Dayaram Brijbhukhandas Vs Income Tax Department (ITAT Surat)
The Income Tax Appellate Tribunal (ITAT), Surat, decided three appeals filed by different assessees against separate orders dated 22.07.2025 passed by the Principal Commissioner of Income Tax (Pr. CIT), Valsad under Section 263 of the Income Tax Act, 1961 for Assessment Year 2017–18.
In all three cases, the assessees challenged the invocation of revisionary jurisdiction under Section 263, contending that the mandatory twin conditions—namely that the assessment order must be both “erroneous” and “prejudicial to the interests of the Revenue”—were not satisfied. It was argued that the Assessing Officer (AO) had conducted detailed inquiries during assessment proceedings, including issuing questionnaires and examining documents such as books of accounts, stock records, cash books, bank statements, sales data, and VAT returns. The assessees submitted that merely because the assessment order did not contain elaborate discussion on each issue, it could not be treated as lacking inquiry.
In one of the cases, the assessee was engaged in the business of manufacturing and trading gold and silver ornaments and bullion. The AO observed that there was no discrepancy in the business, but found cash sales unverifiable and rejected the books of account under Section 145. The AO treated cash sales of ₹1,32,15,000 during the period 01.04.2016 to 08.11.2016 as inflated turnover and estimated additional profit at 10%, resulting in an addition of ₹13,21,500. The assessment was completed under Section 143(3).
