DCIT, Ernakulam V. Sri. A.P.Vinu, Ernakulam

ITA 383/COCH/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4309 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2010
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 26-04-2007
• Court: TRIBUNAL
• Department Lawyers: DR BABU JOSEPHSR
• Assessee Lawyers: R KRISNA IYERCA
• Keywords: Gift; Business income; Residential status; Corroborative evidences
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.383/COCH/2007 ASSESSMENT YEAR:2004 - 05 THE DY. COMMISSIONER OF INCOME-TAX, CENT.CIR.II,ERNAKULAM. VS. SHRI A.P. VINU, ERNAKULAM. PA NO.ABNPV 7398A (APPELLANT) (RESPONDENT) & C.O.NO.15/COCH/2007 (ARISING OUT OF I.T.A.NO.383/COCH/2007) ASSESSMENT YEAR: 2004 - 05 SHRI A.P. VINU, ERNAKULAM. PA NO.ABNPV 7398A VS. THE DY. COMMISSIONER OF INCOME-TAX, CENT.CIR.II,ERNAKULAM. ( CROSS OBJECTOR ) ( RESPONDENT ) ASSESSEE BY SHRI R. KRISNA IYER,CA REVENUE BY DR. BABU JOSEPH,SR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE CIT(APPEALS)-I, KOCHI, DATED 15-1-2006 FOR THE ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS FILED CROSS OBJECTION. ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 2 2. THESE MATTERS WERE DISPOSED OFF BY THE TRIBUNAL THROUGH ITS ORDER DATED 30-03-2009, WHEREIN THE TRI BUNAL ALLOWED THE APPEAL OF THE REVENUE AND DISMISSED THE CROSS OBJECTION OF THE ASSESSEE. AGAINST THE ORDER OF T HE TRIBUNAL DATED 30-03-2009, ASSESSEE WENT IN APPEAL BEFORE TH E HONBLE JURISDICTIONAL HIGH COURT AND THEIR LORDSHI PS OF THE HONBLE HIGH COURT IN ITA NO.1690 OF 2009 DATED 05 TH OCTOBER, 2009 DISMISSED THE APPEAL. THEREAFTER, T HE ASSESSEE FILED A REVIEW PETITION BEFORE THE HONBLE HIGH COURT DELIVERED THEIR JUDGMENT ON 18 TH FEBRUARY,2010 IN RP NO.23 OF 2010(). FOR THE SAKE OF BREVITY, WE RE PRODUCE HEREUNDER THE REVIEW ORDER PASSED BY THE HONBLE HI GH COURT: REVIEW PETITION IS FILED BY THE APPELLANT WHO FILE D THE APPEAL BEFORE US CONTENDING THAT THE FACTS BASED ON WHICH THE TRIBUNAL DECIDED THE CASE ARE INCORRECT INASMUC H AS HE WAS NOT A RESIDENT IN INDIA FOR THE RELEVANT ASS ESSMENT YEAR. WE FIND THAT THIS COURT DID NOT ENTERTAIN T HE APPEAL AS THE FINDINGS RENDERED WERE BASED ON FACTS . IF THERE IS MISTAKE IN THE FINDINGS RENDERED BY THE TR IBUNAL BASED ON WHICH THEY HAVE DECIDED THE APPEAL, IT IS OPEN TO THE REVIEW PETITIONER TO BRING THE FACTS BEFORE THE TRIBUNAL AND MOVE FOR RECTIFICATION BEFORE IT. RE VIEW PETITION IS CLOSED LEAVING FREEDOM TO THE PETITIONE R TO MOVE THE TRIBUNAL FOR RECTIFICATION. WE MAKE IT C LEAR THAT THE TRIBUNAL NEED NOT FOLLOW THE OBSERVATIONS IN THE ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 3 JUDGMENT WHICH ARE BASED ON FACTS AVAILABLE ON RECO RD INCLUDING THOSE CONTAINED IN THE TRIBUNALS ORDER. 2. ON THE BASIS OF THE ABOVE REVIEW ORDER, THE ASSE SSEE FILED A MISCELLANEOUS PETITION AND THE TRIBUNAL RE- CALLED ITS ORDER DATED 30-03-2009 AND POSTED THE APPEAL FOR HE ARING ON 12-07-2010 TO HEAR THE MATTER ON MERITS. ACCOR DINGLY, WE HEARD BOTH SIDES ON 12-07-2010 AFRESH. 3. THE FIRST ISSUE IN THE APPEAL IS WITH REGARD TO THE RESIDENTIAL STATUS OF THE ASSESSEE FOR THE YEAR UND ER CONSIDERATION, I.E. WHETHER THE ASSESSEE IS A RESI DENT OR NON-RESIDENT. THIS ISSUE WAS DEALT WITH AT LENGTH IN THE ORDER OF THE TRIBUNAL DATED 30-03-2009. NOW THE AR GUMENT OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE ASS ESSING OFFICER HAS ACCEPTED NON-RESIDENCY STATUS OF THE AS SESSEE IN THE WEALTH0TAX ASSESSMENT FOR THE ASSESSMENT YEAR 2 004- 05. THEREFORE, THE RESIDENTIAL STATUS OF THE ASSES SEE IS NON- RESIDENT FOR THE YEAR UNDER CONSIDERATION. THE ARGU MENT OF THE LD. D.R. IS THAT WEALTH-TAX ASSESSMENT WAS SUBS EQUENTLY RECTIFIED AND IT WAS FINALLY ASSESSED ON THE STATUS OF RESIDENT ONLY UNDER THE WEALTH-TAX ACT. LD. SR. D.R. RELIED THE ORDER U/S.35 OF W.T.ACT, DATED 27-01-2009. TA KING THE SHELTER OF THE PROVISIONS OF SECTION 6(1) OF T HE INCOME- ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 4 TAX ACT, RELYING ON THE DECISION OF THE SUPREME COU RT IN THE CASE OF FAKIR MOHD.(DECD.) BY LRS V. SITA RAM (2002 ) 1 SCC 741 AND INVITING OUR ATTENTION TO PARA.2.3 ON PAGE 23 OF TAX PAYERS INFORMATION SERIES-22 INCOME TAX GUIDE FOR NON RESIDENTS AND INDIAN NATIONALS ABROAD ISSUED BY TH E I.T. DEPARTMENT, DIRECTORATE OF INCOME-TAX, RSP & PR. MA YUR BHAVAN, NEW DELHI, THE LD. COUNSEL VEHEMENTLY ARGUE D THAT THE STATUS OF THE ASSESSEE IS NON-RESIDENT. LAS TLY, THE LD. COUNSEL SUBMITTED THAT AS PER THE PASSPORT, THE ASS ESSEE WAS IN DUBAI FOR A TOTAL OF 210 DAYS (PAGE NOS.52 T O 69 OF THE PAPER BOOK). 4. WE HAVE HEARD THE PARTIES TO THE DISPUTE AND PER USED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER FOUND THAT IN THE BANK ACCOUNT OF THE ASSESSEE WITH THE CATHOLIC SYRIAN BANK, MG ROAD (A/C.NO.45720) THERE WERE CREDITS OF RS.6016786 AND 10167938 WHICH IS THE PRO CEEDS OF 126990$ AND 219990$. WHEN THE ASSESSEE WAS ASKE D TO EXPLAIN THE SOURCE OF THESE DEPOSITS, THE ASSESSEE FILED A LETTER STATING AS UNDER: I WAS A NON RESIDENT INDIAN TILL THE END OF 2003 A ND I WAS DOING BUSINESS IN DUBAI. BEFORE RETURNING TO INDIA , I HAVE CLOSED MY BUSINESS DEALINGS AT DUBAI AND TRANSFERRE D MY ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 5 ENTIRE AMOUNT FROM THERE TO MY ACCOUNT WITH CATHOLI C SYRIAN BANK AND THE SAME