DCIT, Ernakulam V. Benny Kuriakose, Ernakulam

ITA 476/COCH/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96839 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• 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: 2001-2002
• Appeal Filed On: 19-07-2013
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Assessee Lawyers: K P PAULSON
• Keywords: Gift; Principle of natural justice; Source of fund; Additional evidence; Valuation report; Tax effect; Capital receipt; Revised return; Reason to believe
• Section: 153A; 234B; 147; 131; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH C OCHIN BEFORE S/SHRI B.P. JAIN, AM AND GEORGE GEO RGE K., JM I.T.A. NOS. 476 TO 482/COCH/2013 ASSESSMENT YEARS : 2001-02 TO 2007-08 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. VS. SHRI BENNY KURIAKOSE, PADAYATTIL HOUSE, VENGOOR P.O., ANGAMALY. [PAN:ACUPK 6692C] (REVENUE -APPELLANT) (ASSESSEE- RESPONDENT) C.O. NOS. 38 TO 43/COCH/2013 (ARSG. OUT OF I.T.A. NOS. 476 TO 481/COCH/2013 ASSESSMENT YEARS : 2001-02 TO 2006-07 SHRI BENNY KURIAKOSE, PADAYATTIL HOUSE, VENGOOR P.O., ANGAMALY. VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE-RESPONDENT) REVENUE BY SHRI SHANTAM BOSE, CIT(DR) ASSESSEE BY SHRI K.P. PAULSON, CA DATE OF HEARING 23/11/2015 DATE OF PRONOUNCEMENT 22/12/2015 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.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 2 1. (B) 2. 476/COCH/2013 C.O. NO. 38/COCH/2013 BENNY KURIAKOSE DEPTT. ASSESSEE 2001-02 27-03- 2013 K.P. PAULSON SHANTAM BOSE, CIT(DR) 3. 4. 477/COCH/2013 C.O. NO. 39/COCH/2013 DEPTT. ASSESSEE 2002-03 5. 6. 478/COCH/2013 C.O. NO. 40/COCH/2013 DEPTT. ASSESSEE 2003-04 7. 8. 479/COCH/2013 C.O. NO. 41/COCH/2013 DEPTT. ASSESSEE 2004-05 9. 10. 480/COCH/2013 C.O. NO. 42/COCH/2013 DEPTT. ASSESSEE 2005-06 11. 12. 481/COCH/2013 C.O. NO. 43/COCH/2013 DEPTT. ASSESSEE 2006-07 13. 482/COCH/2013 DEPTT. 2007-08 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. 476/COCH/2013 : AY 2001-02 3. WE SHALL TAKE UP THE REVENUES APPEAL IN THE CASE OF BENNY KURIAKOSE IN I.T.A. NO. 476/COCH/2013 AS UNDER: 4. THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 3 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APP EALS)-I, KOCHI IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE ADDITI ON MADE BY THE AO ON ACCOUNT OF OPENING CASH BALANCE AMOUNTING TO RS.1,9 5,380/- WITHOUT CONSIDERING THE REMAND REPORTS SUBMITTED BY THE AO WHEREIN IT WAS CLEARLY STATED THAT THE ASSESSEE HAD MADE CONTRADIC TORY SUBMISSION BEFORE THE ASSESSING OFFICER AND CIT(A) AND THE PRO OF FOR ADDITIONAL CLAIM MADE BEFORE THE CIT(APPEALS) REGARDING INCOME OUT O F SALE OF TREES IS RELATING TO EARLIER YEAR I.E. A.Y. 2000-01 WHICH CA N BE CONSIDERED ONLY AS AN ACCOMMODATION RECEIPT. 3. THE LEARNED CIT(A) ERRED IN DELETING THE DISALL OWANCE OF AGRICULTURAL INCOME AT RS.1,56,000/- WITHOUT CONSIDERING THE FAC T THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-01-2011 SUBMITTED BY THE ASSESSING OFFICER . THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VARIOUS STATISTI CAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS RELATING TO EARLIER YE ARS ALSO. A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SHRI K.A. KUNJACHAN AND S MT. JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK6230K/20 10-11 AND I.T.A. NOS. 310 TO 315/AKRPK8732C/2010-11 DATED 30- 11-2012 RESPECTIVELY THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSES SEE. THE CIT(APPEALS) IS NOT JUSTIFIED IN USING THE SAME REP ORT SUBMITTED BY THE INCOME-TAX INSPECTOR TO PASS DIFFERENT VIEWS/DECISI ONS ON THE SAME ISSUE. 4. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT FROM MR. P.J. THOMAS WITHOUT ANY ADDITIONAL FA CTS OR MATERIALS ON RECORD TO JUSTIFY SUCH RELIEF. THE CIT(APPEALS) OUG HT TO HAVE NOTICED THAT GIVING INDUSTRY LOAN BEFORE A LONG PERIOD OF 8 YEAR S WHICH REMAINS UNPAID IS BEYOND HUMAN PROBABILITY WHICH LEAD TO THE CONCL USION THAT IT IS ASSESSEES OWN MONEY ONLY FOR WHICH THE SOURCE WAS NOT PROVED. THE CIT(A) OUGHT TO HAVE NOTICED THAT THE DONOR HAD MAD E CONTRADICTORY STATEMENTS ABOUT THE LOAN AND NO EVIDENCE REGARDING THE SOURCE OF LOAN AND MODE OF PAYMENT HAS BEEN FURNISHED. 5. THE CIT(APPEALS) ERRED IN DECIDING THAT THE ASS ESSMENTS U/S. 153(A) ARE REVISED ASSESSMENT AND SO MUCH SO, INTEREST COU LD BE DEMANDED FOR THE PERIOD MENTIONED IN SECTION 234(B)(3) OF THE IT ACT BY RELYING ON THE DECISION OF THE HONORABLE HIGH COURT OF KERALA IN T HE CASE OF CIT(CENTRAL) V. B. LAKSHMIKANTHAN IN I.T.A. NOS. 20 & 41 DATED 2 0-1-2011. THE I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 4 CIT(APPEALS) FAILED TO NOTICE THAT THIS DECISION HA S NOT BEEN ACCEPTED BY THE DEPARTMENT. HOWEVER, FURTHER APPEAL HAS NOT BE EN FILED BEFORE THE SUPREME COURT SINCE THE TAX EFFECT WAS BELOW THE MO NETARY LIMIT FOR MAINTAINING THE APPEAL FOR WHICH REASONS HAS BEEN R ECORDED IN THE ORDER SHEET ITSELF. 6. AS PER HONOURABLE SUPREME COURTS DECISION IN T HE CASE OF CIT VS. SURYA HERBAL LIMITED REPORTED IN (243 CTR 327 DATED 1-9-2011) DEPARTMENTAL APPEAL IS MAINTAINABLE EVEN IF THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN BOARDS CIRCULAR IF QU ESTION INVOLVED IS SUBSTANTIAL AND ARISING IN MANY CASES AND THE SUBSE QUENT YEARS ALL IN LARGE NUMBER OF MATTERS. SINCE QUESTION INVOLVED IS SUBSTANTIAL AND RECURRING IN NATURE THIS APPEAL IS PREFERRED EVEN T HOUGH THE TAX EFFECT IS BELOW THE MONETARY LIMIT. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER IS RESTORED. 5. GROUND NOS. 1 AND 7 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 6. AS REGARDS GROUND NO. 3 REGARDING AGRICULT URAL INCOME, THE FACTS ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKO SE IN REVENUES APPEAL IN I.T.A. NO.262/COCH/2013 AND ACCORDINGLY, OUR ORDER OF EVEN DATE IN I.T.A. NO.262/COCH/2013 SHALL BE IDENTICALLY APPLICABLE IN THE PRESENT CASE. THUS GROUND NO. 3 OF THE REVENUE IS DISMISSED. 7. AS REGARDS GROUND NO. 2, THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE AO ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 5 3.1 OPENING BALANCE RS.1,95,380 : THE ASSESSEE CLAIMED IT IS OUT OF HIS ACCUMULATED CASH FROM HIS BUSINESS OR PROFESSION WH ICH WAS STARTED MANY YEARS BACK. HE FURTHER STATED THAT HE DOES NO T HAVE THE HABIT OF CARRYING ON DEPOSITS IN BANKS AND PREFERS TO RETAIN IT AS CASH IN HAND. THE EXPLANATION IS VAGUE AND EVASIVE AS THE NATURE OF BUSINESS, COMMENCEMENT OF BUSINESS ETC. ARE NOT FURNISHED. T HE ASSERTION THAT HE IS NOT IN THE HABIT OF MAKING DEPOSITS IN THE BA NK IS CONTRADICTED BY HIS DEPOSITS AND TAKING OF LOAN THROUGH BANKING CHA NNELS FOR HIS HOUSE CONSTRUCTION HENCE THE EXPLANATION IS NOT ACCEPTAB LE AND THE OPENING CASH BALANCE O RS.1,95,380/- IS BROUGHT TO TAX AS I NCOME FROM UNEXPLAINED SOURCES OF THE ASSESSEE. ADDITION: RS.1,95,380/- 8. BEFORE THE LD. CIT(A), THE ASSESSEE MADE THE EXPLANATIONS WHICH WERE SENT TO THE ASSESSING OFFICER FOR HIS REPORT. THE ASSESSEE ALSO SUBMITTED COUNTER ARGUMENTS IN RESPONSE TO THE REMAND REPORT. THE LD. CIT(A) DELETED THE ADDITION VIDE PARA 8 OF HIS ORDER. 9. THE LD. DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER. ON THE OTHER HAND, THE LD. AR RELIED UPON THE ORDER OF TH E LD. CIT(A). 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IT IS UNDISPUTED FACT THAT THE ASSESSEE IS A PARTNER IN MANY CONCERNS AND IT IS UNBELIEVABLE THAT A PERSON OF HIS STATURE CANNOT HAVE ANY CASH IN HAND ESPECIALLY WHEN THE ASSESSING OFFICER HIMSELF IN THE CASE OF THE SAME ASSESSEE HAS ALLOWED CASH BALANCE OF RS.3,34,794/- IN THE SUBSEQUENT ASSESSMENT YEAR. FOR THE SAKE OF CONVENIENCE, WE R EPRODUCE HEREINBELOW THE FINDINGS OF THE LD. CIT(A) IN PARA 8 OF HIS ORD ER: I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 6 8. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. I FIND THAT THE APPELLANT, DURING THE ASSESSMENT PROCEEDINGS, HAS TOLD THE POSITION THAT THE ACCUMULATED CASH BALANCE WAS OUT O HIS BUSINESS OR PROFESSION W HICH WAS STARTED MANY YEARS BACK. HOWEVER, DURING THE APPELLANT PROC EEDINGS, THE APPELLANT HAD STATED THAT HE HAD ALSO RECEIVED RS.8 3,000/- FROM THE SALE OF STANDING TREES IN HIS PREMISES AND THIS WAS INCL UDED IN HIS OPENING CASH IN HAND. HE HAS ALSO PRODUCED A LETTER OF RECE IPT FROM THE PARTY WHO HAD PURCHASED THE TREES FROM HIS PREMISES. THE ASSESSING OFFICER MAKES HIS OBJECTION AND GOES TO STATE THAT THE SAME CAN ONLY BE CONSIDERED AS AN ACCOMMODATION RECEIPT HAVING NO EV IDENTIARY VALUE. HOWEVER, I FIND THAT, ON THE QUESTION AS TO WHETHER THE OPENING BALANCE CLAIMED BY THE APPELLANT IS ALLOWABLE, IS NOT FULLY DEPENDENT ON THE CLAIM OF THE APPELLANT THAT HE HAD RECEIVED RS.83,000/- BY SALE OF TREES STANDING IN HIS PREMISES. WHAT IS MORE IMPORTANT I S THE FACT THAT THE APPELLANT IS A PARTNER IN MANY FIRMS LIKE M/S. MATH A ENTERPRISES, M/S. PA KURIAKOSE JEWELLERS, M/S. BEST BAKERY AND M/S. STER LING STEEL PALACE ETC. IN ADDITION, THE APPELLANT ALSO HAS CLAIMED INCOME FROM COMMISSION/BROKERAGE. THE APPELLANT IS A SEASONED BUSINESSMAN AND THE RETURN FOR AY 2001-02 IS NOT THE FIRST RETURN O F THE APPELLANT. THE APPELLANT HAS CLAIMED THAT HE DOES NOT MAINTAIN MAN Y DEPOSITS IN BANK ACCOUNTS AND PREFERS TO KEEP LIQUID CASH, AS HE WAS INTO REAL ESTATE OPERATIONS. REFERENCE OF THE ASSESSING OFFICER TO C HITTY INVESTMENTS MADE BY THE APPELLANT AND CLAIMING THAT THE APPELLA NT HAS SUFFICIENT INVESTMENTS IS NOT VERY MUCH RELEVANT IN THIS CONTE XT. FOR A PERSON HAVING BUSINESS INTERESTS IN MANY VENTURES AND ACTI VITIES, PRESUMING THAT THERE IS NO CASH IN HAND IS UNJUSTIFIED AND I ALSO FIND THAT THE AO HAS ALLOWED THE OPENING BALANCE OF RS.3,34,794/-FOR THE SUBSEQUENT ASSESSMENT YEAR, 2002-03. HENCE THE ACTION OF THE ASSESSING OFFICER IN REJECTING THE OPENING BALANCE OF THE IMPUGNED ASSES SMENT YEAR RS.1,95,380/- IS NOT BASED ON ANY EVIDENCE AND WAS CONTRARY TO EVIDENCES ON RECORD AN WAS THEREFORE NOT SUSTAINABL E. THE ASSESSING OFFICER IS, THEREFORE, DIRECTED TO WITHDRAW THE ADD ITION MADE AND GRANT APPROPRIATE RELIEF TO THE APPELLANT. THIS GROUND O F APPEAL IS TREATED AS ALLOWED. 