AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 992
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....king an assessment afresh. 4. That the order of learned CIT is lacking conjunction of prejudicial to the interest of revenue and erroneous in law as such order of the learned CIT is wrong and bad in law." 3. In this case, in the assessment order, Assessing Officer noted that assessee has derived his income from salary and retail business of handloom goods u/s 44AD of the Income Tax Act, 1961. The Assessing Officer observed that during the year it is noticed that assessee has deposited cash in the bank on the various dates. The assessee was called upon to explain the source of cash deposit with supporting evidence. In response thereto, the assessee explained that cash was deposited in the bank out of cash available with him out of withdrawal on earlier date, cash sales from the retail business & funds transferred from the OD a/c. For the cash available out of withdrawn amount, the assessee did not elaborate the purpose of the withdrawal & further its non-utilization. Further AO noted that mostly cash was deposited in the bank in the round figure. That there are possibilities of revenue leakages. That the assessee was confronted about these facts. That case was discussed ....
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....29.07.2010), Rs. 10,11,000/- (on 02.12.2010), Rs.2,25,000/- (on 25.1.2011), Rs.1,00,000/- (on 27.01.2011),. Rs.3,00,000/- (on 31.01.2011) and Rs.80,000/- (on 10.03.2011) by making cash deposit on the same day, for which, the AO had not raised any question about the source of deposit. 8. The ld. PCIT thereafter referred to another notice issued. He did not mention as to what was in the said notice. However, ld. Counsel of the assessee has submitted a copy of the same in the paper book before us. The same reads as under: "This is in continuation to the show cause notice dated 14/1609-2015 vide this office letter F. No. 2385 in respect of the subject cited above in your case. 2. In this regard, you are hereby required to provide information apart from the information sought by this office letter as stated above on the issues mentioned below:- (a) Provide the evidence in support of the sales of Rs. 15,61,000/- admitted during the assessment proceedings. (b) Provide the evidence in support of the purchases made against the sales of Rs. 15,61,000/-. (c) Provide the details of debtors and creditors. (d) Provide the details of account of loan....
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....presentative." 9. The ld. PCIT observed that Assessment Order passed by the AO is erroneous and in so far as it is prejudicial to the interest of the revenue. For this observation, the ld. PCIT gave following reasons: a) As discussed above, this case was selected for scrutiny to verify the sources of cash deposits in bank account as per AIR information. During assessment proceedings, the assessee had furnished narration of credit / debit entries exceeding Rs. 10,000/- as appearing in the bank account of the assessee, but no query/verification were made by the AO and he simply accepted the version of the assessee and made an addition of Rs.3,20,000/- on account of possible leakage of revenue on account of cash deposited in the bank. b) From the statement of saving bank account maintained with Bank of India, Karnal by the assessee, it is seen that the assessee had made DBD (FDR) on the following dates by making cash deposits on the same day: 29.07.2010 12,00,000/- 02.12.2010 10,11,000/- 25.01.2011 2,25,000/- 27.01.2011 1,00,000/- 31.01.2011 3,00,000/- 10.03.2011 80,000/- During assessment proceedings, the AO did not ra....
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....real. g) If the assessee had Rs.30 Lacs or so in the form of cash deposits, then even if he keeps his money invested in bank (in term deposits), he could have easily earned Rs.3 Lacs per annum, on the other hand the assessee is showing Rs.1.25 Lacs as business income and about Rs.90,000/- as interest income, which is against business sense and defies logic. h) The assessee appears to be engaged in some business which he has not disclosed to the department for example on 21.07.2010, Rs.38 Lacs in cash and then on 23.07.2010, further cash of Rs,5 Lacs were withdrawn by the assessee. Similarly, on 16.10.2010 Rs.13 Lacs is withdrawn but the same is apparently kept idle till 02.12.2010. Unless there is some urgent business need / requirement, no sane person would withdraw that sort of money to just keep the cash idle at home even for a few days. 5. Further as per the provisions of section 263(1) explanation 2 - effective from 01.06.2015, "an order passed by the AO shall be deemed to be erroneous in so as it is prejudicial to the interest of the revenue, if in the opinion of the Pr.CIT/ CIT - the order is passed by the AO without making enquiries / verification....
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....ct. Otherwise also, this issue also pertains to bank transactions which were duly explained before the the deposits in bank which already explained in point ( a) above. e) Deposit and withdrawal from the bank account Same as point (a) above f), g), h) Certain observations regarding OD limit, cash deposit and business of the appellant These are just certain general observations that are not backed by any supporting document or material findings. Further, all the relevant facts and documents regarding these observations were also filed before the Ld. AO which were duly examined and verified by the Ld. AO. 13. Accordingly, the ld. Counsel of the assessee submitted that AO has made proper and due enquiry. She referred to several case laws in this regard. She further submitted that ld. PCIT invoking Explanation-2 to Section 263 is not sustainable in as much as Explanation-2 to Section 263 is applicable for Assessment Orders passed for A.Y. 2015-16 onwards and the ITAT Delhi in several cases has so held and similar order of ITAT in the case of M/s Brahma Centre Development Pvt. Ltd. was confirmed by the Hon'ble Delhi High Court. She further referred to several ....
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....mit copies of bank account statement with narration. 3. Please furnish details of loan & advances indicating name, address PAN, amount of loan/advance, nature of transaction giving rise to such loan/advance. 4. Please give copies of ledger accounts of interest paid & interest received. Details of TDS deducted & evidence for deposit in Govt. account. 5. Date wise copy of capital account should be filed & necessary evidence with regard to the source of addition & destination of drawing should be filed. 6. Furnish complete details of withdrawals for household expenses giving details of all dependent family members & justify the withdrawals shown indicating expenses on education with name, class fee paid, vehicle charges, name of school/college and in electricity, telephone and function/marriage solemnized if any, during the year, separately under each head by you/family members. 7. Details of investment made in house property/loan, advances gift, shares, motor vehicle, jewellary & corresponding sales of immovable property/any other asset which give rise to capital gain, if any. 8. Please furnish a list of concerns (firms, companies....
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....rawal with documentary evidence. 6. You have also OD account term deposit with Bank of India. Please furnish the purpose for such account & source of meeting out interest liability on the OD account. 7. Please furnish the source of TD account No. 451,460 & 561 against which substantial amount shown credited in your name as on 31.03.11. 8. It further, revealed that loan has been availed from LIC of India & loan amount repaid during the year. Please furnish the details that how much of the loan was taken & repaid & the purpose for which loan was taken." 18. Thereafter, the assessee response have also been submitted. The details of total cash deposited has also been submitted. The issue of interest on advances have also been addressed. The bank statement has also been submitted. We note that Assessing Officer has made due enquiry. Thereafter, upon receipt of assessee's response he has passed an order. There is no whisper in order of ld. PCIT as to why the explanation given by the assessee is not acceptable. Hence, his direction qua cash deposit to consider the issue afresh is erroneous and not liable to be sustained. In our considered opinion if two views....