2014 (4) TMI 699

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....on under Sec.263 of the IT Act. 2. On the facts and circumstances, the Ld. CIT erred in setting aside to the file of respondent AO for re-looking in detail the issue of cash deposit in bank which found to have or looked/omitted in assessment proceedings u/s.143 of the IT Act. 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is an individual and is engaged in the business of preparation of household masala items and filed her return of income declaring total income of Rs.1,53,590/- along with balancesheet and other details. Thereafter the case of the assessee selected for scrutiny, wherein the AO accepted the income of the assessee as business income. Thereafter, on AIR information, it was n....

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....ts from the sale proceeds of trading of masala items in Chembur Nagrik Sahakari Bank, which was inadvertently omitted to be taken care in return of income as well as before the AO while assessment proceedings, but the income component in such deposits falls in the ambit of Sec.44AF.Therefore, Rs.14,85,500/- being cash withdrawal and paid to suppliers and corresponding balance with the above said bank was also increased by the same amount. She also stated that the AO might not have discussed it appropriately in the assessment order being satisfied with the explanation given in the said letter. Hence, the CIT found that the assessment order passed by the AO was erroneous and prejudicial to the interest of Revenue and set aside the same. Now, ....

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.... The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. 6.1 After going through the order of the AO, it is quite clear that he has not applied his mind with respect to the deposit in bank account, which led to increase in the capital of the assessee. There is no dispute to the well settled proposition that where the AO frames assessment without application of mind and without making enquiry, the order of the AO becomes erroneous as well as prejudicial to the interest of Revenue. In the instant case before us, it is clear from....