarded as unsustainable in law and revisionary jurisdiction under section 263 cannot be exercised. In instant case, the issue relating to bogus purchases had been duly examined by AO during reassessment and then only, consequent addition of 1.5% of the bogus purchases was made, therefore, it could be said that a possible view had been taken while framing the assessment and hence, proceedings under section 263 and the consequent order were set aside.
Distinguished:Royal Rich Developers Pvt. Ltd. v. PCIT (2019) 108 taxmann.com382 (Bom) : 2019 TaxPub(DT) 5365 (Bom-HC) Vijay Proteins Ltd. v. CIT (2015) 58 taxmann.com 44 (Guj) : 2018 TaxPub(DT) 7917 (Guj-HC) Bhagirath Aggarwal v. CIT (2013) 31 taxmann.com 274(Delhi) : 2013 TaxPub(DT) 0672 (Del-HC) N.K. Proteins Ltd. v. DCIT SLP © CC No. 769 of 2017 dated 16-1-2017 : 2017 TaxPub(DT) 1860 (SC)
REFERRED : CIT v. Nirav Modi (2017) 390 ITR 292 (Bom.) : 2016 TaxPub(DT) 3506 (Bom-HC) Grasim Industries Ltd. v. CIT (2010) 321 ITR 92 (Bom.) : 2010 TaxPub(DT) 1431 (Bom-HC) Malabar Industrial Co. Ltd. v. CIT 2000 TaxPub(DT) 1227 (SC)
FAVOUR : In assessee's favour
A.Y. : 2009-10
IN THE ITAT, MUMBAI BENCH
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