SAIICHHA LAND DEVELOPERS,NAGPUR V. PRINCIPAL COMMISSINONER OF INCOME TAX-2, NAGPUR

ITA 44/NAG/2023

AI Insights

The case involves Saiicha Land Developers, a firm engaged in land development, which appealed against the order of the PCIT, Nagpur-2. The PCIT had set aside the original assessment order, citing lack of proper examination of certain financial documents and issues related to cash transactions and demonetization. The Tribunal examined whether the PCIT was justified in exercising revisional powers under section 263, given that the Assessing Officer had already scrutinized the documents and accepted the assessee's return. The Tribunal concluded that the PCIT's intervention was not warranted as the Assessing Officer had taken a reasonable view based on the documents provided.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32285 (ITAT-NAGPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: CIT vs. Embassy Brindavan Developers [2024] 7 SLPCTO 1526
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDIPKUMAR SALUNKE
• Assessee Lawyers: MANOJ G MORYANI
• Keywords: Set aside; Business income
• Section: 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH : NAGPUR BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI KHETTRA MOHAN ROY, ACCOUNTANT MEMBER ITA.No.44/NAG./2023 Assessment Year 2017-2018 Saiicha Land Developers, Plot No.67, Saiiccha Sadan, Umred Road, Bahadura Juni Vasti, Vihirgaon, NAGPUR. PIN – 441 204. Maharashtra. PAN ACJFS4850R vs. The Principal Commissioner of Income Tax-2, Aaykar Bhavan, Civil Lines, NAGPUR. PIN – 440 001 Maharashtra. (Appellant) (Respondent) For Assessee : Shri Manoj G Moryani, Advocate For Revenue : Shri Sandipkumar Salunke, CIT-DR Date of Hearing : 22.01.2025 Date of Pronouncement : 06.02.2025 ORDER PER V. DURGA RAO, J.M. : This appeal filed by the Assessee has been directed against the order dated 31.01.2022, of the learned Principal Commissioner of Income Tax, Nagpur-2, Nagpur, passed u/sec.263 of the Act relating to assessment year 2017-2018. 2 ITA.No.44/NAG./2023 2. There is a delay of 260 days in filing the appeal before the Tribunal. We are satisfied with the averments stated in the affidavit and petition seeking for condonation of delay and accordingly, we, condone the delay of 260 days in filing the appeal before the Tribunal and proceed the decide the appeal on merits. 3. Facts of the case, in brief, are that the assessee is a firm engaged in the business of land developers. The assessee e-filed return of income on 31.03.2018 declaring total income at Rs.2,90.450/- which was processed u/sec.143(1) of the Act. The case of the assessee was selected for complete scrutiny under CASS. The Assessing Officer issued statutory notices u/sec.143(2) and 142(1) of the Act and in response thereto, the assessee has furnished computation of income, copy of balance-sheet, P & L A/c, cash-flow statement, details of cash balances at the end of each month, cash book, confirmation of unsecured loans and bank statements etc., from time to time. After considering the documents and submissions of the 3 ITA.No.44/NAG./2023 assessee, the Assessing Officer determined the total income of the assessee at Rs.2,90,450/- by accepting the return of income filed by the assessee vide order dated 10.12.2019 u/sec.143(3) of the Act. 4. The learned PCIT, Nagpur-2 after verification of the records and assessment order, noticed that the Assessing Officer, during the course of assessment proceedings, had not called for the cash book so as to analyse the unusual cash flow and large cash in hand as on immediate following day of demonetization. He further noted that the assessee has cash in hand of Rs.49,61,595/- as on 09.11.2016 and the issue of cash payment exceeding Rs.20,000/- in a day in contravention of sec.40A(3) of the Act have not been examined by the Assessing Officer and the Assessing Officer failed to verify the cash sales of assessee according to the provisions of sec.269SS of the Act as the total sales of the assessee are in cash during the course of assessment proceedings. The learned PCIT noted that there is lack of enquiry on the part of Assessing Officer on the above three issues which resulted into assessment 4 ITA.No.44/NAG./2023 order dated 10.12.2019 as an erroneous one and causes prejudicial to the interest of revenue and by exercising his revisional powers u/sec.263 of the Act set aside the assessment order of the Assessing Officer and directed to inquire into the above issues. 5. Aggrieved by the order of the learned PCIT, Nagpur-2, the assessee carried the matter in appeal before the Tribunal. 6. During the course of hearing, Learned Counsel for the Assessee submitted that the assessee has cash receipt of Rs.84,11,738/- for the F.Y. 2016-2017 relevant to the impugned assessment year 2017-2018 but assessee declared in his P & L A/c a sum of Rs.72,22,000/- and for the balance sum of Rs.11,89,738/- during the course of assessment proceedings the Assessing Officer called for the information which were duly placed and examined by the Assessing Officer and accepted the return of income filed by the assessee after considering the documents i.e., computation of income, copy of balance-sheet, P & L A/c, cash-flow statement, details of cash balances at the end of 5 ITA.No.44/NAG./2023 each month, cash book, confirmation of unsecured loans and bank statements etc. Therefore, the Assessing Officer has taken one of the possible views while passing the assessment order u/sec.143(1) of the Act. In support of this proposition, the Learned Counsel for the Assessee relied on the decision of Hon’ble Supreme Court in the case of CIT vs. Embassy Brindavan Developers [2024] 7 SLPCTO 1526 which is placed on record. 7. The Learned DR on the other hand relied on the order of the PCIT and submitted that the Assessing Officer was failed to property verify the documents placed on record and, therefore, the PCIT has exercised his revisional powers u/sec.263 of the Act which is in accordance with law. He pleaded that the order of the PCIT be confirmed. 8. We have heard the rival submissions of both the parties and perused the material on record. We find that the case of the assessee was selected for complete scrutiny under CASS and the Assessing Officer issued statutory notices u/sec.143(2) and 142(1) of the Act calling the explanation of the assessee. In response thereto, the 6 ITA.No.44/NAG./2023 assessee has furnished computation of income, copy of balance-sheet, P & L A/c, cash-flow statement, details of cash balances at the end of each month, cash book, confirmation of unsecured loans and bank statements etc., before the Assessing Officer. The Assessing Officer after being satisfied with the documents placed before him and after duly verifying the same, has accepted the returned income of the assessee and completed the assessment u/sec.143(3) of the Act vide his order dated 10.12.2019. We find that it is the settled position of law that when two views are possible and Assessing Officer has taken one of the possible view, the PCIT cannot exercise jurisdiction u/sec.263 of the Act. The Hon’ble Supreme Court in it’s latest Judgment in the case of Embassy Brindavan Developers vs. CIT (supra) has further affirmed this position. We, therefore, set aside the order of the PCIT, Nagpur-2 passed u/sec.263 of the Act and restore that of the Assessing Officer. The grounds of appeal raised by the assessee are accordingly allowed. 9. In the result, appeal of the Assessee is allowed. 7 ITA.No.44/NAG./2023 Order pronounced in the open Court on 06.02.2025. Sd/- Sd/- (KHETTRA MOHAN ROY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Nagpur, Dated 06TH February, 2025 VBP/- Copy to 1. The appellant 2. The respondent 3. The CIT(A)-2, Nagpur concerned. 4. The CIT, Nagpur concerned 5. The D.R. ITAT, Nagpur Bench, Nagpur 6. Guard File. //By Order// //True Copy// Sr. Private Secretary : ITAT : Nagpur Bench NAGPUR. "