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TMI Blog2023 (10) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry, unless there is an established case of total lack of enquiry. In this regard, we draw strength from the decisions in the cases of Sunbeam Auto Ltd. [ 2009 (9) TMI 633 - DELHI HIGH COURT] and Narain Singla[ 2015 (10) TMI 2371 - ITAT CHANDIGARH] and Chemsworth P Ltd. [ 2020 (9) TMI 875 - KARNATAKA HIGH COURT] all followed in Annu Agrotech. [ 2021 (9) TMI 856 - ITAT JAIPUR] by this bench. Assessee appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter VIA of Rs. 1,51,758/- resulting into total income of Rs. 6,07,675/- for the year under consideration. The AO also noted in his assessment order that the ld. AR of the assessee filed the relevant details/ documents online electronically through e-filing account on dates of hearing as per order sheet which were perused and examined by the AO. Hence, the AO being satisfied with the submissions/ replies of the ld.AR of the assessee completed the assessment vide order dated 07-02-2021 u/s 143(3) of the Act with following narration. ''5. Subject to the above discussion and on the basis of the data made available on record, the total income of the assessee for the year under consideration is computed as under:- Total income as per return of income: Rs. 6,08,680/- Assessed Total Income: Rs. 6,08,680/- 2.2 The ld. PCIT on examination of the details/ records available before him issued show cause notice dated 21-07-2022 to the assessee and thus proposed to invoke revisional proceedings u/s 263 of the Act on the ground that assessment order dated 02-07-2021 passed by the AO is erroneous insofar as it is prejudicial to the interest of Revenue because the AO did not verify ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter before this Bench of ITAT praying therein that the ld. PCIT has erred in invoking the provisions of Section 263 of the Act upon the assessee which deserves to be quashed for which the ld. AR of the assessee filed the detailed written submission as under:- ''The impugned order passed u/s 263 is completely beyond the scope of S. 263 of the Act on various grounds, as discussed herein below. 1. Legal Position on S. 263 Judicial Guideline: Before proceeding, we may submit as regards the judicial guideline, in the light of which, the facts of this case are to be appreciated. 1.1 The pre-requisites to the exercise of jurisdiction by the Commissioner u/s 263, is that the order of the Assessing Officer is established to be erroneous in so far as it is prejudicial to the interest of the Revenue. 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. If any one of them is absent i.e. if the assessment order is not erroneous but it is prejudicial to the Revenue, S. 263 cannot be invoked. This provision cannot be invoked to correct each and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subjected assessment. 2.1 In the present case jurisdiction u/s 263 of the Act is on the ground that the while completing assessment proceedings the AO did not verify/examine the sundry creditors balances appearing in the audited financials of the assessee for the year under consideration. The observation and allegation made in the show cause notice u/s 263 that there is lack of supporting evidences and no proper inquiry was made, is not correct in as much as the AO raised specific queries vide notice u/s 142 dt. 24.02.2021 (PB 4A- 4E Para 8 and Para 12) w.r.t. the issue as under: "8. Kindly furnish confirmations of unsecured loans/creditors/squared up accounts along evidence of identity, genuineness and creditworthiness of the creditors, raised during the year. Kindly furnish the copy of the concern bank account, balance sheet, capital account, and ITR of the concerned persons as evidences. Kindly note that in absence of evidences, those amounts shall be treated your income u/s 68 of the Act 9. Kindly furnish the details of all immovable properties held by you in the following format 10. Please furnish the details purchased and sold of immovable properties during the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of personal loan of Rs. 3,91,028/- on dated 04/09/2018, as evident from his Bank account statement Copy of ITR and Bank Account are enclosed herewith (PB2-4). Thus, there is a direct source of receipt of Rs. 4,00,000/- 3.2 Shri Dinesh Kumar Bairwa- Rs. 17,96,000/- He is government employee at PHED department Tonk and retired during the year under consideration itself, whereupon he received statutory benefits of Rs. 18,93,637/- on dated 16.10.2018. After this only, he transferred Rs.9,96,000/- and Rs.8,00,000/- on 06/11/2018 and 05/02/2019 respectively, as evident from his Bank account statements. Copy of ITR, computation and Bank Account are enclosed herewith (PB 5-9). Thus here also, there is a direct source of receipt