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TMI Blog2024 (9) TMI 860X X X X Extracts X X X X X X X X Extracts X X X X ..... licability is examined by the ld. AO and the assessee has given a detailed reply about the applicability of the provision section 115BBE of the Act, the ld. PCIT cannot impose her view on the view taken by the ld. AO. We get support of our view from the decision of apex court in the case of Malabar Industrial Co. Ltd. [ 2000 (2) TMI 10 - SUPREME COURT ] where in the Court has taken the view that the phrase prejudicial to the interests of the revenue under Section 263 has to be read in conjunction with the expression erroneous order passed by the assessing officer. Every loss of revenue because of an order of the assessing officer cannot be treated as prejudicial to the interests of the revenue and where two views are possible and the Income Tax Officer has taken one view with respect to which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue , unless the view taken by the Income Tax Officer is unsustainable in law. Decided in favour of assessee. - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Sh. P. C. Parwal, CA For the Revenue : Sh. Arvind Kumar, CIT-DR ORDER PER: RATHOD KA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sen from the business income of the year under consideration which is offered to tax and on this issue there are decisions in favour of the assessee. 3. The appellant craves to alter, amend and modify any ground of appeal. 4. Necessary cost be awarded to the assessee. 5. The present appeal challenged the order of ld. PCIT passed u/s 263 of the Act, the fact as culled out from the records is that in this case a Survey action u/s 133A of the Act was carried out on 31.01.2019 at the business premise of the assessee firm M/s Singhal Timber Hardware Store, Prop. Sh. Kirodi Mal Singhal, situated at Alwar Road, Kishangarh Bass, Alwar. The assessee e-filed its return of income u/s 139 on 27.09.2019 vide acknowledgement no. 180210441270919 declaring income of Rs. 22,26,820/-. The case was selected for compulsory scrutiny, being a survey case, as per CBDT guidelines for selection of cases under compulsory scrutiny. 5.1 The proceedings of assessment of income were initiated by issuing of notice u/s 143(2) of the Act on 29-09-2020 through computer systems which was served electronically on the Email of the assessee firm. Thereafter, notice u/s 142(1) dated 10.02.2021 along with questionnaire w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not have any explanation in respect of source of such excess cash found during survey proceedings, the same was surrendered for taxation. Hence, from the statement of the assessee and subsequent surrendered in the assessment proceeding it is clear that the assessee failed explain the source of cash found and the same is is covered under the definition of unexplained money u/s 69A whereon tax would be charged at special rates under the provisions of section 115BBE whereas as per Computation Sheet, tax was charged at Normal Rates by the ld. AO. Ld. PCIT similarly noted that the assessee has purchased excess stock, out of Books of Accounts, using unexplained funds, therefore, the same is covered under the definition of unexplained expenditure u/s 69C whereon tax would be charged at special rates under the provisions of section 115BBE whereas as per Computation Sheet, tax was charged at Normal Rates.. In view of these observation ld. PCIT noted that the order passed u/s 143(3) for the AY 2019-20 dated 20.09.2021 was erroneous and prejudicial to the Revenue. Accordingly, a show cause notice u/s 263, on the issued that remained to be examined/verified while passing assessment order, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2). 3. During the course of assessment proceedings the assessee vide reply dt. 13.09.2021 (PB 23-26) submitted that the stock and cash difference was subject to various discrepancies as discussed in various replies filed u/s 142(1). However, to avoid future litigation and waiver of penalty assessee has disclosed the same. This disclosure pertains to normal business income of the assessee and thus section 115BBE cannot be invoked for which reliance was placed on certain case laws. The AO after considering the submission of assessee taxed the income surrendered during the survey at normal slab rate. 4. The Ld. PCIT(Central), Jaipur issued show cause notice u/s 263 dt. 05.03.2024 stating that excess cash of Rs. 5,07,205/- is covered under the definition of unexplained money u/s 69A and excess stock of Rs. 18,32,947/- is covered under the definition of unexplained investment u/s 69 chargeable to tax u/s 115BBE but AO has charged the tax on normal rate and thus the order passed by AO is erroneous in so far as it is prejudicial to the interest of revenue. In response to the same assessee filed detailed reply on 07.03.2024 (PB 1-15). 