M.A.Azeez, Palakkad V. DCIT, Trichur

ITA 240/COCH/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68960 (ITAT-COCHIN)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-06-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 04-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSAN GEORGE VARGHESE
• Assessee Lawyers: T M SREEDHARANSR
• Keywords: Unexplained investment; Document seized; Valuation report; Documents seized
• Section: 132

Judgement Text

1 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 240 TO 243/COCH/2012 (ASSESSMENT YEARS 2003-04 & 2007-08 TO 2009-10) SHRI M.A. AZEEZ VS THE DY.CIT, CENT.CIR MAHALI HOUSE THRISSUR MUTTIKULANGARA PUTHUPARIYARAM PALAKKAD DIST. PAN : AGEPA8815H (APPELLANT) (RESPONDENT) I.T.A. NO.215/COCH/2012 (ASSESSMENT YEAR 2009-10) THE DY.CIT, CENT.CIR VS SHRI C.H. MOHAMMAD HUSSA IN THRISSUR ALMAS MANZIL, PUMP ENGINE ROAD, OLAVAKODE, PALAKKAD PAN : AIFPM5113M (APPELLANT) (RESPONDENT) ASSESSEES BY :SHRI T.M. SREEDHARAN, SR.COUNSEL REVENUE BY : SMT. SUSAN GEORGE VARGHESE DATE OF HEARING : 11-06-2013 DATE OF PRONOUNCEMENT : 30-08-2013 2 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 O R D E R PER N.R.S. GANESAN (JM) THE ASSESSEE, SHRI M.A. AZEEZ FILED APPEALS FOR TH E ASSESSMENT YEARS 2003-04, 2007-08, 2008-09 AND 2009-10 WHEREAS THE REVENUE FILED THE APPEAL FOR ASSESSMENT YEAR 2009-10 IN THE CASE OF SHRI CH MOHAMMED HUSSAIN. 2. LET US FIRST TAKE THE ASSESSEES APPEAL IN ITA N O.240/COCH/2012 FOR THE ASSESSMENT YEAR 2003-04. THE ONLY GROUND OF AP PEAL IS WITH REGARD TO ADDITION OF RS. 9,75,000 TOWARDS DIFFERENCE IN OPEN ING CASH BALANCE. 3. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH IN THE CASE OF SH RI D SUDEVAN AND OTHERS ON 04-03-2009. PROCEEDINGS WERE INITIATED A GAINST THE ASSESSEE U/S 153C OF THE ACT. ACCORDING TO THE LD.SENIOR CO UNSEL, THE ASSESSEE CLAIMED OPENING CASH BALANCE OF R.10 LAKHS. AFTER AVAILING LOAN FROM KERALA FINANCIAL CORPORATION, THE ASSESSEE HAS MADE CERTAIN INVESTMENTS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE HAS ALSO FILED A LETTER FROM THE KERALA FINANCIAL CORPORATION BEFORE THE AS SESSING OFFICER FOR SANCTIONING OF LOAN OF RS.10 LAKHS. THE ASSESSING OFFICER REJECTED THE 3 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 SOURCE FOR THE INVESTMENT AND ASSESSED RS.9,96,500 AS UNDISCLOSED INCOME OF THE ASSESSEE. ON APPEAL BY THE ASSESSEE, THE CIT(A) FOUND, ACCORDING TO THE LD.SENIOR COUNSEL, THAT THE LOAN W AS SANCTIONED BY KERALA FINANCIAL CORPORATION ON 29-08-2001. THE ASSESSEE PURCHASED MEENAKSHI TILE COMPANY IN CHITTUR TALUK, ALONGWITH ONE SHRI NIJAMUDHEEN. THE LAND WAS SUBSEQUENTLY SOLD IN PAR TS. THE CIT(A), HOWEVER, HAS NOT EXAMINED THIS ASPECT BUT FOUND THA T THE ASSESEE