of Rs. 17,96,000/- 3.3 Shri Jitendra Singh Solanki- Rs.2,00,000/- He had sufficient bank balances prior to transfer the amount of Rs.2,00,000/- on dated 10/09/2018, as evident from his Bank account statement. Copy of ITR, and Bank Account are enclosed herewith (PB 10-11). Thus here also, there is a direct source of receipt of Rs.2,00,000/- 3.4 Shri Neeraj Gurjar- Rs. 3,00,000/- He had sufficient bank balances prior to transfer the amount of Rs.2,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, we are still trying to obtain a confirmation from Smt. Neetu Khandelwal. There apart, your goodself may kindly direct enquiries from all the creditors. We have already supplied their PAN No. and complete addresses. The department may ascertain all the relevant information with reference to the respective PAN No's. Still however, if some more clarifications are required we shall have to submit the same (Sufficient opportunity is provided)" This implies that the identity, genuineness and creditworthiness of such subjected creditors already stood established but even was accepted by the department in the assessment of preceding year /s. Pertinently, those assessments have not been disturbed so far by the time of the passing of the subjected Assessment Order nor before passing impugned order u/s 263. Hence, those assessments held good and has all the binding value upon the parties. Once, the same creditors (except a few cases) are continuing in the subjected year, there is no reason of finding fault in the approach of the AO. In fact, the AO even could have relied upon this fact alone and no further inquiry is normally felt necessary in such cases, yet in this ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose. 3.2.1 Kindly refer Labhchand Bohra V/s ITO (2008) 8 DTR 44 (Raj.) (DPB 1-4) held that: "Cash credit- burden of proof- identity of the creditors established and the confirmed the credit. This discharged the burden of appellant to prove genuineness. However, capacity of the lender to advancement money to appellant was not a matter which the appellant could be required to establish and that would amount to calling upon him to establish the source of source. Hence addition cannot be sustained." 3.2.2 In Aravalli Trading Co. v/s ITO (2008) 8 DTR 199 (Raj) .) (DPB 12-16) held that: "Once the existence of the creditors is proved and such persons own the credits which are found in the books of the appellant, the appellant's onus stand discharged and the latter is not further required to prove the sources from which the creditors could have acquired the money deposited with him and, therefore the addition u/s 68 cannot be sustained in the absence of anything to establish that the sources of the creditors deposits flew from the appellant itself." Thus, in view of the above binding judicial guideline, the AO was not obliged still to ask the assessee to provide source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22, affirmed." Thus, these facts being admittedly available on record before the AO showing his complete application of mind and a reasonable basis of reaching satisfaction by a quasi- judicial authority. Thus, the AO did all what he was supposed to do under law and took a possible view. 4. Not a case of complete/total lack of inquiry: The CIT himself admits in the Impugned Order that the AO did make enquiry on the issue in hand. The law is well settled that the Assessment order cannot be held to be erroneous simply on the allegation of inadequate enquiry unless there is an established case of total lack of enquiry. Kindly refer CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del)(DPB 18-32 ) (wherein Delhi High Court was considering the aspect, when there is no proper or full verification, and it was held that: "One has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant issues and the assessee has given detailed explanation by a letter in writing and the Assessing Offer allowed the claim being satisfied with the explanation of assessee, the decision of the Assessing Officer cannot be held to be erroneous simply because in his order not make an elaborate discussion in that regard." 8.2 In ANNU AGROTECH ( P) LTD. Vs PCIT,(2021) 214 TTJ (Jp)1118 (DPB 5-11 ) Revision--Erroneous and prejudicial order--Lack of proper enquiry--Case of the assessee was selected for scrutiny under limited scrutiny for enquiry as to whether the funds received in the form of share premium are from disclosed sources--Assessee's Authorised Representative produced books of account including cash book, ledger, subsidiary records and various other details as required, which were duly examined--AO made all the inquiries, sought clarifications on all the relevant aspects to the extent he was supposed looking to the nature of the issue involved, the past accepted history of the case and the evidences and material already available together with the material provided during the assessment proceedings--Entire details of each shareholder i.e., balance sheet, income de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly beyond the scope of S.263 of the Act and therefore, deserves to be dropped. 