SH. KIRODI MAL SINGHAL,ALWAR vs. PCIT(CENTRAL), JAIPUR, JAIPUR
Facts
During a survey action, excess stock and cash were found in the assessee's business premises. The assessee surrendered these amounts as income. The Assessing Officer (AO) initially accepted the surrendered income and taxed it at normal rates. However, the Principal Commissioner of Income Tax (PCIT) initiated revision proceedings under Section 263, holding that the AO's assessment order was erroneous and prejudicial to the revenue.
Held
The Tribunal held that the PCIT's order was not justified. The AO had conducted necessary inquiries and taken a plausible view by accepting the surrendered income as business income and taxing it at normal rates. The PCIT could not substitute her own view for that of the AO when the AO's view was sustainable.
Key Issues
Whether the PCIT was justified in initiating revision proceedings under Section 263 when the AO had made inquiries and taken a plausible view on the taxability of surrendered income as business income at normal rates, rather than under Section 115BBE.
Sections Cited
263, 133A, 143(3), 142(1), 115BBE, 69A, 69C, 69, 68, 10(38)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES, “A” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 663/JPR/2024
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “A” JAIPUR Jh lanhi xkslkbZ] U;kf;d lnL; ,oa Jh jkBkSM deys’k t;arHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 663/JPR/2024 fu/kZkj.k o"kZ@Assessment Year : 2019-20
cuke Kamlesh Singhal PCIT (Central) Vs. Prop M/s Rahul Enterprises, Jaipur Kakra Road, Village & Post- Kishangarh Bas, Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AETPS 0715 F vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@ITA No. 664/JPR/2024 fu/kZkj.k o"kZ@Assessment Year : 2019-20 cuke Kirodi Mal Singhal PCIT (Central) Vs. Prop. M/s Singhal Timber and Jaipur Hardware Store, Kishangarh Bass, Alwar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AXFPS 5798 B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. P. C. Parwal, CA jktLo dh vksj ls@ Revenue by : Sh. Arvind Kumar, CIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 08/08/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 29/08/2024 vkns'k@ ORDER
PER: RATHOD KAMLESH JAYANTBHAI, A.M.
2 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT These two appeals are filed by the assessee aggrieved from
the order of Pr. Commissioner of Income Tax (Central), Jaipur
[Here in after referred as (PCIT)] for the assessment year 2019-20
dated 18.03.2024 & 19.03.2024. The ld. PCIT passed the order
under challenges in this appeal as per provisions of section 263 of
the Income Tax Act (for short ‘the Act’) while examining the
assessment record of the above named assessee which was
passed by DCIT, Central Circle, Alwar dated 20.09.2021 &
21.09.2021 as per provisions of section 143(3) of the Income Tax
Act.
Since the issues involved in these appeals are almost
identical on facts and are almost common, except the difference in
figure, therefore, these appeals were heard together with the
agreement of both the parties and are being disposed off by this
consolidated order.
At the outset, the ld. AR has submitted that the matter in ITA
No. 664/JP/2024 may be taken as a lead case for discussions as
the issues involved in the lead case are common and inextricably
3 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT interlinked or in fact interwoven and the facts and circumstances of
other cases are identical except the difference in the amount in
other cases. The ld. DR did not raise any specific objection against
taking that case as a lead case. Therefore, for the purpose of the
present discussions, the case of ITA No. 664/JP/2024 is taken as a
lead case. Based on the above arguments we have also seen that
for these appeals grounds are similar, facts are similar, and
arguments were similar and therefore, were heard together and
are disposed by taking lead case facts, grounds, and arguments
from the folder in ITA No. 664/JP/2024.
Before moving towards the facts of the case we would like to
mention that the assessee has assailed the appeal in ITA
No.664/JP/2024 on the following grounds;
“1. Under the facts and circumstances of the case, order passed by the Ld. PCIT u/s 263 is illegal & bad in law and the same be quashed. 2. The Ld. PCIT has erred on facts and in law in holding that the assessment order dt. 20.09.2021 passed u/s 143(3) is erroneous in so far as it is prejudicial to the interest of revenue as the excess stock of Rs.18,32,947/- and excess cash of Rs.5,07,205/- found during the course of survey proceedings has been charged by the AO at normal rates instead of at the rate provided u/s 115BBE of the Act ignoring that the same has arisen from the business income of the year under consideration which is offered to tax and on this issue there are decisions in favour of the assessee.
4 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT
The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee.”
The present appeal challenged the order of ld. PCIT passed
u/s 263 of the Act, the fact as culled out from the records is that in
this case a Survey action u/s 133A of the Act was carried out on
31.01.2019 at the business premise of the assessee firm M/s
Singhal Timber & Hardware Store, Prop. Sh. Kirodi Mal Singhal,
situated at Alwar Road, Kishangarh Bass, Alwar. The assessee e-
filed its return of income u/s 139 on 27.09.2019 vide
acknowledgement no. 180210441270919 declaring income of Rs.
22,26,820/-. The case was selected for compulsory scrutiny, being
a survey case, as per CBDT guidelines for selection of cases
under compulsory scrutiny.
5.1 The proceedings of assessment of income were initiated by
issuing of notice u/s 143(2) of the Act on 29-09-2020 through
computer systems which was served electronically on the Email of
the assessee firm. Thereafter, notice u/s 142(1) dated 10.02.2021
along with questionnaire was issued to the assessee. The
5 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT assessee firm is engaged in the business of manufacturing of
timber and trading/supply of timber, cement sheet, iron sheet etc.
5.2 During survey proceedings, the stock of Rs. 58,72,780/- was
found in physical verification, whereas as per books of accounts
the available stock was Rs. 40,39,833/-. Thus, the stock of Rs.
18,32,947/- was found in excess. In this regard, the assessee was
asked vide question no. 14 of his statements recorded during
survey proceedings to give justification of excess stock of Rs.
18,32,947/- found at business premises. In response to question,
he surrendered the amount of Rs. 18,32,947/- as his income of the
year under consideration. Further, on perusal of the return and
reply of the assessee, ld. AO noticed that the assessee has
declared the amount of Rs. 18,32,947/- in the return of income filed
for the year under consideration and paid due taxes thereon.
5.3 During survey proceedings, the cash of Rs. 5,91,900/- was
found in physical verification, whereas as per books of accounts
the available cash was Rs. 84,695/-. Thus, the cash of Rs.
5,07,205/- was found excess. In this regard, the assessee was
6 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT asked vide question no. 13 of his statements recorded during
survey proceedings to give justification of excess cash of Rs.
5,07,205/- found at business premises. In response to the
question, he surrendered the excess cash amounting to Rs.
5,07,205/- as his income of the year under consideration. The ld.
AO did not find that disclosure in the return of filed so he raised the
issue to the assessee and the assessee submitted that income on
account of excess remained to be offered and the software does
not permits to revise the return the assessee offered that income
by way of letter dated 26.03.2021. Accordingly, the ld. AO made
the addition of Rs. 5,07,205/- in the return of income filed for the
year under consideration.
On culmination of the assessment proceedings, the ld. PCIT
called for examination the assessment records. Upon, examination
of the records, ld. PCIT noted that the assessee, during the survey
proceedings, surrendered a sum of Rs. 5,07,205/- on account of
excess cash found during the survey proceedings. Since, the same
is not declared in the return of income, the then AO has made an
addition of Rs.5,07,205/- on account of excess cash surrendered
7 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT during the survey. Since, the assessee did not have any
explanation in respect of source of such excess cash found during
survey proceedings, the same was surrendered for taxation.
Hence, from the statement of the assessee and subsequent
surrendered in the assessment proceeding it is clear that the
assessee failed explain the source of cash found and the same is
is covered under the definition of unexplained money u/s 69A
whereon tax would be charged at special rates under the
provisions of section 115BBE whereas as per Computation Sheet,
tax was charged at Normal Rates by the ld. AO.
Ld. PCIT similarly noted that the assessee has purchased
excess stock, out of Books of Accounts, using unexplained funds,
therefore, the same is covered under the definition of unexplained
expenditure u/s 69C whereon tax would be charged at special
rates under the provisions of section 115BBE whereas as per
Computation Sheet, tax was charged at Normal Rates..
In view of these observation ld. PCIT noted that the order
passed u/s 143(3) for the AY 2019-20 dated 20.09.2021 was
8 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT erroneous and prejudicial to the Revenue. Accordingly, a show
cause notice u/s 263, on the issued that remained to be
examined/verified while passing assessment order, was issued to
the assessee on 05.03.2024.
In response to the said show cause notice, the assessee
furnished a written reply on 12.03.2024 which is placed on record
by ld. PCIT. The submission of the assessee has been perused
carefully by ld. PCIT, but she observed that the A/R of the
assessee has in the submission tried to establish that the
Assessment order passed by the Assessing Officer is not
erroneous, but it is a fact that the Assessing Officer failed to apply
his mind on the material available on record and failed to invoke
the applicable provisions of law for the excess stock and excess
cash found during the survey. Thus, she holds that the
assessment order has been passed by the ld. AO in a routine and
casual manner without applying the applicable sections of the Act.
Ld. AO has not verified the details which were required to be
verified under the scope of scrutiny. The order of the AO is,
therefore, considered by her liable to revision under the
explanation (2) clause (b) and clause (a) of section 263 of the Act.
9 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT 7. Feeling aggrieved from the above order of the PCIT passed
u/s. 263 of the Act, the present appeal is filed by the assessee
challenging the finding recorded thereon. Apropos to the ground so
raised the ld. AR appearing on behalf of the assessee has placed
their written submission which is reproduced herein below;
The assessee is proprietor of M/s Singhal Timber & Hardware Store engaged in the business of manufacturing of timber and trading/supply of timber, cement sheet, iron sheet, etc. A survey was carried out at the business premises of assessee on 31.01.2019. In course of survey assessee in his statement dt. 31.01.2019 which continued on 01.02.2019, in reply to Q. No.13 & 14 (PB 31-32) offered for tax current year income of Rs.23,40,152/- represented in form of excess cash of Rs.5,07,205/- and excess stock of Rs.18,32,947/-.
The assessee filed the return on 27.09.2019 declaring total income of Rs.22,26,820/- which includes excess stock of Rs.18,32,947/- offered in survey. In respect of excess cash of Rs.5,07,205/- assessee vide reply dt. 26.03.2021 (PB 16-18) submitted that he has shown excess cash in his ITR as other income in capital account annexure but due to technical glitch in software this amount was not reflected in ITR. Accordingly assessee filed the revised computation declaring excess cash of Rs.5,07,205/- (PB 19- 22).
During the course of assessment proceedings the assessee vide reply dt. 13.09.2021 (PB 23-26) submitted that the stock and cash difference was subject to various discrepancies as discussed in various replies filed u/s 142(1). However, to avoid future litigation and waiver of penalty assessee has disclosed the same. This disclosure pertains to normal business income of the assessee and thus section 115BBE cannot be invoked for which reliance was placed on certain case laws. The AO after considering the submission of assessee taxed the income surrendered during the survey at normal slab rate.
The Ld. PCIT(Central), Jaipur issued show cause notice u/s 263 dt. 05.03.2024 stating that excess cash of Rs.5,07,205/- is covered under the definition of unexplained money u/s 69A and excess stock of Rs.18,32,947/- is covered under the definition of
10 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT unexplained investment u/s 69 chargeable to tax u/s 115BBE but AO has charged the tax on normal rate and thus the order passed by AO is erroneous in so far as it is prejudicial to the interest of revenue. In response to the same assessee filed detailed reply on 07.03.2024 (PB 1-15).
The Ld. PCIT(Central) by invoking clause (a) & clause (b) of Explanation 2 to section 263 set aside the assessment order to the file of AO. Submission:-
At the outset it is submitted that clause (a) & clause (b) of Explanation 2 to section 263 provides that order passed by AO is deemed to be erroneous in so far as prejudicial to the interest of revenue if the order is passed without making enquiries or verification which should have been made or the order is passed allowing any relief without enquiring into the claim. In the present case, assessee in his reply dt. 13.09.2021 (PB 23-26) has specifically clarified that section 115BBE cannot be invoked for which he relied on the decision of Rajasthan High Court in case of Bajargan Traders where the appeal filed by the department against the order of ITAT, Jaipur Bench was dismissed where the Hon’ble ITAT has held that excess stock which is clearly identifiable and related to regular business stock of assessee has to be brought to tax under the head business income. Further reliance was placed on the decision of ITAT, Jodhpur Bench in ITA No.143/Jodh/2018 where it was held that lower authorities were not justified in taxing the surrender made on account of excess stock and excess cash found u/s 69 of the Act and thus there is no justification for taxing such income u/s 115BBE of the Act. Thus on both the issues for which order u/s 263 is passed has been enquired and examined by the AO and therefore invocation of clause (a) & (b) of Explanation 2 to section 263 is unjustified. Reliance in this connection is placed on the following cases:-
Smt. Rekha Shekhawat Vs. PCIT (2022) 218 DTR 161 (Jaipur) (Trib.) In view of the fact that the unrecorded trade advances and cash in hand admitted during the course of survey u/s 133A emanated from and related to the real estate business carried on by the assessee and the same were later incorporated in the regular books of accounts, the additional income was in the nature of business income and did not fall u/s 68 and/or sec. 69 and therefore, Principal CIT was not justified in invoking the provisions of sec. 263 by holding that the assessment order was passed without considering that such additional income fell under the purview of ss. 68 and 69 and that tax was chargeable u/s 115BBE as against normal rates.
11 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT Surya Hatchery Vs. PCIT (2023) 222 DTR 57 (Chd.) (Trib.) AO having accepted the additional income surrendered by the assessee at the time of survey u/s 133A as normal business income after making enquiries into the nature of assessee's income and considering the assessee's replies and the relevant facts on record, it cannot be held that the assessment order has been passed without a proper enquiry and therefore, the Principal CIT was not justified in passing the impugned revisional order u/s 263 on the basis that the surrendered income is assessable as per the provisions of sec. 115BBE.
CIT Vs. Embassy Brindavan Developers (2023) 294 Taxman 437 (SC) Notice issued in SLP against High Court’s order that where assessee purchased property for development of a Tech Park, however, same was sold for want of funds without any development whatsoever and AO had taken a view that assessee was liable to pay capital gain tax on profit from said transaction, merely because out of two plausible views available, AO had taken one view, jurisdiction u/s 263 could not be exercised.
Bhikhabhai Rajabjai Dhameliya Vs. PCIT (2023) 201 ITD 424 (Surat) (Trib.) Where any inquiry, even inadequate was made by AO, that would not give occasion to invoke jurisdiction u/s 263 merely because Commissioner had different opinion unless view taken by AO is unsustainable in law.
Dhanraj Chhipa Vs. PCIT (2023) 225 DTR 315 (Jodhpur) (Trib.) If there was any enquiry and a possible view was taken by the AO, it would not give occasion to the CIT to pass orders u/s 263 merely because he has a different opinion in the matter. Since the AO has examined the assessee's case and made complete enquiry regarding the issue raised in the revision proceeding, the Principal CIT was not justified in passing the impugned revision order.
Satya Narayan Dhoot Vs. PCIT (2023) 222 DTR 177 (Jodhpur) (Trib.) AO having issued notice u/s 142(1) wherein he called for details of exempt income and also justification for various exemptions and deductions claimed in the return of income including the profit on sale of investments and the assessee having filed the break-up details of exempt income including exemption of long-term capital gain claimed u/s 10(38) in reply thereto, the Principal CIT was not justified in initiating revision proceedings on the basis that the AO has allowed the exemption without examining the claim.
It is a settled law that when the stock & cash found in survey is clearly identifiable and related to the regular business of assessee,
12 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT the alleged excess stock and cash can be brought to tax only under the head business income and section 115BBE is otherwise not applicable. In this connection reliance is placed on the decision of Hon’ble Rajasthan High Court where the appeal filed by the department against the order of ITAT, Jaipur Bench in case of PCIT Vs. Bajargan Traders DBITA No.258/2017 order dt. 12.09.2017 was dismissed. The Hon’ble ITAT in this case at Para 2.10 & 2.11 of the order held as under:-
“2.10. We have heard the rival contentions and perused the material available on record. During the course of survey, the assessee has surrendered an amount of Rs.70,04,814/- towards investment in stock of rice which had not been recorded in the books of accounts. Subsequently, in the books of accounts, the assessee has incorporated this transaction by debiting the purchase account and crediting the income from undisclosed sources. In the annual accounts, the purchases of Rs.70,04,814/- were finally reflected as part of total purchases amounting to Rs.33,47,19,658/- in the profit and loss account and the same also found included as part of the closing stock amounting to Rs.1,94,42,569/- in the profit/loss account since the said stock of rice was not sold out. In addition to the purchase and the closing stock, the amount of Rs.70,04,814/- also found credited in the profit and loss account as income from undisclosed sources. The net effect of this double entry accounting treatment is that firstly the unrecorded stock of rice has been brought on the books and now forms part of the recorded stock which can be subsequently sold out and the profit/loss therefrom would be subject to tax as any other normal business transaction. Secondly, the unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the profit and loss account. Had this investment been made out of known source, there was no necessity for assessee to credit the profit/loss account and offer the same to tax. Accordingly, we do not see any infirmity in assessee’s bringing such transaction in its books of accounts and the accounting treatment thereof so as to regularise its books of accounts. In fact, the same provides a credible base for Revenue to bring to tax subsequent profit/loss on sale of such stock of rice in future. 2.11. Having said that, the next issue that arises for consideration is whether the amount surrendered by way of investment in the unrecorded stock of rice has to be brought to tax under the head “business income” or “income from other sources”. In the present case, the assessee is dealing in sale of food grains, rice and oil seeds, and the excess stock which has been found during the course of survey is stock of rice. Therefore, the investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. The decision of the Co-ordinate Bench in case of Shri Ramnarayan Birla (supra) supports the case of the assessee in this regard. Therefore, the investment in the excess stock has to be brought to tax under the head “business income” and not under the head income from other sources”. In the result, ground No. 1 of the assessee is allowed.” Similar view has been taken by Hon’ble ITAT, Jaipur Bench in case of DCIT Vs. Sh. Ram Narayan Birla ITA No.482/JP/2015 order dt.
13 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT 30.09.2016 and Sanjay Gupta Vs. ACIT ITA No.292/JP/2023 order dt. 17.07.2023 (copy enclosed). In the present case also, excess stock and excess cash has been duly incorporated in the books of accounts by making general entries (PB 25-26) and the same has arisen in normal course of business of assessee. Therefore, such income is taxable at normal rate and not u/s 115BBE of the Act. Thus when there are favorable decisions on this issue, proceedings u/s 263 is bad in law for which the cases referred at Point No.1 is relied upon.
In view of above, order passed u/s 263 be quashed.”
To support the contention so raised in the written submission
reliance was placed on the following evidence / records / decisions:
Sr. No. Particulars Pg. No. 1 Copy of reply dt. 07.03.2024 filed to PCIT (Central) in response to 1-15 notice u/s 263 2 Copy of letter dt. 26.03.2021 filed to AO along with revised computation 16-22 of total income 3 Copy of reply dt. 13.09.2021 filed to the AO explaining why section 23-26 115BBE is not applicable on the income declared for excess cash & stock surrendered in statement recorded in survey along with relevant vouchers 4 Copy of statement dt. 31.01.2019 of Sh. Kirodi Mal Singhal recorded 27-33 during course of survey
Case laws relied upon:
S. No. Particulars Pg No. 1. Copy of decision of Hon’ble ITAT, Jaipur Bench in case of Smt. Rekha 1-24 Shekhawat Vs. PCIT (2022) 99 ITR (Trib.) 69 2. Copy of decision of Hon’ble ITAT, Chandigarh Bench in case of Surya 25-53 Hatchery Vs. PCIT (2023) 222 DTR 57 3. Copy of decision of Hon’ble Rajasthan High Court in case of PCIT Vs. 54-58 Bajargan Traders DBITA No.258/2017 order dt. 12.09.2017
Copy of decision of Hon’ble ITAT, Jaipur Bench in case of Bajargan 59-71
14 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT Traders Vs. ACIT ITA No.137/JP/2017 order dt. 17.03.2017 5. Copy of decision of Hon’ble ITAT, Jaipur Bench in case of Sanjay Gupta 72-78 Vs. ACIT ITA No.292/JP/2023 order dt. 17.07.2023
The ld. AR of the assessee in addition to the above written
submission so filed vehemently argued that the issue which the ld.
PCIT is raising has already been verified by the ld. AO and the
assessee submitted the reply in the assessment proceeding vide
letter dated 13.09.2021 (APB-23-24) so when the issue of stock
and cash has already been subjected to verification and the same
is accepted considering the reply of the assessee. Ld PCIT cannot
enforce her view when the ld. AO has applied the mind and has
taken a plausible view on the matter.
Per contra, the ld. DR relied upon the order of ld. PCIT which
is passed after considering the reply of the assessee and ld. DR
supported the finding recorded in the order of ld. PCIT.
We have heard the rival contentions and perused the material
placed on record. As there is not dispute about the facts of the
case the same are not repeated and are already reiterated herein
above. The bench noted that in the case a Survey action u/s 133A
15 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT of the Act was carried out on 31.01.2019 at the business premise
of the assessee firm M/s Singhal Timber & Hardware Store, Prop.
Sh. Kirodi Mal Singhal, situated at Alwar Road, Kishangarh Bass,
Alwar. In the survey proceeding so conducted by the revenue the
stock of Rs. 58,72,780/- was found in physical verification, whereas
as per books of accounts the available stock was Rs. 40,39,833/-.
