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2022 (8) TMI 730 - AT - Income TaxRevision u/s 263 by CIT - Introduction of cash as capital in the firm - HELD THAT:- There is no dispute on the fact that the assessee has introduced cash of Rs.7,00,000/- as capital in the firm. Prima facie, enough cash was not available with the assessee to introduce as capital. AO had not verified it. During the hearing before the ld.CIT, the assessee submitted that he had taken Loan from Life Insurance Corporation of India - CIT observed that the explanation submitted by the assessee was not acceptable. We agree with the ld.CIT, that the explanation of the assessee that he had obtained Loan from LIC and then Rs.7,00,000/- had been introduced in cash as Capital in the firm, is not acceptable. Because, the LIC disburses Loan through banking channel, then why a prudent man will withdraw the amount in cash and introduce it as Capital in the firm? If the assessee wanted to introduce the impugned amount then he could have directly issued a cheque. Therefore, we agree with the ld.CIT that the explanation is not acceptable. Hence, the ld.CIT was right in holding that the assessment was erroneous and prejudicial. Similarly, the Assessing Officer has not verified the cash deposits in the impugned bank account. Thus CIT(A) has rightly invoked the jurisdiction u/s.263 - Decided against assessee.
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