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2014 (11) TMI 547 - AT - Income TaxCondonation of delay delay of 50 days - Chartered Account filed an affidavit stating the reasons for delay Held that:- The assessees are laymen and not acquainted with the intricacies of Income-tax Law and the delay was caused due to misunderstanding of CIT order by the Chartered Accountant in Kewalkumar Jain vs. ACIT [2014 (11) TMI 526 - ITAT PUNE] - assessee misconstrued law by assuming that since matter was remitted back to AO, he could agitate consequential order to be passed by AO in appeal proceedings before CIT(A) only - Thus assessee entertained a belief that as original assessment had been set aside, there was no necessity of challenging revisional order of Commissioner before Tribunal the delay is condoned and appeal admitted for adjudication on merit. Validity of revision order u/s 263 Disallowance u/s 40A(3) in respect of cash payments Held that:- The AO was fully aware of the survey operations and the income was estimated on the basis of loose slips and purchase and sale documents during the post survey proceedings itself - The estimate was not based on any books of account but the income was admitted on the basis of loose slips and the assessees paid taxes as agreed - The AO accepted the incomes returned as the assessee had admitted the incomes and declared in the sworn statements during the post survey proceedings - The AO had fully applied his mind and accepted the incomes returned and passed orders u/s 143(3) of the Act - the CIT is no justified in assuming jurisdiction u/s 263 - invoking the provisions of section 40A(3) on advances is not correct under the facts of the case. The CIT came to a wrong conclusion that the assessees had violated the provisions of s. 40A(3) - the AO asked for cash-flow statement and on the basis of such statements the assessees admitted income - Since the issue of purchases did not arise in the course of survey nor anything is identified that the assessees had paid any amount in violation of provisions of s. 40A(3), the AO did not invoke the provisions of that section and accepted the admitted incomes - the CIT without any basis on record invoked the provisions of s. 40A(3) and that too included certain amounts which cannot be disallowed u/s. 40A(3) - the orders of the CIT per se are not correct on facts - the AO applied his mind to the facts of the cases and the assessees made sworn statements and admitted the income - Taxes thereon were also paid - the CIT is not correct in assuming jurisdiction u/s. 263 of the Act thus, the order of the CIT(A) passed u/s. 263 of the Act is set aside Decided in favour of assessee.
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