TaxTMI 
TaxTMI 
2021 (9) TMI 981
X X X X Extracts X X X X
X X X X Extracts X X X X
....Learned PR.CIT u/s 263 is against the provision of Explanation 2 of Section 263 of the Income Tax Act. 4. On the facts and circumstance of the case, invoking Section 263 is bad in law as the Assessing officer has taken a plausible view while completing the Assessment and hence the Assessment order cannot be treated as erroneous which Is prejudicial to the interest of revenue. 5. On the facts and circumstance of the case, the order passed by the PCIT is void as the learned PCIT has not conducted the enquiries and has not established that the Assessment order passed is unsustainable 'in law. 6. On the facts and circumstance of the case, Learned Pr.ClT erred in coming into conclusion that the claim of agricultural income was accepted in the assessment order without making inquiries or verification because AO has done detailed enquiries by sending the Inspector of Income Tax and after due verification of the documents, 7, On the facts and circumstance of the case, Learned Pr.ClT is erred in coming to the conclusion that the issue of large cash deposits in the 'Bank accounts during the demonetization period and high value receipt of cash shown from third parties in respo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere to the tune of Rs. 89,58,370/- i.e. with State Bank of Hyderabad vide current Ale No.62340557654 is Rs. 49,01,870/- and with Andhra Pragathi Grameena Bank vide SB A/c No.91078644686 is Rs. 40,56,500/-. It was explained by the assessee that the sources for the deposits in Andhra Pragathi Grameena Bank were out of the opening cash balances available with the' assessee as on 01.04.2016. As noticed from the Balance sheet as on 31.03.2016, the assessee had cash on hand of Rs. 1,60.89,213/-. With regard to deposits in State Bank of Hyderabad, the sources for deposits were the amounts received from his clients towards payment of Income Tax. The copies of Income tax challans paid on behalf of the clients, ledger account copy of the clients are verified with reference to the bank account statement. The information filed electronically by the assessee in respect of sources for deposits during demonetization period and high value receipts Nil cash shown from third parties were examined thoroughly with reference to the books of account. Further the decrease in the admission of agricultural income as compared to the previous year was verified. 2.3 In view of the above observations, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....11/2019. He, therefore, contended that the Pr. CIT is not justified in exercising his revisionary powers u/s 263. Further, he submitted that if the AO has arrived at a decision, on which two views are possible, one of the view which is favourable to the assessee is to be taken into consideration. He further submitted that agricultural income was shown in previous year relevant to AY 2016-17 at Rs. 28 lakhs, against which, the Income-tax Inspector was not recorded adverse findings, but, later on the same issue, Pr. CIT exercised his power, which was quashed by the Hon'ble Tribunal accepting the plea of the assessee. 5.1 As regards the cash deposits of Rs. 49,01,870/- made in the current account of SB during the demonetization period, He further submitted that during the demonetization period, the ld. AR submitted that the assessee made the said cash deposits out of amounts paid by his professional clients in cash towards their tax liabilities, since they did not have access to net banking facilities and the tax payments on their behalf were made by the assessee through net banking after depositing the amounts of the clients in his current account. He, therefore, submitted that ther....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der the possession and control of the assessee and his family members. The assessee has also stated before the ld. PCIT that he had produced the Pattadar Pass Book and other relevant documentary evidence for earning agricultural income before the ld. AO. Further, it is evident from the Order of the Ld.PCIT that he has produced the same before him also. Similarly, as regards the Chit Bid amounts received by the assessee, the assessee 5 has produced the bank statements and other relevant documents before the Ld. PCIT and also claimed to have produced before the Ld. AO. With respect to loan received from HDFC bank also the assessee had produced the bank statement before the Ld. PCIT and also claimed to have produced the same before the Ld. AO. In this situation, the ld. PCIT without examining the documents furnished by the assessee setting aside the order of the Ld. AO and directing the Ld. AO to re-do the assessment de novo is not appreciable. It is apparent from the order of the Ld. PCIT itself that the assessee had produced all the requisite documents before him. From the order of the Ld. PCIT and Ld.AO it is apparent that the Ld.AO has not only examined the documents produced by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to these questions may be noticed here. The case relates to the assessment year 1983-84 for which the accounting period of the appellant ended on February 28, 1983. The appellant is a public limited company. It entered into an agreement for sale of the estate of rubber plantation measuring acres 699 of land for consideration of Rs. 210 lakhs with M/s. Supriya Enterprises (for short the purchaser) on July 18, 1982. The Agreement provided, inter alia, for payment of the consideration in instalments as scheduled therein. However, the purchaser could not adhere to the schedule and on his request the parties agreed to extension of time for payment of the instalments on condition of his paying compensation/damages for loss of agricultural income and other liabilities in a sum of Rs. 3,66,649. Accordingly, the appellant passed a resolution also to that effect on September 25, 1983 and the purchaser paid the said amount. In the annexure to the return filed by it for the assessment in question the amount was noted as compensation and damages for loss of agricultural income. By Order dated October 31, 1985, the Income-tax Officer accepted the same and endorsed nil assessment for that year. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." Explanation - x x x A bare reading of this provision makes it clear that the prerequisite to exercise of jurisdiction by the Commissioner suo moto under it, is that the order of the Income-tax Officer is erroneous insofar as it is prejudicial to the interests of the revenue. The Commissioner has to be satisfied of twin conditions, namely, (i). the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If one of them is absent -- if the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but is prejudicial to the revenue -....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the Income-tax Officer is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue. Rampyari Devi Saraogi Vs. Commissioner of Income-tax [67 ITR 84] and in Smt. Tara Devi Aggarwal Vs. Commissioner of Income-tax, West Bengal [88 ITR 323]. In the instant case, the Commissioner noted that the Income-tax Officer passed the order of nil assessment without application of mind. Indeed, the High Court recorded the finding that the Income-tax Officer failed to apply his mind to the case in all perspective and the order passed by ....