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2024 (5) TMI 26 - ITAT DELHIRevision u/s 263 - source of cash found in the course of search remains unexplained and additions u/s 69A r.w. Section 115BBE - CIT proceeded on the premise that AO has also failed to make cogent inquiries with reference to investments in jewellery found in the course of search in terms of Sections 69 / 69A r.w. Section 115BBE - HELD THAT:- Source of cash available, we take note of the contentions raised on behalf of the assessee that an opportunity of barely three working days in aggregate has been given to assessee to defend the allegations. Despite such extremely short time made available, assessee has attempted to comply with the show cause notice in the best possible manner and has pointed out that search team itself was prima facie satisfied with the source of cash available in the course of search and did not choose to seize the cash. The source of cash was shown to be arising from the earlier balances as well as some accumulation thereafter to the satisfaction of the AO. A specific inquiry was directed by the AO and the source was found to be satisfactory. While seeking to dislodge the action of AO, no inquiries were made by the CIT in the course of revisional proceedings. CIT without giving any effective opportunity, has decided the issue against the assessee with a degree of finality disregarding the vital facts such as opening balances available in the F.Y. 2016-17 to the tune which was admitted and accepted as closing balance of cash in the preceding A.Y. 2016-17 and also has attained finality. CIT has adjudicated the issue against the assessee without giving any allowance for any cash in hand which, a common person would ordinarily possess having regard to the construct of the Indian society. An amount of Rs. 10 lakh cannot be stated to be highly implausible having regard to the postulations which define Indian socio-eco structure. Business model of the assessee and need of cash for running business was also disregarded by the CIT. We find substantial merits in the ardent defense raised on behalf of the assessee on both counts. Assessee has demonstrated the existence of cash in hand. The relevant facts were placed before the AO which suggests the view taken by the AO in its quasi judicial capacity to be plausible while framing the assessment. Assessee has not declared any cash in hand in its return of income filed prior to search since it was not compulsory for the assessee to do so owing to presumptive taxation scheme availed by the assessee. The cash in hand was however declared for different assessment years in the return filed u/s 153A. Pursuant to search, the opening cash in hand for F.Y. 2016-17 declared has been accepted by the Revenue and has attained finality in the absence of any pending proceedings. This itself gives rise to a somewhat plausible explanation towards cash found - revisional action has been taken at a ferocious speed and in unprecedented hurry apparently to meet the limitation period denying any opportunity to the assessee to objectively explain the factual position to the CIT. CIT has merely rejected the plea of the assessee with preconceived notions and without countering the assessee in any manner. When the facts are collated, the view taken by the AO cannot be branded as without any enquiry. The direction of the CIT to make additions on account of cash found in the course of search with aid on the contour of Section 69A r.w.s. 115BBE without effective opportunity, thus cannot be countenanced in law. Such directions are thus required to be set aside and the action of the AO is required to be restored. Directions of the Pr.CIT setting aside the assessment order to make inquiry on source of jewellery is clearly marred by total lack of opportunity and is in contravention of the statutory enactment codified u/s 263 of the Act. A revisional directions given without any opportunity to assessee is a complete non starter. The impugned revisional order passed u/s 263 is thus set aside and quashed. Assessee appeal allowed.
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