9.2 SOP u/s 68 not binding and not a valid ground for S 263: The ld. CIT in Para 8 at Page 10 of his Order, has alleged that the CBDT had issued Standard Operating Procedures (SOP dt. 10.07.2018). However, the AO did not follow the guidelines detailed therein which was binding upon AO.However the same is not a valid ground for the reasons that: 1. Firstly, this was never made a ground in the Show Cause Notice issued u/s 263 and therefore, the CIT could not have adopted such reasoning in the impugned order for the first time which was not earlier confronted to the assessee. Reliance is placed on PCIT vs. ShreejiPrints (P.) Ltd. 2021] 130 taxmann.com 294 (SC) Surat-2 (DPB 47-51) held "SLP dismissed against impugned order passed by High Court holding that where assessee-company had received unsecured loans from two different companies and Assessing Officer had made inquires in detail and accepted genuineness of same, such view of Assessing Officer being a plausible view could not be considered erroneous or prejudicial to interest of revenue" The Gujarat High Court affirmed the ITAT Order as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidences produced by the assessee, he accepted the assessee's claim of loan similar view were also expressed by the Hon'ble Delhi High Court in the case of CIT v. Vodafone Essar South Ltd. [2013] 212 taxman 0184. We observe the Pr.CIT has drawn support from newly inserted Explanation 2 below section 263(1) of the Act introduced by Finance Act, 2015 w.e.f. 1-6-2015 for his action. The Explanation 2 inter alia provides that the order passed without making inquiries or verification 'which should have been made' will be deemed to be erroneous insofar as it is prejudicial to the interest of the Revenue. It is on this basis, the assessment order passed by the AO under section 143(3) of the Act has been set aside with a direction to the AO to pass a fresh assessment order. It will be therefore imperative to dwell upon the impact of Explanation 2 for the purposes of section 263 of the Act. XXX. "17 We thus find merit in the plea of the assessee that the Revisional Commissioner is expected show that the view taken by the AO is wholly unsustainable in law before embarking upon exercise of revisionary powers. The revisional powers cannot be exercised for directing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee." 2.Secondly, it is wrong to say that SOP is binding in as much as it is not a case of Instruction issued u/s 119 and the CIT himself stated the same to be a guideline. 3.Thirdly in the alternate, in the said SOP II (PB 88) the ld. CIT did not point out with reference to a particular creditor as to how the AO did not follow the guideline in as much as all the three necessary elements stands satisfied in this case (though the AO could not have been asked for source of source as per the law of the land). More particularly, when almost 70% amount were coming from the preceding year and where credit amounts was received during the year, the assessee had already furnished copies of ITR, bank statement, etc. apart from confirmatory affidavits. 4.Lastly, the SOP do not indicate that non following the guidelines maybe based for invoking revisionary jurisdiction u/s 263. 9.3 With regard to Para 6 Page 8- 10 The ld. CIT has given the instances showing alleged cases of missing information or non-reconciliation of details (kindly refer the following chart), it is submitted as under: 1. Para 6.1 ld. CIT made a comparison between column no.31 (a) form 3CD (PB II 74- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the preceding year has been shown as Rs. 3,50,000/- only. Thus, all the instances cited are surprisingly not material but are rather based on misconception of law and facts and on the part of the ld. CIT himself and does not show any seriousness/ serious mistake or error committed by the AO so as to call for action u/s 263.There is no end for suspicion and it is held that suspicion cannot be a ground for invoking S 263 in the case of Commissioner of Income-tax v. Trustees of Anupam Charitable Trust [1987] 31 Taxman 335 /167 ITR 129 (Raj ) wherein it was held as under: "The error envisaged by section 263 was not one which depended on possibility or the guess work but it should be actually an error either of fact or law. Unless the Commissioner categorically says that there was some income from speculative business which could not qualify for deduction much less exemption under section 11, it cannot be said that there was any error in the order of the ITO relating to the assessment year 1971-72. This error was not relevant to the assessment year 1975-76. Hence, the impugned Order deserves to be quashed.'' 