Vivaa Tradecom Pvt. Ltd Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that revisionary proceedings under section 263 of the Income Tax Act is not sustainable in law since Assessing Officer examined the aspect of disallowance of bogus losses on sale of steel scrap and took plausible view.
Facts- During the course of assessment, AO made addition of Rs.4,01,941/- on account of excess claim of bonus and disallowance of Rs.3,47,446/- being bogus book losses. On going through the records, the PCIT was of the view that, in the instant case, the assessee had made purchases from M/s. Global Metals and made corresponding 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 AO 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. Accordingly, the PCIT held that the assessment order was erroneous and prejudicial to the interest of the Revenue and accordingly directed to set aside the same.
