GOPALAKRISHNAN PUKALAKKAT BALAKRISHNAN,ERNAKULAM V. ACIT, NON-CORPORATE CIRCLE , KOCHI

ITA 89/COCH/2024

AI Insights

The case involves Gopalakrishnan Pukalakkat Balakrishnan, who appealed against the orders of the Assistant Commissioner of Income-tax, Non-Corporate Circle Kochi, and the Commissioner of Income-tax (Appeals). The dispute originated from the reassessment of the income declared by Balakrishnan for the assessment year 2011-2012, which was initially reopened under section 148 of the Income-tax Act. The AO added substantial amounts to Balakrishnan's income based on alleged investments not recorded in the books and disallowed certain claimed expenses related to long-term capital gains. Both the CIT(A) and the Tribunal found procedural lapses in the AO's handling of the case, particularly the lack of opportunity for cross-examination of a key witness.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397242 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: SHERRY S.OOOMMEN

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.89/Coch/2024 : Asst.Year 2011-2012 Gopalakrishnan Pukalakkat Balakrishnan 35/3086, Pukalakkat House Palarivattom Kochi – 682 025. PAN : ACMPB0076D. v. The Asst.Commissioner of Income-tax, Non-Corporate Circle Kochi. (Appellant) (Respondent) Appellant by : Sri.Sherry S.Ooommen, Advocate Respondent by : Smt.Leena Lal, Sr.AR Date of Hearing : 27.05.2025. Date of Pronouncement : 30.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the National Faceless Appeal Center / learned Commissioner of Income-tax (Appeals) [“CIT(A)”] dated 07.12.2023 and relates to the assessment year 2011-2012. 2. Brief facts of the case as coming out from the orders of the authorities below are that the assessee is an individual filed its return of income on 11th November, 2011 declaring an income of Rs.84,90,210. Thereafter the case of the assessee was reopened u/s.148 of the Income-tax Act vide notice dated 11th June, 2014. In response to the notice u/s.148 of the Act, the assessee filed the return of income making certain ITA No.89/Coch/2024. Gopalakrishnan Pukalakkat Balakrishnan. 2 additional disclosure and increases the returned income to the tune of Rs.1,01,01,940. Thereafter, the Assessing Officer issued statutory notices to the assessee. During the course of assessment proceedings, the AO observed that the assessee has made certain investments out of the books of account amounting to Rs.78,71,000. The AO was of the view that the assessee has made these investments outside the books of account. The AO relied upon the statement of third party, Mr.Bhaskaran Nair, Ernakulam and added the amount u/s.69 of the Act in the hands of the assessee. Besides this, the AO also disallowed an amount of Rs.87,18 lakh being development charges and the cost of improvement of Rs.10.8 lakh incurred by the assessee with respect to the long term capital gain declared by the assessee. 3. Aggrieved with the order of the AO, the assessee filed an appeal before the CIT(A), but remained unsuccessful. Thereafter, the assessee has come up in appeal before us. The learned Counsel for the assessee reiterated the submissions made before the AO as well as CIT(A), both on legal as well as on merits of the case. 4. The learned DR relied upon the orders of the authorities below. 5. After considering the rival submissions, we are of the view that there is no error in the action of AO with respect to the assumption of jurisdiction u/s.147 of the Act. So far as the other additions u/s.69 and disallowance of development ITA No.89/Coch/2024. Gopalakrishnan Pukalakkat Balakrishnan. 3 expenses and cost of improvement are concerned, we are of the view that the matter requires fresh consideration at the end of the AO, inasmuch as, the AO has not provided an opportunity of cross-examining Mr.Bhaskaran Nair, on whose statement the addition has been made. With these observations, we remit this matter back to the file of the AO for deciding afresh, in accordance with law. The assessee will provide further documentary evidences with respect to its claim of development expenses and cost of improvement. Needless to say, the AO shall afford meaningful opportunities to the assessee, before passing any order. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on this 30th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 30th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "