The ACIT, Cen-circle-2, Ernakulam V. Sri.A. A. Jayakrishnan, Idukki

ITA 559/COCH/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8571 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-07-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 07-12-2018
• Court: TRIBUNAL

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO S . 559 - 561 / COCH/ 2 018 ASSESSMENT YEAR S : 2012 - 13, 2013 - 14 & 2014 - 15 THE ASSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2, KOCHI. VS. SHRI A. JAYAKRISHNAN, NANDANAM, TEMPLE ROAD , THODUPUZHA, IDUKKI - 685 584. [PAN: ACOPJ 9505H] (R EVENUE - AP PELLANT) (ASSE SSEE - RESPONDENT) REVENUE BY SMT. A.S. BINDHU, SR. DR ASSESSEE BY S HRI T.M. SREEDHARAN, SR. ADV. D ATE OF HEARING 11/07/2019 DATE OF PRONOUNCEMENT 15 / 0 7 /201 9 O R D E R PER CHANDRA POOJARI, AM: TH ESE APPEAL S FILED BY THE REVENUE ARE D IRECTED AGAINST THE COMMON ORDER OF THE CIT(A) - III , KOCHI DATED 17/09/2018 AND PERTAIN TO THE ASSESSMENT YEAR S 2012 - 13 TO 2014 - 15. 2. THE REVENUE HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL S WHICH ARE COMMON EXCEPT FOR VARIANCE IN FIGURES: 1) THE COMMISSIONER OF INCOME TAX (APPEALS) WHILE DELETING THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS, OVERLOOKED THE FACT THAT A SUM OF RS.3.17 CRORES WAS WITHDRAWN F ROM BANKS FOR THE PURPOSE OF CONSTRUCTION OF A BAR HOTEL AT THODUPUZHA OUT OF THE TOTAL CASH WITH D RAWALS OF RS. 6.44 CRORES. THIS WAS EVIDENCED BY THE COPIES OF THE CHEQUES OBTAINED FROM THE BANKS AND PLACED IN FILE. I.T.A. NO S . 559 - 561 /COCH/201 8 2 2) THE COMMISSIONER OF INCOME TAX(AP PEALS) WHILE DELETING THE ADDITIONS MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS, HAS OVERLOOKED THE SWORN STATEMENT DATED 7/8/2015 OF SHRI RAJENDRA BABU K.V. IN WHOSE NAME THE BEARER CHEQUES WAS ISSUED IN MOST OF THE CASES WHERE IN IT WAS ADMITTED THAT THE SIGNATURE ON THE BEARER CHEQUES BELONGS TO HIM AND THE MONEY WAS WITHDRAWN AS PER THE INSTRUCTIONS OF SHRI A. JAYAKRISHNAN, FOR THE PURPOSE OF HOTEL CONSTRUCTION WHICH WAS GOING ON AT HOTEL VYSALI. 3) THE CIT(A) HAS ERRED IN ACCEPTING THE COPY OF THE CER TIFICATE OBTAINED FROM THE THODUPUZHA MUNICIPALITY, ISSUED AT A LATER DATE, STATING THAT NO HOTEL OR COMMERCIAL BUILDING CONSTRUCTION WAS GOING ON AT THODUPUZHA, DURING THE PERIOD FROM 1/4/2011 TO 31/3/2014, WITHOUT VERIFICATION OF THE SAME. 3. THE FACT S OF THE CASE AS NARRATED IN ITA NO. 559/COCH/2018 ARE THAT SEARCH REVEALED LARGE FINANCIAL DEALINGS BETWEEN SHRI, SUNIL KUMAR OF KOLLAM AND THE ASSESSEE. THE ASSESSEE HA D ACCEPTED THE FOLLOWING LOANS FROM THE CONCERNS BELONGING TO SHRI SUNIL KUMAR @ SUNIL SWAMY. DATE A.Y CONCERN AMOUNT . 