MANOJ SHARMA,MUZAFFARNAGAR vs. ITO WARD - 1(3), MUZAFFARNAGAR

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ITA 427/DEL/2021Status: DisposedITAT Delhi05 September 2023AY 2010-11Bench: SHRI SAKTIJIT DEY (Vice President), SHRI PRADIP KUMAR KEDIA (Accountant Member)2 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the AO had applied his mind and made appropriate inquiries regarding the cash deposits. The AO's conclusion, which allowed for some cash in hand and treated a portion as unexplained, was deemed plausible and not erroneous per se. Therefore, the revisional action of the Pr.CIT was quashed.

What were the facts?

The assessee challenged a revisional order passed by the Principal Commissioner of Income Tax (Pr.CIT) under Section 263. The Pr.CIT held the Assessing Officer's (AO) order to be erroneous as prejudicial to the revenue, citing the assessee's failure to prove the source of cash investment for share purchases.

What were the issues?

Whether the Pr.CIT was justified in invoking Section 263 to revise the AO's order when the AO had already made inquiries and arrived at a plausible conclusion regarding the source of cash deposits.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E” DELHI

Before: SHRI SAKTIJIT DEY & SHRI PRADIP KUMAR KEDIA

For Appellant: Shri Deepak Kumar Gupta, Adv
For Respondent: Shri Subhra Jyoti Chakraborty, CIT-DR

PER PRADIP KUMAR KEDIA, A.M.: The captioned appeal has been filed at the instance of the assessee against the revisional order of the ld. Principal Commissioner of Income Tax, Dehradun (‘Pr.CIT’ in short) dated 09.03.2021 wherein order passed by the Assessing Officer (AO) under Section 147 r.w. Section 143(3) of the Income Tax Act, 1961 (the Act) dated 22.09.2017 concerning AY 2010-11 was held to be erroneous in so far as prejudicial to the interest of the revenue within the meaning of Section 263 of the Act.

2.

As per the grounds of appeal

1.

, the assessee has challenged the revisional jurisdiction usurped by the Pr.CIT in terms of powers conferred under Section 263 of the Act on the ground that the assessee has failed to furnish documentary evidences to prove the source of cash investment of Rs.3,56,000/- towards share purchases.

3. We have carefully considered the rival submissions on the challenge towards assumption of jurisdiction under Section 263 of the Act.

4. It is the case of the assessee that the shares were purchased out of cash deposits of Rs.3,56,000/- in the bank account. The Assessing Officer has made appropriate inquiry in this regard. The Assessing Officer has not only disallowed the speculation business losses but has also treated the source of a part of cash deposit to be unsatisfactory and treated a sum of Rs.1,50,000/- to be unexplained towards source of such deposit.

5.

Under the circumstances where the Assessing Officer has applied his mind and reached to a plausible conclusion giving benefit of some cash in hand normally available at the disposal of an assessee and treating an estimated sum as an unexplained, the view taken by the Assessing Officer cannot be summarily disregarded to substitute the opinion of the Pr.CIT in this regard. The view of the Assessing Officer appears plausible and resonates with common sense approach and thus cannot be said to be erroneous per se. The revisional action of the Pr.CIT, if permitted, has the potential to upset any and every assessment order on shallow pretext and thus cannot be countenanced. We thus set aside and quash the revisional order passed under Section 263 of the Act. In the result, the appeal of the assessee is allowed. 6. Order pronounced in the open court on 05/09/2023

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