ASHOK KUMAR SHARMA,MORENA vs. PR. CIT, GWALIOR

Upon perusal of case records, it could be seen that the assessee’s case was subjected to scrutiny pursuant to recovery of Rs.58 Lacs by police authorities. The assessee derived income from dairy business and commission income. The assessee explained that the impugned cash was withdrawn from bank accounts. The bank mentioned summary of currency notes on the backside of the cheque itself. Accepting the explanation of the assessee, Ld. AO chose not to make any addition thereof.

Subsequently, Ld. Pr. CIT, upon perusal of case records, alleged that no enquiries were made by Ld. AO to verify creditworthiness of cash creditors and unsecured loans. The assessee reflected high turnover with low profit. The Ld. AO simply accepted the submissions with respect to cash seized for Rs.58 Lacs. Accordingly, the assessee was show-caused. The assessee refuted all these allegations and stated that due enquiries were made on all the issues during assessment proceedings itself. However, rejecting the same, Ld. Pr. CIT held the assessment order to be erroneous and prejudicial to the interest of the revenue and directed Ld. AO to pass fresh order after examining all the aspects thoroughly. Aggrieved, the assessee is in further appeal before us.

At the outset, it could be observed that the case was subjected to scrutiny to verify the seizure of cash of Rs.58 Lacs. During the course of assessment proceedings, various queries were raised by Ld. AO in this regard and the assessee furnished replies to the satisfaction of Ld. AO. It was demonstrated that the said cash was withdrawn from the bank accounts. The Ld. AO looked into the same and arrived at a satisfaction. In the light of all these facts, it could be concluded that whatever enquiries were required, the same were made by Ld. AO during the course of assessment proceedings itself.

The Hon’ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT (supra) has held that 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 consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law. The said principal has been reiterated by Hon’ble Court in its subsequent judgment titled as CIT V/s Max India Ltd. (295 ITR 282). Similar principal has been followed in Grasim Industries Ltd. V/s CIT (321 ITR 92). The ratio ofall these decisions is that where two views are possible and AO has preferred one view against another view, order could not be said to be erroneous or prejudicial to the interest of the revenue.

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 appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) लेखासद7 / ACCOUNTANT MEMBER 6ाियक सद7 /JUDICIAL MEMBER Dated: 22.04.2025 आदेशकी9ितिलिपअ;ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. � थ�/Respondent 3. आयकरआयु1/CIT 4. िवभागीय�ितिनिध/DR 5. गाड7फाईल/GF ASSISTANT REGISTRAR