15.09.2011 2012 - 13 SABARI QUALITY FOODS RS. 2,00,00,000 / - 03.10.2011 2012 - 13 SABARI QUALITY FOODS RS. 1,44,00,000 / - 21.10.2011 2012 - 13 SABARI QUALITY FOODS RS. 6,00,000 / - 20.04.2012 2013 - 14 SA BARI SWITCH GEARS(P)LTD. RS. 1,25,00, 000/ - I.T.A. NO S . 559 - 561 /COCH/201 8 3 3.1 . THESE CREDITS APPEAR ED IN ASSESSEE S BANK ACCOUNTS WITH KOTAK MAHINDRA B ANK, THODUPUZHA BRANCH. A/C NO. 15531. IT WAS SEEN THAT THE ASSESSEE HA D REPAID PART OF THE LOANS IN THIS Y EAR ITSELF FROM THE SAM E BANK AS BELOW: DATE REPAYMENT AMOUNT CASH DEPOSITS PRIOR TO REPAYMENT 03.10.2011 SABARI QUALITY FOODS RS.10,00,000/ - 03.11.2011 SABARI QUALITY FOODS RS. 2,50,000 / - - 03.11.2011 RS. 3,50,000/ - 08.11.2011 SABARI QUALITY FOODS RS, 10 , 00, 000/ - 05.11.2011 RS. 5,45,000/ - 01.12.2011 SABARI QUALITY FOODS RS. 10,00,000/ - 30.11,20 1 1& 01.12.2011 RS. 1 2,75,000/ - 01.12.2011 SABARI QUALITY FOODS RS. 2,50,000 / - 03.02.2012 SABARI QUALITY FOODS RS. 2,50,000/ - 03 . 02.2012 RS . 2,50,000/ - 04.02.2012 SABARI QUALITY FOODS RS. 10,00,000/ - 04.02.2012 RS. 10,00,000/ - 05.03.2012 SABARI QUALITY FOODS RS. 2,50,000/ - 05.03.2012 RS. 2,50,000/ - 06.03.2012 SABARI QUALITY FOODS RS. 10,00,000/ - 06.03.2012 RS. 10,00,0 00/ - 30.03.2012 SUNIL KUMAR RS. 80,00,000 / - RS . 1,40 ,00,000 / - RS. 46,70,000 / - 3.2 IN ORDER TO EXPLAIN CASH DEPOSITS, THE ASSESSEE PREPARED A CASH BOOK. A LL THE CASH DEPOSITS IN BANK ACCOUNTS WERE EXPLAINED AS WITHDRAWAL FROM CASH B OOK AND DEPOSITS IN CASH BOOK WERE EXPLAINED AS WITHDRAWAL FROM BANK ACCOUNTS. CORRESPONDING TO THE DEPOSITS OF RS. 12,75,000 / - ON 30.11.2011 AND 01.12.2011, I.T.A. NO S . 559 - 561 /COCH/201 8 4 THERE WERE C ASH WITHDRAWALS SHOWN IN THE CASH BOOK ON THESE DAYS. SIMILARLY CORRESPONDING TO CASH DEPOSITS IN THE CASH BO O K, THERE WERE WITHDRAWALS FROM THE VARIOUS BANKS. TOTAL CASH INTRODUCED IN THE CASH BOOK IS AS FOLLOWS: DATE PARTICULARS AMOUNT 20.04.2011 EAP JEWELLERY RS. 30,00, 000 / - 20.04.2011 EAP JEWELLERY PARTNERS A/C RS. 1,20,0 0,000/ - 02.05.2011 FEDERAL BANK A/C 169277 RS. 1 ,65,000/ - 02.05.2011 FEDERAL BANK A/C 169277 RS. 14,85,000/ - 07.06.2011 FEDERAL BANK A/C 169277 RS. 10,00,000/ - 05.07.2011 FEDERAL BANK A/C 169277 RS. 20,00,000/ - 07.07.2011 FEDERAL BANK A/C 169277 RS. 30,00,000/ - 25.08.2011 FEDERAL BANK A/C 169277 RS. 22,00, 000/ - 01.09.2011 FEDERAL BANK A/C 169277 RS. 5,00,000/ - 15.09.2011 FEDERAL BANK A/C 169277 RS. 6,05,000/ - 17.09.2011 ING VYSYA A/C 15531 RS. 25,00,000/ - 17.09.2011 ING VYSYA A/C 15531 RS. 25,00,000/ - I.T.A. NO S . 559 - 561 /COCH/201 8 5 17.09.2011 ING VYSYA A/C 15531 RS. 25, 00 ,000/ - 17.09.2011 ING VYSYA A/C 15531 RS. 25,00,000/ - 26.09.2011 ING VYSYA A/C 15531 RS. 50,00,000/ - 01.10.2011 ING VYSYA A/C 15531 RS. 25,00,000/ - 03.10.2011 IN G VYSYA A/C 15531 RS. 20,00,000/ - 08.10.2011 ING VYSYA A/C 15531 RS . 24,00,000/ - 22.10.2011 ING VYSYA A/C 15531 RS. 6,00,000/ - 30.12.2011 KUMALY GATE RS. 6,00,000/ - 23.01.2012 ING VYSYA A/C 15531 RS. 10,00,000/ - 25.01.2012 ING VYSYA A /C 15531 RS. 4,00,000/ - 26.01.2012 WINGSPARK HOTEL RS. 10,00, 000/ - 14.02.2012 ING VYSYA A/C 15531 RS. 10,00,000/ - 14.02.2012 ING VYSYA A/C 15531 RS. 15,00,000/ - 01.03.2012 ING VYSYA A/C 15531 RS. 15,00,000/ - 01.03.2012 ING VYSYA A/C 15 531 RS. 15,00,000/ - 01.03.2012 ING VYSYA A/C 15531 RS. 20,00,000/ - I.T.A. NO S . 559 - 561 /COCH/201 8 6 30.03.2012 ING VYSYA A/C 15531 RS. 49 , 00,000/ - 31.03.2012 AGRICULTURAL INCOME RS. 6,00,000 / - L RS.6,44,55,000/ - 3.3 THE ASSESSING OFFICER NOTICED THAT WHEREAS THE ASS ESSEE DID NOT HAVE BOOKS IN FISH BUSINESS AND CLAIMED TO BE EARNING ONLY COMMISSION FROM THE FISH BUSINESS, FACED WITH THE SITUATION OF HAVING TO EXPLAIN THE CASH DEPOSITS IN BANK ACCOUNTS, THE ASSESSEE PREPARED A CASH BOOK CLAIMING THAT HE WAS BUYING AND SELLING FISH. IT WAS NOTICED THAT THROUGH THE EXPEDIENT OF THE CASH BOOK, HE CLAIMED TO BE EXPLAINING ALL THE CASH DEPOSITS IN THE BANK ACCOUNTS. DURING POST SEARCH INVESTIGATIONS, THE INSTRUMENTS USED FOR WITHDRAWING CASH FROM THE BANK, WERE CALLED FOR AN D EXAMINED AND IT WAS FOUND THAT ON THE BACK OF CERTAIN CHEQUES, THE NAME OF THE PERSON WITHDRAWING THE AMOUNT AND THE PURPOSE FOR WHICH IT WAS INTENDED WAS MENTIONED WHICH IS AS FOLLOWS: DATE PARTICULARS AMOUNT REMARKS WRITTEN AT THE BACK OF THE CHEQUE 20.04.201 1 EAP JEWELLERY RS. 30,00,000/ - 20 . 04. 2011 EAP JEWELLERY PARTNERS A/C RS. 1 ,20,00,000/ - 02.05 .201 1 FEDERAL BANK A/C 169277 RS. 1,65,000 / - 02.05.2011 FEDERAL BANK A/C 169277 RS. 14,85,000 / - I.T.A. NO S . 559 - 561 /COCH/201 8 7 07.06.201 1 FEDERAL BAN K A/C 169277 RS. 10,00,000/ - 05.07.2011 FEDERAL BANK A/C 169277 RS. 20,00,000/ - 07.07.2011 FEDERAL BANK A/C 169277 RS. 30,00,000/ - 25.08.2011 FEDERAL BANK A/C 169277 RS. 22,00,000/ - 01.09.2011 FEDERAL BANK A/C 169277 RS. 5,0 0,000 / - 15.09.2011 FEDERAL BANK A/C 169277 RS. 6,05,000 / - 17.09.201 1 ING VYSYA 15531 RS. 25,00,000/ - ON - GOING HOTEL CONSTRUCTION AT THODUPUZHA 17. 09.2011 ING VYSYA 15531 RS. 25,00,000/ - ON - GO ING HOTEL CONSTRUCTION AT THODUPUZHA 17.0 9.2011 ING VYSYA 15531 RS. 25,00,000 / - ON - GOING HOTEL CONSTRUCTION AT THODUPUZHA 17.09.2011 ING VYSYA 15531 RS. 25, 00,000 / - ON - GOING HOTEL CONSTRUCTION AT THODUPUZHA 26.09.2011 ING VYSYA 15531 RS. 50,00,000 / - ON - GOING HOTEL CONSTRUCTION AT THO DUPUZHA 01.10.2011 ING VYSYA 15531 RS. 25,00,000 / - 03.10.2011 ING VYSYA 15531 RS. 20,00, 000/ - ON - GOING HOTEL CONSTRUCTION AT THODUPUZHA I.T.A. NO S . 559 - 561 /COCH/201 8 8 08.10.2011 ING V YSYA 15531 RS. 24,00,000 / - CASH DRAWN FOR BAR CONSTRUCTION AT THODUPUZHA 22.10.2011 ING VYSYA 15531 RS. 6,00,000 / - WITHDRAWN BY HARISH 30.12.2011 KUMALY GATE RS. 6,00,000 / - 23.01.2012 ING VYSYA 15531 RS. 10,00,000 / - ON - GOING HOTEL CONSTRUCTION AT THODUPUZLIA 25.01.2012 ING VYSYA 15531 RS. 4,00,000 / - HOT EL VYSALI, THODUPUZHA 26.01.2012 WINGSPARK HOTEL RS. 4,00,000/ - 14.02.2012 ING VYSYA 15531 RS. 10,00,000 / - FOR CONSTRUCTION OF BAR HOTEL 14.02.2012 ING VYSYA 15531 RS. 15,00,000 / - FOR CONSTRUCTION OF BAR HOTEL 01.03.201 2 IN G VYSYA 15531 RS. 15,00,000 / - AMOUNT DRAWN FOR CONSTRUCTION OF BAR HOTEL 01.03.2012 ING VYSYA 15531 RS. 20,00,000 / - CASH DRAWN FOR B AR HO T E L CONSTRUCTION 30.03.2012 ING VYSYA 1 5531 RS. 49,00,000 / - HOTEL V YSALI THODUPUZHA 31.03.2012 AGRICULTURAL INCOME RS. 6,00,000 / - RS.6,44,55,000 / - 3 . 4 FROM THE ABOVE, THE ASSESSING OFFICER NOTICED THAT OUT OF THE CASH CLAIMED TO HAVE BEEN INTRODUCED IN THE BOOKS OF THE FISH BUSINESS BY WITHDRAWING FROM THE BANK, RS. 3 ,17,00, 000 / - WAS WITHDRAWN FOR THE PURPOSE OF CONSTRUCTION OF A BAR I.T.A. NO S . 559 - 561 /COCH/201 8 9 HOTEL AT THODUPUZHA WHICH WAS EVIDENCED BY THE COPIES OF CHEQUES OBTAINED FROM THE B ANK AND HENCE , THE CASH DEPOSITS AMOUNTING TO RS. 3.17 CRORE S WERE HELD TO BE UNEXPLAINED AND TREATED AS THE INCOME OF THE ASSESSEE. THE ASSESSING OFFICER REJECTED THE CONTENTION OF THE ASSESSEE T HAT THERE WAS NO HOTEL CONSTRUCTION D URING THE YEAR AND THE STAFF IN THE B ANK MIGHT HAVE RECORDED THE NARRATION IN THE CHEQUE. THE ASSESSEE FURTHER ENCLOSED A CERTI FICATE FROM THE S ECRETARY, T HODUPUZHA M UNICIPALITY STATING THAT HE HA D NOT CONSTRUCTED ANY COMMERCIAL BUILDING DURING THE SAID PERIOD. THE ASSESSING OFFICER OBSERVED THAT A CASE WAS NOT BROUGHT OUT THAT A NEW COMMERCIAL BUILDING HAD BEEN CONSTRUCTED BUT THERE COULD ALWAYS BE AN EXTENSION. THE ASSESSING OFFICER RELIED ON THE SWORN STATEMENT DATED 07.08.2015 FROM SHRI RAJENDRA B ABU K . V. IN WHOSE NAME THE BEARER CHEQUE WAS ISSUED IN MOST OF THE CASES. SHRI RAJENDRA BABU ADMITTED THAT THE SIGNATURE ON THE BEA RER CHEQUE BELONG ED TO HIM AND THE MONEY WAS WITHDRAWN AS PER THE INSTRUCTIONS OF SHRI JAYAKRISHNAN. FURTHER, HE STATED THAT HOTEL C ONSTRUCTION WAS INDEED GOING ON AT HOTEL V YSALI, THODUPUZHA AND THE CONSTRUCTION WAS MANAGED BY ONE SHRI ABHILASH. FROM THE ABOVE, THE ASSESSING OFFICER FOUND THAT WHERE THE PURPOSE OF WITHDRAWAL WAS MENTIONED IN THE REVERSE SIDE OF THE CHEQUE AND ALSO AUTHENTICATED BY THE PERSON MAKING THE WITHDRAWAL, IT WAS APPARENT THAT THE WITHDRAWAL WAS MADE FOR THAT VERY PURPOSE. IN THE C IRCUMSTANCES, THE ASSESSING OFFICER TREATED THE AMOUNT OF RS. 3.17 CRORE S BEING THE AMOUNT OF WITHDRAWALS TAKEN FOR HOTEL C ONSTRUCTION WHICH WAS SHOWN AS SOURCE OF CASH IN THE CASH BOOK AS INCOME FROM 'OTHER SOURCES' FOR THE YEAR UNDER CONSIDERATION. I.T.A. NO S . 559 - 561 /COCH/201 8 10 4. BEFORE THE CIT(A), THE ASSESSEE E XPLAINED THAT H OTEL VYSALI AT THODUPUZHA WAS A FAMILY RESTAURANT AND RUN IN ASSOCIATION WITH TWO MORE PARTNERS. THIS H OTEL VYSALI WAS NOT OWNED BY HIS FIRM AND IT WAS TAKEN ON RENT. HE ALSO GAVE A RECENT PHOTOGRAPH OF T HE HOTEL, WHICH PROVE D THAT IT WAS A REASONABLY SMALL PREMISE AND NO CONSTRUCTION WORK WAS CARRIED OUT AT THE SAID HOTEL. THE CIT(A) OBSERVED THAT THE SOURCE OF BANK DEPOSITS WAS EXPLAINED AND THERE WAS NO DISPUTE ABOUT WITHDRAWALS MADE. ACCORDING TO THE C IT(A), THE A.O. HA D NOT POINTED OUT TO ANY SPECIFIC MISTAKES IN THE CASH - BOOK MAINTAINED BY THE ASSESSEE AND THE A.O. HA D ALSO NOT INDICATED ANY OTHER SOURCE THROUGH WHICH CASH WAS BEING GENERATED WHICH WAS THEN DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSE E. ACCORDING TO THE CIT(A), NO INCRIMINATING MATERIAL EVIDENCING GENERATION OF UNACCOUNTED CASH WAS FOUND DURING THE COURSE OF SEARCH AND CASH WITHDRAWALS FROM ONE'S OWN BANK ACCOUNT CANNOT BE TREATED AS INCOME. I N VIEW OF ALL THESE FACTS DISCUSSED ABOVE, THE CIT(A) WAS OF THE VIEW THAT THE A.O. WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 3,17,00,000/ - ON ACCOUNT OF CASH WITHDRAWAL FROM THE B ANK AND DELETED THE ADDITION. 4.1 SIMILARLY, F OR THE ASSESSMENT YEAR 2013 - 14 , ON IDENTICAL REASONS, THE CIT(A) DELETED THE ADDITION OF RS. 1.62 CRORES ON ACCOUNT OF CASH WITHDRAWAL FROM OWN BANK ACCOUNT . I.T.A. NO S . 559 - 561 /COCH/201 8 11 4.2 FOR THE ASSESSMENT YEAR 2014 - 15 , A DDITION WAS MADE FOR AN AMOUNT OF RS. 52,25,000 / - ON ACCOUNT OF CASH WITHDRAWAL FROM B ANK ACCOUNT, THE A.O. OBSERVE D THAT AS PER THE NARRATION AT THE BACK OF THE WITHDRAWAL SLIP, THE CASH WAS WITHDRAWN FOR PAYING BAR LICENSE FEE AND THIS WAS AN UNEXPLAINED EXPENDITURE OF THE ASSESSEE. IT WAS CONTENDED THAT THE ASSESSEE HAD NO BAR LICENSE IN HIS NAME AND NO SUCH FEES WE RE PAID BY HIM. ON IDENTICAL REASONS, THE CIT(A) DELETED THE ADDITION OF RS. 52,25,000 / - ON ACCOUNT OF CASH WITHDRAWAL FROM THE B ANK ACCOUNT . 5. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. THE CONTENTION OF THE LD. DR IS THAT THERE IS EVIDENCE TO SHOW THAT THE ASSESSEE HAS USED THE AMOUNT WITHDRAWN FROM BANK FOR THE CONSTRUCTION OF HOTEL VYSALI IN THODUPUZHA WHICH WAS REFLECTED IN THE BACK SIDE OF THE CHEQUE. HOWEVER, THE CIT(A) SOLELY BASED ON THE CERTIFICATE ISSUED BY THE SECRETARY, THODUPUZH A MUNICIPALITY DELETED THE ADDITION BY OBSERVING THAT THERE WAS NO CONSTRUCTION OF COMMERCIAL BUILDING OR HOTEL DURING THE PERIOD. ACCORDING TO THE LD. DR, THE DETAILS WRITTEN ON THE BACK SIDE OF THE CHEQUE IS HAVING DIRECT NEXUS WITH THE PURPOSE FOR WHIC H THE MONEY WAS WITHDRAWN FROM THE BANK ACCOUNT AND ONCE MONEY WAS SPENT FOR CONSTRUCTION OF HOTEL BUILDING, THAT AMOUNT WAS NOT AVAILABLE WITH THE ASSESSEE FOR DEPOSITING IN THE BANK ACCOUNT. HENCE, SHE SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER M AY BE CONFIRMED. 6. THE LD. AR SUBMITTED THAT FOR ASSESSMENT YEAR 2012 - 13, THE ENTIRE AMOUNTS WERE WITHDRAWALS FROM BANK ACCOUNT AND UTILIZED FOR CONSTRUCTION OF BAR AT THODUPUZHA WHICH WAS ACCEPTED BY THE ASSESSING OFFICER. HOWEVER, CASH I.T.A. NO S . 559 - 561 /COCH/201 8 12 WITHDRAWALS WERE TAKEN AS UNEXPLAINED AND TREATED AS INCOME OF THE ASSESSEE. THE LD. AR SUBMITTED THAT FOR THE ASSESSMENT YEAR 2013 - 14 , THE ASSESSING OFFICER CONSIDERED THE BANK WITHDRAWALS FOR THE PERIOD FROM 30.04.2012 TO 30.03.2013, AGGREGATING TO RS.1,62,00,000/ - AS UNEXPLAINED CREDIT AND M ERELY FROM THE WITHDRAWALS MADE FROM THE BANK ACCOUNT IN ING VYSYA BANK. SBT AND FEDERAL BANK, THE ASSESSING OFFICER AGGREGATED THE WITHDRAWALS AT RS.1,62,00, 000/ - WHICH WAS TREATED AS UNDISCLOSED INCOME. THE CIT(A), AFTER CONS IDERING THE FACTS AND LACK OF PROPER VERIFICATION, DELETED THE ADDITION. THE LD. AR SUBMITTED THAT FO R THE A SSESSMENT Y EAR 2014 - 15, THE ASSESSING OFFICER ADDED RS.52 LAKHS, WHICH REPRESENTED THE WITHDRAWAL FROM THE BANK ACCOUNT IN ING VYSYA BANK ON 31.03. 2014. IT WAS SUBMITTED THAT T WO WITHDRAWALS OF RS.10,00,000/ - AND RS.42,25,000/ - WERE TREATED AS UNEXPLAINED CREDIT WITHOUT ANY VERIFICATION OR ENQUIRY. ACCORDING TO THE LD. AR, RS.42,25,000/ - WAS WITHDRAWN FOR RENEWING BAR LICENCE FEE AND THE ABOVE SUM WAS ADDED MECHANICALLY AS UNDISCLOSED INCOME WHICH WAS RIGHT LY DELETED BY THE CIT(A). 6.1 THE LD. AR POINTED OUT THAT FOR ASSESSMENT YEAR 2012 - 13, THE EXPLANATION OF THE ASSESSEE THAT THERE WAS NO HOTEL CONSTRUCTION MADE DURING THE YEAR WHICH WAS CE RTIFIED BY THE SECRETARY, THODUPUZHA MUNICIPALITY STATING THAT THE ASSESSEE HA D NOT CONSTRUCTED ANY COMMERCIAL BUILDING DURING THE SAID PERIOD WAS NOT CONSIDERED BY THE ASSESSING OFFICER . IT WAS SUBMITTED THAT THE UTILIZATION OF THE AMOUNT WITHDRAWN FROM THE B ANK ACCOUNT OVER THE PERIOD OF ONE YEAR WAS TRULY REFLECTED IN THE CASH BOOK AS FOR BUSINESS PURPOSES AND NOT FOR BUILDING CONSTRUCTION. IT WAS I.T.A. NO S . 