Appeal Details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 96840 (ITAT-COCHIN)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
4 year(s) 7 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-12-2015
Appeal Filed By
Department
Bench Allotted
DB
Next Hearing Date
23-11-2015
Assessment Year
2005-2006
Appeal Filed On
12-05-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEOR GE K., JM I.T.A. NOS. 464 TO 470/COCH/2011 ASSESSMENT YEARS : 2001-02 TO 2007-08 SHRI POLY KURIAKOSE, PADAYATTIL HOUSE, VENGOOR P.O., ANGAMALY. [ADHPK:7547E] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) I.T.A. NOS. 343 & 344/COCH/2011 ASSESSMENT YEARS : 2004-2005 & 2005-06 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. VS. SHRI POLY KURIAKOSE, PADAYATTIL HOUSE, VENGOOR P.O., ANGAMALY. (REVENUE -APPELLANT) (ASSESSEE- RESPONDENT) REVENUE BY SHRI SHANTAM BOSE, CIT(DR) ASSESSEE BY SHRI ANIL D NAIR, ADV. DATE OF HEARING 23/11/2015 DATE OF PRONOUNCEMENT /12/2015 O R D E R PER BENCH: THESE VARIOUS APPEALS OF REVENUE AND THE ASSES SEE ARISE FROM DIFFERENT ORDERS OF LD. CIT(A) WHERE THE ASSESSEES HAVE ALSO FILED CROSS OBJECTIONS IN DIFFERENT YEARS, THE DETAILS OF WHICH IS LISTED HER EIN BELOW: I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 2 1. (C) 464/COCH/2013 POLY KURIAKOSE ASSESSEE 2001-02 18-02- 2011 ANIL D NAIR SHANTAM BOSE CIT/DR 2. 465/COCH/2013 2002-03 3.. 466/COCH/2013 2003-04 4. 5. 467/COCH/2013 343/COCH/2013 DEPTT. 2004-05 6. 7. 468/COCH/2013 344/COCH/2013 ASSESSEE DEPTT. 2005-06 8. 469/COCH/2013 ASSESSEE . 2006-07 9. 470/COCH/2013 ASSESSEE . 2007-09 2. SINCE THE ISSUES IN ALL THE APPEALS HEREINABO VE ARE ALMOST IDENTICAL EMANATING FROM A SEARCH CARRIED OUT U/S. 132 ON 13-02-2007, A CCORDINGLY, ALL THESE APPEALS ARE BEING TAKEN UP BY THIS CONSOLIDATED ORDER. I.T.A. NO.464/COCH/2011 : A.Y.2001-02 3. NOW WE SHALL TAKE UP THE APPEAL IN THE CASE OF POLY KURIAKOSE IN I.T.A. NO. 464/COCH/2011 FOR THE ASSESSMENT YEAR 2001-02 AS UN DER:- 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. DISALLOWANCE OF RS.1,00,000/- IN OPENING CASH BA LANCE : THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISA LLOWING A PORTION OF THE OPENING CASH BALANCE DISCLOSED IN THE CASH FLOW STA TEMENT EVEN WITHOUT GIVING ANY EFFECT TO THE ACCUMULATED CASH HOLDING O F THE APPELLANT, ESPECIALLY AS THE APPELLANT WAS A REGULAR INCOME TA X PAYEE, IN THE PRECEDING YEARS ALSO. THE CASH FLOW STATEMENT SUBM ITTED TO DDI IN THE COURSE OF ENQUIRY WAS PREPARED ON ROUGH AND READY M ETHOD TO EXPLAIN THE SOURCE OF INVESTMENTS TO M/S. P.A. KURIAKOSE JEWELL ERS. IT DID NOT CONTAIN THE DETAILS OF OTHER INVESTMENTS AND SOURCE FOR THE SAME THE REVISE CASH FLOW CONTAINS CORRECT AND COMPLETE PARTICULARS, WHI CH SHOULD HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. HENCE, UNJUST AD DITION OF THE SAME MAY BE DELETED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 3 2. DISALLOWANCE OF AGRICULTURAL INCOME RS.20,000/ - (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING A PORTION OF THE AGRICULTURAL INCOME OF THE APPELLANT. (B) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ALLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME EVERY YEAR, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING O VER THE YEARS. (C) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ENTIRELY RELYING ON THE REPORT OF THE INSPECTOR OF INCOME TAX WHO IS NOT A QUALIFIED/REGISTERED VALUER. (D) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING ON THE ENQUIRY REPORT OF THE INSPECTOR OF INCOME TAX, MADE BY VISI TING THE FIELDS IN DECEMBER 2008, AS IT MAY NOT GIVE CORRECT RESULTS F OR THE PRECEDING 7-8 YEARS, FOR OBVIOUS REASONS OF PASSAGE OF TIME. NO T RACE OF SEASONAL CROPS CULTIVATED WILL BE AVAILABLE AFTER A LONG PERIOD OF 2 TO 8 YEARS. (E) THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED TH E HONEST AND BONA FIDE ESTIMATE OF AGRICULTURAL INCOME DECLARED BY TH E APPELLANT, IN THE ABSENCE OF ANY EVIDENCE IN HIS POSSESSING, TO HOLD THAT THE AGRICULTURAL INCOME OF THE APPELLANT IS ONLY RS.10,000/- FOR THE YEAR. (F) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHERE IN THE SELLING RATES ADOPTED ARE AV ERAGE RATES FOR THE WHOLE YEAR. G. THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE EXPLANATIONS RENDERED AS TO THE EXTENT OF AGRICULTURAL HOLDINGS, THE CROPS THAT WERE GROWN AND THE REALIZATIONS OF AGRICULTURAL PROCEEDS , WHETHER OR NOT THEY ARE SUPPORTED BY EVIDENCES, DUE TO PASSAGE OF TIME, ESPECIALLY SINCE THEY WERE RETURNED AS SUCH IN THE ORIGINAL RETURNS ALSO. (H) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 3. LOANS AND ADVANCES FROM FRIENDS RS.55,024/- (A) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING THE AMOUNTS RECEIVED AS LOANS FROM FRIENDS ON THE TRIVIAL GROUN DS THE ASSESSING OFFICER HAS NOT CONSIDERED THE CONFIRMATION CERTIFICATE FIL ED BEFORE HIM. HENCE, UNFAIR ADDITION OF THE SAME MAY BE DELETED. (B) LOAN RECEIVED FROM FRIENDS ARE TRUE AND CORRECT . THE APPELLANT HAS ALREADY PRODUCED ORIGINAL CONFIRMATIONS BEFORE THE ASSESSING OFFICER. THERE IS NO DOUBTFULNESS IN CASE OF LOAN RECEIPT. (C) NO ADDITION SHOULD HAVE BEEN MADE HAVING REGARD TO THE CONFIRMATORY LETTER FILED AND THE EVIDENCE ON RECORD. D. NO FURTHER EVIDENCE WERE SOUGHT BY THE LEARNED A SSESSING OFFICER, REGARDING THESE LOANS, DURING THE COURSE OF HEARING . FURTHER, THE ASSESSING OFFICER COULD ALSO HAVE VERIFIED THE VERA CITY OF THE LOANS. (E)THE APPELLANT IS CAPABLE OF PRODUCING FURTHER EV IDENCE. (F) HENCE, THE UNJUST ADDITION IS UNWARRANTED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 4 4. OTHER RECEIPTS RS.10,38,820/- (A) GIFT FROM MRS. TAREENA POLY (WIFE) RS.4,50,00 0/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT R ECEIVED FROM MRS. TAREEN POLY, ESPECIALLY WHEN SHE HAD ADVANCED THE AMOUNT F ROM HER MARRIAGE GIFTS RECEIVED. FURTHER, CONFIRMATION LETTER FROM M RS. TAREENA CLEARLY STATING THESE PARTICULARS WAS ALSO PRODUCED TO THE ASSESSING OFFICER. HENCE, THE UNJUST ADDITION MAY BE DELETED. (B) GIFTS RECEIVED ON THE OCCASION OF MARRIAGE R8 7-S.2,85,000/- (I) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT RECEIVED ON THE OCCASION OF MARRIAGE. THE LEARNED ASSESSING OFFICER DID NOT CONSIDER THE FAMILY STATUS OF THE APPELLANT. (II) THE ASSESSING OFFICER HAS ADDED THE GIFTS RECE IVED ON TRIVIAL GROUNDS THAT THE DATE OF MARRIAGE ETC. WAS NOT FURNISHED. F URTHER, THE LIST OF PERSONS TENDERED WAS ALSO NOT CONSIDERED BY THE ASS ESSING OFFICER. (C) GIFT RECEIVED FROM P.A. KURIAKOSE, ON THE OCCAS ION OF MARRIAGE RS.1,00,000/-. THE ASSESSING OFFICER ERRED IN LAW A ND FACT IN DISALLOWING GIFT RECEIVED FROM MR. P.A. KURIAKOSE, ESPECIALLY W HEN THE INCOME RETURN OF MR. P.A. KURIAKOSE IS ACCEPTED BY ASSESSING OFFI CER. FURTHER, DETAILED CONFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE AS SESSING OFFICER. HENCE, THIS ADDITION IS UNWARRANTED. 5. LEVY OF INTEREST U/S. 234B : THE ASSESSING OFFICER ERRED IN LAW AND FACT IN LEVY ING INTEREST U/S. 234B OF THE ACT IN THE APPELLANTS CASE WHEN THERE IS NO LE VY OF THAT INTEREST IN THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR 2001-02 IN THE APPELLANTS CASE. 6. FOR THESE AND OTHER GROUNDS AND DOCUMENTS TO BE SUBMITTED AT THE TIME OF HEARING AND IT IS HUMBLY PRAYED THAT THE TR IBUNAL BE PLEASED TO ALLOW THE APPEAL. 5. THE BRIEF FACTS OF THE CASE AS PER THE ASSESSIN G OFFICERS ORDER ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: AS REGARDS GROUND NO.1 OF THE ASSESSEE, THE FACTS AS EMANATING FROM THE ORDER OF THE AO ARE AS UNDER: I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 5 IN THE CASH FLOW FILED ALONG WITH THE RETURN THE O PENING BALANCES SHOWN ARE: CASH BALANCE : RS.1,72,500 BANK OF BARODA : RS. 540 DHANALAKSHMI BANK : .RS. 538 IN THE CASH FLOW STATEMENT FILED WITH THE DDIT(INV. ), KOCHI AT THE TIME OF POST SEARCH ENQUIRIES THE ASSESSEE HAD SHOWN AN OPE NING CASH BALANCE OF RS.72500/-. IN THE QUESTIONNAIRE ATTACHED TO NOTICE U/S. 142(1) VIDE Q.NO. 6 THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY THE DIFF ERENCE BETWEEN THE OPENING BALANCE AS PER THE FIGURES OF RS.72,500/- F URNISHED BEFORE THE DDIT AND THE FIGURES NOW ADMITTED IN THE CASH FLOW OF RS.1,72,500/- SHOULD NOT BE BROUGHT TO TAX AS ASSESSEES UNEXPLAI NED CASH. IN HIS REPLY THE ASSESSEE STATED THAT THE BANK BALANCES WERE NOT TAKEN INTO ACCOUNT IN THE CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV) AND AS SUCH THE CASH FLOW FILED BEFORE THE DDIT WAS INCORRECT. THE ASSES SEES REPLY IS CONSIDERED IN THE CASH FLOW STATEMENT FILED ALONG W ITH THE RETURN THE BANK BALANCES ARE SHOWN SEPARATELY AND THEY DO NOT HAVE AN EFFECT ON THE OPENING CASH BALANCES. AS SUCH THE DIFFERENCE OF RS .1,00,000/- REMAIN AS UNEXPLAINED AND IS TREATED AS ASSESSEES UNEXPLAINE D CASH BAND BROUGHT TO TAX. ADDITION : RS.1,00,000/- 6. BEFORE THE LD. CIT(A) , THE LD. COUNSEL FOR THE ASSESSEE FILED WRITTEN SUBMISSIONS WHICH WERE SENT TO THE ASSESSING OFFICE R FOR REPORT. AFTER RECEIVING THE REPORT, THE ASSESSEE ALSO FILED COUNTER COMMENT S. 7. THE LD. CIT(A) AFTER CONSIDERING THE FACTS ON RECORD CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 8. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE ASSESSING OFFICER HAS NOT CONSIDERED THE ACCUMULATED CASH HOLDING OF THE ASSESSEE. THE ASSESSEE IS ENGAGED IN MULTIFARIOUS BUSINESS ACTIVITIES SINCE 1 996 AND A REGULAR TAX PAYEE. THE CASH FLOW STATEMENT FILED BEFORE THE DDIT(INV) RELIED UPON BY THE I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 6 ASSESSING OFFICER AND THE LD. CIT(A) WAS A ROUGH ST ATEMENT AND WAS NOT A CORRECT STATEMENT. IN FACT, THE ASSESSEE HAS PRESEN TED BEFORE THE AO COMPLETE CASH FLOW STATEMENT TAKING INTO CONSIDERATION THE I NCOMES, RECEIPTS, INVESTMENTS AND OTHER EXPENSES AND IT ALSO INCLUDES ALL BANK BALANCES IN CONTRAST TO THE ERSTWHILE SUMMARY STATEMENT PRESENT ED BEFORE THE DDIT(INV). THEREFORE, THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN RELYING UPON THE CASH FLOW SUMMARY PRESENTED BEFORE THE DDIT(INV). THUS THE LD . COUNSEL PRAYED TO REVERSE THE ORDER OF BOTH THE AUTHORITIES BELOW AND DIRECTED TO DELETE THE ADDITION SO CONFIRMED BY THE LD. CIT(A). 9 THE LD. DR ON THE OTHER HAND RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW. 10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAS FILE D CASH FLOW SUMMARY BEFORE THE DDIT(INV) WHEREIN THE OPENING CASH BALANCE OF R S.75,000/- HAD BEEN DISCLOSED. IT IS TRUE THAT AT THE TIME OF THE SEARC H, ROUGH AND READY METHOD IS NORMALLY ADOPTED. BUT THAT DOES NOT MEAN THE STATEM ENT CAN BE CHANGED WITHOUT ANY BASIS OR MATERIAL ON RECORD. IN THE PRE SENT CASE, THE ASSESSEE HAS PREPARED A FRESH CASH FLOW STATEMENT FOR TAKING INT O CONSIDERATION ALL INCOMES, RECEIPTS, INVESTMENTS AND OTHER EXPENSES INCLUDING THE BANK BALANCES. NO DEFECT HAS BEEN POINTED OUT BY ANY OF THE AUTHORITI ES BELOW. THE AUTHORITIES I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 7 BELOW HAVE PROCEEDED ONLY TO MAKE ADDITION ON THE D IFFERENCE OF THE STATEMENT PRESENTED BEFORE THE DDIT(INV.) AND THAT OF THE ASSESSING OFFICER. THIS APPROACH OF THE ASSESSING OFFICER AS WELL AS O F THE LD. CIT(A) WAS NOT A CORRECT APPROACH. NO ADDITION ON THIS ACCOUNT CAN B E MADE UNLESS THE STATEMENT WAS PRESENTED BEFORE THE AO AS WELL AS BE FORE THE LD. CIT(A) IS DISPUTED. IN THE CIRCUMSTANCES AND FACTS OF THE CA SE, THE ADDITION SO MADE AT RS.1 LAKH IS DIRECTED TO BE DELETED. THUS GROUND N O. 1 OF THE ASSESSEE IS ALLOWED. 11. AS REGARDS GROUND 2 OF THE ASSESSEE, THE F ACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKO SE FOR THE ASSESSMENT YEAR 2001-02 WHICH HAS BEEN DECIDED BY US IN REVENUES A PPEAL IN I.T.A. NO 262/COCH/2013 OF EVEN DATE. THE ONLY DIFFERENCE IN THE PRESENT CASE IS THAT THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE ASSE SSING OFFICER WHEREAS IN THE CASE OF JOHNY KURIAKOSE, THE LD. CIT(A) HAS DELETED THE ADDITION SO MADE BY THE ASSESSING OFFICER AND WE HAVE ALSO CONFIRMED TH E ORDER OF THE LD. CIT(A) AND THE GROUND RAISED BY THE REVENUE HAS BEEN DISMI SSED IN THE CASE OF JOHNY KURIAKOSE IN I.T.A. NO. 262/COCH/2013. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKO SE, FOLLOWING THE SAME, OUR ORDER IN THE CASE OF JOHNY KURIAKOSE OF EVEN DATE S HALL BE IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE AND ACCORDINGLY, T HE ORDER OF THE LD. CIT(A) IS LIABLE TO BE REVERSED AND ACCORDINGLY, GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 8 12. AS REGARDS GROUND NO. 3, THE BRIEF FACTS AS E MANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW FO R THE SAKE OF CONVENIENCE: 3.3 LOANS AND ADVANCES : THE ASSESSEE HAS SHOWN A SUM OF RS.11,524 AS SUNDRY LOANS RECEIVED BACK AND RS.43,500/- AS FROM SHYAM KUMAR (FRIEND). IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THIS CLAIM, THE CLAIMS ARE NOT ACCEPTABLE.. HENCE, THE SUM OF RS.55 ,024/- (11,524 + 43,500) IS TREATED AS INCOME FROM UNEXPLAINED SOURC ES. ADDITION:RS.55,024/- 13. BEFORE THE LD. CIT(A), THE ASSESSEE MADE S UBMISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND ON THE BASI S OF THE FACTS ON RECORD, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICE R. THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 14. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RE LIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE FACTS OF THE CASE. AS EMANATING FROM THE ORDER OF THE LD. CIT(A) AND FROM THE SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE HAS SUBMITTED THE FOLLOWING DOCUMENTS IN THE CASE OF SHRI SHYAM KUMAR FROM WHOM AN AMOUNT OF RS.43,500/- HAS BEEN RECEIVED. (1) CONFIRMATION LETTER FROM MR. SHYAM KUMAR DATED 02.03.2009. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 9 (2) COPY OF THE BANK STATEMENT (NRE A/C 0119208 3801) OF MR. SHYAM KUMAR WITH STATE BANK OF INDIA. (3) COPY OF THE CHEQUES NO. 00517781 & 0051778 2 DATED 01.09.2000 AND 05.09.2000 RECEIVED FROM MR. SHYAM KUMAR. THE AO AS WELL AS THE LD. CIT(A) HAVE NOT CONSIDERE D THE SAME WHICH IN FACT ARE MATTER OF RECORD. IN THE CIRCUMSTANCES AND FAC TS OF THE CASE, THE ASSESSEE HAS DISCHARGED HIS ONUS OF PROVING THE IDENTITY, CR EDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND THEREFORE, THE L D. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE SAID ADDITION OF RS.43,500/- AND THE SAME IS DIRECTED TO BE DELETED. 16. AS REGARDS OTHER LOANS RECEIVED BACK, AMOUNT ING TO RS.11,524/-, IT WAS SUBMITTED THAT THE SAID AMOUNT WAS RECEIVED BACK AN D BEING PETTY AMOUNT, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION. THE SAME IS ACCORDINGLY DIRECTED TO BE DELETED. THUS GROUND NO. 3 OF THE A SSESSEE IS ALLOWED. 16(A). AS REGARDS GROUND NO. 4, THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED H EREINBELOW FOR THE SAKE OF CONVENIENCE: 3.4 OTHER CAPITAL RECEIPTS: UNDER THE HEAD THE ASS ESSEE HAS SHOWN THE FOLLOWING RECEIPTS: 1. FROM MRS. SERENA NRI AS GIFT (WIFES SISTER) RS.1,98,820/- 2. FROM MRS. TERENA POLY (WIFE) RS. 4,50,000/- 3. GIFT ON THE OCCASION OF MARRIAGE RS. 2,85,000/- 4. P.A. KURIAKOSE (FATHER) RS. 1,00,000/- TOTAL RS.10,33,820/- 1. FOR THE GIFT FROM MRS.SERENA, NO CONFIRMATION HA S BEEN FILED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 10 2. IN THE CASE OF MRS. TERANA POLY, THE CONFIRMATIO N LETTER DID NOT INDICATE THE DATE OF GIFT. REGARDING THE SOURCE FOR THE INCO ME OF THE DONOR HER CLAIM THAT IT HAS BEEN PAID OUT OF HER MARRIAGE GIF TS RECEIVED IS NOT ACCEPTABLE AS IN HER ASSESSMENT THAT THE CLAIM OF M ARRIAGE WAS NOT ACCEPTABLE FOR WANT OF EVIDENCE. 3. AS REGARDS GIFT ON THE OCCASION OF MARRIAGE, THE ASSESSEE FILED ONLY A LIST OF 54 NAMES WITH INCOMPLETE ADDRESS. THE DETAI LS LIKE DATE OF MARRIAGE, HOW AND IN WHAT FORM THESE GIFTS WERE KEP T ETC. WERE NOT FURNISHED. IN THE ABSENCE OF THESE DETAILS, THE GE NUINENESS OF THIS RECEIPT IS NOT PROVED. 4. FOR THE SAME REASONS STATED IN COL 3 ABOVE, THE GIFT CLAIMED TO HAVE BEEN RECEIVE FROM P.A. KURIAKOSE IS TREATED AS UNEX PLAINED. FOR THE REASONS STATED ABOVE THE SUM OF RS10,33,820 /- IS TREATED AS INCOME FROM UNEXPLAINED SOURCES AND BROUGHT TO TAX. ADDITION:RS.10,33,820/- 17. BEFORE THE LD. CIT(A), THE ASSESSEE MADE T HE SUBMISSIONS ALONGWITH CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR HIS REPORT. THE ASSESSEE ALSO SUBMITTED THE COUNTER COMMENTS TO THE REPORT OF THE ASSESSING OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) VIDE PARAS 24 TO 24.3 ALLOWED PARTIAL RELIEF AND CONFIRMED THE REST OF THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. 18. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON T HE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND ON THE OTHER HAND THE LD. DR REL IED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 19. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE FACTS OF THE CASE. AS REGARDS GIFTS OF RS.4,50,000/- FROM MRS. TERENA POLY, WIFE OF THE ASSESSEE, THE UNDISPUTED FACT IN THE PRESENT CASE IS THAT MRS . TERENA POLY, WIFE OF THE I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 11 ASSESSEE IS ALSO ASSESSED TO TAX WITH THE SAME ASSE SSING OFFICER WHERE SHE HAD DECLARED TO HAVE GIVEN THE GIFT OF RS.4,50,000/- AN D NO ISSUE ON THIS ACCOUNT HAS BEEN RAISED BY THE ASSESSING OFFICER. THE ASSE SSEE HAS ALSO SUBMITTED IN THE CASH FLOW STATEMENT SUBMITTED BEFORE THE DDIT(I NV) IN THE POST SEARCH ENQUIRY THAT THE GIFT WAS RECEIVED FROM MRS. TERENA POLY, WIFE OF THE ASSESSEE. THE CONFIRMATION LETTER FILED BY MRS. TERENA POLY C LEARLY STATES ALL THESE FACTS WHICH HAS NOT BEEN DOUBTED AND NO DEFECT IN THE SAM E HAS BEEN POINTED OUT BY THE ASSESSING OFFICER. IN THE CIRCUMSTANCES AND FA CTS OF THE CASE, THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUI NENESS OF THE TRANSACTION. ACCORDINGLY, THE LD. CIT(A) IS NOT JUSTIFIED IN CON FIRMING THE ACTION OF THE ASSESSING OFFICER AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSED AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION SO MADE. 20. AS REGARDS GIFT AMOUNTING TO RS. 2,85,000/-, IT WAS SUBMITTED THAT THE GIFTS WERE RECEIVED ON OCCASION OF MARRIAGE . THE ASSESSING OFFICER AND THE LD CIT(A) HAVE NOT CONSIDERED THE STATUS OF THE FAMILY INSPITE OF THE FACT THAT THIS FACT WAS POINTED OUT BEFORE BOTH THE AUTHORITIES BE LOW. THE SAID AMOUNT HAS ALSO BEEN SHOWN IN THE CASH FLOW STATEMENT BEFORE T HE DDIT(INV). NO COGENT REASON HAS BEEN GIVEN BY ANY OF THE AUTHORITIES BEL OW WHILE DISALLOWING THE SAID GIFTS SO RECEIVED. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION SO MADE AN D ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 12 21. AS REGARDS CLAIM OF GIFT OF RS. 1 LAKH , THE ASSESSING OFFICER HAS MADE THE ADDITION ON THE BASIS OF HIS OBSERVATIONS IN PARA 5 OF THE ASSESSMENT ORDER THAT THE DETAILS OF THE DONORS WERE NOT GIVEN. IN FACT A S PER PARA 24.3, THE LD. CIT(A) HAS MENTIONED THAT THE GIFT HAS BEEN RECEIVE D FROM MR. P.A. KURIAKOSE, THE FATHER OF THE ASSESSEE WHO IS ALSO ASSESSED TO TAX WITH THE SAME ASSESSING OFFICER AND THEREFORE, THE DETAILS OF THE DONORS IS IRRELEVANT. THE GIFT WAS DULY CONFIRMED AND THE LD. CIT(A) DELETED THE ADDITION S O MADE. ACCORDINGLY, GROUND NO. 4 RAISED BY THE ASSESSEE IS INFRUCTUOUS ONCE THE ADDITION HAS BEEN DELETED BY THE LD. CIT(A) VIDE PARA 24.3 OF THE ORD ER OF THE LD. CIT(A). 22. AS REGARD GROUND NO. 5 WITH REGARD TO LEVY OF INTEREST U/S. 234B OF THE ACT, THE SAME IS NOT MAINTAINABLE. AND CONSEQUENTIA L IN NATURE. THUS GROUND NO. 5 OF THE ASSESSEE IS ALLOWED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN I.T.A. NO.464/COCH/2011 IS ALLOWED. I.T.A. NO.465/COCH/2011 : A.Y.2002-03 23. NOW WE SHALL TAKE UP THE ASSESSEES APPEAL IN I.T.A. NO. 465/COCH/2011 FOR THE ASSESSMENT YEAR 2002-03 AS UNDER: 24. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 13 1. DISALLOWANCE OF AGRICULTURAL INCOME RS.40,000/ - (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING SOME PORTION OF THE AGRICULTURAL INCOME RETURNED BY THE APPELLAN T. (B)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN A LLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING OVER THE YE ARS. (C) THE ENQUIRY REPORT OF THE INSPECTOR OF INCOME T AX, MADE BY THE INSPECTOR BY VISITING THE FIELDS IN DECEMBER 2008, MAY NOT GIVE CORRECT RESULTS FOR THE PREVIOUS 7-8 YEARS, FOR OBVIOUS REA SONS OF PASSAGE OF TIME. NO TRACE OF SEASONAL CROPS CULTIVATED WILL BE AVAIL ABLE AFTER A LONG PERIOD OF 2 TO 8 YEARS. (D) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHEREIN THE SELLING RATES ADOPTED ARE AVE RAGE RATES FOR THE WHOLE YEAR. (E) SO, THE UNJUST ADDITION MAY BE DELETED. (I) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 2. LOANS AND ADVANCES FROM FRIENDS RS.95,214/- (A) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING THE AMOUNTS RECEIVED AS LOANS FROM FRIENDS ON THE TRIVIAL GROUN DS. THE ASSESSING OFFICER HAS NOT CONSIDERED THE CONFIRMATION CERTIFICATE FIL ED BEFORE HIM. HENCE, UNFAIR ADDITION OF THE SAME MAY BE DELETED. (B) REGARDING THE LOANS RECEIVED BACK, NO FURTHER QUERIES WERE ASKED BY THE LEARNED ASSESSING OFFICER. HOWEVER, ALL AMOUNT S ARE RECEIVED BY CHEQUES/DD AND WERE CREDITED IN THE APPELLANTS BAN K ACCOUNTS. 3. OTHER RECEIPTS RS.10,33,820/- (A) GIFT FROM MRS. SEREENA (WIFES SISTER) RS.1,3 1,041/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT R ECEIVED FROM MRS. SEREENA (WIFES SISTER) ON THE GROUND THAT NO CONFIRMATION HAS BEEN FILED FROM HER. THE AMOUNT WAS ADVANCED BY MRS. SEREENA FROM HER AC COUNT WITH PNC BANK, NEW JERSEY, USA, OPERATED JOINTLY WITH HER HU SBAND, MR. AJITH. CONFIRMATION FROM HER HUSBAND MR. AJITH WAS PRODUCE D BEFORE THE LEARNED ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER H AS NOT CONSIDERED THE SAME. (B) GIFT FROM MR. AJITH CHERAYIL RS. 3,50,000/-. THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT RECEIVED FROM MR. AJITH CHERAYIL. THE ASSESSING OFFICER HAS NOT CONSIDERED THAT MR. A JITH IS AN NRI WORKING AT USA AND HE HAD PAID SUCH AMOUNT OUT OF HIS NRI R ECEIPTS. HENCE, THE UNJUST ADDITION MAY BE DELETED. 4. LEVY OF INTEREST U/S. 234B : I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 14 THE ASSESSING OFFICER ERRED IN LAW AND FACT IN LEVY ING INTEREST U/S. 234B OF THE ACT IN THE APPELLANTS CASE WHEN THERE IS NO LE VY OF THAT INTEREST IN THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR 2002-03 IN THE APPELLANTS CASE. 25. AS REGARDS GROUND NO.1, THE FACTS IN THE PR ESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2001-02 IN I.T.A. NO. 464/COCH/2013 AND OUR ORDER HREINABOVE SHALL BE IDE NTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. 26. AS REGARDS GROUND NO.2, THE BRIEF FACTS OF T HE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREI NBELOW FOR THE SAKE OF CONVENIENCE: 3.2 LOANS AND ADVANCES: THE ASSESSEE HAS SHOWN A S UM OF RS.25,466/- AS SUNDRY LOANS RECEIVED BACK AND RS.69748/- AS FROM SUBASH (NRI FRIEND). IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THIS CLAIM OF RS.25,466/-, THE CLAIM IS NOT ACCEPTABLE. REGARDING THE LOAN FROM SUBASH, THE CONFIRMATION LETTER IS GIVEN BY THE MOTHER OF S UBASH AND BY SUBASH. SECONDLY, IT DID NOT INDICATE THE DETAILS OFCHEQUE ISSUED LIKE CH. NO. BANK ETC. HENCE THE SUM OF RS.95,214/- (25466+69748) IS TREATED AS INCOME FROM UNEXPLAINED SOURCES. 27. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUB MISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT. THE ASSESSEE ALS O FILED COUNTER SUBMISSIONS IN RESPONSE TO THE REPORT OF THE ASSESSING OFFICER. 28. AFTER CONSIDERING THE FACTS ON RECORD, THE L D. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 15 29. THE LD. AR RELIED UPON THE SUBMISSIONS MADE B EFORE THE LD. CIT(A) AND ON THE OTHER HAND THE LD. DR RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 30. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. THE ASSESSEE HAS RECEIVED RS.69,748 FROM SHRI SUBASH, A NRI FRIEND FROM WHOM CONFIRMATION LETTER HAS BEEN FILED BEFORE THE ASSES SING OFFICER AND THE LD. CIT(A) BOTH THE ASSESSING OFFICER AND THE LD. CIT(A) HAVE NOT CONSIDERED THE SAID CONFIRMATION LETTER AND HAVE NOT FOUND ANY DEFECT I N THE SAME AND THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE AD DITION ON THIS COUNT. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REVERSE D AND THE ASSESSEE GETS RELIEF TO THIS EXTENT. AS REGARDS SOME RECEIPTS AMOUNTING TO RS.25,466/- AS SUNDRY LOAN RECEIVED BACK WHICH ARE IN FACT SMALL AMOUNT F OR WHICH BY CONSIDERING THE STATUS OF THE ASSESSEE, NO ADDITION OUGHT TO HAVE BEEN MADE AND ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED. THUS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. 31. AS REGARDS GROUND NO. 3, THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER IS REPRODUCED HEREIN BELOW FO R THE SAKE OF CONVENIENCE: 3.3 OTHER CAPITAL RECEIPTS : UNDER THIS HEAD THE ASSESSEE HAS SHOWN THE FOLLOWING RECEIPTS: 1. FROM MRS. SERENA NRI AS GIFT (WIFES SISTER) RS.1,31,041/- 2. FROM MR. AJIT CHIRAYIL (NRI) RS.3,50,000/- CO-BROTHER GIFT I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 16 TOTAL RS.4,81,041/- 1. FOR THE GIFT FROM MRS.SERENA, THE CONFIRMATION I S SIGNED BY HER HUSBAND AJIT CHIRAYIL AND IT DID NOT CARRY THE CHEU QUE DETAILS. 2. IN THE CASE OF MR. AJIT CHIRAYIL, NO CONFIRMATIO N HAS BEEN FILED HENCE THE CLAIMS OF GIFTS AMOUNTING TO RS. 3,50,000/- IS NOT ACCEPTABLE. FOR THE REASONS STATED ABOVE THE SUM OF RS.4,81,041 /- TREATED AS INCOME FROM UNEXPLAINED SOURCES AND BROUGHT TO TAX. ADDITION:RS.4,81,041/- 32. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SU BMISSIONS AND FILED CERTAIN DOCUMENTS IN SUPPORT OF HIS CLAIM WHICH WERE SENT T O THE ASSESSING OFFICER FOR REPORT. THE ASSESSEE ALSO FILED COUNTER COMMENTS T O THE REPORT OF THE ASSESSING OFFICER. 33. AFTER CONSIDERING THE FACTS ON RECORD, THE L D. CIT(A) ALLOWED RELIEF TO THE EXTENT OF RS.1,31,041/-. HOWEVER, TO THIS EXTENT, T HE AGITATION BY THE ASSESSEE BECOMES INFRUCTUOUS. HOWEVER, AS REGARDS ADDITION OF RS.3,50,000/-, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 34. THE LD. AR RELIED UPON THE SUBMISSIONS MADE B EFORE THE LD. CIT(A) AND ON THE OTHER HAND THE LD. DR RELIED UPON THE ORDER OF BOTH THE AUTHORITIES BELOW. 35. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. AS REGARDS GIFT FROM SHRI AJITH CHIRAYIL, WHO IS WORKI NG IN US, AMOUNTING TO RS.3,50,000/-, THE ASSESSEE HAS PRODUCED CONFIRMATI ON LETTER FROM SHRI AJIT I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 17 CHIRAYIL AND THE LOAN WAS RECEIVED IN THE SB ACCOUN T OF FEDERAL BANK, ANGAMALY BRANCH. THE ADDITIONAL EVIDENCES PRODUCED BEFORE T HE LD. CIT(A) WERE EMPLOYMENT CARD OF MR.AJITH CHIRAYIL, FRESH CONFIRM ATION LETTER FROM MR. AJITH WHEREIN HE HAD CONFIRMED THAT THE FUNDS WERE TRANSF ERRED FROM HIS JOINT ACCOUNT WITH HIS WIFE SEREENA AJITH WITH PNC BANK, AS A PAR T OF THEIR FAMILY SETTLEMENT AND COPY OF CONFIRMATION LETTER FROM MRS. SEREENA F RANCIS, ALSO CONFIRMING THE ABOVE. WHEN MR AJITH CHIRAYIL CAME FOR A VISIT TO INDIA IN OCTOBER, 2010, THE ASSESSEE PRODUCED HIM BEFORE THE ASSESSING OFFICER AND REQUESTED THE ASSESSING OFFICER TO CROSS EXAMINE HIM SO AS TO UNDERSTAND TH E VERACITY OF THE GIFTS RECEIVES. BUT THE ASSESSING OFFICER DID NOT CROSS EXAMINE MR. AJITH CHIRAYIL ON THE GROUND THAT THE FACTS OF THE CASE WERE NOT AVAI LABLE WITH HIM AS THE FILES WERE IN THE OFFICE OF THE CIT(A) EVEN THOUGH THE CA SE WAS PENDING BEFORE THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. IN FAC T, THE ASSESSING OFFICER FAILED TO UNDERSTAND THE DIFFICULTY OF PRODUCING A PERSON RESIDENT IN US . THE ASSESSEE HAS ALSO PRODUCED OTHER EVIDENCES AS FOLLOWS: A. A LETTER FROM MARSH INCORPORATED, NEW JERSEY WH EREIN IT IS STATED THAT MR. AJITH IS A FULL TIME EMPLOYEE OF THE COMPANY AN D HE IS COMPENSATED AT AN ANNUAL RATE OF $1,80,250/-, WHICH MEANS AT AN EX CHANGE RATE OF RS.45 PER DOLLAR, THE CONSIDERATION IS RS.81,11,250/-. (B) A LETTER FROM FEDERAL BANK LTD., ANGAMALY WHERE IN IT IS STATED THAT ALL THE TRANSACTIONS ENTERED AS FCP, MEANS FOREIGN CHEQ UE PURCHASE AND ALL THESE TRANSACTION REPRESENT GENUINE TRANSACTIONS. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASS ESSEE HAS BEEN ABLE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTION ACCORDINGLY, THE I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 18 ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE AD DITION TO THE TOTAL INCOME OF THE ASSESSEE AND ACCORDINGLY, THE ORDER OF THE LD. CIT( A) IS REVERSED. THUS, GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. 36. AS REGARDS, GROUND NO. 4, REGARDING LEVY O F INTEREST U/S. 234B OF THE ACT, THE SAME IS MANDATORY AND CONSEQUENTIAL IN NATURE. ACCORDINGLY, GROUND NO. 5 OF THE ASSESSEE IS ALLOWED. THUS, THE APPEAL OF THE AS SESSEE IN I.T.A. NO.465/COCH/2011 IS ALLOWED. I.T.A. NO.466/COCH/2011 : A.Y.2003-04 37. NOW WE SHALL TAKE UP THE ASSESSEES APPEAL IN I.T.A. NO. 466/COCH/2011 FOR THE ASSESSMENT YEAR 2003-04 AS UNDER:- 38. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: 1. DISALLOWANCE OF AGRICULTURAL INCOME RS.40,000/ - (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING A PORTION OF THE AGRICULTURAL INCOME RETURNED BY THE APPELLANT. (B) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ALLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME EVERY YEAR, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING O VER THE YEARS. (C) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ENTIRELY RELYING ON THE REPORT OF THE INSPECTOR OF INCOME TAX WHO IS NOT A QUALIFIED/REGISTERED VALUER. (D) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING ON THE ENQUIRY REPORT OF THE INSPECTOR OF INCOME TAX, MADE BY VISI TING THE FIELDS IN DECEMBER 2008, AS IT MAY NOT GIVE CORRECT RESULTS F OR THE PRECEDING 7-8 YEARS, FOR OBVIOUS REASONS OF PASSAGE OF TIME. NO T RACE OF SEASONAL CROPS CULTIVATED WILL BE AVAILABLE AFTER A LONG PERIOD OF 2 TO 8 YEARS. (E) THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED TH E HONEST AND BONA FIDE ESTIMATE OF AGRICULTURAL INCOME DECLARED BY TH E APPELLANT, IN THE ABSENCE OF ANY EVIDENCE IN HIS POSSESSION, TO HOLD THAT THE AGRICULTURAL INCOME OF THE APPELLANT IS ONLY RS.24,000/- FOR THE YEAR. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 19 (F) THE ASSESSING ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHEREIN THE SELLING RATES ADOPTED ARE AVE RAGE RATES FOR THE WHOLE YEAR. (G) THE INSPECTOR OF INCOME TAX OUGHT TO HAVE CONSI DERED THE INCOME FROM AGRICULTURAL PROPERTY OF THE APPELLANT AT NAYA THODE KARA, NEAR AIRPORT WHICH WAS SOLD TO CASINO GROUP IN 2004. SIMILARLY I NSPECTOR OUGHT TO HAVE CONSIDERED THE AGRICULTURAL INCOME FROM THE PROPERT Y AT KIDANGOOR WHEREIN RUBBER WAS CULTIVATED, AND LATER ON HOUSE W AS CONSTRUCTED. THE FACT THAT THE APPELLANT HAD TAKEN LANDS ON LEASE WA S ALSO NOT CONSIDERED. (H)THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE EXPLANATIONS RENDERED AS TO THE EXTENT OF AGRICULTURAL HOLDINGS, THE CROPS THAT WERE GROWN AND THE REALIZATIONS OF AGRICULTURAL PROCEEDS , WHETHER OR NOT THEY ARE SUPPORTED BY EVIDENCES, DUE TO PASSAGE OF TIME, ESPECIALLY SINCE THEY WERE RETURNED AS SUCH IN THE ORIGINAL RETURNS ALSO. (I) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 2. LOANS AND ADVANCES FROM FRIENDS RS.75,621/- (A) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING THE LOANS RECEIVED BACK, AS NO FURTHER QUERIES WERE ASKED BY THE LEARNED ASSESSING OFFICER AND HENCE THE APPELLANT WAS DENIED THE OPPO RTUNITY TO FURNISH THE SAME. HOWEVER, ALL AMOUNTS ARE RECEIVED BY CHEQUES/ DD AND WERE CREDITED IN THE APPELLANTS BANK ACCOUNTS. HENCE UN FAIR ADDITION OF THE SAME MAY BE DELETED. 3. OTHER RECEIPTS RS.2,45,563/- (A) GIFT FROM MRS. SEREENA (WIFES SISTER) RS.53, 313/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT R ECEIVED FROM MRS. SEREENA (WIFES SISTER) ON THE GROUND THAT NO CONFIRMATION HAS BEEN FILED FROM HER. THE AMOUNT WAS ADVANCED BY MRS. SEREENA FROM HER AC COUNT WITH PNC BANK, NEW JERSEY, USA, OPERATED JOINTLY WITH HER HU SBAND, MR. AJITH. CONFIRMATION FROM HER HUSBAND MR. AJITH WAS PRODUCE D BEFORE THE LEARNED ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER H AS NOT CONSIDERED THE SAME. (B) GIFT FROM MR. AJITH CHERAYIL RS. 75,000/-: TH E ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT RECEIVED FROM M R. AJITH CHERAYIL. THE ASSESSING OFFICER HAS NOT CONSIDERED THAT MR. AJITH IS AN NRI WORKING AT USA AND HE HAD PAID SUCH AMOUNT OUT OF HIS NRI RECE IPTS. HENCE, THE UNJUST ADDITION MAY BE DELETED. (C) GIFT FROM MR. P.A. KURIAKOSE RS.35,000/-:- TH E ASSESSING OFFICER ERRED IN LAW AND IN FACT IN DISALLOWING GIFT RECEIV ED FROM MR. P.A. KURIAKOSE, ESPECIALLY WHEN THE INCOME RETURNED OF M R. P.A. KURIAKOSE IS ACCEPTED BY THE ASSESSING OFFICER. FURTHER, DETAILE D CONFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER. HEN CE, THIS ADDITION IS UNWARRANTED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 20 (D) GIFT RECEIVED FROM MRS. MARY KURIAKOSE RS.35, 000/-:- THE ASSESSING OFFICER ERRED IN LAW AND IN FACT IN DISALLOWING THE GIFT RECEIVED FROM MRS. MARY KURIAKOSE. THE FACT THAT THE AMOUNT WAS ACTUA LLY RECEIVED FROM SMT. MRS. MARY KURIAKOSE COULD HAVE BEEN VERIFIED F ROM HER CASH FLOW STATEMENT FILED WITH THE ASSESSING OFFICER. FURTHER DETAILED CONFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFIC ER. HENCE, THIS ADDITION IS UNWARRANTED. (E) GIFT FROM MRS. TAREENA POLY (WIFE) RS.47,250/ -: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING THE GIFT RECEI VED FROM MRS. TAREENA POLY (WIFE). THE FACT THAT THE AMOUNT WAS ACTUALLY RECEIVED FROM MRS. TAREENA POLY (WIFE) COULD HAVE BEEN VERIFIED FROM H ER CASH FLOW STATEMENT FILED WITH THE ASSESSING OFFICER. FURTHE R DETAILED CONFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFIC ER. HENCE, THIS ADDITION IS UNWARRANTED. 4. LEVY OF INTEREST U/S. 234B : THE ASSESSING OFFICER ERRED IN LAW AND FACT IN LEVY ING INTEREST U/S. 234B OF THE ACT IN THE APPELLANTS CASE WHEN THERE IS NO LE VY OF THAT INTEREST IN THE REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 IN THE APPELLANTS CASE. 39. AS REGARDS GROUND NO.1, THE FACTS IN THE PR ESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2001-02 IN I.T.A. NO. 464/COCH/2013 AND OUR ORDER HREINABOVE SHALL BE IDE NTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. 40. AS REGARDS GROUND NO.2, THE BRIEF FACTS OF T HE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREI NBELOW FOR THE SAKE OF CONVENIENCE: 3.2 LOANS AND ADVANCES: THE ASSESSEE HAS SHOWN A S UM OF RS.75,621/-, AS SUNDRY LOANS RECEIVED BACK. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 21 IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THIS C LAIM OF RS.75,621/-, THE CLAIM IS NOT ACCEPTABLE. HENCE THE SUM OF RS.75,62 1/- IS TREATED AS INCOME FROM UNEXPLAINED SOURCES. ADDITION: RS.75,621/- 41. BEFORE THE LD. CIT(A), THE ASSESSEE MADE TH E SUBMISSIONS WHICH WERE SENT TO THE AO FOR REPORT. THE ASSESSEE ALSO FILED COUNTER COMMENTS. THE LD. CIT(A) AFTER CONSIDERING THE FACTS ON RECORD CONFIR MED THE ACTION OF THE ASSESSING OFFICER. 42. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON T HE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND ON THE OTHER HAND THE LD. DR RE LIED ON THE ORDER OF BOTH THE AUTHORITIES BELOW. 43. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE A SSESSEE HAD DECLARED SUNDRY LOANS RECEIVED BACK AMOUNTING TO RS.75,621/- WHICH IN FACT HAS BEEN CREDITED IN THE BANK ACCOUNT. IT HAS BEEN CLAIMED THAT THE ASSE SSEE HAS FILED CONFIRMATION LETTERS FROM THE CREDITORS. HOWEVER, BEING PETTY A MOUNT WHICH TOTALS TO RS.75,621/-, THE ASSESSING OFFICER WAS NOT JUSTIFI ED IN MAKING ADDITIONS BY SEEING THE STATUS OF THE ASSESSEE. IN THE CIRCUMST ANCES AND FACTS OF THE CASE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING TH E ADDITION. ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT(A) IS REVERSED. THUS GROUND NO. 2 OF THE ASSESSEE IS ALLOWED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 22 44. AS REGARDS GROUND NO. 3, THE BRIEF FACTS EMA NATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW FOR TH E SAKE OF CONVENIENCE: 3.3 OTHER CAPITAL RECEIPTS : UNDER THIS HEAD THE ASSESSEE HAS SHOWN THE FOLLOWING RECEIPTS: 1. MRS. SERENA (WIFES SISTER)-GIFT RS.53,313/- 2. MR. AJIT CHIRAYIL (NRI)-(CO-BROTHER ) - GIFT RS.75,000/- 3. SHRI P.A. KURIAKOSE (FATHER) RS.35,000/- 4. SMT. MARY KURIAKOSE(MOTHER) RS.35,000/- 5. MRS. TAREENA POLY OTHER INCOME RS.47,250/- CREDITED IN SB T OTAL RS.2,45,563/- 1. FOR THE GIFT FROM MRS.SERENA, THE CONFIRMATION I S SIGNED BY HER HUSBAND AJIT CHIRAYIL AND IT DID NOT CARRY THE CHEU QUE DETAILS. 2. IN THE CASE OF MR. AJIT CHIRAYIL, THE CONFIRMATI ONLETTER DOES NOT CONTAIN DATE OF GIFT, MODE OF PAYMENT AND CHEQUE DETAILS ET C. HENCE THE CLAIMS OF GIFTS AMOUNTING TO RS. 3,50,000/- IS NOT ACCEPTABLE . 3&4.FOR THE REASONS AS ABOVE, THE CONFIRMATION IN T HE PA KURIAKOSE AND MARY KURIAKOSE ARE ACCEPTABLE. MOREOVER IN THE CASE OF MARY KURIAKOSE, IN HER ASSESSMENT IT HAS BEEN HELD IT HAS BEEN HELD SO URCE OF INCOME FROM MILK COWS AND POULTRY WAS NOT ACCEPTED 5. NO CONFIRMATION FILED FOR THE GIFT FROM MRS. T AREENA POLY. IN HER ASSESSMENT HER SOURCE OF INCOME LIKE TAILORING, TUI TION ETC WAS NOT ACCEPTED. 45. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUB MISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR COMMENTS AND AFTER RECEIV ING COMMENTS FROM THE ASSESSING OFFICER, THE ASSESSEE ALSO FILED COUNTER COMMENTS. THE LD. CIT(A) AFTER CONSIDERING THE FACTS ON RECORD, DELETED THE ADDITION OF RS.53,313/- . ACCORDINGLY, GROUND RAISED BY THE ASSESSEE BECOMES INFRUCTUOUS. AS REGARDS THE GIFT RECEIVED FROM AJITH CHERAYIL WHO IS CO-BROTHE R OF THE ASSESSEE, AND I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 23 THEREFORE HIS CLOSE RELATIVE, WHO HAS GIFTED RS.75, 000/-, THE FACTS WERE ON RECORD BEFORE THE LD. CIT(A) AND THE ASSESSING OFFICER. MR . AJIT CHERAYIL IS A NRI WHO IS WORKING IN USA AND CONFIRMATION LETTER HAS BEEN FIL ED WHICH IS NOT DISPUTED. NO DEFECT IN THE SAME HAS BEEN POINTED OUT. IN THE CIR CUMSTANCES AND FACTS OF THE CASE, THE ASSESSEE HAS PROVED THE IDENTITY, CREDITW ORTHINESS AND GENUINENESS OF THE TRANSACTION. ACCORDINGLY, THE SAID ADDITION IS LIABLE TO BE DELETED AND THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. THE ORDE R OF THE LD. CIT(A) IS REVERSED TO THIS EXTENT. 46. AS REGARDS GIFT RECEIVED FROM P.A. KURIAKOS E AMOUNTING TO RS.35,000/-, THE ADDITION MADE BY THE ASSESSING OFFICER HAS BEEN DELETED AND THEREFORE, THIS ADDITION HAS BECOME INFRUCTUOUS AND CANNOT BE CHALL ENGED BY THE ASSESSEE. 47. AS REGARDS GIFT RECEIVED FROM SMT. MARY KUR IAKOSE, MOTHER OF THE ASSESSEE, THE ADDITION, THE ASSESSEE HAS FILED THE CONFIRMATION LETTER BEFORE THE ASSESSING OFFICER AS WELL AS BEFORE THE LD. CIT(A) ALONGWITH THE CASH FLOW STATEMENT. NO DEFECT IN THE SAME HAS BEEN POINTED O UT BY BOTH THE AUTHORITIES BELOW. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSEE HAVING PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE TRANSACTION, HAS DISCHARGED THE ONUS. ACCORDINGLY, THE ADDITIONS SO MADE IS DI RECTED TO BE DELETED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 24 48. AS REGARDS GIFT OF RS. 47,250/- FROM MRS. TAR EENA POLY, WIFE OF THE ASSESSEE, THE ASSESSEE HAS FILED DETAILED CONFIRMAT IONS AND THE CASH FLOW STATEMENT WHICH HAS NOT BEEN DISPUTED BY ANY OF THE AUTHORITIES BELOW. ACCORDINGLY, THE ASSESSEE HAVING PROVED THE IDENTIT Y, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION, HAS DISCHARGED THE ONUS. ACCORDINGLY, THE SAID ADDITION IS DIRECTED TO BE DELETED. THUS GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. 49. AS REGARDS GROUND NO. 4 REGARDING LEVY OF INTEREST U/S. 234B, THE SAME IS MANDATORY AND CONSEQUENTIAL IN NATURE. ACCORDINGLY, GROUND NO. 4 OF THE ASSESSEE IS ALLOWED. THUS THE APPEAL OF THE ASSESS EE IN I.T.A. NO. 466/COCH/2011 IS ALLOWED. I.T.A. NO.467/COCH/2011 : A.Y.2004-05 I.T.A. NO.343/COCH/2011:A.Y.2004-05 REVENUES APPEA L 50. NOW WE SHALL TAKE UP THE ASSESSEES APPEAL IN I.T.A. NO. 467/COCH/2011 FOR THE ASSESSMENT YEAR 2004-05 AS UNDER:- 51. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: 1. DISALLOWANCE OF AGRICULTURAL INCOME RS.40,000/ - (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING A PORTION OF THE AGRICULTURAL INCOME OF THE APPELLANT. (B)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN A LLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME EVERY YEAR, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING O VER THE YEARS. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 25 (C) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ENTIRELY RELYING ON THE REPORT OF THE INSPECTOR OF INCOME TAX WHO IS NOT A QUALIFIED/REGISTERED VALUER. (D) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING ON THE ENQUIRY REPORT OF THE INSPECTOR OF INCOME TAX, MADE BY VISI TING THE FIELDS IN DECEMBER 2008, AS IT MAY NOT GIVE CORRECT RESULTS F OR THE PRECEDING 7-8 YEARS, FOR OBVIOUS REASONS OF PASSAGE OF TIME. NO T RACE OF SEASONAL CROPS CULTIVATED WILL BE AVAILABLE AFTER A LONG PERIOD OF 2 TO 8 YEARS. (E) THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED TH E HONEST AND BONA FIDE ESTIMATE OF AGRICULTURAL INCOME DECLARED BY TH E APPELLANT, IN THE ABSENCE OF ANY EVIDENCE IN HIS POSSESSING, TO HOLD THAT THE AGRICULTURAL INCOME OF THE APPELLANT IS ONLY RS.10,000/- FOR THE YEAR. (F) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHERE IN THE SELLING RATES ADOPTED ARE AV ERAGE RATES FOR THE WHOLE YEAR. (G) THE INSPECTOR OF INCOME TAX OUGHT TO HAVE CONSI DERED THE INCOME FROM AGRICULTURAL PROPERTY OF THE APPELLANT AT NAYA THODE KARA, NEAR AIRPORT WHICH WAS SOLD TO CASINO GROUP IN 2004. SIMILARLY I NSPECTOR OUGHT TO HAVE CONSIDERED THE AGRICULTURAL INCOME FROM THE PROPERT Y AT KIDANGOOR WHEREIN RUBBER WAS CULTIVATED, AND LATER ON HOUSE W AS CONSTRUCTED. THE FACT THAT THE APPELLANT HAD TAKEN LANDS ON LEASE WA S ALSO NOT CONSIDERED. (H)THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE EXPLANATIONS RENDERED AS TO THE EXTENT OF AGRICULTURAL HOLDINGS, THE CROPS THAT WERE GROWN AND THE REALIZATIONS OF AGRICULTURAL PROCEEDS , WHETHER OR NOT THEY ARE SUPPORTED BY EVIDENCES, DUE TO PASSAGE OF TIME, ESPECIALLY SINCE THEY WERE RETURNED AS SUCH IN THE ORIGINAL RETURNS ALSO. (I) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 2. LOANS AND ADVANCES FROM FRIENDS RS.96,598/- (A) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING THE LOANS RECEIVED BACK, AS NO FURTHER QUERIES WERE ASKED BY THE LEARNED ASSESSING OFFICER AND HENCE THE APPELLANT WAS DENIED THE OPPO RTUNITY TO FURNISH THE SAME. HOWEVER, ALL AMOUNTS ARE RECEIVED BY CHEQUES /DD AND WERE CREDITED IN THE APPELLANTS BANK BY CHEQUES/DD AND WERE CREDITED IN THE APPELLANTS BANK ACCOUNTS. HENCE UNFAIR ADDITION OF THE SAME MAY BE DELETED. 3. OTHER RECEIPTS RS.13,68,075/- (A) GIFT ROM MRS. MARYKUTTY FRANCIS (MOTHER-IN-LAW) RS.10,00,000/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOW ING GIFT RECEIVED FROM MRS. MARYKUTTY FRANCIS. ALL PARTICULARS OF THE TRA NSACTION WERE PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT CONSIDERED THE FACT THAT THE GIFT WAS PAID OUT OF SALES PROCEEDS O F HER PROPERTY AT KADAVANTHARA. HENCE, THE UNJUST ADDITION MAY BE DEL ETED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 26 (B) GIFT FROM MRS. TAREENA POLY (WIFE) RS.3,18,55 0/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT R ECEIVED FROM MRS. TAREENA POLY. THE FACT THAT THE AMOUNT WAS ACTUALLY RECEIVE D FROM SMT. TAREENA POLY COULD HAVE BEEN VERIFIED FROM HER CASH FLOW ST ATEMENT FILED WITH THE ASSESSING OFFICER. FURTHER, DETAILED CONFIRMATION L ETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER. HENCE, THIS ADDITION IS UNWARRANTED. (C) GIFT RECEIVED FROM MRS. SEREENA (WIFES SISTER) RS.49,525/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOW ING THE GIFT RECEIVED FROM MRS. SEREENA (WIFES SISTER) ON THE GROUND THAT NO CONFIRMATION HAS BEEN FILED FROM HER. THE AMOUNT WAS ADVANCED BY MRS. SE REENA FROM HER ACCOUNT WITH PNC BANK, NEW JERSEY, USA, OPERATED JO INTLY WITH HER HUSBAND, MR. AJITH. CONFIRMATION FROM HER HUSBAND M R. AJITH WAS PRODUCED BEFORE THE LEARNED ASSESSING OFFICER. HOW EVER, THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME. 4. SALE OF LAND RS.13,37,009/- THE ASSESSING OFFICER ERRED IN LAW AND FACT IN COMP UTING THE VALUE OF SALES CONSIDERATION ON LAND SOLD AT NEDUMBASSERY, ANGAMAL Y. THE ASSESSING OFFICER ALSO ERRED IN LAW AND FACT IN NOT CONSIDERI NG THE EVIDENCE/EXPLANATIONS GIVEN AND ARRIVING AT A CONCL USION ON SURMISES, PRESUMPTIONS AND CONJECTURES. 52. AS REGARDS GROUND NO.1, THE FACTS IN THE P RESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2001-02 IN I.T.A. NO. 464/COCH/2013 AND OUR ORDER IN I.T.A. NO. 464/COCH/ 2013 HEREINABOVE SHALL BE IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. 53. AS REGARDS GROUND NO.2, THE BRIEF FACTS OF T HE CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREI NBELOW FOR THE SAKE OF CONVENIENCE: 3.2 LOANS AND ADVANCES: THE ASSESSEE HAS SHOWN A S UM OF RS.3,098/- AND RS.93,500/-AS SUNDRY LOANS RECEIVED BACK AND SUN DRY LOANS FROM FRIENDS RESPECTIVELY. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 27 IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THIS CLAIM OF RS.96,598/- (RS.3,098/- + RS.93,500/-), THE CLAIM IS NOT ACCEPT ABLE. HENCE THE SUM OF RS.96,598/- IS TREATED AS INCOME FROM UNEXPLAINED S OURCES. ADDITION: RS.96,598 54. BEFORE THE LD. CIT(A) THE ASSESSEE MADE TH E SUBMISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE AS SESSEE ALSO MADE COUNTER SUBMISSIONS IN RESPONSE TO THEREPORT OF THE ASSESSI NG OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) CONFIRMED THE A CTION OF THE ASSESSING OFFICER. 55. THE LD. AR RELIED ON THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF B OTH THE AUTHORITIES BELOW. 56. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE FACTS OF THE CASE. THE UNDISPUTED FACT IN THE PRESENT CASE AS SUBMITTE D BEFORE THE LD. CIT(A) AT PAGE 5 BY THE ASSESSEE IS THAT THE ASSESSEE HAS FIL ED CONFIRMATION LETTERS OF THE SAID PARTIES. NO DEFECT HAS BEEN POINTED OUT AND T HEREFORE, HAVING RECEIVED THE MONEY BY CHEQUES/DEMAND DRAFTS THROUGH PROPER BANKI NG CHANNEL, THE ASSESSEE HAS ESTABLISHED THE IDENTITY, CREDITWORTHI NESS AND GENUINENESS OF THE TRANSACTION AND MOREOVER, THESE ARE PETTY LOANS FOR WHICH NO ADDITION SHOULD HAVE BEEN MADE AND ACCORDINGLY, THE ASSESSING OFFIC ER IS DIRECTED TO DELETED THE ADDITION AND ACCORDINGLY, THE ORDER OF THE LD. CIT( A) IS REVERSED. THUS GROUND NO. 2 OF THE ASSESSEE IS DISMISSED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 28 57. AS REGARDS GROUND NO.3, THE BRIEF FACTS EMAN ATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW FOR TH E SAKE OF CONVENIENCE: 3.3 OTHER CAPITAL RECEIPTS : UNDER THIS HEAD THE ASSESSEE HAS SHOWN THE FOLLOWING RECEIPTS. 1. MRS.MARYKUTTY FRANCIS-MOTHER-IN-LAW RS.10,00,000 /- 2. MRS.TAREENA POLY-WIFE RS. 2,51,000/- 3. MRS. TAREENA POLY OTHER INCOME CREDITED IN SB RS. 67,550 4. MRS. SAREENA WIFES SISTER (NRI) RS. 49,525/- TOTAL RS.13,68,075/- 1. MRS. MARYKUTTY FRANCIS MOTHER-IN-LAW: RS.10,00 ,000/- : ONLY CONFIRMATION LETTER HAS BEEN FILED. MERE FILING OF CONFIRMATION LETTER WOULD NOT ESTABLISH THE CAPACITY AND GENUINENESS OF THE RECEIPT. HENCE THE CLAIM OF THE ASSESSEE IN THIS REGARD IS NOT ACCEPTABLE. 2&3. MRS. TAREENA POLY WIFE; RS.3,18,550/- (RS.2, 51,000/-+67,550/-): IT IS SEEN FROM THE CONFIRMATION LETTER THAT THE MONEY IS GIVEN IN CASH. IN THE ASSESSMENT COMPLETED IN THE CASE OF TAREENA POLY, I T HAS BEEN HELD THAT SHE HAD NO SOURCES OF INCOME AS CLAIMED FROM TAILORING, STITCHING, TUITION ETC. TO SUPPORT GIVING OF CREDITS TO HER HUSBAND AND OTHER MEMBERS OF THE FAMILY. IN VIEW OF THE ABOVE, THE CLAIM OF RECEIPTS OF RS.3,18 ,550/- IS NOT ACCEPTABLE. 4. MRS. SAREENA WIFES SISTER(NRI) : RS.49,525/- : FOR THE GIFT FROM MRS. SERENA, THE CONFIRMATION LETTER IS SIGNED BY HER HU SBAND AJIT CHIRAYIL AND IT DID NOT CARRY THE CHEQUE DETAILS. IN VIEW OF THE ABOVE THE SUM OF RS.1368075/- IS TREATED AS INCOME FROM UNEXPLAINED SOURCES AND BROU GHT TO TAX ACCORDINGLY. ADDITION:RS.13,68,075/- 58. BEFORE THE LD. CIT(A) THE ASSESSEE MADE THE SUBMISSIONS AND FILED CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE ASSESSEE ALSO MADE COUNTER ARGUMENTS IN RESPONSE T O THE REPORT OF THE I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 29 ASSESSING OFFICER. AFTER CONSIDERING THE FACTS ON R ECORD, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER WITH REGARD TO THE GIFT RECEIVED FROM MRS. MARYKUTTY FRANCIS, MOTHER-IN-LAW OF THE ASSESSEE AN D WITH REGARD TO THE GIFT RECEIVED FROM MRS. SEREENA, WIFES SISTER, WHO IS A NRI, THE ADDITION HAS BEEN DELETED. 59. THE LD. AR RELIED ON THE SUBMISSIONS MADE BE FORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF B OTH THE AUTHORITIES BELOW. 60. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. AS REGARDS GIFTS RECEIVED FROM MRS. MARYKUTTY FRANCIS, MOTHER-IN-LAW OF THE ASSESSEE AMOUNTING TO RS.10,00,000/-, THE ASSESSING OFFICER HAS NOT CONSIDERED THE FACT THAT THE GIFT WAS PAID OUT OF THE SALE PRO CEEDS OF HER PROPERTY AT KADVANTHARA AND THE FOLLOWING DOCUMENTS WERE PRODUC ED IN SUPPORT OF THE CLAIM OF THE ASSESSEE: 1.COPY OF CONFIRMATION LETTER FROM SMT. MARYKUTTY F RANCIS. 2.CERTIFICATE NO. NIL DATED 18.02.2010 ADDRESSED TO MAR K.O. (ALIAS MARYKUTTY FRANCIS) FROM PUNJAB NATIONAL BANK THRIPU NITHURA BRANCH REGARDING THE DD PURCHASED 2 NOS. EACH FOR RS.5, 00,000/-. 3.CERTIFICATE NO.ANG/SM/09 DATED 17.02.2010 ADDRESS ED TO MR. POLY KURIAKOSE REGARDING THE DETAILS OF AMOUNTS CLEARED IN THE SAVINGS BANK ACCOUNT 10020100202452. 4. SALE DEED NO. 5649/03DATED 29/11/2003 FOR RS.9,8 7,500/- BY SMT. MARYKUTTY FRANCIS. NO DEFECT IN THE ABOVE DOCUMENTS HAVE BEEN POINTED OUT. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSEE H AS PROVED THE IDENTITY, I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 30 CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION AND THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE AD DITION AND THE ORDER OF THE LD. CIT(A) IS ACCORDINGLY REVERSED. 61. AS REGARDS GIFT RECEIVED FROM MRS. SEREENA, WIFES SISTER AMOUNTING TO RS.49,525/-, THE LD. CIT(A) HAS ALREADY DELETED THE ADDITION SO MADE BY THE ASSESSING OFFICER AND THEREFORE, THE AGITATION MADE BY THE ASSESSEE IS HELD TO BE INFRUCTUOUS. THUS GROUND NO. 3 OF THE ASSESSEE IS DISMISSED. 62. AS REGARDS GROUND NO.4, THE BRIEF FACTS OF TH E CASE AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER IS REPRODUCED HE REINBELOW FOR THE SAKE OF CONVENIENCE: 3.4 SALE OF LAND RS.2,85,900/- IN HIS RETURN, THE ASSESSEE HAS COMPUTED A SHORT TERM CAPITAL GAINS OF RS.2,32,852/- ON ACCOUN T OF SALE OF 28,529 CENTS OF LAND EFFECTED THROUGH DOC. NO. 721/04 DATED 12.2 .2004. THE RATE PER CENT WORKS OUT TO RS.10021.38 ONLY. IT IS SEEN THAT IN T HE GROUP OF CASE BENNY KURIAKOSE SALE OF LAND TO M/S. ANJALI PARK EFFECTED IN THE SAME DOCUMENT WAS ADMITTED AT THE COST OF RS.48,724/-. THE LAND IN QU ESTION VIZ. 28.529 CENTS OF THE ASSESSEE ALSO IS ADJACENT TO THE LAND SOLDAT TH E RATE RS.48,724/-.THE LAND IN QUESTION VIZ. 28.529 CENTS OF THE ASSESSEE ALSO IS ADJACENT TO THE LAND SOLD AT THE RATE OF RS.48,724/-WHEREAS THE ASS ESSEE IS ADMITTING SALE CONSIDERATION ONLY AT THE RATE OF RS.10021.38. WHEN ASKED TO EXPLAIN THE DIFFERENCE BETWEEN THE SALE PRICE OF ADJACENT LAND AND HIS LAND, THE ASSESSEE STATED THAT THE PROPERTY WHICH FETCHED HIGHER PRI CE IS HAVING ROAD CONNECTIVITY AND HIS PROPERTY IS A CLOSED LAND HAVI NG NO ROAD CONNECTIVITY AND BEHIND THE OTHER ONE. THE REPLY WAS CONSIDERE D. BOTH PROPERTIES SOLD ARE ADJACENT TO EACH OTHER. THE PERIOD OF SALE IS THE SAME. HENCE, THE EXPLANATION IS NOT ACCEPTABLE. IN THE CIRCUMSTANCE S THE SALE CONSIDERATION IS TAKEN AT RS.48.724/- PER CENT FOR 28.529 WHICH WORK S OUT TO RS.13,90,057/- AND CAPITAL GAINS IS COMPUTED AS UNDER: SALE CONSIDERATION : RS.13,90,057 I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 31 LESS: BROKERAGE & OTHER EXPENSES RS . 7148 AS CLAIMED RS.13,82,909 LESS COST OF ACQUISITION RS. 45,900 RS.30,13,303 63. BEFORE THE LD. CIT(A) THE ASSESSEE MADE THE S UBMISSIONS AND FILED CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE ASSESSEE ALSO MADE COUNTER ARGUMENTS IN RESPONSE TO THE REPO RT OF THE ASSESSING OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT( A) DELETED THE ADDITION 64. THE LD. AR RELIED ON THE ORDER OF THE LD. CIT( A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER . 65. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE A SSESSING OFFICER ADOPTED THE RATE OF LAND WORKED OUT ON THE BASIS OF LAND SOLD B Y MR. BENNY KURIAKOSE. WE CONCUR WITH THE VIEW THAT THE ASSESSING OFFICER IGN ORED THE FACT THAT THE PROPERTY ALLOCATED TO M. BENNY KURIAKOSE WAS ON THE ROAD SID E WHEREAS THE PROPERTY ALLOCATED TO THE ASSESSEE WAS A CLOSED LAND WITH NO ROAD CONNECTIVITY. THERE IS NO CASE THAT THE ASSESSEE HAS RECEIVED ANY UNACCOUN TED SUM IN THE TRANSACTION. THE WHOLE LAND PERTAINING TO THE FAMILY GROUP OF TH E ASSESSEE MEASURING 171.91 CENTS WAS SOLD THROUGH A COMMON SALE DEED FOR A CON SIDERATION OF RS.40 LAKHS AND THE SAME WERE APPORTIONED AMONG THE FAMILY MEMB ERS IN PROPORTION TO AREA OF THE LAND ALLOCATED TO THEM AND ALSO AFTER TAKING INTO ACCOUNT THE LOCATION OF I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 32 PORTION ALLOCATED TO THEM. MR. PAULSON P. VARKEY W AS ALLOCATED AROUND 50% OF THE LAND I.E. 85,943 CENTS FOR WHICH HE WAS PAID RS .20 LAKHS. FOR THE BALANCE 50 PERCENT LAND THE AMOUNT OF RS.20 LAKHS WAS ALLOCATE D AMONGST THE ASSESSEE, MR.BENNY KURIAKOSE AND MR. POLY KURIAKOSE AS UNDER: AMOUNT RECEIVED MR.PROMY KURIAKOSE 6,06,400 MR.BENNY KURAIKOSE 11,07,700 MR.POLY KURIAKOSE 2,85,900 THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APPLYING UNIFORM RATE FOR DIFFERENT PARTS OF PROPERTIES. WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE LD. CIT(A). FOR THE SAKE OF CONVENIENCE, THE RELEVANT P ORTION OF THE ORDER OF THE LD. CIT(A) IS REPRODUCED HEREINBELOW: 25. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. I FIND THAT THE ASSES SING OFFICER ADOPTED THE RATE OF LAND WORKED OUT ON THE BASIS OF THE LAND SOLD BY MR. BENNY KURIAKOSE. THE ASSESSING OFFICER IGNORED THE FACT THAT THE PROPERT Y ALLOCATED TO MR. BENNY KURIAKOSE WAS ON THE ROAD SIDE WHEREAS THE PROPERTY ALLOCATED TO THE APPELLANT WAS A CLOSED LAND WITH NO ROAD CONNECTIVITY. THERE WAS NO CASE THAT THE APPELLANT HAS RECEIVED ANY UNACCOUNTED SUM IN THE T RANSACTION. THE WHOLE LAND PERTAINING TO THE FAMILY GROUP OF THE APPELLANT MEA SURING 171.91CENTS WAS SOLD THROUGH A COMMON SALE DEED FOR A CONSIDERATION OF R S.40 LAKHS AND THE SAME WERE APPORTIONED AMONG THE FAMILY MEMBERS IN PROPOR TION TO AREA OF THE LAND ALLOCATED TO THEM AND ALSO AFTER TAKING INTO ACCOUN T THE LOCATION OF PORTION ALLOCATED TO THEM. MR. PAULSON P. VARKEY WAS ALLOC ATED AROUND 50% OF THE LAND I.E. 85,943 CENTS FOR WHICH HE WAS PAID RS.20 LAKHS. FOR THE BALANCE 50 PERCENT LAND THE AMOUNT OFRS.20 LAKHS WAS ALLOCATED AMONGST THE APPELLANT,MR.BENNY KURIAKOSE AND MR. POLY KURIAKOSE AS UNDER: AMOUNT RECEIVED MR.PROMY KURIAKOSE 6,06,400 MR.BENNY KURAIKOSE 11,07,700 MR.POLY KURIAKOSE 2,85,900 I THUS, FIND THAT THE ASSESSING OFFICER WAS NOT JUS TIFIED IN APPLYING UNIFORM RATE FOR DIFFERENT PARTS OF PROPERTIES. FURTHER TO ABOVE , THERE WAS NO CASE OF RECEIPT OF ANY UNACCOUNTED SUMS AND THE TOTAL CONSIDERATION RE CEIVED BY THE APPELLANT AND I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 33 HIS TWO BROTHERS FOR HALF SHARE OF PROPERTY TOTALS TORS.20 LAKHS WHICH IS EQUAL TO THE CONSIDERATION RECEIVED FOR THE BALANCE 50% PROP ERTY BY MR.PAULSON VARKEY. I, THEREFORE, DO NOT FIND ANY MERIT IN THE ACTION O F THE ASSESSING OFFICER TO IGNORE THE ABOVE MATERIAL FACTS AND CALCULATE THE VALUE OF THE PROPERTY IN A MECHANICAL MANNER TO REACH TO A CONCLUSION THAT THERE WAS ANY UNACCOUNTED RECEIPT BY THE APPELLANT AND WORK OUT SHORT TERM CAPITAL GAIN BY A DOPTING SALE CONSIDERATION OF RS.13,90,057 AS AGAINST RS.2,85,900 RECEIVED AND SH OWN BY THE APPELLANT. FOR THE ABOVE REASONS, THE CONSEQUENTIAL ADDITION MADE BY THE ASSESSING OFFICER WAS NOT SUSTAINABLE. THE SAME IS THEREFORE, DIRECTED TO BE WITHDRAWN. THE ASSESSING OFFICER SHALL ACCORDINGLY GRANT APPROPRIATE RELIEF TO THE APPELLANT. THIS GROUND OF APPEAL IS THEREFORE, ALLOWED. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE REV ENUES APPEAL IN I.T.A. NO.343/COCH/2013 IS DISMISSED AND THE ASSESSEE IS N OT JUSTIFIED IN AGITATING THE ISSUE SINCE HE HAS ALREADY GOT RELIEF BY THE LD. CI T(A) AND THE ASSESSEES APPEAL HAS BECOME INFRUCTUOUS. THUS THE APPEAL OF THE ASS ESSEE IN I.T.A. NO.467/COCH/2011 IS ALLOWED AND THE REVENUES APPEA L IN I.T.A. NO.343/COCH/2013 IS DISMISSED. I.T.A. NO.468/COCH/2011 : A.Y.2005-06 (ASSESSEES APPEAL) AND I.T.A. NO.344/COCH/2011:A.Y.2005-06 (REVENUES APPE AL) 66. NOW WE SHALL TAKE UP THE ASSESSEES APP EAL IN I.T.A. NO. 468/COCH/2011 FOR THE ASSESSMENT YEAR 2005-06 AS UN DER:- 67. THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL: 1. DISALLOWANCE OF AGRICULTURAL INCOME RS.51,000/ - (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING A PORTION OF THE AGRICULTURAL INCOME OF THE APPELLANT. (B)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN A LLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME EVERY YEAR, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING O VER THE YEARS. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 34 (C) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ENTIRELY RELYING ON THE REPORT OF THE INSPECTOR OF INCOME TAX WHO IS NOT A QUALIFIED/REGISTERED VALUER. (D) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING ON THE ENQUIRY REPORT OF THE INSPECTOR OF INCOME TAX, MADE BY VISI TING THE FIELDS IN DECEMBER 2008, AS IT MAY NOT GIVE CORRECT RESULTS F OR THE PRECEDING 7-8 YEARS, FOR OBVIOUS REASONS OF PASSAGE OF TIME. NO T RACE OF SEASONAL CROPS CULTIVATED WILL BE AVAILABLE AFTER A LONG PERIOD OF 2 TO 8 YEARS. (E) THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED TH E HONEST AND BONA FIDE ESTIMATE OF AGRICULTURAL INCOME DECLARED BY TH E APPELLANT, IN THE ABSENCE OF ANY EVIDENCE IN HIS POSSESSING, TO HOLD THAT THE AGRICULTURAL INCOME OF THE APPELLANT IS ONLY RS.10,000/- FOR THE YEAR. (F) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHERE IN THE SELLING RATES ADOPTED ARE AV ERAGE RATES FOR THE WHOLE YEAR. (G)THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED TH E EXPLANATIONS RENDERED AS TO THE EXTENT OF AGRICULTURAL HOLDINGS, THE CROPS THAT WERE GROWN AND THE REALIZATIONS OF AGRICULTURAL PROCEEDS , WHETHER OR NOT THEY ARE SUPPORTED BY EVIDENCES, DUE TO PASSAGE OF TIME, ESPECIALLY SINCE THEY WERE RETURNED AS SUCH IN THE ORIGINAL RETURNS ALSO. (H) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 2. LOANS AND ADVANCES FROM FRIENDS RS.45,430/- THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISA LLOWING THE LOANS RECEIVED BACK, AS NO FURTHER QUERIES WERE ASKED BY THE LEARNED ASSESSING OFFICER AND HENCE THE APPELLANT WAS DENIED THE OPPO RTUNITY TO FURNISH THE SAME. HOWEVER, ALL AMOUNTS ARE RECEIVED BY CHEQUES /DD AND WERE CREDITED IN THE APPELLANTS BANK BY CHEQUES/DD AND WERE CREDITED IN THE APPELLANTS BANK ACCOUNTS. HENCE UNFAIR ADDITION OF THE SAME MAY BE DELETED. 3. OTHER RECEIPTS RS.3,25,667/- (A) GIFT FROM MR. BENNY KURIAKOSE RS.1,40,000/-: THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT RECEIVED FROM MR.BENNY KURIAKOSE. EVEN THOUGH ALL PARTICULARS OF THE TRANSACTION WAS P RODUCED BEFORE THE ASSESSING OFFICER, HE CAME TO A CONCLUSION ON SURMI SES, PRESUMPTIONS AND CONJECTURES. HENCE, THE UNJUST ADDITION MAY BE DELE TED. (B) GIFT FROM MRS. TAREENA POLY (WIFE) RS.1,00,000 /-. THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT R ECEIVED FROM MRS. TAREENA POLY. THE FACT THAT THE AMOUNT WAS ACTUALLY RECEIVE D FROM SMT. TAREENA POLY COULD HAVE BEEN VERIFIED FROM HER CASH FLOW ST ATEMENT FILED WITH THE ASSESSING OFFICER. FURTHER, DETAILED CONFIRMATION L ETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER. HENCE, THE ADDITION I S UNWARRANTED. (C)TAREENA PAULY RENT OF M/S. ANJALI PARK RS.12,000 /-: THE ASSESSING OFFICER ERED IN LAW AND IN FACTIN DISALLOWING AMOUN T RECEIVED FROM HOTEL I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 35 ANJALI PARK, BEING RENT OF REGISTERED OFFICE. THIS AMOUNT WAS CREDITED DIRECTLY TO THE CAPITAL ACCOUNT OF THE APPELLANT. S PECIFIC DETAILED COFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE ASS ESSING OFFICER. HENCE, THIS ADDITION IS UWARRANTED. (D) GIFT FROM MRS. MARYKUTTY FRANCIS RS.65,000/-. THE ASSESSING OFFICER ERRED IN LAW AD FACT IN DISALLOWING GIFT RECEIVED F ROM MRS. MARYKUTTY FRANCIS. ALL PARTICULARS OF THE TRANSACTION WERE P RODUCED BEFORE THE ASSESSING OFFICER. HENCE, THE UNJUST ADDITION MAY B E DELETED. (E) GIFT RECEIVED FROM MRS. SEREENA (WIFES SISTER) ON THE GROUND THAT NO CONFIRMATION HAS BEEN FILED FROM HER. THE AMOUNT WA S ADVANCED BY MRS. SEREENA FROM HER ACCOUNT WITH PNC BANK, NEW JERSEY, USA, OPERATED JOINTLY WITH HER HUSBAND MR. AJITH. CONFIRMATION FR OM HER HUSBAND MR. AJITH WAS PRODUCED BEFORE THE LEARNED ASSESSING OFF ICER. HOWEVER, THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME. 4. SALE OF ACCENT CAR RS.1,00,000/- THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ADDI NG THE AMOUNT OF RS.1,00,000/- UPON SALE OF ACCENT CAR. ALL PARTICUL ARS AND NECESSARY EXPLANATIONS WERE PRODUCED BEFORE THE ASSESSING OFF ICER. HOWEVER, THESE HAVE NOT BEEN CONSIDERED. THE APPELLANT IS CAPABLE OF PRODUCING NECESSARY EVIDENCES IN SUPPORT OF THE SAME. 5. UNEXPLAINED INVESTMENT IN M/S. P.A. KURIAKOSE JE WELLERS RS.10,27,953/- THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ADDI NG RS.10,27,953/- AS UNEXPLAINED INVESTMENT IN M/S. P.A. KURIAKOSE JEWEL LERS ON THE BASIS OF THE COMPUTER PRINT OUT WHICH IS ERRONEOUS. THE ASSE SSING OFFICER ERRED IN LAW AND FACTS IS NOT CONSIDERING THE EVIDENCES/EXPL ANATIONS GIVEN TO HIM AND IN COMPLETING THE ASSESSMENT ON SURMISES, PRESU MPTIONS AND CONJECTURES. 68. AS REGARDS GROUND NO.1, THE FACTS IN THE PRES ENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2001-02 IN I.T.A. NO. 464/COCH/2013 WHICH SHALL BE IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 36 69. AS REGARDS GROUND NO. 2 WITH REGARD TO LOAN S AND ADVANCES FROM FRIENDS AMOUNTING TO RS.45,430/-, THE BRIEF FACTS AS EMANAT ING FROM THE ORDER OF THE ASSESSING OFFICER IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 3.2 LOANS AND ADVANCES: THE ASSESSEE HAS SHOWN A SUM OF RS.12,980/- AND RS.32,450/- AS SUNDRY LOANS RECEIV ED BACK FROM FRIENDS RESPECTIVE. IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THIS C LAIM OF RS.45,430/- (RS.12,980/- + RS.32,450/-), THE CLAIM IS NOT ACCEP TABLE. HENCE THE SUM OF RS.45,430/- IS TREATED AS INCOME FROM UNEXPL AINED SOURCES. ADDITION :RS.45,430/- 70. BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE SUBMIS SIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE AS SESSEE ALSO MADE COUNTER SUBMISSIONS IN RESPONSE TO THE REPORT OF THE ASSESS ING OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) CONFIRMED THE A CTION OF THE ASSESSING OFFICER. 71. THE LD. AR RELIED ON THE SUBMISSIONS MADE B EFORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF B OTH THE AUTHORITIES BELOW.. 72. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT T HE ASSESSEE RECEIVED MONIES THROUGH CHEQUES/DD. THE ASSESSEE HAS ALSO FILED CO NFIRMATION LETTER FROM SHRI SHIJU AND FROM SHRI PRASANTH NARAYANAN FOR RECEIPT OF SUNDRY LOANS. THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. ACCORDINGLY, THESE ARE PAID LOANS AND THE ASSESSING OFFICER HAS NOT POINTED OUT ANY DEFECT IN THE CONFIRMATION LETTERS. ACCORDINGLY, HE IS NOT JUSTIFIED I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 37 IN MAKING THE ADDITION AND THEREFORE, THE SAME IS D IRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT(A) IS TO BE REVERSED. THUS GRO UND NO. 2 OF THE ASSESSEE IS ALLOWED. 73. AS REGARDS GROUND NO.3 WITH REGARD TO RECEIPT OF RS.3,25,667/-, THE OBSERVATION OF THE ASSESSING OFFICER AS EMANATING F ROM THE ORDER OF THE ASSESSING OFFICER IS REPRODUCED HEREINBELOW: 3.3 OTHER CAPITAL RECEIPTS : UNDER THE HEAD THE AS SESSEE HAS SHOWN THEFOLLOWOING RECEIPTS: 1.MR. BENNY KURIAKOSE (BROTHER) : RS.1,4 0,000/- 2,MRS. TAREENA POLY WIFE : RS. 1,00,000/- 3.MRS.TAREENA POLY WIFE RENT OF ANJALI : RS. 12, 000/- PARK 4. MRS. MARYKUTTY FRANCIS- MOTHER-IN-LAW : RS. 65, 000/- 5. MRS. SEREENA- WIFES SISTER(NRI) : RS. 8,667/- TOTAL : RS.3,25,667/- 1. MR.BENNY KURIAKOSE (BROTHER) : RS.1,40,000/-:CON FIRMATION FILED DOES NOT CONTAIN DETAILS SUCH AS DATE, MODE OF PAYMENT ETC. 2. MRS. TAREENA POLY WIFE : RS.1,00,000/- : AND 3. MRS. TAREENA POLY- WIFE- RENT OF ANJALI PARK : R S.1200/-. IN THE CONFIRMATION FILED, DETAILS SUCH AS DATES, SOURCES ARE NOT FURNISHED. FURTHER, IN THE ASSESSMENT OF MRS.TAREENA POLY, HER SOURCE O F INCOMES LIKE TAILORING, TUITION ETC. WAS NOT ACCEPTED. 4. MRS. MARYKUTTY FRANCIS MOTHER-IN-LAW : RS.65,0 00/- : DATE OF PAYMENT IS NOT FURNISHED IN THE CONFIRMATION LETTER. MERE F ILING OF CONFIRMATION LETTER WOULD NOT ESTABLISH THE CAPACITY AND GENUINENESS OF THE RECEIPT. HENCE THE LETTER WOULD NOT ESTABLISH THE CAPACITY AND GENUINE NESS OF THE RECEIPT. HENCE THE CLAIM OF THE ASSESSEE IN THIS REGARD IS N OT ACCEPTABLE. 5. MRS. SEREENA WIFES SISTER (NRI) : RS.8,667/- : FOR THE GIFT FROM MRS. SEREENA, THE CONFIRMATION LETTER IS SIGNED BY HER H USBAND AJIT CHIRYAIL AND IT DID NOT CARRY THE CHEQUE DETAILS. ADDITION:RS.3,25,667/- I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 38 74. BEFORE THE LD. CIT(A) THE ASSESSEE MADE THE SUBMISS IONS AND FILED CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE ASSESSEE ALSO MADE COUNTER ARGUMENTS IN RESPONSE TO THE REPO RT OF THE ASSESSING OFFICER. 75. AS REGARDS THE GIFT OF RS.1,40,000/- FROM M R. BENNY KURIAKOSE, RS. 1 LAKH HAS BEEN ACCEPTED BY THE LD. CIT(A) AND TO THAT EXT ENT, THE AGITATION OF THE ASSESSEE IS INFRUCTUOUS. THE ONLY DISPUTE REMAINS WITH REGARD TO RS.40,000/-. AS REGARDS THE AMOUNT OF RS.40,000/-, THE SAME IS C LAIMED TO HAVE BEEN GIFTED ON 20-01-2005 OUT OF RS.1,50,000/- WITHDRAWN BY HIM FROM STATE BANK OF INDIA, ANGAMALY BRANCH. THE ASSESSING OFFICER IN THE REMAN D REPORT DID NOT TAKE COGNIZANCE OF THE ABOVE DETAILS AS OBSERVED BY THE LD. CIT(A) IS NOT ACCEPTABLE. THEREFORE, THE ASSESSEE HAS PROVED THE IDENTITY, CR EDITWORTHINESS AND THE GENUINENESS WITH REGARD TO THE SAID RS.40,000/- AND ACCORDINGLY, THE SAME IS DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT (A) IS TO BE REVERSED. 76. AS REGARDS THE GIFT FROM MRS. TAREENA POLY, WIFE OF THE ASSESSEE AMOUNTING TO RS.1.12 LAKHS, THE UNDISPUTED FACT IS THAT THE W IFE OF THE ASSESSEE IS A CLOSE RELATIVE. THE AMOUNT OF RS. 1 LAKH WAS GIFTED BY H ER ON 20-12-2004 OUT OF SALE PROCEEDS OF LAND RECEIVED ON THAT DATE. ANOTHER AMO UNT OF RS.12,000 WAS RECEIVED BY THE ASSESSEE OUT OF JOURNAL ENTRY IN TH E BOOKS OF THE HOTEL ANJALI PARK WHEREIN RENT RECEIVABLE BY TAREENA POLY WAS CR EDITED TO THE ACCOUNT OF HER HUSBAND, THE ASSESSEE. THE LD. CIT(A) VIDE PARA 20 .1 HAD DELETED THE ADDITION I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 39 AND THEREFORE, THE ADDITION MADE BY THE ASSESSING O FFICER IS CANCELLED AND THE AGITATION MADE BY THE ASSESSEE IS INFRUCTUOUS, THOU GH WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). 77. AS REGARDS GIFT OF RS.65,000/- FROM MRS. MAR YKUTTY FRANCIS, MOTHER-IN-LAW OF THE ASSESSEE, THE ASSESSEE HAS SUBMITTED THAT TH E SOURCE OF THE ABOVE GIFT IS OUT OF AGRICULTURAL INCOME AND THE ASSESSEE HAS FIL ED THE CONFIRMATION LETTER IN WHICH NO DEFECT HAS BEEN POINTED OUT. THE CASH FLOW STATEMENT IS ALSO PLACED ON RECORD WHEREIN NO DEFECT HAS BEEN POINTED OUT. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THERE IS NO DISPUTE WITH REGARD TO THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION. ACCORDINGLY, THE A SSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION AND THE SAME IS DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT(A) IS REVERSED. 78. AS REGARDS GIFT RECEIVED FROM MRS. SEREENA AM OUNTING TO RS.8,667/-,THE ASSESSEE HAS FILED CONFIRMATION LETTER AND FRESH CO NFIRMATION LETTER FROM MR. AJITH CHIRAYIL AND NO DEFECT HAS BEEN POINTED OUT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, BEING A PETTY AMOUNT RECEIVED FROM MR. AJ IT CHIRAYIL WHO IS A NRI, NO ADDITION IS CALLED FOR AND ACCORDINGLY, THE ASSESSI NG OFFICER IS DIRECTED TO DELETE THE SAME AND ACCORDINGLY, THE ORDER OF THE CIT(A) I S REVERSED. THUS GROUND NO. 3 OF THE ASSESSEE IS ALLOWED. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 40 79. AS REGARDS GROUND NO. 4 WITH REGARD TO SALE OF ACCENT CAR, THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICE R ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 3.4 IN THE CASH FLOW STATEMENT NOW FILED, THE AS SESSEE HAS SHOWN A SUM OF RS.3,50,000/- AS THE SALE OF ACCENT CAR. HOW EVER IN THE CASH FLOW STATEMENT FILE BEFORE THE DDIT, THE ASSESSEE HAS SH OWN ONLY A SUM OF RS.2,50,000/- UNDER THIS ITEM. IN AS MUCH AS CASH O UTFLOW TO THE EXTENT OF RS.1,00,000.-REMAIN UNEXPLAINED AND THE SAME BRO UGHT TO TAX. ADDITION :RS.1,00,000/- 80. BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE SUBMISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE AS SESSEE ALSO MADE COUNTER SUBMISSIONS IN RESPONSE TO THE REPORT OF THE ASSESS ING OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) CONFIRMED THE A CTION OF THE ASSESSING OFFICER. 81. THE LD. AR RELIED ON THE SUBMISSIONS MADE BE FORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF B OTH THE AUTHORITIES BELOW. 82. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS OF THE PRESENT CASE ARE THAT T HE ASSESSEE FILED CASH FLOW STATEMENT BEFORE THE DDIT WHEREIN SALE OF CAR WAS R EPORTED AT RS.3,50,000/- IT WAS SUBMITTED BEFORE THE LD. CIT(A) AND BEFORE US T HAT THE CASH FLOW SUMMARY SUBMITTED BEFORE THE DDIT WAS ROUGH AND READY METHO D. HOWEVER, THE CASH FLOW STATEMENT PRESENTED BEFORE THE ASSESSING OFFIC ER WAS PREPARED TAKING INTO ACCOUNT ALL INCOMES, RECEIPTS, INVESTMENTS AND OTHE R EXPENSES. THE AGREEMENT FOR SALE OF CAR WAS MADE FOR RS.3,50,000/- AND THE BALANCE RS.50,000/- WAS FOR I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 41 THE ACCESSORIES AND EXTRA FITTINGS IN THE CAR FOR W HICH COPY OF AGREEMENT WAS PLACED ON RECORD. THESE FACTS ARE UNDISPUTED. IN T HE CIRCUMSTANCES AND FACTS OF THE CASE, THERE CANNOT BE A DISPUTE AND ACCORDINGLY , THE CASH FLOW SUMMARY FILED BEFORE THE DDIT CANNOT BE CONCLUSIVE EVIDENCE WHERE IN THE SAME HAS BEEN REPORTED AND REVISED CASH FLOW STATEMENT HAS BEEN P LACED BEFORE THE ASSESSING OFFICER ALONG WITH THE EVIDENCES. THEREFORE, THE A SSESSING OFFICER IS NOT JUSTIFIED IN MAKING THE ADDITION AND ACCORDINGLY, THE ADDITIO N IS DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT(A) IS REVERSED. THUS, GROU ND NO. 4 IS ALLOWED. 83. GROUND NO. 5 IS WITH REGARD TO UNEXPLAINED IN VESTMENTS IN P.A.KURIAKOSE JEWELLERY AMOUNTING TO RS.10,27,953/-. THE BRIEF F ACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE APPEARING IN PGS . 18 TO 23 OF THE ORDER OF THE LD. CIT(A). 84. BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE SUBMISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND THE ASSESSE E ALSO MADE COUNTER SUBMISSIONS AFTER PERUSING THE FACTS ON RECORD. AF TER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. THE LD. CIT(A) FURTHER GAVE HIS FINDINGS AND DETAILS OF INV ESTMENTS OF RS.10,27,953/- AS UNACCOUNTED CAPITAL ACCRETION WHICH STANDS TELESCOP ED BY THE ASSESSEES SHARE IN THE UNACCOUNTED PROFITS OF THE FIRM AND THE ASSESSI NG OFFICER WAS DIRECTED TO GIVE THE BENEFIT OF TELESCOPING TO THE ASSESSEE AND WITHDRAW THE ADDITION MADE I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 42 IN THE HANDS OF THE ASSESSEE. HE ALSO OBSERVED THA T THE FINDING IS SUBJECT TO VARIATION IN THE ADDITIONS UPHELD AT FURTHER APPEL LATE LEVEL IN THE CASE OF THE FIRM M/S. P.A. KURIAKOSE JEWELLERS CONSIDERED FOR ABOVE TELESCOPING AND ACCORDINGLY, THE GROUND WAS PARTLY ALLOWED. 85. THE LD. AR RELIED ON THE SUBMISSIONS MADE BEF ORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF B OTH THE AUTHORITIES BELOW. 86. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. AT THE OUTSET, WE CONCUR WITH THE VIEW OF THE LD. CIT( A) IN PARA 33.1. THE ORDER OF THE LD. CIT(A) I PARA 33.1 IS REPRODUCED HEREINBELO W FOR THE SAKE OF CONVENIENCE: 33.1 ALTERNATIVE PLEA OF THE LEARNED COUNSEL FOR T HE APPELLANT REGARDING BENEFIT OF TELESCOPING, HOWEVER, NEEDS A JUDICIOUS CONSIDERATION. IT IS SEEN THAT THE SOLE BASIS FOR THE ADDITION IN THE HA NDS OF APPELLANT ARE THE DOCUMENTS SSA-29. THE CAPITAL OF THE APPELLANT AS APPEARING IN THESE DOCUMENTS IS ADOPTED FOR MAKING THE ADDITION. ON TH E BASIS OF SAME DOCUMENTS SUBSTANTIAL ADDITIONS WERE MADE AND CONFI RMED IN THE CASE OF THE FIRM M/S. P.A.KURIAKOSE JEWELLERS AND THEREFORE ACCRETION TO THE CAPITAL OF PARTNERS OF THE ABOVE APPELLANT FIRM AS A CONSEQUENCE OF UNACCOUNTED INCOME SO DETERMINED IN THE CASE OF THE FIRM, WHICH IS NOT CAPITALIZED OR TELESCOPED IN THE FIRM, NEEDS TO BE CONSIDERED. NO OTHER SOURCES OR OTHER UNACCOUNTED BUSINESS ACTIVITY OF T HE APPELLANT HAS BEEN IDENTIFIED DURING THE COURSE OF SEARCH ACTION OR SU BSEQUENT INVESTIGATIONS WHICH COULD BE LINKED WITH ANY UNACCOUNTED CAPITAL CONTRIBUTION BY THE APPELLANT IN THE FIRM M/S. P.A.KURIAKOSE JEWELLERS, I, THEREFORE, FIND THAT THE DOCUMENTS SSA-29 THEMSELVES PROVIDED A DIRECT N EXUS BETWEEN THE UNACCOUNTED EARNINGS BY THE FIRM AND CONSEQUENTIAL ACCRETION OF UNACCOUNTED UNACCOUNTED CAPITAL CONTRIBUTION BY THE ASSESSEE IN THE FIRM. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE APPELLANT, THE SHARE OF APPELLANT IN THE UNACCOUNTED PROFITS DETERMINED AND CONFIRMED IN APPEAL, ON THE BASIS OF SSA-29, OF THE FIRM M/S. P. A. KURIAKOSE JEWELLERS I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 43 UPTO A.Y. 2005-06 WORKS OUT TO RS.74,93,658 DULY TA KING INTO ACCOUNT THE INCOME TELESCOPED IN THE CASE OF THE FIRM. I THUS FID THAT WHOLE N INVESTMENT OF RS.10,27,953 AS UNACCOUNTED CAPITAL A CCRETION STANDS TELESCOPED BY THE APPELLANTS SHARE IN UNACCOUNTED PROFITS OF THE FIRM. THE ASSESSING OFFICER IS THEREFORE, DIRECTED TO GIV E BENEFIT OF TELESCOPING TO THE APPELLANT IN THE ABOVE MANNER AND WITHDRAW T HE ADDITION MADE IN THE HANDS OF THE APPELLANT. THIS FINDING IS, HOWEVE R, SUBJECT TO VARIATION IN THE ADDITIONS UPHELD AT FURTHER APPELLATE LEVEL IN THE CASE OF THE FIRM M/S. P.A. KURIAKOSE JEWELLERS CONSIDERED FOR ABOVE TELESCOPING. THIS GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOWED. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE DO N OT FIND ANY INFIRMITY WITH THE ORDER OF THE LD. CIT(A). ACCORDINGLY GROUND NO. 5 OF THE ASSESSEE IS ALLOWED. THUS THE APPEAL OF THE ASSESSEE IN I.T.A. NO.468/COCH/2011 IS ALLOWED. 87. THE ASSESSEES APPEAL IN I,T.A. NO. 468/COCH/ 2011 IS ALLOWED AND REVENUES APPEAL IN I.T.A. NO.344/COCH/2011 IS DISM ISSED. I.T.A. NO.469/COCH/2011 : A.Y.2006-07 88. NOW WE SHALL TAKE UP THE ASSESSEES APPEAL I N I.T.A. NO. 469/COCH/2011 FOR THE ASSESSMENT YEAR 2006-07 AS UNDER:- 89. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. DISALLOWANCE OF AGRICULTURAL INCOME RS75,000/- (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING A PORTION OF THE AGRICULTURAL INCOME OF THE APPELLANT. (B)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN A LLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME EVERY YEAR, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING O VER THE YEARS. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 44 (C) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ENTIRELY RELYING ON THE REPORT OF THE INSPECTOR OF INCOME TAX WHO IS NOT A QUALIFIED/REGISTERED VALUER. (D) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING ON THE ENQUIRY REPORT OF THE INSPECTOR OF INCOME TAX, MADE BY VISI TING THE FIELDS IN DECEMBER 2008, AS IT MAY NOT GIVE CORRECT RESULTS F OR THE PRECEDING 7-8 YEARS, FOR OBVIOUS REASONS OF PASSAGE OF TIME. NO T RACE OF SEASONAL CROPS CULTIVATED WILL BE AVAILABLE AFTER A LONG PERIOD OF 2 TO 8 YEARS. (E) THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED TH E HONEST AND BONA FIDE ESTIMATE OF AGRICULTURAL INCOME DECLARED BY TH E APPELLANT, IN THE ABSENCE OF ANY EVIDENCE IN HIS POSSESSING, TO HOLD THAT THE AGRICULTURAL INCOME OF THE APPELLANT IS ONLY RS.10,000/- FOR THE YEAR. (F) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHERE IN THE SELLING RATES ADOPTED ARE AV ERAGE RATES FOR THE WHOLE YEAR. (G)THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE EXPLANATIONS RENDERED AS TO THE EXTENT OF AGRICULTURAL HOLDINGS, THE CROPS THAT WERE GROWN AND THE REALIZATIONS OF AGRICULTURAL PROCEEDS , WHETHER OR NOT THEY ARE SUPPORTED BY EVIDENCES, DUE TO PASSAGE OF TIME, ESPECIALLY SINCE THEY WERE RETURNED AS SUCH IN THE ORIGINAL RETURNS ALSO. (H) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 2. LOANS AND ADVANCES FROM FRIENDS RS.10,000/- THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISA LLOWING THE LOANS RECEIVED BACK, AS NO FURTHER QUERIES WERE ASKED BY THE LEARNED ASSESSING OFFICER AND HENCE THE APPELLANT WAS DENIED THE OPPO RTUNITY TO FURNISH THE SAME. HOWEVER, ALL AMOUNTS ARE RECEIVED BY CHEQUES /DD AND WERE CREDITED IN THE APPELLANTS BANK BY CHEQUES/DD AND WERE CREDITED IN THE APPELLANTS BANK ACCOUNTS. HENCE UNFAIR ADDITION OF THE SAME MAY BE DELETED. 3. OTHER RECEIPTS RS.3,20,147/- (A) GIFT FROM MRS. SEREENA POLY (WIFES SISTER) RS .1,35,147/-. THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOW ING GIFT RECEIVED FROM MRS. SEREENA (WIFES SISTER) ON THE GROUND THAT NO CONFIRMATION HAS BEEN FILED FROM HER. THE AMOUNT WAS ADVANCED BY MRS. SER EENA FROM HER ACCOUNT WITH PNC BANK, NEW JERSEY, USA, OPERATED JO INTLY WITH HER HUSBAND, MR. AJITH. CONFIRMATION FROM HER HUSBAND M R. AJITH WAS PRODUCED BEFORE THE LEARNED ASSESSING OFFICER. HOW EVER, THE ASSESSING OFFICER HAS NOT CONSIDERED THE SAME. (B) GIFT FROM MRS. TAREENA POLY(WIFE) RS.1,00,000 /-. THE ASSESSING OFFICER ERRED IN LAW AND IN FACT IN DISALLOWING GIF T RECEIVED FROM MRS. TAREEENA POLY. THE FACT THAT THE AMOUNT WAS ACTUALL Y RECEIVED FROM SMT. TAREENA POLY AND SOURCE BEING SALE OF LAND AT ANGAM ALY COULD HAVE BEEN VERIFIED FROM HER CASH FLOW STATEMENT FILED WITH TH E ASSESSING OFFICER. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 45 FURTHER, DETAILED CONFIRMATION LETTER WAS ALSO PROD UCED BEFORE THE ASSESSING OFFICER. HENCE, THIS ADDITION IS UNWARRAN TED. (C) GIFT FROM P.A. KURIAKOSE RS.75,000/-:THE ASSE SSING OFFICER ERRED IN LAW AND FACT IN DISALLOWING GIFT RECEIVED FROM MR. P.A. KURIAKOSE, ESPECIALLY WHEN THE INCOME RETURN OF MR. P.A. KURIAKOSE IS ACC EPTED BY THE ASSESSING OFFICER. FURTHER, DETAILED CONFIRMATION L ETTER WAS ALSO PRODUCED BEFORE THE AO. HENCE, THIS ADDITION IS UNWARRANTED. (D) GIFT RECEIVED FROM MRS. MARY KURIAKOSE (WIFE) RS.10,000/-. THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOW ING GIFT RECEIVED FROM MRS. MARY KURIAKOSE. THE FACT THAT THE AMOUNT WAS ACTUALLY RECEIVED FROM MRS. MARY KURIAKOSE COULD HAVE BEEN VERIFIED B Y THE ASSESSING OFFICER FROM HER CASH FLOW STATEMENT FILED. FURTHER , DETAILED CONFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFIC ER. HENCE, THIS ADDITION IS UNWARRANTED. 4. UNEXPLAINED INVESTMENT INLAND RS.13,71,565/- THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ADDI NG RS.13,71,565/- AS UNEXPLAINED INVESTMENT IN LAND, ON THE BASIS OF THE COMPUTER PRINTOUT TAKEN FROM M/S. P.A. KURIAKOSE JEWELLERS, WHICH IS ERRONEOUS. THE ASSESSING OFFICER ALSO ERRED IN LAW AND FACT IN NOT CONSIDERING THE EVIDENCE/EXPLANATIONS GIVEN TO HIM AND IN COMPLETIN G THE ASSESSMENT ON SURMISE, PRESUMPTIONS AND CONJECTURES. 90. AS REGARDS GROUND NO.1, THE FACTS IN THE PRE SENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2001-02 IN I.T.A. NO. 464/COCH/2013 WHICH SHALL BE IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. 91. AS REGARDS GROUND NO.2 REGARDING LOAN OF RS. 10,000/- , THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICE R ARE REPRODUCED HEREINBELOW: 3.2 LOANS AND ADVANCE: - RS.10,000/- : THE ASSESSE E HAS SHOWN A SUM OF RS.10,000/- FORM MR. PRASANTH NARAYANAN. IN THE ABSENCE OF ANY EVIDENCE IN SUPPORT OF THIS CLAIM OF RS.10,000/-, T HE CLAIM IS NOT ACCEPTABLE. HENCE THE SUM OF RS.10,000/- IS TREATED AS INCOME FROM UNEXPLAINED SOURCES. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 46 ADDITION:RS.10,000/- 92. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUB MISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT AND AFTER RECEIVING THE COMMENTS, THE ASSESSEE ALSO FILED COUNTER SUBMISSIONS. AFTER EXAMINING THE FACTS ON RECORD, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 93. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. THERE IS NO DISPUTE THAT THE AMOUNT HAS BEEN RECEIV ED FROM MR. PRASANTH NARAYANAN, FRIEND OF THE ASSESSEE BY CHEQUE WHICH W AS CREDITED TO THE BANK ACCOUNT OF THE ASSESSEE AND SEEING THE STATUS OF THE FAMILY, THIS ADDITION SHOULD NOT HAVE BEEN MADE AND ACCORDINGLY, THE ADDITION IS DIRECTED TO BE DELETED AND THE ORDER OF THE LD. CIT (A) IS REVERSED. ACCORDINGLY, GROUND NO. 2 OF THE ASSESSEE IS ALLOWE D. 94. AS REGARDS GIFTS AMOUNTING TO RS.3,20,147/-, THE OBSERVATION OF THE ASSESSING OFFICER AS EMANATING FROM THE ORDER OF TH E ASSESSING OFFICER IS REPRODUCED HEREINBELOW: 3.3 OTHER CAPITAL RECEIPTS : UNDER THIS HEAD THE A SSESSEE HAS SHOWN THE FOLLOWING RECEIPTS: 5. MRS. SEREENA- WIFES SISTER(NRI) : RS. 1,35,147 2,MRS. TAREENA POLY WIFE : RS . 1,00,000/- 3. MR. P.A. KURIAKOSE (FATHER) : RS . 75,000/- 4. MRS. MARY KURAIKOSE (MOTHER) : RS. 10,000/- TOTAL : RS. 3,20,147/- I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 47 1. MRS. SEREENA WIFES SISTER (NRI)- RS.135,147 - : FOR THE GIFT FROIM MR. SEREENA, THE CONFIRMATION LETTER IS SIGNED BY HER H USBAND AJHIT CHERAYIL AND IT DID NOT CARRY THE CHEQUE DETAILS. 2. MRS. TAREENA POLY WIFE : RS.1,00,000/- : NO CO NFIRMATION FILED FOR THE GIFT FROM MRS. TAREENA POLY. IN HER ASSESSMENT HER SOURCE OF INCOMES LIKE TAILORING, TUITION ETC. WAS NOT ACCEPTED. 3. MR. P.A. KURIAKOSE (FATHER) RS.75,000/- : 4. M RS. MARY KURAIKOSE (MOTHER) RS.10,000/- : IN THE CASE OF MARY KURIAK OSE, IN HER ASSESSMENT IT HAS BEEN HELD SOURCE OF INCOME FROM MILCH COWS AND POULTRY WAS NOT ACCEPTED. ADDITION:RS.3,20,147/- 95. BEFORE THE LD. CIT(A) THE ASSESSEE MADE THE SUBMISSIONS AND FILED CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REPORT . THE LD. COUNSEL FOR THE ASSESSEE FILED THE COUNTER COMM ENTS IN RESPONSE TO THE REPORT OF THE ASSESSING OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) DELETED THE ADDITION OF RS.1,35,147/- OF GIF T RECEIVED FROM MRS. SEREENA AND CONFIRMED THE ADDITION OF RS.1 LAKH FRO M MRS. TAREENA POLY AND DELETED THE ADDITION OF RS.75,000/- RECEIVED FR OM P.A. KURIAKOSE AND CONFIRMED THE ADDITION OF RS.10,000/- FROM MRS. MAR Y KURIAKOSE. 96. THE LD. AR RELIED UPON THE SUBMISSIONS MADE BE FORE THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF BOTH THE AUTHORITIES BELOW. 97. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. AS REGARDS THE ADDITIONS ON ACCOUNT OF MRS. SEREENA , WIFES SISTER AND MR.P.A. KURIAKOSE, FATHER OF THE ASSESSEE, THE ADDI TIONS HAVE BEEN DELETED I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 48 BY THE LD. CIT(A) AND ACCORDINGLY, THERE IS NO PURP OSE OF AGITATING BEFORE THIS BENCH WITH RESPECT TO THE SAID ADDITIONS AND A CCORDINGLY, THE SAID AGITATION AND COMMENTS ARE INFRUCTUOUS. AS REGARDS THE ADDITION OF RS.1 LAKH, CONFIRMED BY THE LD. CIT(A), FOR THE AMOUNT R ECEIVED FROM MRS. TAREENA POLY, WIFE OF THE ASSESSEE, DETAILED CONFIR MATION LETTERS AND CASH FLOW STATEMENT WERE FILED BEFORE THE LD. CIT(A). IT WAS ARGUED THAT THE SAID AMOUNT HAS BEEN ADDED IN THE HANDS OF MRS. TAREEENA POLY WHO IS ALSO A PART OF THE GROUP WHICH WOULD AMOUNT TO DOUBLE TAXA TION. NO DEFECT IN THE CONFIRMATION LETTER AND CASH FLOW STATEMENT OF MRS. TAREENA POLY HAS BEEN POINTED OUT. IN THE CIRCUMSTANCES AND FACTS OF TH E CASE, NO ADDITION IS CALLED FOR ON THIS COUNT AND THE ADDITION IS TO BE DELETED. AS REGARDS THE AMOUNT RECEIVED FROM MRS. MARY KURIAKOSE AMOUNTING TO RS.10,000/- THE ASSESSEE HAS FILED CONFIRMATION LETTER IN WHICH NO DEFECT HAS BEEN POINTED OUT AND THEREFORE, THE AO IS NOT JUSTIFIED IN MAKIN G THIS SMALL ADDITION AND THE SAME IS DIRECTED TO BE DELETED. THUS GROUND NO . 