2.4 On the other hand, the ld. CIT-DR relied upon the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olumn No. 31(a) the auditor has reported Nil and in Schedule E the auditor has not segregated that whether there are old loans carried forward or new loans have been received and the Ld. A/R submits that new loans are mentioned in Schedule E. When auditor is certifying in Form 3CD that no new loans are given and then in audit report Schedule E includes new loans then the issue calls for verification and merits PCIT's order u/s 263. Hence, it is clear misleading of facts and law and submission of incomplete and improper facts by the assessee. 04. So, the facts of the case are summarized as: The Ld. PCIT at S.No. 3 of his showcause clearly mentions that on the examination of the responses of the assessee, confirmations were found to be filed without any documentary evidence towards establishing the identity, genuineness and creditworthiness of the loan given and thus did not inspire confidence and at S.No. 5 clearly stated that the fact of not having maintained books of accounts by the assessee as also owned up in the statement recorded on oath, has not been discussed in the assessment order or in the order sheet. In support of genuineness of these loan transactions, supporti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by The ld. CIT DR) 1. In Para 2 & 3 w.r.t. Para 6.1 Page 8 -10 of the Impugned Order: 1.1 The contention of ld. CIT DR are without appreciating the true objection raised by the CIT and the submission made there against in Para 9.3. As a matter of fact, there is no substantive incorrectness so far as the AO is concerned in the context of S. 263 of the Act as wrongly alleged in as much as the mention of S. 269SS of the Act in the Tax audit report shows the reporting of the Cash receipts of loans exceeding Rs. 20,000 and hence, the ld. Tax Auditor finding the fact that there was no loan taken in cash so as to attract S. 269SS mentioned nil. The ld. Tax Auditor has taken a possible and plausible interpretation of the reported nil because there was no amount taken exceeding the limit. At the same the requisite details were available before the AO as admitted by the ld. CIT and CIT DR in Annexure E of the Audit report. Thus, in any case, it can't be said that there was a contradiction of showing nil on one hand and showing details of the Unsecured Loans, on the other. The AO therefore correctly considered these facts as they were before him and did not entertain any sort of conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on various occasions he repeatedly raised queries vide letter dated 24.02.2021 Q.No.8 & 12 (PB 4C) replied vide letter dated 12.03.2021 (PB 5-8) along with confirmatory affidavits of 22 creditors. Further vide letter dated 12.04.2021 (PB 31-32) he again raised specific query only with regards to the cash creditors which was replied and through another Show Cause Notice dated 15.04.2021 (PB 33-34) again asked for the unsecured creditors to which was replied by the assessee vide letter dated 19.04.2021 (PB 35-40) in which copies of the remaining conformity affidavits were also filed. This was followed by another reply dated 29.06.2021 (PB 55-57). Further, the Annexure-E (PB 4) shows 25 names out of which in as many as 20 cases, there is no difference noticed as alleged. Out of the remaining also, two are old cases i.e. Anand Goyal Sister & Jagdamba Tractors. Thus, the material reconciliation was already available. Moreover, in the scrutiny cases like the one where verification of creditors involved it is a usual practice of verifying the confirmation/affidavit with the list of the creditors by the AO manually however there is no practice that he notes down each and every communicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside assessment order mainly on ground that substantial increase in capital investment reflected by assessee in his balance sheet as compared to preceding year was not examined by Assessing Officer - Tribunal set aside revisional order observing that these issues were raised by Assessing Officer in scrutiny assessment and that assessee had given proper explanation, which was taken note of by Assessing Officer while completing assessment under section 143(3) - Whether since Pr. Commissioner did not point out anything specifically as to how assessment order was erroneous, no question of law arose out of impugned order of Tribunal - Held, yes [Paras 10 and 13] [In favour of assessee]" 2.3 In the case of Hill Queen Investment (P.) Ltd. Vs PCIT, Kolkata [2021] 127 taxmann.com 682 (Kol - Trib.) it was held that: "Section 68, read with section 263, of the Income-tax Act, 1961 - Cash credit (Bogus sales) - Assessment