A.SHIHABUDEEN V. THE COMMERCIAL OF INCOME TAX, KOTTAYAM

ITA/97/2012

AI Insights

The case involves A. Shihabudeen, a jeweler from Karunagappally, who appealed against the order of the Income Tax Appellate Tribunal, which had dismissed his appeals regarding the addition of large credits by way of gold deposits to his income under Section 68 of the Income Tax Act. Initially, the tribunal had ruled in favor of the appellant, but upon the Revenue's appeal, the High Court remanded the matter back to the tribunal, which then upheld the Revenue's stance. The appellant contended that the tribunal did not comply with the High Court's earlier directions to consider the evidence realistically and make reasonable inferences.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 755850 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 08-03-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, KGST Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P BALAKRISHNAN; MOHAN PULICKKAL
• Keywords: Assessment Order; Income tax appeal; Income tax appellate tribunal; Section 5A; Section 68; Gold Deposit
• Section: 254(2); 68; 5A

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN FRIDAY, THE 8TH DAY OF MARCH 2013/17TH PHALGUNA 1934 ITA.No. 97 of 2012 () ---------------------- AGAINST THE ORDER/JUDGMENT IN ITA.NO.116/COCH/2008 of INCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH DATED 25-11-2011 ..... APPELLANT(S): ------------------------ A.SHIHABUDEEN, VILAYIL JEWELLERS, KARUNAGAPPALLY, KOLLAM BY ADVS.SRI.P.BALAKRISHNAN SRI.MOHAN PULICKKAL RESPONDENT(S): ---------------------------- THE COMMERCIAL OF INCOME TAX, KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 08-03-2013 ALONG WITH ITA. NO.146 OF 2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss ITA NO.97/2012 APPENDIX APPELLANT'S ANNEXURES: ANNEX.A: COPY OF THE ASSESSMENT ORDER DTD. 28/02/2006 OF THE ASSESSING OFFICER. ANNEX.B: COPY OF THE ORDER DTD. 15/10/2007 OF THE COMMISSIONER OF INCOMETAX (APPEALS) IV, KOCHI. ANNEX.C: COPY OF THE ORDER DTD. 20/04/2009 OF THE INCOME TAX APPELLATE TRIBUNAL IN ITA NO.116/COCH/2008. ANNEX.D: COPY OF THE JUDGMENT DTD. 24/03/2010 IN ITA NO.1766 OF 2009 OF THIS HON'BLE COURT. ANNEX.E: COPY OF THE ORDER DTD. 25/11/2011 OF THE INCOMETAX APPELLATE TRIBUNAL IN ITA NO.116/COCH/2008. ANNEX.F: COPY OF THE LETTER DTD. 7/10/2011 FROM THE REPRESENTATIVE OF THE APPELLANT ADDRESSED TO THE TRIBUNAL. RESPONDENT'S ANNEXURES: N I L /TRUE COPY/ P.S.TO JUDGE Kss K. M. JOSEPH & K. RAMAKRISHNAN, JJ. ---------------------------------------------- I. T. A. NOS. 97 & 146 OF 2012 ----------------------------------------------- Dated this the 8th March, 2013 JUDGMENT K.M. Joseph, J. Appellant has approached this Court being aggrieved by the order of the Appellate Tribunal. 2. This is a case where large credits by way of deposit of gold were found and it was added to the income of the appellant under Section 68 of the Income Tax Act. Originally, the tribunal had held in favour of the appellant. Revenue came before this Court in appeal and this Court allowed the appeal and remanded the matter with certain observations. The tribunal after considering the matter, has found in favour of the Revenue and dismissed the appeals filed by the appellant. 3. The tribunal found that the case of the appellant that the gold was available on the basis of deposits made by various ITA.97 & 146/12 2 parties, cannot be believed. Various circumstances were relied on in arriving at the said conclusion. Statements were obtained from the so-called depositors of gold and contradictions were brought out rendering the version of the appellant unacceptable. 4. We heard the learned counsel for the appellant and the learned counsel appearing for the Revenue. 5. Learned counsel for the appellant would only raise one complaint before us. He would point out the following portion of the Judgment of this Court in the earlier appeal: “When the Assessing Officer and the first appellate authority considered the genuineness of each and every case of deposit alleged to have been received by the appellant, it was the duty of the Tribunal to have considered the evidence in a realistic manner and to make reasonable inference and decide the case reasonably. Even though assessee is a dealer in gold ornaments who has registration under the KGST Act and is filing returns, strangely none of the authorities have chosen to consider whether assessee has accounted purchase of all these gold ornaments and paid purchase tax under Section 5A because deposits are admittedly taken as stock in trade and ITA.97 & 146/12 3 used in business. Therefore, if the transaction is genuine, the assessee would have accounted purchase of old gold paying tax under Section 5A and paid sales tax on corresponding sales turnover of new jewellery. This is of course only a corroboration of facts and even if assessee has paid sales tax accounting bogus purchases, nothing stands in the way of the Income Tax Department in making addition under Section 68, if justified.” He would contend that there was non-compliance of the said direction. In other words, he would contend that this Court had found that if deposits had been received, it would have been included as old stock of gold and tax would have been paid under Section 5A and thereafter the court also proceeded to hold that this could been corroboration of the appellant's case. Thereafter, the court also observed that even if tax is paid, it is open to the tribunal to take a view in favour of the Revenue. The complaint is that even though sales tax records revealing purchase of gold from nine persons and payment of tax under Section 5A of the KGST Act was made available, there is no reference at all to the same. Learned counsel for the Revenue would submit that there is no ITA.97 & 146/12 4 reference to the same in the order. We feel that if that is the case of the appellant, the appellant can move under Section 254(2) of the Income Tax Act for rectification. In such circumstances, we are of the view that we need not consider the matter in these Appeals, as the orders stand now, nothing is brought on record for us to come to the conclusion that even though the records were produced, they were not considered. Without prejudice to the right of the appellant, if so advised, to move under Section 254(2) of the Income Tax Act, the Appeals are dismissed. Sd/= K. M. JOSEPH JUDGE Sd/= K. RAMAKRISHNAN JUDGE kbk. //True Copy// "