3 OF THE ASSESSEE IS ALLOWED. 98. AS REGARDS GROUND NO. 4, THE BRIEF FACTS OF THE CASE, AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER IS REPRODUC ED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 4. DURING THE COURSE OF SEARCH IN M/S. P.A. KURIAK OSE JEWELLERS, ANGAMALY, A CPU (CENTRAL PROCESSING UNIT) OF THE CO MPUTER WAS SEIZED IN ANNEXURE S.S.-O. AT THE TIME OF SEARCH, A QUESTI ON (Q.NO.10) RELATING TO USE OF COMPUTER FOUND IN THE PREMISES A ND SUBSEQUENTLY I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 49 SEIZED, WAS PUT TO SHRI POLY KURAIKOSE. HE REPLIED THAT IT WAS USED AS BILLING UNIT ONLY. IN REPLY TO THE QUESTION NO 11, HE STATED THAT GOLDEST SOFTWARE DEVELOPED BY INFOSEL,KODUNGALLUR WAS USED IN THE COMPUTER. QNOS.14&15 AND THE PARTNERS REPLIES TO THESE QUEST IONS ARE REPRODUCED BELOW: Q.14: DO THE DATA CONTAINED IN THE SOFTWARE AFTER U SING THE PASSWORD STATED BY YOU MATCH THE CONTENTS OF YOUR DAY BOOK WRITTEN MANUALLY? ANS: MAY NOT. Q.15. YOU HAVE ALREADY STATED THAT THE COMPUTER IS USING ONLY AS A BILLING UNIT. THEN EXPLAIN HOW THE CONTENTS OF THE SAME DO NOT MATCH WITH THE DAY BOOK MAINTAINED MANUALLY? I ANS.: THE PROGRAM, FREQUENTLY SHOWS ERRORS. THERE FORE WE DEPEND ON THE MANUAL DAY BOOK. ON 29/05/2007, DURING THE COURSE OF POST S EARCH ENQUIRIES, A STATEMENT U/S. 131 WAS RECORDED FROM SRI POLY. A LO OSE SHEET BUNCH, MARKED SSA-29,SEIZED DURING THE COURSE OF SEARCH WA S SHOWN TO HIM AND HE WAS SHOWN TO HIM AND HE WAS REQUESTED TO EXPLAIN THE CONTENTS OF THE SHEETS 4,5 AND 6. (SHEET 6 WAS A COMPUTER PRINTOUT P&L ACCOUNT AS ON 31.03.2005, SHEET 5 AND 4 WERE COMPUTER PRINT OUTS, BUT THE FIGURES IN THE SHEETS WERE NOT CORRECT ONES. A PRINT OUT OF THE CA SH GOOK AS AVAILABLE FROM THE SEIZED CPU WAS TAKEN ON 06.03.2007 IN THE PRESE NCE OF SRI POLY KURIAKOSE, BY THE DDIT(INV) DURING POST SEARCH INVE STIGATION. THOUGH IT WAS CLAIMED BY THE PARTNER THAT THE SOFTWARE IS NOT DEP ENDABLE, ENQUIRY CONDUCTED BY THE INSPECTOR OF THIS OFFICE AND THE S TATEMENT RECORDED FROM THE E GOLDEST SUPPLIER, IT IS FOUND THAT NO COMPL AINT WAS LODGED WITH THE SUPPLIER OF THIS SOFTWARE, I.E. INFOSEL SYSTEMS. THE COMPUTER PRINT OUT OF TRIAL BALANCE AS ON 13.02 .2007 IN THE CASE OF P.A. KURIAKOSE JEWELLERS SHOWS AN ENTRY ABOUT TH E HOUSE CONSTRUCTION OF POLY KURIAKOSE THE ASSESSEE HAD CON STRUCTED HOUSE IN HE PLOT OF 40 CENTS PURCHASED VIDE TWO DOCUMENTS 49 74 DATED 23.09.2005 AND 6422 DATED 05.12.2005 FOR A DOCUMENT ED VALE OF RS.1,75,000/- (95,000/- +80,000/-).THE ENTRIES IN T HE TRIAL BALANCE MENTIONED ABOVE, SHOW THAT THERE IS AN ON MONEY PAY MENT OF RS.13,71,565/- IN THE PURCHASE OF THESE PLOTS IN TH E NOTICE UNDER SECTION 142(1) DATED 21.11.2008, THE ASSESSEE WAS A SKED TO SHOW CAUSE WHY THIS ON MONEY PAYMENT OF RS.13,71,565/- S HOULD NOT BE TREATED AS HIS UNEXPLAINED INVESTMENT. THE ASSESSEE S REPLY WAS THAT THE COMPUTER FIGURES WERE NOT RELIABLE. AS DISCUSSE D IN DETAIL IN THE ORDER OF M/S.P.A. KURIAKOSE JEWELLERS FOR THE AY 20 05-06 WHICH HAS BEEN REPRODUCED IN THE ORDER OF THE ASSESSEE FOR TH E AY 2005-06, THE I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 50 ASSESSEES CONTENTION IS NOT ACCEPTED AND RS.13,71, 565/- IS TREATED AS ASSESSEES UNEXPLAINED INVESTMENT IN IMMOVABLE PROP ERTY ADDITION:RS.13,71,565/- 99. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUBMI SSIONS AND FILED CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR COMMENTS AND AFTER RECEIVING THE REPORT/COMMENTS OF THE ASSESSING OFFI CER, THE ASSESSEE ALSO FILED COUNTER COMMENTS. AFTER CONSIDERING THE FACTS OF THE CASE, THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICE R. 100. THE LD. AR RELIED UPON THE SUBMISSIONS MADE B EFORE THE LD CIT(A) AND ON THE OTHER HAND, THE LD. AR RELIED UPON THE O RDER OF BOTH THE AUTHORITIES BELOW. 101. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE FACTS OF THE CASE. IT IS UNDISPUTED FACT THAT THE ASSESSING OFFI CERMADE THE ADDITION OF RS.13,71,565/- AS UNEXPLAINED INVESTMENT IN THE LAN D ON THE BASIS OF THE COMPUTER PRINTOUT TAKEN FROM M/S. P.A. KURIAKOSE J EWELLERS WHICH IS ERRONEOUS. THE ASSESSING OFFICER HAS NOT CONSIDERED THE EVIDENCES/EXPLANATIONS GIVEN TO HIM AND COMPLETING THE ASSESSMENT ON SURMISES, PRESUMPTIONS AND CONJECTURES. IT WAS EXPL AINED IN THE NOTES THAT THAT THE SOFTWARE INSTALLED WERE THROWING OUT ERROR S IN ITS OUTPUTS AND HENCE SOFTWARE TESTING WAS BEING UNDERTAKEN. SOME T EST DATA WAS ENTERED I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 51 TO EVALUATE THE PERFORMANCE OF THE SOFTWARE. THE AS SESSEE HAS PRODUCED A LETTER FROM THE TECHNICALLY COMPETENT OWNER OF THE SOFTWARE DEVELOPMENT FIRM. THE ASSESSEE HAS ALSO FILED AFFIDAVIT OF THE OWNER OF INFOSEL SYSTEMS WHO HAD DEVELOPED THE SOFTWARE. THE FACTS BEING ON RECORD, THE ALLEGED ENTRY WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCO UNTS MAINTAINED BY THE ASSESSEE. THUS IN THE CIRCUMSTANCES AND FACTS OF T HE CASE, THESE FACTS HAVE NOT BEEN TAKEN INTO CONSIDERATION EITHER BY THE ASS ESSING OFFICER OR BY THE LD. CIT(A) AND THIS ADDITION SHOULD NOT HAVE BEEN M ADE AND ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION SO MADE AND THE ORDER OF THE LD. CIT(A) IS REVERSED. THUS GROUND NO . 4 OF THE ASSESSEE IS ALLOWED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 469/COCH/2011 IS ALLOWED. I.T.A. NO.470/COCH/2011 : A.Y.2007-08 102. NOW WE SHALL TAKE UP THE ASSESSEES APPEA L IN I.T.A. NO. 470/COCH/2011 FOR THE ASSESSMENT YEAR 2007-08 AS UNDER:- 103. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: 1. DISALLOWANCE OF AGRICULTURAL INCOME RS.1,20,00 /- (A)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN D ISALLOWING A PORTION OF THE AGRICULTURAL INCOME OF THE APPELLANT. (B)THE ASSESSING OFFICER ERRED IN LAW AND FACT IN A LLOWING ONLY A CONSTANT OR FIXED AMOUNT AS AGRICULTURAL INCOME EVERY YEAR, ESPECIALLY WHEN THE PRICES OF AGRICULTURAL PRODUCES HAVE BEEN VARYING O VER THE YEARS. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 52 (C) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN ENTIRELY RELYING ON THE REPORT OF THE INSPECTOR OF INCOME TAX WHO IS NOT A QUALIFIED/REGISTERED VALUER. (D) THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED T HE HONEST AND BONA FIDE ESTIMATE OF AGRICULTURAL INCOME DECLARED BY TH E APPELLANT, IN THE ABSENCE OF ANY EVIDENCE IN HIS POSSESSING, TO HOLD THAT THE AGRICULTURAL INCOME OF THE APPELLANT IS ONLY RS.10,000/- FOR THE YEAR. (E) THE ASSESSING OFFICER ERRED IN LAW AND FACT IN RELYING THE REPORT OF THE INSPECTOR WHERE IN THE SELLING RATES ADOPTED ARE AV ERAGE RATES FOR THE WHOLE YEAR. (F)THE ASSESSING OFFICER OUGHT TO HAVE ACCEPTED THE EXPLANATIONS RENDERED AS TO THE EXTENT OF AGRICULTURAL HOLDINGS, THE CROP S THAT WERE GROWN AND THE REALIZATIONS OF AGRICULTURAL PROCEEDS, WHETHER OR NOT THEY ARE SUPPORTED BY EVIDENCES, DUE TO PASSAGE OF TIME, ESP ECIALLY SINCE THEY WERE RETURNED AS SUCH IN THE ORIGINAL RETURNS ALSO. (G) HENCE UNJUST ADDITION OF THE SAME MAY BE DELETE D. 2. OTHER RECEIPTS: RS.1,90,000/- (B) GIFT FROM MRS. TAREENA POLY(WIFE) RS.1,30,000 /-. THE ASSESSING OFFICER ERRED IN LAW AND IN FACT IN DISALLOWING GIF T RECEIVED FROM MRS. TAREEENA POLY. THE FACT THAT THE AMOUNT WAS ACTUALL Y RECEIVED FROM SMT. TAREENA POLY COULD HAVE BEEN VERIFIED FROM HER CASH FLOW STATEMENT FILED WITH THE ASSESSING OFFICER. ALL DETAILS REGARDING T HE SAME WAS PRODUCED BEFORE THE ASSESSING OFFICER. FURTHER DETAILED CO NFIRMATION LETTER WAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER. HENCE, THIS ADDITION IS UNWARRANTED. (B) GIFT RECEIVED FROM MRS. MARY KURIAKOSE (WIFE) RS.60,000/-. THE ASSESSING OFFICER ERRED IN LAW AND FACT IN DISALLOW ING GIFT RECEIVED FROM MRS. MARY KURIAKOSE. THE FACT THAT THE AMOUNT WAS ACTUALLY RECEIVED FROM MRS. MARY KURIAKOSE COULD HAVE BEEN VERIFIED B Y THE ASSESSING OFFICER FROM THE CASH FLOW STATEMENT FILED BEFORE T HE ASSESSING OFFICER. FURTHER, DETAILED CONFIRMATION LETTER WAS ALSO PROD UCED BEFORE THE ASSESSING OFFICER. HENCE, THIS ADDITION IS UNWARRAN TED. 104. AS REGARDS GROUND NO.1, THE FACTS IN THE PR ESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2001-02 IN I.T.A. NO. 464/COCH/2013 AND OUR ORDER IN I.T.A. NO . 464/COCH/2013 I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 53 HEREINABOVE SHALL BE IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 1 OF THE ASSESSEE IS ALLOWE D. 105. AS REGARDS GROUND NO.2, THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 3.2 OTHER CAPITAL RECEIPTS : UNDER THIS HEAD THE A SSESSEE HAS SHOWN THE FOLLOWING RECEIPTS. 1. MRS. TAREEENA POLY WIFE : RS.1,3 0,000/- 2.MRS. MARY KURIAKOSE (MOTHER) : RS. 60 ,000/- 1. MRS. TAREENA POLY WIFE RS.1,30,000/- : NO CO NFIRMATION FILED FOR THE RECEIPT FROM MRS. TAREENA POLY IN HER ASSESSMEN T HER SOURCE OF INCOME LIKE TAILORING, TUITION, ETC. WAS NOT ACCEPT ED. 2. MRS. MARY KURIAKOSE (MOTHER) RS.60,000/- : IN THE CASE OF MARY KURIAKOSE, IN HER ASSESSMENT IT HAS BEEN HELD SOURC E OF INCOME FROM MILCH COWS AND POULTRY WAS NOT ACCEPTED. ADDITION:RS.1,90,000/- 106. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUB MISSIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR COMMENTS. THE ASS ESSEE ALSO FILED COUNTER COMMENTS IN RESPONSE TO THE REPORT OF THE ASSESSING OFFICER. AFTER CONSIDERING THE FACTS ON RECORD, THE LD. CIT(A) CON FIRMED THE ACTION OF THE ASSESSING OFFICER. I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 54 107. THE LD. COUNSEL FOR THE ASSESSEE RELIED ON TH E SUBMISSIONS MADE BEFORE THE ORDER OF THE LD. CIT(A) AND ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDER OF BOTH THE AUTHORITIES BELOW. 108. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE ASSESSEE HAS PRODUCED THE CONFIRMATION LETTERS AND ALSO FILED TH E CASH FLOW STATEMENT IN WHICH NO DEFECT HAS BEEN POINTED OUT. THE UNDISPUTE D FACT IS THAT MRS. TAREENA POLY, WIFE OF THE ASSESSEE IS ASSESSED WITH THE SAME ASSESSING OFFICER WHERE SHE HAS DISCLOSED THE SAID GIFT AND N O DEFECT HAS BEEN POINTED OUT. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, T HE ASSESSEE HAVING PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTION, NO ADDITION IS CALLED FOR AND THE ADDITIONS SO MADE AR E DIRECTED TO BE DELETED AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS REV ERSED. 109. AS REGARDS GIFT RECEIVED FROM MRS. MARY KUR IAKOSE AMOUNTING TO RS.60,000/-, THE ASSESSEE HAS FILED CONFIRMATION LE TTER AND THE CASH FLOW STATEMENT IN WHICH NO DEFECT HAS BEEN POINTED OUT. IT IS UNDISPUTED FACT THAT MRS. MARY KURIAKOSE IS ALSO ASSESSED WITH THE SAME ASSESSING OFFICER IN WHICH SHE HAS DECLARED THE SAID GIFT. IN THE CIRCU MSTANCES AND FACTS OF THE CASE, HAVING ESTABLISHED THE IDENTITY, CREDITWORTHI NESS AND GENUINENESS OF THE TRANSACTION, NO ADDITION IS CALLED FOR AND ACCO RDINGLY, THE ADDITION SO I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 55 MADE IS DIRECTED TO BE DELETED. ACCORDINGLY, GROUN D NO. 2 OF THE ASSESSEE IS ALLOWED. THUS, APPEAL OF THE ASSESSEE IS ALLOWE D IN I.T.A. NO.470/COCH/2011. 110. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED AND THE APPEALS FILED BY THE REVENUE IN I.T.A. NOS. 343 &344/COCH/2011 ARE DISMISSED. PRONOUNCED IN THE OPEN CO URT ON 22-12-2015. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACC OUNTANT MEMBER PLACE: KOCHI DATED: 22 ND DECEMBER, 2015 GJ COPY TO: 1. SHRI POLY KURIAKOSE, PADAYATTIL HOUSE, KIDANGOOR P.O., VENGOOR, ANGAMALY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-1, ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI . 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI 5. D.R., I.T.A.T.,COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN I.T.A. NOS. 464-470/COCH/2011 & 343&344/COCH/2011 56
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