year 2015-16 - Assessee company filed its return of income for relevant year - Case was selected for limited scrutiny on ground of mismatch in sales turnover and suspicious sale transaction in shares - Assessment was completed under section 143(3) - Thereafter, Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s account and confirmation of parties before Assessing Officer - It was again furnished in revision proceedings and that nothing was found wrong against those documents by Pr. Commissioner - During scrutiny assessment assessee filed reply to all querries raised by Assessing Officer and produced all relevant evidences and after considering those materials and explanation, Assessing Officer came to a conclusion regarding advances and commission payments in question though it was not mentioned explicitly in assessment order - Whether, on facts, impugned invocation of revision under section 263 was unjustified - Held, yes [Paras 10, 11, 16 and 17] [In favour of assessee]" 2.5 In the case of Meerut Roller Flour Mills (P.) Ltd. Vs CIT [2019] 110 taxmann.com 170 (Allahabad) it was held that: "Section 69A, read with section 263, of the Income-tax Act, 1961 - Unexplained money (Loan) - Assessment year 2007-08 - For relevant year, assessee filed its return declaring certain taxable income - Assessee's case was selected for scrutiny and a notice was issued under section 143(2) to which assessee replied along with documentary evidence - Assessing Officer being satisfied, passed assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal order passed by Commissioner - Held, yes [Para 11] [In favour of assessee]" 2.7 In the case of CIT, Central-III vs. Nirav Modi [2017] 77 taxmann.com 78 (SC) it was held that: "Section 68, read with section 263 of the Income-tax Act, 1961 - Cash credit (Gift) - Assessment years 2007-08 and 2008-09 - During relevant years, assessee received certain amount as gifts from his father and sister who were non-residents in India - Assessing Officer after making detailed enquiries, took a view that assessee had duly proved identity, source and creditworthiness of donors - He thus accepted transaction of gift declared by assessee - Commissioner, however, passed a revisional order under section 263 directing Assessing Officer to enquire into capacity of donors and to decide about genuineness of gifts afresh - Tribunal set aside revisional order - It was noted that Commissioner in his order of revision, did not indicate any doubt in respect of genuineness of evidence produced by assessee - Moreover, satisfaction of Assessing Officer on basis of documents produced was not shown to be erroneous - Whether on facts, it was a case where a view had been taken by Assessing Officer after makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addressed this issue elaborately after referring to number of cases on revisionary powers vested in the CIT under s. 263 of the Act and summed up the fundamental principles emerging from several cases as under-- "(i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 of the Act cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be treated as prejudicial to the interests of the Revenue and if the AO has adopted one of the courses permissible under law or where two views are possible and the AO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order, unless the view taken by the AO is unsustainable under law. (vi) If whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22, it was proposed to invoke revisional proceedings u/s 263 of the Act on the ground that captioned assessment order dated 24.09.2022 passed by the AO is erroneous in so far as prejudicial to the interest of Revenue because the AO did not verify/examine the issues which he ought to have made. The crux of the allegation made are: a) Liability of Rs. 9,81,205/- has been shown under head Sundry Creditors without any corresponding purchases or transaction. The complete details of the same were not furnished. b) Books not maintained by the assessee, this fact has not been discussed or inquired or satisfactorily examined in the assessment proceedings. c) The submission of a chart showing details of unsecured loans lacked satisfactory supporting documentary evidence, indicating a lack of documentary evidence. d) Confirmations of loan filled by creditors u/s 133(6) were without any documentary evidence and do not inspire confidence. The list of 22 creditors with their confirmations lacked necessary details, and the particulars did not match with the details provided in Schedule "E", indicating incomplete or inaccurate creditor details. The appropriate inquiries / verific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by assessee during scrutiny proceedings, is reproduced below: "The assessee filed her e- return of income on 31.10.2019 declaring total income amounting Rs. 