WAS SHOWING ONLY A SMALL INCOME AND THEREFORE, HE HAS N O SOURCE FOR MAKING INVESTMENT. ACCORDING TO THE LD.SENIOR COUNSEL, TH E CASH FLOW STATEMENT FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERAT ION EXPLAINS THE INVESTMENTS MADE BY THE ASSESSEE DURING THE RELEVAN T FINANCIAL YEAR. ACCORDING TO THE LD.SENIOR COUNSEL, IF THE CASH FLO W STATEMENT FILED BY THE ASSESSEE IS EXAMINED, THEN, THERE MAY NOT BE ANY AD DITION FOR THE YEAR UNDER CONSIDERATION. 4. ON THE CONTRARY, SMT. SUSAN GEORGE VARGHESE, THE LD.DR SUBMITTED THAT DURING THE COURSE OF SEARCH OPERATION IN THE C ASE OF SHRI D SUDEVAN AND OTHERS SEVERAL INCRIMINATING MATERIALS WERE FOU ND AND SEIZED U/S 132 OF THE ACT. THE ASSESSEE WAS ALLOWED TO INSPECT TH E SEIZED DOCUMENTS AND TAKE PHOTOCOPIES. ACCORDING TO THE LD.DR, THE ASSESSEE CLAIMED OPENING CASH BALANCE OF RS.10 LAKHS IN THE CASH FLO W STATEMENT FILED FOR 4 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 THE YEAR UNDER CONSIDERATION. THOUGH THE ASSESSEE HAS FILED THE SANCTION LETTER OF KERALA FINANCIAL CORPORATION FOR SANCTION OF LOAN ON 29-08-2001, NO MATERIAL IS FILED TO SHOW THAT THE LOAN SANCTION ED BY KERALA FINANCIAL CORPORATION REMAINED WITH THE ASSESSEE AS ON 01-04- 2002. AS PER THE BALANCE-SHEET ATTACHED WITH THE RETURN OF INCOME AS ON 31-03-2002 THE ASSESSEE HAS SHOWN THE CASH BALANCE AT R.3,500. TH EREFORE, ACCORDING TO THE LD.DR, AS ON 01-04-2002, THE LOAN SAID TO BE SA NCTIONED BY KERALA FINANCIAL CORPORATION MAY NOT BE AVAILABLE WITH THE ASSESSEE. HENCE, THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THOUGH T HE ASSESSEE PRODUCED SANCTION LETTER FROM KERALA FINANCIAL CORPORATION F OR SANCTION OF LOAN OF RS.10 LAKHS ON 29-08-2001, THE ASSESSEE HAS NOT FIL ED ANY MATERIAL TO SHOW THAT THE VERY SAME AMOUNT WAS AVAILABLE AS ON 01-04-2002. IN FACT, THE ASSESSEE, IN THE BALANCE-SHEET HAS SHOWN THE CA SH IN HAND AT RS.3,500. THEREFORE, IT APPEARS THAT THE ASSESSEE HAS UTILIZED THE LOAN SANCTIONED BY KERALA FINANCIAL CORPORATION FOR SOME OTHER PURPOSE. IF THE LOAN SANCTIONED BY KERALA FINANCIAL CORPORATION IS AVAILABLE, IT IS FOR THE ASSESSEE TO PRODUCE SUFFICIENT MATERIAL INDICATING THAT THE LOAN SANCTIONED BY KERALA FINANCIAL CORPORATION WAS VERY MUCH AVAIL ABLE WITH THE 5 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 ASSESSEE. IN THE ABSENCE OF ANY MATERIAL, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE COULD NOT SUBS TANTIATE THE OPENING CASH BALANCE AS ON 01-04-2002, THEREFORE, THE CIT(A ) HAS RIGHTLY CONFIRMED THE ADDITION. WE UPHOLD THE ORDER OF THE CIT(A). 6. NOW COMING TO APPEAL FOR ASSESSMENT YEAR 2007-08 IN ITA NO.241/COCH/2012, THE FIRST GROUND OF APPEAL IS ADD ITION ON ACCOUNT OF DIFFERENCE IN COST OF CONSTRUCTION. 7. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL SUBM ITTED THAT THE ASSESSING OFFICER MADE ADDITION OF THE DIFFERENCE I N THE COST OF VALUATION FOR THREE ASSESSMENT YEARS, I.E. 2007-08, 2008-09 AND 2 009-10. ACCORDING TO THE LD.REPRESENTATIVE, FOR THE ASSESSMENT YEAR 2007 -08, THE ASSESSING OFFICER MADE ADDITION OF RS.1,26,900; FOR THE ASSES SMENT YEAR 2008-09 AN ADDITION OF RS.7,61,240 WAS MADE; AND FOR ASSESSMEN T YEAR 2009-10 AN ADDITION OF RS. 5,92,100 WAS MADE. ACCORDING TO TH E LD.SENIOR COUNSEL, THE ASSESSING OFFICER REFERRED THE COST OF VALUATION TO THE DISTRICT VALUATION OFFICER, WHO ESTIMATED THE COST OF CONSTRUCTION AT RS.49,80,240. THE VALUATION OFFICER ALLOWED A REBATE OF 10% FOR PERSO NAL SUPERVISION. THE DIFFERENCE BETWEEN THE VALUE ESTIMATED BY THE DVO A ND THE VALUE DISCLOSED BY THE ASSESSEE COMES TO RS.14,80,240. T HIS WAS APPORTIONED 6 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 FOR ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10. ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSEE HAS ALSO FILED VALU ATION REPORT FROM REGISTERED VALUER. ACCORDING TO THE REGISTERED VAL UERS REPORT, THE DIFFERENCE IN COST COMES TO ONLY RS.1,17,000. THE LD.SENIOR COUNSEL SUBMITTED THAT THE DVO HAS ADOPTED THE VALUE AS PER THE CPWD RATES. ACCORDING TO THE LD.SENIOR COUNSEL, ONLY STATE PWD RATE HAS TO BE ADOPTED. THE LD.SENIOR COUNSEL PLACED HIS RELIANCE ON THE UN REPORTED JUDGMENT OF THE KERALA HIGH COURT IN CIT VS M.N. SAIDALAVI IN I TA NO.37 OF 2011 JUDGMENT DATED 17 TH JANUARY, 2012, COPY OF WHICH IS AVAILABLE IN THE P APER BOOK AND SUBMITTED THAT THE KERALA HIGH COURT PREFE RRED THE VALUE ESTIMATED ON THE BASIS OF THE STATE PWD RATE. ACCO RDING TO THE LD.SENIOR COUNSEL, THE COST OF CONSTRUCTION HAS TO BE ADOPTED AS PER THE RATES OF THE STATE PWD AND IF THE COST OF CONSTRUCTION WAS ESTIM ATED ON THE BASIS OF THE STATE PWD, THE DIFFERENCE WOULD ONLY BE RS.1,17 ,000 WHICH WORKS OUT TO 3%. SINCE THE DIFFERENCE IS NEGLIGIBLE IT HAS T O BE IGNORED. 8. ON THE CONTRARY, SMT. SUSAN GEORGE VARGHESE, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS CONSTRUCTED A RESIDENTIAL HOU SE AND DECLARED THE COST OF CONSTRUCTION AT RS.35 LAKHS. THE COST OF C ONSTRUCTION WAS REFERRED TO THE VALUATION OFFICER, WHO ESTIMATED THE COST OF CONSTRUCTION AT RS. 55,33,600. AFTER CALLING FOR OBJECTION FROM THE AS SESSEE ON THE VALUATION 7 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 REPORT, THE ASSESSING OFFICER MADE PROPORTIONATE AD DITION FOR THE ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10. ACC ORDING TO THE LD.DR, STATE PWD RATE MAY NOT BE ACCURATE FOR CONST RUCTION OF RESIDENTIAL HOUSE; HENCE ONLY THE CENTRAL PWD RATE HAS TO BE AD OPTED. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY DISPUTE IS THE COST OF CONSTRUCTION. THE DISPUTE BETWEEN THE ASSESSEE AND THE DEPARTMENT IS WHETHER CPWD RATE HAS TO BE ADOPTED OR STATE PWD RA TE HAS TO BE ADOPTED. THIS TRIBUNAL FINDS THAT STATE PWD RATE D ETERMINES THE VALUE PREVAILING IN THE MARKET OF A PARTICULAR STATE AND THE AVAILABILITY OF THE LABOUR FORCE THERE. CPWD RATE MAY NOT BE ACCURATE TO EACH AND EVERY STATE. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE STATE PWD RATE HAS TO BE PREFERRED FOR VALUING THE COST O F CONSTRUCTION. IN FACT, THE KERALA HIGH COURT APPROVED THE VALUATION MADE O N THE BASIS OF THE STATE PWD RATE IN SRI M.N. SAIDALAVI (SUPRA). THER EFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FOR ESTIMATING THE COST OF CONSTRUCTION, STATE PWD RATE HAS TO BE ADOPTED. SINCE THE DVO HAS ADOP TED THE CENTRAL PWD RATE, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT THE VALUATION REPORT NEEDS TO BE MODIFIED AFTER ADOPTING THE STAT E PWD RATE. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SE T ASIDE AND THE ISSUE IS 8 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER AND MODIFY THE VALUATION REPORT ON THE BASIS OF THE STATE PWD RATE AND THEREAFTER DECIDE THE ISSUE IN ACCORDA NCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 10. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.25,000 TOWARDS COMMISSION ON SALE OF SHOP BUILDING. 11. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL SUB MITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS.25,000 TO THE TOTAL INCOME ON ACCOUNT OF COMMISSION ON SALE OF SHOP BUILDING AT K OPPAM. HOWEVER, HE FAILED TO GIVE CREDIT FOR THE SAME WHILE COMPUTING THE UNEXPLAINED INVESTMENT. THEREFORE, ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSING OFFICER IS BOUND TO GIVE CREDIT FOR THE UNEXPLAINED INCOME ASSESSED. ON THE CONTRARY, SMT. SUSAN GEORGE VERGHESE, THE LD.DR SUBMITTED THAT THE ASSESSEE BY A LETTER ADDRESSED TO THE ASSESSING OFF ICER ADMITTED THAT HE EARNED A COMMISSION OF RS.25,000 ON 08-03-2007 IN R ESPECT OF TWO CENTS OF LAND ON THE FIRST FLOOR OF THE SHOP BUILDING AT KOPPAM. 12 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE IS NOT DISPUTING 9 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 THE EARNING OF INCOME. THE ONLY CONTENTION OF THE ASSESSEE IS THAT THE INCOME OF RS.25,000 SHALL BE CONSIDERED WHILE ESTIM ATING THE UNDISCLOSED INCOME. ADMITTEDLY, THE COST OF VALUATION OF THE B UILDING WAS ESTIMATED AND ADDITION WAS MADE. HOWEVER, THIS TRIBUNAL REMA NDED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDER ATION IN THE LIGHT OF THE RATES FIXED BY THE STATE PWD AUTHORITIES. THEREFOR E, WHILE CONSIDERING THE UNEXPLAINED INVESTMENT IN THE BUILDING, THIS AMOUNT OF RS.25,000 WAS VERY MUCH AVAILABLE WITH THE ASSESSEE. AS SUCH, AS HAS RIGHTLY SUBMITTED BY THE LD.SENIOR COUNSEL FOR THE ASSESSEE, THIS HAS TO BE TAKEN INTO CONSIDERATION. ACCORDINGLY WE DIRECT THAT WHILE GI VING EFFECT TO THE ORDER OF THIS TRIBUNAL, THE ASSESSING OFFICER SHALL CONSIDER THE AVAILABILITY OF R.25,000 FOR THE YEAR UNDER CONSIDERATION WHILE QUA NTIFYING THE UNEXPLAINED INVESTMENT. 