Case Law Details
Mahesh Arvind Tilve Vs PCIT (ITAT Mumbai)
Introduction: Dive into the intricate case of Mahesh Arvind Tilve vs. PCIT (ITAT Mumbai), where the assessment for the year 2010-11 comes under scrutiny. The focus revolves around the reopening of the assessment, specifically to investigate cash transactions related to a payment of Rs. 3,75,000 made by the assessee to a builder. Unravel the challenges to jurisdiction and the subsequent validity of the assessment.
Detailed Analysis: The genesis of the case lies in the reopening of the assessment, prompted by the need to verify cash transactions and a particular cash payment made by the assessee to a builder. The crucial payment of Rs. 3,75,000 for the purchase of residential and commercial premises during the financial year 2010-11 becomes a focal point of contention.
The Assessing Officer (AO) accepted the detailed submissions and explanations furnished by the assessee, who provided a cash ledger showing the opening balance of cash in hand and withdrawals from banks. The AO, after meticulous scrutiny, deemed the explanations satisfactory and concluded that the assessee had sufficient cash to make the payment in question. The AO correlated the bank drawings in the cash book, thereby taking one of the possible views on the matter.
However, the Principal Commissioner of Income Tax (PCIT) intervened, invoking Explanation 2 to sub-section 1 of Section 263 of the Income Tax Act. The PCIT contended that the assessment order was erroneous and prejudicial to the interest of the revenue, as the AO had allegedly accepted the justification of cash payments solely based on the cash ledger without adequate linkage to bank accounts or reliable documents.
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