M/s Hotel Plaza, Alappuzha V. ACIT, Ernakulam

CO 61/COCH/2006

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6596 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 7 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 12-11-2014
• Assessment Year: misc
• Appeal Filed On: 26-04-2006
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Keywords: Period of limitation; Reasonable cause; Block assessment; Condonation of delay
• Section: 133A; 132

Judgement Text

K IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM & SANJAY ARO RA, AM I.T.(SS)A NO.196/COCH/2005 BLOCK PERIOD: 1.4.1990 TO 6.5.1999 THE ASSISTANT COMMISSIONER OF INCOME-TAX,CIRCLE-1(2), ERNAKULAM. VS. HOTEL PLAZA, KALAVOOR, ALLEPPEY. (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) C.O. NO. 61/COCH/2006 (ARSG. OUT OF IT(SS)A NO.196/COCH/2005 BLOCK PERIOD: 1.4.1990 TO 6.5.1999 HOTEL PLAZA, KALAVOOR, ALLEPPEY. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX,CIRCLE-1(2), ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE - RESPONDENT) REVENUE BY MS. S.VIJAYAPRABHA, JR. DR ASSESSEE BY SHRI MATHEW JOSEPH, CA DATE OF HEARING 12/10/2011 DATE OF PRONOUNCEMENT 30 /11/2011 O R D E R PER N.R.S.GANESAN, JM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE CITA(A)-II, KOCHI DATED 25.8.2005. THE ASSESSEE HAS FILED CROSS OBJE CTION AGAINST THE SAME ORDER. SINCE COMMON ISSUES ARE ARISING FOR CONSIDERATION, BOTH T HE APPEAL AND THE CROSS OBJECTION WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON, CONSOLIDATED ORDER. I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 2 2. THE FIRST ISSUE ARISING FOR CONSIDERATION IS WIT H REGARD TO CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THE CIT(A). MS. S.VIJAYAPR ABHA, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE WAS DELAY OF 3 YEARS AND 3 MONTHS IN FILING THE APPEAL BEFORE THE CIT(A) BY THE ASSESSEE. ACCORDING TO THE LD. DEPARTMENTAL REPRESENTATIVE THE REASONS FOR NOT FILING THE APPEAL BEFORE THE CIT(A) IN TIME WAS MAINLY MENTAL STRESS AND FINANCIAL CONSTRAINTS. HOWEVER, THE LD. DEPARTMENT AL REPRESENTATIVE SUBMITTED THAT THESE REASONS ARE ALL OF ROUTINE NATURE AND THIS CANNOT B E THE REASON FOR NOT FILING THE APPEAL WITHIN THE PRESCRIBED TIME. REFERRING TO THE JUDGM ENT OF THE APEX COURT REPORTED IN AIR 1981 SC 733, 735, THE LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT AN EVENT OR CIRCUMSTANCES ARISING AFTER THE EXPIRY OF LIMITATIO N CANNOT BE SAID TO BE SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMI TATION. THE JUDGMENT OF THE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS.NITIN MUNJE, 264 ITR 620 WAS DATED 3.7.2003 AND THEREFORE, IT WAS AFTER THE EXPIRY OF LIMITATIO N FOR FILING FIRST APPEAL. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE DELA Y OF 3 YEARS AND 3 MONTHS WAS NOT PROPERLY EXPLAINED. THEREFORE, THE CIT(A) OUGHT N OT TO HAVE CONDONED THE DELAY IN FILING OF THE APPEAL. THE LD. DEPARTMENTAL REPRESE NTATIVE HAS ALSO PLACED HIS RELIANCE ON THE DECISION OF THE CHENNAI BENCH OF THE TRIBUNAL I N SRI VENKATESA PAPER AND BOARDS LTD., 98 ITD 200. 3. ON THE CONTRARY, SHRI MATHEW JOSEPH, THE LD. CHA RTERED-ACCOUNTANT- REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES PARTNER WAS OUT OF THE COUNTRY AT THE RELEVANT POINT OF TIME AND HE CAME B ACK TO INDIA ONLY IN THE YEAR 1999. THE LD. REPRESENTATIVE SUBMITTED THAT THERE WAS A CRIMI NAL CASE INSTITUTED AGAINST SHRI A.S.NARAYANAN NAIR UNDER THE PROVISIONS OF ABKARI A CT AND HE WAS IN JUDICIAL CUSTODY FOR A FEW MONTHS. DUE TO MENTAL STRESS AND FINANCIA L CONSTRAINTS, THE ASSESSEE WAS IN A CONFUSED STATE OF MIND. DUE TO THESE COMPULSIONS, THE ASSESSEE COULD NOT FILE THE APPEAL BEFORE THE CIT(A) WITHIN THE PERIOD OF LIMITATION A ND THEREFORE, THE CITA(A) HAS RIGHTLY CONDONE THE DELAY. I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEES PARTNER WAS OUT OF THE COUNTRY, AND HE RETURNED TO INDIA ONLY IN THE YEAR 1999. THE ASSESSEE WAS ALSO PROSE CUTED UNDER ABKARI ACT AND HE WAS IN JUDICIAL CUSTODY FROM 6.4.2001 TO 27.4.2001.. FROM THE COPY OF THE HIGH COURT ORDER FILED BY THE ASSESSEE IT APPEARS THAT THE ASSESSEE WAS GRANTED BAIL BY AN ORDER DATED 27.4.2001. WHEN A PERSON WAS IN JUDICIAL CUSTODY, IT IS DEFINITELY A STIGMA AND HE CANNOT GO AROUND IN THE SOCIETY LIKE A NORMAL HUMAN BEING. IN THE COUNTRY LIKE INDIA, CRIMINAL PROSECUTION IS ALWAYS CONSIDERED TO BE A STIGMA. IT IS NOT IN DISPUTE THAT SEARCH OPERATION WAS CARRIED ON IN THE CASE OF HOTEL ASHOKA. AS SEE N FROM THE ASSESSMENT ORDER IN THE CASE OF THE PRESENT ASSESSEE, ONLY A SURVEY OPERATI ON UNDER SECTION 133A WAS CARRIED OUT BY THE REVENUE. THE STATEMENT WAS RECORDED FROM SHR I A.S. NARAYANAN NAIR, VIJAYAN NAIR AND SOMASEKHARAN NAIR. THE REVENUE HAS NOT DI SPUTED THAT THE ASSESSEE WAS UNDER FINANCIAL CONSTRAINT. NOW-A-DAYS, EXPENSES FOR LEG AL PROCEEDINGS ARE VERY HIGH AND THE ASSESSEE HAS TO NECESSARILY SHELL OUT LOTS OF MONEY FOR PROSECUTING NUMBER OF LEGAL PROCEEDINGS BEFORE THE COURTS/TRIBUNAL. THEREFORE, TAKING INTO CONSIDERATION OF THE PENDENCY OF CRIMINAL PROCEEDINGS AGAINST ONE OF THE PARTNERS AND THE FINANCIAL CONSTRAINT, IN OUR OPINION, THE ASSESSEE WOULD HAVE BEEN IN MEN TAL STRESS AND CONFUSION. THE BAIL WAS GRANTED ON CONDITION THAT THE ASSESSEE SHALL AP PEAR BEFORE THE INVESTIGATING OFFICER ON EVERY SUNDAY. DUE TO THE FINANCIAL CONSTRAINT AND PENDENCY OF CRIMINAL PROCEEDINGS, THE ASSESSEE COULD NOT HAVE FILED THE APPEAL WITHIN THE PERIOD OF TIME. NO DOUBT, THE ASSESSEE HAS TO EXPLAIN THE PERIOD OF FOR WHICH IT WAS PREVE NTED FROM FILING THE APPEAL. WHAT IS REQUIRED IS THE SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN TIME. THE ASSESSEE HAS TO EXPLAIN THE REASONS FOR THE DELAY IN FILING THE APP EAL. AS IS EXPLAINED BY THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI (1987) 167 ITR 471, EACH AND EVERY DAYS DELAY NEED NOT BE EXPLAINED. TAKING INT O ACCOUNT THE TOTALITY OF THE CIRCUMSTANCES INCLUDING THE PENDENCY OF CRIMINAL PR OCEEDINGS, FINANCIAL POSITION AND THE JUDGMENT OF THE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST KATIJI (SUPRA), IN OUR OPINION, THE CIT(A) HAS RIGHTLY CO NDONED THE DELAY IN FILING THE APPEAL BEFORE THE CIT(A). IN VIEW OF ABOVE DISCUSSION, THE DECISIOF THE CHENNAI BENCH OF THE I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 4 TRIBUNAL IN THE CASE OF SRI VENKATESA PAPER AND BOARDS LTD. (SUPRA) MAY NOT BE APPLICABLE TO THE FACTS OF THE CASE. 5. NOW COMING TO THE MERITS OF THE APPEAL. THE FIRS T ISSUE IS WITH REGARD TO THE DELETION OF ADDITION BY THE ASSESSING OFFICER TOWAR DS SUNDRY EXPENSES FOR THE ASSESSMENT YEARS 1997-98 TO 2000-01. MS. S. VIJAYAPRABHA, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT A SWORN STATEMENT WAS RECORDED DURIN G THE SURVEY OPERATIONS U/S. 133A FROM SHRI P.P. VIJAYAN NAIR AND SHRI SOMASEKHARAN NAIR. THESE DEPOSITIONS SHOW THAT THERE WAS SUPPRESSION OF SALES INCLUDING THAT OF SO DA AND INFLATION OF EXPENSES SUCH AS FOR PURCHASING VEGETABLES ETC. THEREFORE, THE LD. DEPAR TMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) OUGHT NOT TO HAVE DELETED THE ADDITION. 6. ON THE CONTRARY, THE LD. CHARTERED ACCOUNTANT- REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT NO MATERIAL WAS FOUND DURING THE COU RSE OF SEARCH OPERATIONS EITHER IN THE PREMISES OF HOTEL PLAZA OR HOTEL ASHOKA. IN THE AB SENCE OF ANY MATERIAL FOUND DURING THE SEARCH, THE EXPENSES CANNOT BE CONSIDERED TO BE THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE LD. CHARTERED ACCOUNTANT- REPRESENTATI VE FOR THE ASSESSEE SUBMITTED THAT THE STATEMENT RECORDED DURING THE COURSE OF SURVEY OPER ATIONS UNDER SECTION 133A, HAS NO MATERIAL OF EVIDENTIARY VALUE. THEREFORE, NO ADDIT ION COULD BE MADE ONLY ON THE BASIS OF THE STATEMENT RECORDED DURING THE SURVEY OPERATIONS . 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL ON RECORD. FROM THE ORDER OF THE ASSESSING OFFICER , IT APPEARS THAT THERE IS NO MATERIAL FOUND DURING THE COURSE OF THE SEARCH OPERATIONS IN THE CASE OF THE PRESENT ASSESSEE, WHAT WAS FOUND IS ONLY A PROMISSORY NOTE SEIZED FROM HOT EL ASHOKA WHICH SHOWS RENTAL DEPOSIT OF ` 7 LAKHS. APART FROM THE PRO NOTE, NO SEIZED MATERI AL WAS AVAILABLE IN THE CASE OF THE PRESENT ASSESSEE. THE DISALLOWANCE OF EXPEND ITURE WAS MADE ON THE BASIS OF THE STATEMENT RECORDED FROM SHRI P.P.VIJAYAN NAIR AND S OMASEKHARAN NAIR AND A.S. NARAYANAN NAIR IN THE COURSE OF THE SURVEY OPERATIO NS UNDER SECTION 133A. IT IS NOT THE CASE OF THE REVENUE THAT THE STATEMENT RECORDED DUR ING THE SURVEY OPERATIONS UNDER I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 5 SECTION 133A IS WITH REFERENCE TO ANY MATERIAL FOUN D DURING THE SEARCH OPERATIONS. IT IS WELL SETTLED PRINCIPLES OF LAW THAT SURVEY UNDER SE CTION 133A AND SEARCH UNDER SECTION 132 ARE DIFFERENT AND TWO INDEPENDENT PROCEEDINGS. FOR THE PURPOSE OF BLOCK ASSESSMENT, UNDER SECTION 158BC AS WELL AS 158BD, THE ASSESSIN G OFFICER HAS TO NECESSARILY CONFINED TO THE MATERIAL FOUND DURING THE SEARCH OP ERATION OR ANY INFORMATION RELATABLE TO THE MATERIAL FOUND DURING THE SEARCH OPERATION. TH E ASSESSING OFFICER CANNOT TRAVEL BEYOND THE MATERIAL FOUND DURING THE SEARCH OR ANY INFORMATION RELATABLE TO THE MATERIAL FOUND DURING THE SEARCH OPERATION. IN THE CASE BEF ORE US, ADMITTEDLY, NO MATERIAL WAS FOUND ON RECORD WITH REGARD TO THE SUNDRY EXPENSES DURING SEARCH OPERATION. WHAT IS AVAILABLE IS ONLY THE STATEMENT RECORDED FROM SHRI A.S. NARAYANAN NAIR, VIJAYAN NAIR AND SHRI SOMASEKHARAN NAIR DURING SURVEY UNDER SECT ION 133A. AS HELD BY THE KERALA HIGH COURT, THE REVENUE AUTHORITIES ARE NOT EMPOWER ED TO RECORD ANY SWORN STATEMENT IN THE COURSE OF THE SURVEY OPERATIONS THEREFORE, THE STATEMENT RECORDED DURING THE SURVEY OPERATIONS HAS NO EVIDENTIARY VALUE. IN VIEW OF TH E ABOVE, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION IN RESPECT OF EXPENSES FOR THE ASSESSMENT YEARS 1997-98 TO 2000-01.AND CONFIRM THE ORDER OF THE CIT(A). 8. THE NEXT GROUND IS WITH REGARD TO THE DEDUCTION ON UNACCOUNTED EXPENSES. MS. S. VIJAYAPRABHA, THE LD. DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THE ASSESSING OFFICER DISALLOWED 75% OF THE EXPENSES. THOUGH THESE EXPEN SES ARE NECESSARY FOR CARRYING ON THE BUSINESS, ACCORDING TO THE LD. DEPARTMENTAL REP RESENTATIVE THE ASSESSEE HAS NOT MADE THE CLAIM BEFORE THE ASSESSING OFFICER. THE LD. CI T(A) IS NOT JUSTIFIED IN RESTRICTING THE DISALLOWANCE TO 15%. ON THE CONTRARY, SHRI MATHEW JOSEPH, THE LD. CHARTERED- ACCOUNTANT- REPRESENTATIVE FOR THE ASSESSEE SUBMITT ED THAT NO MATERIAL WAS AVAILABLE ON RECORD FOR DISALLOWANCE OF ANY EXPENSES. THE ASSES SING OFFICER PROPOSED TO DISALLOW THE CLAIM AT THE RATE OF 75% ON THE BASIS OF THE BOOKS OF ACCOUNTS PRODUCED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER WHICH WAS IMPOUNDED. NO SEIZED MATERIAL WAS AVAILABLE FOR COMPUTING ANY UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION. IN THE ABSENCE OF ANY MATERIAL AVAILABLE ON RECORD, DISALLOWANCE EITH ER AT 75% OR 15% IS NOT JUSTIFIED. I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 6 SINCE THE CIT(A) RESTRICTED THE EXPENSES TO 15%, TH E SAME WAS NOT CHALLENGED BY THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE MATERIAL ON RECORD. THE ASSESSING OFFICER DISALLOWED THE EXP ENSES TO THE EXTENT OF 75%. SECTION 158BB(1) CLEARLY SAYS THAT UNDISCLOSED INCOME FOR T HE BLOCK PERIOD HAS TO BE COMPUTED ONLY ON THE BASIS OF THE MATERIAL FOUND OR INFORMAT ION RELATABLE TO THE MATERIAL FOUND DURING SEARCH. THE SO CALLED INFLATED EXPENSES WAS FOUND BY THE ASSESSING OFFICER FROM THE BOOKS OF ACCOUNTS PRODUCED BEFORE THE ASSESSING OFFICER AFTER THE SURVEY OPERATIONS. IT IS NOT DISPUTED THAT THERE IS NO MATERIAL FOUND DURING THE SEARCH OPERATIONS. IN THE ABSENCE OF ANY MATERIAL FOUND OR INFORMATION RELATA BLE TO THE MATERIAL FOUND DURING SEARCH, IT IS NOT JUSTIFIED TO DISALLOW THE CLAIM O F THE ASSESSEE WHILE COMPUTING THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THE LD. C IT(A) RESTRICTED THE DISALLOWANCE AT 15%. THEREFORE, WE DO FIND ANY INFIRMITY IN THE OR DER OF THE CIT(A) AND ACCORDINGLY, THE SAME IS CONFIRMED. 10. NOW COMING TO THE DISALLOWANCE WITH REGARD TO T HE PAYMENT OF ADVANCE TAX OF ` 80, 000/- DELETED BY THE CIT(A), MS. S.VIJAYAPRABHA, TH E LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT MERELY BECAUSE THE AD VANCE TAX WAS PAID, IT CANNOT BE SAID THAT THE ENTIRE INCOME FOR THE ASSESSMENT YEAR 1999 -2000 CANNOT BE CONSIDERED AS UNDISCLOSED INCOME.. 11. ON THE CONTRARY, THE LD. CHARTERED ACCOUNTANT-R EPRESENTATIVE, SHRI MATHEW JOSEPH SUBMITTED THAT WHENEVER ADVANCE TAX WAS PAID IT WAS TO BE TREATED AS DISCLOSED TO THE DEPARTMENT. THEREFORE, THERE CANNOT BE UNDISCL OSED INCOME FOR THE YEAR UNDER CONSIDERATION. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. SECTION 158B(B) CLEARLY DEFINES UNDISCLOSED INCOME. AS PER THIS DEFINITION, ANY MONEY, BULLION OR VALUABLE OR ARTICLE ETC. WHICH HAS NOT B EEN DISCLOSED OR WOULD NOT HAVE BEEN I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 7 DISCLOSED FOR THE PURPOSE OF THE INCOME TAX ACT, HA S TO BE TREATED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. IF THE EXPENSES, DEDUCTION O R ALLOWANCE CLAIMED UNDER THIS ACT WAS FOUND TO BE FALSE, THEN THAT HAS ALSO TO BE TREATED AS UNDISCLOSED INCOME. IF THE ASSESSEE PAYS ADVANCE TAX OF ` 80,000/- UNDER THE SCHEME OF THE INCOME TAX ACT, IT AMOUNTS TO DISCLOSURE OF INCOME ATLEAST TO THE EXTENT OF ADVAN CE TAX OF ` 80,000/- . IN NORMAL CIRCUMSTANCES, THE ASSESSEE IS LIABLE TO PAY TAX O NLY AFTER COMPLETION OF THE ASSESSMENT AND THE DEMAND IS RAISED THEREON. HOWEVER, IN VIEW OF THE SPECIFIC PROVISIONS OF THE I.T. ACT AND THE SCHEME MADE THEREIN, THE ASSESSEE WAS COMPELLED TO PAY ADVANCE TAX EVEN BEFORE FILING THE RETURN AND COMPLETION OF ASSESSME NT. IT IS NOT THE CASE OF THE REVENUE THAT THE PAYMENT OF ADVANCE TAX WAS NOT FOR THE PUR POSE OF INCOME TAX ACT. IF THERE IS NO PROVISION, THE ASSESSEE WOULD NOT PAY ANY ADVAN CE TAX AT ALL. SINCE THE LEGISLATURE FRAMED A SCHEME BY WAY OF I.T.ACT TO PAY ADVANCE TAX BEFORE COMPLETION OF THE ASSESSMENT, IN OUR OPINION, THE PAYMENT OF ADVANCE TAX WOULD AMOUNT TO DISCLOSURE OF THE RELATABLE INCOME UNDER THE INCOME TAX ACT. THEREFO RE, ATLEAST TO THE EXTENT OF INCOME FOR WHICH THE ADVANCE TAX WAS PAID, CANNOT BE CONST RUED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) AND ACCORDINGLY, THE SAME IS CONFIRMED. 13. COMING TO THE CROSS OBJECTION FILED BY THE ASSE SSEE, THERE IS DELAY OF 73 DAYS IN FILING OF THE CROSS OBJECTION. THE ASSESSEE HAS F ILED AN APPLICATION TO CONDONE THE DELAY. THE CONTENTION OF THE ASSESSEE IS THAT DUE TO THE DISCONTINUANCE OF THE HOTEL BUSINESS WITH EFFECT FROM 30.11.1999 AS THERE WAS NO OFFICE STAFF EMPLOYED TO LOOK INTO THE MATTER. THE ASSESSEE COULD NOT FILE THE CROSS OBJECTION IN TIME . THE LD. REPRESENTATIVE ALSO SUBMITTED THAT THE ORDER OF THE CIT(A) WAS MISPLACED, THEREFO RE, THE ASSESSEE COULD NOT FILE THE APPEAL IN TIME. WE HEARD THE LD. DEPARTMENTAL REPR ESENTATIVE ALSO. 14. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. TAKING INTO CONSIDERATION THE DISCONTINUANCE OF THE HOTEL BUSINESS WITH EFFECT FORM 30.11.1999 CONSEQUENT TO WHICH THE ORDER OF THE CIT(A) WAS MIS PLACED, IN OUR OPINION, THERE WAS A REASONABLE CAUSE IN NOT FILING THE CROSS OBJECTION WITHIN THE PERIOD OF LIMITATION. I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 8 ACCORDINGLY, THE DELAY OF 73 DAYS IN FILING THE CRO SS OBJECTION BY THE ASSESSEE IS CONDONED. 15. THE ONLY ISSUE ARISES FOR CONSIDERATION IS PAYM ENT OF ADVANCE TAX TO THE EXTENT OF ` 60,000/- FOR THE ASSESSMENT YEAR 1998-99. 16. WE HAVE HEARD SHRI MATHEW JOSEPH, THE LD. CHART ERED ACCOUNTANT-REPRESENTATIVE AND MS. S.VIJAYAPRABHA, THE LD. DEPARTMENTAL REPRES ENTATIVE. AS DISCUSSED IN THE EARLIER PART OF THE ORDER IN THE REVENUE APPEAL, WHEREVER T HE ADVANCE TAX WAS PAID, IT HAS TO BE TREATED AS DISCLOSED TO THE DEPARTMENT IN RESPECT O F RELATABLE INCOME. THEREFORE, IF THE ASSESSEE HAS PAID ADVANCE TAX OF 60,000/- TO THE D EPARTMENT BEFORE THE DATE OF SEARCH, IT HAS TO BE TREATED AS DISCLOSURE OF RELATABLE INCOME FOR THE YEAR UNDER CONSIDERATION. HOWEVER, THE ASSESSING OFFICER HAS TO VERIFY WHETHE R THE ASSESSEE HAS IN FACT PAID THIS AMOUNT AS ADVANCE TAX BEFORE THE DATE OF SEARCH AS CLAIMED. IF THE PAYMENT IS MADE BEFORE THE DATE OF SEARCH AS CLAIMED BY THE ASSESSE E, THEN THAT PART OF THE INCOME MAY NOT BE TREATED AS UNDISCLOSED INCOME. 17. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D AND THE ASSESSEES CROSS OBJECTION IS ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (SANJAY ARORA) (N.R.S.GANESAN) (ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: ERNAKULAM DATED: 30TH NOVEMBER, 2011 GJ COPY TO: 1. HOTEL PLAZA, KALAVOOR, ALLEPPEY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(2), ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM/KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . I.T.(SS)A. NO. 196 /COCH/2005 & C.O. NO. 61/COCH/2006 9