WAS TRANSFERRED TO ALUKKAS JEWELL ERY A/C. THE AMOUNT IS MY OWN ACCUMULATED AMOUNT AT DUBAI. THE ADMISSION OF THE ASSESSEE AS ABOVE, VIDE HIS LE TTER DATED 06-12-2006 CLEARLY ESTABLISHES THAT THE FIND ING OF THE ASSESSING OFFICER THAT THE ASSESSEE WAS A RESIDENT AS HE SATISFIES ONE OF THE CONDITIONS FOR ARRIVING THE ST ATUS OF THE ASSESSEE FOR THIS ASSESSMENT YEAR UNDER APPEAL. W E HAD ALSO GIVEN A CATEGORICAL FINDING THAT FROM THE PASS PORT COPIES AVAILABLE IN THE ASSESSEES PAPER BOOK PAGES 1 TO 16, IT CLEARLY SHOWED THAT THE EMIGRATION ENTRIES SPECI FY THE ASSESSEE AS A TOURISM VISA AND SHORT VISIT WITH AN ENDORSEMENT NOT VALID FOR EMPLOYMENT. IN VIEW O F THE ABOVE SPEAKING MATERIALS THAT THE ASSESSEE WAS A R ESIDENT DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, WE HAVE NO OPTION BUT TO CONFI RM THE ORDER OF THE ASSESSING OFFICER BY SETTING ASIDE THE ORDER OF THE FIRST APPELLATE AUTHORITY. THUS, ON THIS ISS UE REVENUE SUCCEEDS. 5. THE OTHER ISSUE FOR OUR CONSIDERATION IN THIS AP PEAL IS WITH REGARD TO THE TAXABILITY OF RS.1,61,84,724/-. THE ASSESSING OFFICER ASSESSED THIS AMOUNT U/S.68 OF TH E ACT, AS ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 6 UNEXPLAINED DEPOSITS. THERE IS NO DISPUTE THAT THE AMOUNT HAS COME THROUGH BANKING CHANNELS THAT TOO FROM ALU KKAS JEWELLERY, DUBAI. VIDE LETTER DATED 6-12-2006, ASS ESSEE EXPLAINED THAT THESE WERE HIS ACCUMULATED INCOME AT DUBAI. ACCORDING TO THE ASSESSING OFFICER WHEN HE INFORMED THAT HIS STATUS IS TO BE TAKEN AS RESIDENT AND AS SUCH , THE ENTIRE AMOUNT HAS TO BE TAXED. AT THIS JUNCTURE, ASSESSEE CLAIMED THIS AS A GIFT RECEIVED FROM SHRI AV JOY, U NCLE OF THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER DID NOT ACCEPT CLAIM THAT THE MONEY BELONGS TO HIS UNCLE AN D ACCORDINGLY ASSESSED TO TAX UNDER SECTION 68 OF THE I.T.ACT AS UNEXPLAINED DEPOSITS. ON APPEAL, THE LD. CIT(AP PEALS) DELETED THE ADDITION AND ALLOWED THE CLAIM OF THE A SSESSEE. HENCE, REVENUE IS ON FURTHER APPEAL BEFORE US. 6. WE HAVE CONSIDERED BOTH SIDES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.1,61,84,72 4/- IS THE ALLEGED AS INCOME DETERMINED U/S.68. AS PER THE SAID SECTION, IF THE ASSESSEE OFFERS NO EXPLANATION REGA RDING THE NATURE AND SOURCE, IN THE OPINION OF THE ASSESSING OFFICER, CREDIT CAN BE CHARGED TO INCOME-TAX AS INCOME OF TH E ASSESSEE FOR THE PREVIOUS YEAR. THE ONLY REASON F OR THE ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 7 ASSESSMENT IN THE PRESENT CASE IS THAT THERE WAS A DIFFERENCE IN THE STATEMENT GIVEN EARLIER AND SUBSE QUENTLY. HOWEVER, IT HAS BEEN PROVED BEYOND DOUBT THAT THE A MOUNTS HAVE BEEN SENT FROM OUTSIDE INDIA (DUBAI) BY HIS UN CLE SHRI A.V. JOY THROUGH BANKING CHANNEL AND THEREFORE IT C ANNOT BE SAID THAT THE SUBSEQUENT STAND IS AN AFTER-THOUGHT. THE TRIBUNAL HAS NOT CONSIDERED THIS ISSUE IN PROPER PE RSPECTIVE AND ONLY ON THE GROUND THAT TWO STATEMENTS WERE GIV EN, THE TRIBUNAL HAS SET ASIDE THE ORDER OF THE CIT(APPEALS ). THE CONFIRMATION LETTER FROM SHRI A.V.JOY TO THE EFFECT THAT HE HAS GIVEN THE AMOUNTS ON TWO OCCASIONS AS GIFT AND CERTIFICATE FROM CATHOLIC SYRIAN BANK CERTIFYING TH AT THE MONEY WAS SENT TO THE ASSESSEE FROM THE ACCOUNT OF ALUKKAS JEWELLERY, DUBAI, IS ON RECORD. THE AMO UNTS WERE SENT ON 9-4-2003 AND 22-7-2003 BY TT FROM DUBAI TO THE BANK ACCOUNT OF THE ASSESSEE WITH CATHOLIC SYRIAN B ANK LTD. CONFIRMATION LETTER AND CERTIFICATE FROM CATHOLIC S YRIAN BANK LTD. HAVE ALSO BEEN PLACED AT PAGES 47-50 OF THE PA PER BOOK. AS SUCH, ASSESSEE HAS EXPLAINED THE SOURCE, IDENTITY AND CAPACITY OF THE DONOR FOR REMITTING THE AMOUNTS AND ALSO CONVINCING EXPLANATION HAS BEEN FURNISHED REGA RDING THE NATURE AND SOURCE WITH SUPPORTING EVIDENCES AND ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 8 THEREFORE ASSESSMENT U/S.68 IS INCORRECT AND UNWARR ANTED AND THEREFORE DESERVES TO BE DELETED. 7. ON THE OTHER HAND, THE LD. SR.D.R. SUBMITTED THA T THE INITIAL STAND OF THE ASSESSEE WAS THAT IT WAS HIS B USINESS MONEY AND NOT FROM ANY OTHER SOURCE. SUBSEQUENTLY, THE ASSESSEE CHANGED HIS STAND AND PLEADED GIFT THAT DU E TO FINANCIAL CRISIS OF THE ASSESSEE, HIS UNCLE SHRI A. V. JOY OFFERED GIFTS ON TWO OCCASIONS AND DEPOSITED THE SA ME IN THE BANK AND BROUGHT TO INDIA. THUS, THE CONTENTI ON OF THE LD SR.DR IS THAT A PRUDENT MAN HAVING RECEIVED SUCH A HUGE AMOUNT OF GIFT SHOULD NOT HAVE FORGOTTEN SO AS TO S AY BY CHANGING THE STAND THAT IT WAS BUSINESS INCOME FROM DUBAI FIRST, THEN CHANGING THE STAND AS A GIFT FROM HIS U NCLE, THAT TOO WHEN THE ASSESSING OFFICER POINTED OUT THAT THE INCOME EARNED BY THE ASSESSEE AT DUBAI IS TAXABLE IN HIS H ANDS. RELIANCE WAS PLACED TO THE DECISIONS OF THE SUPREME COURT IN THE CASE OF P. MOHANAKALA & ORS. -291 ITR 278, S UMATI DAYAL VS. CI.T. -214 ITR 801, TIRATH RAM GUPTA VS. C.I.T. 304 ITR 145 (P&H), INDUS VALLEY PROMOTERS LTD. VS. CIT - 305 ITR 202 (DEL). ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 9 8. WE HAVE GIVEN DUE CONSIDERATION TO THE RIVAL SUBMISSIONS. WE HAVE ALREADY FOUND FROM THE EMIGR ATION ENTRIES WHICH SPECIFIED THAT THE ASSESSEE WAS ON A TOURISM VISA AND SHORT VISIT WITH AN ENDORSEMENT NOT VA LID FOR EMPLOYMENT. IF THAT BEING THE CASE, HOW THE ASSE SSEE CAN EARN THIS MUCH AMOUNT BUT AT THE SAME TIME THE MONE Y HAS COME FROM THE ACCOUNT OF ALUKAS JEWELLERY, DUBAI