2026 (2) TMI 1184

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....Act, 1961 [the Act, for short], and further erred in holding that the assessment order dated 8.06.2017 framed u/s 143(3) of the Act is not only erroneous but also prejudicial to the interest of the revenue. 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. Judicial decisions relied upon duly considered. 4. Briefly stated, the facts of the case are that M/s Sikka Infrastructure Private Limited is engaged in construction/infrastructure activity, which is inherently cash-intensive and has filed its original return of income u/s 139(1) of the Income Tax Act, 1961 (hereinafter referred to as &#3....

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....s as there is no "Lack of Enquiry". The Assessing Officer raised a specific query on cash deposits and their source. The assessee furnished replies, schedules and balance sheet. The Assessing Officer applied his mind and accepted the explanation. Once enquiry is conducted and a view is taken, section 263 of the Act cannot be invoked merely because the PCIT desires further enquiry. 9. For this settled proposition, the ld. counsel for the assessee relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. (332 ITR 167), wherein it has been held that inadequate enquiry is not a ground for invoking section 263; only lack of enquiry can justify revision. The ld. counsel for the assessee contended tha....

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....cash, where the cash was kept, is legally irrelevant once the source of cash is explained, the amount is recorded in books, and the Assessing Officer is satisfied after enquiry. The law does not mandate the Assessing Officer to undertake endless or roving enquiries; revision under section 263 of the Act on such a premise would amount to impermissible substitution of the Commissioner's opinion for that of the Assessing Officer. 12. Finally, the ld. counsel for the assessee submitted that in the present case there is no error in the assessment order, there is no prejudice to the revenue, and the revision is based solely on change of opinion and incorrect factual assumptions. Accordingly, it was prayed that the impugned order passed u/s....

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....cted enquiries on the precise issue of cash deposit during demonetisation period and carried out due scrutiny. Upon being satisfied with assessee's explanation and Audited balance sheet/documents, accepted the return. The ld. PCIT questioned the credibility of amount of Rs 2.35 crore as 'imprest to staff' account, which we find, are duly reflected in the balance sheet under Advances Recoverable (in Cash or Kind) and the schedule of imprest/staff advances. We therefore, agree with the assessee that mere classification under a different accounting head cannot render the source unexplained, particularly when the amount is recorded in audited books. We are therefore of the considered view that the ld PCIT has attempted to invoke revisionary pow....