13. NOW COMING TO THE APPEAL FOR THE ASSESSMENT YEA R 2008-09 IN ITA NO.242/COCH/2012, THE ONLY ISSUE RAISED BY THE ASSE SSEE IS WITH REGARD TO THE COST OF CONSTRUCTION. WHILE CONSIDERING ASSESS EES APPEAL FOR ASSESSMENT YEAR 2007-08, THIS ISSUE WAS REMITTED BA CK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION. SINCE THE V ERY SAME BUILDING WAS SUBJECT MATTER IN THIS YEAR ALSO, THE ASSESSING OFF ICER SHALL RECONSIDER THE ISSUE ON THE LINES OF DIRECTIONS ISSUED BY THIS TRI BUNAL FOR THE ASSESSMENT 10 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 YEAR 2007-08. ACCORDINGLY, THE ORDERS OF LOWER AUT HORITIES ARE SET ASIDE AND THE ISSUE IS REMITTED BACK TO THE FILE OF THE A SSESSING OFFICER AS INDICATED FOR THE ASSESSMENT YEAR 2007-08. 14. NOW COMING TO THE ASSESSEES APPEAL FOR ASSESSM ENT YEAR 2009-10, THE FIRST GROUND OF APPEAL APPEAL IS WITH REGARD TO THE ADDITION OF RS. 1,44,54,924. 15. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS. 1,16,68,000 TOWARD UNEXPLAINED INVESTMENT IN MENONPARA PROPERTY . ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSING OFFICER CONSIDERED THE PAYMENT MADE TO SHRI S BABU ON 01-11-2008 TO THE EXTENT OF RS.1.10 CRORES AND ON 15-12- 2008 TO THE EXTENT OF RS.40 LAKHS AGGREGATING TO RS .1.50 CRORES. ACCORDING TO THE LD.SENIOR COUNSEL, THE ASSESSING O FFICER ALLOWED CREDIT FOR RS.33,32,000 ON THE BASIS OF THE CASH FLOW STATEMEN T AND THE BALANCE- SHEET AND THE BALANCE OF RS.1,16,68,000 WAS ADDED T O THE TOTAL INCOME OF THE ASSESSEE. ACCORDING TO LD.SENIOR COUNSEL, THE SUM OF RS.1.50 CRORES PAID FOR PURCHASE OF PROPERTY OF 18 ACRES OF LAND A T MENONPARA VILLAGE BY ASSESSEE AND SHRI C.H. MOHD HUSSAIN TO SHRI S BABU. IN THE CASE OF SHRI MOHD HUSSAIN THE CIT(A) RECORDED THE FINDING THAT T HE PROPOSED 11 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 TRANSACTION OF SALE OF 18 ACRES OF LAND DID NOT MAT ERIALIZE. THEREFORE, THE ALLEGED PAYMENT OF 50% OF THE SHARE OF SHRI C.H. MO HMAD HUSSAIN TO THE EXTENT OF RS.58,34,000 WAS DELETED. ACCORDING TO T HE LD.SENIOR COUNSEL, THE FINDING RECORDED BY THE CIT(A) IN THE CASE OF S HRI C.H. MOHD HUSSAIN IS EQUALLY APPLICABLE IN THE CASE OF THE ASSESSEE. 