ITO, Kollam V. Dr D.Rajan, Adoor

ITA 550/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61451 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-04-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 14-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: A S NARAYANAMURTHY
• Keywords: Income from undisclosed sources
• Section: 69C; 133A

Judgement Text

1 ITA NO.550/COCH/2010 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. 550/COCH/2010 (ASSESSMENT YEAR 1999-2000) ITO, WD.4 VS SHRI D RAJAN KOLLAM KALPAKA PHARMACEUTICALS ADOOR PAN : AAXPD4624J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ABHIMANYU SINGH YADAV RESPONDENT BY : SHRI A.S. NARAYANAMURTHY DATE OF HEARING : 23-04-2012 DATE OF PRONOUNCEMENT : 27-04-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIVANDRUM DATED 29-07-2010 FOR THE ASSESSMENT YEAR 1999- 2000. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS ADDIT ION OF RS.6,59,697 U/S 69C OF THE ACT. 3. SHRI ABHIMANYU SINGH YADAV, THE LD.DR SUBMITTED THAT IN THE FIRST ROUND OF LITIGATION, THIS TRIBUNAL REMANDED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO CONSIDER THE LOAN TAKEN FROM KERALA FINANCE CORPORATION. THE ASSESSING OFFICER, AFTER CONSIDERING THE LOAN TAKEN BY THE AS SESSEE FROM KERALA FINANCE 2 ITA NO.550/COCH/2010 CORPORATION TO THE EXTENT OF RS.18,30,000 NOTICED F ROM THE DAY BOOK FOUND DURING THE COURSE OF SURVEY U/S 133A OF THE ACT ON 23-04-1999 THAT THE ASSESSEE HAS MADE TWO WITHDRAWALS FOR BUILDING CONSTRUCTION. HOWEVER, AS PER THE CASH BOOK PRODUCED BY THE ASSESSEE AT THE TIME OF ASSESSMENT THERE WAS NO SUC H WITHDRAWAL UPTO 14-12-1998. THEREFORE, THE ASSESSING OFFICER CAME TO THE CONCLU SION THAT THE WITHDRAWAL AS ON 23-04- 1999 I.E. THE DATE OF SURVEY TO THE EXTENT OF RS. 1 1,89,000 HAS COME OUT OF UNACCOUNTED INCOME. IN THE CIRCUMSTANCES, THE ASSESSING OFFICE R FOUND THAT THERE IS NO NEED FOR SEPARATE CREDIT OF THE LOAN AVAILED BY THE ASSESSEE FROM KERALA FINANCE CORPORATION. ON APPEAL BY THE ASSESSEE, THE COMMISSIONER OF INCOME- TAX(A) FOUND THAT THE ASSESSING OFFICER NOTICED THAT FROM THE LOAN OF RS.18,30,000 THE ASSESSEE HAS WITHDRAWN RS.9,15,000 EACH ON 14-01-1998 AND 07-02-1998. THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THE ORIGINAL ASSESSMENT ORDER GOT MERGED WITH THE ORDER OF THE TRIBUNAL AND THE TRIBUNAL HAS CONSIDERED THE WITHDRAWAL FOUND IN THE DIARY SEIZED BY THE DEPARTMENT AT THE TIME OF SURVEY OPERATION. ACCORDINGLY, THE COMMISSIONER OF INCOME-TAX(A) DELETED THE ADDITION. ACCORDING TO THE LD.DR, THE WITHDRAWALS SHOWN BY THE ASSESSEE ON VARIOUS DATES WERE NOT EXPLAINED PROPERLY BEFORE TH E ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY MADE THE ADDITION TO THE EXTENT OF RS.6,59,697. 4. ON THE CONTRARY, SHRI A.S. NARAYANAMURTHY, THE L D.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE SPECIFIC DIRECTION OF T HE TRIBUNAL WAS TO CONSIDER THE LOAN AVAILED BY THE ASSESSEE FROM KERALA FINANCE CORPORA TION AND SUCH A LOAN WOULD BE AVAILABLE IN THE HANDS OF THE ASSESSEE FOR MAKING F URTHER INVESTMENT. THE ASSESSING OFFICER FAILED TO CONSIDER THE LOAN AVAILED BY THE ASSESSEE FROM KERALA FINANCE CORPORATION WHEREAS THE COMMISSIONER OF INCOME-TAX( A) HAS RIGHTLY DELETED THE ADDITION. 4. WE HAVE CONSIDERED THE SUBMISSIONS ON EITHER SID E AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE ORIGINAL ROUN D OF LITIGATION, THIS TRIBUNAL FOUND THAT THE LOAN AVAILED FROM KERALA FINANCE CORPORATION WA S NOT PROPERLY EXAMINED AND 3 ITA NO.550/COCH/2010 APPRECIATED BY THE LOWER AUTHORITIES. THE TRIBUNAL HAS ALSO FOUND THAT THE LOAN AVAILED BY THE ASSESSEE FROM KERALA FINANCE CORPORATION WOU LD BE AVAILABLE FOR MAKING INVESTMENT IN THE HANDS OF THE ASSESSEE. ACCORDING LY, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO RE-EXAMINE THE ISSUE AFTER CON SIDERING THE LOAN AVAILED BY THE ASSESSEE FROM KERALA FINANCE CORPORATION. DURING T HE COURSE OF RE-EXAMINATION AS PER THE DIRECTION OF THIS TRIBUNAL, THE ASSESSING OFFIC ER FOUND