Sh. Vijay Dhingra, New Delhi V. CIT-X, New Delhi

ITA 1148/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5247 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 31-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Assessee Lawyers: AMIT GOEL
• Keywords: Income from undisclosed sources; Peak credit; Deemed to accrue or arise in india; Assessment record
• Section: 143(3); 263

Judgement Text

ITA NO. 1148/DEL/2014 ASSESSMENT Y EAR: 2009 - 10 PAGE 1 OF 12 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D BENCH NEW DELHI) BEFORE SHRI G.D. AGRAWAL, PRESIDENT & SHRI AMIT SHUKLA , JUDICIAL MEMB E R I N ITA NO. 1 148 /DEL/201 4 ASSESSMENT YEAR: 20 0 9 - 1 0 VIJAY DHINGRA 5456, CHOWK NARAIN, G.B ROAD, NEW DELHI VS. C OMMISSIONER OF I NCOME T AX - X NEW DELHI (APPLICANT) (RESPONDENT) (PAN: A AFPD8249P ) ASSESSEE BY: SHRI AMIT GOEL, ADVOCATE REVENUE BY: SHRI VIJAY VERMA, CIT DR DATE OF HEARING 0 3 / 0 8 /201 7 DATE OF PRONOUNCEMENT 1 1 / 0 8 /201 7 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER : THE AFORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE AGAINST IMPUGNED O RDER DATED 04.2 .201 4 , PASSED BY THE L D. CIT - X, NEW DELHI UNDER REVISIONARY JURISDICTION U/S 263 FOR THE A.Y. 20 0 9 - 1 0 . IN THE GROUNDS OF APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX - X, NEW DELHI (HEREINAFTER REFERRED TO AS THE LD. CIT) ERRED IN INITIATING PROCEEDINGS UNDER SECTION 263 OF INCOME TAX ACT, 1961 (ACT) BY WRONGLY ASSUMING JURISDICTION UN DER SECTION 263 OF THE ACT AND HENCE, THE ORDER PASSED BY THE LD. CIT UNDER SECTION 263 OF ACT IS WITHOUT JURISDICTION, BAD IN LAW AND VOID AB - INITIO. PAGE 2 OF 12 2. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT ERRED IN SETTING ASIDE THE ASSESSMENT A ND HAS ALSO ERRED IN HOLDING THAT THE ORIGINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF ACT WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE DIRECTIONS I SSUED BY THE LD. CIT UNDER SECTION 263 OF ACT ARE ERRONEOUS, VAGUE, AMBIGUOUS AND UNTENABLE AND, THEREFORE THE ORDER U/S 263 OF THE ACT PASSED BY THE LD. CIT IS LIABLE TO BE QUASHED. 4. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT ERRED I N INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT, AND THEREBY DIRECTING THE ASSESSING OFFICER TO RE - EXAMINE THE ISSUE OF DEPOSITS IN BANK. THE APPELLANT CRAVES LEAVE TO ADD ONE OR MORE GROUND OF APPEAL OR TO ALTER / MODIFY THE EXISTING GROUND BEFORE OR AT THE TIME OF HEARING OF APPEAL. THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT AN AIR INFORMATION WAS RECEIVED TO THE ASSESSING OFFICER THAT THE ASSESSEE HAS