DCIT, Ernakulam V. T.C.Mani, Ernakulam

ITA 506/COCH/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1212 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-02-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T BANUSEKHAR
• Assessee Lawyers: M ANIL KUMAR; SUSAN GEORGE VARGHESE
• Keywords: Unexplained investment; Business income; Document seized; Block assessment; Onus to prove; Documents seized
• Section: 133A; 153A; 234B; 131; 132; 15

Judgement Text

1 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 445/COCH/2011 - A.Y. 2001-02 I.T.A NO. 446/COCH/2011 - A.Y. 2002-03 I.T.A NO. 447/COCH/2011 - A.Y. 2003-04 I.T.A NO. 448/COCH/2011 - A.Y. 2004-05 I.T.A NO. 449/COCH/2011 - A.Y. 2005-06 I.T.A NO. 450/COCH/2011 - A.Y. 2006-07 M/S JOHN & CO VS A.C.I.T., CENT.CIR.II LOVEDON TOURIST HOME KOCHI KARIMUGHAL P.O. PUTHENCRUZ 682 308 PAN : AABFJ7831M (APPELLANT) (RESPONDENT) I.T.A NO. 487/COCH/2011 - A.Y. 2001-02 I.T.A NO. 488/COCH/2011 - A.Y. 2002-03 I.T.A NO. 489/COCH/2011 - A.Y. 2003-04 I.T.A NO. 490/COCH/2011 - A.Y. 2004-05 I.T.A NO. 491/COCH/2011 - A.Y. 2005-06 DY.CIT, CENT.CIR.2 VS M/S JOHN & CO KOCHI PUTHENCRUZ 682 308 (APPELLANT) (RESPONDENT) I.T.A NO. 451/COCH/2011 - A.Y. 2001-02 2 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 I.T.A NO. 452/COCH/2011 - A.Y. 2002-03 I.T.A NO. 453/COCH/2011 - A.Y. 2003-04 I.T.A NO. 454/COCH/2011 - A.Y. 2004-05 I.T.A NO. 455/COCH/2011 - A.Y. 2005-06 I.T.A NO. 456/COCH/2011 - A.Y. 2006-07 I.T.A. NO.457/COCH/2011 - A.Y. 2007-08 T.C. MANI VS A.C.I.T., CENT.CIR.II THANNIKKAMATTATHIL HOUSE ERNAKULAM KOLENCHERY 682 311 PAN : ACAPM3621K (APPELLANT) (RESPONDENT) I.T.A NO. 502/COCH/2011 - A.Y. 2001-02 I.T.A NO. 503/COCH/2011 - A.Y. 2002-03 I.T.A NO. 504/COCH/2011 - A.Y. 2003-04 I.T.A NO. 505/COCH/2011 - A.Y. 2004-05 I.T.A NO. 506/COCH/2011 - A.Y. 2005-06 I.T.A NO. 507/COCH/2011 - A.Y. 2006-07 I.T.A NO. 508/COCH/2011 - A.Y. 2007-08 D.C.I.T., CENT.CIR.2 VS T.C. MANI ERNAKULAM KOLENCHERY 682 311 (APPELLANT) (RESPONDENT) APPELLANTS BY : SHRI T BANUSEKHAR RESPONDENT BY : SHRI M ANIL KUMAR, C.I.T. & SMT. SUSAN GEORGE VARGHESE DATE OF HEARING : 19-02-2013 DATE OF PRONOUNCEMENT : 26-04-2013 3 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 O R D E R PER N.R.S. GANESAN (JM) THESE CROSS APPEALS PERTAINING TO TWO DIFFERENT AS SESSEES ARE DIRECTED AGAINST THE ORDERS OF THE RESPECTIVE COMMI SSIONERS OF INCOME-TAX (APPEALS) FOR THE ASSESSMENT YEARS 2001-02 TO 2007- 08. SINCE ALL THE APPEALS ARISE OUT OF THE SEARCH CONDUCTED BY THE RE VENUE ON 27-03-2007, WE HEARD ALL THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. MOVING TO THE APPEALS FILED BY THE ASSESSEE AND REVENUE IN THE CASE OF M/S JOHN & CO, IN PURSUANCE OF THE SEARCH CONDUC TED AT THE PREMISES OF SHRI T.C. MANI, A SURVEY WAS CONDUCTED U/S 133A OF THE ACT, AT THE BUSINESS PREMISES OF M/S JOHN & CO. M/S JOHN & CO IS A PART NERSHIP FIRM IN WHICH SHRI T.C. MANI IS A PARTNER. DURING THE COURSE OF SEARCH OPERATION IN THE PREMISES OF SHRI T.C. MANI, ONE OF THE SEIZED DOCUM ENTS MKG-12 WAS FOUND AND SEIZED. THE SEIZED DOCUMENTS MKG-12, MORE PART ICULARLY, PAGES 9 & 10 SHOWED THE INCOME OF M/S JOHN & CO FOR THE PERIOD F ROM 01-04-2005 TO 31- 4 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 03-2006. THE SEIZED DOCUMENT MKG-12, PAGES 9 & 10 SHOWED THE ACTUAL SALE OF LIQUOR FOR THE PERIOD FROM 01-04-2005 TO 31 -03-2006 AT RS. 3,34,60,261 WHEREAS THE ASSESSEE DISCLOSED ONLY RS. 2,71,82,979 FOR THE ASSESSMENT YEAR 2006-07. THEREFORE, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE DIFFERENCE BETWEEN THE SALES DE CLARED AND FOUND IN THE DOCUMENT MKG-12 SHOWED THE SUPPRESSION OF SALE OF L IQUOR. ACCORDINGLY, THE SAME WAS ASSESSED TO TAX FOR THE ASSESSMENT YEA R 2006-07. THE ASSESSING OFFICER HAS ALSO COME TO THE CONCLUSION T HAT THE SUPPRESSED SALE FOR THE ASSESSMENT YEAR 2006-07 IS 23.09% OF THE DE CLARED SALES. ACCORDINGLY FOR THE OTHER ASSESSMENT YEARS, I.E. 20 01-02 TO 2006-07 HE WORKED OUT THE SUPPRESSED SALES AT 23.09% ON THE BA SIS OF THE SEIZED DOCUMENT MKG-12. HOWEVER, THE CIT(A) FOUND THAT TH E ENTIRE SUPPRESSED SALES SHOULD NOT BE TAKEN AS INCOME OF THE ASSESSEE . ONLY THE PROFIT ELEMENT SHOULD BE TAKEN AS INCOME OF THE ASSESSEE. ACCORDINGLY, THE CIT(A) CAME TO THE CONCLUSION THAT 25% OF THE SUPPRESSED T URNOVER WOULD BE GROSS PROFIT OF THE ASSESSEE. THEREFORE, HE ESTIMA TED 25% OF THE SUPPRESSED TURNOVER FOR ALL THE ASSESSMENT YEARS UN IFORMLY ON THE BASIS OF 5 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE SEIZED DOCUMENT MKG-12. THE ASSESSEE HAS FILED THE APPEALS CHALLENGING THE ORDER OF THE CIT(A) ON THE GROUND T HAT THE CIT(A) ERRONEOUSLY STRETCHED THE SEIZED DOCUMENT FOUND FOR THE ASSESSMENT YEAR 2006-07 TO OTHER ASSESSMENT YEARS FALLING IN THE BL OCK PERIOD AND ESTIMATED THE GROSS PROFIT AT 25% OF THE SUPPRESSED TURNOVER. THE REVENUE HAS ALSO FILED THE APPEALS ON THE GROUND THAT THE ENTIRE SUP PRESSED TURNOVER SHOULD BE TAKEN AS THE INCOME. 3. SHRI T BHANUSEKHAR, THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THERE IS NO SEARCH CONDUCTED IN THE PREMISES O F THE ASSESSEE. WHAT WAS DONE AT THE PREMISES OF THE ASSESSEE IS SURVEY U/S 133A OF THE ACT. REFERRING TO SECTION 153C OF THE ACT, THE LD.REPRES ENTATIVE SUBMITTED THAT FOR INITIATING PROCEEDINGS U/S 153C, THE ASSESSING OFFICER SHOULD SATISFY HIMSELF THAT THE MATERIAL FOUND DURING THE COURSE O F SEARCH OPERATIONS RELATES TO ASSESSEE. IN THIS CASE, ACCORDING TO TH E LD.REPRESENTATIVE, THE SEARCH DOCUMENT MKG-12 SAID TO HAVE BEEN SEIZED FRO M THE PREMISES OF SHRI T.C. MANI ADMITTEDLY RELATES TO THE PERIOD 01- 04-2005 TO 31-03-2006, 6 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 I.E. FOR THE ASSESSMENT YEAR 2006-07. NO OTHER DOC UMENT WAS AVAILABLE FOR OTHER ASSESSMENT YEARS. ACCORDING TO THE LD.REPRES ENTATIVE, EVEN IN THE COURSE OF SURVEY PROCEEDINGS THE DEPARTMENT COULD N OT FIND OUT ANY DOCUMENT FOR OTHER ASSESSMENT YEARS WITH REGARD TO SUPPRESSION OF SALES. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE AS SESSING OFFICER HAS NOT RECORDED ANY SATISFACTION THAT THE DOCUMENT SEIZED FROM THE RESIDENTIAL PREMISES OF SHRI T.C. MANI BELONGS TO THE ASSESSEE. IN THE ABSENCE OF ANY SATISFACTION RECORDED BY THE ASSESSING OFFICER, ACC ORDING TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY PROCEEDINGS U/S 153C OF THE ACT. AT THE BEST, THE LD.REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER MAY HAVE MATERIALS IN MKG-12 FOR THE ASSESSMENT YEAR 20 06-07 AND NOT FOR OTHER ASSESSMENT YEARS. 4. REFERRING TO THE STATEMENT SAID TO BE RECORDED F ROM THE MANAGER, SHRI JOSEPH VARGHESE, THE LD.REPRESENTATIVE SUBMITT ED THAT THE STATEMENT WAS RECORDED BEHIND THE BACK OF THE ASSESSEE AND NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO CROSS EXAMINE SHRI JOSEPH VARGHESE. THEREFORE, 7 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE STATEMENT CANNOT HAVE ANY EVIDENTIARY VALUE. A PART FROM THAT THE STATEMENT OF SHRI JOSEPH VARGHESE WAS RECORDED IN T HE COURSE OF SURVEY PROCEEDINGS CONDUCTED AT THE PREMISES OF THE ASSESS EE U/S 133A OF THE ACT. REFERRING TO THE PROVISIONS OF SECTION 133A, THE LD .REPRESENTATIVE SUBMITTED THAT THE ASSESSING OFFICER HAS NO AUTHORITY TO RECO RD ANY SWORN STATEMENT IN THE COURSE OF SURVEY PROCEEDINGS. SINCE THE ASSESS ING OFFICER WAS NOT EMPOWERED TO RECORD SWORN STATEMENT U/S 133A, ACCOR DING TO THE LD.REPRESENTATIVE, THE STATEMENT SAID TO BE RECORDE D FROM SHRI JOSPEH VARGHESE CANNOT HAVE ANY EVIDENTIARY VALUE IN THE I NCOME-TAX PROCEEDINGS. REFERRING TO THE JUDGMENT OF THE APEX COURT IN CIT VS KHADER KHAN SON APPEAL (CIVIL) NO.13224 OF 2008 AND 6747 OF 2012 DA TED 20-09-2012 COPY OF WHICH IS FILED BY THE ASSESSEE, THE LD.REPRESENTATI VE SUBMITTED THAT THE JUDGMENT OF THE MADRAS HIGH COURT WHICH FOLLOWED TH E JUDGMENT OF KERALA HIGH COURT IN PAUL MATHEW & SONS VS CIT (2003) 263 ITR 101 (KER) WAS CONFIRMED BY THE APEX COURT. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THE STATEMENT RECORDED FROM SHRI JOSEPH VARGHESE CANNOT HAVE ANY EVIDENTIARY VALUE. THEREFORE, IT I S TO BE IGNORED. 8 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 5. ACCORDING TO THE LD.REPRESENTATIVE, THE CIT(A) I S NOT JUSTIFIED IN FOLLOWING THE JUDGMENT OF THE ANDHRA PRADESH HIGH C OURT IN RAJNIK & CO VS ACIT (2001) 251 ITR 561 (AP). REFERRING TO THE JUD GMENT IN THE CASE OF RAJNIK & CO (SUPRA), THE LD.REPRESENTATIVE SUBMITTE D THAT IN THE CASE BEFORE THE ANDHRA PRADESH HIGH COURT A SEARCH WAS CONDUCTE D U/S 132 OF THE INCOME-TAX ACT AND STATEMENT WAS RECORDED U/S 132(4 ) OF THE ACT. IN THE STATEMENT RECORDED U/S 132(4) THERE WAS AN ADMISSIO N BY ONE OF THE PARTNERS THAT THE ASSESSEE HAS BEEN CONSISTENTLY PR ACTICING SUPPRESSION OF SALES IN THE BUSINESS. ON THE BASIS OF THE STATEME NT RECORDED U/S 132(4) FROM THE PARTNER OF THE FIRM TO THE EFFECT THAT THE FIRM IS CONSISTENTLY PRACTISING SUPPRESSION OF SALES IN THE BUSINESS, TH E ADDITION MADE BY THE LOWER AUTHORITIES WERE CONFIRMED BY THE ANDHRA PRAD ESH HIGH COURT. ACCORDING TO THE LD.REPRESENTATIVE, IN THE CASE BEF ORE US, NO STATEMENT WAS RECORDED FROM THE PARTNER. THE STATEMENT WAS RECOR DED IN THE COURSE OF SURVEY OPERATION U/S 133A FROM THE MANAGER, SHRI JO SEPH VARGHESE. THE STATEMENT RECORDED IN THE COURSE OF SURVEY OPERATIO N HAS NO EVIDENTIARY 9 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 VALUE. THEREFORE, IT HAS TO BE IGNORED IN TOTO. H ENCE, THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT IN THE CASE OF RAJNIK & C O (SUPRA) MAY NOT BE APPLICABLE TO THE FACTS OF THE CASE. SIMILARLY, TH E JUDGMENT OF RAJASTHAN HIGH COURT RELIED UPON BY THE CIT(A) HAS ALSO NO RE LEVANCE TO THE FACTS OF THE CASE. IN VIEW OF THE ABOVE, ACCORDING TO THE L D.REPRESENTATIVE, THE CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE ADDITION BY ESTIMATING THE GROSS PROFIT AT 25% OF THE SO-CALLED SUPPRESSED TURNOVER. ACCORDING TO THE LD.REPRESENTATIVE, THE CIT(A) SHOULD HAVE DELETED T HE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER FOR ALL THE ASSESSMENT YEA RS UNDER CONSIDERATION. THE LD.RPERESENTATIVE HAS PLACED RELIANCE ON THE DE CISION OF THE HYDERABAD BENCH OF THIS TRIBUNAL IN THE CASE OF VISHNU AGARWA L VS ACIT (2010) 45 DTR (HYD) (TRIB) 222 AND THE DECISION OF THIS BENCH OF THIS TRIBUNAL IN DR. P SASIKUMAR VS DCIT (ITA NO.251 TO 257/COCH/2011 DATE D 29-06-2012). 6. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT NO DOUBT THERE WAS A SURVEY IN THE PREMISES OF THE ASS ESSEE. HOWEVER, SEIZED DOCUMENT MKG-12 WAS FOUND IN THE PREMISES OF SHRI T .C. MANI, ONE OF THE 10 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 PARTNERS OF THE ASSESSEE FIRM IN THE COURSE OF SEAR CH PROCEEDINGS. THESE SEIZED DOCUMENTS, MORE PARTICULARLY, PAGES 9 & 10 O F MKG-12 CLEARLY SHOWS THE SUPPRESSION OF SALES TURNOVER OF LIQUOR TO THE EXTENT OF RS. 62,77,282 FOR THE ASSESSMENT YEAR 2006-07. ACCORDING TO THE LD.DR, THE TURNOVER OF LIQUOR AS PER THE SEIZED DOCUMENT IS RS. 3,34,60,26 1 WHEREAS THE ASSESSEE DISCLOSED ONLY RS.2,71,82,979. THEREFORE, THE ASSE SSING OFFICER FOUND THAT THERE WAS A SUPPRESSION OF TURNOVER TO THE EXTENT O F RS.62,77,282. THE LD.DR FURTHER SUBMITTED THAT THE ENTIRE LIQUOR WAS PURCHASED FROM KERALA STATE BEVERAGES CORPORATION. THEREFORE, THERE IS N O SUPPRESSION OF PURCHASE. THE ENTIRE EXPENDITURE INCURRED BY THE A SSESSEE WAS ALREADY CLAIMED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS . THEREFORE, THE SUPPRESSED TURNOVER OF LIQUOR WHICH WAS FOUND IN PA GES 9 & 10 OF SEIZED DOCUMENT MKG 12 HAS TO BE TAKEN AS INCOME OF THE AS SESSEE FOR THE ASSESSMENT YEAR 2006-07. ONCE SUPPRESSION OF TURNO VER WAS FOUND FROM 01-04-2005 TO 31-03-2006, THE PRESUMPTION IS, ACCOR DING TO THE LD.DR, THE ASSESSEE WAS PRACTICING SAME METHOD OF SUPPRESSION FOR OTHER ASSESSMENT YEARS UNDER CONSIDERATION ALSO. THEREFORE, THE CIT (A) SHOULD HAVE TAKEN 11 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE ENTIRE SUPPRESSED TURNOVER AS INCOME. ACCORDIN G TO THE LD.DR, THE CIT(A) IS NOT JUSTIFIED IN RESTRICTING THE ADDITION TO 25% OF THE SUPPRESSED TURNOVER. 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS ON EITHER S IDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, NO SEARCH PROCEEDINGS WERE CONDUCTED IN THE CASE OF THE ASSES SEE, M/S JOHN & CO. IN THE COURSE OF SEARCH PROCEEDINGS IN THE RESIDENTIAL PREMISES OF SHRI T.C. MANI, THE PARTNER OF THE ASSESSEE FIRM DOCUMENT MKG 12 WAS FOUND AND SEIZED. AT PAGES 9 & 10 OF MKG 12, THE ACTUAL SALE OF LIQUOR FROM 01-04- 2005 TO 31-03-2006 WAS FOUND. THIS SHOWS THE TURNO VER OF RS.3,34,60,261. HOWEVER, M/S JOHN & CO DECLARED THE SALES TURNOVER ONLY AT RS.2,71,82,979. ON THE BASIS OF THE DOCUMENT FOUND IN MKG 12 SURVEY PROCEEDINGS WERE INITIATED IN THE BUSINESS PREMISES OF M/S JOHN & CO. HOWEVER, FROM THE MATERIAL AVAILABLE ON RECORD IT A PPEARS, NO FURTHER DOCUMENT WAS OBTAINED EXCEPT A STATEMENT OF SHRI JO SEPH VARGHESE, THE MANAGER. ADMITTEDLY, THE STATEMENT OF SHRI JOSEPH VARGHESE WAS RECORDED 12 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 IN THE COURSE OF SURVEY PROCEEDINGS U/S 133A OF THE ACT. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE SEIZED DOCUM ENT SHOWS THE SUPPRESSION OF SALES OF LIQUOR FROM 01-04-2005 TO 3 1-03-2006 WHETHER SUCH KIND OF SUPPRESSION CAN BE PRESUMED AND ESTIMATED F OR PRIOR ASSESSMENT YEARS AND FOLLOWING ASSESSMENT YEARS FALLING IN THE BLOCK PERIOD? 8. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 153A AND 153C OF THE ACT. FOR INITIATING PROCEEDINGS U/S 15 3C IN RESPECT OF THE PERSONS OTHER THAN SEARCHED, THE ASSESSING OFFICER SHALL SATISFY HIMSELF THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG S OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. THE LANGUAGE EMPLOYED BY THE LEGISLATURE IN SECTION 153 A CLEARLY SAYS THAT IRRESPECTIVE OF THE MATERIAL FOUND DURING THE COURS E OF SEARCH OPERATION, THE BLOCK ASSESSMENT COULD BE COMPLETED ON THE BASI S OF THE MATERIAL AVAILABLE ON RECORD. THE HYDERABAD BENCH OF THIS T RIBUNAL IN VISHNU AGARWAL (SUPRA) HAD AN OCCASION TO EXAMINE THE PROV ISIONS OF SECTION 153A 13 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 AND 158BB(1) OF THE ACT. THE HYDERABAD BENCH OF TH IS TRIBUNAL, AFTER ANALYZING THE SCHEME OF THE INCOME-TAX ACT PROVIDED UNDER CHAPTER XIVB OF THE ACT FOR SINGLE ASSESSMENT OF UNDISCLOSED INC OME FOR THE BLOCK PERIOD AND THE NEW PROCEDURE PROVIDED IN SECTION 153A FOR INDEPENDENT ASSESSMENT FOR ALL THE YEARS FALLING IN THE BLOCK P ERIOD FOUND THAT THE LEGISLATURE HAS INTENTIONALLY OMITTED THE PROCEDURE FOR COMPUTATION OF UNDISCLOSED INCOME PROVIDED IN CHAPTER XIVB, MORE P ARTICULARLY, UNDER SECTION 158BB(1) AND THE INCOME IS TO BE COMPUTED U /S 153A OF THE ACT AFTER 01 ST JUNE, 2003. THEREFORE, THE HYDERABAD BENCH OF THI S TRIBUNAL FOUND THAT THE ASSESSMENT U/S 153A IN RESPECT OF TH E PERSON SEARCHED CAN BE COMPLETED ON THE BASIS OF THE ENTIRE MATERIAL AV AILABLE ON RECORD INCLUDING THE SEARCH MATERIAL. IT WAS ALSO FOUND T HAT FOR COMPLETING THE ASSESSMENT U/S 153A IT IS NOT NECESSARY FOR THE ASS ESSING OFFICER TO CONFINE HIMSELF TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. THE TRIBUNAL FURTHER FOUND THAT IN THE ABSENCE OF ANY M ATERIAL FOUND EITHER DURING THE COURSE OF SEARCH OR OTHERWISE, NO ADDITI ON COULD BE MADE IN PROCEEDINGS U/S 153A OF THE ACT. IN VIEW OF THE AB OVE, IT IS OBVIOUS THAT 14 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THERE SHOULD BE SOME MATERIAL FOUND DURING THE COUR SE OF SEARCH OPERATION OR OTHERWISE FOR MAKING ADDITION U/S 153A OF THE AC T. IN FACT, THE HYDERABAD BENCH OF THIS TRIBUNAL HAS OBSERVED AS FO LLOWS AT PARA 14 OF ITS ORDER: 14. WE HAVE ALSO CAREFULLY GONE THROUGH THE DECISI ON OF THE VIZAG BENCH OF THIS TRIBUNAL IN THE CASE OF KGR EXP ORT (SUPRA). THE VIZAG BENCH OF THIS TRIBUNAL AFTER REFERRING TO THE JUDGMENT OF RAJASTHAN HIGH COURT IN CIT VS. SHIV RA TAN SONI (2008) 217 CTR (RAJ) 222 : (2008) 8 DTR (RAJ) 17 FO UND THAT THE AO HAS TO CONFINE HIMSELF ONLY TO THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN TH E ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION IT WAS HELD THAT THE AO CANNOT MAKE ANY A DDITION WHILE COMPUTING INCOME UNDER S. 153A. AS DISCUSSED IN PARA 13 OF THIS ORDER, THE PROCEDURE PRESCRIBED IN S.158 BB(1) IS OMITTED BY THE PARLIAMENT IN RESPECT OF SEARCHES CO NDUCTED ON AND AFTER 1 ST JUNE, 2003. THEREFORE, IN OUR OPINION, THE DISCUSSION OF THE VIZAG BENCH IN KGR EXPORTS (SUPRA ) ALSO MAY NOT BE OF ANY ASSISTANCE TO THE ASSESSEE. THIS ISS UE WAS CONSIDERED ELABORATELY BY THE CHENNAI BENCH OF THIS TRIBUNAL IN 15 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 HARVEY HEART HOSPITAL LTD (SUPRA). THE CHENNAI BEN CH OF THIS TRIBUNAL AFTER CONSIDERING THE DECISION OF THE CALC UTTA BENCH OF THIS TRIBUNAL IN LMJ INTERNATIONAL LTD. (SUPRA) AND DELHI BENCH OF THIS TRIBUNAL IN MS. SHYAM LATA KAUSHIK VS. ASST T.CIT (2008) 114 TTJ (DEL) 940 : (2008) 4 DTR (DEL)(TRIB) 337 : (2008) 114 ITD 305 (DEL) AND SHIVNATH RAI HARNARAIN (INDIA) LT D VS DY.CIT (2008) 117 TTJ (DEL) 480 : (2008) 9 DTR (DEL)(TRIB) 466 : (2008) 304 ITR 271 (DEL)(AT) FOUND THAT S. 153A MANDATES T HE AO TO ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF A SSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS. IT WAS F URTHER OBSERVED THAT THERE IS NO REFERENCE TO INCRIMINATIN G MATERIAL IN S.153A AS REFERRED IN SS.158BB AND 158BC TO WHICH T HE ASSESSMENT HAS TO BE CONFINED TO. IN VIEW OF DECIS ION OF THE CHENNAI BENCH OF THIS TRIBUNAL IN THE CASE OF HARVE Y HEART HOSPITAL LTD (SUPRA), THE DECISION OF THE VIZAG BEN CH OF THIS TRIBUNAL MAY NOT BE OF ANY ASSISTANCE TO THE ASSESS EE. AS WE HAVE OBSERVED EARLIER, THE LEGISLATURE REPLACED THE ENTIRE PROCEDURE FOR COMPUTATION OF INCOME IN THE CASE OF SEARCH CONDUCTED ON OR AFTER 1 ST JUNE, 2003 BY INCORPORATING S.153A THEREBY THE PROCEDURE CONTEMPLATED UNDER S.158BB(1) WAS OMITTED AND ABOLISHED. THEREFORE, AS RIGHTLY OBSER VED BY CHENNAI BENCH OF THIS TRIBUNAL WE CANNOT INTERPOLAT E ANYTHING TO THE ACT WHEN THE ACT ITSELF IS VERY CLEAR. IN O UR OPINION, IT IS 16 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 OPEN TO THE AO TO COMPUTE THE INCOME UNDER S.153A O N THE BASIS OF THE ENTIRE MATERIAL AVAILABLE ON RECORD. IN OTHER WORDS, IT IS NOT NECESSARY FOR THE AO TO CONFINE HI MSELF ONLY TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPER ATION. THE AO CAN ALSO PLACE RELIANCE ON ALL MATERIAL EVEN THO UGH IT WAS NOT FOUND DURING SEARCH OPERATION. HOWEVER, WE HAS TEN TO ADD THAT IN THE ABSENCE OF ANY MATERIAL EITHER FOUN D DURING SEARCH OR OTHERWISE, NO ADDITION CAN BE MADE. IN V IEW OF THE ABOVE, WE ARE UNABLE TO FIND ANY MERIT IN THE CONTE NTION OF THE ASSESSEE THAT THE AO HAS TO CONFINE HIMSELF ONLY TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. 9. IN THE CASE BEFORE US, THE ASSESSMENT WAS MADE U /S 153C OF THE ACT AND NOT U/S 153A OF THE ACT. THE LANGUAGE EMPLOYED BY THE PARLIAMENT IN SECTION 153A AND 153C ARE TOTALLY DIFFERENT. IN PR OCEEDINGS U/S 153C, THE ASSESSING OFFICER HAS TO SATISFY HIMSELF THAT ANY M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION BELONGS OR BELONG TO A PERSON OTHER THA N THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. THEREFORE, IT IS OBVIO US THAT FOR INITIATING PROCEEDINGS U/S 153C THERE SHOULD BE SOME SEIZED DO CUMENT. IN THE CASE 17 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 BEFORE US, THERE WAS SEIZED DOCUMENT, VIZ. MKG 12, MORE PARTICULARLY, PAGES 9 & 10 WHICH WAS FOUND DURING THE COURSE OF S EARCH OPERATION. THEREFORE, THE ASSESSING OFFICER IS JUSTIFIED IN IN ITIATING PROCEEDINGS U/S 153C OF THE ACT. 10. LET US NOW EXAMINE THE SEIZED DOCUMENT MKG 12. ADMITTEDLY PAGES 9 & 10 OF MKG 12 SHOW THE SUPPRESSED SALE OF LIQUOR FOR THE PERIOD 01-04- 2005 TO 31-03-2006. APART FROM MKG 12, THERE IS NO OTHER DOCUMENT AVAILABLE ON RECORD TO SHOW THAT THE ASSESSEE HAS S UPPRESSED ANY SALE FOR ANY OTHER ASSESSMENT YEARS. THE QUESTION ARISES FO R CONSIDERATION IS WHEN THE MATERIAL AVAILABLE ON RECORD SHOWS SUPPRESSION OF SALES FOR THE ASSESSMENT YEAR 2006-07 ALONE CAN THE SUPPRESSION O F SALES BE PRESUMED AND ESTIMATED FOR THE PRIOR AND SUBSEQUENT ASSESSME NT YEARS FALLING UNDER THE BLOCK PERIOD? THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION OR OTHERWISE, THERE CANNOT BE ANY ADDITION IN OTHER AS SESSMENT YEARS. IN THE CASE OF VISHNU AGARWAL (SUPRA), THE HYDERABAD BENCH OF THIS TRIBUNAL 18 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 EXAMINED THIS ISSUE ELABORATELY AND FOUND THAT THER E CANNOT BE ANY ADDITION FOR OTHER ASSESSMENT YEARS OTHER THAN THE MATERIAL FOUND RELATES TO. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT AT THE BEST, THE ADDITION COULD BE MADE ONLY FOR THE ASSESSMENT YEAR 2006-07 AND NOT FOR OTHER ASSESSMENT YEARS. THE OBSERVATION MADE B Y THE HYDERABAD BENCH OF THIS TRIBUNAL AT PARAGRAPHS 15, 16 & 17 AR E REPRODUCED BELOW: 15. NOW COMING TO THE MERIT OF THE ADDITION, WHETH ER THE AO IS JUSTIFIED IN MAKING ADDITION FOR OTHER ASSESS MENT YEARS UNDER CONSIDERATION WHEN ADMITTEDLY THE MATERIAL WA S FOUND FOR THE ASST.YR. 2005-06. IT IS NOT IN DISPUTE THA T AO HAS MATERIAL WHICH WAS FOUND DURING THE COURSE OF SEARC H OPERATION FOR THE ASST.YR.2005-06. WHEN THE ASSESS EE WAS EXAMINED, THE ASSESSEE ADMITTED THAT THEY ARE FOLLO WING THIS PRACTICE FOR THE PAST 1-1/2 YEAR. THEREFORE, AT BE ST THE AO HAD MATERIAL ONLY FOR THE ASSTT.YRS. 2004-05 AND 2005-0 6. IN RESPECT OF OTHER YEARS, THE AO HAS NO MATERIAL TO S HOW THAT THE ASSESSEE HAS SUPPRESSED ANY INCOME FROM JOB WORK. THE QUESTION NOW ARISES FOR CONSIDERATION IS, CAN THERE BE AN ADDITION WHILE COMPUTING THE INCOME UNDER S.153A IN THE ABSENCE OF ANY MATERIAL FOR OTHER ASSESSMENT YEAR E XCEPT TO 19 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE ASSTT.YRS. 2004-05 AND 2005-06? IN THE ABSENCE OF ANY MATERIAL FOR THE ASST.YRS. 1999-2000, 2000-01, 2001 -02, 2002- 03 AND 2003-04, FOR THE PURPOSE OF COMPLETING THE A SSESSMENT THE AO CERTAINLY HAS TO PLACE RELIANCE ON SOME MATE RIAL. FOR THE PURPOSE OF MAKING ADDITION THE AO HAS TO NECESS ARILY CONSIDER THE MATERIAL AVAILABLE ON RECORD TO SHOW T HAT THE ASSESSEE HAS EARNED INCOME WHICH IS TAXABLE UNDER T HE IT ACT. IN THE ABSENCE OF ANY MATERIAL IN OUR OPINION THE A O CANNOT MAKE ANY ADDITION. THE AO HAS TO ACCEPT THE INCOME RETURNED BY THE ASSESEE. HOWEVER, FOR THE ASST.YRS. 2004-05 AND 2005- 06 THE ASSESSEE CATEGORICALLY ADMITTED THAT THE JOB WORK RECEIPTS WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE, IT IS A CLEAR CASE OF SUPPRESSION OF JOB WORK RECEIPT FOR THE ASST.YRS. 2004-05 AND 2005-06. IN THOSE CI RCUMSTANCES, IN OUR OPINION, FOR THE ASST.YRS. 2004-05 AND 2005- 06 WE CANNOT SAY THAT THERE WAS NO MATERIAL. EVEN ADMISS ION BY ORAL STATEMENT CAN ALSO FORM PART OF MATERIAL FOR THE PU RPOSE OF MAKING ADDITION. IN SUCH SITUATION IT IS FOR THE A SSESSEE TO PROVE WITH SUFFICIENT MATERIAL THAT THE ADMISSIONS MADE EARLIER ARE CONTRARY TO THE MATERIALS AVAILABLE ON RECORD. IN THE CASE BEFORE US FOR THE ASST.YRS. 2004-05 AND 2005-06 ASS ESSEE ADMITTED THAT THERE WAS SUPPRESSION OF JOB WORK REC EIPTS AND NO MATERIAL AVAILABLE ON RECORD TO SHOW THAT ASSESS EE HAS 20 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 MADE SUCH STATEMENT CONTRARY TO ANY MATERIALS. THE REFORE, FOR THE ASST.YRS. 2004-05 AND 2005-06 AO IS JUSTIFIED I N ESTIMATING THE INCOME ON SUPPRESSION OF JOB WORK. 16. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT IN THE CASE OF RAJNIK & C O. (SUPRA). IN THE CASE BEFORE THE ANDHRA PRADESH HIGH COURT DU RING THE COURSE OF SEARCH REVENUE FOUND MATERIAL RELATING TO SUPPRESSION OF SALES FOR THE FINANCIAL YEARS 1995-9 6 AND 1996- 97. DURING THE COURSE OF SEARCH OPERATION, ONE OF THE PARTNERS ADMITTED THAT THE ASSESSEE HAD PRACTICED SUPPRESSIO N OF SALES TURNOVER FOR THE ENTIRE ASSESSMENT YEAR WHICH FALLS IN THE BLOCK PERIOD. IN THESE CIRCUMSTANCES, THE HIGH COURT FOU ND THAT THE EVIDENCE OF THE PARTNER CLEARLY SHOWS THAT THE FIRM HAS SUPPRESSED THE TURNOVER EVEN FOR OTHER YEARS. ACCO RDINGLY, THE ADDITION MADE BY THE LOWER AUTHORITY WAS CONFIR MED BY THE HIGH COURT. 17. IN THE CASE BEFORE US, NO STATEMENT WAS AVAILAB LE ON RECORD TO SHOW THAT ASSESSEE HAS PRACTICED SUPPRESS ION OF JOB WORK FOR ALL THE YEARS UNDER CONSIDERATION. FOR TH E ASST.YR.2005-06 THE ASSESSEE HAS ADMITTED THAT HE S UPPRESSED THE RECEIPTS. THE ONLY STATEMENT AVAILABLE ON RECO RD IS THAT 21 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE SUPPRESSION WAS PRACTICED FOR 1-1/2 YEAR. THER EFORE, AT BEST WE MAY ABLE TO SAY THAT THE MATERIAL AVAILABLE ON RECORD SHOWS SUPPRESSION OF JOB WORK RECEIPT FOR 1-1/2 YEA R. IN OTHER WORDS, SUPPRESSION IS FOR THE ASST.YRS. 2004-05 AND 2005-06. IN RESPECT OF OTHER YEARS ABSOLUTELY THERE IS NO MATER IAL. 11. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMEN T OF THE ANDHRA PRADESH HIGH COURT IN THE CASE OF RAJNIK & CO (SUPR A). IN THE CASE BEFORE THE ANDHRA PRADESH HIGH COURT THERE WAS A SEARCH IN THE BUSINESS PREMISES OF RAJNIK & CO AND IN THE STATEMENT RECORD FROM PAR TNER OF RAJNIK & CO, THE PARTNER ADMITTED THAT SALES SUPPRESSION FOUND FOR B OTH THE YEARS DURING THE COURSE OF SEARCH OPERATION WAS REGULARLY PRACTICED EVERY YEAR IN ITS SALES TURNOVER. IN THE CASE BEFORE US NO SEARCH WAS COND UCTED IN THE PREMISES OF THE ASSESSEE AND ONLY A SURVEY OPERATION U/S 133A W AS CARRIED OUT. THE STATEMENT WAS RECORDED FROM THE MANAGER, SHRI JOSEP H VARGHESE IN THE COURSE OF SURVEY OPERATIONS U/S 133A OF THE ACT. 12. LET US NOW EXAMINE WHETHER THE STATEMENT RECORD ED IN THE COURSE OF SURVEY PROCEEDINGS U/S 133A HAS ANY EVIDENTIARY VAL UE OR NOT? THE KERALA 22 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 HIGH COURT IN THE CASE OF PAUL MATHEWS & SONS (SUPR A) HAS CONSIDERED THIS ISSUE ELABORATELY AND FOUND THAT THE STATEMENT RECO RDED U/S 133A OF THE ACT IN THE COURSE OF SURVEY PROCEEDINGS HAS NO EVID ENTIARY VALUE SINCE THE OFFICER WAS NOT AUTHORIZED TO ADMINISTER OATH AND T O TAKE ANY SWORN STATEMENT. IN FACT, THE KERALA HIGH COURT HAS OBSE RVED AS FOLLOWS AT PAGE 108 OF THE ITR: THE PROVISION ALSO ENABLES THE INCOME-TAX AUTHORI TY TO IMPOUND AND RETAIN IN HIS CUSTODY FOR SUCH PERIOD A S HE THINKS FIT AND BOOKS OF ACCOUNT OR OTHER DOCUMENTS INSPECT ED BY HIM, PROVIDED THE AUTHORITY RECORDS HIS REASONS FOR DOIN G SO AND ALSO SHALL NOT RETAIN THE BOOKS OF ACCOUNT FOR A PE RIOD NOT EXCEEDING 15 DAYS. SECTION 133A(3)(III) ENABLES TH E AUTHORITY TO RECORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE ACT. SECTION 133A, HOWEVER, ENABLES THE INCOME-TAX AUTHORITY ONL Y TO RECORD ANY STATEMENT OF ANY PERSON WHICH MAY BE USE FUL, BUT DOES NOT AUTHORIZE TAKING ANY SWORN STATEMENT. ON THE OTHER HAND, WE FIND THAT SUCH A POWER TO EXAMINE A PERSON ON OATH IS SPECIFICALLY CONFERRED ON THE AUTHORIZED OFFICER TO EXAMINE A PERSON ON OATH IS SPECIFICALLY CONFERRED ON THE AUT HORIZED 23 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 OFFICER ONLY UNDER SECTION 132(4) OF THE INCOME-TAX ACT IN THE COURSE OF ANY SEARCH OR SEIZURE. THUS, THE INCOME- TAX ACT, WHENEVER IT THOUGHT FIT AND NECESSARY TO CONFER SUC H POWER TO EXAMINE A PERSON ON OATH, THE SAME HAS BEEN EXPRESS LY PROVIDED WHEREAS SECTION 133A DOES NOT EMPOWER ANY INCOME-TAX OFFICER TO EXAMINE ANY PERSON ON OATH. THUS, IN CONTRADISTINCTION TO THE POWER UNDER SECTION 133A, SECTION 132(4) OF THE INCOME-TAX ACT ENABLES THE AUTHORIZED OFFICER TO EXAMINE A PERSON ON OATH AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION CAN ALSO BE USED IN EVIDENCE UNDER THE INCOME-TAX ACT. ON THE OTHER HAND, WHATE VER STATEMENT IS RECORDED UNDER SECTION 133A OF THE INC OME-TAX ACT IT IS NOT GIVEN ANY EVIDENTIARY VALUE OBVIOUSLY FOR THE REASON THAT THE OFFICER IS NOT AUTHORIZED TO ADMINI STER OATH AND TO TAKE ANY SWORN STATEMENT WHICH ALONE HAS EVIDENT IARY VALUE AS CONTEMPLATED UNDER LAW. THEREFORE, THERE IS MUC H FORCE IN THE ARGUMENT OF LEARNED COUNSEL FOR THE APPELLANT T HAT THE STATEMENT ELICITED DURING THE SURVEY OPERATION HAS NO EVIDENTIARY VALUE AND THE INCOME-TAX OFFICER WAS WE LL AWARE OF THIS. 13. THE MADRAS HIGH COURT IN THE CASE OF CIT VS KHA DER KHAN SON (SUPRA) HAS FOLLOWED THE JUDGMENT OF KERALA HIGH COURT IN T HE CASE OF PAUL 24 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 MATHEWS & SONS (SUPRA) AND FOUND THAT THE STATEMENT RECORDED IN THE COURSE OF SURVEY PROCEEDINGS U/S 133A OF THE ACT HA S NO EVIDENTIARY VALUE. THE APPEAL FILED BY THE REVENUE IN CIT VS KHADER KH AN SON (SUPRA) AGAINST THE JUDGMENT OF THE MADRAS HIGH COURT WAS DISMISSED BY THE APEX COURT. THEREFORE, THE LAW IS NOW WELL SETTLED THAT THE STA TEMENT RECORDED DURING THE COURSE OF SURVEY PROCEEDINGS U/S 133A WOULD NOT HAVE ANY EVIDENTIARY VALUE SINCE THE AUTHORISED OFFICER WAS NOT AUTHORIZ ED TO RECORD ANY SWORN STATEMENT. IN VIEW OF THIS SETTLED LEGAL POSITION, THE STATEMENT RECORDED FROM SHRI JOSEPH VARGHESE, THE MANAGER OF JOHN & CO CANNOT HAVE ANY EVIDENTIARY VALUE, THEREFORE, THAT STATEMENT CANNOT BE A BASIS FOR MAKING ANY ADDITION. 14. NOW THE ONLY DOCUMENT AVAILABLE ON RECORD IS MK G 12, MORE PARTICULARLY, PAGES 9 & 10 WHICH SHOW A SUPPRESSION OF SALE OF LIQUOR FROM 01-04-2005 TO 31-03-2006, I.E. FOR THE ASSESSMENT Y EAR 2006-07. THIS DOCUMENT MKG 12, PAGES 9 & 10 WAS FOUND IN THE COUR SE OF SEARCH PROCEEDINGS IN THE RESIDENTIAL PREMISES OF SHRI. T. C. MANI, ONE OF THE 25 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 PARTNERS OF THE ASSESSEE FIRM. THEREFORE, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE SEARCH DOCUMENT MKG 12 PAGES 9 & 1 0 CAN BE A BASIS FOR MAKING ADDITION FOR THE ASSESSMENT YEAR 2006-07 ALO NE. HOWEVER, AS FOUND BY THE HYDERABAD BENCH OF THIS TRIBUNAL IN TH E CASE OF VISHNU AGARWAL (SUPRA) AND THIS BENCH OF THIS TRIBUNAL IN DR P SASIKUMAR (SUPRA), IN THE ABSENCE OF ANY MATERIAL THERE CANNOT BE ANY ADD ITION FOR OTHER ASSESSMENT YEARS FALLING UNDER THE BLOCK PERIOD. I N OTHER WORDS EXCEPT FOR ASSESSMENT YEAR 2006-07, FOR ALL OTHER ASSESSMENT Y EARS FALLING UNDER THE BLOCK PERIOD THERE CANNOT BE ANY ADDITION. THEREFO RE, THE LOWER AUTHORITIES ARE NOT JUSTIFIED IN MAKING ADDITION IN RESPECT OF ASSESSMENT YEARS PRIOR AND SUBSEQUENT TO THE ASSESSMENT YEAR 2006-07 FALLING I N THE BLOCK PERIOD. ACCORDINGLY, THE ADDITION MADE BY THE LOWER AUTHORI TIES FOR THE ASSESSMENT YEARS 2001-02 TO 2005-06 ARE DELETED. 15. NOW COMING TO ASSESSMENT YEAR 2006-07 THE ASSES SING OFFICER HAS TAKEN THE ENTIRE AMOUNT, I.E. DIFFERENCE BETWEEN TH E TURNOVER DECLARED AND THAT WAS FOUND IN MKG 12 AS INCOME OF THE ASSESSEE. UNDER THE SCHEME OF 26 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE INCOME-TAX ACT, ONLY THE PROFIT ELEMENT AFTER A LL EXPENSES HAS TO BE CONSIDERED FOR TAXATION. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE SUPPRESSED SALES TURNOVER WAS FOUND, THE REASONABLE EXPENDITURE WHICH WOULD HAVE BEEN INCURR ED BY THE ASSESSEE FOR EARNING INCOME HAS TO BE EXCLUDED FROM THE SUPP RESSED TURNOVER. IN THIS CASE, THE CIT(A) HAS ESTIMATED THE PROFIT AT 2 5% OF THE SUPPRESSED TURNOVER. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE CIT(A) HAS REASONABLY ESTIMATED THE GROSS PROFIT AT 25% OF THE SUPPRESSED TURNOVER. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF THE LOWER AUTHORITY FOR THE ASSESSMENT YEAR 2006-07. ACCORDINGLY, THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2006-07 IS CONFIRMED. 16. THE NEXT GROUND OF APPEAL IS WITH REGARD TO LEV Y OF INTEREST U/S 234A AND 234B OF THE ACT. 17. WE HEARD SHRI T BHANUSEKHAR, THE LD.REPRESENTAT IVE FOR THE ASSESSEE AND SHRI M ANIL KUMAR, THE LD.DR. THIS TRIBUNAL IS OF THE CONSIDERED OPINION 27 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THAT LEVY OF INTEREST U/S 234A AND 234B IS MANDATOR Y AND CONSEQUENTIAL. THEREFORE, THE ASSESSEE IS LIABLE TO PAY INTEREST. WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES. HOWEVER, THE ASSESSING OFFICER SHALL RECOMPUTE THE INTEREST WHILE GIVING E FFECT TO THIS ORDER. 18. IN VIEW OF THE ABOVE DISCUSSION, IN THE CASE OF M/S JOHN & CO APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2001-02 TO 200 5-06 ARE PARTLY ALLOWED AND APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006-07 IS DISMISSED; WHEREAS THE APPEALS FILED BY THE REVENUE FOR ALL TH E ASSESSMENT YEARS ARE DISMISSED. 19. LET US NOW TAKE THE ASSESSEES APPEAL IN THE CA SE OF SHRI T.C. MANI IN I.T.A. NO.451 TO 457/COCH/2011 AND THE APPEALS OF T HE REVENUE IN ITA NOS 502 TO 508/COCH/2011 FOR THE ASSESSMENT YEARS 2001- 02 TO 2007-08. 20. SHRI T BANUSEKHAR, THE LD.REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT A SEARCH WAS CONDUCTED AT RESIDENTIAL PREMISES OF THE ASSESSEE, SHRI 28 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 T.C. MANI ON 27-03-2007. DURING THE COURSE OF SEAR CH PROCEEDINGS, SOME INCRIMINATING MATERIALS WERE FOUND AND SEIZED. PRO CEEDINGS WERE INITIAITED IN THE CASE OF SHRI T.C. MANI U/S 153A OF THE ACT. HOWEVER, IN THE CASE OF PARTNERSHIP FIRM, M/S JOHN & CO, PROCEEDINGS WERE I NITIAITED U/S 153C OF THE ACT. THE LD.REPRESENTATIVE FOR THE ASSESSEE SU BMITTED THAT SHRI T.C. MANI IS A PARTNER IN JOHN & CO AND OTHER FIRMS, VIZ . T.K. CHACKO & CO, ALAPPATTU AGENCIES, ST. PETERS CONSTRUCTION CO, S. R.M. CONSTRUCTION CO. ALONG WITH SEARCH, SURVEY WAS ALSO CONDUCTED AT THE BUSINESS PREMISES OF THE FIRMS IN WHICH SHRI T.C. MANI WAS A PARTNER. A CCORDING TO THE LD.REPRESENTATIVE, THE SEARCH WARRANT WAS RESTRICTE D TO RESIDENTIAL PREMISES OF SHRI T.C. MANI. HOWEVER, THE SURVEY WAS IN RESP ECT OF BUSINESS PREMISES OF THE PARTNERSHIP FIRM. ON THE BASIS OF THE MATER IAL FOUND, PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEES. 21. ACCORDING TO THE LD.REPRESENTATIVE, THE FIRST G ROUND OF APPEAL IS WITH REGARD TO REJECTION OF BOOKS OF ACCOUNT. 29 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 22. SHRI T BANUSEKHAR, THE LD.REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAINTAINING BOOKS OF ACCOUNT A ND THE ASSESSING AUTHORITY HAS POINTED OUT NO DEFECT. IT IS ALSO NO T THE CASE OF THE REVENUE THAT THE BOOKS OF ACCOUNT DID NOT DISCLOSE THE TRUE STATE OF AFFAIRS. UNDER THOSE CIRCUMSTANCES, REJECTION OF BOOKS OF ACCOUNT AND RESORTING TO ESTIMATION OF PROFIT DOES NOT ARISE FOR CONSIDERATI ON. 23. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR S UBMITTED THAT VARIOUS MATERIALS WERE FOUND DURING THE COURSE OF SEARCH AN D SURVEY. THE MATERIAL FOUND DURING THE COURSE OF SEARCH AND SURVEY SHOWS THAT THE BOOKS OF ACCOUNT WERE NOT MAINTAINED CORRECLTY AND COMPLETEL Y. SEVERAL TRANSACTIONS WERE NOT ENTERED INTO IN THE BOOKS OF ACCOUNT. THEREFORE, A SHOW CAUSE NOTICE WAS ISSUED U/S 145(3) OF THE ACT. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THE COMPUTER WAS MISUSED BY HIS STAFF. THE ASSESSEE HAS ALSO EXPLAINED THAT THE SALES-TAX AUTHORITIES ACCEPTED THE BOOKS OF ACCOUNT AND THE BOOK RESULT. HOWEVER, IN VIEW OF THE MATERIAL FOUND DURING THE COURSE OF SURVEY OPERATION IT WAS FOUND THAT THE ENTIRE 30 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 TRANSACTIONS WERE NOT RECORDED AND THE BOOKS OF ACC OUNT WERE NOT COMPLETE AND IT WAS ALSO INCORRECT. REFERRING TO S EIZED MATERIAL MKG-57 THE LD.DR SUBMITTED THAT IT IS A RECORD OF SALES MA DE TO RATION SHOP. REFERRING TO SEIZED MATERIAL MKG-12 WHICH IS THE PR OFIT AND LOSS ACCOUNT OF BAR BUSINESS FROM 01-04-2005 TO 31-03-2005, THE LD. DR SUBMITTED THAT THE CLOSING STOCK AS PER THIS PROFIT & LOSS ACCOUNT WAS RS.14,58,367. SINCE THE SEIZED MATERIAL CLEARLY SHOWS THAT THE BOOKS OF ACC OUNT MAINTAINED IN THE COURSE OF BUSINESS WAS INCORRECT AND INCOMPLETE AND THE CLAIM OF THE ASSESSEE THAT THE COMPUTER PRINT-OUTS ARE CREATION OF HIS STAFF WAS FOUND TO BE NOT CORRECT. ACCORDING TO THE LD.DR, THE ASSESS ING OFFICER HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT. 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR THE ASSESSMENT YEAR 2006-07 WHILE CONSIDERING THE SEIZED MATERIAL AND THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER FOUND THAT ALL TRANSACTIONS WERE NOT ENTERED IN THE BOOKS OF ACCOUNT. THE SEIZED MATERIAL DISCLOSES THAT THE TRANSACTIONS WERE MADE 31 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 OUTSIDE THE BOOKS OF ACCOUNT. THOUGH THE ASSESSEE CLAIMS THAT THE COMPUTER PRINT-OUTS ARE THE CREATION OF HIS STAFF, IT WAS NOT SUBSTANTIATED. ON THE BASIS OF THE MATERIAL FOUND DURING THE COURS E OF SEARCH AND SURVEY OPERATION, THE ASSESSING OFFICER FOUND THAT THE BOO KS OF ACCOUNT ARE NOT CORRECT AND COMPLETE. IT DOES NOT REFLECT THE CORR ECT PROFIT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATE RIAL FOUND DURING THE COURSE OF SEARCH AND SURVEY OPERATION DISCLOSES THA T THE BOOKS OF ACCOUNT WAS NOT CORRECT AND IT IS INCOMPLETE. THEREFORE, T HE ASSESSING OFFICER HAS RIGHTLY REJECTED THE BOOKS OF ACCOUNT AND RESORTED TO ESTIMATE THE PROFIT ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE O F SEARCH OPERATION. THE CIT(A) HAS RIGHTY CONFIRMED THE SAME. THEREFORE, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACC ORDINGLY, THE SAME IS CONFIRMED. 25. THE NEXT GROUND OF APPEAL IS WITH REGARD TO CON FIRMATION OF ADDITION OF RS.2,75,000 TOWARDS COMMISSION WITHOUT ALLOWING EXPENSES. SHRI T BANUSHEKHAR, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE 32 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 CIT(A) CONFIRMED THE ADDITION OF RS.2,75,000 ON ACC OUNT OF COMMISSION WITHOUT ALLOWING ANY REASONABLE EXPENDITURE. REFER RING TO THE ORDER OF THE CIT(A), MORE PARTICULARLY, PARAGRAPH 11.2, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) FOUND THAT THE A SSESSEE COULD HAVE EARNED RS.500 AS COMMISSION PER LORRY CONSIDERING T HAT THE TOTAL RICE SOLD WAS 550 LORRIES. THEREFORE, HE ESTIMATED THE INCOM E AT RS.2,75,000. THE CONTENTION OF THE LD.REPRESENTATIVE FOR THE ASSESSE E IS THAT WHILE ESTIMATING THIS INCOME, THE COMMISSIONER (APPEALS) HAS NOT ALL OWED ANY REASONABLE EXPENSES FOR EARNING SUCH INCOME. ACCORDING TO THE LD.REPESENTATIVE, THE ASSESSEE NECESSARILY INCURRED CERTAIN EXPENDITURE. THEREFORE, ADDITION OF RS.2,75,000 WITHOUT ALLOWING THE EXPENSES FOR EARNI NG THAT COMMISSION IS NOT JUSTIFIED. 26. WE HEARD SHRI ANIL KUMAR, THE LD.DR ALSO. THE LD.DR SUBMITTED THAT THE ASSESSEE BY HIS LETTER DATED 19-12-2008 SUBMITT ED THAT APPROXIMATELY RS.300 TO RS.550 WAS EARNED AS COMMISSION PER LORRY LOAD. AFTER CONSIDERING THIS LETTER DATED 19-12-2008, THE CIT(A ) FOUND THAT THE ASSESSEE 33 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 COULD HAVE EARNED RS.500 PER LORRY LOAD AND ACCORDI NGLY IT WAS ESTIMATED AT RS.2,75,000. 