9911796707
TMI Blog2023 (3) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation so furnished by the assessee. Amounts received by the assessee, pursuant to comprise and settlement as per various Courts orders , PCIT has accepted the fact that these Court orders are on record and the compensation amount as so stated therein and the parties to the compensation are thus not disputed. However, for the reason that the exact date of receipt of compensation is not discernable, the explanation of the assessee has been negated. We find that the date of the Court s order are clearly discernable from the records and one of the such order is dated 24/12/2015 and it can reasonably be presumed that the amount has been received by the assessee within a reasonable period pursuant to such Court order during the financial year 2015-16 in absence of any evidence that such Court order has not been honoured and complied with by the other party and which is not the case of the Revenue either. Regarding other receipts on maturity of insurance policies, sale of land etc, the factum of these transactions and necessary evidence on record has not been disputed by the ld. PCIT - Only reason why the ld. PCIT has not accepted the explanation of the assessee is that it is again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 by Ld. Principal CIT and order passed under section 263 is illegal bad in law and against the facts of the case. 3. That the Ld. Principal CIT has erred in passing the order u/s. 263 as he could not have passed the order u/s. 263, being taken the case for limited scrutiny under CASS and, therefore, the Ld. Principal CIT has exceeded his jurisdiction issuing the notice u/s. 263 and passing the order 263(1). 4. That the Ld. Principal CIT has erred in invoking the provisions of section 263 of the income tax act on the ground that the assessment order passed by the Assessing Officer for AY 2017-18 in not only prejudicial to the interest of Revenue but it is also erroneous on account of cash deposit in demonetization amounting to Rs. 24,00,000/-. Although deposits were duly explained before the Ld. AO. 5. That the proceeding and the order passed by the Ld. Principal CIT u/s. 263 is perverse as it based on general observation and not specific to the facts of the case. 6. That the Ld. Principal CIT ignored the fact that the Ld. AO during assessment proceedings had thoroughly examined the assessment record of the year in question and earlier two years i.e. 2015-16 and 2016-17 als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(2) dt. 21/09/2018 wherein it was mentioned that the case of the assessee has been selected for limited scrutiny to examine cash deposited during the demonetization period. Thereafter, another notice under section 142(1) dt. 04/01/2019 was issued by the AO wherein the assessee was asked to furnish the source of cash deposits made during the demonetization period alongwith documentary evidence. Further the assessee was also required to furnish the bank statement for the relevant period and all the bank accounts maintained by the assessee and the family members. In response, the assessee vide its submission dt. 10/01/2019 submitted that the assessee was doing business of Commission Agent which was earlier carried on by her husband who has since expired and was having an opening balance of cash in hand amounting to Rs. 24,34,428/- and the cash has been deposited out of the said cash in hand. It was further submitted that the assessee has sold her share in agriculture land and out of the sale proceeds, an amount of Rs. 4,00,000/- has been deposited in her bank account. It was submitted that after taking into consideration, the submission of the assessee and examining the same, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duly reflected in the return of income filed for A.Y. 2016-17 on 12/08/2016 well before the date of demonetization i.e 08/11/2016 and given that there is no evidence on record to prove that the aforesaid cash has been utilized by the assessee anywhere else. It is clear that for A.Y. 2017-18 there is no income which has been under assessed by the AO. As such there is no question of any prejudice cost to the Revenue. It was submitted that the contents of the show cause notice as well as the findings of the Ld. PCIT are relating to cash generated during the previous A.Y. 2015-16 and 2016-17 and not for the year under consideration. It was submitted that even though the AO was not required to examine the cash in hand as on the beginning of the financial year which was duly reflected in the returned income, still AO has gone ahead and verify the same. However the same cannot be a basis for issuing show cause under section 263 of the Act and if at all, the Revenue has any objection regarding the availability of cash at the beginning of the financial year, then the matter may be looked at for the previous year and not for the year under consideration. 4.3. It was further submitted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to November, 2016 till the time of deposit. This argument is not acceptable as it is against the human probability that such large amount of cash was kept in the hands of the assessee. The safety of the money is much more secure in the bank account than in the hands of the assessee. Further no evidence could be furnish by the assessee which substantiates her claimed keeping money at home. Similarly, the argument of the assessee that she kept with her all the cash sale consideration of land sold at village Sanour for Rs. 2,70,000/- and Rs. 3,00,000/- till the demonetization period is not also not plausible. (v) The assessee also has not explained the source of addition of Rs. 1,08,862/- to capital account on account of profit in sale of shares which was also required to be verified by the AO. 4.1 Therefore, the increase in cash balance from Rs. 4,76,831/- as on 31.03.2014 to Rs. 24,34,429/- as on 31.03.2016 remained unexplained being sufficient time elapsed since the receipt/withdrawal of amounts and deposit of the said amounts in the bank accounts and required to verify as to the reasons for keeping such huge amounts in cash for such a long period in spite of the assessee havin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year and out of which, the deposits have been made in her bank account, the ld. PCIT has exercised his jurisdiction u/s. 263 of the Act and we are of the considered view that the same is clearly subject matter of examination and emerging out of the assessment order and there is no infirmity in initiation of proceedings and exercise of jurisdiction u/s. 263 of the Act. Where the said contention of the ld. AR is accepted, then, it will lead to a situation where the assessees shall be at liberty to plead the source of deposits in their bank account out of opening cash-in-hand and irrespective of merit of such explanation and whether substantiated or not, the said explanation has to be accepted by the AO on face value and the ld. PCIT would be without any recourse and cannot take any action u/s. 263 of the Act which he is otherwise duty bound to exercise and in our considered view, the same cannot be allowed as we believe that the same would be putting restrictions on the powers and duties of the ld. PCIT and something which is extraneous to the provisions of section 263 of the Act. 7. Now, coming to the explanation of the assessee regarding availability of opening cash-in-hand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to comprise and settlement as per various Courts orders, the ld. PCIT has accepted the fact that these Court orders are on record and the compensation amount as so stated therein and the parties to the compensation are thus not disputed. However, for the reason that the exact date of receipt of compensation is not discernable, the explanation of the assessee has been negated. We find that the date of the Court's order are clearly discernable from the records and one of the such order is dated 24/12/2015 and it can reasonably be presumed that the amount has been received by the assessee within a reasonable period pursuant to such Court order during the financial year 2015-16 in absence of any evidence that such Court order has not been honoured and complied with by the other party and which is not the case of the Revenue either. 9. Further, regarding other receipts on maturity of insurance policies, sale of land etc, the factum of these transactions and necessary evidence on record has not been disputed by the ld. PCIT. Only reason why the ld. PCIT has not accepted the explanation of the assessee is that it is against human probability that the assessee would be keeping hug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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