Case Law Details
Arvi Lights Vs ITO (ITAT Delhi)
The assessment was sought to be revised u/s 263 of the I T Act holding that ld. AO had not enquired about the cash deposits of Rs 80,50,000/- deposited in bank during the demonetization period. Huge increase in sales in the month of October, 2016 due to Diwali season is found to be reasonable due to Diwali season. Cash deposits were sourced out of cash sale by reducing the stock of goods and Opening Stock, Purchases and Sales are interlinked.
ITAT determined that the assessing officer (AO) had conducted sufficient inquiries during the original assessment proceedings. This conclusion was supported by the detailed questionnaire issued by the AO and the responses provided by the assessee. The AO also explicitly mentioned in the assessment order that the cash deposits were derived from cash sales made by the assessee. When an adequate inquiry has been conducted by the AO, resulting in a correct and plausible view, the Principal Commissioner of Income Tax (PCIT) cannot disturb the same through the exercise of revision jurisdiction under Section 263 of the Income Tax Act. The legal position on this matter is well-established, as affirmed by the Supreme Court in the cases of Malabar Industrial Co. Ltd. (reported in 243 ITR 83) and CIT vs. Max India Ltd. (reported in 166 Taxman 188).
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal in ITA No.578/Del/2022 for AY 2017-18 arises out of the order of the Pr. Commissioner of Income Tax, Delhi-10 [hereinafter referred to as ‘ld. PCIT’, in short] in DIN & Order No.ITBA/REV/F/REV5/2021-22/1039802410(1) dated 16.02.2022 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.05.2019 by the ld. Assessing Officer, Ward 47(5), Delhi (hereinafter referred to as ‘ld. AO’).
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