559 - 561 /COCH/201 8 13 SUBMITTED THAT THE EMPLOYEE WHO WITHDREW THE CASH FROM THE BANK ACCOUNT WAS EXAMINED. HOWEVER, IT WAS SUBM ITTED THAT THE ASSESSING OFFICER WITHOUT ANY VERIFICATION OR WITHOUT BRINGING ANY EVIDENCE OR MATERIAL ON RECORD MECHANICALLY TREATED THE UTILIZATION OF THE CASH AS UNEXPLAINED CRE DITS AND BROUGHT THE SAME AND ASSESSED THE SAME BY INVOKING SECTION 69 OF TH E ACT. 6. 2 AS REGARDS, THE ADDITION OF RS.52,25,000/ - FOR THE ASSESSMENT YEAR 2014 - 15, T HE ASSESSEE CLEARLY EXPLAINED THAT THE WITHDRAWAL OF RS.52,25,000/ - WA S FOR PAYMENT OF BAR LICENSE RENEWAL FEES AND THE SAME WAS UTILIZED FOR THAT PURPOSE AS PER TH E CASH BOOK. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HA D MECHANICALLY ADDED THE AMOUNT BY RELYING UPON THE COPIES OF CHEQUES OBTAINED FROM B ANK AND THE A DDITION WAS MISCONCEIVED SINCE THE EXPENDITURE IS TREATED AS INCOME WHEN THE SOURCE IS FROM BANK WI THDRAWAL. 6.3 IT WAS SUBMITTED THAT T HE ASSESSING OFFICER ALSO DISALLOWED PART OF THE INTEREST CLAIM FOR THE ASST. YEAR 2010 - 11 AND THE ASSESSEE'S APPEAL AGAINST THESE DISALLOWANCES WERE DISMISSED AND ADDITIONS WERE SUSTAINED BY THE CIT(A). AGAINST TH IS ORDER, NO SECOND APPEAL HAS BEEN FILED BY THE ASSESSEE. 6 . 4 SIMILARLY, FOR THE ASST. YEARS 2011 - 12 TO 2014 - 15, THE CIT (A) ALSO SUSTAINED DISALLOWANCE OF MAJOR PART OF AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE RESULTING IN TREATING SUBSTANTIAL PO RTION OF THE AGRICULTURAL INCOME AS BUSINESS INCOME AND THE DISALLOWANCE OF THE AGRICULTURAL INCOME WA S TO THE EXTENT OF RS.2.25 LAKHS FOR 2011 - I.T.A. NO S . 559 - 561 /COCH/201 8 14 12 , RS.5 LAKHS FOR 2012 - 13 AND RS.6 LAKHS FOR 2014 - 15. NO 2 ND APPEAL WAS FILED BY THE ASSESSEE. IT WAS SUBMITT ED THAT ALL THE BANK TRANSACTIONS OF DEPOSITS AND WITHDRAWALS WERE ALSO TRULY REFLECTED IN THE BOOKS OF ACCOUNTS AND HAD BEEN ACCEPTED. IT WAS SUBMITTED THAT THE ALLEGATION THAT THE ASSESSEE UTILIZED THE AMOUNT WITHDRAWN FOR CONSTRUCTION OF COMMERCIAL BU ILDING WAS ALSO DISPROVED BY THE ASSESSEE AND ALSO SUBSTANTIATED BY THE CERTIFICATE ISSUED BY THODUPUZHA MUNICIPALITY. THE LD. AR RELIED ON THE FINDINGS OF THE CIT(A) FOR ALL THE ASSESSMENT YEARS. IN ADDITION TO THE ABOVE AND ON MERITS OF THE CASE, FOR THE ASST. YEAR 2014 - 15, THE LD. AR SUBMITTED THAT THE TAX EFFECT ON RS.50,25,000/ - WA S BELOW THE MONETARY LIMIT FOR SUSTAINING THE DEPARTMENTAL APPEAL AND THEREFORE, TH IS GROUND ALSO MAY BE CONSIDERED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RECORD. ADMITTEDLY, THE ASSESSEE HAD INTRODUCED RS.6,44,55,000/ - INTO CASH BOOK FOR THE ASSESSMENT YEAR 2012 - 13 AS PER THE NARRATION WRITTEN ON THE BACK SIDE OF THE CHEQUE. OUT OF THE ABOVE AMOUNT, RS.3,17,00,000/ - WAS WITHDRAWN BY THE ASSESSEE FROM THE BANK ACCOUNT FOR THE PURPOSE OF CONSTRUCTION OF BAR/HOTEL IN THODUPUZHA. THIS WAS EVIDENCED BY