DEPOSITED CASH AMOUNTING TO RS. 58, 91,425/ - ON DIFFERENT DATES IN BANK ACCOUNTS OF HDFC BANK AND PUNJAB NATIONAL BANK. ON THE BASIS OF SUCH AIR INFORMATION THE ASSESSEE S CASE WAS SELECTED FOR SCRUTINY . THE ASSESSING OFFICER ON THE PERUSAL OF THE BANK STATEMENT NOTED THAT THE ASSESSEE HAS DEPOSITED CASH AMOUNT ON VARIOUS DATES AND HAD ISSUED CHEQUES ; AND ACCORDINGLY , HE REQUIRED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS. IN RESPONSE TO THE S HOW CAUSE NOTICE TO EXPLAIN THE SOURCE OF DEPOSITS , THE ASSESSEE STATED THAT THE CASH DEPOSITS IN THE SAID ACCOUNT S WERE MADE FROM DAY TO DAY CASH FLOW OF HIS PROPRIETARY CONCERN, M/S. VIJAY CLOTH HOUSE WHICH HAD TURNOVER OF RS. 24,17,751/ - . S INCE THERE WA S A LOSS FROM PAGE 3 OF 12 THE SAID BUSINESS, THE REFORE, ASSESSEE HAD NOT DISCLOSED THE SAID INCOME/LOSS IN THE RETURN OF INCOME . HOWEVER, BEFORE THE AO, ASSESSEE SURRENDERED THE TURNOVER OF RS. 24,17,751/ - OF THE SAID FIRM AND OFFERED FOR TAXATION U/S 44AF OF THE I.T. ACT . THE ASSESSING OFFICER ACCEPTING THE ASSESSEE S OFFER TO BE TAXED U/S 44AF , COMPUTED THE INCOME @ 5% OF RS. 24,17,751/ - WHICH WORKED OUT TO RS. 1,20,887/ - AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. IN THIS MANNER , THE ASSESSING OFFICER HAD ACCE PTED THE ASSESSEE S CONTENTION THAT CASH DEPOSITS IN HIS BANK ACCOUNTS WERE FROM THE BUSINESS AND HIS INCOME FROM THE SAID BUSINESS WAS ACCEPTED AT RS. 1,20,887/ - . ACCORDINGLY, THE ASSESSMENT WAS COMPLETED VIDE ORDER DATED 19.12.2012 AT INCOME OF RS. 4,53, 610/ - WHICH INCLUDED RETURN OF INCOME OF RS. 3,32,720/ - . 3. SUBSEQUENTLY, THE LEARNED CIT IN HIS REVISIONARY JURISDICTION U/S 263, ISSUED NOTICE DATED 26.12.2013 TO THE ASSESSEE. IN HIS NOTICED HE FIRSTLY, POINTED OUT THAT THE CASH DEPOSIT ED IN PUNJAB NATIO NAL BANK AND HDFC BANK AGGREGATED TO RS. 66,98,405/ - AND NOT RS. 58,91,425/ - ; AND SECOND LY, THE PROVISION OF SECTION 44 AF WILL NOT BE APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE CASH FLOW OF M/S. VIJAY CLOTH HOUSE EXCEEDED THE LIMIT OF RS. 4 0 LA KHS . THUS, HE CAME TO PRIMA FACIE CONCLUSION THAT THE ASSESSING OFFICER HAS FAILED TO MAKE ENQUIRY REGARDING CASH DEPOSITS OF RS. 66,98,405/ - . 4 . IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT HE WAS CARRYING ON BUSINESS IN THE NAME AND STYLE OF M/S. VIJAY CLOTH HOUSE AND FROM SUCH BUSINESS , DAY TO DAY CASH GENERATED WAS DEPOSITED IN THE PUNJAB AND NATIONAL BANK AND HDFC BANK PAGE 4 OF 12 ACCOUNTS . IN SUPPORT, IT WAS CATEGORICALLY SUBMITTED THAT THE ASSESSEE HAD FILED C OPY OF BALANCE SHEET, PROFIT AND LOSS ACCO U NT AND QUANTITATIVE DETAILS OF THE SAID BUSINESS BEFORE THE ASSESSING OFFICER AND IT WAS DEMONSTRATED THAT THE TOTAL TURNOVER OF SAID BUSINESS WAS ONLY RS. 24,17,751/ - ; AND SINCE THERE WAS A LOSS OF RS. 6 , 056/ - FROM THE SAID BUSINESS, THEREFORE, IT WAS NOT SHOWN IN THE RETURN OF INCOME. ALL THE RELEVANT BOOKS OF ACCOUNTS AND DETAILS REGARDING THE SAID BUSINESS WERE FILED BEFORE THE ASSESSING OFFICER FOR SCRUTINY AND VERIFICATION. IT WAS ALSO SHOWN THAT THE CASH IN THE ABOVE MENTIONED BA NK ACCOUNT HAVE BEEN DEPOSITED OUT OF THE DAY TODAY CASH FLOW OF THE SAID FIRM. REGARDING AGGREGATE CASH DEPOSIT OF RS. 66,98,505/ - , THE ASSESSEE ADMITTED THAT THE ACTUAL FIGURE OF AGGREGATE DEPOSIT WAS RS. 66,98,505/ - ONLY AND ASSESSING OFFICER HAS WRONGL Y TAKEN THE FIGURE AT RS. 58,91,425/ - WHICH WAS TAKEN BY HIM AS PER THE AIR INFORMATION AND THIS FACT WAS DULY BROUGHT TO THE NOTICE OF AO . 5 . HOWEVER T HE LD. CIT HELD THAT , FIRSTLY, THE PROVISION OF 44 AF WILL NOT APPLICABLE IN THE CASE OF THE ASSESSEE, BECAUSE T HE TURNOVER WAS ABOVE RS. 40 LAKHS ; SECONDLY, THE ASSESSEE HAD NOT SHOWN BANK ACCOUNT OF PUNJAB NATIONAL BANK IN HIS BALANCE SHEET ; THIRDLY , IF THE ASSESSEE HAS PREPARED A PROFIT AND LOSS ACCOUNT FROM HIS REGULAR BOOKS OF ACCOUNT THEN PROVISION OF SECTION 44AF CANNOT BE HELD TO BE APPLICABLE ; AND LASTLY, THE ASSESSING OFFICER HAS TAKEN THE LOWER FIGURE OF THE CASH DEPOSITS. ACCORDINGLY, HE HELD THAT THE ASSESSING OFFICER HAS FAILED TO CARRY OUT PROPER ENQUIRY AND THUS, HE SET ASIDE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO RE - EXAMINE THE WHOLE MATTER. PAGE 5 OF 12 6. BEFORE US THE LD. COUNSEL SUBMITTED THAT , FIRST OF ALL IT IS INCORRECT TO SAY THAT NO ENQUIRY HAS BEEN DONE BY THE ASSESSING OFFICER , BECAUSE THE CASE WAS SELECTED FOR SCRUTINY ON LY ON THE BASIS OF AIR INFORMATION WITH REGARD TO THE CASH DEPOSIT IN THE BANK ACCOUNTS OF HDFC AND PUNJAB NATIONAL BA NK . T HE ASSESSING OFFICER SPECIFICALLY REQUIRED THE ASSESSEE TO FURNISH THE SOURCE OF CASH DEPOSIT S VIDE ORDER SHEET ENTRY DATED 12.12.2011 , IN RESPONSE TO WHICH ASSESSEE HA D FILED HIS REPLY DATED 16.12.2011 . IN SUPPORT OF THIS FACT , HE DREW OUR ATTENTION AT PAGE 44 OF THE PAPER BOOK WHICH IS THE TYPED COPY OF ORDER SHEET ENTRY OF THE ASSESSMENT PROCEEDINGS. HE FURTHER POINTED OUT THAT THE BALANCE SHEET WHICH WAS FILED BEFORE AO AND ALSO BEFORE THE LD. CIT, CONTAINS BOTH BANK ACCOUNTS OF HDFC AS WELL AS PUN JAB NATIONAL BANK AND THEREFORE, THE OBSERVATION OF THE LD. CIT THAT THE BANK ACCOUNT OF PUNJAB NATIONAL BANK HAS NOT BEEN DISCLOSED IN THE BOOKS OF ACCOUNTS IS ERRONEOUS , BECAUSE THE LD. CIT HAS WRONGLY REFERRED TO S CHEDULE VI WHICH IS A BALANCE SHEET OF AN OTHER PROPRIET ARY CONCERN AND NOT OF M/S. VIJAY CLOTH HOUSE. THE COMPLETE BANK STATEMENTS FOR THE PERIOD OF 1.4.2008 TO 31.3.2009 ALONG WITH THE LEDGER ACCOUNTS , CASH BOOK AND BANK BOOK GIV ING NARRATION OF EACH AND EVERY DEBIT AND CREDIT ENTRIES WAS FILED BEFORE THE ASSESSING OFFICER WHICH WAS VERIFIED BY HIM . ONCE THE ASSESSING OFFICER HAS VERIFIED THE ENTIRE CASH DEPOSITS FROM THE REGULAR BOOKS OF ACCOUNTS AND CASH BOOK ALONG WITH QUALITATIVE DETAILS PURCHASE AND SALES, THEN IT CANNOT BE HELD THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY. REGARDING THE NOTING OF LOWER FIGURE OF RS. 58.91 LAKH S BY THE AO , HE SUBMITTED THAT THE SAME WAS TAKEN ON ACCOUNT OF THE AIR INFORMATION. HOWEVER IN RESPONSE TO THE QUERY RAISED B Y THE ASSESSING OFFICER , THE ASSESSEE HAS GIVEN THE SOURCE OF ENTIRE DETAILS OF CASH DEPOSITS OF RS. 66.98 PAGE 6 OF 12 LA KH S AND THIS FACT WAS CLARIFIED BEFORE THE LD. CIT A LSO . L ASTLY , REGARDING NON APPLICABILITY OF SECTION 44 - AF ON THE GROUND THAT TURNOVER WAS ABOVE RS. 40 LAKH S , LD. COUNSEL SUBMITTED THAT , THERE CANNOT BE ANY PRESUMPTION THAT EACH AND EVERY DEPOSIT MADE IN THE BANK ACCOUNT IS TURNOVER OR SALES. THE DEPOSITS WERE OUT OF DAY TO DAY CASH FROM THE BUSINESS OF THE FIRM AND SAME WAS TALLIED FROM THE BOOKS OF ACCOUNT FILED BEFORE THE ASSESSING OFFICER. HE ALSO RELIED UPON THE CATENA OF DECISIONS FOR WHICH SEPARATE COMPILATION OF CASE LAWS HAVE BEEN FILED BEFORE US. 5. ON THE OTHER HAND , THE L D. CIT - DR RELYING UPON THE ORDER OF THE L D. CIT SUBMITTED THAT IF THE ASSESSEE WAS HAVING REGULAR BUSINESS ACTIVITY IN HIS PROPRIETORSHIP FIRM , M/S. VIJAY CLOTH HOUSE, THE N THE SAME SHOULD HAVE BEEN REFLECTED NOT ONLY IN THE RETURN OF INCOME BUT ALSO IN THE FINANCIAL ACCOUNTS FILED ALONG WITH THE RETURN OF INCOME . THE TURNOVER OF RS. 24,17,751/ - CANNOT BE PROVED FROM THE BANK ACCOUNTS WHICH REFLECTED THE AGGREGATE DEPOSITS OF MORE THAN RS. 66 LA KH S. THE ASSESSING OFFICER SHOULD HAVE AT LEAST EXAMINE D THE ENTIRE ACCOUNTS AND THEN COULD HAVE COME TO A CONCLUSION, WHETHER THERE WAS AN Y ACTUAL TURNOVER FROM THE ALLEGED BUSINESS OR NOT , BECAUSE HE HAS SIMPLY ACCEPTED THE FIGURE OF TURNOVER AS GIVEN BY THE ASSESSEE AND ALSO ACCEPTED TO BE ASSESSEE S PLEA TO BE ASSESSED U/S 44 - AF. THE ENTIRE APPROACH OF T HE ASSE SSING OFFICER CLEARLY SHOWS THAT , NO PROPER ENQUIRY HAS BEEN MADE OR THERE IS ANY APPLICATION OF MIND. THUS, THE ASSESSMENT ORDER IS NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEREFORE, IT HAS RIGHTLY BEEN SET ASIDE. PAGE 7 OF 12 6. WE HAVE HEARD THE RIVAL SUBMISSIONS , PERUSED THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDER AS WELL AS MATERIAL REFERRED TO BEFORE US. THE L D. CIT HAS SET ASIDE THE ASSESSMENT ORDER MAINLY ON THE GROUND THAT , FIRSTLY, THE ASSESSEE HAD NOT SHOWN BANK ACCOUNT OF PUNJAB NATIONAL BANK IN HIS BALANCE SHEET OR BOOKS OF ACCOUNTS; SECONDLY, THE PROVISION OF SECTION 44AF WOULD BE APPLICABLE ONLY WHEN SALES/TURNOVER IS BELOW THE PRESCRIBED LIMIT PROVIDED U/S 44A B I.E., R S . 40 LA KH S , SINCE THE CASH DEPOSITS IN THE BANK ACCOUNTS ARE APPROXIMATELY RS. 66. 98 LAKH S AND THEREFORE, THE PROVISION OF SECTION 44AF WOULD NOT BE APPLICABLE; AND LASTLY, THE ASSESSING OFFICER HAS TAKEN NOTE OF CASH DEPOSIT S OF RS. 58,91,425/ - , WHEREAS THE AGGR EGATE CASH DEPOSITS WERE TO THE TUNE OF RS. 66,98,505/ - . BASED ON THESE SHORTCOMINGS IN THE ASSESSMENT ORDER , LD. CIT HAS HELD THAT AO HAS WRONGLY APPLIED THE SECTION 44AF AND FURTHER OBSERVE THAT EITHER THE WHOLE OF THE AMOUNT CREDITED IN THE BANK ACCOUNT S SHOULD HAVE BEEN ADDED OR PEAK CREDIT ALONG WITH GROSS PROFIT SHOULD HAVE BEEN ADDED. THUS, THE ASSESSING OFFICER SHOULD RE EXAMINE THE WHOLE MATTER AND ACCORDINGLY , HE SET ASIDE THE ASSESSMENT ORDER HOLDING IT TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE JUSTICE. 7. FROM THE PERUSAL OF THE ASSESSMENT RECORDS AS PRODUCED BY THE ASSESSEE BEFORE US IN THE PAPER BOOK, WE FIND THAT FIRST OF ALL CASE WAS SELECTED FOR SCRUTINY ONLY TO EXAMINE THE CASH DEPOSITS AND IN THIS REGARD THE FOLLOWING QUERIES WERE RAISED BY THE AO DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS: - 17.10.2011 : SH. JITENDER GUPTA, CA APPEARED SOUGHT MORE TIME FOR FILING THE DETAILS. AIR INFORMATION PROVIDED TO REPLY BY 31.10 .2011. CASE ADJOURNED FOR PAGE 8 OF 12 31.10.2011. ALSO TO GIVE SOURCE OF ADDITION IN CAPITAL AND FIXED ASSETS. 12.12.2011 : PRESENT SH. JITENDER GUPTA, CA ASKED TO EXPLAIN THE CASH DEPOSITS IN PNB AMOUNTING TO RS.40,46,245.00 AND CASH DEPOSITS IN HDFC BANK AMOUNTING TO RS. 18,45,180.00 IN THE NAME OF ASSESSEE AND WHY NOT TO TREAT THIS CASH DEPOSIT AS INCOME OF THE ASSESSEE AS 'INCOME FROM UNDISCLOSED SOURCES AND WHY NOT PENALTY BE IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT. CASE ADJOURNED FOR 16.12.2011. 16.12.2011 PR ESENT SH. JITENDER GUPTA, CA FILED SAVING BANK ACCOUNT COPY MAINTAINED WITH PNB AND COPY OF SAVING BANK ACCOUNT MAINTAINED WITH HDFC BANK VIDE LETTER DATED 16.12.2011. HE ALSO FILED COPY OF CASH BOOK, BALANCE SHEET, PROFIT AND LOSS ACCOUNT, QUANTITATIVE DE TAILS OF STOCK, ABSTRACT OF DEPOSIT AND WITHDRAWALS AND BOTH THE BANK ACCOUNTS OF THE BUSINESS CARRIED ON BY THE ASSESSEE UNDER THE NAME & STYLE OF M/S VIJAY CLOTH HOUSE. HE FURTHER EXPLAINED THAT THERE WAS A LOSS IN THE BUSINESS SO, HE DID NOT CLAIM THE S AME IN THE RETURN FILED. HOWEVER, HE OFFERED THE TURNOVER OF THE BUSINESS RS.24,17,751.25 FOR TAXATION AS HIS DEEMED INCOME FROM THE SAID BUSINESS U/S 44AF. 8. FROM THE ABOVE ORDER SHEET ENTRIES OF THE ASSESSMENT PROCEEDINGS , IT IS QUITE EVIDENT THAT THE ASSESSING OFFICER HAS SPECIFICALLY ASKED THE ASSESSEE TO EXPLAIN THE CASH DEPOSITS IN PNB BANK ACCOUNT AMOUNTING TO RS. 40,46,245/ - AND IN HDFC BANK ACCOUNT OF RS. 18,45,180/ - . IN RESPONSE , ASSESSEE HAS FILED COPY OF CASH BOOK , BALANCE SHEET, PRO FIT AND LOSS ACCOUNT , QUALITATIVE DETAILS OF STOCK , ABSTRACT OF DEPOSITS AND WITHDRAWALS IN BOTH THE BANK ACCOUNTS AND THE BOOKS RELATING TO BUSINESS CARRIED OUT UNDER THE PAGE 9 OF 12 NAME AND STYLE OF M/S. VIJAY CLOTH HOUSE. FURTHER, WE FIND THAT THE ASSESSEE HAD ALS O FILED A LETTER DATED 16.12.2011 ALONG WITH THE VOLUMINOUS DOCUMENTS CONTAINING ALL THE BANK ACCOUNTS AND COPY OF BANK STATEMENT , CASH BOOK , BALANCE SHEET , P&L ACCOUNT , QUANTITATIVE DETAILS , ETC. ONCE THESE DETAILS HAVE BEEN FILED AND ASSESSING OFFICER HA S TAKEN DUE NOTE OF THESE FACTS , THEN IT CANNOT BE RECKONED THAT THE ASSESSING OFFICER DID NOT CARRY OUT ANY ENQUIRY OR DID NOT APPLY HIS MIND ON THE SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS. FURTHER FROM THE PERUSAL OF THE BANK BOOK, WE FIND THAT THE CREDIT BALANCE FOR MOST OF THE DATES IN THE RELEVANT FINANCIAL YEAR IS IN FEW THOUSANDS AND ONLY ON FEW OCCASIONS , THE CRED IT BALANCE HAD REACHED BETWEEN RS. 1 LAKH TO RS. 2 LA KH S. THE DEBIT AND CREDIT ENTRY SHOWS THAT THERE HAVE BEEN REGULAR DEPOSITS AND WITHDRAWALS OF PETTY SUMS ALMOST EVERY DAY. APART FROM THAT , IT HAS NOT BEEN REBUTTED AT ANY STAGE THAT THE ENTIRE DEPO SITS ARE FULLY REFLECTED IN BANK BOOK AND TALLIES WITH THE CASH BOOKS MAINTAINED BY THE ASSESSEE ALONG WITH THE REGULAR BOOKS OF ACCOUNTS FOR THE BUSINESS CARRIED OUT IN PROPRIETARY FIRM, M/S. VIJAY CLOTH HOUSE. IF THE ENTIRE BOOKS OF ACCOUNTS HAVE BEEN FU RNISHED ALONG WITH THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT AND ALL THE ENTRIES APPEARING THEREIN HAVE NOT BEEN DOUBTED OR FOUND TO BE INCORRECT , THEN THE ASSESSEE S CONTENTION THAT ALL THE SOURCE OF CASH DEPOSITS STANDS EXPLAINED FROM THE CASH FLOW OF M/S. VIJAY CLOTH HOUSE CANNOT BE DIS CARDED . SO FAR AS THE ALLEGATION OF L D. CIT THAT PNB BANK ACCOUNT IS NOT REFLECTED IN THE BALANCE SHEET PERHAPS IS NOT A CORRECT OBSERVATION, BECAUSE HE HAS ONLY REFERRED TO S CHEDULE 6 OF THE BALANCE SHEET WHICH HAS BEEN CLARIFIED BY THE L D. C OUNSEL THAT IT PERTAIN S TO OTHER PROPRIETOR CONCERN NAMELY , M/S NIRMAL BEARINGS AND NOT M/S VIJAY CLOTH HOUSE. AS REGARD THE NOTING OF CASH DEPOSIT OF RS. 58,91,425/ - , PAGE 10 OF 12 B EFORE THE ASSESSING OFFICER HIMSELF THE ASSESSEE HAD CLARIFIED THAT AGGREGATE CASH DEPOSIT WAS RS. 66,98,405/ - WHICH FACT IS ALSO BORNE OUT FROM THE BANK STATEMENT AS WELL AS THE CASH BOOK AND THE BANK BOOK PRODUCED BEFORE THE AO . LASTLY, AS REGARD THE ALLEGATION OF THE L D. CIT THAT TURNOVER OF M/S. VIJAY CLOTH HOUSE HAD EXCEEDED RS. 40 LAKH S IS AGAIN BASED ON PRESUMPTION , BECAUSE IT IS NOT NECESSARY THAT THE ENTIRE AMOUNT APPEARING ON CREDIT SIDE ON DAY TO DAY BASIS CAN BE RECKONED AS TURNOVER OR SALES OF THE BUSINESS . THERE IS NO R EASON TO DOUBT THE ENTRIES IN THE REGULAR BOOKS OF ACCOUNTS ON THE BASIS OF WHICH PROFIT AND LOSS ACCOUNT HAS BEEN PREPARED. IN ANY CASE, ONCE THE ASSESSING OFFICER HAS DULLY APPLIED HIS MIND AND HAD EXAMINE ALL THE RECORDS INCLUDING REGULAR BOOKS OF ACCOU NTS AND BANK STATEMENTS, QUANTITATIVE TALLY OF STOCKS, ETC., THEN IT CANNOT BE HELD THAT THERE IS EITHER NON - APPLICATION OF MIND BY THE ASSESSING OFFICER OR THERE IS ANY LACK OF ENQUIRY. EVEN IF PEAK CREDIT OF THE BANK ACCOUNTS IS TO BE ANALYZED , THEN SUCH PEAK WOULD BE AROUND RS. 1 LA KH TO RS. 2 LAKHS AND IF THE ASSESSEE HAD ALREADY OFF ERED INCOME FOR TAXATION AT RS.1 ,20,000/ - , THEN ALSO IT FALLS WITHIN THE SAME RANGE. THUS, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT THE ASSESSING OFFICER HAS EXAMINE THE RECORDS AND HAS ALSO APPLIED HIS MIND WHILE ACCEPTING THE ASSESSEE S EXPLANATION AND THE INCOME OFFERED BY HIM , THEREFORE, THE L D. CIT WAS NOT JUSTIFIED IN INVOKING REVISIONARY JURISDICTION U/S 263 , SO AS TO HOLD THAT THE ASSESSMENT ORDER IS EITHER ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, THE IMPUGNED REVISION ORDER U/S 263 IS SET - ASIDE AND THE ASSESSM ENT ORDER OF THE ASSESSING OFFICER IS RESTORED . 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . PAGE 11 OF 12 ORDER P RONOUNCED IN THE OPEN COURT ON 1 1 . 0 8 .201 7. S D / - S D / - ( G.D. AGRAWAL ) (AMIT SHUKLA) (PRESIDENT) (JUDICIAL MEMBER) DATED: 1 1 . 0 8 .2017 NARENDER COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 0 4 .0 8 .2017 DRAFT PLACED BEFORE AUTHOR 04 . 0 8 .2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 1 1 . 8 .2017 KEPT FOR PRONOUNCEMENT ON 1 1 . 8 .2017 PAGE 12 OF 12 FILE SENT TO THE BENCH CLERK 1 1 . 8 .2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.