Case Law Details
M/s. Vaghasiya Exports Vs Pr. CIT (ITAT Mumbai)
Ld. AO was clinched with the issue of suspicious purchases made by the assessee from various entities of tainted group. In fact, it is the only addition made in the assessment order. Specific queries were raised requiring the assessee to substantiate the purchases under suspicion. The assessee produced requisite details and documentary evidences including stock record and quantitative details of opening stock, closing stock, purchase, sale etc. The corresponding sales made against the purchases were also demonstrated. The copies of purchase invoices as well as ledger extracts were furnished in support of purchase transactions. After considering all these evidences, Ld. AO came to a conclusion that since sales were offered and adequate quantitative details were produced by the assessee, the conclusion which was to be drawn was that the goods were procured from grey market whereas the bills were obtained from accommodating suppliers. In such a case, the only option left was to estimate the suppressed profits on these transactions. Keeping in view the applicable VAT rate, Ld. AO estimated a further addition of 1.6% against these purchases. There facts would show that Ld. AO took one of the possible view with due application of mind which could not be termed as perverse, in any manner. There could be no sale without actual purchase of goods keeping in view the nature of assessee’s business. The action of Ld. AO was in conformity with the ratio of various judicial pronouncements as enumerated in para 6.4 of the assessment order. In view of the foregoing, it could very well be said that the view of Ld. AO was one of the possible view which was not contrary to law or unsustainable in law.
Merely because Ld. Pr. CIT held a view that the estimation should have been at higher rates or entire purchase should have been disallowed, the same would not make the order erroneous unless it was found that the action of Ld. AO was not in accordance with law or perverse, in any manner. This being the case, the revision could not be held to be justified as per the ratio laid down by jurisdictional High court in Grasim Industries Ltd. V/s CIT (2010; 321 ITR 92).
FULL TEXT OF THE ITAT JUDGEMENT
1. By way of this appeal, the assessee challenges the invocation of revisional jurisdiction u/s 263 by Ld. Principal Commissioner of Income Tax-32, Mumbai (Pr. CIT) for Assessment Year (AY) 2014-15 vide order dated 18/03/2019. The grounds raised by the assessee read as under:-
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