COPIES OF CHEQUES OBTAINED FROM THE BANK BY THE ASSESSING OFFICER. AS SUCH, THE ASSESSING OFFICER OBSERVED THAT THE SUM OF RS.3.17 CRORES WHICH WAS INTRODUCED INTO THE CASH BOOK WAS NOT AT ALL AVAILABLE WITH THE ASSESSEE AS IT WAS USED FOR THE CONSTRUCTION OF BAR/HOTEL. TO SUPPORT THIS, THE ASSESSING OFFICER RELIED ON THE SWORN STATEMENT RECORDED FROM SHRI RAJENDRA BABU K.V. IN WHOSE NAME THE BEARER CHEQUE WAS I SSUED IN MOST OF THE CASES. SHRI RAJENDRA BABU ADMITTED THAT THE SIGNATURE ON THE BACK SIDE OF THE CHEQUE BELONGED TO HIM AND MONEY WAS I.T.A. NO S . 559 - 561 /COCH/201 8 15 WITHDRAWN AS PER THE INSTRUCTIONS OF THE ASSESSEE, SHRI JAYAKRISHNAN. THE ASSESSING OFFICER OBSERVED THAT CONSTRUCTION OF HOTEL WAS GOING AT HOTEL VYSALI IN THODUPUZHA A ND CONSTRUCTION WAS MANAGED BY ONE SHRI ABHILASH. HOWEVER, CONTRARY TO THIS, THE CIT(A) OBSERVED THAT THERE WAS NO CONSTRUCTION ACTIVITY WITH REGARD TO HOTEL VYSALI IN THODUPUZHA AND THE SAID HOTEL WAS OWNED BY THE ASSESSEE AND TWO MORE PARTNERS AND NOT BY THE ASSESSEE HIMSELF. THE BUILDING WAS TAKEN ON RENT AND NO CONSTRUCTION WORK HAS BEEN CARRIED OUT AT THE SAID HOTEL. FOR THIS PURPOSE, HE RELIED ON THE CERTIFICATE ISSUED BY SECRETARY, THODUPUZHA MU NICIPALITY. HOWEVER, WE FIND THAT EACH ENTRY IN THE CASH BOOK FOR INTRODUCTION OF CASH WAS NOT AT ALL EXPLAINED BY THE ASSESSEE. THE ASSESSEE MADE A GENERAL STATEMENT THAT THERE WAS NO CONSTRUCTION ACTIVITY AT HOTEL VYSALI AND THE AMOUNT WAS AVAILABLE FOR INTRODUCTION INTO THE CASH BOOK . IN OUR OPINION, THE ASSESSEE HAS TO EXPLAIN EACH ENTRY IN THE CASH BOOK. THE ASSESSING OFFICER HAS TO PROVE THAT IF THERE IS CONSTRUCTION ACTIVITY, HOW MUCH AMOUNT HAS BEEN SPENT FOR CONSTRUCTION ACTIVITY AT THE SAID HOTE L AFTER PROVIDING OPPORTUNITY OF CROSS - EXAMINATION OF THE PERSON WHOSE STATEMENT WAS RELIED ON BY THE ASSESSING OFFICER FOR MAKING SUCH ADDITIONS FOR THE SE ASSESSMENT YEARS UNDER CONSIDERATION. WITH THIS OBSERVATION, WE REMIT THE ENTIRE ISSUE IN DISPUTE IN ALL THESE APPEALS TO THE FILE OF THE ASSESSING OFFICER FOR FRESH CONSIDERATION. THIS GROUND OF APPEALS OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO S . 559 - 561 /COCH/201 8 16 9. IN THE RESULT, THE APPEAL S OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH JULY, 2019 SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 15 TH JULY, 2019 GJ COPY TO: 1 . SHRI A. JAYAKRISHNAN, NANDANAM, TEMPLE ROAD, THODUPUZHA, IDUKKI - 685 584. 2. THE A SSISTANT COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 2 , KOCHI. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) , KO CHI. 4. THE COMMISSIONER OF INCOME - TAX, CENTRAL, KOCHI. 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN