TaxTMI 
TaxTMI 
2019 (9) TMI 913
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.... are that from the perusal of the records, it was noticed that the order u/s. 143(3) dated 11-11-2016 for the assessment year 2014-15 passed by the Assessing Officer was erroneous in so far as it was prejudicial to the interest of revenue for the reasons mentioned below: i) Cash deposit made by the assessee during the period amounting to Rs. 95,00,000/- were not disclosed by the assessee in the return of income for the AY 2014-15. This amount was deposited into bank by sale of laterite and gravel earth from her land and no accounts were maintained by the assessee. As a consolidated turnover is less than one crore, income can be computed as per sec. 44AD. However, assessee offered 10% of the turnover and addition was made amounting to Rs. 9,50,000/-. During the relevant previous year, the assessee admitted the receipt of Rs. 35,00,000/- on sale of laterite and gravel earth and also Rs. 60,00,000/- as gift from sister. Her sister also confirmed transfer of Rs. 60,00,00/- as gift to the assessee vide letter dated 23/08/2016. The assessee had not revealed these receipts tantamount to Rs. 95,00,000/- in the return of income. The Assessing Officer added back an amount of Rs. 9,50,000/-....
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....e matter, in the assessment proceedings, had been examined by the Assessing Officer, resort to issue of notice u/s.263 was not legally tenable. It was submitted that the assessee had submitted confirmation letter from her sister and also evidences of seeking permission for extraction of laterite and gravel earth from the Mining and Geology department which formed part of the record of the case. It was submitted that the claim was considered and after examination, the same was allowed by the ITO on being satisfied with the explanation of the assessee. The Ld. AR submitted that such decision of the ITO cannot be held to be 'erroneous' simply because in the assessment order the ITO did not make an elaborate discussion in that regard. The Ld. AR relied on the judgment of the Bombay High Court (203 ITR 108). 5.1 The Ld AR submitted that section 263 cannot be invoked to correct each and every or error committed by the Assessing Officer; it is only when an order is erroneous, that section will be attracted and incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. Reliance was placed on the judgment of the Supre....
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....e assessee had produced relevant material and offered explanation in pursuance of the notices issued under section 142(1) as well as section 143(2) of the Act and after considering the material and explanation, the income-tax officer had come to a definite conclusion. Since material was there on record and material was considered and a particular view was taken, the mere fact that different view can be taken should not be the basis for action under section 263. This court, therefore, took the view that the order of revision was not justified." 5.4 With regard to gift from mother and sister it was mentioned in notice dated 21-01-2019 and not in the earlier notice dated 26-10-2018 that "The gift received from assesse's sister and mother amounting to Rs. 60, 00,000/- is also not found properly examined by the Assessing Officer while framing the assessment order dated 11-11-2016". It was submitted that during the course of assessment proceedings the evidence of gifts and how they were made were made clear in the letter of the donors. It was submitted that once the Assessing Officer was satisfied with regard to the same, there was no further requirement on the part of the Assessing Off....
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....ch calls for further enquiry to know the genuineness of it. In other words, he must carry out investigation where the facts of the case so require and also decide the matter judiciously on the basis of materials collected by him as also those produced by the assessee before him. The Assessing Officer was statutorily required to make the assessment under Section 143(3) after scrutiny and not in a summary manner as contemplated by Sub-section (1) of Section 143. The Assessing Officer is therefore, required to act fairly while accepting or rejecting the claim of the assessee in cases of scrutiny assessments. The Assessing Officer should protect the interests of the revenue and to see that no one dodged the revenue and escaped without paying the legitimate tax. The Assessing Officer is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him. It is his duty to ascertain the truth of the facts stated and the genuineness of the claims made in the return. The order passed by the Assessing Officer becomes erroneous when an enquiry has not been made before accepting the genuineness of the claim which resulted in loss of revenue. Further, the Ld. ....
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....2001). The legal heirs of Sri. P.V. Paulose are: i. Thankamma Paulose (Wife) ii. Chithra Shirilson (Daughter) iii. Mithra Paul (Daughter) 2. Smt. Thankamma Paulose died on 16-01-2016 and the legal heirs of Smt. Thankamma Paulose are as follows: i. Chithra Shirilson (Daughter) ii. Mithra Paul (Daughter) Copy of legal heirship certificate is enclosed. 3. Myself, my mother Smt. Thankamma Paulose and Mithra my sister had inherited 1.5 acres of rubber plantation at Valakom Village upon demise of our father Sri. P. V. Paulose. Copy of land tax receipt dt. 21-04-2016 is enclosed. 4. Rubber plantation was very old and it was reaching its sag end of natural life. Also since rubber plantation was not economical due to fall in prices and scarcity of workers for tapping and maintenance, we opted to clear the rubber plantation and level the hilly slope into a plain ground. In the process we extracted substantial quantity of hard laterite (vettukal) and loose earth. The sale proceeds at the same in F.Y. 2013-2014 amount to approximately Rs. 60 lakhs. 5. Other than Mithra, only myself and my mother Thankamma PauJose were the owners. I confirm that myself and Smt. Thankamma....
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....the time of assessment that the assessee carried out the sale of laterite and gravel earth from the lands owned by her in Muvattupuzha and Changanassery and the cash deposits made into her bank account were out of sale of said laterite and gravel earth business. Since the assessee's turnover was less than Rs. 1 crore during the previous year, the Assessing Officer had taken a clue from the provisions of section 44AD of the I.T. Act and applied 10% of the total income as income of the assessee from the said business and made an addition of Rs. 9,50,000/- to the returned income of the assessee. 6.5 The PCIT was not agreeing with this view of the Assessing Officer. According to him, the impugned amount deposited into the bank account is to be re-examined by the Assessing Officer. In our opinion, since the Assessing Officer while framing the original assessment, had considered the entire material, was satisfied with the above factual aspect and thereafter, estimated the income of the assessee at 10% and made an addition of Rs. 9,50,000/-. The Assessing Officer had taken one possible view where two views are possible. When the PCIT does not agree, the assessment cannot be treated as er....