On basis of AIR information flagged, Assessing Officer had noticed that deposits had been made by a non-filer of returns and accordingly, issued notice to assessee to explain deposits etc.  In response thereto, return was filed.  Assessing Officer issued notices to assessee to explain deposits vis-à-vis returned income.  Assessee submitted that during year under consideration it was doing trading of cloth and amount deposited in cash was sale proceeds of business which had been declared in return under section 44AD. After discussion and keeping in view information filed by assessee, returned income of Rs. 2.09 lakhs was accepted. Principal Commissioner passed order under section 263 on ground that amount of cash deposit of Rs. 24.79 lakhs in account of assessee was unexplained cash deposit. Tribunal held that source of deposit was fully enquired into and explanation offered by assessee was considered and only thereafter assessment order was passed by Assessing Officer.  No fact or evidence had been referred to by Principal Commissioner to show that assessee was engaged in any nefarious activity from which amounts were deposited and withdrawn. There was no fact referred to show that Assessing Officer had committed an error in accepting claim of assessee. Accordingly   revision  order was  quashed with the finding that revisionary powers could not be permitted to be exercised on suspicions and inferences.  (AY. 2011-12)