TMI Blog1992 (3) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... In other words, the sub-contractors were treated by the AO as benamidars of the appellants. The AO was of the view that this arrangement was entered into by the appellants with a view to reduce the incidence of taxation. The AO was also of the view that the entire profit of the contract works at Boggulavagu and Yeleswaram belongs to the appellants. This finding of the AO was based on books of account, documents and other materials seized from one Sri A. Suryanarayana on 27th July, 1984 from Room No. 51, Tajmahal Hotel, Abids Road, Hyderabad. The said room in the hotel was registered in the name of Sri A. Suryanarayana. On the basis of the books of account, documents and other materials seized, the AO came to the conclusion that these books of account, though maintained in the name of sub-contractors, in fact belonged to the appellants. He accordingly made various additions in the case of the appellants. 3. In the case of M/s Prasad Co., the present appeal is against the assessment for asst. yr. 1982-83. The assessment for the said year was originally completed by the AO on 17th March, 1983 under s. 143(1). The ITO, however, took recourse to s. 147 and he made the reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal which squarely covers the issue, and should have deleted the additions made by the AO. The CIT(A) further erred in not following the findings of the Tribunal in appellants own case on the same facts for asst. yr. 1983-84 to the effect that the appellant had nothing to do with the books seized from Sri A. Suryanarayana, that the appellant had given away the contract on sub-lease, to the sub-contractors separately and that the appellant had earned only 1 per cent royalty from the sub-contractors on the gross bills receipts. In the opinion of the learned counsel, the CIT(A) is bound by the findings of the Tribunal which is the final fact-finding authority under the IT Act and the decision of the CIT(A) in setting aside the assessments for further investigation on the same facts would be tantamount to violation of judicial discipline. The learned counsel has also drawn our attention to the finding of the CIT(A) in para 5(ii) of his order which reads as under : "From the facts of the case it looks as though Sri A. Suryanarayana is also the GPA holder of the various sub-contractor firms. From the method adopted by Sri A. Suryanarayana, it is clear that he has purchased t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal in ITA Nos. 2778, 2780 2783/Hyd/1988 and 2779, 2781 2782/Hyd/1988, dt. 31st Dec., 1991, has been placed before us for our consideration. In the said appellate order, the sub-contractor firms were held to be genuine firms and doing the business on their own without having any connection with the appellants before us. On these facts, the CIT(A) was not legally correct in setting aside the assessments and directing the AO to do further investigation to displace the findings of the Tribunal arrived at on the basis of evidence on record which was considered and discussed by the AO in his assessment orders. The learned counsel, therefore, concludes that the orders of the CIT(A) are without any justification and should be vacated. 9. On the other hand, the learned senior Departmental Representative, Smt. K. Mythili Rani, strongly supported the orders of the CIT(A) and contended that it is within the power of the CIT(A) to direct the AO to investigate the case further and plug certain loopholes which the AO had left at the time of completion of the original assessments. The AO is also legally empowered to investigate the case further and find out whether the sub-contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership. There is no evidence to show that the profits earned by the sub-contractor has come to the appellant as such. The ordinary rule is that the apparent state of affairs is real unless the contrary is proved. Onus piobandi apropos the transaction said to have been sham is on those who assert it. This is in consonance with the well known dictum incumbit probatio qui dicit, non qui negat. It means burden lies upon one who alleges not upon one who deny. The burden of showing that a particular transaction is benami and owner is not the real owner always rests on the person asserting it to be so, and this burden has to be strictly discharged by adducing legal evidence of a defence character which would either directly prove the fact of benami or establish circumstances unravelling and reasonably raising an inference of that fact. The essence of benami is the intention of the parties. Such intention is shrouded in a thick steel which cannot be easily pierced through. But such difficulties do not release the person asserting the transaction to be benami of the serious onus that rests on him, nor justify the acceptance of mere conjectures or surmises as a substitute for proof. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eful reading of order of the CIT(A) shows that his directions to the AO are to "fill up the gaps" and to "overcome" the decision of the Tribunal. This, in our view, is not permitted by law. In our considered opinion, the CIT(A) is duty-bound to follow the decision of the Tribunal. This issue has been settled by the apex Court in the case of Union of India vs. Kamalakshi Finance Corpn. Ltd. (1991) 55 ELT 433 (SC). Since the decision of the Supreme Court is not reported in ITR, we reproduce the required portion of it: "The learned additional Solicitor-General submits that the learned Judges have erred in passing severe strictures [(1990) 47 ELT 231 (Bom)] against the two Asstt. Collectors who had dealt with the matter. He submitted that these officers had given reasons for classifying the goods under heading 39.19 and not 85.46 and could do no more. He submitted that they acted bona fide in the interest of revenue in not accepting a claim which, they felt, was not tenable. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gher appellate authorities which are binding on them." In view of the decision of the Supreme Court, it is settled that the decision of a higher authority is binding on a lower authority in the judicial heirarchy. The CIT(A) is, therefore, bound by the decision of the Tribunal. He should have followed the Tribunal s decision and should not have set aside the assessment orders of the AO with a direction to make certain investigations. 12. We may, however, mention that under the IT Act, the AO is not precluded from making further investigation. However, he has to make the investigation, if required, by reopening the assessment under s. 147 if he is of the view that income chargeable to tax had escaped assessment. If he has material to legally invoke the provisions of s. 147, then there is no bar for him to investigate the matter further. But, when a decision has been rendered by the Tribunal on identical facts, the first appellate authority or the AO is bound to follow it and cannot fill up the gaps or overcome the decision of the Tribunal by further investigation. The remedy for the Department perhaps lies elsewhere by a reference application against the order of the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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