Thus, the stock of Rs. 18,32,947/- was found in excess. In this
regard, the assessee was asked vide question no. 14 of his
statements recorded during survey proceedings to give justification
of excess stock of Rs. 18,32,947/- found at business premises. In
response to the question, he surrendered the amount of Rs.
18,32,947/- as his income of the year under consideration. Further,
on perusal of the return and reply of the assessee, ld. AO noticed
that the assessee has declared the amount of Rs. 18,32,947/- in
the return of income filed for the year under consideration and paid
due taxes thereon.
In that survey proceeding cash of Rs. 5,91,900/- was found in
physical verification, whereas as per books of accounts the
available cash was Rs. 84,695/-. Thus, the cash of Rs. 5,07,205/-
was found excess. In this regard, the assessee was asked vide
16 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT question no. 13 of his statements recorded during survey
proceedings to give justification of excess cash of Rs. 5,07,205/-
found at business premises. In response to the question, he
surrendered the excess cash amounting to Rs. 5,07,205/- as his
income of the year under consideration. The ld. AO did not find that
disclosure in the return of filed so he raised the issue to the
assessee and the assessee submitted that income on account of
excess remained to be offered and the software does not permit to
revise the return the assessee offered that income by way of letter
dated 26.03.2021. Accordingly, the ld. AO made the addition of Rs.
5,07,205/- in the return of income filed for the year under
consideration.
The bench also noted that on both the additional income so
disclosed by the assessee the ld. AO has called for the explanation
of the assessee about the applicability of the section 115BBE of the
Act and the assessee has replied to that aspect of the matter vide
letter dated13.09.2021 and therefore, the ld. AO has considered
the explanation of the assessee about the chargeability of the
income offered by the assessee and has taken a plausible view on
the matter. Thus, based on these set of facts when the assessment
17 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT has been completed after conducting all the enquiries and
verification and ld. AO has taken the plausible view on the matter
the ld. PCIT cannot quashed that assessment order u/s. 263 of the
Act. As it is transpired from the record of the proceedings, in the
present case, no presumption can be drawn that the Assessing
Officer had not applied his mind to the aspects for verification of
income so disclosed by the assessee. Be that as it may, when the
issue of applicability is examined by the ld. AO and the assessee
has given a detailed reply about the applicability of the provision
section 115BBE of the Act, the ld. PCIT cannot impose her view on
the view taken by the ld. AO. We get support of our view from the
decision of apex court in the case of Malabar Industrial Co. Ltd. v.
CIT (2000) 243 ITR 83 where in the Court has taken the view that
the phrase "prejudicial to the interests of the revenue "
under Section 263 has to be read in conjunction with the
expression "erroneous" order passed by the assessing officer.
Every loss of revenue because of an order of the assessing officer
cannot be treated as prejudicial to the interests of the revenue and
where two views are possible and the Income Tax Officer has
taken one view with respect to which the Commissioner does not
18 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT agree, it cannot be treated as an erroneous order prejudicial to the
interests of the revenue , unless the view taken by the Income Tax
Officer is unsustainable in law.
In terms of these observations, the appeal of the assessee in
ITA no. 644/JP/2024 is allowed.
The fact of the case in ITA No. 663-JP-2024 is similar to the
case in ITA No. 644-JP-2024 and we have heard both the parties
and persuaded the materials available on record. The bench has
noticed that the issues raised by the assessee in this appeal No.
663-JP-2024 is equally similar on set of facts and grounds.
Therefore, it is not imperative to repeat the facts and various
grounds raised by both the parties. Hence, the bench feels that the
decision taken by us in ITA No. 664-JP-2024 in the case of Sh.
Kirodi Mal Singhal for the Assessment Year 2019-20 shall apply
mutatis mutandis in the case of Sh. Kamlesh Singhal in ITA No.
663-JP-2024 for the Assessment Year 2019-20.
In the result, both appeals of the assessee are allowed.
19 ITA Nos. 663 & 664/JP/2024 Sh. Kamlesh Singhal vs. PCIT Order pronounced in the open court on 29/08/2024.
Sd/- Sd/- ¼ jkBkSM deys’k t;arHkkbZ ½ ¼ lanhi xkslkbZ ½ (Sandeep Gosain) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 29/08/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Sh. Kirodi Mal Singhal, Alwar Sh. Kamlesh Singhal, Alwar 2. izR;FkhZ@ The Respondent- PCIT (Central), Jaipur 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA Nos. 663 & 664/JP/2024} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत
