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2014 (10) TMI 1039 - ITAT BANGALORERevision u/s 263 - Narration in the cash books which reflected deposits in cash to the bank accounts of trade creditors’ and Non-examination of books of account with reference to the deposits into trade creditors’ bank accounts - as per CIT that provisions of section 40A(3) were attracted to cash deposits made directly to the accounts of suppliers - HELD THAT:- There is no dispute that the issue regarding application of section 40A(3) of the Act was verified by the AO during the course of assessment proceedings. That, queries were raised in this regard and assessee had given reply on 8.3.2013 is clear from the paperbook filed by the assessee. It might be true that there are some decisions of different High Courts which could lead to a view that payments effected directly to suppliers’ bank account in cash would also attract section 40A(3) - it cannot be said that the view taken by AO is not a lawful one, especially when the co-ordinate Bench of the Tribunal in the case of Sandur Sales & Services Pvt. Ltd. [2012 (11) TMI 1305 - ITAT BANGALORE] had held in favour of the assessee in similar facts and circumstances, relying on the decision of Hon’ble Apex Court in Attar Singh Gurmukh Singh [1991 (8) TMI 5 - SUPREME COURT] So, effectively, the ld. CIT was trying to substitute a lawful view taken by AO with that of his own. The Hon’ble Apex Court in the case of Max India Ltd [2007 (11) TMI 12 - SUPREME COURT] had clearly held that when two views are possible and ITO had taken one view with which Commissioner does not agree, it could not be treated as an erroneous order prejudicial to the interest of revenue, unless view taken by ITO was unsustainable in law. The Hon’ble Bombay High Court in Gabriel India Ltd. [1993 (4) TMI 55 - BOMBAY HIGH COURT] has clearly held that section 263 did not visualize substitution of judgment of Commissioner with that of ITO. We are, therefore, of the opinion that this was not a fit case where powers u/s. 263 could have been invoked. The original assessment order could be stated to be erroneous insofar as it was prejudicial to the interests of revenue. Order of the CIT u/s. 263 is quashed. - Decided in favour of assessee.
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