TMI Blog2020 (12) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. Hence we do not find any substance or merit in the ground no. 1 challenging the validity of the revision order passed under section 263. Undisclosed bank deposits - HELD THAT:- Assessee has raised this plea that the entire deposits made in the bank account cannot be considered as turnover, however, when the assessee is not maintaining the books of account as required under section 44AA as well as the audit of the same under section 44AB, then the claim of availability of opening cash balance with the assessee cannot be accepted. The withdrawal of the amount from the bank can be considered as a source for re-depositing if the assessee can fully satisfy the AO that the withdrawal made from the bank is not utilized for any other purposes being the purchases and other expenditures incurred by the assessee in the course of business as well as personal drawings. Therefore, to that extent all the facts and details are required to be properly verified. No error or illegality in the impugned order of the ld. Commissioner to the extent that the order of the AO is erroneous and prejudicial to the interest of the revenue. However, the AO is directed to verify the availability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 147 is erroneous so far as it is prejudicial to the interest of the revenue as the AO has not conducted any enquiry about the total deposits made by the assessee in the bank account and consequently the turnover of the assessee remained understated. The Commissioner issued show cause notice under section 263 on 10.12.2019. In response to the show cause notice the assessee has filed the reply/written submissions objecting to the invocation of provisions of section 263 as well as holding the assessment order erroneous as well as prejudicial to the interest of the revenue. The ld. Commissioner while passing the impugned order set aside the assessment order passed by the AO with a direction to the AO to pass a speaking order after considering the issues as taken up in the revisional proceedings under section 263 of the Act. Aggrieved by the impugned order, the assessee has filed the present appeal. 3. The ld. A/R of the assessee has submitted that in the course of assessment proceedings, the assessee produced books of account, bills and vouchers, bank statements etc. The AO after verification of the books of accounts, supporting documents as well as bank statements has assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that even the Explanation 2 to section 263 inserted with effect from 01.06.2015 does not override the law that the Commissioner cannot treat the AO s order erroneous and prejudicial to the interest of the revenue without conducting an enquiry and recording a finding. Thus the ld. A/R has submitted that the revisional order passed by the ld. Commissioner is not sustainable in law and liable to be quashed. 4. On the other hand, the ld. D/R has submitted that it is not a case of any view taken by the AO on an issue but it is a simple case of factual aspect of the matter whereby the AO estimated the income of the assessee by considering the turnover equal to the cash deposit of ₹ 1,04,97,340/- which was reported in AIR information without conducting any verification of the bank account of the assessee wherein a total amount of ₹ 1,89,51,996/- was deposited during the year under consideration. Thus the AO has completed the assessment without conducting a proper enquiry. He has further submitted that the assessee has not filed any return of income and even the return of income filed in response to notice under section 148 was at the fag end of the limitation per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he books of account of the assessee. The AO then estimated the income of the assessee by applying NP rate at 2.75% on the total sales of ₹ 1,04,97,340/-. The AO further noted that the assessee has shown the sales of ₹ 1,04,97,340/-, however the books of accounts were not audited and no audit report was produced by the assessee. The AO has though rejected the books of account and estimated the income, however, the AO has not examined and verified the total deposit made by the assessee in the bank account despite the fact that the assessment was reopened on the issue of cash deposit in the bank account of the assessee. Thus it is evident on the face of the assessment order that the AO has not even conducted a minimum required enquiry to find out the total turnover of the assessee and deposits made in the bank account of the assessee. On one hand the AO has rejected the books of account and on the other hand the turnover as shown in the Profit Loss account so prepared by the assessee was accepted. The ld. Commissioner has noted this fact that during the year the assessee has deposited a sum of ₹ 1,89,51,996/-. This fact is not in dispute as the very bank stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uarrel on the point that if the AO has taken one of the possible views, then the Commissioner is not permitted to invoke the provisions of section 263 merely because he does not agree with the view taken by the AO. Therefore, the decisions relied upon by the ld. A/R of the assessee on this point are not applicable to the facts of the present case where the ld. Commissioner has clearly pointed out the factual error in the assessment order and lack of enquiry on the part of the AO to verify the minimum required facts about the deposits made in the bank account during the year and consequential turnover of the assessee. Hence we do not find any substance or merit in the ground no. 1 challenging the validity of the revision order passed under section 263 of the Act. The same is rejected. Ground No. 2 is regarding the merits of the order passed by the Commissioner. 6. The ld. A/R of the assessee has submitted that the ld. Commissioner has directed the AO to consider the total turnover of the assessee at ₹ 1,89,51,996/-, the amount which was deposited during the year under consideration. However, the assessee has explained the source of this deposit made in the bank account a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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