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2016 (4) TMI 340 - ITAT HYDERABAD

2016 (4) TMI 340 - ITAT HYDERABAD - TMI - Revision u/s 263 - case selected for scrutiny under Computer Aided Scrutiny Selection [CASS] method for verifying the sources of cash deposits - Held that:- Expenditure claim towards IMFL is either from the sale proceeds of the IMFL or withdrawals from the bank account. It may be true that AO did not leave any notes about the examination of various items. But having completed assessment by recording the above noting, it can be safely presumed that AO has .....

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taxes of ₹ 38,20,875/-. Therefore, it cannot be stated that AO did not examine this major item. Be that as it may, in our opinion, furnishing of proof in the course of assessment on record may not be required in all cases, when AO takes up the scrutiny for examining specific issues since the case has been selected under CASS system. May be that AO is constrained to examine only the issue on which scrutiny was taken up. In view of this, it cannot be held that order of the AO is erroneous a .....

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he directions given with reference to item Nos. 2 to 5 are hereby set aside. We modify the directions of the CIT only to the issue of making the addition of ₹ 24,200/- which should have been added by the AO in the original order - Decided partly in favour of assessee - I.T.A. No. 1186/HYD/2015 - Dated:- 4-3-2016 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri K.A. Sai Prasad, AR For The Revenue : Shri B.V. Gopinath, DR ORDER PER B. .....

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on [CASS] method for verifying the sources of cash deposits above the threshold limit in saving bank account. In the scrutiny assessment, since assessee has produced the savings bank A/c copies and explained that deposits are made from sale proceeds of IMFL and the corresponding withdrawals were utilized for business purposes, AO accepted them. Since assessee did not furnish the evidence in support of expenditure claimed, Assessing Officer (AO) disallowed round-sum amount of ₹ 3 Lakhs to t .....

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the proof of payment of license fee of ₹ 38,20,875/-; iv. AO has not verified the rent receivable from Reliance, from whom advance of ₹ 60,000/- was received; v. AO has not verified rent receivable from Bidar house property; 4. In spite of serving various notices on assessee, assessee did not represent before the Ld. CIT. Consequently, Ld. CIT has no occasion to consider assessee s submissions on the above five issues. He came to the opinion that AO has not examined the issues proper .....

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Further, the matters were handled by assessee s uncle who approached an advocate to submit the information before the CIT. Since there is no representation, no order was also received by assessee. Subsequently, it was noticed that the order issued by the CIT was stated to have been served on 23-12-2014 and that case was not properly represented before the CIT. Consequently, assessee s uncle approached another advocate/tax consultant, who prepared the appeal papers, obtained the signature and pai .....

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ment of taxes after the consequential order was passed which was also passed ex-parte, assessee realised that appeal was not be filed. Ld. Counsel explained that payment challan itself proves that assessee has bonafidely intend to prefer the appeal but due to some reasons, the appeal could be filed belatedly. He also showed the correspondence to the bank in support of the contention that Counsel who prepared the appeal could not file it in time. Subsequently, present Counsel came into picture an .....

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tion for the addition of balance amount of ₹ 24,200/- as it was a mistake committed by the AO. As far as the issues in item No. 4 & 5 are concerned ie. advance rent from Reliance and rent receivable from Bidar, it was submitted that assessee do not own any properties as alleged by the CIT and referred to the Balance Sheet and P&L A/c filed along with return of income. He further submitted that AO in the consequential order also did not make any addition which indicates that these t .....

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ently, the opinion of the CIT for directing to estimating the income to 5% of net purchases is only a change of opinion of a Superior Officer which cannot be resorted to in the proceedings u/s. 263. With reference to the proof of payment of license fee, Ld. Counsel submitted that this amount was claimed in the P&L A/c which the AO has examined at the time of scrutiny and accepted. Therefore, it was submitted that directions of the CIT on these two issues are not correct. 7.1. Ld. DR, however .....

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c. Therefore, AO s duty in scrutiny is confined to the examination of various deposits as per the Board s guidelines issued under the CASS Scheme of selection of scrutiny. However, AO not only examined the above, but also examined various claims and disallowed round-sum amount of ₹ 3 Lakhs, without rejecting the Books of Accounts. Consequently, estimation of income as proposed by the Ld. CIT does not arise in this case. In fact, when AO accepts the Books of Accounts and does not reject the .....

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sale proceeds of IMFL and the corresponding withdrawals were also utilized for business purposes . This indicates that the expenditure claim towards IMFL is either from the sale proceeds of the IMFL or withdrawals from the bank account. It may be true that AO did not leave any notes about the examination of various items. But having completed assessment by recording the above noting, it can be safely presumed that AO has examined the deposits and withdrawals in the course of assessment proceedin .....

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