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2021 (9) TMI 446 - AT - Income TaxRevision u/s 263 by CIT - understatement of commission receipts - as per CIT No proper enquiries and verifications have not been carried out by the AO and the order so passed has been held as erroneous in so far as prejudicial to the interest of Revenue - HELD THAT:- methodology to be adopted for examining a particular transaction or set of transactions is something which is best left to the discretion of the Assessing officer who is the best judge to device an appropriate methodology given the facts and circumstances of a particular case. At the same time, we are conscious of the fact that there are standard operating procedures devised by the CBDT and the Assessing officers are expected to follow the same while discharging their functions. However, in the instant case, we find that there are no standard operating procedures devised by the CBDT and the ld PCIT has basically suggested a different methodology than the one followed by the Assessing officer and merely by virtue of the same, the order so passed by the Assessing officer cannot be held as erroneous in nature. Explanation so offered by the assessee regarding the nature of various credit entries have not been disputed by the ld PCIT, therefore, there is no justifiable basis to hold that there is a failure on part of the Assessing officer by virtue of inadequate enquiries and verifications and the directions so issued to verify bank credits and recalculate commission receipts is hereby set-aside. Non-verification of remuneration and interest paid to two - Requisite documents have been called for by the AO and duly examined in terms of payment of remuneration and interest to the partners and no adverse finding has been recorded by the AO. It is thus not a case where the AO has failed to examine and verify the subject matter - As during the course of revision proceedings, the assessee has again submitted copy of the partnership deed and partner’s capital account and there is no finding recorded by the ld PCIT as to whether the allowance of remuneration and interest is not in accordance with the facts and relevant provisions of the Act - where the matter has been duly examined by the AO, the findings of the ld PCIT for fresh examination cannot be upheld and is hereby set-aside. Difference in bank balance as per books and as per bank statement - Where the difference is on account of cheque issued and not presented before the close of the financial year and the details of cheque payment and its subsequent clearance after the close of the financial year is duly available on record and examined by the AO, the order so passed by the AO cannot be held as erroneous on account of non-verification and in any case, the accrural/payment to KUMS has not been disputed, therefore, the allowance thereof cannot be held as prejudicial to the interest of Revenue. Addition u/s 40A(3) - cash payment to farmer against agriculture crop - As the factum of payment being made to Shri Ranjeet Singh Lambra, a farmer towards supply of potato is not under dispute and the assessee has reasonably explained the business exigency of making such payment in cash which is also covered in the exception so provided in Rule 6DD. Therefore, where the matter has been verified and examined during the course of assessment proceedings and the claim has been allowed as per provisions of law, the order so passed by the AO cannot be held as erroneous due to nonapplication of relevant law and related provisions. As necessary enquiries and examination as reasonably expected have been carried out by the Assessing officer and he has taken a prudent, judicious and reasonable view after considering the entire material available on record and the order so passed u/s 143(3) cannot be held as erroneous in so far as prejudicial to the interest of Revenue - Decided in favour of assessee.
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