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2021 (3) TMI 1197 - AT - Income TaxRevision u/s 263 - AO estimated the income at 8% on the cash deposits without examining source of each cash deposit - HELD THAT:- AO has verified the source of cash deposits and taken a conscious decision that the source of deposits made in the bank account was related to the turnover. The cash deposits made in the savings bank was duly verified by the AO. As discussed earlier, this case was selected for limited scrutiny for verification of deposits made in the savings bank account and the case was not converted into full scrutiny. AO is not permitted to travel beyond the scope of the case for which it was selected, unless the case is being converted into full scrutiny with the approval of Chief Commissioner of Income Tax or Commissioner of Income Tax as the case may be, as per the instructions given by the Board to the field functionaries. Calling for the details of movable and immovable properties, unexplained investments and any other information not related to limited scrutiny amounts to travelling beyond the scope of scrutiny for which the case was selected. AO acted within the scope of limited scrutiny and assessed the income, after verification of the details. The Ld.Pr.CIT intends to substitute his view in place of decision taken by the AO, which is not permissible in the guise of revision u/s 263. No other evidence was collected by the department to show that the assessee has understated the income. As argued by the Ld.AR, inadequate enquiry is not the reason for taking up the case for revision u/s 263 as decided by the Tribunal in the case of M/s Naveena Rice Industries [2018 (7) TMI 2170 - ITAT VISAKHAPATNAM] relied upon by the assessee. Though the Ld.DR tried to distinguish the case of the assessee with the Naveena Rice Industries, we find that the observation of the Tribunal is squarely applicable to the assessee’s case also. In the cited case, this Tribunal held that though lack of enquiry is the reason or for taking up the case for revision, inadequate enquiry cannot be held to be erroneous and prejudicial to the interest of the revenue. We hold that there is no error which is prejudicial to the interest of the revenue in the order passed by the AO u/s 143(3) dated 16.08.2016. Hence, we set aside the order of the Ld.Pr.CIT and allow the appeal of the assessee.
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