PR COMMISSIONER OF IT ALWAR vs. JITENDRA KUMAR AGARWAL

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 272 / 2016 Pr Commissioner Of It Alwar ----Appellant Versus Jitendra Kumar Agarwal ----Respondent _____________________________________________________ For Appellant(s) : Ms. Parinitoo Jain For Respondent(s) : _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 17/05/2017

(2 of 4) [ITA-272/2016] which commission was earned and the parties with whom he was trading thus the working of peak cash credit as unexplained deposit u/s 69 was unjustified? iii) Whether the Tribunal was legally justified in quashing the order of the CIT specifically when after examining the record the CIT found that the assessment order was erroneous and prejudicial to the interest of the revenue and so direction for fresh assessment was given in accordance with the provisions of Section 263?” 3. Counsel for the appellant contended that in spite of the order recorded by the Commissioner of Income Tax, Alwar, wherein it was found that the assessment which has been done by the Ao was not proper and it was against the interest of revenue and recorded these reasons. 4. The show cause notice has been produced before us today para 1 thereof, reads as under:- “1. On perusal of Bank statement of Bank of Maharashtra furnished by you at the time of assessment proceedings, it was noticed that you have made various cash transactions at credit of the account and payments made through cheque/RTGS to various parties. Total deposit of the transactions made in cash were totaling to Rs.1,27,09,000/- in the bank account which was affirmed by the Bank of Maharashtra in contrary to the figures of Rs.2,23,70,000/- reflected through CASS system as per the AIR data. Further, it was also found that you have not disclosed any income with reference to the transactions of Rs.1,27,09,000/- held with the different parties appearing in the bank account of Maharashtra Bank whereas you have claimed to have purchased sugar from various parties and sold to other parties and the payment in lieu of purchases was made through cheque/RTGS. On the basis of information provided by you, the AO adopted cash deposits

Rs.1,27,09,000/-

instead

of Rs.2,23,70,000/- in the saving bank account of Maharashtra Bank without properly examining the facts of the case. The AO has passed the assessment order without conducting proper inquiry on this issue either from the competent authority (AIR FILTER) the information in CASS or from assessee with regard to

(3 of 4) [ITA-272/2016] the bank account. In this regard, it is also observed from the assessment records that you have also maintained a bank account with the United Bank of India, Kedal Ganj, Alwar bearing account No.0512010109763. In this bank account, you have made various cash transaction but details of the same were not inquired into by the AO. The AO has worked out the peak amount without properly examining the source of deposits.” 5. The CIT(A) while considering the case has reversed the order of AO and held that revision be filed. The order is at Annexure-2. The assessee carried in appeal before the tribunal and the Tribunal after considering the Supreme Court judgment in case of Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 and in case of CIT vs. Max India Ltd. reported in 295 ITR 282 (SC) and another judgment in case of Delhi High Court CIT vs. Sunbeam Auto Ltd. (Del. HC) reported in (2011) 332 ITR 167 held that the action u/s 263 of the Act is unsustainable. 6. Taking into consideration the Tribunal in para 4 observed as under:- “4. We have heard the rival contentions of both the parties and perused the material available on the record. It emerges from the record that the ld Assessing Officer has examined both the issues diligently and in proper manner. Apropos AIR/CASS information received by AO necessary queries were raised about unreconciled figures. After considering the assessee’s reply, the ld Assessing Officer came to conclusion that a part thereof was not remained unexplained. Consequently, the reconciliation part was accepted and a peak working of part reconciled portion was worked out. In our considered view that there is no merit in the allegation of ld. CIT that AIR/CASS information was not enquired by the Assessing Officer besides it is not a case of non conducting of enquiries. It clearly emerges from the record that Assessing Officer took necessary steps for CASS verification of information and took a decision on the basis of quasi judicial powers vested in him. No where it has been demonstrated that the view

(4 of 4) [ITA-272/2016] adopted by the Assessing Officer is wholly untenable or against the law. The Hon’ble Supreme Court in the caswe of Malabar Industries and CIT vs. Max India (supra) has held that if the Assessing Officer had taken one of the possible and plausible view, the same cannot be held to be erroneous or prejudicial to the interest of the revenue merely because the CIT holds a different view or information on the material. 4.1. In consideration of the entirety of the facts and circumstances and relied on the Hon’ble Supreme court judgments mentioned above and Hon’ble High Court decision in the case of CIT vs. Sunbeam Auto Ltd. (supra) we are of the view that the impugned assessment is neither erroneous or prejudicial to the interest of the revenue. In view thereof, the action u/s 263 of the Act is unsustainable and is accordingly quashed.” 7. In that view of the matter, no substantial question of law arises. 8. Hence, the appeal being devoid of merit deserves to be dismissed. The same is dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/80