9911796707
TMI Blog2024 (11) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... "PCIT"), Vadodara-1, under Section 263 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). Since the facts and issues involved in both the appeals are identical, they are being disposed of by this consolidated order for the sake of convenience. Both the appeals challenge the revisionary jurisdiction exercised by the Ld.PCIT, contending that the scrutiny assessment orders passed by the Assessing Officer (hereinafter referred to as "AO") under Section 143(3) for the Assessment Year (AY) 2017-18 were neither erroneous nor prejudicial to the interests of the Revenue. Facts of the Case: 2. The assessee-firms, both engaged in the business of real estate development, filed their returns of income for AY 2017-18. A survey action u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income admitted during the survey under Section 133A of the Act. Specifically, the PCIT, observed that the AO accepted the undisclosed income as part of regular business receipts without investigating whether it was unexplained cash receipts under Section 69A of the Act. The PCIT also observed that the undisclosed income was taxed at the normal rate of 30%, instead of the higher rate of 60% under Section 115BBE of the Act, which applies to income covered under Sections 68 to 69D of the Act. By failing to tax the undisclosed income under Section 69A and at the higher rate prescribed by Section 115BBE of the Act, the AO's omission led to a potential revenue loss, which renders the assessment order prejudicial to the interests of the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is neither erroneous nor prejudicial to the interest of revenue. 2. The action of Ld. PCIT revising an order passed after extensive verification of the details on record is without any justification to invoke revisional jurisdiction. 3. Ld. PCIT erred in law and on facts holding order erroneous that was framed without any inquiry or verification to examine whether the cash receipts as noted in the impounded documents and admitted during survey proceedings were in the nature of business receipts by calling for the details of identity, confirmation of the persons from whom cash has been received. 4. Ld. PCIT erred in law and on facts in passing impugned order on the alleged ground of possible violation of Sec. 269ST and 274DA inserted w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore his order is not erroneous. The AR placed reliance on the judgement of Hon'ble Jurisdictional High Court in PCIT Vs. Dharti Estate [2024] 163 taxmann.com 179 (Gujarat). 5. The Departmental Representative (DR), on the other hand, stated that the AO has not made any inquiry into the receipts of cash and whether such receipts are in violation of provisions of 269ST of the Act. The DR also stated that the details were available with the AO and still he failed to enquire into the source of cash receipts. The DR relied on the order of the PCIT. 7. We have heard the contentions put forth by the learned AR for the assessee-firms, as well as the arguments advanced by the learned DR on behalf of the Revenue. We have also carefully perused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipts did not violate Section 269ST of the Act. The PCIT did not present any evidence to contradict the assessee's explanation, and therefore, the invocation of Section 263 on the ground of potential Section 269ST of the Act violations was based on conjecture rather than facts. 7.2. Moreover, the reliance placed by the AR on the Hon'ble Gujarat High Court's judgement in the case of Dharti Estate is valid. In that case, the court held that if the AO has made adequate inquiries and treated the undisclosed income as business income, the revisionary powers under Section 263 of the Act cannot be invoked simply because the PCIT holds a different view. This legal principle applies here, where the AO took a plausible view after considering ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
