2023 (7) TMI 235 - AT - Income Tax

Revision u/s 263 by CIT - assessee had received excess amounts in cash in respect of sale of certain plots over and above the officially recorded price - HELD THAT - From the fact, it emerges that certain additions of on-money have been made in the hands of the assessee on protective basis. However, it was noted by revisionary authority that the figures of on-money, on substantive basis was much higher and a portion of the same was omitted to be considered by AO while framing the assessment order. It is a clear case where error has incurred which is prejudicial to the interest of the revenue. Therefore, no fault could be found in the revision of the order. However, as noted from the impugned order, the addition has to be made on protective basis only. Assessee appeal dismissed.

Summary

Issues involved:
The issues involved in the judgment are the invocation of revisionary jurisdiction u/s 263 for Assessment Year 2010-11, the addition of unexplained cash credit u/s 69A, and the failure to consider certain amounts for taxation.

Revisionary Jurisdiction u/s 263:
The appellant challenged the invocation of revisionary jurisdiction u/s 263 for AY 2010-11, contending that the order passed was contrary to law and facts. The Principal Commissioner observed that the assessment was erroneous and prejudicial to the revenue due to the omission of mentioning that the assessment was made on a protective basis. It was also noted that the Assessing Officer failed to call for details from the AO who made the substantive assessment. The Principal Commissioner directed the AO to make a de novo assessment, which was contested by the appellant. The Tribunal upheld the revisionary order, emphasizing that the error in the assessment was prejudicial to the revenue, and the addition should be made on a protective basis only.

Addition of Unexplained Cash Credit u/s 69A:
The assessee, a director in a corporate entity, was assessed u/s 143(3) r.w.s. 147 for AY 2010-11. The AO made an addition of unexplained cash credit u/s 69A amounting to Rs. 60.81 Crores based on findings from the assessee's case for AY 2009-10. The assessment for AY 2009-10 had a similar addition of Rs. 101.22 Crores. The revisionary jurisdiction was invoked based on the assessee receiving excess amounts in cash for the sale of certain plots. The case was reopened to tax the excess amount of Rs. 85.58 Crores, of which only Rs. 60.81 Crores was added in the assessment. The remaining Rs. 24.77 Crores was omitted, leading to a show-cause notice to the assessee. The revisionary authority found that the AO failed to tax the remaining amount, which was already collected by the corporate entity. The AO was directed to consider the taxability of the omitted amount on a protective basis, which was upheld by the Tribunal.

Failure to Consider Certain Amounts for Taxation:
The revisionary authority noted that certain amounts of on-money were omitted by the AO while making additions on a protective basis. The AO failed to consider a portion of the on-money collected by the corporate entity, leading to an error prejudicial to the revenue. The revision of the order was deemed appropriate, with the addition to be made on a protective basis only. The appeal was dismissed accordingly.