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2021 (6) TMI 445 - AT - Income TaxRevision u/s 263 - Low Income shown by large contractors, Mismatch in amount paid to related persons u/s. 40A(2)(b) reported in Audit Report and ITR and Higher Turnover reported in Service Tax Return compared to ITR and assessee has deposited large amount of cash in saving bank account - HELD THAT:- Where there are two possible views and the AO has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the judgment of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016 (6) TMI 1004 - BOMBAY HIGH COURT]. Now when matter was again re-examined by the Ld. Pr. CIT, before setting aside the issue to the Ld. AO for conducting further enquiry, provision of section 263 of the Act requires that primary enquiry should first be conducted by the Ld. Pr. CIT/CIT so as to find that whether the order is erroneous and prejudicial to the interest of revenue. As relying on DG HOUSING PROJECTS LTD [2012 (3) TMI 227 - DELHI HIGH COURT] revisionary powers by Ld. Pr. CIT/CIT can be held to be correct if the Ld. Pr. CIT had examined and verified the said transactions himself and given a finding on merit. In the instant case, this aspect was completely missed out. The information of large cash deposit in Saving Bank Account had come before Ld. Pr. CIT. He should have called for the records so as to find out the details of Saving Bank account in which alleged large cash was deposited. It was not done so. Pr. CIT should have noted that how a partnership firm can open a saving bank account, it was again not done so. It is quite possible that the reasons on the basis of which case of the assessee was selected for scrutiny itself had some short comings or error which at least when Ld. Pr. CIT was issuing the show cause notice should have taken note of. Going through impugned order we find that the Ld. Pr. CIT has only mentioned the reasons and the brief submission made by the assessee and with a very brief analysis of facts just referred to plethora of judgments and held the order of the Ld. AO as erroneous and prejudicial to the interest of revenue which in our view was not correct to a certain extent. We, therefore, are of the considered view that the impugned order u/s. 263 of the Act is partly held to be correct and the direction for setting aside the order of the Ld. AO dated 26.04.2017 is held to be correct only limited to single issue of examining the payment of rent and legal fees made to related person namely Deepak Nenwani (son of partner) during the year as provided in section 40A(2)(a) of the Act regarding the reasonableness of the said expenditure incurred by the assessee.
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