TaxTMI 
TaxTMI 
2022 (8) TMI 1460
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....ile materials, filed her return of income for the Assessment Year 2017-18 declaring a total income of Rs. 5,46,640/-. The case of the assessee was selected for limited scrutiny under CASS to verify cash deposited in Bank Accounts of Rs. 70,43,000/- during the demonetization period. The details of the cash deposited in 5 Bank Accounts of the assessee are given by the Assessing Officer (AO) in paragraph-4 of his Assessment Order. In paragraph-6 of the Order of the Assessment, the AO has recorded the fact that she had called details from the Bank and fond that Rs. 63,43,000/- were old currencies that were demonetized that had been deposited by the assessee in her bank account. The assessee explained that the source of cash was c....
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....es. Therefore, it is very much evident that the assessee was inflating both purchases and sales for the purpose of inflating his cash in hand as on 08/11/2016 which obviously was unaccounted money and due to de-monetisation had to be deposited in banks. The cash deposited during demonetisation was Rs. 70,43,000/-. 8.3 From' Table 2 above, it is seen that after the month of October 2016, the aggregate highest cash received {cash sales plus cash receipts) is during the month of May 2016 which amounts to Rs. 48,90,727/-[36,92,422+11,98,305] while the cash receipts during the month of October 2016 is Rs. 88,40,436/-. Thus, the difference amount of Rs. 39,49,710/- is treated as unexplained cash credits u/s. 68 and taxe....
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....e and nature of the cash deposited during the demonetization period is not conducted by the Assessing Officer." 4. A show cause notice (SCN) under section 263 of the Act dated 07.03.2022 was issued by the AO. 5. The assessee in reply to the same by her letter dated 14.03.2022 submitted that in respect of the addition made by the AO in the Order of Assessment, the assessee prepared appeal before CIT(A). Pending disposal of the said appeal, the assessee opted to settle the dispute under Direct Tax Vivad Se Viswas Act, 2020 (VSV Scheme) and filed necessary forms and made payment of taxes as per the said Act. Therefore, settled issue cannot be reopened under section 263 of the Act. The assessee also submitted that the AO made proper and nece....
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....cussed above. The Assessing Officer has not conducted necessary inquiries and has not made the additions required as per law. The assessee failed to furnish a satisfactory explanation regarding the source of cash deposited in the bank accounts and the amount remained unexplained, but the required addition has not been made in the assessment order." 7. On the question when the dispute is settled under VSV Scheme, the PCIT held that the same would be valid only to the extent of addition made by the AO and not the entire cash deposit in the Bank Account. Therefore the action under section 263 of the Act to the extent of the cash deposits that remains unexplained less the addition settled under VSV Scheme is valid. 8. The PCIT also without n....
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....l submissions. The learned Counsel for assessee reiterated stand of the assessee which is in line with the reply to the SCN under section 263 of the Act. She relied on decision of Madras High Court in the case of Gopalakrishnan Rajkumar Vs. PCIT (2022) 40 taxmann.com 349 (Mad.) wherein the Hon'ble Court held that when disputes are settled under VSV Scheme, no proceedings under section 263 of the Act can be initiated on the same. Reliance was placed on decision of Bombay High Court in the case of PCIT Vs. M/s. Universal Music India Pvt. Ltd., ITA No. 238 of 2018, judgment dated 19.04.2022 for the proposition that the PCIT in exercise of his powers under section 263 of the Act cannot take up issues not stated in SCN under section 263 of ....