SANDHU DIARY AND SWEETS,PATIALA vs. ITO WARD-5, PATIALA

By way of this appeal, the assessee assails invocation of revisionary juri iction u/s 263 by Ld. Pr. Commissioner of Income Tax, Patiala (Pr.CIT) for Assessment Year 2017-18 vide impugned order dated 26-02-2022 in the matter of an assessment framed by Ld. AO u/s 147 r.w.s.144 of the Act on 26-03-2023. The Ld. AR advanced arguments and made out a case of one of the possible views by Ld. AO. The Ld. CIT-DR also advanced arguments and 2 AY: 2017-18 supported the impugned revision of the assessment order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. 2. From case records, it emerges that the assessee-firm made cash deposits and cash withdrawals from its current account as maintained with PNB but the assessee did not file return of income. To verify the same, the case was reopened and notices were issued to the assessee. The assessee remained non- compliant. Left with no option, Ld. AO framed assessment to the best of his judgment and applied Gross Profit Rate of 8% on total bank credit of Rs.362.35 Lacs. The Ld. AO also held that the assessee failed to explain the source of cash deposits of Rs.15.30 Lacs and accordingly added the same separately to the income of the assessee. 3. Subsequently, Ld. Pr. CIT opined that Ld. AO erred in treating the credit entries as sales turnover of the assessee. The assessee was found to be the owner of credit entries for Rs.362.35 Lacs for which no explanation was offered. Therefore, the entire credit was to be treated as unexplained money u/s 69A r.w.s. 115BBE of the Act. Hence, the assessment order was passed without making due enquiries and verifications. Accordingly, the assessment order was set aside and Ld. AO was 3 AY: 2017-18 directed to redo the assessment against which the assessee is in further appeal before us. 4. From the assessment order, it is quite clear that the assessment has been framed to the best judgment of Ld. AO. The Ld. AO has considered the credit entries to be the sales turnover and accordingly, applied presumptive GP rate of 8% on these credits. The cash deposits of Rs.15.30 Lacs have separately been added to the income of the assessee for want of sources thereof. It could thus be concluded that Ld. AO has taken one of the possible views in the matter and framed the assessment to the best of his judgment. On these facts, the assessment order could not be branded as having been passed without making due enquiries or verification. No question of enquiry would arise since the assessee has remained non-compliant during regular assessment proceedings and the assessment is based on the bank statement of the assessee as procured by Ld. AO. Nevertheless, Ld. AO has taken one of the plausible view which was based on the factual matrix of the case. In such a case, no allegation of lack of enquiry could be leveled against Ld. AO. Therefore, on the given facts, the impugned revision of assessment order could not be sustained in law. We order so. The assessment as framed by Ld. AO stand restored back. The other