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2014 (4) TMI 620 - AT - Income TaxAddition u/s 69A of the Act Quantification of unaccounted investment Rejection of books of account not made Held that:- During the course of search operation incriminating materials was found which disclosed investment of undisclosed income for construction of the building assessee rightly contended that the books of account were not rejected by the assessing officer - in the assessment proceedings consequent to the search, the material found during the course of search operation along with the books of account maintained in the course of regular activity has to be taken into consideration - the observation made by the CIT(A) with regard to rejection of books of account may not prejudice the interest of revenue in any way thus, there is no infirmity in the order of the CIT(A) Decided against Revenue. Opportunity of being heard Held that:- The CIT(A) found that the AO suo motu rejected the objections filed by the assessee which witnessed in three or four instances of duplication - an opportunity was provided by the assessing officer on 03-12-2010 and 08-12-2010 and ultimately, the order was passed on 30-12-2010 - if further time was given to the assessee they would have explained the investment before the AO - There is a statutory limit for passing the assessment order- the AO has done everything possible within the prescribed time by affording an opportunity to the assessee thus, there is no reason to interfere with the order of the CIT(A) Decided against Revenue. Enhancement of income on account of credit mismatch Held that:- The Tribunal is empowered to adjudicate the matter - The Tribunal cannot place the assessee in a worst position than he was before the CIT(A) - If the CIT(A) failed to enhance the income of the assessee, then certainly, the Tribunal also cannot enhance the income for the simple reason that the Tribunal is not empowered to place the assessee in a worst position than he was before the CIT(A) - the assessee cannot be placed in a worst position than it was before the CIT(A) - the Tribunal has no jurisdiction to enhance the taxable income due to mismatch of the account Decided against Revenue. Payment made on behalf of assessee trust Payment made to South Kerala Cashew Export Held that:- The material available on record suggests that the payment was made by South Kerala Cashew Export - The assessee has produced copies of the vouchers / invoices - The assessee has also filed a reconciliation statement before the CIT(A) - CIT(A) found that the assessee could not explain a sum of Rs.2,54,782 - he confirmed the addition to the extent of Rs.2,54,782 there is no infirmity in the order of CIT(A) Decided against Revenue. Enhancement of income Difference in credits Held that:- The CIT(A) has a discretion to enhance the income in exercise of his appellate jurisdiction, Tribunal cannot compel the CIT(A) to enhance the income - The CIT(A) ought to have exercised his jurisdiction since he has powers which is co-terminus with that of the assessing officer - The jurisdiction of the Tribunal cannot be extended to put the assessee in jeopardy thus, there was no infirmity in the order of the CIT(A) Decided against Revenue. Unaccounted investment Held that:- In the block assessment income has to be computed primarily on the basis of the material available on record including the seized material - the seized material as well as the valuation done by the District Valuation Officer has to be taken into consideration - When the District Valuation Officer estimated the cost of construction and there is a difference in reconciliation to the extent of Rs.46,18,176, the Tribunal is of the considered opinion that this Rs.46,18,176 might have been relating to the revenue expenditure - the CIT(A) has rightly deleted the addition made by the AO Decided against Revenue. Exemption u/s 10(23C) of the Act Held that:- All receipts of the assessee cannot be considered to be income of the assessee - any amount collected for admission of the students over and above the prescribed fee has to be considered as capitation fee and that cannot be construed as income of the assessee within the meaning of section 10(23C) - Collection of capitation fee is inhuman, contrary to all social norms besides being contrary to the provisions of Constitution of India Relying upon This view of ours is fortified by the judgment of the Apex Court in T.M.A. Pai Foundation & Ors vs State of Karnataka & Ors [2002 (10) TMI 739 - SUPREME COURT] - the term "any income" has to be considered as income of the property held under the trust and the income generated in the course of running of the institution in the legal manner - It cannot include capitation fee collected for admission of the students - no material is on record to suggest that the assessee has collected any capitation fee for admission of the students - The trustees Shri Abdul Salam and Shri AA Salam happened to be businessmen and admitted that they have invested their own funds in the statement recorded u/s 132(4) of the Act - the CIT(A) has rightly deleted the addition made by the AO there was no infirmity in the order of the CIT(A) Decided against Revenue. Dropping of the enhancement proceedings Unaccounted payments made to doctor Held that:- Unless the addition is made by the CIT(A) in the enhancement proceedings or the addition made by the AO is confirmed by the CIT(A), the Tribunal cannot step into the shoes of the lower authority and make the assessment - The Tribunal cannot put the assessee in a worst position than he was before the CIT(A) - In the absence of any specific addition made by the CIT(A) in the course of first appellate proceedings, the Tribunal cannot make any further addition in the course of second appellate proceedings Decided against Revenue.
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