TMI Blog2018 (12) TMI 1718X X X X Extracts X X X X X X X X Extracts X X X X ..... at letter. Therefore assessee gave complete explanation about the cash deposit in the bank account with the Jammu and Kashmir bank and also demonstrated the cash realized on sale of goods. Undisputedly the sale of goods have also been shown on the credit side of the profit and loss account, the cash has been generated out of the sale and same has been deposited in the bank account. The above fact has been verified by the learned assessing officer with respect to the cashbook, sales book and bank account of the assessee. On perusal of the order u/s 263 of Commissioner of income tax does not show that what kind of further enquiry the learned assessing officer should have done on the issue of cash deposit into the bank account of the assessee. Principal Commissioner of income tax did not say what other enquiry on this aspect the learned assessing officer should have been made. According to us so far as the cash deposit is concerned in the Jammu and Kashmir bank by the assessee. AO has made all possible enquiries to verify the source of cash deposit. According to us on this account. The order of the learned Commissioner of income tax passed under section 263 of the income tax act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the revenue is not correct. Accordingly, the order passed by the learned CIT is unsustainable. - Appeal of the assessee is allowed. - ITA No. 6187/Del/2015 - - - Dated:- 20-12-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For the Appellant : Shri Ashwani Taneja, Adv, Shri Saurabh Goyal, CA For the Respondent : Smt Paramita Tripathi, CIT DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by assessee against the order under section 263 of the income tax, 1961 passed by the learned Commissioner of income tax, Karnal dated 27/10/ 2015 wherein the order passed by the learned Income Tax Officer, Ward 3, Panipat under section 143 (3) on 30/12/2013 has been held to be an order erroneous and prejudicial to the interest of the revenue. The assessee has raised the following grounds of appeal:- 1. That having regard to facts and circumstances of the case, the ld CIT has erred on facts in assuming jurisdiction u/s 263 and has further erred in setting aside the assessment order to be made afresh on the issue of purchase of ₹ 131.24 lacs in cash in violation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction. It was further noted in the show cause notice that on perusal of the copy of account of the bank filed by assessee during the course of assessment proceedings, it revealed that assessee has made the cash deposits of ₹ 5437000 in the bank account and there is no evidence on record to explain the source of the above cash deposits. Therefore, it was proposed that the order passed by the learned assessing officer is erroneous and prejudicial to the interest of the revenue in not examining the above claim. 4. Assessee submitted his reply on 18/8/2015 explaining the reasons for deposit of cash in the bank account as well as the payment of purchases. However the learned CIT was not satisfied with the explanation of the assessee and held that ₹ 103.94 lakhs deposited in cash in the bank account of the assessee remain unexplained which were not properly enquired and examine by the assessing officer. It was further held that assessee has made purchases of ₹ 131.24 lakhs in violation of the provisions of section 40A (3) of the income tax Act which was not properly explained before the assessing officer and therefore that issue was also required to be set- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been given with regard to the said two issues along with the several judicial precedents relied upon. In nutshell he was pressing upon the issue that when all the issues as been dealt by the learned assessing officer in the original assessment order passed under section 143 (3) in extensive manner then the order passed by the learned assessing officer cannot be said to be erroneous and prejudicial to the interest of the revenue. Therefore he stated that the proceedings is bad for the reason that it is based on audit objection as is evident from the above correspondence. 7. The learned department and representative also vehemently submitted that revisionary powers of the Commissioner are contained under section 263 of the income tax act are explicitly laid down therein. He further stated that the jurisdiction under section 263 has been correctly assumed by the learned CIT by holding that the order passed by the assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue . In the instant case , there is no enquiry made by the learned assessing officer, which he should have made. Therefore, the order is erroneous and prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the paper book the assessee submitted the copy of the bank account to the assessing officer. Further vide a letter assessee explained regarding sales and cash deposit in bank accounts submitting that the assessee is holding license and selling liquor for human consumption to retail customers. The products were delivered as a mint, half bottles/BS et cetera whereas the sale price ranges from ₹ 50 to ₹ 1000 depending upon the quantity of liquor. It was further stated that the cash collected from retail customers and deposited in the bank account on the same day or alternate days. Assessee also produced vide same letter the cashbook for the relevant period. Assessee also placed the copy of the bank account with Jammu and Kashmir bank at page number 21 of the paper book, which was submitted along with that letter. Therefore assessee gave complete explanation about the cash deposit in the bank account with the Jammu and Kashmir bank and also demonstrated the cash realized on sale of goods. Undisputedly the sale of goods have also been shown on the credit side of the profit and loss account, the cash has been generated out of the sale and same has been deposited in the bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the guidelines and procedures stated in instruction number 7/2014. Therefore according to us when the learned assessing officer was not required to enquire on those issues such as purchases in cash more than specified sum, the learned CIT was not correct in holding that the learned assessing officer has not made due inquiries on that ground as the verification of the purchases exceeding specified limit in cash was not an issue before the assessing officer. Naturally, he should not have made any enquiry on that aspect. Even though the learned assessing officer has raised the specific questions on that aspect and verified the requisite detail. Therefore, it cannot be said that the order of the learned assessing officer is erroneous and prejudicial to the interest of the revenue on this ground also. 10. In view of this, according to us the order of the learned CIT in assuming jurisdiction under section 263 of the income tax act holding that the order of the learned assessing officer passed under section 143 (3) of the act is erroneous and prejudicial to the interest of the revenue is not correct. Accordingly, the order passed by the learned CIT is unsustainable. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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