TH ROUGH BANKING CHANNEL. SO WE HAVE TO ACCEPT THE STAND O F THE ASSESSEE THAT IT IS A GIFT FROM HIS UNCLE, AV JOY, WHO IS THE UNCLE OF THE ASSESSEE AND ASSOCIATED WITH ALUKAS JE WELLERY AND SHRI A.V. JOY HAS CONFIRMED THAT HE HAS GIVEN T HE SAID GIFTS AND CATHOLIC SYRIAN BANK AND CONFIRMED THAT I T WAS TRANSFERRED FROM DUBAI FROM THE ACCOUNT OF ALUKAS JEWELLERY. THUS, THE SOURCE, IDENTITY AND CAPACITY OF THE DONOR HAS BEEN ESTABLISHED AND CONFIRMED. BE THAT MAY, THE QUESTION OF APPLICATION OF SECTION 68 DOES NOT ARISE. 9. SECTION 68 PROVIDES THAT ANY CASH CREDIT FOUND I N THE BOOKS RELATING TO WHICH ASSESSEE OFFERS NO EXPLANAT ION ABOUT THE NATURE AND SOURCE THEREOF OR SUCH EXPLANA TION IS UNSATISFACTORY, WHICH CREDITS COULD BE CHARGED TO T AX AS INCOME OF THE ASSESSEE. THE PRINCIPLE EMBODIED IN SECTION 68 IS ONLY A STATUTORY RECOGNITION OF WHAT WAS ALWA YS ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 10 UNDERSTOOD TO BE THE LAW PASSED ON THE RULE OF EVID ENCE THAT IT IS FOR THE TAX PAYER TO PROVE THE GENUINENE SS OF THE BORROWINGS OR OTHER CREDITS IN HIS BOOKS, SINCE THE RELEVANT FACTS ARE EXCLUSIVELY WITHIN HIS KNOWLEDGE. THE PR ECEDENTS ON THE SUBJECT PRIOR TO THIS LAW INDICATE THAT THE LAW WAS NO DIFFERENT. AS PER THE EARLIER LAW ONLY CHOICE OF C HOOSING ACCOUNTING YEAR AND THAT UNPROVED CASH CREDITS ARE ASSESSED AS OTHER SOURCE. TO AVOID SUCH INCONVENI ENCE THIS SECTION 68 INTRODUCED WHICH INCORPORATES ONLY A RUL E OF ETHICS . BUT AT THE SAME TIME, THE LAW DOES NOT EXPECT THE IMPOSSIBLE ON THE PART OF THE TAX PAYER. IN OTHER WORDS, THE LAW DOES NOT CONTEMPLATE OR REQUIRE THE PERFORM ANCE OF AN IMPOSSIBLE ACT. THE MAXIM LEX NON COGIT AD IMPOS SIBILIA - RATIO OF DECISION REPORTED IN 230 ITR 580 - CIT VS. BEDI AND COMPANY PVT. LTD. AFTER LAPSE OF TIME THE ASSESSE E SHOULD NOT BE PLACED UPON THE RACK AND CALLED UPON TO EXPL AIN NOT MERELY THE ORIGIN AND SOURCE BUT ALSO ORIGIN OF THE ORIGIN AND THE SOURCE OF SOURCE AS WELL CIT VS. METACH EM INDUSTRIES - 245 ITR 160(MP). 10. THE LD. FIRST APPELLATE AUTHORITY HAS ALSO FOUN D THAT ASSESSEE HAS RECEIVED TWO GIFTS FROM HIS UNCLE SHRI JOY ALUKKA, WHO IS A NON-RESIDENT INDIAN. THE ASSESSEE HAS FILED ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 11 CONFIRMATION LETTER FROM THE DONOR CONFIRMING THE G IFT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ASSESSING OF FICER HAS ACCEPTED THE FACT THAT MONEY HAS BEEN SENT FROM ABROAD AND THAT TOO FROM ALUKKAS JEWELLERY, DUBAI, WHICH IS A CONCERN IN WHICH HIS UNCLE, JOY ALUKKA IS ASSOCIA TED. THIS IS FURTHER SUPPORTED BY THE CERTIFICATE FROM T HE CONCERNED BANK. CONSIDERING THESE FACTS, THE LD. CIT(APPEALS) HELD THAT THE ADDITION IS UNWARRANTED. 