TaxTMI 
TaxTMI 
2017 (2) TMI 1522
X X X X Extracts X X X X
X X X X Extracts X X X X
....income of Rs.1,82,800/- was filed on 28.08.2011. During assessment proceedings, the Assessing Officer observed that assessee had deposited an amount of Rs. 55,25,758 in the bank accounts with HDFC Bank and PNB. After obtaining explanation from the assessee, the Assessing Officer held the deposits in the bank as business receipts and calculated income on the total deposits at the rate of 10 per cent. 4. The Ld. Pr. CIT was not satisfied with the assessment order and therefore he issued show cause notice to assessee and required the assessee to explain as to why not the order of assessment be not set aside as in his opinion, the Assessing Officer should have made addition of the whole amount of Rs. 55,25,758 instead of making addition at the rate of 10 per cent. In reply the assessee submitted that the order passed by Assessing Officer was not erroneous and prejudicial to the interest of revenue and therefore, the provisions of section 263 were not applicable. However, the Ld. Pr. CIT was not satisfied with the reply and he set aside the order passed by Assessing Officer and directed the Assessing Officer to pass fresh order after considering all aspects of the matter and after carr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the request of assessee and had applied 10 per cent income to the deposits holding that the deposits represented business receipts. It was submitted that since Assessing Officer had taken a plausible view therefore, the provisions of Section 263 were not applicable. Our attention was also invited to letter dated 26.02.2014 placed at (PB-46) wherein the assessee had submitted that the deposits represented business receipts, it was submitted that Income-tax Officer has exercised the quasi judicial power vested in him in accordance with the law arrived and at conclusion and such a conclusion cannot be termed to be erroneous, though it may be such a case that the order in question is prejudicial to the interest of revenue but that by itself not would be enough because the first requirement for invoking provisions of section 263 is that the order should be erroneous. Reliance in this respect was placed on the following case laws: (a) Malabar Industries Co. Ltd. (243 ITR 83 (SC) (b) CIT vs. Green World Corp. (314 ITR 81 (SC)) (c ) CIT vs. DLF (350 ITR 555 (Del)) (d) Grasirn Industrial Ltd. vs. CIT (321 ITR 92 (Bomb.) (a)COMMISSIONER OF INCOME TAX vs. ARVIND JEWELLERS HIGH COURT &#....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... objections filed by revenue be dismissed. 12. We have heard the rival parties and have gone though the material placed on record. We find that undisputedly the assessee is engaged in the business of running immigration consultancy agency as has been noted by Assessing Officer in his order. The Assessing Officer during assessment proceedings required the assessee to explain the deposits in the bank accounts which is apparent from the copy of order sheet page at paper book sheet 17 to 20. The Assessing Officer also examined the bank accounts of the assessee as is apparent from paper book page 21 to 44. After examining the bank accounts and after examining the facts and circumstances of the case, the Assessing Officer held the deposits in the bank account as business receipts and took a plausible view. The view taken by Assessing Officer is supported by the nature of entries in the bank account which reflects the cash deposit and also reflects cash paid to various persons. Further the debit entries in the HDFC account bank reflect payments to various persons. From the copies of banks statement, we further find that the peak credit never exceeded Rs. 4 or Rs. 5 lacks and for deposits....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing assessment proceedings had duly verified the entries in the banks statement and therefore had arrived at the conclusion that the deposits represented business transactions and had taken a plausible view and therefore the provisions of section 263 were not applicable. The Hon'ble Supreme Court in the case of Malabar Industries Co. Ltd. Vs. CIT (243 ITR 83 (SC) has observed as under: "A bare reading of s. 263 of the IT Act, 1961, makes it clear that the prerequisite for the T exercise of jurisdiction by the CIT suo motu under it, is that the order of the ITO is erroneous insofar as it is prejudicial to the interests of the Revenue. The CIT has to be satisfied of twin conditions, namely, (i) the order of the AO 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 ITO is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-recourse cannot be had to s. 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the AO, it is only when an order is erroneous, that the section will be ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer is unsustainable in law. Before invoking provisions of section 263 of the Act one has to keep in mind the distinction between "lack of enquiry and inadequate enquiry". If there was any enquiry, even thought inadequate it would not in itself empower CIT to invoke provisions of section 263 of the Act merely because he had different opinion in the matter. It is only in cases of lack of enquiry that such a course of action would be available to CIT. The Hon'ble High Court of Delhi in the case of CIT Vs. Sunbeam Auto Ltd. 133 ITR 167 as held as under : Revision-Erroneous and prejudicial order-Lack of proper enquiry-There is a distinction between "lack of enquiry" and "inadequate enquiry"-If there is an enquiry, even inadequate, that would not by itself give occasion to the CIT to pass order under s. 263, merely because he has a different opinion in the matter-Such a course of action is open only in cases of "lack of enquiry"-Contention of the Revenue that the AO did not consider as to whether the expenditure in question was capital or revenue expenditure cannot be accepted-Although apparently the assessment does not give any reasons for allowing the entire expenditure as ....