11. FOR THE REASONS MENTIONED HEREINABOVE BY US A ND ALSO IN THE ORDER OF THE LD. CIT(A), WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, GROUND NO. 2 OF THE REVENUE IS DISMISSED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 7 12. GROUND NO.4 BEING GIFT RECEIVED FROM SHRI P.J . THOMAS, HIS WIFES UNCLE, THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER IN PARA 3.4 (I) ARE REPRODUCED HEREINBELOW FOR THE SAK E OF CONVENIENCE: 3.4 OTHER CAPITAL RECEIPTS (I) THE ASSESSEE HAS SHOWN A SUM OF RS.2,00,000/- A S GIFT FROM ONE SHRI THOMAS (WIFES UNCLE). IN THE STATEMENT RECOR DED ON 22.11.08 FROM THOMAS U/S. 131 HE STATED THAT HE GAVE RS.2,00 ,000/- AS INTEREST FREE LOAN. OUT OF HIS VRS PROCEEDS HE DEPOSITED 18 LAKHS HE DEPOSITED THE SAID SUM IN VARIOUS MODES AND EARNING OF EARNIN G OF INTEREST AT 9.5% TO 12%. THE ASSESSEES CLAIM OF GIFT IS CONTR ADICTED BY THE STATEMENT OF THOMAS. MOREOVER GIVING OF LOAN IN NOV 2000 INTEREST FREE WHICH REMAIN STILL UNPAID IS BEYOND HUMAN PROB ABILITY HENCE THE AMOUNT OF RS.2,00,000/- SHOWN AS GIFT FROM THOMAS I S NOT ACCEPTABLE AND TREATED AS INCOME FROM UNEXPLAINED SOURCES. 13. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTE D EXPLANATIONS ALONG WITH LETTER FROM SHRI P.J. THOMAS AND OTHER EVIDENC ES WHICH WERE SENT FOR REPORT FROM THE ASSESSING OFFICER. THE ASSESSING O FFICER SUBMITTED THE REMAND REPORT ON 24.01.2011 WHICH IS REPRODUCED AT PARA 21, PGS. 13 & 14 OF THE LD. CIT(A)S ORDER. THE ASSESSEE ALSO OFFER ED COUNTER COMMENTS WHICH ARE REPRODUCED AT PARA 22, PGS. 14 & 15 OF TH E LD. CIT(A)S ORDER. 14. THE LD. DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER WHEREAS THE LD. AR RELIED UPON THE ORDER OF THE LD. CIT(A). 15. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. UNDISPUTEDLY, THE FACT IN THE PRESENT CASE IS THAT THE ASSESSING OFFICER HAS I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 8 RECORDED THE STATEMENT ON OATH U/S. 131 OF THE ACT ON 22-11-2008 IN WHICH SHRI THOMAS HAS CONFIRMED THAT HE HAD GIVEN AN AMOU NT OF RS.2 LAKHS AS INTEREST FREE LOAN OUT OF THE VRS PROCEEDS OF RS.18 LAKHS RECEIVED AT THE TIME OF HIS RETIREMENT ASSESSEE. IT IS RELEVANT TO REPRODUCE THE ORDER OF THE LD. CIT(A) AT PARA 23, PGS. 15 & 16 FOR THE SAKE OF CONVENIENC E AS UNDER: 23. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. I FIND THAT THE ASSESSING OFFICER HAS RECORDED A STATEMENT ON OATH OF SHRI THOMAS U/S. 13 1 OF THE IT ACT ON 22.01.2008, IN WHICH SHRI THOMAS CONFIRMED THAT HE HAD GIVEN AN AMOUNT OF RS,2,00,000/- AS INTEREST FREE LOAN, OUT OF THE VRS PROCEEDS OF RS.18 LAKHS RECEIVED, AT THE TIME OF HIS RETIRE MENT. I FIND THAT THE AO HAS PRIMARILY RESORTED TO THIS STATEMENT RECORDE D U/S. 1312, FOR MAKING THE ADDITION, CHALLENGING THE GENUINENESS OF THE LOAN. BUT, THE APPELLANT HAS RAISED A STRONG GRIEVANCE THAT THE S TATEMENT ON OATH OF SHRI P.J. THOMAS RECORDED BY THE AO, WAS NOT OUT BE FORE THE APPELLANT. SUCH STATEMENT ON OATH FALL WITHIN THE CLASS OF ORAL EVIDENCES AND SUCH ORAL EVIDENCES MAY INCLUDE ADMISSIONS MADE BY ANOTH ER PARTY ADMISSION MADE BY A PARTY, IF USE ADVERSELY AGAINST ANOTHER PERSON HAS, AS PER SETTLED LEGAL PRINCIPLES, TO BE CONFRONTED T O THE PARTY WHO IS ADVERSELY AFFECTED. IN THIS CONTEXT, I AM OF THE OP INION THAT THE DENIAL OF OPPORTUNITY TO CROSS EXAMINE THE PARTY AMOUNTS TO V IOLATION OF THE PRINCIPLE OF NATURAL JUSTICE HOWEVER, FROM THE DISC USSIONS OF THE AO IN THE ASSESSMENT ORDER, IT CAN REASONABLY BE INFERRED THAT THE AO IS SATISFIED REGARDING THE IDENTITY AND CAPACITY OF TH E PARTY, ADVANCING THE MONEY. THE ONLY QUESTION IS WHETHER THE AMOUNT ADV ANCED IS A GIFT OR A LOAN. THE APPELLANT CLAIMS THE SAME TO BE A GIFT. IN THE REMAND REPORT, THE AO STATES THAT THE RELATIONSHIP OF THE ASSESSEE WITH THE DONOR IS OF A VERY DISTANT ONE AN THERE IS NO REASON TO BELIEVE THAT THE LOAN OF RS.2,00,000/- HAVE NOT BEEN REPAID TILL NOW. THE A PPELLANT CLAIMS THAT THE GIFT TO THE APPELLANT IS, IN EFFECT A GIFT GIVE N BY WIFE OF SHRI PJ. THOMAS TO HER BROTHERS DAUGHTER (SMT. SHEENA BENNY ), WIFE OF THE APPELLANT) ON THE OCCASION OF THEIR HOUSE CONSTRUCT ION. THIS BEING THE SITUATION, THE RELATION IS NOT A VERY DISTANT ONE, BUT IS A CLOSE RELATIVE THAT TOO, ON A GENUINE OCCASION OF HOUSE CONSTRUCTI ON. THE APPELLANT FURTHER CLAIMS THAT THE AMOUNT OF RS.2,00,000/- WAS RECEIVED BY ACCOUNT PAYEE CHEQUE AND CREDITED TO THE JOINT SB ACCOUNT O F MR. BENNY KURIAKOSE AND SHEENA BENNY (WIFE) WITH STATE BANK O F INDIA, ANGAMALY, I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 9 WHICH GOES TO PROVE THE GENUINENESS OF THE TRANSACT ION. THE CONCLUSION AS TO WHETHER THE MONIES RECEIVED IS GIFT OR LOAN, IS FOR THE PARTIES TO DISCUSS AND DECIDE. IN EITHER CASE, THE RECEIPT OF MONEY IS NOT DISPUTED. IT IS WELL ESTABLISHED POSITION OF LAW AND THAT IN THE CASE OF CASH CREDITS, AN ASSESSEE WAS REQUIRED TO PROVE THE IDENTITY OF T HE CREDITOR, THE CAPACITY OF THE CREDITOR AND GENUINENESS OF THE TRA NSACTION. THIS POSITION HAS BEEN UPHELD BY VARIOUS JUDICIAL PRONOU NCEMENTS ALSO. IN THE INSTANT CASE, I FIND THAT THESE REQUIREMENTS ST ANDS DISCHARGED. ACCORDINGLY, ON THE BASIS OF THE DISCUSSIONS ABOVE, I DIRECT THE ASSESSING OFFICER TO WITHDRAW THE ADDITION OF RS.2,00,000/-. IN ACCORDANCE WITH THE ABOVE OBSERVATIONS, THEREFORE FIFTH GROUND OF A PPEAL IS ALLOWED.- ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF T HE LD. CIT(A) WHICH IS A REASONED ORDER. THUS GROUND NO. 4 OF THE REVENUE I S DISMISSED. 16. GROUND NOS. 5 AND 6 ARE INFRUCTUOUS SINCE WE HAVE DECIDED THE APPEAL ON MERIT AND ACCORDINGLY, THE SAME ARE DISMISSED. A CCORDINGLY, THE APPEAL OF THE REVENUE IN I.T.A. NO. 476/COCH/2013 IS DISMI SSED. C.O. NO. 38/COCH/2013 : AY 2001-02 17. WE SHALL TAKE UP THE CROSS OBJECTION IN THE CASE OF THE ASSESSEE IN C.O. NO.38/COCH/2013. THE FACTS ARE IDENTICAL TO THE FAC TS IN THE CROSS OBJECTION IN THE CASE OF JOHNY KURIAKOSE FOR THE ASSESSMENT YEAR 2001-02 WHICH HAS BEEN DECIDED BY US IN CROSS OBJECTION BEARING NO. 44/COC H/2013 OF EVEN DATE. ACCORDINGLY, OUR ORDER IN C.O. NO.44/COCH/2013 IS I DENTICALLY APPLICABLE IN THE PRESENT CASE. THEREFORE, C.O. NO. 38/COCH/2013 IS DISMISSED. I.T.A. NO. 477/COCH/2013 : AY 2002-03 I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 10 18. WE SHALL TAKE UP THE REVENUES APPEAL IN TH E CASE OF BENNY KURIAKOSE IN I.T.A. NO. 477/COCH/2013 AS UNDER:- 19. THE REVENUE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS)-I, KOCHI IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALL OWANCE OF AGRICULTURAL INCOME AT RS.96,000/- WITHOUT CONSIDERING THE FACT THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-01-2011 SUBMITTED BY THE ASSESSING OFFICER . THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VARIOUS STATISTI CAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS RELATING TO EARLIER YE ARS ALSO. A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SHRI K.A. KUNJACHAN AND S MT. JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK6230K/20 10-11 AND I.T.A. NOS. 310 TO 315/AKRPK8732C/2010-11 DATED 30- 11-2012 RESPECTIVELY THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSES SEE. THE CIT(APPEALS) IS NOT JUSTIFIED IN USING THE SAME REP ORT SUBMITTED BY THE INCOME-TAX INSPECTOR TO PASS DIFFERENT VIEWS/DECISI ONS ON THE SAME ISSUE. 3. THE CIT(A)(APPEALS) ERRED IN DELETING THE ADDIT ION MADE ON ACCOUNT OF LOAN FROM MR. BENNY V. RAPHAEL. THE CIT (APPEALS) FAILED TO NOTICE THAT THE MONEY WAS ADVANCED FROM NRI ACCO UNT WITH SBT PUTHUKKAD BRANCH TO WHICH ANYBODY CAN DEPOSIT MONEY . THE CAPACITY OF THE CREDITOR AND THE CREDITWORTHINESS OF THE TRA NSACTION HAS NOT BEEN PROVED. ONLY THE IDENTITY OF THE LENDER HAS B EEN PROVED. THE NEXUS BETWEEN THE NRI INCOME OF THE LENDER AND THE LOAN ADVANCED IS NOT PROVED BY THE ASSESSEE. THE CIT(APPEALS) SHOUL D APPRECIATE THE FACT THAT FOR THE VERY SAME REASON THE GROUND OF AP PEAL (LOAN FROM SHRI BENNY) FOR THE AY 2007-08 IS REJECTED BY HIM V IDE PARA 22 IN PAGE 12 OF THE ORDER IN APPEAL NO. I.T.A. E-263/ACUPK669 2C/2008-09 DATED 27-3-2013 IN ASSESSEES OWN CASE. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 11 4 THE CIT(APPEALS) ERRED IN DELETING THE ADDITIO N MADE ON ACCOUNT OF GIFT FROM RELATIVES AND OTHERS. THE CIT(APPEALS) OUGHT TO HAVE NOTICED THAT IN ALL CASES ONLY THE IDENTITY OF THE PERSONS HAS BEEN PROVED. MERE FILING OF CONFIRMATION LETTERS IS NOT ENOUGH TO PROVE THE CAPACITY OF THE PERSONS AND THE CREDITWORTHINESS OF THE TRANSACTIONS. 5. THE CIT(APPEALS) ERRED IN DELETING THE ADDITIO N MADE ON ACCOUNT O LOANS FROM FRIENDS AN RELATIVES WITHOUT CONSIDERING THE ASSESSMENT ORDER AND REMAND REPORT SUBMITTED BY THE ASSESSING OFFICERS. THE CIT(APPEALS) SHOULD HAVE BORNE IN MIND THAT MERE PA YMENT OF ACCOUNT PAYEE CHEQUE IS NOT SACROSANCT NOR CAN IT M AKE A NON-GENUINE TRANSACTION GENUINE (208 ITR 465 (CAL) 193 ITR 318) . THE DECISION OF THE CIT(APPEALS) IS PERVERSE, IRRATIONAL AND AGAINS T LAW. 6. THE CIT(APPEALS) ERRED IN DECIDING THAT THE ASSE SSMENTS U/S. 153(A) ARE REVISED ASSESSMENT AND SO MUCH SO, INTER EST COULD BE DEMANDED FOR THE PERIOD MENTIONED IN SECTION 234(B) (3) OF THE IT ACT SHOULD BY RELYING ON THE DECISION OF THE HONORABLE HIGH COURT OF KERALA IN THE CASE OF CIT(CENTRAL) V. B. LAKSHMIKAN THAN IN I.T.A. NOS.20 & 41 DATED 20-1-2011. THE CIT(APPEALS) FAILE D TO NOTICE THAT THIS DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTME NT. HOWEVER, FURTHER APPEAL HAS NOT BEE FILED BEFORE THE SUPREME COURT, SINCE THE TAX EFFECT WAS BELOW THE MONETARY LIMIT FOR MAINTAI NING THE APPEAL FOR WHICH REASONS HAS BEEN RECORDED IN THE ORDER SH EET ITSELF. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 20. GROUND NOS. 1&7 ARE GENERAL IN NATURE AND THE REFORE, DO NOT REQUIRE ANY ADJUDICATION. 21. AS REGARDS GROUND NO. 2 REGARDING AGRICULTUR AL INCOME, THE FACTS ARE IDENTICAL TO THE FACTS IN REVENUES APPEAL IN I.T.A. NO.262/C OCH/2013 IN THE CASE OF JOHNY KURIAKOSE AND ACCORDINGLY, OUR ORDER OF EVEN DATE I N I.T.A.262/COCH/2013 SHALL BE I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 12 IDENTICALLY APPLICABLE IN THE PRESENT CASE. THUS GR OUND NO. 2 OF THE REVENUE IS DISMISSED. 22. AS REGARDS GROUND NO. 3, BEING LOAN RECEIVED FROM SHRI BENNY V. RAPHAEL, THE ASSESSING OFFICER MADE THE ADDITION OF RS. 5 LAKHS IN THE ABSENCE OF SOURCE BEING EXPLAINED THOUGH THE ASSESS EE SUBMITTED THE CONFIRMATIONS BEFORE THE ASSESSING OFFICER. 23. BEFORE THE LD. CIT(A), THE ASSESSEE HAS SUB MITTED THE EXPLANATIONS AND SUBMITTED ADDITIONAL EVIDENCES/DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REMAND REPORT WHO SUBMITTED T HE REMAND REPORT AND THE ASSESSEE SUBMITTED THE COUNTER ARGUMENTS. THE LD. CIT(A) AFTER CONSIDERING THE FACTS ON RECORD DELETED THE ADDITIO N SO MADE BY THE ASSESSING OFFICER. 24. THE LD. DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER AND ON THE HAND THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON T HE ORDER OF THE LD. CIT(A). 25. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. AT THE OUTSET, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH APPEARS TO BE WELL REASONED ONE SINCE THE ASSESSEE HAS I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 13 PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTION. THE ORDER OF THE LD. CIT(A) IN PARA 25 FOR THE SAKE OF CONVENIENCE IS REPRODUCED HEREINBELOW: 25. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACT S AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. I FIND THAT THE APPELLANT HAS PRODUCED THE COPY OF THE DRIVING LICENSE AND THE CO PY OF THE HEALTH CARD OF THE LENDER AND HENCE THE IDENTITY OF TH LEN DER IS PROVED BEYOND DOUBT. IN THE CONFIRMATION LETTER PRODUCED, MR. BEN NY HAS STATED THAT HE IS AN NRI AND IS WORKING WITH M/S. MATING TRADIN G INFORMATION, DUBAI, UAE. THE STATUS AND CREDIBILITY OF THE LENDE R IS ESTABLISHED AS THE LENDER IS AN NRI. HE HAS ALSO CONFIRMED THAT H E HAD ADVANCED THE MONIES TO THE APPELLANT UPON THE APPELLANTS REQUES T AND THAT HE HAD ADVANCED SUCH MONIES FROM HISSB NRO ACCOUNT 12625 W ITH STATE BANK OF TRAVANCORE, PUTHUKAD BRANCH. ON A PERUSAL OF THE COPY OF THE BANK SB ACCOUNT, IT IS SEEN THAT THE AMOUNT OF RS.5,00,0 00/- IS TRANSFERRED ON 28/03/2002 VIDE CHEQUE NUMBER 107221. THE SAME I NSTRUMENT IS SEEN CREDITED TO THE SB ACCOUNT OF MR. BENNY KURIAK OSE WITH SBI, ANGAMALY ON 30/03/2002. HENCE, THE GENUINENESS OF THE TRANSACTION ALSO STANDS PROVED. THE ASSESSING OFFICER IN HIS RE MAND REPORT HAS STATED A GENERAL REPLY WITHOUT PERUSING THE INSTANT CASE JUDICIOUSLY, THAT THE CONFIRMATION LETTERS PRODUCED BY THE APPEL LANT WAS MOSTLY SAME AS WHAT WAS PRODUCED DURING THE ASSESSMENT PRO CEEDINGS AND THAT THERE WAS NO NEED FOR ANY FRESH CONSIDERATION. IT IS A WELL ESTABLISHED POSITION OF LAW THAT IN THE CASE OF CAS H CREDITS, AN ASSESSEE WAS REQUIRED TO PROVE THE IDENTITY OF THE CREDITOR, THE CAPACITY OF THE CREDITOR AD GENUINENESS OF THE TRANSACTION. THIS POSITION HAS BEEN UPHELD BY VARIOUS J UDICIAL PRONOUNCEMENTS ALSO. I FIND THAT THE APPELLANT HAS DISCHARGED THE ONUS OF PROVING REQUIR EMENTS OF SEC 68AS DETAILED ABOVE. ACCORDINGLY, THE ADDITION OF RS.5,0 0,000/- MADE BY THE ASSESSING OFFICER- ON THIS GROUND IS DIRECTED TO BE WITHDRAWN. IN ACCORDANCE WITH THE ABOVE OBSERVATIONS. THEREFORE F IFTH GROUND OF APPEAL IS ALLOWED IN THE CIRCUMSTANCES AND FACTS OF THE CASE, WE DO N OT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION SO MADE BY THE ASSESSING OFFICER. ACCORDINGLY, GROUND NO. 3 OF THE REVENUE IS DISMISSED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 14 26. AS REGARDS GROUND NO. 4& 5 BEING SUNDRY CRE DITS RECEIVED FROM RELATIVES AND FRIENDS, THE ASSESSING OFFICER HAS MADE THE ADD ITIONS AS PER PAGE 3 OF HIS ORDER, EVEN THOUGH THE ASSESSEE HAD FILED THE CONFI RMATION LETTERS BEFORE THE ASSESSING OFFICER. 27. BEFORE THE LD. CIT(A), THE ASSESSEE HAS SUBM ITTED THE EXPLANATIONS AND VARIOUS DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR REMAND REPORT WHICH WAS RECEIVED AND THE ASSESSEE ALSO FILED THE COUNTER COMMENTS. THE LD. CIT(A) AFTER CONSIDERING THE FACTS ON RECORD DELETE D THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. 28. THE LD. DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER AND ON THE OTHER HAND, THE LD. AR RELIED UPON THE ORDER OF THE ASSES SEE. 29. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE G IFTS WERE RECEIVED FROM CLOSE RELATIVES AND FRIENDS ON THE OCCASION OF HOUSE CON STRUCTION BY THE ASSESSEE. IT IS UNDISPUTED THAT ALL THE CLOSE RELATIVES AND FRIENDS HAVE FILED CONFIRMATION LETTERS AND HAVE CONFIRMED OF HAVING GIVEN LOANS TO THE ASS ESSEE. NO DEFECT IN ANY OF THE CONFIRMATION LETTERS HAS BEEN POINTED OUT BY TH E ASSESSING OFFICER. THE ASSESSING OFFICER HAS NOT MADE AN INDEPENDENT ENQUI RY IN ANY OF THE CASES. ALL I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 15 THE EXPLANATIONS AND DOCUMENTS WERE FILED BOTH WITH THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS AS WELL AS IN THE R EMAND PROCEEDINGS. THEREFORE, IN THE CIRCUMSTANCES AND FACTS OF THE CA SE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITIONS SO MADE BY THE ASSESSING OFFICER. ACCORDINGLY, GROUND NOS. 4 & 5 O F THE REVENUE ARE DISMISSED. 30. AS REGARDS GROUND NO. 6, WITH REGARD TO LEVY OF INTEREST U/S. 234A AND 234B, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WITH REGARD TO SECTION 234A WHICH IS MANDATORY IN NATURE. AS REGARDS SEC. 234B, THE SAME WAS DELETED BY THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT OF KERALA IN THE CASE OF CIT(CENTRAL) VS. B. LAKSHMIKANTHAN I.T. A.NOS. 20& 41 VIDE ORDER DATED 20-01-2011. 31. THE LD. DR RELIED UPON THE ORDER OF THE ASSE SSING OFFICER AND ON THE OTHER HAND, THE LD. AR RELIED UPON THE ORDER OF THE CIT(A ). 32. WE HAVE HEARD THE RIVAL CONTENTIONS AND PE RUSED THE FACTS OF THE CASE. WE AGREE WITH THE VIEWS OF THE LD. CIT(A) ON THE IS SUE OF APPLICABILITY OF SEC. 234B IN PARAS 41.1 AND 41.2. IT IS QUITE RELEVANT T O REPRODUCE PARAS 41.1 & 41.2 OF THE ORDER OF THE LD. CIT(A) HEREINBELOW FOR THE SAKE OF CONVENIENCE: 41.1 WITH REGARD TO THE APPLICABILITY OF SECTION 2 34B, THE PROVISIONS OF THIS SECTION ARE EXTRACTED BELOW:- I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 16 234B(I)(1) SUBJECT TO THE OTHER PROVISIONS OF THIS SECTION, WHERE, IN ANY FINANCIAL YEAR, AN ASSESSEE WHO IS LIABLE TO PAY AD VANCE TAX U/S. 208 HAS FAILED TO PAY SUCH TAX OR, WHERE THE ADVANCE TAX UN DER SECTION208 HAS FAILED TO PAY SUCH TAX OR, WHERE THE ADVANCE TAX PA ID BY SUCH ASSESSEE UNDER THE PROVISIONS OF SECTION 210 IS LESS THAN NI NETY PER CENT OF THE ASSESSED TAX, THE ASSESSEE SHALL BE LIABLE TO PAY S IMPLE INTEREST AT THE RATE OF ONE AND ONE PER CENT FOR EVERY MONTH OR PART OF A MONTH COMPRISED IN THE PERIOD FROM THE 1 ST DAY OF APRIL NEXT FOLLOWING SUCH FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB-SEC TION (1) OF SECTION 143 AND WHERE A REGULAR ASSESSMENT IS MADE, TO THE DATE OF SUCH REGULAR ASSESSMENT, ON AN AMOUNT EQUAL TO THE ASSESSED TAX OR, AS THE CASE MAY BE, ON THE AMOUNT BY WHICH THE ADVANCE TAX PAID AS AFORESAID FALLS SHORT OF THE ASSESSED TAX. (3) WHERE, AS A RESULT OF AN ORDER OF REASSESSMENT OR RE-COMPUTATION U/S. 147 (OR SECTION 153A), THE AMOUNT ON WHICH INTEREST WAS PAYABLE UNDER SUB-SECTION(1) IS INCREASED, THE ASSESSEE SHALL BE LIABLE TO PAY SIMPLE INTEREST AT THE RATE OF (ONE) PER CENT FOR EVERY MO NTH OR PART OF A MONTH COMPRISED IN THE PERIOD COMMENCING ON THE DAY FOLLO WING (THE DATE OF DETERMINATION OF TOTAL INCOME UNDER SUB-SECTION (1) OR SECTION 143 (AND WHERE A REGULAR ASSESSMENT IS MADE AS IS REFERRED T O IN SUB-SECTION (1) FOLLOWING THE DATE OF SUCH REGULAR ASSESSMENT AND E NDING ON THE DATE OF THE REASSESSMENT OR RE-COMPUTATION U/S. 147 (OR SEC TION 153A), ON THE AMOUNT BY WHICH THE TAX ON THE TOTAL INCOME DETERMI NED ON THE BASIS OF THE REASSESSMENT OR RE-COMPUTATION EXCEEDS THE TAX ON THE TOTAL INCOME DETERMINED 92 (UNDER SUB-SECTION (1) OF SECTION 143 OR) ON THE BASIS OF THE REGULAR ASSESSMENT AFORESAID. THE APPELLANT HAS SUBMITTED THAT THE HONBLE HIGH C OURT OF KERALA, IN THE CASE OF CIT(CENTRAL) VS. B. LAKSHMIKANTHAN I.T.A. N OS. 290 & 41 AS PER ORDER DATED 20THJANUARY, 2011 HAS DECIDED AS FOLLOW S: 6. AFTER HEARING BOTH SIDES, WE FEEL THERE IS NO S UBSTANCE IN THE CONTENTION RAISED BY THE REVENUE THAT IN A RE-ASSES SMENT COMPLETED UNDER SECTION 153A INTEREST FOR NON-PAYMENT OR SHORT PAYM ENT OF ADVANCE TAX IS PAYABLE U/S. 153A MERELY BECAUSE THE SAID RE-ASSESS MENT U/S. 153A IS COMPLETED BY ACCEPTING THE RETURN FILED U/S. 143(1) OF THE ACT. INTEREST FOR NON-PAYMENT OR SHORT PAYMENT OF ADVANCE TAX IS PAYA BLE U/S. 234B FOR DIFFERENT PERIODS UNDER SUB-SECTIONS (1) AND (3) OF THE SAID SECTION. IN ALL THE CASES OF REGULAR ASSESSMENTS COMPLETED U/S. 143 (1) INTEREST IS TO BE CHARGED FOR THE PERIODS PROVIDED U/S. 234B(1) OF TH E ACT. FURTHER, IF THE FIRST ASSESSMENT ITSELF IS INCOME ESCAPING ASSESSME NT MADE U/S. 147 OR U/S. 153A, THEN SUCH ASSESSMENT WILL BE TREATED AS REGULAR ASSESSMENT AD INTEREST FOR NON PAYMENT OR SHORT PAYMENT OF ADVANC E TAX IN SUCH CASES I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 17 WILL BE PAYABLE U/S. 234B(1) OF THE ACT. HOWEVER, W HEN AN ORIGINAL ASSESSMENT COMPLETED U/S. 143 IS REVISED EITHER U/S . 