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TMI Blog2015 (2) TMI 1315X X X X Extracts X X X X X X X X Extracts X X X X ..... of income on 21.08.2009 declaring total income of Rs. 3,51,004. After making an addition of Rs. 40,000 on agreed basis, assessment was completed under section 143(3) vide order dated 30.08.2011 determining total income at Rs. 3,91,004. Ld.CIT in exercise of her power under section 263 of the Act, called for the assessment record and after examining the same was of the view that assessment order passed is erroneous and prejudicial to the interest of Revenue as the A.O. has failed to examine the following issues. "2. On examination of the assessment records for A.Y. 2009-10, it was seen that - (i) The assessee who is a dealer in purchase and sale of lands had shown a purchase of Rs. 9,00,000 and debited it in the profit and loss account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntity of seller is established, who is also an income tax assessee and further the seller has confirmed of receiving the amount, genuineness of transaction is also established. Therefore, no disallowance can be made under section 40A(3). As far as interest payment to creditors is concerned, it was submitted, most of the credits are brought forward from earlier year. Even, with regard to fresh creditors also, assessee submitted confirmation letters. 4. In so far as cash deposits in bank account, it was submitted by assessee that all the deposits are reflected in the cash book and the major source for deposits are from the withdrawals made earlier from the same bank account. in support of such claim assessee also submitted a statement showi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reflected these amounts as loans to the assessee during the relevant assessment year. 5. In so far as cash deposits of Rs. 24,90,000 in the savings bank account is concerned, Ld. CIT acknowledged that they have been properly reflected in the books maintained by the assessee. However, she directed the A.O. to verify the deposits. Accordingly, the assessment order passed was set aside with the above directions. 6. Learned A.R. submitted before us that at the time of assessment proceedings the A.O. has not only examined the books of accounts but has also enquired into all the issues on which the proceedings under section 263 has been initiated. It was submitted, as far as applicability of section 40A(3) is concerned, the A.O. has examined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings has examined this issue but during the revision proceeding also after considering the evidences submitted by assessee, Ld. CIT was convinced with the explanation of the assessee, nevertheless she set aside the assessment order on these two issues also which is not proper. In support of his contention, learned A.R. relied upon the following decisions : (i) Saraswati Housing & Developers vs. Addl. CIT (2013) 142 ITD 198 (Delhi) (Tribu.) (ii) Ayushi Builders & Developers vs. DCIT (2014) 50 taxmann.com 396 (Jodhpur) (Tribu.) 7. Learned D.R. on the other hand strongly supported the impugned order of the Ld. CIT submitted that the A.O. while completing the assessment has not at all examined the applicability of section 40A(3) to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has made cash payments of Rs. 9 lakhs towards purchase of land. However, the A.O. at the time of assessment, as it appears from the assessment order itself, has not at all examined the applicability of section 40A(3). Learned A.R. has not brought any material to our notice which could even remotely establish that during the assessment proceedings A.O. has examined the issue of applicability of section 40A(3) to the aforesaid cash payment. In fact, notice issued under section 154 of the Act by the A.O. itself proves the fact that A.O. has failed to examine this issue at the time of assessment proceedings. Therefore, to that extent, the assessment order is erroneous and prejudicial to the interest of Revenue. Hence, the Commissioner was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it appears from record at the time of assessment proceedings, assessee has also produced confirmation letters from creditors. Therefore, it cannot be said that the A.O. has not examined the credits. In these circumstances, the assessment order passed cannot be held to be erroneous and prejudicial to the interests of Revenue. Similarly, in so far as cash deposits made to the S.B. Account is concerned, it is manifest from the revision order that Ld. CIT has accepted that the deposits have been reflected in the books of accounts. Moreover, assessee has also explained the source of such deposits. It is also not disputed that during the assessment proceedings, A.O. has examined the books of accounts as well as the bank statement. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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