AO properly Verified Documents Adduced by Assessee: ITAT sets aside Revision proceedings u/s 263 [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal has held that Assessing Officer properly verified documents adduced by assessee and set asides revision proceedings u/s 263.

During the course of scrutiny assessment PCIT has observed that the AO had merely accepted the justification of cash payments on the basis of cash ledger of the assessee, Mahesh Arvind Tilve, without making any link to bank account or any other reliable documents and treated the assessment order as erroneous in so far as it is prejudicial to the interest of the revenue. Accordingly, revision proceedings under section 263 were initiated against the assessee. Aggrieved, assessee filed appeal before the Tribunal.

The counsel for the appellant submitted that PCIT initiated proceedings u/s 263 of the Act with the reasons that AO has not considered Rs. 3,75,000/- paid to the builder, M/s Neptune Venture and Development Pvt. Ltd. It has already been explained availability of cash balance before AO and AO has verified the same had taken one of the possible views, the PCIT cannot take a different and divergent view to that of AO and treating the assessment order as erroneous and prejudicial to the interest of the revenue.

The Tribunal has observed that the assessment was reopened specifically to verify the cash transactions and cash payment made by the appellant to the builder as on money and appellant explained the source of cash even though drawings are less but still appellant has sufficient cash to make on money payment.

The Coram of Mr. S Rifaur Rahman, Accountant Member and Mr. Pavan Kumar Gadale, Judicial Member has held that “there is no substance in the views expressed by PCIT and merely relying in explanation to section 263(1) for substituting his other possible view, will not render the assessment order erroneous. We do not find any reason to upheld the revision proceedings and accordingly 263 order is set aside”.

Mr. Vimal Punmiya and Mr. Surendra Kumar appeared on behalf of the appellant and revenue respectively.

To Read the full text of the Order CLICK HERE

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