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Income Tax Appellate Tribunal, ‘’ A’’ BENCH, AHMEDABAD
Before: SHRI RAJPAL YADAV & SHRI WASEEM AHMED
आदेश/O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeals have been filed at the instance of the Assessee against the separate orders of the Learned Principal Commissioner of Income Tax, Ahmedabad, arising in the matter of assessment order passed under s. 263 of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2009-2010 to 2014-15. to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 2
2. The issue raised by the assessee is common in all the appeals filed by it in the different assessment years. Therefore these are clubbed together for the purpose of adjudication and convenience. For the purpose of the order, the facts stated in the A.Y. 2009-10 are adopted.
2.1 The assessee has raised the following grounds of appeal:
The Ld. POT (Central), Ahmedabad ("the PCIT") has grossly erred on facts and in law in invoking jurisdiction u/s 263 of the Act and has further erred in directing the AO to pass a fresh assessment order in accordance with law and facts of the case 2. The Ld. PCIT has grossly erred on facts and in law in passing order u/s 263 of the Income Tax Act, 1961 ignoring the fact that the assessments completed in the cases identical to the case of the of the appellant were quashed by the Hon'ble Income Tax Appellate Tribunal, Ahmedabad for incorrect invocation of Jurisdiction u/s 153C of the Act and for the same reasons the assessment sought to be reviewed was ab-initio bad in law and unsustainable. 3. The Ld. PCIT has grossly erred on facts and in law in failing to appreciate that the invocation of jurisdiction by the AO under section 15SC of the Act was bad in law and has further erred in directing the AO to make fresh assessment in the case of the appellant on the basis of peak working of the duly recorded transactions in the duly audited' books of account/ROI in gross dis-regard of the settled law that the additions in the unabated assessment u/s 153C are required to be made only on the basis of incriminating documents found and seized during the course of the search and also that peak theory has application only if books of accounts are either not maintained or are rejected. 4. The Ld. PCIT has erred on facts and in law in passing order u/s 263 of the Income Tax Act, 1961 in the case of the appellant without appreciating and dealing with various case laws submitted in support of appellant's contentions with regard to the scope of assessment u/s 153C & non maintainability of action u/s 263 of the Income Tax Act, 1961. 5. The Ld. PCIT has grossly erred on facts and in law in passing order u/s 263 of the Income Tax Act, 1961 and unlawfully directing the AO to compute additional income by applying peak theory on the bank account transactions of the appellant duly recorded in the audited books of accounts on which due tax was duly paid by the appellant and thereby subjecting the appellant to double taxation.
6. The Ld. PCIT has grossly erred on facts and in law in passing order u/s 263 of the Income Tax Act, 1961 in contradiction of the jurisdictional requirement of the assessments being erroneous and prejudicial to the interest of revenue for the multiple reasons including among others; a. The view taken by the AO in the case of the appellant was inconsonance with the view taken by him in other group cases and any contradictory view would have been harmful to the interest of revenue. b. The additions were made in other group cases on the basis of the same material and additions in the case of the appellant would have been erroneous and prejudicial to the interest of revenue.
to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 3 c. The appellant would have been assessed at lesser income if the assessment was made in accordance with the show-cause notice. 7. The aforesaid grounds are without prejudice to each other and appellant craves for liberty to add fresh ground(s) of appeal and also to amend, alter, modify any of the grounds of appeal.
3. The only issue raised by the assessee is that the Ld. Pr. CIT erred in holding that the assessment order framed u/s 153C of the Act r.w.s 143(3) of the Act as erroneous in so far prejudicial to the interest of Revenue.
The necessary facts of the case are that the assessee in the present case is a private limited company and it has filed its return of income declaring total income of Rs. 52,80,181/- from the source of interest on the loans and advances. There was a search action u/s 132 of the Act in the case of Venus Group at various premises. As a result of search the documents pertaining to the assesse were found and therefore proceedings u/s 153C of the Act were initiated on 08/05/2015. Consequently, the assessment was completed u/s 143(3) r.w.s. 153C of the Act, vide order dated 28/12/2017 by accepting the income declared by the assessee in the return of income.
