AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1718
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....Rs. 103.94 lacs in bank account and has further erred in holding of cash deposit of Rs. 103.94 lacs in bank account and has further erred in holding that assessment order passed in erroneous and prejudicial to the interest of revenue. 2. That having regard to facts and circumstances of the cased, the ld CIT has erred in law and on facts in passing the impugned order u/s 263 which is bad in law in as much as no adequate opportunity of hearing was granted and framing the impugned order without considering the principle of natural justice. 3. That having regard to facts and circumstances of the case, the ld CIT has erred in law and on facts in passing the impugned order u/s 263 which is barred by limitation illegal, without jurisdiction and contrary to law and facts and deserves to be quashed." 2. The brief facts of the case is that assessee is an individual who filed his return of income for assessment year 2011 - 12 on 24/9/2011 declaring a total income of Rs. 3 01310. The assessee is engaged in the business of retailing of liquor for human consumption. The case of the assessee was also selected through computer aided scrutiny system (CASS). During the course of assessment p....
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....sionary powers of the learned CIT were also rejected. Consequently, the assessment order passed in the case of assessee was set-aside to be made afresh on the issue of purchase of Rs. 131.24 lakhs in cash in violation of section 40A (3) of the income tax Act and for verification of the source of cash deposit of Rs. 1 03.94 lakhs in savings bank account maintained with the Jammu and Kashmir bank, Panipat branch which remained unexplained. Consequently, order under section 263 of the income tax was passed by the learned CIT on 27/10/2015 which is under challenge before us. 5. The learned authorised representative submitted that the learned assessing officer during the course of assessment proceedings has examined all these issues. He referred to the questionnaire dated 25/7/2013 issued by the learned AO and specific very has been raised with regard to the above issue. He further referred to the assessee's reply with respect to the justification of purchases exceeding prescribed limit fixed under the income tax Act as per separate seat attached. He further referred to the detailed note on justification of purchases. With respect to the second issue of cash deposit in the bank accoun....
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....nserted in section 263 of the income tax by financing 2015 with effect from 01/6/2015. He further relied on several judicial precedents to support the order of the learned CIT. 8. We have carefully considered the rival contention and perused the orders of the learned assessing officer. The order passed by the learned assessing officer is held by the learned CIT is erroneous and prejudicial to the interest of the revenue by passing an order under section 263 , of the income tax Act. It is interesting to note that there was an audit objection by the internal audit party which is placed at page number 30 of the paper book. As per the para number two of that audit note it is mentioned that that the case of the assessee was selected for scrutiny under the CASS with a specific direction that the AO should examine the source of cash deposits in his savings bank account as per AIR information. The audit party further notes that from the perusal of the printouts of the screenshots of the AIR information placed on records, it is transpired that during the year the total cash deposits have been made by the assessee in his bank account maintained with Jammu and Kashmir bank of Rs. 11876000/-....
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.... act of the learned principal Commissioner of income tax does not show that what kind of further enquiry the learned assessing officer should have done on the issue of cash deposit into the bank account of the assessee. The learned principal Commissioner of income tax did not say what other enquiry on this aspect the learned assessing officer should have been made. According to us so far as the cash deposit is concerned in the Jammu and Kashmir bank by the assessee. The learned assessing officer has made all possible enquiries to verify the source of cash deposit. According to us on this account. The order of the learned Commissioner of income tax passed under section 263 of the income tax act is not sustainable. 9. On the 2nd Issue the learned CIT has held that the AO has failed to verify the cash payment made for purchase of goods which are not in conformity with the provisions of section 40A (3) of the income tax act. It is apparent from the audit objection filed before us at page number 30 of the paper book that the case of the assessee was selected for the scrutiny to verify only the cash deposit in the bank account of the assessee. The issue before us is whether assessing o....