DCIT, Ernakulam V. Best Bakery & Ice Cream Parlour, Angamally

ITA 498/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58254 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 16-01-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 06-09-2010
• Court: TRIBUNAL
• Department Lawyers: T R PRASANNAKUMARI
• Section: 143(3); 153A; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM I.T.A NOS. 507-513/COCH/2010 ASSESSMENT YEARS:2001-02 TO 2007-08 BEST BAKERY & ICE CREAM PARLOUR, HOTEL HILL PARK BLDG., NEAR KSRTC BUS STATION, ANGAMALY. [PAN:AADFB 8319C] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) I.T.A NOS. 498 & 499/COCH/2010 ASSESSMENT YEARS:2001-02 & 2002-03 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. VS. BEST BAKERY & ICE CREAM PARLOUR, HOTEL HILL PARK BLDG., NEAR KSRTC BUS STATION, ANGAMALY. [PAN:AADFB 8319C] (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) ASSESSEE BY SHRI ANIL D.NAIR, ADV. REVENUE BY SMT. T.R. PRASANNAKUMARI, SR. DR DATE OF HEARING 19/01/2012 DATE OF PRONOUNCEMENT 31/01/2012 O R D E R PER SANJAY ARORA, AM: THESE ARE A SET OF NINE CROSS APPEALS BY THE ASSES SEE AND THE REVENUE ARISING OUT OF THE SEPARATE ORDERS BY THE COMMISSIONER OF INCOM E-TAX (APPEALS)-I, KOCHI (CIT(A) FOR SHORT) OF EVEN DATE, I.E., 15-06-2010, DECIDING THE ASSESSEES APPEALS CONTESTING ITS I.T.A. NOS. 507-513 & 498 & 499/COCH/2010 BEST BAKERY VS. ACIT, CENTRAL, EKM. 2 ASSESSMENT U/S.153C R.W.S. 153A & 143(3) OF THE INC OME-TAX ACT, 1961 ('THE ACT' HEREINAFTER) FOR THE ASSESSMENT YEARS (A.Y.) 2001-0 2 TO 2007-08. 2.1 AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AR, THE ASSESSEES COUNSEL, THAT THE FACTS AND CIRCUMSTANCES OF THE CASE ARE IDENTICAL I N THE CASE OF MATHA ENTERPRISES, ANGAMALY VS. DY.CIT, ERNAKULAM (IN I.T.A. NO. 302/COCH/2010 & 13 OTHERS DATED JANUARY 24, 2011/COPY ON RECORD). THE ASSESSMENTS UNDER REFERENCE BEING ONLY IN PURSUANCE TO THE SAME SEARCH, BASED ON THE SAME MAT ERIALS; THE ASSESSEE BEING ONE OF THE GROUP CONCERNS, AND DECIDED SIMILARLY BY THE FIRST APPELLATE AUTHORITY, WHOSE ORDERS ARE UNDER CHALLENGE, THE FINDINGS BY THE TRIBUNAL IN TH AT CASE ARE EQUALLY VALID FOR THE PRESENT ASSESSEE AS WELL, AND MAY BE FOLLOWED BY IT IN DECI DING THE SAME. CONTINUING FURTHER, IT WAS SUBMITTED THAT PER ITS SAID ORDER, THE TRIBUNAL HAS ACCEPTED THE REVENUES STAND FOR TWO ASSESSMENT YEARS, I.E., A.Y. 2003-04 & 2007-08, I.E., IN RESPECT OF WHICH THE EVIDENCE WAS FOUND IN SEARCH. FOR THE OTHER YEARS C OVERED BY THE ASSESSMENTS, ONLY THE SUPPRESSION OF INCOME WAS INFERRED ON THE BASIS OF THE PRESUMPTION THAT THE SAME REPRESENTED THE ASSESSEES MODUS OPERANDI , IN OPERATION SINCE THE PREVIOUS YEAR RELEVANT TO A.Y. 2001-02, THE EARLIEST PERIOD COVERED BY THE IMPUGNED ASSESSMENTS, IS NOT TENABLE IN VIEW OF THE ASSESSMENTS BEING CONCLUDED WITH NO EVIDENCE BROUGHT ON RECORD WHICH WOULD JUSTIFY INTERFERENCE WITH THE BOOK RESULTS. THE SAID DECISION MAY, THEREFORE, BE ADOPTED IN THE INSTANT CASE AS WELL. 2.2 THE LD. DR, ON THE OTHER HAND, WOULD SUBMIT THA T THE SUPPRESSION IN THE SALES HAD BEEN, INFACT, ADMITTED TO BOTH BY THE ACCOUNTANT, S HRI K.A. PAUL AS WELL THE MANAGING PARTNER SHRI PAULSON P. VARKEY. SHE WAS, ACCORDING LY, REQUIRED TO TAKE US TO THE SAID STATEMENT WHEREBY THE ADMISSION IS SAID TO HAVE BEE N MADE. THE SAME APPEARS AT PGS. 18 TO 28 OF THE PAPER BOOK NO. 2 SUBMITTED BY THE A SSESSEE. THE SAME WAS GONE THROUGH BUT WE FIND NO SPECIFIC ADMISSION FOR ANY OF THE OT HER YEARS. IN FACT, THE ADMISSION IS THAT THE SUPPRESSION COMMENCE ONLY WITH EFFECT FROM DECE MBER, 2006. SHE WAS SPECIFICALLY QUERIED BY THE BENCH AS TO IF ANY SPECIFIC QUERY IN RELATION TO THE ASSESSEE WAS MADE BY THE REVENUE IN THE STATEMENTS OF ACCOUNTANT AND PAR TNER UNDER SECTION 132(4) OF THE ACT I.T.A. NOS. 507-513 & 498 & 499/COCH/2010 BEST BAKERY VS. ACIT, CENTRAL, EKM. 3 BEING RELIED UPON, AND TO WHICH SHE ANSWERED IN THE NEGATIVE. ALSO, SHE SOUGHT TO DISTINGUISH THE FACTS OF THE INSTANT CASE, FURTHER SUBMITTING THAT THE REVENUE HAD A STRONG CASE EVEN FOR THE YEARS FOR WHICH THE LD. CIT(A) HA D ACCEPTED THE ASSESSEES CASE, I.E., PRIOR TO 2003-04, AS IT COULD NOT BE THAT THE ASSES SEES TURNOVER JUMPS BY ABOUT 5 TIMES IMMEDIATELY FOR THE FOLLOWING YEAR, AND AGAIN DIPS BACK FOR THE INTERVENING YEARS, I.E., FOR A.Y 2004-05 TO A.Y. 2006-07, FOR WHICH THE TRIBUNAL ALLOWED THE ASSESSEES CLAIM IN THE ABSENCE OF ANY DIRECT EVIDENCE FOR THOSE YEARS. NO UNUSUAL CIRCUMSTANCE FOR THE SAME HAS BEEN EXPLAINED OR SHOWN BY THE ASSESSEE. SUCH E VIDENCES WOULD ONLY BE DESTROYED IN THE NORMAL COURSE AND NOT RETAINED BY THE ASSESSEE, SO THAT MAKING THE ASSESSMENT ON THAT BASIS WOULD NOT BE PROPER AND AN INFERENCE HAS BE D RAWN ON THE BASIS OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ANALYSIS OF THE EVIDENCE WOULD SHOW A SYSTEMATIC SUPPRESSION OF THE INCOME, AND WHICH WAS BEING REGULARLY MONITORED BY THE PARTNERS, AND WITHDRAWN BY THEM. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. ADMITTEDLY, NO FRESH FACTS OR MATERIALS, I.E., OTHER THAN THOSE AL READY CONSIDERED BY THE TRIBUNAL IN THE CASE OF MATHA ENTERPRISES (SUPRA) HAS BEEN BROUGHT TO OUR NOTICE. THE DECISI ON BY THE CO-ORDINATE BENCH HAS A PERSUASIVE VALUE, AND HAS T O BE NORMALLY FOLLOWED, EVEN AS IN THE INSTANT CASE THE FACTS AND CIRCUMSTANCES, AS WELL A S THE MATERIALS RELIED UPON ARE IDENTICAL. IN THAT CASE, THE TRIBUNAL FOUND PC (I) 22, BEING R ELIED UPON BY THE REVENUE, TO BE A VITAL PIECE OF EVIDENCE, THOUGH COULD BE RELIED UPON IN T HE MANNER DONE IN FRAMING THE ASSESSMENT FOR AY 2003-04. THE OBSERVATIONS AND FIN DINGS BY THE TRIBUNAL WOULD BE FULLY APPLICABLE AND VALID FOR THE IMPUGNED ASSESSMENTS A S WELL. IF AGGRIEVED BY THE SAID DECISION BY THE TRIBUNAL, THE REVENUE COULD CARRY T HE MATTER BEFORE A HIGHER APPELLATE FORUM. WE, THEREFORE, CONSIDER IT FIT AND PROPER UN DER THE CIRCUMSTANCES TO FOLLOW THE ORDER OF THIS TRIBUNAL IN THE CASE OF MATHA ENTERPRISES (SUPRA); THE FACTS AND CIRCUMSTANCES OF THE CASE BEING ADMITTEDLY IDENTICA L. WE DECIDE ACCORDINGLY. I.T.A. NOS. 507-513 & 498 & 499/COCH/2010 BEST BAKERY VS. ACIT, CENTRAL, EKM. 4 5. IN THE RESULT, THE APPEALS BY THE REVENUE FOR AYS 2001-02 AND AY 2002-03 ARE DISMISSED. THE ASSESSEES APPEAL FOR AY 2007-08 IS DISMISSED, WHILE THAT FOR AY 2003- 04 IS PARTLY ALLOWED. FOR THE OTHER YEARS, THE ASSE SSEE SUCCEEDS. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 31 ST JANUARY, 2012 GJ COPY TO: 1. M/S. BEST BAKERY & ICE CREAM PARLOUR, HOTEL HILL PARK BLDG., NEAR KSRTC BUS STATION, ANGAMALY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-1, ERNAKULAM. 3. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I 5. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 6. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 7. GUARD FILE . BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN BENCH