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TMI Blog2023 (10) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... fice. Therefore, we note that assessing officer has examined the issue raised by the ld PCIT in his revision order therefore order passed by AO is neither erroneous nor prejudicial to the interest of revenue. According to us, the present order of AO passed u/s 143(3) cannot be termed as erroneous since enquiry was, in fact, carried out by him on the issue on which the PCIT has found fault with and has taken a plausible view. We note that the AO has made enquiry during the assessment proceedings about cash issued to Raremat Mall Management office and utilization of the such cash. Thus we note that the AO enquired during assessment proceedings and the assessee had filed details before him. So we find that the AO s action cannot be termed erroneous Since not only enquiry was carried out by the AO on the issue under consideration and based on the evidence gathered he has taken a plausible view, which at any rate cannot be called as an un-sustainable view. The Hon ble Supreme Court in the case of Malabar Industries [ 2000 (2) TMI 10 - SUPREME COURT] held that this phrase i.e. prejudicial to the interest of the revenue has to be read in conjunction with an erroneous or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts, as discernible from the orders of lower authorities are that assessee-company (M/s. Raremat Mall Management Company Pvt. Ltd.) had filed its return of income for assessment year (AY) 2017-18, on 07.11.2017, declaring returned loss of Rs. 2,73,097/-. The assessee`s case was selected for complete scrutiny and the scrutiny assessment under section 143(3) of the Act, was completed on 25/12/2019, determining total assessed income of Rs. 34,91,960/-, by making addition of Rs. 37,65,052/-, on account disallowance u/s 40(a)(ia) of the Act. Thereafter, a rectification order, under section 154 r.w.s. 143(3) of the Act dated 30/09/2020 was passed determining income at Rs Nil. (i.e. losses of Rs. 2,45,66,126/-, determined of earlier years i.e. A.Y. 2015-16 and A.Y. 2016-17, not included in the assessment order, passed on 25/12/2019. 3. Later on, Learned Commissioner of Income Tax, (in brief ld PCIT ) has exercised his jurisdiction under section 263 of the Income tax Act, 1961. Ongoing through the assessment records, it was observed by ld PCIT that assessee- company has made cash payment to Rare Mat Mall Management Office, an amount of Rs. 3,84,00,000/- in 87 transactions and the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to non-payment of maintenance charges by the owners of vacant shops and even occupied shops for a long period of time, the company was incurring losses and eventually had to shut down its operations with accumulated losses. The funds already collected in earlier financial years, on which tax was already paid, were being used to meet the expenses of the F.Y. 2016-17 and onwards. The funds sent to the Mall Management Office was debited to Raremat Mall Management Office Account. And from there the office was supposed to incur the expenses. Rs. 3,84,00,000 were transferred from main cash book to Raremat Mall Management Office Account for that purpose only. It is Cash Account at Mall Administration Office. It was to be used from there for the payment of expenses. The copy of the ledger was submitted to the Assessing officer and the same explanation was offered. The total balance of Rs. 3,84,00,000 was shown as Part of Current Assets in Balance Sheet, the copy of the which is enclosed here with for your ready reference. Thus the amount was not expended but was shown as Current Asset in Balance Sheet of F.Y.2016-17. The A.O had duly enquired about it, that being the reason for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of incurring expenses. It was also submitted that total balance of Rs. 3,84,00,000/- was shown as part of current assets in balance sheet and the amount was not expended but was shown as current asset in Balance-Sheet of F.Y.2016-17. From balance-sheet, current assets are shown at Rs. 2,35,05,982/- is on account of short term loans and advance , therefore, ld PCIT note that the submission of the assessee is not correct. 6. The ld PCIT further observed that the assessee has also furnished copy of ledger account of Raremat Mall Management Office in the books of Ramat Mall Management C. Pvt. Ltd., which shows that the said amount of cash of Rs. 3,84,00,000/- received from the cash book has been utilized to make cash payments vide vouchers No.1 to 87 from 01.01.2017 to 26.03.2017 and no explanation has been offered regarding the nature and purpose of such cash payments and how the cash received by the Raremat Mall Management office has been utilized. No inquiry or verification has been made by the AO regarding the manner in which cash of Rs. 3,84,00,000/- has been utilized by the assessee during the period 01.01.2017 to 26.03.2017 and whether the cash payments are in violation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther stated that it is own money of the assessee-company, which has been transferred to his own office, called, Raremat Mall Management office. The ld Counsel also stated that an explanation has been offered by the assessee during the assessment stage, regarding the nature and purpose of such cash payments and how the cash received by the Raremat Mall Management office has been utilized. Therefore, ld Counsel contended that order passed by the assessing officer is neither erroneous nor prejudicial to the interest of revenue, hence order passed by ld PCIT may be quashed. 9. On the other hand, the Learned Departmental Representative (ld.DR) relied on the findings of the ld. PCIT and stated that in assessee`s case there is violation of provisions of section 269T of the Act, therefore order passed by ld PCIT may be upheld. 10. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. PCIT and other material brought on record. Before us, Ld. Counsel for the assessee submitted following documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise details of cash sales for the financial year 2015-16 and month-wise details of cash sales for the financial year 2016-17 relevant to assessment year 2017-18. The assessing officer also asked the assessee to submit cash book for the assessment year 2017-18. The assessing officer also asked the assessee to submit Sales Tax return and VAT return and other returns filed under the Income Tax Act. In response to this, the assessee has submitted its reply, which is placed in the paper book at page nos.17 to 23. We note that with help of these documents and details, the assessing officer has examined the cash received by the Raremat Mall Management office (assessee`s office) from the assessee and summery of cash which have been utilized by the Raremat Mall Management office. Therefore, we note that assessing officer has examined the issue raised by the ld PCIT in his revision order therefore order passed by the assessing officer is neither erroneous nor prejudicial to the interest of revenue. 13. According to us, the present order of AO passed u/s 143(3) dated 25.12.2019 of the Act cannot be termed as erroneous since enquiry was, in fact, carried out by him on the issue on which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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