TaxTMI 
TaxTMI 
2019 (10) TMI 339
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....stances of the case, Ld. Pr. CIT has erred in law and on facts in assuming jurisdiction u/s 263 and further erred in setting aside the issue to the file of Ld. AO with a direction to examine the issue in the light of observations made in para 1 to 10 of the impugned order and that too without observing the principles of natural justice." 2. The facts in brief are that assessee is an individual engaged in the business of trading of wood and property dealing, who has filed his return of income on 01.02.2011 declaring income of Rs. 1,15,960/-. Thereafter, on the basis of AIR information that assessee has deposited cash aggregating to Rs. 33,15,000/- in his Savings Bank Account with Punjab National Bank during the Financial Year 2009-10, a notice u/s.148 was issued to examine the cash deposits. 3. Before us, learned counsel for the assessee, Shri Rakesh Gupta submitted that here in this case, prior to the issuance of notice u/s.148, a query letter was issued by the Assessing Officer on 23.11.2012 regarding source of cash deposit of Rs. 33,15,000/-. In response, the assessee had submitted details of Income Tax particulars, PAN and Income Tax Return. Thereafter, notice u/s.148 was ....
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....he business of sale purchase of property on commission basis. 3. During the year under consideration the assessee has deposited total Rs. 33,15,000.00 in cash in his bank account with Punjab National Bank. This amounts includes Rs. 4,50,000.00 out of the sale proceed of wood and Rs. 26,00,000.00 from different persons for purchase of property on their behalf. Rest of the amount Rs. 2,65,000.00 is the re-deposit of cash withdrawn by the assessee during the course of his business. 4. Regarding purpose for withdrawal is concerned it is submitted that it was meant for the purpose of refund of amount to the prospective buyers who had given the amount for purchase of land. Regarding Rs. 1,12,450.00 transfer on 02.03.2010 it was transferred for purchase of draft and deposited the same as plot booking advance with BKDA, Bulandshahr. Later on this amount was refunded because of failure in allotment of plot. 5. The assessee has not taken as unsecured loan from any person during the year. 6. Since the assessee has not maintained any regular books of accounts, he has filed his return of income by showing income u/s 44AF. 7. If any more information i....
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....see that it was meant for the purpose of refund of amount to the prospective buyers who had given the amount for purchase of land regarding Rs. 1,12,450/- transfer on 02.03.2010 it was transferred for purchase of deposited the same as plot booking advance with BKDA, Bulandshahr. Later on this amount refunded because of failure in allotment of plot. The assessee has not taken as unsecured loan from any person during the year. Since the assessee has not maintained any regular books of accounts, he has filed his return of income by showing income u/s.44AF. In support of evidence above person given copy of the bank pass book, confirmatory letters in the form of affidavit along with photo ID as proof of receipt of Rs. 26,00,000/- from different persons for dealing in properly and other document are place on file. Considering the above facts the amount of Rs. 33,15,000/- is concerned, it is found that Assessee received Rs. 4,50,000/- out of the sale proceed of wood Rs. 26,00,000/- from different persons for purchase of property, who has accepted in his statement to this amount. Rs. 2,65,000/- is re-deposit of cash withdrawn by the assessee during the course of his business. The ....
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....ils of property, no date on which advances received by no date of repayment of advances against which advances in cash were received by the assessee. Thirdly, the Assessing Officer has failed to examine how the said cash was utilized by the assessee. Last but not the least, the A.O. did not raise any query for jurisdiction of giving advances in cash while all the above brokers were having bank account and had been making various transaction through banking channels. In fact the assessee is also maintaining a bank account but the Assessing Officer never enquired as to why the repayments were made in cash. In view of the above facts, the order passed by the A.O. appears to be erroneous and prejudicial to the revenue. Therefore, why it may not be cancelled or modified by invoking the provisions of section 263 of the I.T. Act, 1961. I have been directed to request you to appear before the Pr. Commissioner of Income Tax, C.G.O. Complex- 1, Hapur Chungi, Ghaziabad on 19.01.2017 at 12.30 P.M. either in person or through authorized representative and furnish your explanation with supporting documentary evidences. Please note that in case of non-compliance necessa....
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.... submitted that Assessing Officer should have examined the source of cash deposit taking into consideration, whether the explanation and the contention raised by the assessee is substantiated by any evidence or not, which here in this case Assessing Officer has not conducted proper inquiry, and therefore, such an assessment order has to be held as prejudicial to the interest of Revenue. In support of his contention, he relied upon the following judgment. Hon'ble Supreme Court in the case of Deniel Merchants Pvt. Ltd. vs. ITO(Appeal No. 2396/2017) dated 29.11.2017. In this group of cases, Hon'ble Supreme Court has dismissed SLPs in cases where AO did not make any proper inquiry while making the assessment and accepting the explanation of the assessee(s) insofar as receipt of share application money is concerned. On that basis the Commissioner of Income Tax had, after setting aside the order of the Assessing Officer, simply directed the Assessing Officer to carry thorough and detailed inquiry The relevant judgement of Hon'ble Calcutta High Court n r s case s also enclosed. 2. Malabar Industrial Co. Ltd. Vs CIT r20001 109 Taxman 66 (SC)/f20001 243 ITR 83 (SC)/r20001 ....
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....sed pinpoint queries to the assessee. In response to such queries, the assessee had submitted that out of total deposit of Rs. 33,15,000/-, the source of cash of Rs. 4,50,000/- was out of sale proceed of goods as assessee was trading in wood; sum of Rs. 26 lacs have been received from different persons for purchase of property on their behalf; and balance Rs. 2,60,000/- was re-deposited out of cash withdrawn by the assessee during the course of his business. In support of the source of the amount of Rs. 26 lacs received from four different persons, the assessee had first of all, has filed their affidavits; and when Assessing Officer asked to produced all the four persons along with their passbook and ID proof. In response, the assessee had produced all the four persons, who had duly appeared before the Assessing Officer and their statement were recorded on oath and have also produced their respective bank passbook before the Assessing Officer. The copies of statement along with their passbook are appearing from pages 29 to 43 of the paper book filed before us. Thereafter, assessee has also filed date-wise cash flow statement along with computation of income and return of income for....
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....se is heard. Thus, nowhere the additional issues raised by him were ever confronted to the assessee. In any case, here scope of entire reassessment was based on the 'reasons recorded' by the Assessing Officer and ld. Pr.CIT cannot travelled beyond the 'reasons' to rope in other issues not falling in the reasons recorded. Thus, we agree with the contention of the learned counsel that any such direction is beyond the scope of re-assessment proceedings as the same cannot be raised in revisionary jurisdiction u/s 263. Hence, all other direction given by the Ld. PCIT is quashed. 17. Even on the issue of cash deposit, as has stated above, Assessing Officer has duly examined not only all the persons who have given the advance to the assessee but also the entire cash flow statement, vis-à-vis the assessee's computation of income and cash flow statement coming from Assessment Year 2009-10. Ld. Pr.CIT without finding any defect in the inquiry conducted by the Assessing Officer has simply cancelled the assessment order which cannot be sustained. In case he is of the opinion that Assessing Officer inquiry and verification is lacking, then it is incumbent upon the ld. Pr.CIT to himsel....