608680/- for the assessment year under consideration. The return filed by the assessee was processed u/s 143(1) of the income tax act, 1961. A survey u/s 133A of the income tax act, 1961 was carried out on the business premises of the assessee on 29.10.2018. Subsequently the case of the assessee was manually selected for compulsory scrutiny and a notice u/s 143(2) of the income tax act, 1961 dated 24.09.2020 issued to the assessee. ****** 4. "During the assessment proceeding considering the facts of the cases and details/ explanation filed by the assessee and it's A/R on time to time." The main ground on which impugned order u/s 263 was passed by the ld. PCIT was that the AO did not verify/examine the loan creditors as there is a lack of supporting evidences and no appropriate inquiry was made. However, after a careful perusal of the material placed on record it is noticed that such observations are not legally & factually correct. The AO raised directly relevant and very specific queries on the issue in hand from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - non judicial stamp paper named below is being submitted. ***** 12. Detail given in para no.8" 5.3 Again vide notice dated 15.04.2021 u/s 142(1) copy at (PB 33-34), he asked the Assessee to reply on the issues as under: "2. On perusal of details available on records, it is noticed that sundry creditor amount of Rs. 9,81,205/- and Unsecured Loan of Rs. 1,00,78,817/- were claimed in Balance Sheet of A.Y. 2019-20. In this regard, various opportunities were given to you by issuing notice dated 24.02.2021 u/s 142(1) of the I T Act dated, 12.04.2021 but you have not furnished required details/information." This was duly replied in a great detail vide letter dated 19.04.2022 (Copy at PB 35-40) as under: A. "Cash Creditors of Rs. 1,00,78,817/- The assessee had taken unsecured loans of Rs. 1,00,78,817/-. The entire amount was not taken afresh during the year but, their already existed opening balances in the account of respective creditors of Rs.73,82,817/- and it is only Rs.27,46,000/-, which is taken afresh during the year. For better appreciation refer the following chart. A. "Cash Creditors of Rs. 1,00,78,817/- The assessee had taken unsecured loans of Rs. 1,00,78,817/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing balances from earlier years. Confirmation in almost all the 24 cases has already been filed along with letter dated 13.03.2021 (except in case of one Shri Ashok Jain whose confirmation is also enclosed herewith now with this reply PB-1). Hence a partial compliance had already been made to the statutory notices. 3. As regards the creditworthiness/source from which the 6 creditors had advanced the amount to the assessee has been explained creditor wise as under. 3.1 Shri Ajay Vijayvergiya- Rs. 4,00,000/-. He advanced Rs. 4,00,000/- to the assessee i.e. Rs. 3,00,000/- on dated 06.09.2018 and Rs. 1,00,000/- on dated 11/09/2018. He was in receipt of personal loan of Rs. 3,91,028/- on dated 04/09/2018, as evident from his Bank account statement. Copy of IT and Bank Account are enclosed herewith (PB2-4). Thus, there is a direct source of receipt of Rs. 4,00,000/. 3.2 Shri Dinesh Kumar Bairwa- Rs. 17,96,000/- He is government employee at PHED department Tonk and retired during the year under consideration itself, whereupon he received statutory benefits of Rs. 18,93,637/- on dated 16.10.2018. After this only, he transferred Rs.9,96,000/-and Rs.8,00,000/- on 06.11.2018 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 9,81,205/- Firstly, these are the outstanding balances from 48 parties were the trade creditors, out or which 47 parties the balance totaled to Rs, 6,98,105/, in whose cases the individual balances were less than Rs. 1,00,000/- only. It is only one party Shri Sachin Chourasiya whose credit balance of Rs. 2,83,100/- for which confirmation is attached with the reply al PB-14. In the cases of sundry creditors where the credit balance is below Rs. 1 Lakh only, the AO himself did not require the confirmations of vide his notice dated12.04.2021. Relevant para of the Notice is reproduced: "You are requested to furnish the confirmation of sundry creditors, unsecured loans above Rs. 1 lakh in prescribed performa with enclose IT and Bank Statements and should reach in this office on or before 15.04.2021 at 11.30 AM." C. Thereafter, in the subsequent SC dated 15.04.2021, the assessee was asked about the details required irt Sundry Creditors of Rs. 9,81,205/- and Unsecured Loan of Rs. 1,00,78,817/- and requested to show cause as why the said amount totaling to Rs. 1,10,60,022/- did not treated as unexplained credits. It is also alleged that why best judgment assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT has nowhere alleged nor referred to any material controverting the fact that the 19 cash creditors were old