5. The Ld. PCIT(Central) by invoking clause (a) clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the time of survey u/s 133A as normal business income after making enquiries into the nature of assessee's income and considering the assessee's replies and the relevant facts on record, it cannot be held that the assessment order has been passed without a proper enquiry and therefore, the Principal CIT was not justified in passing the impugned revisional order u/s 263 on the basis that the surrendered income is assessable as per the provisions of sec. 115BBE. CIT Vs. Embassy Brindavan Developers (2023) 294 Taxman 437 (SC) Notice issued in SLP against High Court s order that where assessee purchased property for development of a Tech Park, however, same was sold for want of funds without any development whatsoever and AO had taken a view that assessee was liable to pay capital gain tax on profit from said transaction, merely because out of two plausible views available, AO had taken one view, jurisdiction u/s 263 could not be exercised. Bhikhabhai Rajabjai Dhameliya Vs. PCIT (2023) 201 ITD 424 (Surat) (Trib.) Where any inquiry, even inadequate was made by AO, that would not give occasion to invoke jurisdiction u/s 263 merely because Commissioner had different opinion u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit/loss account since the said stock of rice was not sold out. In addition to the purchase and the closing stock, the amount of Rs. 70,04,814/- also found credited in the profit and loss account as income from undisclosed sources. The net effect of this double entry accounting treatment is that firstly the unrecorded stock of rice has been brought on the books and now forms part of the recorded stock which can be subsequently sold out and the profit/loss therefrom would be subject to tax as any other normal business transaction. Secondly, the unrecorded investment which has gone in purchase of such unrecorded stock of rice has been recorded in the books of accounts and offered to tax by crediting the said amount in the profit and loss account. Had this investment been made out of known source, there was no necessity for assessee to credit the profit/loss account and offer the same to tax. Accordingly, we do not see any infirmity in assessee s bringing such transaction in its books of accounts and the accounting treatment thereof so as to regularise its books of accounts. In fact, the same provides a credible base for Revenue to bring to tax subsequent profit/loss on sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Jaipur Bench in case of Smt. Rekha Shekhawat Vs. PCIT (2022) 99 ITR (Trib.) 69 1-24 2. Copy of decision of Hon ble ITAT, Chandigarh Bench in case of Surya Hatchery Vs. PCIT (2023) 222 DTR 57 25-53 3. Copy of decision of Hon ble Rajasthan High Court in case of PCIT Vs. Bajargan Traders DBITA No.258/2017 order dt. 12.09.2017 54-58 4. Copy of decision of Hon ble ITAT, Jaipur Bench in case of Bajargan Traders Vs. ACIT ITA No.137/JP/2017 order dt. 17.03.2017 59-71 5. Copy of decision of Hon ble ITAT, Jaipur Bench in case of Sanjay Gupta Vs. ACIT ITA No.292/JP/2023 order dt. 17.07.2023 72-78 9. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the issue which the ld. PCIT is raising has already been verified by the ld. AO and the assessee submitted the reply in the assessment proceeding vide letter dated 13.09.2021 (APB-23-24) so when the issue of stock and cash has already been subjected to verification and the same is accepted considering the reply of the assessee. Ld PCIT cannot enforce her view when the ld. AO has applied the mind and has taken a plausible view on the matter. 10. Per contra, the ld. DR relied upon the order of ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional income so disclosed by the assessee the ld. AO has called for the explanation of the assessee about the applicability of the section 115BBE of the Act and the assessee has replied to that aspect of the matter vide letter dated 13.09.2021 and therefore, the ld. AO has considered the explanation of the assessee about the chargeability of the income offered by the assessee and has taken a plausible view on the matter. Thus, based on these set of facts when the assessment has been completed after conducting all the enquiries and verification and ld. AO has taken the plausible view on the matter the ld. PCIT cannot quashed that assessment order u/s. 263 of the Act. As it is transpired from the record of the proceedings, in the present case, no presumption can be drawn that the Assessing Officer had not applied his mind to the aspects for verification of income so disclosed by the assessee. Be that as it may, when the issue of applicability is examined by the ld. AO and the assessee has given a detailed reply about the applicability of the provision section 115BBE of the Act, the ld. PCIT cannot impose her view on the view taken by the ld. AO. We get support of our view from the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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