147 OR U/S. 153A, THEN INTEREST FOR NON-PAYMENT OR SHORT PAYMENT OF A DVANCE TAX IS PAYABLE ONLY FOR THE PERIOD MENTIONED IN SECTION 234B(3) OF THE ACT, WHICH PROVIDES FOR INTEREST FROM THE DATE OF COMPLETION OF REASSES SMENT OR RE-COMPUTATION U/S. 147 OR SECTION 153A OF THE ACT. IN OUR VIEW, FOR THE PURPOSE OF LEVY OF INTEREST U/S. 234B(3), IT IS IMMATERIAL WHETHER RE- COMPUTATION OR RE- ASSESSMENT UNDER SECTION 153A IS MADE BY ACCEPTING THE REVISED RETURN FILED AND BY PROCESSING THE SAME U/S. 143(1) OR WHE THER REASSESSMENT IS MADE BY REJECTING SUCH RETURNS AND BY DETERMINING T HE INCOME. THE FACT THAT THE PROCEDURE FOR CALLING FOR RETURN AND ASSES SMENT AFTER SEARCH OR REQUISITION U/S. 153A IS THE SAME AS PROVIDED U/S. 139 DOES NOT MEAN THAT A REASSESSMENT COMPLETED UNDER THE SAID PROVISION I S A REGULAR ASSESSMENT OR ORIGINAL ASSESSMENT. ON THE OTHER HAND, WHATEVE R BE THE PROCEDURE ADOPTED FOR ASSESSING ESCAPED INCOME OR UNDISCLOSED INCOME PURSUANT TO SEARCH OR REQUISITION, SUCH ASSESSMENT WILL ALWAYS BE A RE-ASSESSMENT OR RECOMPUTATION U/S. 153A AND UNLESS IT IS A FIRST AS SESSMENT, THAT COULD BE TREATED AS THE REGULAR ASSESSMENT IN TERMS OF EXPLA NATION(2) TO SECTION 23B(1), THEN INTEREST CAN BE CHARGED ONLY U/S. 234B (3) OF THE ACT. IN THIS CASE, THE ORIGINAL RETURNS WERE PROCESSED U/S. 143( 1) OF THE ACT AND THE PROCEEDINGS SO COMPLETED WERE ISSUED TO THE ASSESSE E. IT IS ONLY THEREAFTER THE DEPARTMENT CONDUCTED SEARCH AND MADE REVISED AS SESSMENTS U/S. 153A OF THE ACT THOUGH BY ACCEPTING RETURNS OF UNDI SCLOSED INCOME FILED AND BY ISSUING PROCEEDINGS U/S. 143(1) READ WITH SE CTION 153A OF THE ACT. WE, THEREFORE, HOLD THAT THE ASSESSMENTS U/S. 153A ARE REVISED ASSESSMENTS AND SO MUCH SO, INTEREST COULD BE DEMAN DED FOR THE PERIOD MENTIONED IN SECTION 234B(3) OF THE ACT AS HELD BY THE TRIBUNAL. IN THIS VIEW OF THE MATTER, WE UPHOLD THE ORDER OF THE TRIB UNAL AND DISMISS THE DEPARTMENT APPEALS FOR BOTH THE YEAR. 41.2 I HAVE CAREFULLY CONSIDERED THE RELEVANT FACT S AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. RESPECTFULLY FOL LOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AND ITAT COCHIN, I DECIDE THE CASE ACCORDINGLY. SECTION 153A ARE REVISED ASSESSMENTS A ND SO MUCH SO, INTEREST COULD BE DEMANDED ONLY FOR THE PERIOD MENT IONED IN SECTION 234B(3) OF THE ACT. HENCE THIS GROUND OF THE APPEAL IS PARTLY ALLOWED. ACCORDINGLY, WE AGREE WITH THE VIEWS OF THE LD. CIT (A) THAT SECTION 153A ASSESSMENTS ARE REVISED ASSESSMENTS AND SO MUCH SO, INTEREST COULD BE DEMANDED ONLY FOR THE PERIOD MENTIONED IN SECTION 2 34(B)(3) OF THE ACT. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 18 ACCORDINGLY, GROUND NO.6 OF THE REVENUE IS DISMISSE D. THUS THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 477/COCH/2013 IS DISMISSED. C.O. NO. 39/COCH/2013 : AY 2002-03 33. WE SHALL TAKE UP THE CROSS OBJECTION IN THE CASE OF THE ASSESSEE IN C.O. NO.39/COCH/2013. THE FACTS ARE IDENTICAL TO THE FAC TS IN THE CROSS OBJECTION IN THE CASE OF JOHNY KURIAKOSE FOR THE ASSESSMENT YEAR 2002-03 WHICH HAS BEEN DECIDED BY US IN CROSS OBJECTION BEARING NO. 44/COC H/2013 OF EVEN DATE. ACCORDINGLY, OUR ORDER IN C.O. NO.38/COCH/2013 IS I DENTICALLY APPLICABLE IN THE PRESENT CASE. THEREFORE, C.O. NO. 39/COCH/2013 IS DISMISSED. I.T.A. NO.478/COCH/2013 : A.Y.2003-04 34. NOW WE SHALL TAKE UP THE REVENUES APPEAL IN I.T.A. NO. 478/COCH/2013 FOR THE ASSESSMENT YEAR 2003-04 AS UNDER:- 35. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-I, KOCHI, IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF AGRICULTURAL INCOME AT RS.1,76,000/- WITHOUT CONSIDERING THE FAC T THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-1-2011 SUBMITTED BY THE ASSESSING O FFICER. THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VA RIOUS STATISTICAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS R ELATING TO EARLIER YEARS ALSO. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 19 A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SRI K.A.KUNJACHAN AND SMT . JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK230K/2010-11 AND I .T.A. NOS.310- 315/AKRPK8732C/2010-11 DATED 30-11-2012 RESPECTIVEL Y THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(APPEALS) IS NOT JUS TIFIED IN USING THE SAME REPORT SUBMITTED BY THE INCOME-TAX INSPECTOR T O PASS DIFFERENT VIEWS/DECISIONS ON THE SAME ISSUE. 3. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT RECEIVED FROM SMT. SHEENA BENNY WITHOUT CONSID ERING THE FACTS MENTIONED IN THE REMAND REPORT THAT SMT. SHEENA BEN NY HAD NO SUCH INCOME FROM GARDENING, TUITION ETC., AND THAT IT RE PRESENTS ASSESSEES UNDISCLOSED INCOME. THE CIT(A) OUGHT TO HAVE NOTICE D THAT THE ASSESSEE HAS THE PRACTICE OF ROUTING THE UNDISCLOSE D INCOME BY GIFTS. THE CIT(APPEALS) FAILED TO NOTICE THAT A MERE ENTRY IN THE CASH FLOW STATEMENT DOES NOT PROVE THE SOURCE OF THE MONEY RE CEIVED. THE ASSESSEE COULD NOT EVEN FILE ANY PROOF TO ESTABLISH THE CREDITWORTHINESS OF THE TRANSACTION. 4. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF BIRTHDAY GIFT RECEIVED FROM CHILDREN WITHOUT ESTABL ISHING THE CREDITWORTHINESS OF THE TRANSACTION. THE CIT(APPEA LS) OUGHT TO HAVE NOTICED THAT THE ASSESSEE COULD PRODUCE ONLY A LIST OF DONORS WITHOUT ADDRESS AND CONFIRMATION THEREOF BY WHICH VERACITY OF THE GENUINENESS OF THE GIFTS CANNOT BE PROVED. 5. THE CIT(APPEALS) ERRED IN DECIDING THAT THE ASSE SSMENTS U/S. 153(A) ARE REVISED ASSESSMENTS AND SO MUCH SO, INTEREST CO ULD BE DEMANDED FOR THE PERIOD MENTIONED IN SECTION 234(B)(3) OF T HE IT ACT BY RELYING ON THE DECISION OF THE HONORABLE HIGH COURT OF KERA LA IN THE CASE OF CIT(CENTRAL) V. B. LAKSHMIKANTHAN IN I.T.A. NOS.20& 41 DATED 20-1- 2011. THE CIT(APPEALS) FAILED TO NOTICE THAT THIS D ECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. HOWEVER, FURTHER APPEAL HAS NOT BEEN FILED BEFORE THE SUPREME COURT, SINCE THE TAX EFFEC T WAS BELOW THE MONETARY LIMIT FOR MAINTAINING THE APPEAL FOR WHICH REASONS HAS BEEN RECORDED IN THE ORDER SHEET ITSELF. 6. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 20 36. GROUND NOS. 1 & 6 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 37. AS REGARDS GROUND NO. 2, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKOSE IN REVENUE S APPEAL I.T.A. NO.262/COCH/2013 FOR THE ASSESSMENT YEAR 2001-02 DE CIDED BY US IN THE ORDER OF EVEN DATE AND ACCORDINGLY, OUR ORDER IN I.T.A. N O. 262/COCH/2013 IS IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. THUS G ROUND NO. 2 OF THE REVENUE IS DISMISSED. 38. AS REGARDS GROUND NO. 3 WITH REGARD TO GIF T RECEIVED FROM SMT. SHEENA BENNY, THE BRIEF FACTS AS EMANATING FROM THE ORDER OF THE ASSESSING OFFICER IS REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 3.2 THE CASH FLOW FOR THIS YEAR SHOWS THE FOLLOWIN G RECEIPTS: OTHER CAPITAL RECEIPTS SHEENA BENNY (WIFE) RS.6,50,000 MARY KURIAKOSE RS. 36,000 BIRTHDAY GIFT SON ABISHEK BENNY RS. 91,400 -DO- DAUGHTER LEELU MARY BENNY RS . 55,000 TOTAL RS.8,31,400 REGARDING THE RECEIPTS OF RS.6,50,000/- FROM S MT. SHEENA BENNY, HER CLAIM OF INCOME FOR VARIOUS YEARS FROM GARDENING, AND TUI TION HAS BEEN ACCEPTED ON PROTECTIVE BASIS ONLY. SIMILARLY IN RESPECT OF RECE IPT OF RS.35,000/- FROM MARY KURIAKOSE HER INCOME FROM MILCH COWS AND POULTRY HA S BEEN ACCEPTED ON PROTECTIVE BASIS ONLY. HENCE THE RECEIPT FROM WIFE STANDS NOT PROVED AND THE SAME IS TREATED AS INCOME OF THE ASSESSEE FROM UNEX PLAINED SOURCES. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 21 REGARDING THE CLAIMS OF BIRTHDAY GIFTS FOR SON AND DAUGHTER NO EVIDENCE HAS BEEN PRODUCED EXCEPT A LIST OF DONORS WITHOUT ADDRE SSES AS NO VERIFICATION IS POSSIBLE. HENCE THE CLAIMS ARE NOT ACCEPTABLE. THE RECEIPTS ARE TREATED AS GIFTS UNEXPLAINED AND ACCORDINGLY ADDED TO THE TOTAL INCO ME AS INCOME FROM UNEXPLAINED SOURCES. THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS.6 ,50,000/- SINCE THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF T HE ASSESSEE. 39. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SUBM ISSIONS AND PRODUCED CERTAIN DOCUMENTS TO PROVE HIS CLAIM WHICH WERE SEN T TO THE ASSESSING OFFICER FOR REMAND REPORT WHICH WAS OBTAINED AND THE ASSESS EE ALSO SUBMITTED COUNTER ARGUMENTS TO THE REMAND REPORT. THE LD. CIT(A), AF TER CONSIDERING THE FACTS ON RECORD, DELETED THE ADDITION SO MADE BY THE ASSESSI NG OFFICER. 40. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THE FACTS IN THE PRESENT CASE ARE THAT THE ASSESSEE HAD RECEIVED SALE PROCEEDS OF AGRICULTURAL LAND AT KAKK ANAD OF RS.4,33,000/-, DRAWINGS FROM PROPRIETARY CONCERN M/S. LEELU GIFTS AND KITCHEN SHOPPE OF RS.1,80,000/- AND INCOME FROM GARDENING, TAILORING ETC. OF RS.37,000/-. THE ASSESSEE HAS SUBMITTED NECESSARY EXPLANATIONS WHICH WERE ACCEPTED BY THE LD. CIT(A) AND ALL THE EVIDENCES, CONFIRMATIONS AND DOC UMENTS WERE PLACED BEFORE THE ASSESSING OFFICER IN THE REMAND PROCEEDINGS. A CCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND HI S ORDER IS A WELL REASONED ONE WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED HER ENBELOW: I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 22 20. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. SMT. SHEENA BENNY IS THE APPELLANTS WIFE, AND THUS IS A CLOSE RELATIVE. SHE IS ALSO ASSESSED TO T AX IN THE ROLLS OF THE SAME ASSESSING OFFICE. SMT. SHEENA BENNY HAS CONFIRMED T HAT THE AMOUNT WAS ADVANCE TO HER HUSBAND. AS PER THE CONFIRMATION LET TER SUBMITTED, THE DONOR HAS STATED THE FOLLOWING SOURCES OF INCOME FOR MAKI NG THE GIFT: SALE PROCEEDS OF AGRICULTURAL LAND AT KAKKANAD RS. 4,33,000/- DRAWINGS FROM PROPRIETARY CONCERN- M/S. LEELU GIFTS AND KITCHEN SHOPPE RS.1,80,000/- INCOME FROM GARDENING, TAILORING ETC. RS. 37,000/-. 20.1 LET ME DISCUSS THESE INDIVIDUAL ITEMS IN DETA IL. IN THE CASE OF THE INCOME FROM TAILORING, TUITIONS ETC. TO THE EXTENT OF RS.3 7,000/-, I FIND THAT THERE IS A CLEAR DIRECTION FOR LIFTING THE PROTECTIVE ASSESSM ENT AND TO ASSESS THE INCOME OF SMT. SHEENA BENNY, SUBSTANTIVELY IN HER HANDS, O N THE BASIS OF HER CLEAR DEPOSITION BEFORE THE ASSESSING OFFICER. THE APPELL ATE ORDER FOR A.Y. 2001-02, IN THE CASE OF SMT.SHEENA BENNY PRONOUNCES THE SAME . HENCE, CONTENTION OF THE ASSESSING OFFICER THAT THE ADDITION HAS TO BE S USTAINED ON THE BASIS OF THE CLAIM OF PROTECTIVE ASSESSMENT WOULD NOT HOLD GOOD. THE APPELLATE ORDER OF SMT. SHEENA BENNY HAS BEEN PRONOUNCED AFTER CAREFUL CONSIDERATION OF THE EVIDENCES ON RECORD. ACCORDINGLY, I DIRECT THE ASS ESSING OFFICER TO GRANT APPROPRIATE RELIEF TO THE EXTENT OF RS.37,000/-CLAI MED IN THIS REGARD, THE SOURCE BEING INCOME FROM GARDENING AND TAILORING. 20.2 IN THE CASE OF THE DRAWINGS FROM HER PROPRIET ARY CONCERN M/S. LEELU GIFTS AND KITCHEN SHOPPE, THE APPELLANT HAS PRODUCE D THE COPY OF THE CASH FLOW STATEMENT OF THE DONOR, SMT. SHEENA BENNY. IT IS SEEN THAT INCOME OFFERED IN THE SAID FIRM IS RS.2,19,000/-, OUT OF W HICH THE DONOR CLAIMS THAT SHE HAS ADVANCED ONLY RS.1,80,000/- TO THE APPELLAN T. THE ASSESSING OFFICER, IN THE REMAND REPORT HAS NOT OFFERED ANY SPECIFIC C OMMENT ON THIS ITEM. ACCORDINGLY, APPROPRIATE CREDIT HAS TO BE GIVEN FOR RS.1,80,000/-, THE SOURCE BEING DRAWINGS FROM PROPRIETARY CONCERN. ACCORDINGL Y, I DIRECT THE ASSESSING OFFICER TO GRANT APPROPRIATE RELIEF TO THE EXTENT OF RS.1,80,000/- CLAIMED IN THIS REGARD. 20.3 IN THE CASE OF THE GIFTS MADE FROM THE MONIES RECEIVED FROM SALE OF AGRICULTURAL LAND ALSO, THE ASSESSING OFFICER HAS O FFERED NO SPECIFIC COMMENTS. HOWEVER, THE APPELLANT HAS BROUGHT ON RECORD TWO SA LE DEEDS BY WHICH THE PROPERTIES ARE SOLD, ALONG WITH THE DONORS MOTHER AND BROTHERS. AS PER THE SALE DEED NO.708/2002, LANDS ADMEASURING 10.66 ARES WAS SOLD BY THE DONOR, SMT. SHEENA BENNY AND HER BROTHER FOR A TOTA L CONSIDERATION OF RS.4,00,000/-, OUT OF WHICH RS.2,64,915/- DIRECTLY ACCRUED TO THE DONOR. THE APPELLANT CLAIMS THAT THE BALANCE OF RS.1,35,085/- WAS GIFTED BY THE DONORS I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 23 BROTHER. SIMILARLY, THE APPELLANT ALSO CLAIMS THAT VIDE THE SECOND SALE DEED NO. 833/2002 DTD. 25.05.2002, LANDS ADMEASURING 2.1 1 ARES WERE SOLD FOR A TOTAL CONSIDERATION OF RS.78,400/- OUT OF WHICH RS. 19,600/- DIRECTLY ACCRUED TO THE DONOR. THE DONOR CLAIMS THAT THE BALANCE OF RS. 13,400/- WAS GIFTED BY THE DONORS BROTHERS AND MOTHER. THE APPELLANT HAS PRODUCED LETTER OF CONFIRMATION FROM THE DONORS BROTHER AND MOTHER AL SO, IN SUPPORT OF THE ABOVE CONTENTION. I FIND THAT THE APPELLANT HAS BRO UGHT ON RECORD AMPLE EVIDENCES AND PROOF WHICH GOES TO PROVE THAT THE DO NOR, SMT. SHEENA BENNY ALONGWITH HER FAMILY MEMBERS HAVE SOLD SOME LANDS A T KAKKANAD AND MONEY HAS BEEN REALIZED FROM SUCH SALE. THE DONOR OF THE GIFT, SMT. SHEENA BENNY, HAVING PROVED THE OWNERSHIP OF THE PROPERTIES AND F LOW OF CONSIDERATION FROM THE SALE OF LANDS, I FIND NO REASON TO DISBELIEVE T HE EXPLANATIONS AND DOCUMENTS PRODUCED BY THE APPELLANT AND I DIRECT TH E ASSESSING OFFICER TO GIVE APPROPRIATE CREDIT FOR RS.4,33,000/-, THE SOUR CE BEING SALE OF LAND. IN ACCORDANCE WITH THE ABOVE OBSERVATIONS, THEREFORE F OURTH GROUND OF APPEAL IS ALLOWED. ACCORDINGLY, GROUND NO. 3 OF THE REVENUE IS DISMISS ED . 41 . AS REGARDS GROUND NO. 4 BEING BIRTHDAY GIFTS RECEIV ED FROM CHILDREN OF THE ASSESSEE AMOUNTING TO RS. 91,400 FROM SON ABISHEK B ENNY AND RS.55,000/- FROM DAUGHTER LEELU MARY BENNY RESPECTIVELY, THE ASSESSI NG OFFICER MADE THE ADDITION SINCE THE EXPLANATION WAS NOT SATISFACTORY. 42. BEFORE THE LD. CIT(A), THE ASSESSEE MADE SU BMISSIONS AND SUBMITTED THE PHOTOGRAPHS ON THE OCCASION OF BIRTHDAY TO PROVE TH E GENUINENESS OF THE OCCASION ALONG THE EXPLANATIONS. THE REMAND REPORT WAS CALLED FOR FROM THE ASSESSING OFFICER WHICH WAS RECEIVED AND THE ASSESS EE ALSO SUBMITTED COUNTER EXPLANATIONS TO THE REMAND REPORT. THE LD. CIT(A) DELETED THE ADDITION OF RS.1 I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 24 LAKH OUT OF THE TOTAL ADDITION OF RS.1,46,000/-. AND DELETED THE ADDITION OF RS.1 LAKH WITH REGARD TO BOTH THE CHILDREN. 43. THE LD. DR RELIED UPON THE ORDER OF THE ASSESS ING OFFICER. ON THE OTHER HAND, THE LD. AR RELIED UPON THE ORDER OF THE LD. CIT(A). 44. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE UNDISPUTED FACTS IN THE PRESENT CASE AR E THAT THE ASSESSEE HAS CELEBRATED THE BIRTHDAY OF THE CHILDREN WHICH IS EV IDENCED FROM THE PHOTOGRAPHS PRODUCED BEFORE THE LD. CIT(A) AND THE ASSESSING OF FICER IN THE REMAND PROCEEDINGS. THERE IS EVERY POSSIBILITY OF HAVING R ECEIVED THE GIFTS ON THE OCCASION OF BIRTHDAY. IT IS ALSO UNDISPUTED THAT T HE ASSESSEE HAS NOT PRODUCED THE LIST OF DONORS AND THE CONFIRMATIONS LETTERS FR OM THE DONORS. THE GIFTS BY THESE DONORS ARE GENUINE AND CONFIRMATIONS ARE ALMO ST AN IMPOSSIBILITY AND THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A) WHO HAS RIGHTLY ESTIMATED THE BIRTHDAY GIFTS OF THE CHILDRE N AMOUNTING TO RS.1 LAKH INSTEAD OF RS.1,46,400/- WHICH APPEARS TO BE QUITE REASONED ONE. THUS GROUND NO. 4 OF THE REVENUE IS DISMISSED. 45 . AS REGARDS GROUND NO. 5, THE SAME IS IDENTICAL TO G ROUND NO. 6 IN THE CASE OF BENNY KURIAKOSE HIMSELF FOR THE ASSESSMENT YEAR 2002-03 IN REVENUES APPEAL IN I.T.A. NO.477/COCH/2013 AND THEREFORE, OUR ORDER IN I.T.A. NO.477/COCH/2013 I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 25 SHALL BE IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 5 OF THE REVENUE IS DISMISSED. THUS THE APPEAL OF THE REVENUE IN I.T.A. NO. 478/COCH/2013 IS DISMISSED. C.O. NO.40/COCH/2013 ; A.Y. 2003-04 46. AS REGARDS CROSS OBJECTION OF THE ASSESSEE B EARING NO. 40/COCH/2013, THE GROUNDS AND THE FACTS ARE IDENTICAL TO THE FACTS I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN C.O. NO. 38/COCH/201 3 AND ACCORDINGLY, OUR ORDER HEREINABOVE IN C.O. NO.38/COCH/2013 IS IDENTI CALLY APPLICABLE IN THE PRESENT CASE. THUS CROSS OBJECTION BEARING NO. 40/C OCH/2013 IS DISMISSED. I.T.A. NO.479/COCH/2013 : A.Y.2004-05 47. NOW WE SHALL TAKE UP THE REVENUES APPEAL IN I.T.A. NO. 479/COCH/2013 FOR THE ASSESSMENT YEAR 2004-05. 48. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-I, KOCHI, IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF AGRICULTURAL INCOME AT RS.1,76,000/- WITHOUT CONSIDERING THE FAC T THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-1-2011 SUBMITTED BY THE ASSESSING O FFICER. THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VA RIOUS STATISTICAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS R ELATING TO EARLIER YEARS ALSO. A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SRI K.A.KUNJACHAN AND SMT . JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK230K/2010-11 AND I .T.A. NOS.310- 315/AKRPK8732C/2010-11 DATED 30-11-2012 RESPECTIVEL Y THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(APPEALS) IS NOT JUS TIFIED IN USING THE SAME REPORT SUBMITTED BY THE INCOME-TAX INSPECTOR T O PASS DIFFERENT VIEWS/DECISIONS ON THE SAME ISSUE. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 26 3. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT RECEIVED FROM SMT. SHEENA BENNY WITHOUT CONSID ERING THE FACTS MENTIONED IN THE REMAND REPORT THAT SMT. SHEENA BEN NY HAD NO SUCH INCOME FROM GARDENING, TUITION ETC., AND THAT IT RE PRESENTS ASSESSEES UNDISCLOSED INCOME. THE CIT(A) OUGHT TO HAVE NOTICE D THAT THE ASSESSEE HAS THE PRACTICE OF ROUTING THE UNDISCLOSE D INCOME AS GIFTS. THE CIT(APPEALS) FAILED TO NOTICE THAT A MERE ENTRY IN THE CASH FLOW STATEMENT DOES NOT PROVE THE SOURCE OF THE MONEY RE CEIVED. THE ASSESSEE COULD NOT EVEN FILE ANY PROOF TO ESTABLISH THE CREDITWORTHINESS OF THE TRANSACTION. 4. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT OF GOLD RECEIVED FROM SMT. MARY KURIAKOSE WITH OUT CONSIDERING THE FACTS MENTIONED IN THE REMAND REPORT IN PROPER PERS PECTIVE. 5. THE CIT(APPEALS) IS NOT CORRECT IN GIVING FURTH ER RELIEF TO THE ASSESSEE ON ACCOUNT OF VALUATION OF HOUSE PROPERTY EVEN AFTER ADMITTING THE VALUE OF BUILDING AS PER KERALA PWD R ATES SUBMITTED BY THE APPELLANT. THE RELIEF GIVEN BY THE CIT(APPEALS ) IS NOT REASONABLE AND WITHOUT ANY BASIS. THE ARGUMENT THAT THE ASSESS EE HAS DONE SUPERVISORY WORK DOES NOT HOLD ASSESSMENT YEAR MERI T WHO DO NOT HAVE ANY KNOWLEDGE OF CIVIL CONSTRUCTIONS. THE CIT(APPEA LS) FAILED TO NOTICE THAT THE ASSESSEE CANNOT HIRE ANY CONSTRUCTION EMPL OYEE AND START CONSTRUCTION AND THE SAID ARGUMENTS ARE ABSOLUTELY WITHOUT ANY MERITS. 6. THE CIT(APPEALS) ERRED IN DECIDING THAT THE ASSE SSMENTS U/S. 153(A) ARE REVISED ASSESSMENTS AND SO MUCH SO, INTEREST CO ULD BE DEMANDED FOR THE PERIOD MENTIONED IN SECTION 234(B)(3) OF T HE IT ACT BY RELYING ON THE DECISION OF THE HONORABLE HIGH COURT OF KERA LA IN THE CASE OF CIT(CENTRAL) V. B. LAKSHMIKANTHAN IN I.T.A. NOS.20& 41 DATED 20-1- 2011. THE CIT(APPEALS) FAILED TO NOTICE THAT THIS D ECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. HOWEVER, FURTHER APPEAL HAS NOT BEEN FILED BEFORE THE SUPREME COURT, SINCE THE TAX EFFEC T WAS BELOW THE MONETARY LIMIT FOR MAINTAINING THE APPEAL FOR WHICH REASONS HAS BEEN RECORDED IN THE ORDER SHEET ITSELF. 7. AS PER HONORABLE SUPREME COURTS DECISION IN THE CASE OF CIT V SURYA HERBAL LIMITED REPORTED IN (243 CTR 327 DATE 1-9-2011) DEPARTMENTAL APPEAL IS MAINTAINABLE EVEN IF THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN BOARDS CIRCULAR IF QU ESTION INVOLVED IS SUBSTANTIAL AND ARISING IN MANY CASES AND IN SUBSEQ UENT YEARS ALL IN I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 27 LARGE NUMBER OF MATTERS. SINCE QUESTION INVOLVED IS SUBSTANTIAL AND RECURRING IN NATURE THIS APPEAL IS PREFERRED EVEN T HOUGH THE TAX EFFECT IS BELOW THE MONETARY LIMIT. 8. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 49. GROUND NOS. 1 & 8 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 50. AS REGARDS GROUND NO. 2 REGARDING AGRICULTU RAL INCOME, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKOSE IN REVENUES APPEAL I.T.A. NO.262/COCH/2013 FOR THE AS SESSMENT YEAR 2001-02 DECIDED BY US ON EVEN DATE AND ACCORDINGLY, OUR ORD ER IN I.T.A. NO. 262/COCH/2013 IS IDENTICALLY APPLICABLE IN THE PRES ENT CASE. THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. 51. AS REGARDS GROUND NO.3, THE FACTS IN THE PRESENT CA SE ARE IDENTICAL TO THE FACTS IN THE ASSESSEES OWN CASE IN REVENUES APPEA L I.T.A. NO.478/COCH/2013 FOR THE ASSESSMENT YEAR 2003-04 DECIDED BY US HEREI NABOVE AND ACCORDINGLY, OUR ORDER IN I.T.A. NO. 478/COCH/2013 HEREINABOVE SHALL BE IDENTICALLY APPLICABLE IN THE PRESENT CASE. THUS GROUND NO. 3 OF THE REVENUE IS DISMISSED. 52. AS REGARDS GROUND NO.5 REGARDING VALUATION OF HOUSE PROPERTY, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER RE FERRED THE MATTER TO VALUATION OFFICER WHOSE REPORT WAS RECEIVED ON 31-03-2009 WHE REAS THE ASSESSMENT WAS I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 28 COMPLETED ON 31-12-2008. AS PER THE VALUATION REPO RT, COST OF CONSTRUCTION WAS RS.49,02,200/-. THE YEARWISE DETAILS OF COST OF CON STRUCTION FROM 2001-02 TO 2004-05 IS AVAILABLE AT PG. 24 OF THE LD. CIT(A)S ORDER. THE ASSESSING OFFICER, ACCORDINGLY, MADE THE PROPOSAL TO MAKE ENHANCEMENT OF THE DIFFERENCE OF THE DVOS REPORT AND THE ASSESSEES DECLARATION OF THE COST OF CONSTRUCTION AT RS.35,93,250/-. THE LD. CIT(A) ALLOWED RELIEF OF S ELF SUPERVISION CHARGES AT 8% AND RETAINED THE ADDITION OF RS.4,09,164/-. THE OR DER OF THE LD. CIT(A) IN PARAS 40 TO 40.5 ARE REPRODUCED HEREINBELOW FOR THE SAKE OF CONVENIENCE: 40. I HAVE CAREFULLY CONSIDERED THE RELEVANT FACTS AND PROVISIONS OF LAW WITH REGARD TO THE ISSUE INVOLVED. I FIND THAT THE APPEL LANT HAS CLAIMED THAT THE HOUSE CONSTRUCTION WAS DONE DURING THE PERIODS FROM FINANCIAL YEAR2000-01 TO 2003-04 AND THE APPELLANT HAS DISCLOSED A TOTAL CONSTRUCTION COST OF RS.35,93,250/- OVER THE PERIOD. 40.1 THE PROPOSAL FOR ENHANCEMENT WAS MADE BY THE ASSESSING OFFICER, ON THE BASIS OF THE VALUATION REPORT SUBMITTED BY THE DISTRICT VALUATION OFFICER, WHEREIN HE HAS VALUED THE RESIDENTIAL BUILDING OF T HE APPELLANT BY ADOPTING CPWD PLINTH AREA METHOD ADOPTING AN INDEXED RATE @ 237% AND HAS ESTIMATED THE COST OF CONSTRUCTION AT RS.49,02,200/ -. 40.2 THE APPELLANT HAS ALSO PRODUCED A VALUATION F ROM THE APPROVED VALUER, WHEREIN HE HAS STATED THAT THE VALUATION IS DONE AS PER THE KERALA PWD RATES WITH CONVEYANCE OF ALUVA TALUK. THE SAID VALUER HAS VALUED THE SAME PROPERTY @ RS.43,50,450/-. THE AR OF THE APPELLANT PLEADS THAT THE HOUSE CONSTRUCTION AS PER BOOKS OF ACCOUNTS OF THE APPELL ANT COMES TO RS.35,93,250/- AND THIS MAY BE ACCEPTED FOR THE FOL LOWING REASONS: (I) KERALA PWD RATE IS MEANT FOR CONSTRUCTION BY A CONTRACTOR, AND HENCE CONTRACTORS PROFIT SAY 8% IS INCLUDED THEREIN. A S I HAVE CONSTRUCTED THE HOUSE UNDER DIRECT SUPERVISION, CONTRACTORS PR OFIT IS TO BE REDUCED FROM KERALA PWD VALUATION AMOUNT. (II) I HAVE USED MAINLY LOCAL MATERIALS FOR CONSTRU CTION, AS SAND, METAL, RUBBLE, BRICK, TIMBER ETC. ARE AVAILABLE LOCALLY AT CHEAPER RATES,WHICH HAS ALSO REDUCED MY COST OF CONSTRUCTION COMPARED T O KERALA PWD VALUATION AMOUNT AT LEAST BY 4 TO 5%. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 29 (III) KERALA PWD RATES INCLUDE FREIGHT ELEMENT. SIN CE LOCAL MATERIALS ARE USED FOR CONSTRUCTION, FREIGHT ELEMENT SAY 5% IS ALSO TO BE REDUCED FROM KERALA PWD VALUATION AMOUNT. 40.3 I FIND THAT DVO HAS ADOPTED THE PLINTH AREA R ATES DETERMINED BY CPWD. DURING THE COURSE OF HEARING, THE LD. AR SUBMITTED A COPY OF ORDER DATED 17- 01-2012 PASSED BY THE HONOURABLE JURISDICTIONAL KER ALA HIGH COURT IN THE CASE OF CIT VS. M.N. SAIDALAVI IN I.T.A. NO.37 OF 2 011, WHEREIN IT IS OBSERVED THAT THE ADOPTION OF SATE PWD RATES ON A CONSISTENT BASIS FOR THE PURPOSE OF DETERMINATION OF COST OF CONSTRUCTION CANNOT BE FAU LTED. THE SAME VIEW HAS ALSO BEEN FOLLOWED IN ITAT COCHIN BENCH, IN THE CAS E OF DCIT VS. P.P. VARGHESE (I.T.A. NOS.492 &493/COCH/2011. SO, THE V ALUATION BASED ON KERALA PWD RATES IS TO BE RELIED ON FOR THE PURPOSE OF VALUATION. ACCORDINGLY, I AM OF THE OPINION THAT NO ENHANCEMENT NEEDS TO BE MADE ON THE BASIS OF THE VALUATION REPORT OF THE DVO WHICH IS BASED ON C PWD RATES. 40.4 HOWEVER, THE VALUE OF THE BUILDING AS PER THE KERALA PWD RATES SUBMITTED BY THE APPELLANT VALUED BY THE APPROVED V ALUER IS RS.43,50,450/- AND IS ON RECORD. THE VALUE DECLARED BY THE APPELLA NT VALUED BY THE APPROVED VALUER IS RS.43,50,450/- AND IS ON RECORD. THE VALU E DECLARED BY THE APPELLANT IS RS.35,93,250/-. ACCORDINGLY, THE VALUATION BETWE EN THE DECLARED VALUE AND THE VALUE AS PER STATE PWD RATE IS 17.40%. THE APPE LLANT HAS SUBMITTED THAT THE BUILDING WAS CONSTRUCTED UNDER THE DIRECT SUPER VISION AND ACCORDINGLY PLEADS TO REDUCE A MARGIN OF 8%, BEING MINIMUM PROF IT MARGIN FOR A CONTRACTOR. FURTHER, AS PER VARIOUS JUDICIAL PRONOU NCEMENTS, IT HAS BEEN HELD THAT VALUATION REPORT IS ONLY AN ESTIMATE OF THE COST OF CONSTRUCTION, WHICH IS BASED ON CERTAIN PARAMETERS AND HENCE, A DIFFERENCE IN VALUATION OF ABOUT 10% IS TO BE CONSIDERED REASONABLE AND MAY BE IGNOR ED. 40.5 ACCORDINGLY, 8% VARIATION MAY BE CONSIDERED A S MARGIN WHICH IS TO BE REDUCED FROM THE VALUATION REPORT (WITH STATE PWD R ATE RS.43,50,450/- WHICH COMES TO RS.3,48,036/- (4350540 X 8% = 3,48,036). A FTER DUE WEIGHTAGE TO THE PROFIT MARGIN, THE VALUE AS PER REPORT COMES T O RS.40,02,414/- (43,50,450 3,48,036 = 40,02,414) AND THE COST OF CONSTRUCTION AS PER THE BOOKS OF ACCOUNTS OF THE APPELLANT COMES TO RS.35,9 3,250/- ONLY. THE DIFFERENCE COMES TO RS.4,09,164/- (40,02,414-35,03, 250), WHICH CAN BE CONSIDERED FOR ENHANCEMENT FROM THE ASSESSED INCOME . ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO ENHANCE HE INCOME TO THE EXTENT OF RS.4,09,164/- AS SPECIFIED ABOVE FROM HE ASSESSED I NCOME. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 30 53. THE LD. DR RELIED UPON THE ARGUMENT THAT THE VALUAT ION MADE BY THE DVO SHOULD BE ACCEPTED AND NO CREDIT FOR SELF SUPERVISI ON CHARGES SHOULD BE GIVEN IN THE ABSENCE OF ASSESSMENT YEAR RECORD. THE LD. AR ON THE OTHER HAND RELIED UPON THE ORDER OF THE LD. CIT(A). 54. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE THAT THE C IT(A) HAS ACCEPTED THE DVOS REPORT EXCEPT HE HAS GIVEN 8% AS SELF SUPERVISION C HARGES WHICH APPEARS TO BE QUITE REASONABLE AND WE DO NOT FIND ANY INFIRMITY I N THE ORDER OF THE LD. CIT(A). ACCORDINGLY, GROUND NO. 5 OF THE REVENUE IS DISMISS ED. 55. AS REGARDS GROUND NO. 6, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002-03 IN REVENUES APPEAL NO.477/COCH/2013 IN GROUND NO.6 HEREINABOVE AND ACCORDINGLY, OUR ORDER HEREINABOVE IN I.T.A. NO.477/COCH/2013 IS IDE NTICALLY APPLICABLE IN GROUND NO.6 IN THE PRESENT CASE. THUS GROUND NO. 6 OF THE ASSESSEE IS DISMISSED. 56. GROUND NO.7 IS INFRUCTUOUS SINCE WE HAVE DEC IDED THE APPEAL ON MERIT AND ACCORDINGLY, GROUND NO. 7 OF THE REVENUE IS DISMISS ED. THUS APPEAL OF THE REVENUE IN I.T.A. NO.479/COCH/2013 IS DISMISSED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 31 C.O. NO.41/COCH/2013 ; A.Y. 2004-05 57. AS REGARDS CROSS OBJECTION OF THE ASSESSEE BEARING NO. 41/COCH/2013, THE GROUNDS AND THE FACTS ARE IDENTICAL TO THE FACTS I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN C.O. NO. 38/COCH/201 3 AND ACCORDINGLY, OUR ORDER HEREINABOVE IN C.O. NO.38/COCH/2013 IS IDENTI CALLY APPLICABLE IN THE PRESENT CASE. THUS CROSS OBJECTION BEARING NO. 41/C OCH/2013 IS DISMISSED. I.T.A. NO.480/COCH/2013 : A.Y.2005-06 58. NOW WE SHALL TAKE UP THE REVENUES APPEAL IN I.T.A. NO. 480/COCH/2013 FOR THE ASSESSMENT YEAR 2005-06 AS UNDER:- 59. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-I, KOCHI, IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF AGRICULTURAL INCOME AT RS.1,76,000/- WITHOUT CONSIDERING THE FAC T THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-1-2011 SUBMITTED BY THE ASSESSING O FFICER. THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VA RIOUS STATISTICAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS R ELATING TO EARLIER YEARS ALSO. A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SRI K.A.KUNJACHAN AND SMT . JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK230K/2010-11 AND I .T.A. NOS.310- 315/AKRPK8732C/2010-11 DATED 30-11-2012 RESPECTIVEL Y THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(APPEALS) IS NOT JUS TIFIED IN USING THE SAME REPORT SUBMITTED BY THE INCOME-TAX INSPECTOR T O PASS DIFFERENT VIEWS/DECISIONS ON THE SAME ISSUE. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 32 3. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF AMOUNTT RECEIVED FROM SMT. SHIRLEY ANTONY. THE DECI SION OF THE CIT(APPEAL), BASED ON FRESH EVIDENCES FILED BEFORE HIM AT THE TIME OF HEARING LACKS PRINCIPLES OF NATURAL JUSTICE IN THE ABSENCE OF GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER TO REBUT THE S AME. THE CIT(APPEALS) ERRED BY VIOLATING THE PROVISIONS OF R ULE 46A, IN ACCEPTING THE FRESH EVIDENCE/DOCUMENTS FILED BY THE ASSESSEE WHICH WERE NOT PRODUCED BY HIM BEFORE THE ASSESSING OFFICER. THE C ASE LAW REPORTED IN 288 ITR 179(2007) IN THE CASE OF CIT VS. RANJIT KUM AR CHOUDHARY (GAUHATI) WHICH SUPPORTS THE CASE. 4. THE CIT(APPEAL) ERRED IN DELETING THE ADDITION M ADE ON ACCOUNT OF UNEXPLAINED LOAN FROM SHRI UNNIKRISHNAN WITHOUT CON SIDERING THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER. T HE ASSESSEE HAS NOT PROVED THE CAPACITY OF THE LENDER AND THE CREDITWOR THINESS OF THE TRANSACTION MERE FILING OF CONFIRMATION LETTER IS N OT ENOUGH TO PROVE THE CAPACITY OF THE PERSON AND CREDIT WORTHINESS OF THE TRANSACTION. 5. THE CIT(APPEAL) ERRED IN DELETING THE ADDITION M ADE ON ACCOUNT OF UNEXPLAINED LOAN FROM SHRI S.N. MADHAVA WARRIER WIT HOUT CONSIDERING THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICE R. THE ASSESSEE HAS NOT PROVED THE CAPACITY OF THE LENDER AND THE C REDITWORTHINESS OF THE TRANSACTION. MERE FILING OF CONFIRMATION LETTE R IS NOT ENOUGH TO PROVE THE CAPACITY OF THE PERSON AND CREDIT WORTHIN ESS OF THE TRANSACTION. 6. THE CIT(APPEAL) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CAPITAL RECEIPT FROM SHRI SAJU DEVASSY. THE ASSESSING OFFICER HAS MADE THE ADDITION FOR THE REASON THAT T HE CAPACITY OF THE DONOR AND THE CREDIT WORTHINESS OF THE TRANSACTION WAS NOT PROVED BY THE ASSESSEE BY NOT PRODUCING THE STATUTORY DOCUMEN TS LIKE FORM NO. B,C,I, SALARY CERITIFICATES, PASSPORT BANK ACCOUNTS ETC. THE APPROACH AND CONCLUSION OF THE CIT(APPEALS) IS AGAINST THE D ECISION OF THE HON. SUPREME COURT IN THE CASE OF CIT VS P.P. GANAPATHY REPORTED IN 254 CTR 336. 7. THE CIT(APPEALS) ERRED IN DECIDING THAT THE ASSE SSMENTS U/S. 153(A) ARE REVISED ASSESSMENTS AND SO MUCH SO, INTEREST CO ULD BE DEMANDED FOR THE PERIOD MENTIONED IN SECTION 234(B)(3) OF T HE IT ACT BY RELYING ON THE DECISION OF THE HONORABLE HIGH COURT OF KERA LA IN THE CASE OF CIT(CENTRAL) V. B. LAKSHMIKANTHAN IN I.T.A. NOS.20& 41 DATED 20-1- 2011. THE CIT(APPEALS) FAILED TO NOTICE THAT THIS D ECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. HOWEVER, FURTHER APPEAL HAS NOT BEEN FILED BEFORE THE SUPREME COURT, SINCE THE TAX EFFEC T WAS BELOW THE I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 33 MONETARY LIMIT FOR MAINTAINING THE APPEAL FOR WHICH REASONS HAS BEEN RECORDED IN THE ORDER SHEET ITSELF. 8. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 60. GROUND NOS. 1 & 8 ARE GENERAL IN NATURE AND THEREFO RE, DO NOT REQUIRE ANY ADJUDICATION. 61. AS REGARDS GROUND NO. 2 REGARDING DISALLO WANCE OF AGRICULTURAL INCOME DELETED BY THE LD. CIT(A), THE FACTS IN THE PRESENT CASE ARE IDENTICAL AS IN THE CASE OF JOHNY KURIAKOSE IN REVENUES APPEAL I.T.A. NO.262/COCH/2013 FOR THE ASSESSMENT YEAR 2001-02 DECIDED BY US ON EVEN DATE AND ACCORDINGLY, OUR ORDER IN I.T.A. NO. 262/COCH/2013 SHALL BE IDENTICALLY AP PLICABLE IN THE PRESENT CASE. THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. 62. AS REGARDS GROUND NO.3, THE FACTS IN THE P RESENT CASE ARE IDENTICAL TO THE FACTS IN THE ASSESSEES OWN CASE IN REVENUES APPEA L I.T.A. NO.478/COCH/2013 FOR THE ASSESSMENT YEAR 2003-04 DECIDED BY US HEREI NABOVE AND ACCORDINGLY, OUR ORDER IN I.T.A. NO. 478/COCH/2013 IS IDENTICALLY AP PLICABLE IN THE PRESENT CASE. THUS GROUND NO. 3 OF THE REVENUE IS DISMISSED. 63. AS REGARDS GROUND NOS. 3,4,5&6, THE ASSESSEE HAS RECEIVED LOANS FROM THE FOLLOWING PERSONS: I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 34 1. SHIRLEY ANTONY RELATIVE RS.4,00,000 /- 2. MR.UNNIKRISHNAN (FRIEND) RS.1,50,0 00/- 3. MR. S.N. MADHAVA WARRIER RS.3,00,00 0/- 4. MR. SAJU DEVASSY RS.1,50,000 /- THE ASSESSEE HAS FILED CONFIRMATION LETTERS DATED 1 7.10.2008 WHICH WERE EXAMINED. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND ACCORDINGLY, MADE THE ADDITION OF ALL THE CREDITORS. 64. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITT ED THE EXPLANATIONS AND FEW DOCUMENTS IN SUPPORT OF HIS CLAIM WERE SENT TO THE ASSESSING OFFICER FOR HIS REPORT. THE ASSESSEE HAS SUBMITTED THE COUNTER COMM ENTS IN LIEU OF THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER. 65. THE LD. CIT(A) IN THE CASE OF SMT. SHIRLEY ANTONY D ELETED THE ADDITION OF RS. 1 LAKH AS AGAINST THE ADDITION OF RS.4 LAKH, I N THE CASE OF SHRI UNNIKRISHNAN DELETED THE ADDITION OF RS.1,50,000/- , IN THE CASE OF SHRI S.N. MADHAVA WARRIER DELETED THE WHOLE ADDITION AND IN THE CASE OF SHRI SAJU DEVASSY DELETED THE ADDITION OF RS.1,50,000/-. WHO WAS HIS CO-BROTHER. 66. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFF ICER WHEREAS THE LD. AR RELIED UPON THE ORDER OF THE LD. CIT(A). I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 35 67. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE FACTS OF THE CASE. REGARDING THE LOAN OF RS.4 LAKH FROM SMT. SHIRLEY A NTONY, THE ASSESSEE HAS PRODUCED CONFIRMATION LETTER FROM THE CREDITOR AND ALSO THE BANK STATEMENT OF THE DONOR WITH THE FEDERAL BANK, ANGAMALY IN WHICH AN AMOUNT OF RS. 3 LAKHS WAS TRANSFERRED ON 02.04.2004 BY CHEQUE VIDE INSTRU MENT NO.907217. HOWEVER, THE CHEQUE OF RS.1 LAKH WAS NOT PRODUCED BY THE ASS ESSEE IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE PRODUCED THE ID CARD TO PROVE THE IDENTITY OF THE DONOR AN D COPY OF BANK STATEMENTS WHICH SHOWS SUFFICIENT AMOUNT OF REMITTANCES FROM ABROAD TO PROVE THE CREDITWORTHINESS AND CAPACITY OF THE DONOR. THE CRE DITWORTHINESS AND GENUINENESS OF THE TRANSACTION WAS PROVED TO THE EX TENT OF RS.3 LAKHS. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF T HE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION OF RS.3 LAKHS IN THE CASE OF L OAN RECEIVED FROM SMT. SHIRLEY ANTONY. 68. AS REGARDS LOAN FROM SHRI UNNIKRISHNAN AM OUNTING TO RS. 1,50,000/-, THE ASSESSEE HAS PRODUCED ID CARD OF THE LENDER WHICH H AS PROVED BEYOND DOUBT THE IDENTITY OF THE LENDER AND THE LOAN WAS RECEIVED TH ROUGH PROPER BANKING CHANNEL, COPY OF THE BANK ACCOUNT PRODUCED GOES TO PROVE THA T THE AMOUNT OF RS.1,50,000/- WAS TRANSFERRED BY A CHEQUE FROM THE BANK ACCOUNT OF THE LENDER, MAINTAINED WITH BANK OF BARODA. HENCE, THE GENUINEN ESS OF THE TRANSACTION IS ALSO PROVED. THE LENDER HAS CLAIMED TO HAVE DEPOSI TED THE SAME OUT OF I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 36 AGRICULTURAL INCOME. THE ALLEGATION OF THE ASSESSI NG OFFICER THAT THE BANK ACCOUNT ITSELF WAS FAKE IS WITHOUT ANY BASIS. THE ASSESSEE HAS NOT REJECTED THE EXPLANATION OF THE ASSESSEE ON ANY COGENT GROUND AN D IS WITHOUT ANY MATERIAL ON RECORD. IN THE CIRCUMSTANCES AND FACTS OF THE CAS E, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETING TH E ADDITION RS.1,50,000/- IN THE CASE OF LOAN RECEIVED FROM SHRI UNNIKRISHNAN. 69. AS REGARDS LOAN OF RS. 3 LAKHS RECEIVED FROM SHRI S .N. MADHAVA WARRIER, FRIEND OF THE ASSESSEE, THE SAID LOAN WAS RECEIVED IN TWO INSTALLMENTS VIDE TWO CHEQUES , RS. 1 LAKH FROM THE FEDERAL BANK ACCOUNT, RS.2 LAKH FROM THE SB ACCOUNT MAINTAINED BY SHRI MADHAVA WARRIER WITH BAN K OF BARODA. THE ASSESSEE HAD PRODUCED THE ID CARD OF THE LENDER AND ACCORDIN GLY, THE IDENTITY OF THE LENDER IS PROVED. THE CERTIFICATE FROM THE BANK MAN AGER OF BANK OF BARODA WAS ALSO PRODUCED WHICH ESTABLISHES THE GENUINENESS OF THE TRANSACTION. THE LD. CIT(A) HAS PASSED THE ORDER WHICH APPEARS TO BE A REASONED ONE AND ACCORDINGLY, WE FIND NO INFIRMITY IN HIS ORDER IN D ELETING THE ADDITION SO MADE BY THE ASSESSING OFFICER. 70. AS REGARDS GIFT RECEIVED FROM SHRI SAJU DEVA SSY, BROTHER-IN-LAW OF THE ASSESSEE AMOUNTING TO RS.1,50,000/-, IT IS UNDISPUT ED FACT THAT THE CREDITOR IS THE CO-BROTHER OF THE ASSESSEE AND THUS IS A CLOSE RELA TIVE. THE GIFT IS RECEIVED THROUGH PROPER BANKING CHANNEL AND IS TRANSFERRED F ROM NRE ACCOUNT MAINTAINED I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 37 BY HIM WITH THE SOUTH INDIAN BANK, NRE A/C. 275. TH E ALLEGATION OF THE ASSESSING OFFICER ARE WITHOUT ANY COGENT REASON AND WITHOUT ANY BASIS AND NO MATERIAL ON RECORD. THERE IS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE HAS GIVEN THE CASH BACK TO THE CREDITOR AND MERE PRESUM PTION AGAINST THE ASSESSEE DOES NOT ARISE. IN THE CIRCUMSTANCES AND FACTS OF T HE CASE, THE ASSESSEE HAS PROVED THE IDENTITY, CREDITWORTHINESS AND GENUINENE SS OF THE TRANSACTION AND ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE OR DER OF THE LD. CIT(A) IN THIS REGARD. THUS GROUND NOS. 3,4,5 & 6 OF THE REVENUE ARE DISMISSED. 71. AS REGARDS GROUND NO. 7, THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2002-03 IN REVENUES APPEAL IN I.T.A. NO.477/COCH/2013 IN GROUND NO. 6 H EREINABOVE AND ACCORDINGLY, OUR ORDER IN I.T.A. 477/COCH/2013 HEREINABOVE IS ID ENTICALLY APPLICABLE IN THE PRESENT CASE. ACCORDINGLY, GROUND NO. 7 OF THE RE VENUE IS DISMISSED. THUS THE APPEAL OF THE REVENUE IN I.T.A. NO.480/COCH/2013 IS DISMISSED. C.O. NO.42/COCH/2013 ; A.Y. 2005-06 72. AS REGARDS CROSS OBJECTION OF THE ASSESSEE B EARING NO. 42/COCH/2013, THE GROUNDS AND THE FACTS ARE IDENTICAL TO THE FACTS I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN C.O. NO. 38/COCH/201 3 AND ACCORDINGLY, OUR ORDER HEREINABOVE IN C.O. NO.38/COCH/2013 IS IDENTI CALLY APPLICABLE IN THE PRESENT CASE. THUS CROSS OBJECTION BEARING NO. 42/C OCH/2013 IS DISMISSED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 38 I.T.A. NO.481/COCH/2013 : A.Y.2006-07 73. NOW WE SHALL TAKE UP THE REVENUES APPEAL IN I.T.A. NO. 481/COCH/2013 FOR THE ASSESSMENT YEAR 2006-07 AS UNDER:- 74. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-I, KOCHI, IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF AGRICULTURAL INCOME AT RS.1,86,000/- WITHOUT CONSIDERING THE FAC T THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-1-2011 SUBMITTED BY THE ASSESSING O FFICER. THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VA RIOUS STATISTICAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS R ELATING TO EARLIER YEARS ALSO. A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SRI K.A.KUNJACHAN AND SMT . JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK230K/2010-11 AND I .T.A. NOS.310- 315/AKRPK8732C/2010-11 DATED 30-11-2012 RESPECTIVEL Y THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(APPEALS) IS NOT JUS TIFIED IN USING THE SAME REPORT SUBMITTED BY THE INCOME-TAX INSPECTOR T O PASS DIFFERENT VIEWS/DECISIONS ON THE SAME ISSUE. 