2020 (3) TMI 1076 - ITAT INDORE

Revision u/s 263 - unexplained cash deposited in the bank account of the assessee - HELD THAT:- Where the assessing officer has made enquiry and if the Pr. CIT is not satisfied with such enquiry he should make himself enquiry and bring clearly on record as the finding of the assessing officer being erroneous and prejudicial to the interest of revenue. This is not the case in the present case.

AO has made necessary enquiry and issue was also scrutinized by the JCIT while passing order u/s 144A of the Act. In our considered view when two officers at different stage examined the issue before setting aside these finding Ld. Pr. CIT ought to have made some enquiry. But Ld. Pr. CIT in the present case set aside the issue to the Assessing Officer which in our considered view is contrary to ratio laid by the judgment of ITO Vs D.G. Housing Projects [2012 (3) TMI 227 - DELHI HIGH COURT] is not mandate of law. Hence the direction of Ld. Pr. CIT cannot be affirmed.

If it is presumed that the hundis as recovered during the survey proceedings were not genuine in that situation the amount that was reflected on such hundis cannot to be taken as income of the assessee. Therefore the incidence of tax would be on the unexplained cash deposited in the bank account of the assessee. In this case the amount surrendered by the assessee is higher than what it was found to be unexplained cash deposits in its bank account. Therefore there is no infirmity in the order giving set off of the maturity amount. It is however further clarified that we have not expressed our view regarding genuineness of hospital receipts being invested in hundis as surrendered by one of the partner of the assessee firm.

Our finding is purely based on the material placed before us. Ld. PCIT has not brought any material suggesting that the amounts so surrendered by the partner of the firm is related to proceed of crime.

AO failed to make enquiry in respect of year wise investment - No material is placed by the assessee regarding this issue. In our considered view when there is claim of investment being made out of unrecorded hospital receipts he ought to have made investigation regarding year wise investment. This observation of the Ld. Pr.CIT is sustained.

CIT allowing higher depreciation claim of the assessee - We have perused rules and case laws as relied on by the assessee. We do not find any infirmity into the action of the assessing officer for granting depreciation @ 40%. Therefore, this ground of the Pr. CIT is also not sustainable for affirming the action u/s 263 of the Act.

AO has allowed expenditure of salary without verifying whether TDS as per provisions of the Income Tax was made or not - It is stated that the details of TDS was duly filed in support of this contention. The assessee drew our attention to paper book pages 115-116 of the paper book and also pages no. 750-764, therefore, it cannot be inferred that the assessing officer was simply allowed as not verified the tax deducted at source. This ground of Pr. CIT is also not sustainable on the facts and material on records. Appeal of the assessee is partly allowed.