4.1 However, the Ld. Pr. CIT on perusal of the case records found that the assessee was engaged in providing accommodation entries to various associated concerns. The AO during the assessment proceedings vide notice dated 08/12/2017 show caused the assessee to adopt peak credit theory for determining the unaccounted income. As such there were many entries reflected in the bank account of the assessee bearing A/c No. 482313810 in Indian Bank. Thus, it was proposed to adopt the peak balance amount lying in the bank as unaccounted income plus the commission income @ Rs. 50 per lacs. Thus, the AO worked out the proposed income of the assessee for different assessment years as detailed under:
Sr. A.Y Retuned Income Commission Unaccounted Total proposed to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 4 No. Rs.50 lakh addition Capital for the year 1. 2009-10 52.80.1S1/- 68,777/- 1, 69,95, 066/- 1,70,63,843/-
2010-11 60,04. 657/- 67,826/- 0 67,826/- 3 64.S1.198/- 77.215/- 77,2 1 5/- 2011-12 0
4. 79,79,870/- 3,54,773/- 2,48.14,304/- 2012-13 2.51.69.077/-
5. 2013-14 1.92.29.460/- 0 1.76.019/- 1.76.Q19/-
6. 2014-15 3,12.40,230.'- 14.95.259/- 81.98.245/- 96.93.504/-
Total 7,62,25,596 22,39,869 5,00,07.615 5,22,47,484 4.2 However, the assessee vide reply dated 18/12/2017 to the AO submitted that the gross income declared by it for all the years is more than the proposed addition. The plea taken by the assessee was accepted by the AO. Thus, the AO concluded assessment by accepting the amount of income declared by the assessee in the return of income.
4.3 However, the Ld. Pr. CIT was of the view that the provision of the Act requires to tax the income on year to year basis but not on cumulative basis. As such, there should have been the addition of peak amount of the bank balance for the accommodation entries reflected in the bank account and commission thereon besides interest income declared by the assessee in each year. Accordingly, subsequent to the completion of the assessment the learned CIT issued the notice under section 263 of the Act proposing to revise the assessment framed by the AO by issuing a notice u/s 263 of the Act, dated 09/03/2020 for the reasons elaborated above. to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 5 4.4 The assessee in response to show cause notice submitted that the peak amount of addition as proposed by the AO was already added to the total income of the assessee in the case of Shri Ashok Sunderdas Vaswani. The AO of Shri Ashok Sunderdas Vaswani was also the AO of the assessee. Thus if the AO would have made the addition to the total income of the assessee by adopting the peak credit theory, the same would have been amounted to the double addition. Thus, the AO has taken a very conscious decision by accepting income declared by the assessee in return of income which is more than the amount of proposed peak addition. Accordingly the action of the AO does not cause any prejudice to the Revenue.
4.5 Furthermore, there was enough share capital, reserve and surplus amount available with it (the assessee) for Rs. 9,64,30,427/- right from the Financial Year 2004-05 which is more than the purported peak working of the bank balance.
4.6 Furthermore, the amount of share capital, reserve and surplus was accepted by the Revenue in the assessment framed u/s 143 of the Act, for the Assessment Years 2005-06 and 2006-07. Thus, the interest income was offered to tax by assessee from its regular bank account and in such situation the question of adopting peak credit amount lying in the bank cannot be applied.
4.7 The assessee also contended that the peak credit theory is an alternate method of making the assessment which is adopted when books of accounts of the assessee are not reliable. Thus if peak credit theory is adopted in the case of assessee and then there cannot be any addition based on the income declared by the assessee otherwise it would lead to double addition. In view of the above the assessee contended that the AO in the assessment framed u/s 143 r.w.s. 153 C of the Act has taken one of the possible view which cannot be disturbed in the proceedings u/s 263 of the Act. to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 6 4.8 Without prejudice to the above, the assessee also submitted that the assessment framed u/s 143 r.w.s. 153C of the Act was not maintainable for the reason that the AO in the proceedings u/s 153C of the Act has recorded the satisfaction by observing the facts that the documents found during the search at Venus Group pertains/relates to the assesse. As per the assesse, the proceedings u/s 153C of the Act, can be initiated only in a situation where the documents found during the course of search belongs to the assessee but there was no such finding recorded by the AO. In fact the amendment in the provision of section 153C of the Act was made effective from 01/06/2015 where the word ‘belongs to’ was substituted with the word ‘pertains to’ which is prospective in nature and therefore such amendment cannot be applied in the year under consideration.
4.9 Further it was also contended by the assesse that there was no incriminating documents found during the course of search proceedings and therefore there cannot be any addition in the proceedings u/s 153C of the Act.
However, the Ld. Pr. CIT dis-regarded the contention of the assessee and held that the assessment framed by the AO u/s 153C r.w.s. 143(3)of the Act, as erroneous in so far prejudicial to the interest of Revenue by observing as under:
Decision:- I have carefully and thoroughly gone through the submissions of the assessee. The contentions of the assessee stated in its reply are not acceptable due to the following reasons;- 6.1. There are several transactions recorded in the seized documents including the unaccounted cash book seized from Terrace of Crystal Arcade C,G. Road, Ahmedabad with the noting as 'Against EC' and from the correlation of the bank statements and the transactions recorded in the seized unaccounted cash book and supporting cash vouchers, various beneficiaries h?.ve been identified who have transacted in unaccounted cash while dealing with the entities of Venus Group. The assessee company is also involved in providing accommodation entries through the Venus group. Cash has been received and paid by Vaswani group and funds have been transferred from the assessee company through RTGS in the account of beneficiaries. 6.2. In view of the above and considering the reply of the assessee, peak balance in the respective years needs to be examined to conclude whether it is unaccounted income received during the year. The peak balance in the assesee's Bank Account i.e. Indian Bank account No,482313810 in F.Y.2008-09 relevant to A.Y.2009-10 is stated to be to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 7
Rs.170,63,843/-, Therefore, the peak credit balance of Rs.170,63,843/- is to be examined and to determine the taxability of same for A.Y.2009-10. 6.3. During the assessment proceedings, the assessee before the Assessing officer had stated that the gross returned income for all years under consideration (A.Y.2009-10 to A.Y.2014-15) is more than the proposed additions for A.Y.2009-10 to A.Y.2014-15. The Assessing Officer has not made addition in this regard accepting the contention of the assessee. 6.4. The stand taken by the assessing officer is in contravention to the provisions of the Act as income u/s 153C has to be taxed on year to year basis and not on cumulative basis. The Assessing Officer has therefore erroneously considered total income shown of all the assessment years i.e. A.Y.2009-10 to A.Y.2014-15 with respect to peak of the bank balance to be taxed as unaccounted income. As per provisions of Income Tax Act every assessment year is separate and needs to be assessed independently. The total income for a particular period can't be taken to explain the credits of that period.
6.5. The AO should also verify the interest, income shown by the assessee and its source which is separate from the peak credit.
6.6. With regard to the plea of the assessee that provisions of section 153C is not applicable and on similar situation the order has been quashed in group cases, it is to be stated that in this case neither the assessee preferred appeal before the CIT(A) nor challenged the proceedings. Hence logic of other group cases are not applicable here.
In the light of facts and circumstances narrated above, I hold that the AO has erred in making a proper assessment in this case. The assessment order is, therefore, erroneous in as much as it is prejudicial to the interest of Revenue. Hence, in exercise of power conferred in me u/s.263 of the Act, I set aside the assessment order passed u/s. 143(3) r.w.s 153C of the I T Acton 28.12.2017 for the A.Y.2009-10 with the direction to the AO to pass afresh assessment order in accordance with law and facts of the case after examining the particulars as mentioned earlier and giving the assessee a reasonable opportunity of being heard.
6. Being aggrieved by the order of the Ld. Pr. CIT the assessee is in appeal before us.
7. The Ld. AR before us filed a paper book running from pages 1 to 108 and submitted that the proceedings u/s 153C of the Act, can be initiated in the case of search carried out prior to 01/06/2015 if any money, bullion, jewelry and other valuable article or thing or books of accounts or documents seized or requisitioned belongs to or belong to a person other than the person referred to in section 153A of the Act. In the present case the search was initiated on 10/03/2015 and therefore it was mandatory for initiating the proceedings u/s 153C of the Act, only in a to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 8 situation where the document of incriminating nature were found belonging to the assessee.
8. However, the AO in the case on hand while recording the satisfaction has categorically mentioned that the documents found during the search pertains to the assessee and certain information contain therein relates to the assessee. Therefore, the Ld. AR contended that the assessment framed u/s. 143(3) r.w.s. 153C of the Act in itself is invalid and therefore there cannot be any revision in the proceedings of section 263 of the Act.
It was also contended by the Ld. AR that the assessment framed u/s 153C of the Act was barred by limitation as provided u/s 153B of the Act. As per the Ld. AR the AO of the assesse as well as the search person was common and therefore the time limit for making the assessment framed u/s 153C of the Act, could have been two years from the end of the Financial Year in which the last of the authorization for search u/s 132 of the Act was executed.
9.1 The Ld. AR further contended that the AO during the assessment proceedings u/s 153C of the Act, has taken one of the possible view and therefore the same cannot be revised under the provision of section 263 of the Act.
9.2 The Ld. AR further submitted that the AO during the assessment proceedings has conducted various enquiries and thereafter framed the assessment after due application of mind. Therefore, the order cannot be revised u/s 263 of the Act.
On the other hand the Ld. DR before us submitted that the proceedings under section 153C of the Act were initiated after recording the satisfaction as required under the provisions of law. Therefore, the assessment based on such satisfaction cannot be regarded as invalid. to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 9
The provisions of the income tax requires to tax the income in the hands of the right assessee and therefore the assessee cannot be absolved from its liability merely on the reasoning that the amount credited has already been added in the hands of Shri Ashok Vaswani. Similarly, the nature of interest income shown by the assessee has not been verified by the AO during the assessment proceedings.
It was also contended by the learned DR that the time limit for passing the assessment order has to be calculated from the year in which the seized materials was handed over after recording the satisfaction. This procedure has to be followed even where the AO is common for the search as well as the other person. The learned DR vehemently supported the order of the learned PCIT.
We have heard the rival contention of both the parties and perused the materials available on record. Admittedly, the search was conducted at the third party dated 10/03/2015 i.e. prior to amendment brought u/s 153C of the Act i.e. 01/06/2015. Under the old provision, proceedings u/s 153C of the Act, can only be initiated if any incriminating document found belonging to the assessee during the search carried out under section 132 of the Act at the premises of the 3rd party. However, in this connection we find that the AO in his satisfaction recorded has given categorical finding that the documents found pertain to the assessee. For this purpose, the relevant extract of the satisfaction is reproduced as under:
In view of above facts as mentioned in [he Annexure – B I am satisfied that [he above mentioned documents seized from the from the premises (i) Terrace of Crystal Arcade, N:r. Navrangpura Telephone Exchange. CG. Road. Ahmedabad (ii) 901. Sapphire Complex. Opp. Ratnam, C. G. Road. Ahmedabad (iii) G-9. Gold Souk, B/h. Sapphire I Complex. Opp. Ratnam. C. G. Road, Ahmedabad and (iv) 501, Sapphire Complex. Kr. Cargo Motors, C. G. Road. Ahmedabad and during the course of search and post search enquires also various documents were found to relates to/pertains to the assesses company M/s. Greenstone Agro Product and Infrastructure Pvt. Ltd. for the various assessment years. Since the assessee company being other than the person referred to in section 153A of the Act. I have satisfaction to proceed against the assessee M/s. Greenstone Agro Product and Infrastructure Pvt. Ltd. as per the provisions of Section 153C of the Income Tax Act, 1961 as it have bearing on the determination of the total income for the assessment year. Therefore, it is fit case for initiation of proceeding u/s. 153C of the I.T. Act. to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 10 13.1 From the above, there remains no ambiguity to the fact that there was no document found from the search premises belonging to the assessee. Therefore the assessment in itself is bad in law. In holding so we draw support and guidance from the order of this tribunal in the case of the group of the assessee of Shri Hitesh Ashok Vaswani and others Vs. DCIT in IT(SS)A 118-123/AHD/2019 wherein it was held as under: 23. In the appeals of the present assessees, identical situation is there. A perusal of the satisfaction note would indicate that the AO nowhere held that documents belonged to the present appellants were found at the premises of searched person/entity. As far as case laws relied upon by the Id.CIT-DR are concerned they are not directly on the point. He put emphasis on the decision of Hon'ble Kerala High Court cited (supra) for buttressing his contentions that no incriminating material is required for proceedings under section 153A or 153C. This proposition is contrary to the decision of Hon'ble Gujarat High Court rendered in the case of Pr.CIT Vs. Saumya Construction P.Ltd. (supra). Similarly, the order of the ITAT referred by the ld.CIT-DR is with respect to the presumption of truth of certain documents found during the course of search. I; is not directly on the point. Other arguments raised by the Id,CIT-DR were raised by the ld.Senior standing counsel before the Hon'ble Gujarat High Court in the case of Anil Kumar Gopikishna Agraual Vs. ACIT (supra) and those arguments have been considered. Though, section I53C is a procedural section, but the jurisdiction to assess an assesses under this section is being invoked with help of the section. The AO will be in a position to pass assessment order only if during the course of search, any money, bullion, jewellery and other valuable article or thing, or the documents found belong to other person prior to 1.6.2015. and the AO of the searched person was satisfied that such documents disclosed undisclosed income. The documents belonged to the appellants considered under this compartment of the arguments were not found, rather certain information relating to the assessees were found to be embedded in these documents, but prior to 1.6.2015, jurisdiction under section 153C cannot be invoked on the basis of such information. Therefore, we allow this preliminary ground of appeal raised by these 43 appellants (assessees) and quash all these assessment orders passed in the appeals mentioned at serial no.l to 43 of the cause title of this order. Thus al! the appeals of the assessee are partly allowed whereas the Revenue's appeal are dismissed.
13.2 In view of the above we hold that the assessment framed under section 153C read with section 143(3) of the Act is not sustainable. Once the assessment in itself is invalid then the same cannot be revised under the provisions of section 263 of the Act.
13.3 At this juncture, a question also arises to our mind whether the assessment framed under section 143(3) read with section 153C of the Act can be challenged in the proceedings under section 263 of the Act. This query has been answered by the coordinate bench of Mumbai tribunal in of West-life to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 11 Development Ltd. vs. PCIT reported in 88 taxamann.com 439. In the impugned case assessment framed section 143(3) was revised by the PCIT under section 263 of the Act. The assessee being aggrieved proceeded to file appeal before Mumbai tribunal. The learned AR for the assessee contended that the order under section 143(3) passes by the AO in the name of non-existing/ amalgamated company therefore the assessment itself is invalid. Hence the order which is invalid cannot be revised under section 263 of the Act. However the learned DR contended that the validity of original assessment cannot be challenged in the proceeding under section 263 of the Act. The coordinate bench in light of the above counter argument held that the proceeding under section 263 is collateral proceeding to original. Thus the validity of the original assessment can be challenged along the proceeding of section 263 of the Act. The relevant finding of the Mumbai bench is reproduced here under:
Challenging the jurisdictional defects of assessment order for assailing the jurisdictional validity of the revision order passed u/s 263: The first issue that arises for our consideration is - whether the assessee can challenge the jurisdictional validity of order passed u/s 143(3) in the appellate proceedings taken up for challenging the order passed u/s 263? If we analyse the nature of both of these proceedings, which are under consideration before us, we find that the original assessment proceedings can be classified in a way as 'primary proceedings'. These are, in effect, basic/foundational proceedings and akin to a platform upon which any subsequent proceedings connected therewith can rest upon. The proceedings initiated u/s 263 seeking to revise the original assessment order is off shoot of the primary proceedings and therefore, these may be termed as 'collateral proceedings' in the legal framework. The issue that arises here is whether any illegality/invalidity in the order passed in the 'primary proceedings' can be set up in the 'collateral proceedings' and if yes, then of what nature? 8.1. We have analysed this issue carefully. There is no doubt that after passing of the original assessment order, the primary (i.e. original proceedings) had come to an end and attained finality and, therefore, outcome of the same cannot be disturbed, and therefore, the original assessment order framed to conclude the primary proceedings had also attained finality and it also cannot be disturbed at the instance of the assessee, except as permitted under the law and by following the due process of law. Under these circumstances, it can be said that effect of the original assessment order cannot be erased or modified subsequently. In other words, whatever tax liability had been determined in the original assessment order that had already become final and that cannot be sought to be disturbed by the assessee. But, the issue that arises here is that if the original assessment order is illegal in terms of its jurisdiction or if the same is null & void in the eyes of law on any jurisdictional grounds, then, whether it can give rise to initiation of further proceedings and whether such subsequent proceedings would be valid under the law as contained in Income Tax Act? It has been vehemently argued before us that the subsequent proceedings (i.e. collateral proceedings) derive strength only from the order passed in the original proceedings (i.e. primary proceedings). Thus, if order passed in the original proceedings is itself illegal, then to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 12
that cannot give rise to valid revision proceedings. Therefore, as per law, the validity of the order passed in the primary (original) proceedings should be allowed to be examined even at the subsequent stages, only for the limited purpose of examining whether the collateral (subsequent) proceedings have been initiated on a valid legal platform or not and for examining the validity of assumption of jurisdiction to initiate the collateral proceedings. If it is not so allowed, then, it may so happen that though order passed in the original proceedings was illegal and thus order passed in the subsequent proceedings in turn would also be illegal, but in absence of a remedy to contest the same, it may give rise to an 'enforceable' tax liability without authority of law. Therefore, the Courts have taken this view that jurisdictional aspects of the order passed in the primary proceedings can be examined in the collateral proceedings also. This issue is not res integra. This issue has been decided in many judgments by various courts, and some of them have been discussed by us in followings paragraphs.
13.4 The next controversy arises whether the assessment framed by the AO under section 153C read with section 143(3) of the Act is barred by limitation as provided under the provisions of section 153B of the Act. It was contended by the AR that the time provided for framing the assessment under section 153B of the Act as applicable to the search person should also be applied in the present case for the reason that the AO of the search person as well as the other person being assessee is common. However we disagree with the contention of the learned AR for the assessee. For this purpose we refer the provisions of section 153B of the Act which reads as under: 153B. (1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,— (a) in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 153A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed : Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or one year from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:
13.5 The above provisions requires that the time-limit for completing the assessment in the case of other person shall be either two years from the end of the financial year in which the last of the authorisations for search under section to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 13 132 of the Act was executed or one year from the end of the financial year in which books of accounts or documents seized handed over under section 153C of the Act to the AO having jurisdiction over such other person whichever is later. The position of the law is unambiguous and there is no mention that in the case of common AO of the search as well as the other person the time limit as provided under section 153B(1) (a) or (b) will be applicable.
13.6 We can analyze the situation from a different angle. When a search is conducted the documents are looked into by the AO during the proceedings, if he/she finds that any documents belongs to/pertains to the other persons then he/she can initiate proceedings against such other persons after recording the satisfaction to that effect. Now at what stage the AO will come to know during the proceedings that any of the documents found at the premises of searched person belongs/pertain to the other persons? This fact is not known and therefore the lawmakers have given extended time limit for framing the assessment of the other persons. Thus there will not be any change in the provisions of law despite the fact that there was the common AO of the searched as well as other party. Thus we disagree with the contention of the learned AR and accordingly reject the same by holding that the assessment order was not barred by time.
13.7 Moving further, we also note that the AO has made the assessment after making necessary enquiries. For this purpose we refer to the notice issued under section 142(1) of the Act dated 8-12-2017 wherein it was proposed, inter-alia, to make the addition of the peak amount lying in the Indian Bank bearing A/c No. 482313810 of the assessee. The copy of the notice issued under section 142(1) of the Act is placed on pages 10 to 19 of the Paper Book. Thereafter, the assessee made a reply dated 18-12-2017 in response to such notice which is placed on pages 20 to 24 of Paper Book. In view of the above, it can be safely concluded that the issue of the peak credit of the amount lying in the bank account has been duly verified by the AO during the assessment proceedings. Furthermore, it is also a fact on record that the income computed based on peak credit balance in the bank to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 14 account in aggregate for the 6 years was less than the income offered by the assessee in the income tax return filed in response to the notice under section 153C of the Act for all the 6 years under consideration. Accordingly, the AO has chosen to tax the income of the assessee declared in the return of income. Thus the view taken by the AO was one of the possible view and therefore the same cannot be disturbed in the proceedings under section 263 of the Act. In holding so we draw support and guidance from the judgment of Hon’ble Supreme court in case of Malabar Industrial Co. Ltd. vs. CIT reported in 243 ITR 83 where it was held as under:
The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopts one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law.
13.8 We also draw support and guidance from judgment of Hon’ble Supreme Court in case of CIT vs. Kwality Steel Suppliers Complex reported in 395 ITR 1 where it was held as under:
It is clear from the above that where two view are possible and the Assessing Officer has taken one view and the Commissioner again revised the said order on the ground that he does not agree with the view taken by the Assessing Officer, in such circumstances the assessment order cannot be treated as an order erroneous or prejudicial to the interest of the revenue. Reason is simple. While exercising the revisionary jurisdiction, the Commissioner is not sitting in appeal. [Para 9] 13.9 In view of the above, we hold that there was no error in the order passed by the AO causing prejudice to the interest of Revenue. Therefore, the same cannot be revised by initiating the proceedings under section 263 of the Act. As such, the order passed under 263 of the Act is not sustainable and therefore we quash the same. Hence the ground of appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed to138/AHD/2021 Asstt. Years 2009-10 to 2014-15 15
Now Coming to the to 139/Ahd/2021 for Assessment Years 2010-11 to 2014-15.
At the outset we note that similar ground was raised by the assessee in the own case bearing A.Y. 2009-10 which has been decided in favour of assessee vide paragraph No.13 of this order. For detailed discussion please refer the above mentioned paragraph number of this order. Accordingly we hold that finding given in above paragraphs with regard to for A.Y. 2009-10 will mutatis mutandis apply here in the above cases also.
15.1 Hence, all the appeals of the assessee are allowed.
In the combined results, all the appeal filed by the assesse are allowed.
Order pronounced in the Court on 17/09/2021 at Ahmedabad.