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE BY HIS LETTER DATED 19-12-2008 EXPLAINED THAT APPROXIMATELY RS.300 TO R S.550 WAS EARNED AS COMMISSION PER LORRY LOAD. HOWEVER, THE CIT(A) FOU ND THAT THE ASSESSEE COULD HAVE EARNED AVERAGE COMMISSION OF RS.500 PER LORRY. NO MATERIAL IS AVAILABLE ON RECORD TO SUGGEST THAT THE ASSESSEE HA S EARNED RS.500 PER LORRY LOAD EXCEPT LETTER DATED 19-12-2008. MOREOVER, REA SONABLE EXPENDITURE FOR EARNING AN INCOME HAS TO BE ALLOWED WHILE ESTIM ATING THE TAXABLE INCOME. WHEN THE ASSESSEE HIMSELF CLAIMS THAT APPR OXIMATELY HE WOULD HAVE EARNED RS.300 TO RS.550 AS COMMISSION PER LORR Y LOAD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT ESTIMATION OF AVERAG E COMMISSION AT RS.400 AFTER ALLOWING ALL POSSIBLE EXPENDITURE WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE ESTIMATED INCOME FOR 550 LORRY LOA DS @RS.400 WOULD BE RS.2,20,000 FOR THE ASSESSMENT YEARS 2001-02. FOR OTHER ASSESSMENT YEARS 34 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 ALSO, THE INCOME FROM COMMISSION SHALL BE ESTIMATED AT RS.400 PER LORRY LOAD AFTER ALLOWING ALL EXPENDITURE. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE MODIFIED AND THE ASSESSING OFFICER IS DIRECTED TO TAKE THIS RS.2,20,000 AS NET INCOME OF THE ASSESSEE FROM COMM ISSION FOR THE ASSESSMENT YEARS 2001-02 TO 2005-06 INSTEAD OF RS.2 ,75,000. 28. FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08, T HE CIT(A) CONFIRMED THE ADDITION OF RS.3 LAKHS. THIS TRIBUNAL IS OF TH E CONSIDERED OPINION THAT FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 ALSO T HE NET INCOME FROM COMMISSION SHALL BE ESTIMATED AT RS.400 PER LORRY L OAD. HOWEVER, FROM THE MATERIAL AVAILABLE ON RECORD, IT IS NOT CLEAR REGAR DING THE NUMBER OF LORRY LOADS SOLD FOR THE ASSESSMENT YEARS 2006-07 AND 200 7-08. THEREFORE, THE ASSESSING OFFICER SHALL FIND OUT THE APPROXIMATE NU MBER OF LORRY LOAD OF RICE SOLD AND ESTIMATE THE COMMISSION AT RS.400 PER LORR Y LOAD AFTER ALLOWING ALL EXPENSES. ACCORDINGLY, THE ORDERS OF THE LOWER AUT HORITIES ARE MODIFIED TO THE EXTENT AS STATED ABOVE FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 ALSO. 35 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 29. THE NEXT GROUND OF APPEAL IS WITH REGARD TO LEV Y OF INTEREST U/S 234A AND 234B OF THE ACT. 30. WE HEARD SHRI T BHANUSEKHAR, THE LD.REPRESENTAT IVE FOR THE ASSESSEE AND SHRI M ANIL KUMAR, THE LD.DR. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT LEVY OF INTEREST U/S 234A AND 234B IS MANDATOR Y AND CONSEQUENTIAL. THEREFORE, THE ASSESSEE IS LIABLE TO PAY INTEREST. WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES. HOWEVER, THE ASSESSING OFFICER SHALL RECOMPUTE THE INTEREST WHILE GIVING E FFECT TO THIS ORDER. 31. FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05, T HE ASSESSEE HAS TAKEN ONE MORE GROUND WITH REGARD TO CASH CREDIT. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE HAS FILED THE CONFI RMATION LETTER BEFORE THE ASSESSING OFFICER. SINCE THE CONFIRMATION LETTER P ROVES THE CASH CREDIT, ACCORDING TO THE LD.REPRESENTATIVE, HE HAS DISCHARG ED HIS BURDEN OF PROOF. THEREFORE, IT IS FOR THE ASSESSING OFFICER TO EXAMI NE THE GENUINENESS OF THE 36 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 TRANSACTION, CREDITWORTHINESS OF THE CREDITOR AS AL SO THE IDENTITY. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSING OFFICER REJ ECTED THE CLAIM OF THE ASSESSEE ONLY ON THE GROUND THAT THE LOCAL ADDRESS OF THE LOAN CREDITOR WAS NOT GIVEN. WHEN THE CREDITOR WAS IDENTIFIABLE OTHE RWISE, MERELY BECAUSE LOCAL ADDRESS WAS NOT GIVEN, THAT CANNOT BE A REASO N TO DISALLOW THE CLAIM OF THE ASSESSEE. WE HEARD SHRI M ANIL KUMAR, THE L D.DR ALSO. 32. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE ASSESSEE HAS FILED THE CONFIRMATION LETTERS FROM RE SPECTIVE CREDITORS IN THE COURSE OF ASSESSMENT PROCEEDINGS. WHEN THE CONFIRM ATION LETTER WAS FILED IT IS FOR THE ASSESSING OFFICER TO EXAMINE THE CRED ITORS, IF NECESSARY. IN CASE, THE CONFIRMATION LETTER DOES NOT DISCLOSE THE ADDRE SS OF THE CREDITORS, THE ASSESSING OFFICER IS WELL WITHIN HIS POWERS TO CALL FOR SUCH PARTICULARS INCLUDING THE LOCAL ADDRESS OF THE RESPECTIVE CREDI TOR FROM THE ASSESSEE. HOWEVER, WITHOUT EXAMINATION OF THE CONFIRMATION LE TTER, THE ASSESSING OFFICER CANNOT REJECT THE CLAIM OF THE ASSESSEE. T HEREFORE, THIS TRIBUNAL IS OF 37 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE CONSIDERED OPINION THAT THE ASSESSING OFFICER S HALL RECONSIDER THE ISSUE AFRESH IN THE LIGHT OF THE CONFIRMATION LETTER FILE D BY THE ASSESSEE. ACCORDINGLY, THE ISSUE OF ADDITION ON ACCOUNT OF UN PROVED CASH CREDIT IS SET ASIDE AND REMANDED BACK TO THE FILE OF THE ASSESSIN G OFFICER. THE ASSESSING OFFICER SHALL RECONSIDER THE ISSUE AFRESH IN THE LI GHT OF THE CONFIRMATION LETTER FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 33. NOW COMING TO THE DEPARTMENTAL APPEALS IN ITA N OS.502 TO 508/COCH/2011 IN THE CASE OF SHRI T.C. MANI FOR THE ASSESSMENT YEARS 2001- 02 TO 2007-08, THE COMMON GROUND FOR ALL THE YEARS IS WITH REGARD TO INCOME FROM SALE OF RICE AND WHEAT. 34. SHRI M. ANIL KUMAR, THE LD.DR SUBMITTED THAT M/ S T.K. CHACKO & CO, IS A PARTNERSHIP FIRM DEALING IN SALE OF RICE AND WHEA T. ACCORDING TO THE LD.DR, M/S T.K. CHACKO & CO, WOULD PURCHASE RICE FROM CIVI L SUPPLIES CORPORATION AND IT HAS TO BE DISTRIBUTED TO RETAIL RATION SHOP OWNERS FOR DISTRIBUTION 38 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THROUGH PUBLIC DISTRIBUTION SYSTEM. ACCORDING TO T HE LD.DR, NEARLY 55 RATION SHOPS WERE UNDER THE CONTROL OF M/S T.K. CHACKO & C O. THE PRESENT ASSESSEE IS ONE OF THE PARTNERS OF M/S T.K. CHACKO & CO. THE LD.DR SUBMITTED THAT RICE AND WHEAT ARE SUPPLIED TO THE R ATION SHOPS FOR DISTRIBUTION THROUGH PUBLIC DISTRIBUTION SYSTEM AT SUBSIDISED PRICE. THERE IS A HUGE DIFFERENCE BETWEEN THE RATES IN THE RATION S HOP AND IN THE OPEN MARKET. ACCORDING TO THE LD.DR, ALL THE STOCKS GIV EN TO THE RATION SHOPS ARE NOT SOLD TO THE GENERAL PUBLIC, VIZ. THE RATION CAR D HOLDERS. THE UNSOLD STOCK IN THE RATION SHOPS WAS SOLD IN THE OPEN MARKET WIT H THE HELP OF OTHER TRADERS AND RICE MILLS. AFTER THE SEARCH OPERATION STATEMENT WAS RECORDED U/S 131 OF THE ACT IN WHICH THE ASSESSEE EXPLAINED THAT VARIOUS QUALITIES OF RICE WERE SOLD TO THE GENERAL PUBLIC THROUGH PUBLIC DISTRIBUTION SYSTEM. COMPUTER PRINT OUTS WERE ALSO TAKEN ON 25-04-2007 F ROM THE COMPUTER. THE ASSESSEE EXPLAINED THAT THE COMPUTER PRINT OUTS DENOTE THE SALE OF PORTION OF THE RICE ACCOUNTED AS SOLD TO RETAIL SHO PS BUT ACTUALLY SOLD IN THE OPEN MARKET OUTSIDE THE PUBLIC DISTRIBUTION SYSTEM. THEREFORE, ACCORDING TO THE LD.DR, THE ASSESSEE ENGAGED IN SALE OF RICE WHICH IS MEANT FOR PUBLIC 39 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 DISTRIBUTION SYSTEM IN THE OPEN MARKET. THE ASSESS EE EXPLAINED BEFORE THE ASSESSING OFFICER THAT NEARLY 400 550 LORRY LOADS WOULD BE SOLD IN THE OPEN MARKET. ACCORDING TO THE LD.DR, THE ASSESSEE IS RE SPONSIBLE FOR SALE OF RICE AND WHEAT IN THE OPEN MARKET. THEREFORE, THE ENTIR E SALE CONSIDERATION SHALL BE TREATED AS HIS INCOME. 35. THE LD.DR FURTHER SUBMITTED THAT THE ASSESSEE H AS FILED AFFIDAVITS FROM RETAIL SHOP LICENCE HOLDERS. AS PER THE RETAI L RATION SHOP LICENCE HOLDERS THEY CLAIMED THAT THE ASSESSEE WAS ONLY INT ERMEDIARY. ON EXAMINATION, THE ASSESSING OFFICER FOUND THAT THE A FFIDAVITS WERE FILED ONLY AT THE REQUEST OF THE ASSESSEE AND THEY CATEGORICAL LY STATED THAT THEY KNOW ONLY THE ASSESSEE AND NO ONE ELSE. THE RATION SHOP LICENCE HOLDERS WERE ALSO CROSS EXAMINED BY THE ASSESSEES CHARTERED ACC OUNTANT. FROM THE EXAMINATION OF THE RATION SHOP LICENCE HOLDERS, THE ASSESSING OFFICER CAME TO KNOW THAT THEY HAVE NO KNOWLEDGE ABOUT THE ASSES SEES ACTIVITY. IN THE COURSE OF ASSESSMENT PROCEEDINGS OF M/S T.K. CHACKO & CO IT WAS CLAIMED THAT THERE WAS NO UNACCOUNTED SALES. WHEN M/S T.K. CHACKO & CO CLAIMS 40 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THAT THERE IS NO UNACCOUNTED SALE IN RESPECT OF RAT ION RICE AND WHEAT, ACCORDING TO THE LD.DR, THE ENTIRE INCOME ON SALE O F RATION RICE AND WHEAT IN THE OPEN MARKET HAS TO BE ASSESSED IN THE HANDS OF THE PRESENT ASSESSEE. THEREFORE, ACCORDING TO THE LD.DR, THE CIT(A) IS NO T JUSTIFIED IN DELETING THE ADDITION MADE IN THE HANDS OF THE ASSESSEE, SHRI T. C. MANI. 36. ON THE CONTRARY, SHRI T BHANUSEKHAR, THE LD.REP RESENTATIVE FOR THE ASSESSEE SUBMITTED THAT M/S T.K. CHACKO & CO IS ADM ITTEDLY A PARTNERSHIP FIRM. IT IS A SEPARATE ENTITY ASSESSABLE / ASSESSE D AS A SEPARATE UNIT. M/S T.K. CHACKO & CO WAS DOING WHOLESALE BUSINESS. IN THE COURSE OF ITS BUSINESS, M/S T.K. CHACKO & CO WOULD PURCHASE RICE AND WHEAT FROM CIVIL SUPPLIES DEPARTMENT AND THE SAME WOULD BE SOLD TO L ICENSED RETAIL RATION SHOP FOR BEING SOLD / DISTRIBUTING TO GENERAL PUBLI C. THE ASSESSEE IS ONLY A PARTNER IN M/S T.K. CHACKO & CO. THEREFORE, ANY IN COME GENERATED BY M/S T.K. CHACKO & CO HAS TO BE ASSESSED ONLY IN THE HAN DS OF M/S T.K. CHACKO & CO AND NOT IN THE HANDS OF THE PRESENT ASSESSEE. A T THE BEST, ACCORDING TO THE LD.REPRESENTATIVE, ONLY THE COMMISSION RECEIVED BY THE ASSESSEE HAS TO 41 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 BE ASSESSED IN THE HANDS OF THE ASSESSEE AND NOT TH E ENTIRE SALE CONSIDERATION. THE LD.REPRESENTATIVE SUBMITTED THA T THE BUSINESS OF M/S T.K. CHACKO & CO WAS ESTABLISHED IN YEAR 1969 AND A PPROXIMATELY 55 RETAIL LICENSED RATION SHOPS WERE GIVEN TO M/S T.K. CHACKO & CO FOR SUPPLY OF RICE AND WHEAT. THE UNSOLD STOCKS IN THE RATION SHOP CO NSEQUENT TO THE NON PURCHASE OF THE GOODS BY THE GENERAL PUBLIC WAS TO BE SOLD IN THE OPEN MARKET BY M/S T.K. CHACKO & CO. THE ASSESSEE HAS A CTED ONLY AS A MIDDLEMAN AND ARRANGED THE SALE OF THE GOODS IN THE OPEN MARKET AND RECEIVED THE COMMISSION. ON THE BASIS OF THE COMPU TER PRINTOUT WHICH WAS SAID TO BE TAKEN ON 25-04-2007, THE ASSESSING AUTHO RITY CONCLUDED THAT THE ENTIRE SALE CONSIDERATION HAS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. THE LD.REPRESENTATIVE SUBMITTED THAT A STATEMENT WA S RECORDED FROM ONE JAMAL MUVATTUPUZHA AND FROM THAT STATEMENT, THE ASS ESSING OFFICER CONCLUDED THAT SECOND SALES WERE EFFECTED SINCE 200 2. 37. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT TH E REVENUE AUTHORITIES FOUND MATERIAL ONLY WITH REGARD TO ASSESSMENT YEARS 2006-07 AND 2007-08 42 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 AND ABSOLUTELY, THERE IS NO MATERIAL ABOUT THE SAL E OF RICE AND WHEAT IN THE OPEN MARKET FOR OTHER ASSESSMENT YEARS. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, EXCEPT FOR ASSESSMENT YEARS 2006 -07 AND 2007-08 THERE CANNOT BE ANY ADDITION WITH REGARD TO SALE OF RICE. EVEN FOR ASSESSMENT YEARS 2006-07 AND 2007-08, ACCORDING TO THE LD.REPR ESENTATIVE, THE ADDITION SHOULD BE MADE ONLY IN THE HANDS OF M/S T.K. CHACKO & CO AND NOT IN THE HANDS OF PRESENT ASSESSEE. ACCORDING TO THE LD.REP RESENTATIVE, THE MATERIAL FOUND IN THE COURSE OF SEARCH AND SURVEY OPERATION DOES NOT RELATE TO THE PRESENT ASSESSEE, VIZ. SHRI T.C. MANI. THE MATERIA L FOUND FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 RELATES TO M/S T.K. CHACKO & CO WHICH IS AN INDEPENDENT AND SEPARATELY ASSESSABLE U NIT. THE ASSESSEE IS ONLY A PARTNER IN M/S T.K. CHACKO & CO. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. THE LD.REPRESENTATIVE HAS PLACED HIS REL IANCE ON THE DECISION OF THE HYDERABAD BENCH OF THIS TRIBUNAL IN VISHNU AGAR WAL VS DY.CIT (2010) 45 DTR (HYD)(TRIB) 222, COPY OF WHICH IS AVAILABLE AT PAGE 48 OF THE PAPER BOOK AND SUBMITTED THAT ON IDENTICAL CIRCUMSTANCES, THE HYDERABAD BENCH OF THIS 43 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 TRIBUNAL FOUND THAT IN THE ABSENCE OF ANY MATERIAL FOR OTHER ASSESSMENT ASSESSMENT YEAR, THERE CANNOT BE ANY ADDITION. THE LD.REPRESENTATIVE HAS ALSO PLACED RELIANCE ON THE DECISION OF THIS TRIBUN AL IN THE CASE OF DR P SASIKUMAR (ITA NOS 251 TO 257/COCH/2011). THE LD.R EPRESENTATIVE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE BOMBAY HIGH COURT IN CIT VS BHAICHAND H GANDHI (1983) 141 ITR 67 (BOM). ON A Q UERY FROM THE BENCH WHETHER ANY PROCEEDINGS WERE INITIATED AGAINST M/S T.K. CHACKO & CO U/S 153C OF THE ACT ON THE BASIS OF THE SEIZED MATERIAL , THE LD.REPRESENTATIVE VERY FAIRLY SUBMITTED THAT NO PROCEEDINGS WAS INITI ATED EITHER U/S 153A OR U/S 153C OF THE ACT BY THE ASSESSING OFFICER. THER EFORE, ACCORDING TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY ADDITION IN THE HANDS OF THE PRESENT ASSESSEE ON THE BASIS OF THE MATERIAL FOUND IN THE COURSE OF SEARCH OPERATION. 38. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT M/S T.K. CHACKO & CO, A PARTNERSHIP FIRM IN WHICH THE ASSESS EE WAS A PARTNER WAS 44 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 AUTHORIZED BY THE STATE GOVERNMENT TO PURCHASE RICE AND WHEAT FROM CIVIL SUPPLIES DEPARTMENT AND SELL THE SAME TO 55 LICENSE D RETAIL RATION SHOPS. M/S T.K. CHACKO & CO IS ALSO AN INDEPENDENT ASSESSE E UNDER THE INCOME- TAX ACT. THEREFORE, THE INCOME, IF ANY, ACCRUED TO M/S T.K. CHACKO & CO HAS TO BE ASSESSED IN THE HANDS OF M/S T.K. CHACKO & CO AND NOT IN THE HANDS OF THE INDIVIDUAL PARTNERS. IN THE CASE ON HAND, M/S T.K. CHACKO & CO SOLD THE RICE AND WHEAT IN THE OPEN MARKET AFTER COLLECTING THE SAME FROM THE RETAIL RATION SHOPS. ALL THE RICE SUPPLIED TO RETAIL RATI ON SHOPS WERE NOT SOLD TO THE PUBLIC. SOME OF THE PUBLIC MIGHT NOT HAVE PURC HASED RICE AND WHEAT FROM THE RETAIL RATION SHOPS. THE UNSOLD RICE AND WHEAT WAS TAKEN BACK BY M/S T.K. CHACKO & CO AND IT WAS SOLD IN THE OPEN MA RKET. THIS IS VERY CLEAR FROM THE MATERIAL AVAILABLE ON RECORD. THEREFORE, ANY INCOME GENERATED OUT OF SALE OF RATION RICE AND WHEAT IN THE OPEN MA RKET HAS TO BE ASSESSED ONLY IN THE HANDS OF M/S T.K. CHACKO & CO AND NOT I N ANYBODY ELSES HAND. 39. WE HAVE ALSO CAREFULLY GONE THROUGH THE AFFIDAV ITS FILED BY THE RETAIL SHOP OWNERS, COPIES OF WHICH ARE AVAILABLE IN THE P APER BOOK. THE RATION 45 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 SHOP OWNERS HAVE CLEARLY STATED THAT SHRI T.C. MANI HAS ACTED ONLY AS A MEDIATOR. THESE AFFIDAVITS OF THE RATION SHOP OWNE RS WERE REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THE AFFIDAVITS WERE FILED AT THE REQUEST OF THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERE D OPINION THAT THERE IS NO JUSTIFICATION TO REJECT THE AFFIDAVITS FILED BY THE RATION SHOP OWNERS. THE ASSESSEE IS ENTITLED TO BRING ON RECORD THE CORRECT FACTS FOR APPRECIATION OF THE ASSESSING OFFICER. THEREFORE, EVEN IF THE AFFI DAVITS WERE FILED AT THE REQUEST OF THE ASSESSEE, THE ASSESSING OFFICER IS E NTITLED TO SEE WHETHER THE CONTENTS OF SUCH AFFIDAVITS ARE CORRECT OR NOT? TH IS TRIBUNAL DO NOT FIND ANY REASON TO DOUBT THE CORRECTNESS OF THE CONTENTS IN THE AFFIDAVITS. MOREOVER, THE COMMISSION SAID TO BE RECEIVED ON ARR ANGING SALE OF RICE AND WHEAT WAS ASSESSED IN THE HANDS OF THE ASSESSEE. T HEREFORE, THE PROFIT AND SALE CONSIDERATION, IF ANY, NEEDS TO BE CONSIDERED ONLY IN THE CASE OF M/S T.K. CHACKO & CO AND DEFINITELY NOT IN THE HANDS OF THE PRESENT ASSESSEE. APART FROM THAT IT IS NOT IN DISPUTE THAT THE MATER IAL AVAILABLE ON RECORD SHOWS THE SALE OF RICE AND WHEAT ONLY IN THE ASSESS MENT YEARS 2006-07 AND 2007-08 AND NOT IN OTHER ASSESSMENT YEARS. FOR OTH ER ASSESSMENT YEARS, 46 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THERE IS NO MATERIAL TO SHOW THAT THERE WAS ANY SEC OND SALE OF RICE AND WHEAT IN THE OPEN MARKET. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE DECISION OF THE HYDERABAD BENCH OF THIS TRIBUNA L IN THE CASE OF VISHNU AGARWAL (SUPRA) AND THE DECISION OF THIS TRIBUNAL I N THE CASE OF DR P SASIKUMAR (SUPRA) ARE SQUARELY APPLICABLE TO THE CA SE ON HAND. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HYDERABA D BENCH OF THIS TRIBUNAL IN THE CASE OF VISHNU AGARWAL (SUPRA) AND THE DECIS ION OF THIS TRIBUNAL IN THE CASE OF DR P SASIKUMAR (SUPRA) AND IN THE ABSENCE O F ANY MATERIAL, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDERS OF LOWER AUTHORITY. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED. 40. THE ASSESSEE AND THE DEPARTMENT HAS TAKEN ONE M ORE GROUND WITH REGARD TO ADDITION ON ACCOUNT OF SALE OF LIQUOR AND TURNOVER IN THE RESTAURANT FOR THE ASSESSMENT YEARS 2003-04, 2004-0 5, 2005-06, 2006-07 AND 2007-08. 47 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 41. SHRI M ANIL KUMAR, THE LD.DR SUBMITTED THAT THE REVENUE FOUND SEIZED DOCUMENT MKG 12, MORE PARTICULARLY, PAGES 7 & 11 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE WHICH SHOWED SALE OF LIQUO R INCLUDING SODA DURING THE FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT Y EAR 2006-07 AT RS.4,83,13,011. HOWEVER, THE ASSESSEE DISCLOSED ON LY RS.3,81,98,409. THE RESTAURANT SALES AS PER THE SEIZED MATERIAL IS RS.5 8,42,427. BUT THE ASSESSEE HAS DISCLOSED ONLY RS.9,37,011. ON THE BA SIS OF THE MATERIAL FOUND, ACCORDING TO THE LD.DR, THE ASSESSING OFFICE R ESTIMATED THE SUPPRESSED SALES FOR ALL THE ASSESSMENT YEARS. HOW EVER, THE CIT(A) ESTIMATED THE EXPENSES AT 35% OF THE TOTAL SALES AN D THE BALANCE 65% WAS TAKEN AS INCOME OF THE RESTAURANT. HOWEVER, IN RES PECT OF BAR THE CIT(A) ESTIMATED THE PROFIT AT 27% OF THE SUPPRESSED TURNO VER. ACCORDING TO THE LD.DR, WHEN THE SEIZED MATERIALS SHOW SUPPRESSION O F SALE OF LIQUOR AND SUPPRESSION OF TURNOVER IN THE RESTAURANT, THE ASSE SSEE MIGHT HAVE ADOPTED THE SAME METHOD FOR OTHER ASSESSMENT YEARS ALSO. T HEREFORE, THE JUDGMENT OF THE ANDHRA PRADESH HIGH COURT IN THE CA SE OF RAJNIK & CO (SUPRA) HAS TO BE FOLLOWED. 48 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 42. ON THE CONTRARY, SHRI T BHANUSEKHAR, THE LD.REP RESENTATIVE FOR THE ASSESSEE SUBMITTED THAT EXCEPT MKG 12, PAGES 7 & 11 AND MKG 60, PAGES 40 & 42 NO OTHER DOCUMENT IS AVAILABLE ON RECORD WI TH REGARD TO SALE OF LIQUOR OR SUPPRESSION OF TURNOVER IN THE RESTAURANT . THESE MKG 12 & 60 RELATE TO THE PERIOD PERTAINING TO ASSESSMENT YEAR 2006-07. FOR OTHER ASSESSMENT YEARS, THERE IS ABSOLUTELY NO DOCUMENT A VAILABLE ON RECORD. IN THE ABSENCE OF ANY MATERIAL AND STATEMENT RECORDED U/S 132(4), THERE CANNOT BE ANY ADDITION. THEREFORE, THE LD.REPRESEN TATIVE SUBMITTED THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION. 43. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR THE PURPOSE OF MAKING ADDITION IN THE INCOME-TAX ASSESSMENT THERE SHOULD BE SOME MATERIAL TO SHOW THAT THE ASSESSEE HAS SUPPRESSED THE TURNOVER. IN THE CASE BEFORE US, THE SEIZED DOCUMENTS MKG 60 & 12 SHOW THE SUPPRESSI ON OF SALE OF LIQUOR AND SALE IN RESTAURANT FOR THE ASSESSMENT YEAR 2006 -07 ONLY. ADMITTEDLY, 49 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THERE IS NO MATERIAL AVAILABLE ON RECORD WITH REGAR D TO OTHER ASSESSMENT YEARS FALLING IN THE BLOCK PERIOD. IN THE CASE OF RAJNIK & CO (SUPRA), ONE OF THE PARTNERS OF THE FIRM ADMITTED THAT SIMILAR PRAC TICE OF SUPPRESSING THE TURNOVER WAS ADOPTED IN OTHER ASSESSMENT YEARS ALSO . THE STATEMENT RECORDED U/S 133A IN THE COURSE OF SURVEY HAS NO EV IDENTIARY VALUE. THEREFORE, IN THE ABSENCE OF ANY STATEMENT OR MATER IAL TO SHOW THAT THE ASSESSEE HAD ADOPTED THE VERY SAME PRACTICE OF SUPP RESSIONS OF TURNOVER AND SALES FOR OTHER ASSESSMENT YEARS ALSO, THIS TRI BUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) OUGHT TO HAVE DELETED THE E NTIRE ADDITION FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06 AND 2007-08. T HE CIT(A) IS NOT JUSTIFIED IN SUSTAINING ANY PART OF THE ADDITION. ACCORDINGLY, THE ORDER OF THE CIT(A) FOR ASSESSMENT YEARS 2003-04 TO 2005-06 AND 2007-08 ARE SET ASIDE AND THE ENTIRE ADDITION IN RESPECT OF BAR AND RESTAURANT IS DELETED. 44. FOR THE ASSESSMENT YEAR 2006-07, ADMITTEDLY MKG 12 & 60 SHOW SUPPRESSION OF SALE OF LIQUOR AND SALES IN RESTAURA NT. THE ASSESSING OFFICER MADE THE ENTIRE DIFFERENCE OF TURNOVER AS INCOME OF THE ASSESSEE. THE 50 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 CIT(A) CONFIRMED THE ADDITION. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE EXPENDITURE INCURRED BY THE ASSESSEE FOR E ARNING THE INCOME HAS TO BE ALLOWED. THE VERY SAME CIT(A) IN THE CASE OF M/ S JOHN & CO HAS TAKEN ONLY 25% OF THE SUPPRESSED TURNOVER AS PROFIT. FOR ASSESSMENT YEARS 2003- 04 TO 2005-06 AND 2007-08 THE CIT(A) UPHELD THE PRO FIT AT 27% ON BAR AND 65% ON THE RESTAURANT. THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT PROFIT ESTIMATED BY CIT(A) IS EXORBITANT AND NOT BA SED ON ANY COMPARABLE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT EST IMATING PROFIT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AT 25% ON BAR AND 3 5% ON RESTAURANT WOULD MEET THE ENDS OF JUSTICE. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES FOR ASSESSMENT YEAR 2006-07 IS MODIFIED AND THE ASSESSI NG OFFICER IS DIRECTED TO ASSESS THE INCOME AT 35% OF THE SUPPRESSED TURNOVER IN RESPECT OF RESTAURANT AND 25% ON THE SUPPRESSED TURNOVER IN RE SPECT OF BAR. 45. THE REVENUE HAS TAKEN ONE MORE GROUND WITH REGA RD TO COST OF CONSTRUCTION FOR THE ASSESSMENT YEAR 2001-02. 51 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 46. WE HEARD SHRI M ANIL KUMAR, THE LD.DR AND SHRI T BHANUSEKHAR, THE LD.REPRESENTATIVE FOR THE ASSESSEE. 47. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE I NVESTED RS.44,60,000 AS UNEXPLAINED INVESTMENT IN THE CONSTRUCTION OF TH E HOUSE. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT AN INVE STMENT OF RS.39,60,000 WAS MADE DURING THE FINANCIAL YEAR 1999-2000 RELEVA NT TO ASSESSMENT YEAR 2000-01. THE ASSESSING OFFICER FOUND THAT THE ASSE SSEE CLAIMED THAT INVESTMENT WAS MADE IN THE ASSESSMENT YEAR 2000-01 SINCE THE BLOCK PERIOD COMMENCES FROM ASSESSMENT YEAR 2001-02. IT IS ALSO AN ADMITTED FACT THAT COST OF CONSTRUCTION WAS NOT REFERRED TO VALUATION CELL OF THE DEPARTMENT. NO OTHER MATERIAL IS AVAILABLE ON RECO RD TO SUGGEST THAT THE ASSESSEE HAS MADE ANY UNEXPLAINED INVESTMENT DURING THE ASSESSMENT YEAR 2001-02. THE ONLY MATERIAL AVAILABLE ON RECORD IS STATEMENT U/S 132(4) RECORDED FROM THE ASSESSEE. IN THE ABSENCE OF ANY MATERIAL, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT INVESTMENT OF RS.39, 60,000 HAS TO BE TREATED AS INVESTMENT MADE IN THE ASSESSMENT YEAR 2 000-01. THEREFORE, 52 ITA NO. 445 TO 450/COCH/2011 ITA NO. 451 TO 457/COCH/2011 ITA NO. 487 TO 491/COCH/2011 ITA NO. 502 TO 508/COCH/2011 THE COST OF CONSTRUCTION CANNOT BE ADDED IN THE ASS ESSMENT YEAR 2001-02 SINCE ASSESSMENT YEAR 2000-01 FALLS BEYOND THE BLOC K PERIOD. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 48. IN THE RESULT, ALL THE APPEALS OF BOTH THE ASSE SSEES ARE PARTLY ALLOWED; APPEALS FILED BY THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH APRIL, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 26 TH APRIL, 2013 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH