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TMI Blog2021 (3) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... AO acted within the scope of limited scrutiny and assessed the income, after verification of the details. The Ld.Pr.CIT intends to substitute his view in place of decision taken by the AO, which is not permissible in the guise of revision u/s 263. No other evidence was collected by the department to show that the assessee has understated the income. As argued by the Ld.AR, inadequate enquiry is not the reason for taking up the case for revision u/s 263 as decided by the Tribunal in the case of M/s Naveena Rice Industries [ 2018 (7) TMI 2170 - ITAT VISAKHAPATNAM] relied upon by the assessee. Though the Ld.DR tried to distinguish the case of the assessee with the Naveena Rice Industries, we find that the observation of the Tribunal is squarely applicable to the assessee s case also. In the cited case, this Tribunal held that though lack of enquiry is the reason or for taking up the case for revision, inadequate enquiry cannot be held to be erroneous and prejudicial to the interest of the revenue. We hold that there is no error which is prejudicial to the interest of the revenue in the order passed by the AO u/s 143(3) dated 16.08.2016. Hence, we set aside the order of the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of cash deposits of the assessee as income instead of treating the same as turnover, since, the assessee failed to submit the proof in respect of each entry of the cash deposit as forming part of total deposit. Accordingly, the Ld.Pr.CIT set aside the order passed by the AO holding the same as erroneous and prejudicial to the interest of the revenue and directed the AO to make proper enquiries with customers and farmers and obtain complete information in relation to sources of the cash deposits in his bank account instead of resorting to estimation of income at 8% on the turnover and make the assessment afresh as per law. 3. Against the order of the Ld.Pr.CIT, the assessee filed appeal before this Tribunal. During the appeal hearing, the Ld.AR submitted that the assessee is a fruit merchant, engaged in selling the fruits as intermediary and earning the commission of 1% on sales, accordingly admitted the gross commission of ₹ 4,59,400/- in the return of income. The assessee also furnished confirmations from the buyers of the fruits, wherein, they have confirmed that the commission was paid at 1%, as observed in page No.40 to 48 of the paper book. Taking our attention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y this Tribunal in the case of M/s Naveena Rice Industries in I.T.A. No.311/Viz/2017 dated 31.07.2018. Thus argued that the order of the Ld.Pr.CIT passed u/s 263 to be set aside and allow the appeal of the assessee. 4. On the other hand, the Ld.DR vehemently supported the orders of the lower authorities and submitted that the AO has not caused any enquiries, verified the sources, simply accepted the turnover as income, therefore, argued that the assessment order passed by the AO is erroneous and prejudicial to the interest of the revenue, hence, requested to uphold the order of the Ld.Pr.CIT. The Ld.DR distinguished the order of this Tribunal in M/s Naveena Rice Industries (supra) stating that in the said case, there was a survey u/s 133A and all the payments were accounted in the regular books of accounts. Therefore, argued that the facts of the case law in the case of M/s Naveena Rice Industries (supra) are distinguishable and not applicable in the case of the assessee. 5. We have heard both the parties and perused the material placed on record. As per the order of the Ld.Pr.CIT, the assessee s case was taken up for limited scrutiny in order to verify the cash deposits whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the reason for taking up the case for revision u/s 263 as decided by the Tribunal in the case of M/s Naveena Rice Industries (supra) relied upon by the assessee. Though the Ld.DR tried to distinguish the case of the assessee with the Naveena Rice Industries, we find that the observation of the Tribunal is squarely applicable to the assessee s case also. In the cited case, this Tribunal held that though lack of enquiry is the reason or for taking up the case for revision, inadequate enquiry cannot be held to be erroneous and prejudicial to the interest of the revenue. For the sake of clarity and convenience, we extract relevant part of the order of this Tribunal in para No.7 which reads as under : 7. We have heard both the parties and perused the material placed on record. The Pr.CIT has taken up the case for revision u/s 263 for not properly examining the issues in the seized material marked as NRI-1 to NRI-40 for the assessment year 2012-13. Such cash credits and expenditure was worked out to ₹ 1,41,48,064/-. All the cash credits stated to have been recorded by the assessee from explained sources relating to the business transactions. The assessee explained that the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced. Therefore, once the AO examined the books of accounts, there is no basis for holding that the AO has not examined the issue merely because the AO has not recorded his finding with regard to issues in the rough note book in the assessment order or has not placed the relevant details in the assessment records. The Pr.CIT cannot conclude that the AO has not examined the issue when the material is very much available with the AO. In these facts and circumstances, it is for the revenue to establish that the AO has not examined the issue in the reassessment, which the revenue has failed to do so. The Pr.CIT cannot consider the entries made in the rough cash book only with the withdrawals made from the bank. It has to be considered with regular cash book and withdrawals made from the bank account together. If the same is considered, there was no negative balance and the source of the entries made in the rough note book stands explained. The Pr.CIT heavily placed reliance on findings of the AO for the A.Y.2014-15 and the same are irrelevant in the year under consideration. The observations of the Ld.Pr.CIT at best can be called as inadequate enquiry but not the lack of enquir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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