Babu C. George V. The Assistant Commissioner of Income Tax, Central Circle-I, Ernakulam

ITA/14/2008

AI Insights

The case involves an appeal by Babu C. George against the assessments made by the Assistant Commissioner of Income Tax, Central Circle-I, Ernakulam, which were confirmed by the ITA Tribunal, Cochin Bench. The assessments were based on the addition of unexplained investments under Section 69 of the Income Tax Act, arising from property transactions near Nedumbassery Airport. The appellant contended that the higher amounts recorded in the sale agreements were due to the anticipation of government acquisition, which was not accepted by the Tribunal or the High Court. The court's decision emphasized the binding nature of the agreements and the legal implications of the recorded sale considerations.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 670890 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 27-02-2009
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: N J MATHEWS
• Keywords: Assessment; Income Tax; Property Purchase; Sale agreement; Unexplained investment
• Section: 69

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE K.SURENDRA MOHAN FRIDAY, THE 27TH FEBRUARY 2009 / 8TH PHALGUNA 1930 ITA.No. 14 of 2008() -------------------- ITA.479/COCHIN/2006 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT IN ITA/APPELLANT BEOFRE CIT(A): ----------------------------------------------------------------- BABU C.GEORGE, CHANDRATHIL HOUSE, PALARIVATTOM, KOCHI-25. BY ADV. SRI.N.J.MATHEWS SRI.GEORGE VARGHESE KIZHAKKAMBALAM SRI.V.C.BABU KUMAR RESPONDENT/RESPONDENT IN ITA/APPELLANT BEOFRE CIT(A): --------------------------------------------------------------------- THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, ERNAKULAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 27/02/2009, ALONG WITH ITA NOS.16/08 & 19/08 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & K. SURENDRA MOHAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A. Nos. 14, 16 & 19 OF 2008 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 27th day of February, 2009 JUDGMENT Ramachandran Nair,J. Heard counsel appearing for the appellant and Standing Counsel appearing for the respondent. The various questions raised pertain to addition of unexplained investment under Section 69 of the IT Act. The assessee/appellant entered into agreements for purchase of property with various parties. According to the Department, agreements seized in search contains actual sale price, i.e., the value of the property later purchased by the assessee pursuant to such agreements. Assessee's case is that, higher amount is shown for the reason that there was likelihood of acquisition of property, as it was near to Nedumbassery Airport. Counsel further contended that amount shown as received by the seller on the reverse of the agreement was lesser than the amount shown in the agreement and the sale deed showed still lesser amount. However, addition under Section 69 was made based on actual amount shown in the sale agreements. The Tribunal confirmed the same and these appeals are filed to modify that order. We do not find any ground to interfere with the orders of the Tribunal ITA : 14, 16 & 19/2008 -:2:- confirming assessment for the simple reason that the assessee's case that higher amount is shown in the agreement for sale, anticipating acquisition, is unacceptable. In the first place, the agreement binds the assessee and the assessee cannot be expected to agree to pay sale consideration other than what is agreed. Further, by showing higher amount in the agreement executed by the assessee, the assessee cannot claim higher compensation based on his own agreement. It is common knowledge that sale agreements which are enforceable in courts and which bind the parties, contain actual sale consideration and after payments are made, sale deeds are executed showing lesser sale consideration. We do not find any question of law arising out of the orders of Tribunal confirming assessments made based on the agreements signed by the assessee himself. Appeals are consequently dismissed. (C.N.RAMACHANDRAN NAIR) Judge. (K. SURENDRA MOHAN) Judge. ttb ITA : 14, 16 & 19/2008 -:3:- ITA : 14, 16 & 19/2008 -:4:- "