MAMATA DEVI CHOPRA, PROP- M.M.TRADING CO.,CUTTACK vs. PR.CIT-1, BHUBANESWAR

Shri Pramod Kumar Jesty, ld AR appeared for the assessee and Shri Shri Pramod Kumar Jesty, ld AR appeared for the assessee and Shri Shri Pramod Kumar Jesty, ld AR appeared for the assessee and Shri M.K.Gautam, ld CIT DR appeared for the revenue. M.K.Gautam, ld CIT DR appeared for the revenue.

It was submitted by ld AR that the assessee is an individual, who It was submitted by ld AR that the assessee is an individual, who It was submitted by ld AR that the assessee is an individual, who is deriving income from dealing in products of Amul India Limited. It was the deriving income from dealing in products of Amul India Limited. It was the deriving income from dealing in products of Amul India Limited. It was the submission that the assessment came to be completed u/s.143(3) of t submission that the assessment came to be completed u/s.143(3) of t submission that the assessment came to be completed u/s.143(3) of the Act

P a g e 1 | 7 on 19.12.2019. It was the submission that the order u/s.143(3) of the Act was the subject matter of revision u/s.263 by the Pr. CIT, Bhubaneswar-1 on two grounds, first being in respect of demonetization currency deposited by the assessee in the bank account on 10.11.2016 for an amount of Rs.19,68,000/- and second issue was in respect of the loan received from Mangalchand Milapchand, a partnership firm, which is the sister concern of the assessee’s business. It was the submission that in the course of assessment, the Assessing Officer had called for various details in respect of Demonetization period of cash deposit and the assessee have also responded to the same. Ld AR drew our attention to page 23 of PB, which was a copy of the reply to the show cause notice issued by the Assessing Officer, in which, in Point Nos.4,5 & 6, issue of the details of the deposits during demonetization period from 9.11.2016 to 30.12.2016 have been submitted. The demonetization period was from 9.11.2016 to 30.12.2016. It was the submission that the cash was deposited on 10.11.2016. It was the submission that the assessee had closing cash balance as on the end of the September, 2016 of Rs.30,30,046/- and the closing cash balance as on the end of October, 2016 of Rs.36,25,463/- and after the cash deposit of the demonetization currency as of the end of November, 2016, the assessee had cash balance of Rs.29,29,158/-. The assessee had adequate cash available in its books to make the deposit of the demonetization currency. It was the further submission that in respect of loan from M/s. Mangalchand

In reply, ld CIT DR took us in detail through the order passed u/s.263 of the Act. It was the submission that the paper book filed by the assessee is not certified and the questionnaire issued by the Assessing Officer u/s.142(1) nor show cause notice has been placed before the Tribunal. It was the submission that in regard to demonetization currency deposit in the bank account, the Assessing Officer has not done the examination in line with the direction issued by the CBDT in respect of such demonetization currency deposited in the bank account. It was the submission that the assessment order was liable to be revised u/s.263 of P a g e 3 | 7 the Act insofar as the Assessing Officer had violated the provisions of the Explanation 2(c) of the provisions of section 263 of the Act insofar as the assessment order has not been made in accordance with the order, direction or instruction issued by the CBDT u/s.119. On this point, a specific query from the bench as to whether action has been initiated against the Assessing Officer for the alleged violation, it was submitted by ld CIT DR that the revenue would be contemplating the appropriate action.

It was the further submission that the cash books itself has not been produced before the Assessing Officer much less examined by the AO. The assessment order does not talk of cash book or any of the books of account having been produced before the Assessing Officer. In regard to issue of loan from M/s. Mangalachand Milapchand, it was the submission that confirmation of account, which has been filed in the paper book, was never before the Assessing Officer. It was the further submission that in reply filed to the show cause notice, the assessee has categorically mentioned that no fresh introduction of loan was done during the year. It was the submission that in the tax audit report also, the auditors have mentioned that the loan has not been squared up whereas the confirmation of accounts in the paper book shows that the loan has been squared up. It was the submission that the order passed u/s.263 is liable to be upheld.

We have considered the rival submissions. A perusal of the order passed u/s.263 in para 6.1.3 shows that the Pr. CIT records that there is P a g e 4 | 7 reply filed on 8.12.2019 by the assessee before the Assessing Officer. Further, the Pr.CIT further goes on to mention that there is no such details available on record and the Assessing Officer has not called for and examined the cash book for the present year or past year, the most documents to know the pattern of cash holding, deposit and receipt etc. to draw any conclusion. Surprisingly, the Pr. CIT further goes on to hold that the Assessing Officer has not proceeded in the lines indicated in the SOP and instructions of CBDT and conducted the enquiry in a superficial manner. It is also surprising that even after making of the allegation, till now, no action has been initiated against the concerned Assessing Officer. Obviously, if there is action against the Assessing Officer for violating the circular/instruction/direction given by the CBDT, it calls for substantial administrative proceedings. The Assessing Officer admittedly has issued notice u/s.142(1) of the Act alongwith questionnaire and has gone on to issuing show cause notice. True, the Assessing Officer has not mentioned the specific types of books of account that have been produced before him. He mentions in the assessment order that the assessee has furnished the details as called for in reply to notice u/s.142(1) manually, which are kept in the records and also produced the books of account, which were verified. Non- maintenance of proper records by the revenue authorities cannot lead to a conclusion that the assessee has not produced the documents or that the Assessing Officer has not done his job allotted to him in the way he is P a g e 5 | 7 expected to do. Mere allegation cannot make otherwise a settled order or otherwise settled issue, unsettled. This being so, we are of the view that the demonetization currency deposited in the bank account was clearly out of the cash available in its books and this has also been examined by the Assessing Officer in its right perspective. Consequently, the action of the Pr. CIT in invoking his powers u/s.263 on this issue is unsubstantiated and quashed.

In the result, appeal of the assessee stands allowed.