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2019 (9) TMI 1005 - AT - Income TaxRevision u/s 263 - violation of provisions of section 40A(3) - HELD THAT:- AO has made enquiries on the cash payments made by the assessee and after eliciting the explanation of the assessee and after going through the records had partly accepted the assessee’s contention, therefore, the AO’s action cannot be termed as erroneous for want of enquiry. On this issue since we have made a finding that this was not a case of lack of enquiry on the part of the AO, the Ld. Pr. CIT if he wanted to interfere ought to have himself enquired on the facts of this issue and should have recorded a factual finding to upset the decision of the AO to allow as allowable expenditure and thereby not hit by sec. 40A(3) of the Act. Since in this case, the Ld. Pr. CIT has not been able to upset the finding of the AO who has made enquiry, the action of the AO cannot be termed on this issue as a case of ‘no enquiry’. Thus the action of the AO on this issue cannot be termed as erroneous for lack of enquiry. The AO’s action is based on a plausible view in the light of the judicial precedents cited before us. Therefore, the action of AO does not satisfy the twin conditions for invoking revisional jurisdiction u/s. 263 in the light of the ratio of the decision of Hon’ble Supreme Court in Malabar Industrial Co. Ltd [2000 (2) TMI 10 - SUPREME COURT] . The view of the AO in the light of the facts discussed at any rate cannot be termed as ‘unsustainable in law’ and, therefore, on this issue the AO’s action cannot be faulted with for invocation of sec. 263 jurisdiction by Pr. CIT. Excess claim under the head purchase of paddy - HELD THAT:- Assessment order framed by the AO is neither erroneous nor prejudicial to the interest of the revenue and therefore, the Ld. Pr. CIT’s impugned action of interfering with the order of AO invoking the revisional jurisdiction under section 263 of the Act is without jurisdiction and, therefore, null in the eyes of law and so it is quashed. Appeal of assessee is allowed.
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