Case Law Details
Chandrahas Shetty HUF Vs PCIT (ITAT Mumbai)
It is a well settled principle of law, which is enunciated by Hon’ble Supreme Court in the case of Malabar Industrial Company (243 ITR 83), is that the assessment order cannot be termed as erroneous and prejudicial to the interests of revenue if the AO has taken one of the possible views of the matter. In the instant case, the fact remains that the assessee has been filing return of income every year. There is no dispute with regard to the fact that the AO has made enquiries about the deposit of Rs. 15.00 lakhs made into the bank account during demonitisation period. Though the assessee has claimed to have made deposits out of opening cash balance available with it, yet the AO rejected the same and chose to assess the peak credit balance. In our view, the decision so taken by the AO forms within the ambit of one of the possible Merely because, the Ld CIT(A) was having different view in this matter, the same would not render the assessment order erroneous and prejudicial to the interests of revenue. Accordingly, we find no reason to sustain the impugned revision order passed by Ld PCIT. Accordingly we set aside the same.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The assessee has filed this appeal challenging the revision order dated 29.3.2022 passed by learned PCIT-20, Mumbai under section 263 of the I.T. Act for A.Y. 2017-18. The assessee is challenging the validity of reopening of the assessment order.
2. The facts relating to the case are stated in brief. The assessee is a HUF and it is deriving ‘income from rent’ and ‘income from other sources’. The assessee filed its return of income on 29.6.20 17 declaring a total income of Rs. 5,86,000/- and the same was selected for limited scrutiny. In the assessment proceedings, it was noticed that the assessee has deposited a sum of Rs. 15,00,000/- during the demonetisation period. Accordingly the Assessing Officer asked the assessee to explain the sources for the deposits so made. The assessee submitted that it was having opening cash balance of Rs. 27,07,500/- as on 1.4.20 16 and part of the same was deposited into the bank account. The Assessing Officer took the view that there was no reason for the assessee to keep huge cash balance of around Rs. 27 lakhs in cash, when the assessee is having a bank account. Accordingly he did not accept the claim of availability of opening cash balance of Rs. 27 lakhs. He took the view that the assessee could be considered as having opening cash balance of Rs.5.50 lakhs only. Having held so, the AO further held that the peak credit balance should be assessed as income of the assessee. The Assessing Officer computed the peak credit at Rs. 2,34,000/- and assessed the same as ‘income of the assessee’ under section 68 of the Act.
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