TaxTMI 
TaxTMI 
2023 (4) TMI 86
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....d a reply was duly filed in response thereto. A copy of the said reply is made part & parcel of grounds of appeal. The facts of the said reply have not been appreciated and considered and as such the order passed u/s 263 is bad in the eyes of law and the same may be cancelled. 4. That the Principal CIT did not appreciate that all these questions and queries have already been examined by the A.O. during the course of assessment proceedings and the Pr. CIT did not appreciate that there was enquiries which were made in response to said questionnaire. 5. That the Id. Principal CIT did not appreciate that this was not a case where the explanation or enquiry has not been made. The Pr. CIT failed to appreciate that this case does not fall within the mischief of section 263. As such the order passed by the worth) Principal CIT is not based on any facts and circumstances. As such the order passed u/s 263 may be cancelled. 6. That any other grounds of appeal which may be argued at the time of hearing of appeal." 3. Facts are that the appellant's case was selected for Limited Scrutiny under CASS with the reasons of "Cash deposit during demonetization period. During the course of on....
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.... in cash. Furthermore, perusal of certificate issued by the commission agent namely M/s. Amar Nath Kashmiri Lai shows that you have received an amount of Rs.2,77,320/- only till 08.11.2016 on various dates but mode of payment has not been mentioned in the certificate. Therefore, your claim that cash deposits were made out of agricultural income remained unverified. (iv) Perusal of cash Flow Statement shows that opening cash in hand has been claimed at Rs. 1,00,000/-. Perusal of records shows that neither the AO asked you to justify the cash in hand of Rs.1,00,000/- as on 01.04.2016 with supporting evidence nor you furnished any evidence in this regard. Therefore, in the absence of evidence your claim remained unverified. (v) In view of the above facts, it is evident that you have failed to furnish corroboratory evidence in support of your claim. Further, the AO has accepted the cash flow statement furnished by you without making adequate enquires. Therefore, cash flow statement should not have been accepted. No inquiry has been made by the AO to verify the availability of cash with you as on 08.11.2016. Source of cash deposits to the extent of Rs. 12,38,000/- made your ban....
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.... of Rs.2,000/- considered in the cash-flow statement is on 13.11.2016. That even if the credit of Rs.2,000/- is ignored still the assessee was having a sum of Rs. 12,72,791/- at his disposal out of which he has deposited a sum of Rs. 12,38,000/- which has rightly been accepted by the A.O. while completing the assessment under the limited scrutiny scheme as introduced by the Government. That except Rs. 2,000/ the A.O. as well as your goodself has accepted all the transactions of cash incoming and outgoing which have supported by the bank entries, the copy of which has already been furnished before the A.O. and now before your goodself, with the request to kindly point out any entry made wrongly which is otherwise is not a part of the cash-flow statement. In fact the A.O. has duly compared the cash-flow statement with the bank incoming and outgoing and then rightly accepted the same. Thus, the entire deposit of Rs. 12,3 8,000/- in the bank accounts of the assessee was duly explained and accepted as such by the A.O. 2. That your goodself has further stated that there is no withdrawal on account of agriculture expenses such as sowing of crops, fertilizer pesticides/insecticides, lab....
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....ur expenses and further for meeting household expenses. The total amount withdrawn is around Rs. Seven Lacs to Eight Lacs which was spent for agriculture expenses including the cash withdrawals through employees. The complete detail in respect of particular expenses has been mentioned in the bank passbook itself. Similarly, all the cheques issued to M/s Karari is in respect of diesel expenses. 3. That as regard, the deposit of Rs. 1,50,000/- each on 10.07.2016 and 02.11.2016, it is submitted that the assessee has received agriculture income from M/s Amar Nath Kashmiri Lai in cash. This is clear from the certificate as neither any cheque was issued nor the same find place in the bank statements. Further assessee also used to receive cash from M/s Rama Sugar Limited. The necessary confirmation from the said party could not be collected on account of old record pertaining to more than 4-5 years old. 4. That as regard the opening cash in hand of Rs. One Lac on 01.04.2016 is concerned, it is submitted that this is the normal feature in every family to ' have some cash in hand to meet any emergency. The amount of Rs. One Lac is quite reasonable and genuine. Keeping in view, the....
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....sh flow statement from the State Bank of India as well as from the Punjab National Bank and the deposit was also confirmed from the certificate issued by M/s Amar Nath Kashmiri Lai and the status of the farmer earning Rs. Thirty Lacs per annum and similarly the payments for expenses through payee account cheques. The assessee very humbly request your goodself to kindly accept the submission and file the notice proposing to take action u/s 263 of the Income-Tax Act, 1961." 6. The Ld. Dr stands by the PCIT order. 7. Heard rival contentions, perused the material on record, impugned order, and written submission filed. Admittedly, the appellant assesse is an agriculturist. He has maintained following bank accounts during the assessment year under consideration: (a) SB A/C N0.31695362038 and (b) PNB A/e No. 3497000100442475. 8. That the Ld. PCIT has observed on perusal of appellant bank account that he has received Rs. 15,69,206/- on various dates from M/s Rana Sugars Limited through NEFT and of course not in cash. This fact categorical establishes that the appellant was an agriculturist with sufficient agriculture income being earned from sale of agricultural produce inclu....
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....e certificate issued by M/s Amar Nath Kashmiri Lai and the status of the farmer earning Rs. 30.00 Lacs per annum and the payments for expenses thereof and hence, the assessment order cannot be deemed to be erroneous in so far as it is prejudice to the interest of the revenue. 12. The Hon'ble Supreme Court in case of "Malabar Industrial Co. Ltd vs. CIT", 243 ITR 83(SC) has observed that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer and every loss of revenue as a consequence of the order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue. It was further held that whereto views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, the order passed by the Assessing Officer cannot be treated as erroneous order prejudicial to the interest of the revenue. The principles laid down in the aforesaid decision were reiterated by the Supreme Court in 'CIT Vs. Max India Ltd, 295 ITR 282 (SC) and recently in 'Ultratech Cement Ltd vs State of Rajasthan Ors, Civil Appeal No. 2773/202 decided on 17.07.2020. Further in the....