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2011 (1) TMI 1367 - AT - Income TaxRevision u/s 263 - no evidence that any inquiry was conducted in respect of creditors and sundry creditors and the truthfulness of the confirmation letter was accepted without demur - case selected for scrutiny in order to verify low gross profit, high sundry creditors, advances and fresh loans - HELD THAT:- In the case of Rampyari Devi Saraogi, [1967 (5) TMI 10 - SUPREME COURT] came to the conclusion that non-verification of initial capital, gifts, sale of ornaments and profits from business lead to an assessment, which is erroneous and prejudicial to the interest of revenue. To our mind, the ratio of this case is applicable to the facts of case at hand. In the case of Gee Vee Enterprises [1974 (10) TMI 29 - DELHI HIGH COURT] clearly mentioned that the Assessing Officer cannot remain passive in the face of the return which is apparently in order but calls for further inquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances are such as to provoke an inquiry. Looking to the reasons for taking up the case for scrutiny, it was incumbent on the Assessing Officer to make inquiries into genuineness of book profits and credits. Nothing like that has been done. Relying on the decision in the case of Gee Vee Enterprises, the order of the CIT was upheld. The facts of our case are in pari-materia with the facts of our case on this point. On consideration of these cases, we are of the view that the learned CIT was right in exercised her revisionery jurisdiction. Appeal is dismissed.
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