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2013 (10) TMI 1293 - AT - Income TaxDisallowance of unexplained investment - difference in purchases made by the assessee - Held that:- The burden lay on the Department to prove that the assessee made the purchases. In our opinion no addition can be made merely on the basis of assumption and presumption. There may be various reasons that other party might have shown sales to the assessee and in fact assessee would have not made purchases. Subjection whatever wrong may be, it cannot take the shape of actuality. If the Assessing Officer did not agree with the purchases made by the assessee, the onus is on the Assessing Officer to prove by bringing relevant material that in fact the assessee has made purchases. Merely there is a difference in the reconciliation of the accounts of the suppliers and the assessee, it cannot be presumed that the assessee has made purchases outside the books of account. Under these facts and circumstance, we are of the opinion that it is not a fit case that the addition can be sustained. Jurisdiction under section 263 can be invoked if both conditions, i.e., that the order passed by the Assessing Officer is erroneous and it is prejudicial to the interests of the Revenue. If only one of the conditions is satisfied, the jurisdiction under section 263 cannot be invoked. We noted from the assessment order that the Assessing Officer has not made any disallowance under section 40A(3) of the Act. It is apparent from the provisions of section 40A(3) that prior to substitution of this provision by the Finance Act, 2008, with effect from April 1, 2009, this provision does not require that the aggregate of the payment "made to" a person in a day has to be taken into account for the purpose of computing the limit of ₹ 20,000. - there is no violation of the provisions of section 40A(3) and, therefore, there is no error in the order of the Assessing Officer. We also noted from the assessment order that the Assessing Officer at page 4 had duly considered the discount given by the assessee and on this account, the Assessing Officer made the disallowance to the extent of ₹ 31,458. It is settled law in view of the decision of the hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd v. CIT [2000 (2) TMI 10 - SUPREME Court] that unless a view taken by the Assessing Officer is unsustainable in law, it cannot be said that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. No error in the order of the Assessing Officer - order under section 263 is quashed - Decided in favour of assessee.
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