TMI Blog2019 (4) TMI 1520X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO cannot be termed as not a possible view. Since the same has been determined on the basis of various replies given by the assessee, therefore, CIT, in our opinion, is not justified in invoking the jurisdiction u/s 263 on the issue of bank deposits/credits in the bank account . The order passed u/s 263 by the ld.CIT is not sustainable in law. - Decided in favour of assessee. - ITA No.1781/Del/2016 - - - Dated:- 24-4-2019 - Shri R.K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Dr. Rakesh Gupta, Shri Somil Aggarwal Sobhit For the Revenue : Shri Kanwaljit Singh, CIT, DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 3rd February, 2016 passed u/s 263(1) of the IT Act, 1961 by the PCIT, Karnal, relating to assessment year 2011-12. 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 6th July, 2011 declaring total income of ₹ 1,58,105/- and agricultural income of ₹ 5 lakhs. The Assessing Officer completed the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly addition made at ₹ 2 Lacs at the time of assessment. You have also failed to file any gift deed on this account alongwith other supporting documents. Thus, genuineness of cash gift of ₹ 8 Lacs remained unexplained and unverified. (a) Further, out of cash deposit of ₹ 1,00,81,585/-, you have stated that the balance ₹ 47.41 lacs represent the sale of bananas, which is not supported by the requisite details and the AO has merely added ₹ 1,72,440/- on account of presumptive profit i.e. 8.06% GP on ₹ 21,39,513/- (23,39,513 - 2,00,000). The AO has not made addition on account of unexplained investment made for the purchases for the corresponding sales. In view of above, the assessment order passed by the AO has become erroneous in as much as it is prejudicial to the interest of revenue and calls for consideration u/s 263 of the Income Tax Act. You are, therefore, requested to furnish reply / submission alongwith documentary evidence, if any, on the above issues raised in the notice and attend the office of the undersigned at Aayakar Bhawan, Sector-12, Karnal on 07.10.2015 at 11:30 AM personally / through your authorized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the notice u/s 263 is invalid because such a course of action deprives the assessee of the opportunity of hearing as contemplated u/s 263. He submitted that the proceedings u/s 263 has to be strictly confined to the notice issued for invoking the jurisdiction under that section for the reasons stated therein. The law does not permit extending the proceedings u/s 263 after its initiation beyond what is stated in the notice itself. For the above proposition, the ld. counsel for the assessee relied on the following decisions:- (i) CIT vs. Contimeters Electricals (P) Ltd. (2009) 317 ITR 0249 (Del); (ii) Maxpak Investment Ltd. vs. ACIT (2006) 104 TTJ 0881 (Del); (iii) Anil Aggarwal vs. DCIT (2004) 90 TTJ 0946 (Chd.); (iv) Ganesh Builders vs. CIT (2013) 158 TTJ 0801 (Jodhpur); (v) Colourcraft vs. ITO (2007) 107 TTJ 0800 (Mum); and (vi) SSI vs. DCIT (2004) 85 TTJ 1049 (Chennai). 5. The ld. counsel for the assessee also relied on the decision of the Tribunal in the case of Shri Gaurav Bhatia vs. CIT, ITA No.1730/Del/2013, order dated 13.04.2017. 6. He submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsustainable in law. Relying on various other decisions placed in the paper book, he submitted that when the Assessing Officer has accepted the claim of the assessee by applying his mind though the CIT has different opinion on the same, it would certainly fall in the category of inadequate inquiry. In case of inadequate inquiry, the commissioner is not empowered to invoke the provisions contained u/s 263. It has further been held in various decisions that before reaching the conclusion that the order of the Assessing Officer was erroneous and prejudicial to the interests of the Revenue, the Commissioner himself has to undertake some inquiry to establish that the assessment order was erroneous and prejudicial to the interests of the Revenue. Since, in the instant case, out of the three issues he himself has dropped two issues and has added two new issues out of which the Assessing Officer in the subsequent proceedings has accepted the issue on account of contra entry, therefore, this shows that the ld.CIT has not undertaken proper inquiry to establish that the assessment order is erroneous and prejudicial to the interests of the Revenue. He accordingly submitted that the order passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the returned income of ₹ 1,58,105/- and agricultural income of ₹ 5 lacs. We find the ld.CIT issued notice u/s 263 of the IT Act the contents of which have already been reproduced in the preceding paragraph. We find, out of the three issues on which the ld.CIT invoked jurisdiction u/s 263, he has accepted two issues and the only issue that survived for adjudication as per notice u/s 263 is relating to the treatment of ₹ 15,39,513/- as unexplained cash deposits. A perusal of the assessment order shows that the Assessing Officer has discussed this issue in the body of the assessment order and has adopted a net profit rate of 8.06% on the deposit of ₹ 15,39,513/-. The relevant observations of the Assessing Officer read as under:- 2.v. Cash deposits out of sale of bananas:- The assessee has claimed that he has made total sales of bananas in cash at ₹ 32,01,250/- and deposited the same in his bank account and claimed total purchases of ₹ 25,61,000/-. The profit on the above sales have been shown on presumptive basis at ₹ 2,58,105/- giving profit percentage about 8.06%. Accordingly, contention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and no material whatsoever has been brought on record by the Commissioner which showed that there was any discrepancy or falsity in evidence furnished by the assessee, the order of the Assessing Officer cannot be set aside for making deep inquiry only on the presumption and assumption that something new may come out. For making a valid order under section 263 it is essential that the Commissioner has to record an express finding to the effect that the order passed by the Assessing Officer is erroneous which has caused loss to the Revenue. Furthermore, where acting in accordance with law the Assessing Officer frames certain assessment order, the same cannot be branded as erroneous simply because, according to the Commissioner, the order should be written more elaborately. All these principles are highlighted in the judgments noted hereinafter. 14. The various other decisions relied on by the ld. counsel for the assessee also support his case. Since, in the instant case, the Assessing Officer has taken a possible view on the issue relating to the deposits/credits in the bank account of ₹ 15,39,513/- by treating the same on account o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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