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| The Tax Publishers2020 TaxPub(DT) 4530 (Pune-Trib) INCOME TAX ACT, 1961
Section 263
Where assessee was a salaried employee, who was working with pharmaceutical company (W) and his case was selected for scrutiny for 'Cash deposits in bank reflected in the savings bank account', there was no requirement of invoking revisionary jurisdiction under section 263 when AO after proper verification established the fact that albeit the cash was deposited in the assessee's bank account but the source of such cash was another person D, who used assessee's bank account by purchasing demand drafts in favour of W for making purchases, which business the firm was admittedly doing outside the books of account.
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Revision under section 263 - Validity - Cash deposited in assessee's bank account - AO during assessment established the fact that albeit the cash was deposited in the assessee's bank account but the source of such cash was another person
Assessee was a salaried employee, who at the material time, was working with a pharmaceutical company (W). His case was selected for scrutiny on the basis of 'Cash deposits made in the bank reflected in the savings bank account'. AO made small addition while completing the assessment. Thereafter, CIT invoked his power under section 263 alleging that AO did not make proper enquiry in respect of cash deposits made by the assessee in his bank account. CIT set aside assessment order passed under section 143(3) for a de novo determination of total income. Held: It was more than clear that albeit the cash was deposited in assessee's bank account but the source of such cash was D. He used assessee's bank account by purchasing demand drafts in favour of W for making purchases, which business the firm was admittedly doing outside the books of account. AO, not only examined that fact after recording the statement of D as well as the assessee, but also got such transactions verified with W and the bank of the assessee. That amply proves that AO made proper verification of the assessee's claim and reached right conclusion that such cash deposits, in fact, represented transactions carried out by D for and on behalf of L. Neither AO failed to make proper investigation nor did he reach any wrong conclusion in holding that the amount of cash deposits by the assessee in his bank account did not pertain to him. Therefore, order doubting the correctness of the assessment order was set aside.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
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