3. AS PER HONORABLE SUPREME COURTS DECISION IN TH E CASE OF CIT V SURYA HERBAL LIMITED REPORTED IN (243 CTR 327 DATE 1-9-2011) DEPARTMENTAL APPEAL IS MAINTAINABLE EVEN IF THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN BOARDS CIRCULAR IF QU ESTION INVOLVED IS SUBSTANTIAL AND ARISING IN MANY CASES AND IN SUBSEQ UENT YEARS ALL IN LARGE NUMBER OF MATTERS. SINCE QUESTION INVOLVED IS SUBSTANTIAL AND RECURRING IN NATURE THIS APPEAL IS PREFERRED EVEN T HOUGH THE TAX EFFECT IS BELOW THE MONETARY LIMIT. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 39 75. GROUND NOS. 1 & 4 ARE GENERAL IN NATURE AND THEREF ORE, DO NOT REQUIRE ANY ADJUDICATION. 76. AS REGARDS GROUND NO. 2, THE FACTS IN THE PRESENT C ASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKOSE IN REVENUES A PPEAL I.T.A. NO.262/COCH/2013 FOR THE ASSESSMENT YEAR 2001-02 DE CIDED BY US ON EVEN DATE AND ACCORDINGLY, OUR ORDER IN I.T.A. NO. 262/COCH/2 013 IS IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. 77. AS REGARDS GROUND NO.3, THE SAME IS INFRUCTUO US SINCE WE HAVE DECIDED THE ISSUE ON MERIT AND ACCORDINGLY, THE SAME IS DISMISS ED. THUS THE APPEAL OF THE REVENUE IN I.T.A. NO.481/COCH/2013 IS DISMISSED. C.O. NO.43/COCH/2013 ; A.Y. 2006-07 78. AS REGARDS CROSS OBJECTION OF THE ASSESSEE B EARING NO. 43/COCH/2013, THE GROUNDS AND THE FACTS ARE IDENTICAL TO THE FACTS I N THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2001-02 IN C.O. NO. 38/COCH/201 3 AND ACCORDINGLY, OUR ORDER HEREINABOVE IN C.O. NO.38/COCH/2013 IS IDENTI CALLY APPLICABLE IN THE PRESENT CASE. THUS CROSS OBJECTION BEARING NO. 43/C OCH/2013 IS DISMISSED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 40 I.T.A. NO.482/COCH/2013 : A.Y.2006-07 79. NOW WE SHALL TAKE UP THE REVENUES APPEAL IN I.T.A. NO. 482/COCH/2013 FOR THE ASSESSMENT YEAR 2007-08:- 80. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS)-I, KOCHI, IS OPPOSED TO LAW, WEIGHT OF EVIDENCE AND FACTS OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF AGRICULTURAL INCOME AT RS.1,86,000/- WITHOUT CONSIDERING THE FAC T THAT THE ADDITION WAS MADE ON SOUND BASIS AND VALID REASONS AS STATED IN THE REMAND REPORT DATED 24-1-2011 SUBMITTED BY THE ASSESSING O FFICER. THE INSPECTOR HAD SUBMITTED THE REPORT BY COLLECTING VA RIOUS STATISTICAL REPORTS FROM SEVERAL STATE GOVERNMENT DEPARTMENTS R ELATING TO EARLIER YEARS ALSO. A) THE CIT(APPEALS) FAILED TO APPRECIATE THE FACT T HAT WHILE CONSIDERING THE APPEAL IN THE CASE OF SRI K.A.KUNJACHAN AND SMT . JESSY KUNJACHAN VIDE I.T.A. NOS. 316 TO 319/ALGPK230K/2010-11 AND I .T.A. NOS.310- 315/AKRPK8732C/2010-11 DATED 30-11-2012 RESPECTIVEL Y THE LEARNED CIT(APPEALS) HAS RELIED ON THE SAME ITIS REPORT IN ALLOWING THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(APPEALS) IS NOT JUS TIFIED IN USING THE SAME REPORT SUBMITTED BY THE INCOME-TAX INSPECTOR T O PASS DIFFERENT VIEWS/DECISIONS ON THE SAME ISSUE. 3. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF LOAN FROM SHRI P.J.CYRIAC, SHRI SHAJAN P.M. AND SHR I ABRAHAM KANNAMPILLY WITHOUT CONSIDERING THE REMAND REPORT I N PROPER PERSPECTIVE. THE CIT(APPEALS) FAILED TO CONSIDER T HE FACT THAT THE ASSESSEE RECEIVES LOAN FROM NRIS WHICH IS A RAMPANT PRACTICE TO ROUTE THE UNDISCLOSED INCOME THROUGH NRI ROUTES AND THE S AID AMOUNTS ARE NEVER SEEN REPAID. THE CIT(APPEALS) SHOULD HAVE BOR NE IN MIND THAT MERE PAYMENT BY ACCOUNT PAYEE CHEQUE IS NOT SACROSA NCT NOR CAN IT MAKE A NON GENUINE TRANSACTION GENUINE (208 ITR 465 ) (CAL) AND 193 ITR 318. THERE IS NO EVIDENCE TO SHOW THAT MONEY IS DRAWN ONLY FROM THE NRE ACCOUNT. FURTHER THE CIT(APPEALS) OUGHT TO HAVE DECIDED THE ISSUE AS IN THE CASE OF LOAN FROM SHRI BENNY. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 41 4. THE CIT(APPEALS) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF GIFT RECEIVED FROM SMT. SHEENA BENNY WITHOUT CONSID ERING THE FACTS MENTIONED IN THE REMAND REPORT THAT SMT. SHEENA BEN NY HAD NO SUCH INCOME FROM GARDENING, TUITION ETC., AND THAT IT RE PRESENTS ASSESSEES UNDISCLOSED INCOME. THE CIT(A) OUGHT TO HAVE NOTICE THAT THE ASSESSEE HAS THE PRACTICE OF ROUTING THE UNDISCLOSED INCOME AS GIFTS. THE CIT(APPEALS) FAILED TO NOTICE THAT A MERE ENTRY IN THE CASH FLOW STATEMENT DOES NOT PROVE THE SOURCE OF THE MONEY RE CEIVED. THE ASSESSEE COULD NOT EVEN FILE ANY PROOF TO ESTABLISH THE CREDITWORTHINESS OF THE TRANSACTION. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING IT IS REQUESTED THAT THE ORDER OF THE CIT(A ) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 81. GROUND NOS. 1 & 5 ARE GENERAL IN NATURE AND THERE FORE, DO NOT REQUIRE ANY ADJUDICATION. 82. AS REGARDS GROUND NO. 2, THE FACTS IN TH E PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF JOHNY KURIAKOSE IN REVENUE S APPEAL I.T.A. NO.262/COCH/2013 FOR THE ASSESSMENT YEAR 2001-02 DE CIDED BY US ON EVEN DATE AND ACCORDINGLY, OUR ORDER IN I.T.A. NO. 262/COCH/2 013 IS IDENTICALLY APPLICABLE TO THE FACTS IN THE PRESENT CASE. THUS GROUND NO. 2 OF THE REVENUE IS DISMISSED. 83. AS REGARDS GROUND NO. 4, THE FACTS IN THE P RESENT CASE ARE IDENTICAL TO THE FACTS IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEA R 2002-03 IN REVENUES APPEAL IN I.T.A. NO.477/COCH/2013 IN GROUND NO. 6 H EREINABOVE AND ACCORDINGLY, OUR ORDER IN I.T.A. 477/COCH/2013 HEREINABOVE IS ID ENTICALLY APPLICABLE IN THE PRESENT CASE. ACCORDINGLY, GROUND NO.4 OF THE REV ENUE IS DISMISSED. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 42 84. AS REGARDS GROUND NO. 3, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS RECEIVED LOANS FROM THE FOLLOWING PERSONS: 1. MR. CYRIAC (RELATIVE) RS. 1,00, 000/- 2. MR. SHAJAN M-LOAN(FRIEND) RS.10,98,900/ - 3. MR. ABRAHAM KANNAMPILLY RS. 3,00,00 0-/- THE ASSESSEE HAS FILED THE CONFIRMATION LETTERS AND SUBMITTED THE EXPLANATIONS WHICH WERE NOT FOUND SATISFACTORY BY THE ASSESSING OFFICER WHO ACCORDINGLY MADE THE ADDITIONS 85. THE LD. CIT(A) DELETED THE ADDITION OF RS.1 L AKH IN THE CASE OF SHRI CYRIAC P.J., RS.10,98,900/- IN THE CASE OF SHRI SHAJAN P. M. AND RS.3,00,000/- IN THE CASE OF SHRI ABRAHAM KANNAMPILLY VIDE PARAS 23 TO 3 4 AT PGS. 12 TO 19 OF HIS ORDER. 86. BEFORE THE LD. CIT(A), THE ASSESSEE HAS SUBM ITTED THE EXPLANATIONS AND CERTAIN DOCUMENTS WHICH WERE SENT TO THE ASSESSING OFFICER FOR THE REPORT. THE ASSESSEE ALSO FILED SUBMISSIONS IN RESPONSE TO THE REMAND REPORT AND ACCORDINGLY, THE LD. CIT(A), AFTER CONSIDERING THE FACTS ON RECORD, DELETED THE ADDITION IN ALL THE CASES. 87. THE LD. DR RELIED UPON THE ORDER OF THE AO, ON THE OTHER HAND, THE LD. CIT(A) RELIED UPON THE ORDER OF THE LD. CIT(A). I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 43 88. AS REGARDS THE AMOUNT RECEIVED FROM SHRI C YRIAC P.J., IT IS UNDISPUTED THAT IT HAS BEEN RECEIVED THROUGH PROPER BANKING CH ANNEL AND TRANSFERRED BY SHRI CYRIAC P.J. FROM NRE ACCOUNT OF CATHOLIC SYRIAN BANK , ANGAMALY BRANCH. SHRI CYRIAC P.J IS A NRI AND IS WORKING IN UK. THE DETAI LED STATEMENT OF SAVING BANK ACCOUNT AND COPY OF VOTER ID CARD HAS BEEN PRODUCED BEFORE THE LD. CIT(A) AND ALSO IN THE REMAND PROCEEDINGS. THE IDENTITY, CREDI TWORTHINESS AND THE GENUINENESS OF THE TRANSACTION HAS BEEN PROVED AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION OF RS.1 LAKH SO MADE BY THE ASSESSING OFFICER IN THE CASE OF SHRI CYRIAC P.J. 89. AS REGARDS THE DELETION OF ADDITION OF RS.10 ,98,900/- RECEIVED FROM SHRI SHAJAN P.M., FRIEND OF THE ASSESSEE, THE LOAN IS RE CEIVED THROUGH PROPER BANKING CHANNEL AND TRANSFERRED FROM NRE SAVING BANK ACCOUNT MAINTAINED JOINTLY BY SHRI SHAJAN P.M. WITH SHRI JOSE P.M. IN FEDERAL BAN K, KANJOOR BRANCH. THE ASSESSEE HAS PRODUCED A CERTIFICATE FROM THE FEDERA L BANK TO PROVE THAT THE AMOUNTS RECEIVED IN THE ASSESSEES SAVING BANK ACCO UNT IS OUT OF THE REMITTANCES FROM SHRI SHAJAN P.M. THROUGH KANJOOR B RANCH. THE LENDER IS A NRI WHO IS WORKING IN SAUDI ARABIA AS PURCHASE IN CHARG E. THE COPY OF THE VOTER ID CARD AND THE SAVING BANK NRE ACCOUNT OF THE LENDER A RE ON RECORD WHICH IS UNDISPUTED. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE ASSESSEE HAVING PROVED THE IDENTITY, CREDITWORTHINESS AND THE GENUI NENESS OF THE TRANSACTION, WE I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 44 FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) WH O HAS RIGHTLY DELETED THE ADDITION SO MADE BY THE ASSESSING OFFICER IN THE CA SE OF SHRI SHAJAN P.M. 90. AS REGARDS LOAN OF RS. 3,00,000/- RECEIVED FROM SHRI ABRAHAM KANNAMPILLY , THE LENDER IS A FRIEND OF THE ASSESSEE AND THE LOAN HAS BEEN RECEIVED THROUGH PROPER BANKING CHANNEL AND IT HAS BEEN TRANSFERRED FROM NRE ACCOUNT BY CHEQUE NO. 215429 MAINTAINED BY HIM IN T HE SOUTH INDIAN BANK, ANGAMALY BRANCH, SAVING BANK NRE A/C. NO.233 ON 04/1 1/2006. THE ASSESSEE HAVING ESTABLISHED THE IDENTITY, CREDITWORTHINESS A ND GENUINENESS OF THE TRANSACTION, WE FIND NO INFIRMITY IN THE ORDER OF T HE LD. CIT(A) WHO HAS RIGHTLY DELETED THE ADDITION SO MADE BY THE ASSESSING OFFIC E. ACCORDINGLY, GROUND NO. 3 OF THE ASSESSEE IS DISMISSED. THUS, THE APPEAL OF THE REVENUE IN I.T.A. NO. 482/COCH/2013 IS DISMISSED. 91. IN THE RESULT, ALL THE APPEALS OF THE REVENU E AND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. PRONOUNCED IN THE OP EN COURT 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 BENNY KURIAKOSE, PADAYATTIL HOUSE, KIDANGOO R P.O., VENGOOR, ANGAMALY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-1, ERNAKULAM. I.T.A. NOS.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 45 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.476-482/COCH/2013 & C.O.NOS. 38-43/COCH/2013 46