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TMI Blog2023 (6) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee that the AO has issued notice u/s. 142(1) for investigating the matter which were subject matter of issues selected for scrutiny under CASS and from the submissions by the assessee, the AO was satisfied. When the AO has formed one possible view, then the ld. Pr. CIT cannot exercise jurisdiction u/s. 263 of the Act. The order passed by the AO is not erroneous prejudicial to the interests of the revenue. CIT is not correct in observing that the A.O. did not conduct proper enquiry on the issues before completion of assessment. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... violating the principles of natural justice. 5. That the PCIT has erred in the facts and circumstances of the case by passing the impugned order without following the judicial precedence on this matter. That the appellant craves leave to add to and or to alter, amend, rescind, modify the grounds herein above or produce further documents before or at the time of hearing this appeal." 5. The assessee is a Co-operative Society registered under Karnataka Co-operative Society Act and carrying on activity of:- (a) processing and marketing of agricultural produce grown by its members (b) providing credit facilities to its members (c) the purchase and selling of agricultural implements, seeds or other articles intended for agriculture to its members (d) running a kiranna shop (super market) (e) running a rice mill (f) hiring of vans (g) running a boarding places (h) trading in areca nut grown by its members (i) trading in areca nut in the open market from non-members (j) manufacturing and selling of scented sweet supari 6. The assessee for A.Y. 2017-18 filed its original return of income on 31.10.2017 declaring income of Rs.73,84,220/- after claiming deduction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfy the test of genuineness. He also noted that the SBNs received after demonetisaton were not legal tender and do not satisfy the test of genuineness and were therefore, unexplained credits in terms of section 68 The ld. Pr.CIT passed the impugned order u/s 263 was passed on 29.03.2022 setting aside the order passed u/s 143(3) with the direction to the AO to make fresh assessment after conducting necessary inquiries in accordance with law and CBDT guidelines. 11. Before us, the ld. AR has filed written submissions and submitted that the assessee filed its reply on 14.03.2022 providing the details of cash deposits by the third parties along with the ledger of parties which is at page 143-186 of the paper book. The assessee also furnished additional reply via email on 28.03.2022 challenging why the provision of section 68 would not attract to the cash deposited during the demonetisation period which is at page 187-198 of the paper book. 12. The ld. AR further submitted that the cash deposits in SBNs were made by the trade debtors in the bank accounts of the assessee. It was not accepted by the assessee directly. As per Notification dated 8.11.2016[ F No. 10/03/2016-Cy.1] and RB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irsi AACAT0251D - 28,770/- 8 Marbasil Enterprises Not Available - 12,895/- 9 Rising Sun Agencies Anchatageri AALFR4574M 25,00,000/- - 10 Siddhivinayaka Enterprises ADRPT4137D - 97,000/- 11 Uttam Sales AWRPV0227B - 1,67,200/- 16. The ld. AR submitted that after considering the above reply, the AO called for the date-wise details of cash deposited by the aforesaid parties in SBNs during demonetisation period in the Axis Bank Account, Sirsi Branch, which was duly furnished vide email on 28.12.2019 (pg. 124-128 of PB) and the same comprises of details of deposit of Rs.3,67,24,820/- credited in the Axis Bank, Sirsi Branch and Rs.75,00,000/- in Axis Bank, Hubli Branch. He submitted that it is evident from the same that the amount of deposit during the demonetisation period has been duly examined, enquired and verified by the AO. Also, details of deposit by the parties at page 125-128 of the PB matched with the bank statement at page 23-74 of the PB, and it is evident that the cash has been deposited by the trade debtors in the bank account of the assessee. He submitted few transactions as examples in this regard which are reproduced as under:- Axis Bank, Sirsi Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xmann.com 22 (Karnataka) - The Peerless General Finance & Investment Company Limited vs DCIT (I.T.A. No. 892/KOL/2019) 19. In the present case also, it is reiterated that proper enquiries were made by the Ld AO during the course of assessment with respect to all the grounds raised by the Ld.Pr.CIT. Detailed Submissions were filed during assessment stage and the same were carefully looked into and properly examined by the learned AO and after due application of mind, the learned AO took a possible view and allowed the claim of the assessee. Hence, the assessment order cannot be said to be erroneous or prejudicial to the interest of the revenue. 20. He submitted that as held in Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. Commissioner of Income-tax (243 ITR 83) and CIT v. Max India Ltd [2007] 295 ITR 0282-SC, in order to invoke the revisionary provisions u/s 263 of the Act, the Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. 21. An incorrect assumption of facts, an incorrect application of law will satisfy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information relating to cash deposit during demonetisation is as per said checklist issued by the CBDT. A further enquiry was made by AO as per the submission of the assessee furnished on 28.12.2019. Thus the AO has verified the details of cash deposit during the demonetisation period as per the instructions and SOPs issued by the CBDT and then only the AO has taken plausible view that the cash deposits are genuine and not required to be added to the income of the assessee. 25. Next, the ld. AR submitted that the provision of section 68 cannot be applied in the case of the assessee being the receipt from the Trade Debtors. The sales made to the trade debtors during the year is already recorded in the books of accounts of the assessee and offered to tax as revenue from operations. All the details like sales details, Trade Debtors Details, bank statement and statement showing date wise receipts from the said party to show that cash receipts was from the debtors were duly furnished before the AO. Thereafter, after examining the entire details and documents, the AO was satisfied that the receipts in bank account are out of sales already recorded as income of the assessee and receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ails in which it was deposited, and date wise deposit details along with the name of parties. Moreover PAN of the Trade Debtors depositing cash in a bank account has been mentioned by the assessee in its submission. Hence the Ld.AO has duly verified the transaction and found it to be genuine. Thus the question of invoking provision of section 68 in case of receipts from debtors through deposits made by them directly in the bank as per RBI and GOI guidelines cannot be said to be unexplained cash credit. Reliance was placed on the following decisions of Bangalore Tribunal wherein the Hon'ble Tribunal has quashed the proceedings u/s 263 of the Act on the addition u/s 68 of the Act:- - Shree Hanuman Credit Souhard Sahakari Limited vs PCIT, Hubli [ITA No. 29/Bang/2023] - Om Sai Coop Credit Souharda Sahakari Niyamit vs PCIT, Hubli [ITA No. 454/Bang/2022] 30. Thus, the ld. AR submitted that the impugned order passed by the ld. Pr.CIT setting aside the original assessment order for fresh assessment is clearly not as per law and liable to be quashed. 31. On the other hand, the ld. DR relied on the order of the ld. Pr.CIT and submitted that the assessment order is rightly set aside. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g demonetisation period and the assessee has also submitted reply on different dates which is placed at page 86 to 123 of PB. Firstly, the AO is an investigation officer and thereafter he is an adjudicating officer. We note from the paper books filed by the assessee that the AO has issued notice u/s. 142(1) for investigating the matter which were subject matter of issues selected for scrutiny under CASS and from the submissions by the assessee, the AO was satisfied. When the AO has formed one possible view, then the ld. Pr. CIT cannot exercise jurisdiction u/s. 263 of the Act. We find substance in the submissions of the ld. AR that in respect of the impugned issue it cannot be said that the AO has not applied his mind while passing the assessment order and it is not necessary to give a detailed reason in the assessment order in respect of each and every questionnaires issued u/s 142(1) for the completion of assessment. In view of the above, the order passed by the AO is not erroneous & prejudicial to the interests of the revenue. On going through the notice issued by the AO u/s 142(1) and reply submitted by the assessee there is no lack of enquiry. On perusal of the show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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