ITAT held there was no occasion to proceed u/s 263 (of Income Tax Act, 1961) on an audit objection
ITAT held there was no occasion to proceed u/s 263 (of Income Tax Act, 1961) on an audit objection
Assessee's assessment was completed u/s 143(3) (of Income Tax Act, 1961). On going through assessee's bank statement, AO noticed cash deposits of Rs 6.5 lakhs. Assessee explained it was advance received for sale of land, which was later returned. CIT(A) issued notice u/s 263 (of Income Tax Act, 1961) and directed AO to make fresh assessment. ITAT quashed CIT(A)'s order and held that AO passed the order in accordance with law, and there was no occasion to proceed u/s 263 (of Income Tax Act, 1961) on an audit objection.-501208
1. Assessee filed return of income at Rs. 1,29,230/- and assessment was completed under section 143(3) (of Income Tax Act, 1961) on 21.07.2011 at a total income of Rs. 2 lacs. On going through the statement of assessee's bank account, it was found that cash has been deposited on 08.07.2008 in a sum of Rs. 5,30,000/- and on 10.07.2008 Rs. 1,34,000/- ( Rs. 6,64,000/-). Assessee furnished copy of the agreement dated 05.07.2008 to the AO showing that assessee agreed to sell his plot of land for Rs. 25 lacs against which an advance of Rs.6,50,000/- was stated to have been received in cash from Shri Ram Singh Beniwal. Later on, this agreement was cancelled and advance was returned. In the said agreement, it was stated that if purchaser was unable to pay balance amount and get the Registration Deed executed before the appointed date, the advance would be forfeited. The buyer has not paid the amount nor got the registration deed registered and later on, agreement was cancelled and amount was refunded.
2. CIT(A) issued notice u/s 263 (of Income Tax Act, 1961) and held that the source of Rs. 6,50,000/- was not properly examined therefore, the assessment order was set aside and AO was directed to make fresh assessment after making necessary and proper enquiries/investigation.
3. On appeal, the ITAT held as under:
"4. Considering the above discussion, we are of the view that Assessing Officer passed the order in accordance with law and if the CIT did not accept the view of the Assessing Officer and wanted to take a different view, would not give rise to any occasion to proceed under section 263 (of Income Tax Act, 1961) merely on audit object. We, accordingly, set aside the order under section 263 (of Income Tax Act, 1961) and quash the same. The assessment order passed by the Assessing Officer under section 143(3) (of Income Tax Act, 1961) dated 21.07.2011 is restored.”
Case Reference - Shri Vikram Kaswan, Vs The CIT
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND Ms.RANO JAIN, ACCOUNTANT MEMBER
ITA No. 519/CHD/2014
Assessment Year: 2009-10
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