TMI Blog2014 (11) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... as 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order u/s 263 is a direction without any discretion. After consulting seniors in the line, I could now understood that the order u/s 263 of the Commissioner of Income-tax gave a clear direction to modify the assessment order applying the provisions of section 40A(3) and the quantum of the amounts to be disallowed were also fixed. There is no discretion left to the learned Assessing Officer to do anything else. Hence I was told that the only course left is to agitate against the order u/s 263 before the Hon'ble Income-tax Appellate Tribunal, Hyderabad. I hereby solemnly state that because of my misunderstanding of the nature of the orders of the Hon'ble Commissioner of Income-tax, no appeals were suggested and filed in time against these orders u/s 263 to the Income-tax Appellate Tribunal. An appeal has been now filed on 20.11.2013. The delay in filing this appeal is solely on account of my misunderstanding of the orders u/s 263. I hereby solemnly affirm that whatever is stated above is true to the best of my knowledge and belief. Sd/- DEPONENT. 3. The learned counsel for the assessee submitted that the assessees are laymen and not acquainted with the intricacies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in not making the disallowance u/s. 40A(3) in respect of cash payments and, therefore, the order u/s. 263 is not valid. 8. Facts of the cases are that operations u/s. 133A were conducted on 25.2.2009 Sri U. Venkateswarlu, on behalf of the assessee-group, in his statement u/s 131 on 26-03-2009, during the course of post survey proceedings, clearly stated that ... the complete details of land transactions along with the bank account statements shall be furnished in 15 days time as the same have to be obtained from Sub-Registrar's office and respective banks. After obtaining the above information, we shall work out the investments and profits earned from the real estate business and pay taxes accordingly .... . 9. In his statement on 29-04-2009, he stated that ..... We have gathered all relevant information from the sub-registrar's office and worked out the incomes earned in the hands of our family members for different assessment years after duly considering all the transactions that have taken place in our names during different financial years. Based on the working, I am herewith submitting computation statements of income and tax in the names of our fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lete the assessment. Since I have complied with my sworn deposition during the course of survey and subsequent proceedings, the above information may kindly be taken into account and complete the Assessment. 12. The Assessing Officer completed the assessment u/s. 143(3) of the Act accepting the income returned by respective assessee. 13. The CIT assumed jurisdiction and directed the Assessing Officer to appy the provisions of s. 40A(3) to the cash payments listed out in the order u/s. 263 of the Act. The CIT included in the list some of the repayments of advances also. The Assessing Officer while giving effect to the order u/s. 263 of the Act completed the assessment u/s. 143(3) r.w.s. 263 and disallowed the entire amount listed out in the order u/s. 263 of the Act. The repayments of advances were also disallowed u/s. 40A(3). The Assessing Officer had followed the directions of the Commissioner and passed a consequential order giving effect to the order u/s. 263 of the Act. Aggrieved, the assessees are in appeal before us against the order passed u/s. 263 of the Act. 14. The learned counsel pointed out that the CIT failed to appreciate that the payments were entered as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces received and advanced paid and not amounts of purchases so as to disallow u/s. 40A(3) of the Act. Likewise, in all other cases the amounts of purchases and other amounts considered by the learned CIT are listed as under: Name of the assessee A.Y. Purchases (Rs.) Advances (Rs.) Smt. Gonugunta Suseela 2009-10 - 16,00,000 Sri Upputuri Venkateswarlu 2007-08 4,10,040 - 2009-10 16,57,620 - Sri Gonugunta Venkateswarlu 2009-10 2,63,450 5,70,000 Sri Gonugunta Srinivasa Rao 2005-06 261120 50,000 2007-08 384600 260000 2009-10 75480 2305000 Smt. Upputuri Dhanalakshmi 2008-09 1667051 7,00,000 2009-10 458690 1569250 18. It was submitted that the learned CIT did not examine whether the amounts are advances or purchases claimed in the Profit and Loss A/c. Thus, the order of the CIT directing to disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Assessing Officer did not invoke the provisions of that section and accepted the admitted incomes. In view of this, we are of the opinion that 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). Therefore, we are of the opinion that the orders of the CIT per se are not correct on facts. 23. In the case of CIT vs. Arvind Jewellers [259 ITR 502 (Guj)], the Gujarat High Court held that the finding of fact by the Tribunal was that the assessee had produced relevant material and had offered explanations in pursuance of the notices issued under s. 142(1) as well as s. 143(2) of the Act, that after considering the material and explanations, the AO had come to a definite conclusion, that since the material was there on record and the said material was considered by the AO and a particular view was taken, the mere fact that a different view could be taken should not ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
