Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (5) TMI 687 - AT - Income TaxRevision u/s 263 - unexplained expenditure - HELD THAT:- Assessee makes some credit sales to the regular customers, though the amount is not received but the same is entered in the cash sales register and the amount is shown outstanding in the name of truck owners with truck numbers. Subsequently, when the amount is received the same is credited to the daily cash sales customer accounts. Though the policy adopted by the assessee is not at par with the settled accounting policies since the cash is entered in the books without actually receiving the cash, however, going through the flow of the transactions we find that this is in the nature of sales reversal - the sales which is booked at the time of giving goods to the regular customers and though the amount is not received but still the cash sales are increased by that amount but subsequently, when the actual amount is received then again the regular sales is credited with that amount and the amount shown in the past as cash sales from such customers (not actually giving cash), the same is reversed. Therefore, it is merely a sales reversal entry and not a case of unexplained expenditure. Complete documentary evidences in support of these transactions have been filed and we are satisfied that it is not a case of unexplained expenditure. Even otherwise all these details of cash sales including the cash book have examined by ld. AO in detail while carrying out the assessment proceedings for the reason for which the case selected for scrutiny i.e. cash deposit during demonetization period, therefore CIT erred in referring to other issue which was not required to be dealt by ld. AO and thus, wrongly invoked jurisdiction u/s 263 of the Act. Since no prejudice is caused to the Revenue due to this accounting system consistently followed by the assessee and since the order of ld. AO is not erroneous as complete examination of details has been carried out through issuance of notice u/s 142(1) to which proper compliance has been made by the assessee filing requisite details and thus, the assessment proceedings u/s 143(3) of the Act has been carried out after making proper enquiry, proper application of mind and taking a plausible view in accordance with law. No justification in the jurisdiction assumed by CIT u/s 263 for carrying out the revisionary proceedings and even on merits, the impugned proceedings are not valid - Appeal of assessee allowed.
|