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2012 (11) TMI 313 - AT - Income TaxUnaccounted Cash Held that - There was no necessity for AO to invoke the presumption provided u/s 132(4A) of the Act in the hands of Shri Anup Kumar Shah. Further there is no compulsion under the Act that the AO should necessarily invoke the provisions of sec.132(4A) of the Act. Assessee has failed to furnish any credible explanation with regard to the unaccounted cash - Order of CIT(A) on this issue is set aside. Revision u/s 263 - erroneous decision - held that - Ld CIT(A) has listed out the search materials, which have not been examined by the AO and which would have implication to the undisclosed income determined in the hands of the assessee. Thus, it is seen that the AO has failed to apply his mind on those materials and on account of that, the assessment order is rendered erroneous. Since the said issues involve huge tax effect, the assessment order is also rendered as prejudicial to the interests of the revenue. Whether CIT(A) entertain a appeal against an assessment order passed on the directions of the Administrative commissioner - held that - it was not shown to us that the Ld CIT(A) has considered issues which have attained finality in the earlier proceeding. - the assessment order passed u/s 143(3) r.w.s. 263 can very well be appealed before the Ld CIT(A) in respect of the issues which have not already been decided by the appellate authority. - Decided in favor of revenue. Unaccounted Payments - rebuttable presumption u/s 132(4A) - Held that - Considering the quantum of work undertaken by the company and the position of the officials, it would be reasonable, AO was justified in making the addition of Rs.30,25,850/-. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the addition made by the AO. Illegal payments - held that - payments made to the officials of NHAI amounting to Rs.57.50 lakhs are illegal - no infirmity in the decision of CIT(A) in confirming the addition of Rs.57.50 lakhs. - it is seen that the assessee did not explain the entries found in the incriminating documents except stating that they have not made such payments. In this kind of situation the presumption provided u/s 132(4A) comes into operation and we notice that the assessee has failed to rebut the presumption. Payments not accounted in Books - Although assessee reiterated its claim that the transactions pertaining to Rs.12.50 lakhs belong to the Joint Venture concern, yet no material was produced to contradict the findings given by CIT(A) - no reason to interfere with the decision reached by CIT(A) on this issue - In the result,appeal of the revenue is allowed and Both the appeals of the assessee are dismissed.
Issues Involved:
1. Validity of the revision order passed by the Administrative Commissioner under section 263 of the Income-tax Act. 2. Jurisdiction of CIT(A) in admitting and adjudicating appeals against assessment orders passed under section 143(3) while giving effect to a revision order under section 263. 3. Addition of Rs.14,78,500/- relating to the cash seized by the department. 4. Addition pertaining to unaccounted payments claimed to have been paid to the officials of NHAI. 5. Confirmation of additions of Rs.57.50 lakhs for illegal payments and Rs.12.50 lakhs for payments not accounted in the books. Detailed Analysis: 1. Validity of the Revision Order under Section 263: The assessee challenged the revision order passed by the Administrative Commissioner. The Tribunal referred to the legal position regarding the power of the CIT to invoke revision proceedings under section 263. Citing the Supreme Court judgments in Malabar Industrial Co. Ltd. v. CIT and CIT v. Max India Ltd., it was noted that an order is considered erroneous if there is non-application of mind by the AO or if it is prejudicial to the interests of the Revenue. In this case, the Administrative Commissioner directed the AO to examine issues omitted in the original block assessment, which involved significant tax implications. Thus, the Tribunal found no infirmity in the revision order. 2. Jurisdiction of CIT(A) in Adjudicating Appeals: The revenue challenged the jurisdiction of CIT(A) in admitting appeals against assessment orders passed under section 143(3) following a revision order under section 263. The Tribunal clarified that the Administrative Commissioner only directs the AO to examine certain issues, and it is the AO's prerogative to take a view in accordance with the law. The Tribunal cited the Bombay High Court's decision in Hardilla Chemicals Ltd Vs. CIT, stating that appeals can be made against fresh orders by the AO, except on issues that have attained finality. The revenue's contentions were dismissed as they lacked merit. 3. Addition of Rs.14,78,500/- Relating to Cash Seized: The CIT(A) had deleted the addition of Rs.14,78,500/- on the grounds that the cash should be presumed to belong to the person from whom it was seized, per section 132(4A). However, the Tribunal noted that the presumption under section 132(4A) is rebuttable. Statements from multiple individuals, including the Vice President of the company, confirmed that the cash belonged to the assessee-company. The Tribunal found no credible explanation from the assessee regarding the unaccounted cash and restored the addition made by the AO. 4. Addition Pertaining to Unaccounted Payments to NHAI Officials: The AO added Rs.30,25,850/- based on seized materials indicating unaccounted payments to NHAI officials. The CIT(A) deleted this addition, stating the AO did not confront the officials involved. The Tribunal emphasized the responsibility of the assessee to explain entries in incriminating documents. The Tribunal upheld the AO's presumption that the amounts represented "lakhs" and restored the addition, as the assessee failed to rebut the presumption. 5. Confirmation of Additions of Rs.57.50 Lakhs and Rs.12.50 Lakhs: - Illegal Payments to NHAI Officials (Rs.57.50 Lakhs): The Tribunal confirmed the addition, aligning with the reasoning in the previous issue regarding unaccounted payments. - Payments Not Accounted in Books (Rs.12.50 Lakhs): The AO added Rs.40.50 lakhs, later reduced to Rs.12.50 lakhs after confirming that this amount was unaccounted in the books of a Joint Venture concern. The CIT(A) found no evidence in the bank statements to support the assessee's claim. The Tribunal upheld the CIT(A)'s decision as the assessee failed to provide contradictory evidence. Conclusion: The Tribunal allowed the revenue's appeal regarding the addition of Rs.14,78,500/- and Rs.30,25,850/-, and dismissed the revenue's appeal challenging the jurisdiction of CIT(A). Both appeals by the assessee were dismissed, confirming the additions of Rs.57.50 lakhs and Rs.12.50 lakhs.
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