and their closing credit balances were carried forward this year. Needless to say that in the context of S. 68, it is only the amount received during the year, has to be examined and therefore, the AO was not supposed to have looked into the past assessment records. The cash credits of Rs. 73.32 lacs relating to 19 creditors, was already established by completing the assessment of the preceding year, the department dully accepted their identity, creditworthiness of the Sundry Creditors and their genuineness. Finding fault by the ld. PCIT in the Assessment Order for this year in the context of S. 68 would imply that the ld. PCIT expected the AO to make inquiries even in the preceding years where assessment have already been completed. No action u/s 263 was taken in those years but after the expiry of the limitation provided u/s 263(2) the Ld PCIT wanted the AO to review/revise those earlier assessments which he himself was not empowered to do u/s 263 of the Act. Thus, "what cannot be done directly cannot be done indirectly". 2.9 Further, with regard to examination of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove the sources from which the creditors could have acquired the money deposited with him and, therefore the addition u/s 68 cannot be sustained in the absence of anything to establish that the sources of the creditors deposits flew from the appellant itself." Thus, in view of the above binding judicial guideline, the AO was not obliged to ask the Assessee to provide source of source under the pretense of proper examination of the creditworthiness of the creditor and absence of further evidence showing the source of source was not an error. In the present case, the material show that the AO has made all possible enquires acting u/s 68 with reference to all the creditors. There is nothing in record to show that discretion conferred u/s 68 was not properly exercised. Therefore, the finding of the ld. PCIT that appropriate enquires/verifications of loans have not been made by the AO w.r.t cash Creditors is legally & factually incorrect. 2.11 We find that it was not the case of ld. PCIT that there was a complete/total lack of inquiry. He himself admits in the impugned order that the AO did make enquiry on the issues involved. The law is well settled that the assessment order canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ground raised is that the binding Standard Operating Procedure (SOP) dated 10.07.2021, issued by CBDT was not followed. We have carefully gone through the relevant extract copied in the order under challenge and a full copy thereof is available at page PB 88. However, we are not in agreement with the Ld.PCIT. Firstly, such guidelines are not in the nature of binding instructions issued u/s 119 of the Act. But even otherwise on merits, we find that the AO has fulfilled all the requirements made in the guidelines. On the contrary, the SOP speaks of only to examine the credits of a sum found during the year but not the old one. In that view of the matter, not only in six cases but also evidently, the AO made all the inquiries required under law exhaustively and to the extent legally possible. Queries raised were very specific and relevant and were duly replied with supporting evidences. Ld. PCIT did not find any major fault in such supporting evidences. 2.15 By making a reference to the reply dated 12.03.2021 the ld. PCIT observed that the confirmations so filed were in the same font without having details such as mode of payment i.e. in cash or in cheque without date or without re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act contemplates existence of some real genuine errors in the subjected order but not to invent or explore errors. We thus find no substance in such reasoning by the ld. PCIT and in the contention of the ld. CIT DR. 2.17 It will be relevant to mention here that it was a survey case and various documents were impounded, with reference to which the AO made detailed enquiries, on which replies were given by the assessee time to time, as evident from the submissions placed at paper book pages 55 to 59. But the ld. PCIT could not find any fault/error therein. Hence, he is merely justifying his action by citing examples/grounds which are of no significance. In such a scenario, we are of the considered view that the necessary enquiries and examination as reasonably expected have been carried out by the AO in discharge of his quasi-judicial function and he has taken a prudent, judicious and reasonable view in accepting the explanation of the assessee in support of the cash deposits after considering the entire material available on record and the order so passed under s. 143(3) of the Act cannot be held as erroneous insofar as prejudicial to the interest of Revenue. The impugned order p ..... 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