11. THE LD. COUNSEL TOOK THE ATTEMPT TO DISTINGUISH THE RATIO OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. P. MOHANAKALA & ORS. -291 ITR 278 AND CONTE NDED THAT THE EXPLANATION OFFERED BY THE ASSESSEE CAN BE REJECTED BY THE AUTHORITIES ONLY IF IT IS FOUND UN-ACCEPTABL E. HERE, IN THE CASE PRESENT BEFORE US, THE INGREDIENTS SUCH AS GENUINENESS OF THE TRANSACTION, CAPACITY OF THE DON OR, IDENTITY AND RELATIONSHIP OF THE DONOR WERE SUFFICI ENTLY PROVED AND THE REVENUE DOUBTED THE EXPLANATION ONLY ON THE FOOTING THAT THE ASSESSEE EARLIER STATED THAT T HE MONEY CREDITED IN HIS BOOKS WAS HIS EARNINGS AS BUSINESS INCOME FROM DUBAI. NOW THE STAND OF THE ASSESSEE WOULD BE THAT IT IS THE MONEY CAME FROM DUBAI ONLY BUT AS GIFT FROM HIS UNCLE SHRI A.V JOY. THE CONFIRMATION LETTERS DATE D 3-4- ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 12 2003 AND 15-7-2003 WERE ALSO PRODUCED. SHRI A.V. J OY IS ASSESSEES FATHERS ELDER BROTHER. THIS RELATIONS HIP IS NOT DISPUTED. AS PER SEC.56(1)(V) WHICH AMENDMENT INS ERTED W.E.F. 01-04-2005 CLARIFIES THAT THOSE CHARGING PRO VISION ON GIFT WILL NOT BE APPLICABLE UNDER EXCEPTION TO THE GENERAL RULE IF IT IS A GIFT FROM RELATIVE. THE EXPLANATI ON RELATIVE INCLUDES (IV) BROTHER OR SISTER OF EITHER OF THE PA RENTS OF THE INDIVIDUAL. HENCE IT IS AMPLY MADE IT CLEAR THAT THE ASSESSEE DISCHARGED THE BURDEN TO THE SATISFACTION AS REQUIRED BY LAW. IF THE DEPARTMENT WANTS TO PROBE FURTHER THERE MUST BE SOME MATERIAL TO BE WITH THE DEPARTME NT TO BRUSH ASIDE THE WELL FOUNDED EXPLANATION OFFERED BY THE ASSESSEE. 12. IN VIEW OF THE AFORESAID DISCUSSIONS, WE UPHOLD THE FINDINGS OF THE LD. CIT(APPEALS) ON THIS ISSUE. 13. IN THE CROSS OBJECTION FILED BY THE ASSESSEE, I T MERELY SUPPORTS THE FINDINGS OF THE LD. CIT(APPEALS). HO WEVER, ON THE ISSUE OF RESIDENT/NON-RESIDENT, WE HAVE REVERSE D HIS FINDINGS AND UPHELD THE VIEW OF THE ASSESSING OFFIC ER. THEREFORE, THIS ISSUE IS DECIDED AGAINST THE ASSESS EE. ITA NO.383/COCH/2007 & CO NO.15/COCH/2007 DY.CIT VS.A.P. VINU. 13 14. IN RESPECT OF ADDITION U/S.68 OF THE ACT, WE HA VE CONFIRMED THE FINDINGS OF THE LD. CIT(APPEALS). H ENCE, THIS GROUND IN THE CROSS OBJECTION IS ALLOWED. 15. IN THE RESULT, APPEAL OF THE REVENUE AND THE CR OSS OBJECTION OF THE ASSESSEE ARE PARTLY ALLOWED. SD/- SD/- (SANJAY ARORA) (N.VIJAYKUMARAN) ACCOUNTANT MEMBER JUDICIAL MEMBER ERNAKULAM, DATED THE 14 TH JULY,2010. PM. COPY FORWARDED TO: 1. SHRI A.P. VINU, ALUKKAS JEWELLERY, MG ROAD,ERNAKULA M. 2. THE DY. COMMISSIONER OF INCOME-TAX, CENT.CIR.II,ERN AKULAM. 3. CIT(A)-II, ERNAKULAM. 4. CIT,CENTRAL,KOCHI. 5. D.R.