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2023 (10) TMI 261 - AT - Income TaxRevision u/s 263 - Addition u/s 40A(3)/269T - As per CIT AO ought to have inquired the issue of utilization of cash by the company and examined the violation of section 40A(3)/269T of the Act when in fact said amount is not expended during the year but disclosed on assets side of balance sheet - HELD THAT:- AO has asked the assessee to submit month-wise details of cash sales for the financial year 2015-16 and month-wise details of cash sales for the financial year 2016-17 relevant to assessment year 2017-18. The assessing officer also asked the assessee to submit cash book for the assessment year 2017-18. AO also asked the assessee to submit Sales Tax return and VAT return and other returns filed under the Income Tax Act. We note that with help of these documents and details, the assessing officer has examined the cash received by the Raremat Mall Management office (assessee`s office) from the assessee and summery of cash which have been utilized by the Raremat Mall Management office. Therefore, we note that assessing officer has examined the issue raised by the ld PCIT in his revision order therefore order passed by AO is neither erroneous nor prejudicial to the interest of revenue. According to us, the present order of AO passed u/s 143(3) cannot be termed as ‘erroneous’ since enquiry was, in fact, carried out by him on the issue on which the PCIT has found fault with and has taken a plausible view. We note that the AO has made enquiry during the assessment proceedings about cash issued to Raremat Mall Management office and utilization of the such cash. Thus we note that the AO enquired during assessment proceedings and the assessee had filed details before him. So we find that the AO’s action cannot be termed “erroneous” Since not only enquiry was carried out by the AO on the issue under consideration and based on the evidence gathered he has taken a plausible view, which at any rate cannot be called as an un-sustainable view. The Hon’ble Supreme Court in the case of Malabar Industries [2000 (2) TMI 10 - SUPREME COURT] held that this phrase i.e. “prejudicial to the interest of the revenue” has to be read in conjunction with an erroneous order passed by the AO. Their Lordship held that it has to be remembered that every loss of revenue as a consequence of an order of AO cannot be treated as prejudicial to the interest of the revenue. When the AO adopted one of the courses permissible in law and it has resulted in loss to the revenue, or where two views are possible and the Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue “unless the view taken by the AO is unsustainable in law”. Decided in favour of assessee.
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