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2023 (11) TMI 340 - ITAT RANCHIRevision u/s 263 - abnormal increase in cash deposits into the bank account of the assessee during the year especially during the demonetization period - CIT observed that there was no cash sales from April to July, 2016 however in August the cash sales were only 5.00 lacs which rose to Rs. 11.00 lacs in September and fell back to Rs. 1.60 lakhs in October. However in November, sales were more than Rs. 7.00 crores and in December the cash sales have been shown at Rs. 3.00 crores which fell back to Rs. 5.00 lakhs in January, 2017 - HELD THAT:- We note that the AO has recorded a finding in the assessment order that during the demonetization period assessee has deposited huge cash as compared to pre-demonetization period and this was the reason that the case of the assessee was selected for scrutiny under CASS. We also note that comparative details of cash sales and cash deposited for during two years i.e. FY 2015-16 and 2016-17 were furnished after AO asked for the same. Assessee, is a proprietor of two proprietary concern which are authorized traders of Pan Masala & Zarda and accordingly filed return of income - A.R submitted that during demonetization period from 09.11.2016 to 31.12.2016 assessee deposited demonetized currencies in the case of two concerns - The Ld. A.R stated that the assessee is a CSA (Consignee Sales Agent) of the DS group Delhi who is in the business of pan masala, jarda, supari for the state of Bihar. We note that the money received by the assessee in the proprietary concern was immediately transferred to D.S. group on which the assessee received commission. The AO, after analyzing all these facts in details, accepted the explanation of the assessee and made no addition while framing the assessment. A.R therefore submitted that the AO has taken a plausible and possible view on the basis of evidences/explanation furnished by the assessee after doing necessary verification and examination of the same. According to the Pr. CIT AO has not verified the details furnished by the assessee qua the spike in the sales of the assessee during various months particularly during demonetization - cash deposited by the assessee in the bank account was abnormally high and should have raised suspicion in the mind of the AO and AO should have done the necessary enquiry which he has failed to do so. In our opinion, the said observations of the Pr. CIT is factually wrong and contrary to the facts on records. AO has examined the issue in detail and after analyzing the details filed by the assessee with the documents, bank book and cash book, a conclusion has been recorded in the assessment order and only thereafter accepted the plea of the assessee and framed the assessment accordingly. Considering these fact, we are of the view the conditions as envisaged u/s 263 of the Act have not been fulfilled i.e. for invoking jurisdiction u/s 263, the assessment order has to be erroneous insofar as prejudicial to the interest of the revenue. The case of the assessee squarely covered by the decision of Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME COURT), wherein it has been held that the jurisdiction is not available to the Pr. CIT where the twin conditions as envisaged by section 263 of the Act were not satisfied. CIT has revised the assessment on the ground that the AO has not conducted proper enquiry on the cash deposits in the bank account but Ld. PCIT has not conducted any enquiry himself to record a finding as to how the order is erroneous and prejudicial which is not correct , thus we quash the revisionary order passed u/s 263 of the Act. Decided in favour of assessee.
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