16. ON THE CONTRARY, SMT. SUSAN GEORGE VARGHESE, TH E LD.DR SUBMITTED THAT THE ASSESSEE CONTENDED BEFORE THE ASSESSING OF FICER THAT AN AGREEMENT WAS EXECUTED ON 01-11-2008 FOR PURCHASE O F 18 ACRES OF LAND AT MENONPARA FROM SHRI S BABU. HOWEVER, THE TRANSA CTION DID NOT MATERIALIZE. ACCORDING TO THE LD.DR, THIS OBJECTIO N OF THE ASSESSEE WAS FOUND TO BE AN AFTERTHOUGHT BY THE ASSESSING OFFICE R. THE ASSESSEE BEING A PURCHASER AND SHRI S BABU BEING THE VENDOR SIGNED THE AGREEMENT ON 01-11-2008 AND THE ASSESSEE HAS PAID RS.1.10 CRORES AS ADVANCE. SUBSEQUENTLY, ANOTHER SUM OF RS.40 LAKHS WAS PAID O N 15-12-2008. THIS WAS EVIDENCED BY AN ENDORSEMENT MADE ON THE REVERSE SIDE OF THE SEIZED DOCUMENT. IN VIEW OF THE ABOVE, ACCORDING TO THE L D.DR, THE ASSESSING OFFICER RIGHTLY REJECTED THE EXPLANATION OF THE ASS ESSEE. THE LD.DR FURTHER POINTED OUT THAT IN THE CASH FLOW STATEMENT, THE AS SESSEE HAS SHOWN THE PAYMENT OF RS.33,32,000. THEREFORE, ACCORDING TO T HE LD.DR, THE DIFFERENCE BETWEEN THE AMOUNT PAID IN PURSUANCE OF THE AGREEMENT FOR 12 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 SALE AND THE AMOUNT PAID AS PER THE CASH FLOW STATE MENT WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE TO THE EXTENT OF RS.1, 16,68,000. THOUGH THE ASSESSEE CLAIMED THAT THE TRANSACTION WAS NOT MATER IALIZED, NO MATERIAL WAS PRODUCED TO SUBSTANTIATE THE CLAIM. ACCORDING TO THE LD.DR, THE AGREEMENT FOR SALE WAS ENTERED INTO AND CONSIDERABL E AMOUNT TO THE EXTENT OF RS. 1.50 CRORES WAS PAID AS EVIDENCED BY THE AGREEMENT FOR SALE. IN VIEW OF THIS AGREEMENT FOR SALE WHICH WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERATION, ACCORDING TO THE LD.DR, IT IS FOR THE ASSESEE TO PROVE THAT INTEREST PAYMENT WAS MADE. THEREFORE, A CCORDING TO THE LD.SENIOR COUNSEL, THE CIT(A) HAS RIGHTLY MADE THE ADDITION. HOWEVER, WITH REGARD TO THE SUBSTITUTION OF ASSET MADE BY THE PAR TIES TO THE EXTENT OF 13 CENTS OF LAND AND BUILDING OF MADHAVAN AT AKATHETHA RA WAS FOUND TO BE EXCHANGED FOR 72 LAKHS AND THE BALANCE OF RS.78 LAK HS WAS RECEIVED BY SHRI S BABU IN CASH. THE CIT(A) ACCEPTED THIS PLEA OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO SUBSTITUTE THE EX CHANGE VALUE OF AKATHETHARA LAND FOR RS.72 LAKHS AND TO RE-WORK THE UNDISCLOSED INVESTMENT IN THE IMMOVABLE PROPERTY. 17. REFERRING TO THE APPEAL OF THE REVENUE IN THE C ASE OF SHRI C.H. MOHAMMAD HUSSAIN IN ITA NO.215/COCH/2012 THE LD.REP RESENTATIVE SUBMITTED THAT SINCE SUBSTANTIAL ASSESSMENT WAS MAD E IN THE HANDS OF 13 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 SHRI M.A. AZEEZ, THE CIT(A) DELETED THE ADDITION IN THE HANDS OF SHRI C.H. MOHAMMAD HUSSAIN. ACCORDING TO THE LD.SENIOR COUNS EL IT IS NOT CORRECT TO SAY THAT THE CIT(A) DELETED THE ADDITION ON THE GRO UND THAT THE TRANSACTION WAS NOT MATERIALIZED. THE ADDITION IN THE HANDS OF SHRI C.H. MOHAMMAD HUSSAIN WAS DELETED ONLY ON THE GROUND THAT THE SUB STANTIAL ADDITION WAS CONFIRMED IN THE HANDS OF SHRI M.A. AZEEZ. ACCORDI NG TO THE LD.DR, THE REVENUE FILED THE APPEAL IN ITA NO.215/COCH/2012 IN THE CASE OF SHRI C.H. MOHAMMAD HUSSAIN TO KEEP THE MATTER ALIVE IN CASE T HE ADDITION IN THE HANDS OF M.S. AZEEZ IS DELETED. 