Revision under section 263 on unexplained cash deposits: difference of opinion cannot overturn assessment if AO accepted evidence.

Revision under section 263 challenged an assessment framed after information of cash deposits; the principal issue was whether unexplained bank credits were sufficiently explained by the assessee. The assessee, a salaried person, produced date-wise deposit details, boutique sales bills of spouse, tuition receipts of daughter and asserted gifts and past savings, which the AO accepted as evidence. The revisional authoritys disagreement based on a different view of the same evidence was held to be insufficient to render the assessment erroneous or prejudicial to revenue, and revisional power cannot be used to substitute opinion.

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Issues: Whether the order passed by the Principal Commissioner of Income Tax under section 263 of the Income-tax Act, 1961 setting aside the assessment and directing addition of Rs.11,24,000/- as undisclosed income was unsustainable and liable to be quashed.

Analysis: The Assessing Officer issued notices under sections 147/148 and made specific inquiries under section 142(1) regarding cash deposits. The assessee furnished source details, supporting documents including sales bills of the wife's boutique, receipts for the daughter's coaching institute, and confirmations addressing the cash deposits. The Assessing Officer considered these materials and framed the assessment under section 143(3). The Principal CIT revisional order under section 263 concluded that the explanation was not supported by bifurcation or evidence and that the assessment was erroneous and prejudicial to the revenue.

Analysis: The Tribunal examined whether the revisional jurisdiction under section 263 was properly invoked. It held that mere disagreement by the revisional authority with the assessment officer's evaluation does not constitute an error prejudicial to the revenue. Where the assessee has discharged the onus by placing substantive evidence before the AO and the AO has made enquiries and formed an opinion, the superior authority cannot substitute its view unless the assessment is shown to be not in accordance with law.

Conclusion: The revisional order under section 263 is quashed and the appeal of the assessee is allowed; the impugned order setting aside the assessment and directing addition of Rs.11,24,000/- is held unsustainable (in favour of the assessee).

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