THAT AS PER THE DAY BOOK FOUND DURING THE COURSE OF SURVEY OPERATION ON 23-04-1999 THERE WERE TWO WITHDRAWALS. THE ASSESSEE HAS SHOWN WITHDRAWAL OF RS.1 LAKH ON 18-05 -1998 AND ANOTHER WITHDRAWAL OF RS. 10,89,000 ON 27-09-1998. THIS WITHDRAWAL WAS N OT FOUND IN THE CASH BOOK PRODUCED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDIN GS. LIKEWISE, AN AMOUNT OF RS.5,49,000 WAS FOUND TO BE WITHDRAWN ON 18-12-1998 AS PER THE DAY BOOK FOUND DURING THE COURSE OF SURVEY OPERATION. HOWEVER, AS PER THE DAY BOOK PRODUCED BY THE ASSESSEE AT THE TIME OF ASSESSMENT PROCEEDINGS THER E WAS WITHDRAWAL OF RS. 1 LAKH ONLY. SO THE ASSESSING OFFICER FOUND THAT THERE WAS A DIF FERENCE OF RS.4,49,000. AS OBSERVED BY COMMISSIONER OF INCOME-TAX(A), THE ASSESSEE HAS SHOWN THE WITHDRAWALS OF RS.9,15,000 EACH ON 24-01-1998 AND 07-02-1998 FROM THE LOAN TAKEN FROM THE KERALA FINANCE CORPORATION TO THE EXTENT OF RS.18,30,000. IF THAT IS SO, APART FROM THE LOAN TAKEN FROM KERALA FINANCE CORPORATION TO THE EXTENT OF RS.18,30,000 THERE WAS A DIFFERENCE IN THE WITHDRAWALS BETWEEN THE CASH BOOK FOUND DURING THE COURSE OF SURVEY ACTION AND THE CASH BOOK PRODUCED BEFORE THE ASSESS ING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THIS FACT WAS BROUGHT OUT IN THE ASSESSMENT ORDER. THE DIRECTION OF THIS TRIBUNAL WAS TO EXAMINE THE AVAIL ABILITY OF THE FUNDS TO THE EXTENT OF LOAN TAKEN BY THE ASSESSEE FROM KERALA FINANCE CORP ORATION. IT DOES NOT MEAN THAT THE OTHER WITHDRAWALS SHOWN BY THE ASSESSEE IN THE CASH BOOK FOUND DURING THE COURSE OF SURVEY ACTION AND THAT PRODUCED IN THE ASSESSMENT P ROCEEDINGS NEEDS TO BE IGNORED. SINCE THERE WAS SOME DIFFERENCE IN THE WITHDRAWALS FOUND IN THE CASH BOOKS APART FROM THE WITHDRAWALS SHOWN IN RESPECT OF LOAN AVAILED BY THE ASSESSEE FROM KERALA FINANCE CORPORATION, WE MAY NOT BE ABLE TO SAY THAT THE ASS ESSING OFFICER HAS EXCEEDED HIS LIMITS WHILE RE-CONSIDERING THE ISSUE AS PER THE DIRECTION OF THIS TRIBUNAL. THEREFORE, THE 4 ITA NO.550/COCH/2010 COMMISSIONER OF INCOME-TAX(A) COMMITTED A MISTAKE I N COMING TO THE CONCLUSION THAT THERE WAS NO NEED OF MAKING ADDITION ON THE SAME PO INT ON WHICH THE ADDITION WAS MADE IN THE ORIGINAL ASSESSMENT. THE TRIBUNAL HAD DIRECTED THE ASSESSING OFFICER TO CONSIDER THE LOAN AVAILED BY THE ASSESSEE FROM KERA LA FINANCE CORPORATION WHICH WOULD BE AVAILABLE FOR MAKING INVESTMENT IN THE CONSTRUCT ION. WHEN THERE WAS A FURTHER WITHDRAWAL FROM THE CASH BOOK AS FOUND BY THE ASSES SING OFFICER IT WAS FOR THE ASSESSEE TO EXPLAIN THE SOURCE OF SUCH WITHDRAWALS AND THE D EPOSIT. ADMITTEDLY, THE COMMISSIONER OF INCOME-TAX(A) HAS NOT EXAMINED THE DIFFERENCE BETWEEN THE CASH BOOK / DAY BOOK FOUND DURING THE COURSE OF SURVEY OPERAT ION AND THAT WAS PRODUCED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSME NT PROCEEDINGS. THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THE CIT(A) HAS TO R ECONSIDER THE ISSUE IN THE LIGHT OF DIFFERENCE IN WITHDRAWALS IN THE CASH BOOK AND DAY BOOK FOUND IN THE COURSE OF SURVEY ACTION AND THAT WAS PRODUCED BEFORE THE ASSESSING O FFICER. SINCE THE COMMISSIONER OF INCOME-TAX(A) HAS NOT TAKEN SUCH AN EXERCISE, THIS TRIBUNAL IS OF THE OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE COMMISSIONER OF INCOME-TAX(A). ACCORDINGLY, THE ORDER OF COMMISSIONER OF INCOME-TAX(A) IS SET A SIDE AND MATTER IS RESTORED TO HIS FILE FOR RECONSIDERATION. THE COMMISSIONER OF INCOME-TA X(A) SHALL RE-CONSIDER THE ISSUE AFTER TAKING INTO CONSIDERATION ALL THE RELEVANT MA TERIAL AVAILABLE ON RECORD AS ALSO ALL THE INVESTMENTS AND WITHDRAWALS MADE BY THE ASSESSEE IN THE LIGHT OF ABOVE OBSERVATIONS OF THIS TRIBUNAL AND DECIDE THE MATTER AFRESH IN ACCOR DANCE WITH LAW. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF APRIL, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 27 TH APRIL, 2012 PK/- 5 ITA NO.550/COCH/2010 COPY TO: 1. ITO, WD.4, KOLLAM 2. SHRI DR D RAJAN, KALPAKA PHARMACEUTICALS, ADOOR 3. THE COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH