Dr.R.P. Patel, Kottayam V. ACIT, Kottayam

ITA 1328/COCH/2004

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61474 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-03-2012
• Assessment Year: 1992-1993
• Appeal Filed On: 30-12-2004
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: K I JOHN
• Keywords: Assessment record
• Section: 154

Judgement Text

1 ITA NO.1328/COCH/2004 ITA 374/COCH/2005 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T.A NO. 1328/COCH/2004 - A.Y. 1992-93 DR.R.P. PATEL VS THE A.C.I.T., CIR.1 HAHNEMAN HOUSE, COLLEGE ROAD KOTTAYAM KOTTAYAM PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) I.T.A NO. 374/COCH/2005 - A.Y. 1991-92 THE DY.CIT, CIR.1 VS DR. R.P. PATEL KOTTAYAM KOTTAYAM (APPELLANT) (RESPONDENT) REVENUE BY : SHRI S.R. SENAPATI ASSESSEE BY : SHRI K.I. JOHN DATE OF HEARING : 27-03-2012 DATE OF PRONOUNCEMENT : 27-04-2012 O R D E R PER N.R.S. GANESAN (JM) THE ASSESSEE FILED THE APPEAL FOR THE ASSESSMENT Y EAR 1992-93 IN ITA NO.1328/COCH/2004. THE REVENUE FILED THE APPEAL FO R THE ASSESSMENT YEAR 1991- 92 IN ITA NO.374/COCH/2005. SINCE THE ISSUES ARISE FOR CONSIDERATION ARE COMMON, WE HEARD THESE APPEALS TOGETHER AND DISPOSE OF THEM BY THIS COMMON ORDER. 2 ITA NO.1328/COCH/2004 ITA 374/COCH/2005 2. LET US FIRST TAKE ITA NO.1328/COCH/2004 FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1992-93. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDITION OF RS.73,703 TOWARDS ACCRUED INTEREST BY RECTIFYING TH E ORDER U/S 154 OF THE ACT. 3. SHRI K.I. JOHN, THE LD.REPRESENTATIVE FOR THE ASS ESSEE SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION THE REVENUE AUTHORIT IES FOUND CERTAIN INVESTMENTS. HOWEVER, THE ASSESSING OFFICER FAILED TO BRING TO TAX THE INTEREST ACCRUED ON SUCH INVESTMENTS. THE ASSESSING OFFICER RECTIFIED THE ORDER U/S 154 OF THE ACT BRINGING TO TAX RS.73,703 BEING THE INTERES T ACCRUED ON FIXED DEPOSIT. ACCORDING TO THE LD.REPRESENTATIVE, THE INTEREST ON FIXED DEPOSIT WOULD ACCRUE TO THE ASSESSEE ONLY AT THE TIME OF MATURITY, THEREFOR E, IT CANNOT BE BROUGHT TO TAX ON ACCRUAL BASIS. 4. ON THE CONTRARY, SHRI S.R SENAPATI, THE LD.DR SU BMITTED THAT INTEREST ON INVESTMENT HAS TO BE BROUGHT TO TAX ON ACCRUAL BASI S. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE INTEREST ON FIXED DEPOSITS WERE NOT BROUGHT TO TAX, THEREFORE, THE ASSESSING OFFICE R BY RECTIFYING THE ASSESSMENT ORDER BROUGHT TO TAX RS.73,703 BEING THE ACCRUED IN TEREST ON THE FIXED DEPOSIT. IT IS NOT IN DISPUTE, THAT THE DETAILS OF INVESTMENT I N FIXED DEPOSIT ARE AVAILABLE IN THE ASSESSMENT RECORDS. THEREFORE, THE ACCRUED INT EREST ON SUCH FIXED DEPOSIT HAS TO BE SUBJECTED TO TAX. IN OTHER WORDS, SINCE THE DETAILS OF FIXED DEPOSIT IS AVAILABLE ON RECORD, FAILURE OF THE ASSESSING OFFIC ER IN NOT BRINGING THE ACCRUED INTEREST FOR TAXATION IS ONLY A PRIMA FACIE ERROR W HICH IS APPARENT ON THE FACE OF THE RECORD. THE FACT REMAINS IS THAT IN THE ASSESS EES OWN CASE IN RESPECT OF 3 ITA NO.1328/COCH/2004 ITA 374/COCH/2005 INTEREST FROM INDIRA VIKAS PATRA, THIS TRIBUNAL FOUN D THAT THE INTEREST HAS TO BE ASSESSED ON ACCRUAL BASIS. ON APPEAL BY THE ASSESS EE, THE HIGH COURT CONFIRMED THE ORDER OF THE