9911796707
TMI Blog2021 (3) TMI 1197X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was Rs. 1,99,32,034/- and observed that Assessing Officer (AO) estimated the income at 8% on the cash deposits of Rs. 88.93 lakhs without examining source of each cash deposit. The Ld.Pr.CIT also observed that the cash deposits were made by the assessee himself in the account and taken example of couple of occasions. The Ld.Pr.CIT, viewed that the AO ought to have examined the sources of each cash deposits entry wise independently and collected the details of assets and liabilities and ascertained whether there was any unexplained investment in the year under consideration or not. Since the AO has not called for the full details, such as movable or immovable assets to ascertain unexplained investment in the year under consideration and estimated the income @8% on total cash deposits without examining the source of each deposit, the Ld.Pr.CIT viewed that the assessment made by the AO was erroneous and prejudicial to the interest of the revenue, hence, issued show cause notice calling for explanation of the assessee as to why the assessment should not be revised u/s 263 of the Act. In response to the notice issued u/s 263, the assessee filed detailed explanation which was co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s turnover, the Ld.AR submitted that there was no error in the order passed by the AO which needs revision u/s 263. The Ld.AR submitted that the commission received by the assessee was only Rs. 4,59,400/- which was admitted in the return of income and the income estimated by the AO was Rs. 7,11,519/- more than the gross commission received. The Ld.AR further submitted that what was admitted in the return of income was gross commission received by the assessee on sales, but not the turnover. Therefore, argued that there is no error in the order of the AO which is prejudicial to the interest of the revenue, and the Pr.CIT is not justified in directing the AO to treat the entire cash deposits as income. The Ld.AR further submitted that the case was selected for limited scrutiny and it was not converted into full scrutiny, therefore, argued that the Ld.Pr.CIT has travelled beyond the scope of the scrutiny on this aspect also. Further, the Ld.AR argued that the AO had verified the source of deposits and treated the same as turnover. The Ld.Pr.CIT viewed that the AO has not properly examined the source of cash deposits which was incorrect. The Ld.AR further submitted that inadequate enqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated to the turnover. The cash deposits made in the savings bank was duly verified by the AO. As discussed earlier, this case was selected for limited scrutiny for verification of deposits made in the savings bank account and the case was not converted into full scrutiny. Therefore, the AO is not permitted to travel beyond the scope of the case for which it was selected, unless the case is being converted into full scrutiny with the approval of Chief Commissioner of Income Tax or Commissioner of Income Tax as the case may be, as per the instructions given by the Board to the field functionaries. Calling for the details of movable and immovable properties, unexplained investments and any other information not related to limited scrutiny amounts to travelling beyond the scope of scrutiny for which the case was selected. Thus, the 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 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s withdrawn from the bank account, the cash available as per the books of accounts, the amounts noted in the rough note books and with the remarks, before the Ld.Pr.CIT in the paper book at page No. 78 to 80 during the revision u/s 263..On going through the Annexure A, there was sufficient cash balances available as per the regular books of accounts and there was no negative cash balance. It is a fact that the AO has conducted the survey u/s 133A and recorded the statements during the course of survey and found the discrepancies at the time of survey. All the above discrepancies were found by the AO at the time of survey and because of the discrepancies found during the course of survey, the assessment was reopened u/s 147 to examine the material available at the time of survey. Accordingly, the AO has taken up the case for assessment, called for the books of accounts, examined the books of accounts and completed the assessment. In this case, the entire material was available to the AO and the books of accounts were also made available to the AO. The assessee contended that the entries made in the rough cash book are nothing but the duplication of entries in the regular books of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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