TMI Blog2022 (8) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to the fact that the impugned cash deposits have been made out of cash balance available in the books of accounts. The said cash balance has been accumulated out of past cash balance and sales made by the assessee. The quantity details of purchases and sales have been accepted and hence sales made by the assessee cannot be doubted with. We also notice that the said books of accounts have not been rejected. Under these set of facts, the sources of cash deposits would get stand explained by the books of accounts itself. Hence the AO has taken the view that no addition in respect of cash deposits is warranted in the facts and circumstances of the case. Hence the view so taken by the AO is a possible view in this matter. PCIT has expressed the view that the AO has neither made any addition nor has applied his mind, meaning thereby, it is the view of the Learned PCIT that the AO should have made addition to the total income in respect of cash deposits. In our opinion, the view so entertained by learned PCIT cannot be the basis for initiating revision proceedings. - Decided in favour of assessee. - I.T.A. No. 793/Mum/2022 - - - Dated:- 12-8-2022 - Shri B.R. Baskaran (AM) Smt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order so passed by PCIT, the assessee has filed this appeal before the Tribunal. 5. The Learned AR submitted that the Assessing Officer has made extensive enquiry in respect of cash deposits made by the assessee into its bank account during demonetization period. The Ld A.R narrated the details of enquiries made by the AO as under:- (a) The AO issued summons dated 24.03.2017 calling for various details. The AO has particularly asked for cash book and bank book for the period from 1.4.2016 to 8.11.2016 and from 9.11.2016 to till date. The assessee furnished those details before the AO on the very same day. (b) The assessee furnished further details, vide its letter dated 17.3.2017 as per the instruction given by the AO. The details so given included the audited financial statements for the assessment year 2015- 16 and the details of cash book and bank book for the period from 1.1.2017 to 24.3.2017. (c) The AO issued a notice dated 18.01.2019 u/s 142(1) of the Act, wherein the AO, inter alia, asked the reasons for abnormal increase in cash deposit during demonetization period as compared to the predemonetization period. The assessee furnished a detailed reply dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly contended that the impugned revision order is liable to be set aside. 6. The Learned A.R. further submitted that the Ld PCIT has taken the view that the AO has not conducted enquiry as required and in this regard, he has taken support of Explanation (a) to sec. 263. He submitted that the above said view of the Learned PCIT is proved to be wrong, when one examine the detailed enquiries carried on by the assessing officer, which was explained by him earlier. The Ld A.R further placed his reliance on the following case law in support of his submissions:- (a) Narayan Tatu Rane vs. ITO (2016)(70 taxmann.com 227)(Mum-Trib). (b) JRD Tata Trust vs. DCIT (2020)(122 taxmann.com 275)(Mum-Trib) (c) Dena Bank vs. PCIT (2020)(114 taxmann.com 639)(Mum-Trib) (d) PCIT vs. Shreeji Prints (P) Ltd (2021)(130 taxmann.com 294)(SC). (e) PCIT vs. Deccan Jewellery (P) Ltd (2021)(132 taxmann.com 73)(AP) (f) CIT vs. Gabriel India Ltd (1993)(71 taxman 585)(Bom). Accordingly, he submitted that the impugned revision order is liable to be quashed. 7. On the contrary, the learned DR submitted that the Assessing Officer has accepted the submission of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction to revise the assessment order u/s 263 of the Act. 9. We have heard rival contentions and perused the record. The scope of revision proceedings initiated under section 263 of the Act was examined by Hon'ble Bombay High Court, in the case of Grasim Industries Ltd. V CIT (321 ITR 92) by taking into account the law laid down by the Hon'ble Supreme Court. The relevant observations are extracted below: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, to pass an order upon hearing the assessee and after an enquiry as is necessary, enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment. The key words that are used by section 263 are that the order must be considered by the Commissioner to be erroneous in so far as it is prejudicial to the interests of the Revenue . This provision has been interpreted by the Supreme Court in several judgments to which it is now necessary to turn. In Mal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to start fishing and roving enquiries in matters or orders which are already concluded. 10. The Learned PCIT has taken support of clause (a) of Explanation given under sec. 263 of the Act to come to the conclusion that, according to him, the AO has not conducted enquiries, which should have been made. The (a) of Explanation was examined by the co-ordinate bench in the case of Narayan Tatu Rane (supra) and it was held that this provision shall apply, if the order has been passed without making enquiries or verification which a reasonable and prudent officer shall have carried out in such cases. Hence Explanation (a) cannot be invoked as a casual manner by Ld PCIT, i.e., he has to show that the enquiries or verification conducted by the AO was below the standard of a reasonable and prudent officer. In the case of JRD Tata Trust (supra), the coordinate bench has held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been rejected. Under these set of facts, the sources of cash deposits would get stand explained by the books of accounts itself. Hence the AO has taken the view that no addition in respect of cash deposits is warranted in the facts and circumstances of the case. Hence the view so taken by the AO is a possible view in this matter. 13. We noticed that the Learned PCIT has expressed the view that the AO has neither made any addition nor has applied his mind, meaning thereby, it is the view of the Learned PCIT that the AO should have made addition to the total income in respect of cash deposits. In our opinion, the view so entertained by learned PCIT cannot be the basis for initiating revision proceedings. At the cost of repetition, we may extract below the view expressed by Hon ble Supreme Court in the case of Malabar Industrial Co (supra) with regard to the scope of revision proceedings:- ..for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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