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TMI Blog2022 (12) TMI 1120X X X X Extracts X X X X X X X X Extracts X X X X ..... at when Ld. AO had examined the issue of deposit of cash and accepted it to be business income then Ld. PCIT was in error in setting aside the assessment order on the ground that one part of the income was assessed as per P L account and the other part of income was assessed as per the provisions of section 44AD of the Act, because as such there was no loss of revenue and rather the P L Account profit percentage being lower, the revenue only gained. That being so, the assessment order cannot be considered to be one prejudicial to the interest of revenue and accordingly invoking of the jurisdiction u/s 263 by Ld. PCIT is not justified. The ground raised are decided in favour of the appellant. The appeal of assessee is allowed. - ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cash deposited of Rs. 25,65,812/-. The ld Revisional Authority was of the view that the assessee had already worked out the profit as per audited profit and loss account at Rs. 18,46,180/- and mentioned in the return that the entire expenses have been taken into account while arriving at the profit of Rs. 1,86,430/-. Therefore, surrendering a profit @8% on the balance unexplained cash deposited at Rs. 25,65,812/- by applying provisions of section 44AD of the Act was not permissible under the law for the reason that assessee could not exercise two different option for business receipts of the year under consideration. Thus, the ld Revisional Authority was of the view that the entire cash deposit in bank deserves to be treated as unexplai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit was considered to be unexplained cash deposit liable to be added u/s 68 of the Act and the failure of the ld AO to do so and to accept the same as additional income being 8% of Rs. 205550/- was not sustainable and accordingly, the ld AO was directed to enhance the income of the assessee by an amount of Rs. 23,60,547/-, that was arrived by reducing the disputed deposit of Rs. 2565812/- less addition made at Rs. 2,05,550/-. 6. The assessee is in appeal against the order u/s263 of the Act, raising following grounds of appeal:- 1. That the learned Principal Commissioner of Income. Tax erred in law to issue direction to enhance the income of the assessee by amount of Rs. 23,60,547.00 (Total cash Deposit of Rs. 25,65,812.00 (-) Additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied than also addition would have been Rs. 1,41,579/- which is lower than what is added by Ld. AO and thus it was submitted the assessment order was not prejudicial to the interest of the revenue. 9. On the other hand, Ld. DR submitted that the Ld. PCIT has rightly invoked the revisional powers as Ld. AO had fallen in error to give benefit of Section 44AD of the Act and also accepting some part of the income by way of accounting in P L Accounts. 10. Giving thoughtful consideration to the matter on record, it can be appreciated from the paper book filed by the appellant that the reasons for notice u/s 148 of the Act available at page no. 48 of the paper book mention that Ld. AO had concluded that the account with PNB, Ambedkar Roa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SB A/c Punjab National Bank belong to business run by the assessee in his HUF capacity and HUF return was regularly filed since A.Y. 2009-10 in addition to business run in the individual capacity and Tax Audited return was already filed in time and that opening the bank account in the individual Name is not the conclusive evidence that transaction recorded belong to individual case only. 14. Considering the aforesaid submission and relying the same, Ld. AO has considered surrendered income of Rs. 2,05,551/-. The assessment order reflects that in para no. 2 Ld. AO had taken into account the peak credit balance factor also. Thus, there appears to be an erroneous exercise of jurisdiction by Ld. Revisional Authority as the issue was thorough ..... X X X X Extracts X X X X X X X X Extracts X X X X
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