TRIBUNAL. HOWEVER, THE ASSESSEE H AS ALREADY FILED AN APPEAL BEFORE THE APEX COURT AND THE SAME IS PENDING. THE REFORE, AS OF NOW, THE FACT REMAINS IS THAT THE HIGH COURT CONFIRMED THE ORDER OF THIS TRIBUNAL ON THE GROUND THAT THE INTEREST ON IVP HAS TO BE BROUGHT TO TAX O N ACCRUAL BASIS. BY FOLLOWING THE JUDGMENT OF THE HIGH COURT IN ASSESSEES OWN CA SE AND THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.194 & 195 /COCH/2005 ORDER DATED 25- 01-2012 FOR THE ASSESSMENT YEAR 1988-89 AND 1989-90 WH EREIN IT WAS HELD THAT THE INTEREST ON IVP HAS TO BE ASSESSED ON ACCRUAL B ASIS, WE HOLD THAT THE ASSESSING OFFICER HAS RIGHTLY RECTIFIED THE ORDER. THEREFORE , WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 6. NOW COMING TO THE DEPARTMENTAL APPEAL IN ITA NO. 374/COCH/2005 FOR THE ASSESSMENT YEAR 1991-92, THE ASSESSING OFFICER BROUG HT TO TAX AN AMOUNT OF RS.73,703 ON THE GROUND THAT THE INTEREST ON INVEST MENT WAS NOT DISCLOSED. ON APPEAL BY THE ASSESSEE THE COMMISSIONER OF INCOME-TA X(A) FOUND THAT THE VERY EXISTENCE OF THE DEPOSIT WAS NOT DISCLOSED TO THE D EPARTMENT IN THE RETURN FILED FOR ASSESSMENT YEAR 1991-92. THEREFORE, THERE IS NO MISTAKE APPARENT ON THE RECORD. 7. WE HEARD THE LD.DR AND THE LD.REPRESENTATIVE FOR THE ASSESSEE. WE FIND THAT THE VERY SAME ISSUE WAS CONSIDERED BY THIS TRI BUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 1989-90 IN ITA NO.372/COCH/2 005 DATED 25-01-2012. THIS TRIBUNAL AFTER CONSIDERING THE ARGUMENTS OF BO TH THE PARTIES HAS OBSERVED AS FOLLOWS AT PARAGRAPH 22 OF THE ORDER: 4 ITA NO.1328/COCH/2004 ITA 374/COCH/2005 22. WE HAVE HEARD THE LD.DR AND THE LD.REPRESENTAT IVE FOR THE ASSESSEE. ADMITTEDLY, THE ASSESSEE HAS NOT DISCLOS ED THE DEPOSITS IN THE IVPS AND THE INTEREST ACCRUED THEREON IN THE RETURN OF INCOME. THEREFORE, NO PARTICULARS WITH REGARD TO D EPOSIT OR INTEREST ARE ON RECORD. THE ASSESSING OFFICER, ON THE BASIS OF INFORMATION AVAILABLE ON THE RECORDS FOR ASSESSMENT YEAR 1992-93 RECTIFIED THE ORDER. THEREFORE, AS RIGHTLY FOUND BY THE COMMISSI ONER OF INCOME- TAX(A), AT BEST, IT MAY BE AN INCOME ESCAPED ASSESS MENT FOR THE YEARS UNDER CONSIDERATION AND IT CANNOT BE SAID THA T THERE IS A PRIMA FACIE ERROR ON RECORD. THE VERY FACT THAT NO MATERIAL IS AVAILABLE ON RECORD FOR ASSESSMENT YEAR 1989-90 TO S HOW THE INVESTMENT MADE IN THE IVPS AND INTEREST ACCRUED TH EREON THERE CANNOT BE ANY PRIMA FACIE ERROR WITHIN THE MEANING OF SECTION 154 OF THE I.T. ACT. IN VIEW OF THE ABOVE, WE DO NOT FI ND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. SINCE THE FACTS ARE IDENTICAL FOR THE ASSESSMENT YE AR UNDER CONSIDERATION ALSO, THE ORDER CANNOT BE RECTIFIED U/S 154 OF THE ACT. THER EFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACC ORDINGLY THE SAME IS CONFIRMED. 8. IN THE RESULT, BOTH THE APPEAL OF THE ASSESSEE A ND THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF APRIL, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 27 TH APRIL, 2012 PK/- 5 ITA NO.1328/COCH/2004 ITA 374/COCH/2005 COPY TO: 1. DY.CIT, CIR.1, KOTTAYAM 2. DR. R.P. PATEL, HAHNEMAN HOUSE, COLLEGE ROAD, KOTTAY AM 3. THE COMMISSIONER OF INCOME-TAX(A)-IV, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH