TMI Blog2022 (10) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... estioned the information supplied by the assessee with regard to the source of cash deposits into the safe custody account and has simply accepted those details without further enquiry. In such circumstances, it cannot be said that the AO has made any enquiry or taken a particular view by application of mind on the issue. As relying on the ratio laid down by the Hon ble Delhi High Court in the case of Gee Vee Enterprises [ 1974 (10) TMI 29 - DELHI HIGH COURT] , we hold that there is no infirmity in the impugned order passed by the PCIT u/s. 263 of the Act. Appeal by the assessee is dismissed. - ITA No.371/Bang/2022 - - - Dated:- 18-8-2022 - Shri George George K., Judicial Member And Ms. Padmavathy S, Accountant Member For the Appellant : Smt. Suman Lunkar, CA For the Respondent : Shri Deva Rathna Kumar, CIT(DR)(ITAT), Bengaluru ORDER PER PADMAVATHY S., ACCOUNTANT MEMBER This appeal by the assessee is against the order of the Principal Commissioner of Income-tax, Bengaluru-2 (PCIT) passed u/s.263 of the Income Tax Act 1961 (the Act) dated 16.3.2022 for the assessment year 2017-18. 2. The assessee has raised the following grounds:- 1. The learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther grounds to be adduced at the time of hearing, it is requested that the impugned order passed by Principal Commissioner of Income-tax be quashed or atleast the directions issued by Principal Commissioner of Income-tax in the order be held to be wrong and erroneous and be quashed. 3. The assessee is the proprietor of M/s. M.D. Jewellers [MDJ] and filed return of income declaring an income of Rs.9,35,850. The case was selected for limited scrutiny under CASS for verification of cash deposits during the year. Assessment was completed u/s. 143(3) of the Act on 6.12.2019 accepting the income shown in the return. 4. The PCIT noticed that the assessee has made cash deposit of Rs.88,16,000 in her bank account the source of which was submitted before the AO by the assessee as from opening cash in hand, cash sales, amount received from Debtors, amount transferred from personal books and cash withdrawals. The PCIT also noticed from the cash book of the assessee that the assessee had deposited money in the form of cash of Rs.5,00,000 on 05.08.2016, Rs.10,00,000 on 29.9.2016 from an account termed as safe custody account and transferred the said amount to the business account of MD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any reliable evidence on record to substantiate the source of cash deposits of Rs. 15,00,000/- during A.Y. 2017-18. When the case has been selected for scrutiny specifically for examining the cash deposited in the bank, it was incumbent on the Assessing Officer to conduct necessary enquiries and examine whether the source of the cash deposited is explained, or not. The assessee should have filed a detailed, explanation giving details of the source of cash deposited in the bank accounts. The Assessing Officer should have conducted necessary enquiries to examine whether the assessee's claim regarding the cash deposits being out of Safe Deposit account is factually correct. The Assessing Officer has passed the assessment order without making enquiries or verification of cash deposits by the assessee. 5. Aggrieved by the order of the PCIT, the assessee is in appeal before the Tribunal. 6. The ld. AR submitted that the assessee had accumulated cash balance which was held under safe custody account and the assessee had transferred the said amount to cash book from where it was transferred to the proprietary account of MDJ. In this regard, the ld. AR drew our attention to pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Gee Vee Enterprises v .ACIT [1975] 99 ITR 375 (Del) has held as under:- In Tara Devi Aggarwal v. Commissioner of Income-tax [1973] 88 ITR 323 (SC) also the Income-tax Officer, Howrah, while remarking that the source of income of the assessee was income from speculation and interest on investments stated that neither the assessee was able to produce the details and vouchers of the speculative transactions made during the accounting year nor was there evidence regarding the interest received by the assessee from different parties on her investments. Notwithstanding these defects the Income-tax Officer did not investigate into the various sources but assessed the assessee on a total income of Rs. 9,037. The inquiries made by the Commissioner revealed that the assessee did not reside or carry on business at the address given in the return. The Commissioner was also of the view that the Income-tax Officer was not justified in accepting the initial capital, the sale of ornaments, the income from business, the investments, etc., without any inquiry or evidence whatsoever and that the order of assessment was erroneous and prejudicial to the interests of the revenue. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded over construction work to the partnership even though the object of the company was to make such construction should naturally provoke a query as to why this was done. The partnership was required to be in existence as a genuine firm in the previous year before it could be registered under section 185 of the Act. Such registration gives a substantial advantage to it for the purpose of taxation. In the very first assessment of the company and the firm, the advantage of the registration was given to the firm. The question would naturally arise whether the firm was formed merely for the purpose of getting a tax advantage. Shri Sharma argued that there is nothing wrong if a legitimate advantage is sought by these means. But it was precisely for that reason that the Income-tax Officer had to be satisfied that the firm had existed in the previous year genuinely. It cannot be said that the Commissioner could not be reasonably of the opinion that the order of the Income-tax Officer was erroneous because previous inquiries were not made by the Income-tax Officer. Nor can it be said that it was necessary for the Commissioner himself to make such inquiry before cancelling the order of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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