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT AN AGREEMENT FOR SALE WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH OPERATION. THIS AGREEMENT FOR SALE EVIDENCES THE P AYMENT OF RS.1.10 CRORE ON 01-11-2008 AND ANOTHER SUM OF RS.40 LAKHS ON 15-12-2008 WHICH WAS ENDORSED ON THE BACK SIDE OF THE SEIZED DOCUMEN T. THEREFORE, THE PAYMENT OF RS.1.50 CRORES IS SUBSTANTIATED BY MATER IAL EVIDENCE IN PURSUANCE OF THE AGREEMENT. THEREFORE, IT MAY NOT BE CORRECT TO SAY THAT THE AGREEMENT WAS NOT ACTED UPON OR NOT MATERIALIZE D. HOWEVER, IT APPEARS THAT ON THE BASIS OF THE STATEMENT RECORDED FROM THE PARTIES, THE CIT(A) FOUND THAT THERE WAS EXCHANGE OF LAND BETWEE N THE PARTIES AND THE 14 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 LAND WAS EXCHANGED FOR RS.72 LAKHS AND THE BALANCE AMOUNT OF RS.78 LAKHS WAS PAID TO SHRI S BABU IN CASH. THIS WAS ES TABLISHED BY EXAMINING THE ASSESSEE AND SHRI S BABU. IN VIEW OF THE ABOVE , THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY DIRE CTED THE ASSESSING OFFICER TO SUBSTITUTE THE EXCHANGE VALUE OF RS.72 L AKHS AND THEREAFTER REWORK THE UNDISCLOSED INVESTMENT. SINCE THE ENTIR E ADDITION WAS CONFIRMED IN THE HANDS OF SHRI M.A. AZEEZ, THE CIT( A) FOUND THAT THERE IS NO NEED FOR ANY ADDITION IN THE HANDS OF SHRI C.H. MOHD HUSSAIN. IN VIEW OF THIS ESTABLISHED FACTUAL SITUATION, THIS TRIBUNA L DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED AND THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 IS DISMISSED. 19. IN THE RESULT, APPEAL IN ITA NO.240/COCH/2012 I S DISMISSED; APPEAL IN ITA NOS. 241 AND 242/COCH/2012 ARE ALLOWED, FOR STATISTICAL PURPOSE AND APPEALS IN ITA NOS.243/COCH/2012 & 215/COCH/201 2 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH AUGUST, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 30 TH AUGUST, 2013 PK/- 15 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH 16 ITA NO.240-243/COCH/2012 ITA 215/COCH/2012 1. DATE OF DICTATION : 21-08 2. DATE OF PLACING THE DRAFT ORDER BEFORE THE MEMBE R : 22-08 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.PS : 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER: 5. DATE OF RETURN OF THE ORDER TO PS AFTER APPROVAL : 6. DATE OF PRONOUNCEMENT : 7. DATE ON WHICH THE FILE ALONG WITH THE ORDER SENT TO BC : 8. NO. OF PAGES OF DICTATION PADS ATTACHED TO THE F ILE : 12 9. NO. OF PAGES OF DRAFT COPY OF THE ORDER ATTACHED TO THE FILE :