G.Soman, Kollam V. DCIT, Kollam

ITA 598/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64890 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Business income; Document seized; Revised return; Documents seized
• Section: 68

Judgement Text

1 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/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. 599/COCH/2011 - A.Y. 2003-04 I.T.A NO. 600/COCH/2011 - A.Y. 2004-05 I.T.A NO. 601/COCH/2011 - A.Y. 2005-06 I.T.A NO. 602/COCH/2011 - A.Y. 2006-07 I.T.A NO. 603/COCH/2011 - A.Y. 2007-08 HOTEL AKASH & ROHINI VS THE DY.CIT, CENT.CIR. SHOPPING COMPLEX, PULAMON KOLLAM KOTTARAKKARA, KOLLAM PAN : AAAFH5910L (APPELLANT) (RESPONDENT) I.T.A NO. 593/COCH/2011 - A.Y. 2002-03 I.T.A NO. 594/COCH/2011 - A.Y. 2003-04 I.T.A NO. 595/COCH/2011 - A.Y. 2004-05 I.T.A NO. 596/COCH/2011 - A.Y. 2005-06 I.T.A NO. 597/COCH/2011 - A.Y. 2006-07 I.T.A NO. 598/COCH/2011 - A.Y. 2007-08 SHRI G SOMAN VS THE DY.CIT, CENT.CIR. 6/576, ROHINI BHAVAN KOLLAM PALLICKAL, KOTTARAKKARA, KOLLAM PAN : ADWPG2017J (APPELLANT) (RESPONDENT) ASSESSEES BY : SHRI R KRISHNA IYER REVENUE BY : MS. A.S. BINDHU 2 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 DATE OF HEARING : 09-08-2012 DATE OF PRONOUNCEMENT : 25-10-2012 O R D E R PER N.R.S. GANESAN (JM) THESE 11 APPEALS BY TWO TAXPAYERS ARE DIRECTED AGA INST THE INDEPENDENT ORDERS OF THE COMMISSIONER OF INCOME-TA X(A)-I, TRIVANDRUM. APPEALS IN THE CASE OF HOTEL AKASH & ROHINI PERTAIN TO ASSESSMENT YEARS 2003-04 TO 2007-08 WHEREAS APPEALS IN THE CASE OF S HRI G SOMAN PERTAIN TO ASSESSMENT YEARS 2002-03 TO 2007-08. SINCE COMMON ISSUES ARISE FOR CONSIDERATION WE HEARD ALL THE APPEALS TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORDER. 2. LET US FIRST TAKE APPEALS IN ITA NOS.599 TO 603/ COCH/2011. 3. THE FIRST COMMON ISSUE IN THESE APPEALS IS ADDIT ION OF RS. 29,700 FOR A.Y 2003-04; RS. 1,87,920 FOR A.Y. 2004-05; AND RS. 71,725 FOR A.Y. 2005-06 BEING THE DIFFERENCE OF ROOM RENT SHOWN IN THE SALE S-TAX RETURNS AND THE INCOME-TAX RETURNS. 4. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR T HE TAXPAYER SUBMITTED THAT THE INCOME FROM ROOM RENT WAS RS.1,49,700 FOR A.Y. 2003-04; RS.3,07,720 FOR A.Y. 2004-05; RS.1,91,725 FOR A.Y. 2005-06. ACCORDING TO THE LD.REPRESENTATIVE, THE RECEIPT OF RENT WAS DISC LOSED TO THE SALES-TAX DEPARTMENT ON THE BASIS OF THE GROSS RECEIPT. HOWE VER, WHILE FILING THE 3 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 INCOME-TAX RETURN, THE NET RECEIPT OF RS.1,20,000 I N RESPECT OF ALL THE YEARS UNDER CONSIDERATION WAS DISCLOSED. THEREFORE, THER E WAS A DIFFERENCE OF RS.29,700 FOR A.Y. 2003-04; RS.1,87,120 FOR A.Y. 2 004-05; RS.71,725 FOR A.Y. 2005-06. ACCORDING TO THE LD.REPRESENTATIVE, THE TAXPAYER HAS TO MEET VARIOUS EXPENSES LIKE WATER, ELECTRICITY, SALARY TO THE STAFF FROM THE GROSS RECEIPT. THEREFORE, WHILE FILING THE INCOME-TAX RE TURN, THESE EXPENSES FOR EARNING THE RENTAL INCOME WAS REDUCED FROM THE GROS S RECEIPT. ACCORDING TO THE LD.REPRESENTATIVE GROSS ROOM RENT CANNOT BE CONSIDERED AS NET INCOME WITHOUT DEDUCTING THE ACTUAL EXPENSES. ACCO RDING TO THE LD.REPRESENTATIVE, THE DIFFERENCE BETWEEN THE GROSS INCOME AND THE NET INCOME IS ONLY 30%. THEREFORE, THE CLAIM OF THE TA XPAYER IS REASONABLY. 5. ON THE CONTRARY, MS. A.S. BINDU, THE LD.DR SUBMI TTED THAT THE TAXPAYER COULD NOT FURNISH ANY MATERIAL TO SHOW THA T WHAT WAS DISCLOSED TO SALES-TAX DEPARTMENT IS A GROSS RECEIPT AND THE TAX PAYER HAS INCURRED EXPENDITURE WHICH NEEDS TO BE DEDUCTED FROM THE INC OME DISCLOSED TO THE SALES-TAX DEPARTMENT. IN THE ABSENCE OF ANY MATERI AL, ACCORDING TO THE LD.DR, THE LOWER AUTHORITIES HAVE RIGHTLY ASSESSED THE DIFFERENCE BETWEEN THE INCOME RETURNED TO THE SALES-TAX DEPARTMENT AND THE INCOME TAX DEPARTMENT AS INCOME OF THE TAXPAYER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS PER T HE INCOME-TAX ACT, THE NET INCOME AFTER DEDUCTING ALL EXPENSES HAS TO BE C OMPUTED FOR LEVY OF TAX. 4 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 THE TAXPAYER CLAIMS THAT THE TAXPAYER INCURRED EXPE NDITURE FOR WATER, ELECTRICITY AND SERVICES OF THE STAFF. HERE, THE T AXPAYER DISCLOSED THE RECEIPT OF RS.1,49,700 FOR A.Y. 2003-04; RS.3,07,720 FOR A .Y. 2004-05; RS.1,91,725 FOR A.Y. 2005-06. THE TAXPAYER CONTENDS THAT GROSS RECEIPTS WERE DISCLOSED TO THE SALES-TAX DEPARTMENT. HOWEVER, IT IS NOT KN OWN WHY THE TAXPAYER HAD TO DISCLOSE THE RENTAL INCOME TO THE SALES-TAX AUTHORITIES. SALES-TAX IS LEVIED ON SALE OF GOODS. LETTING OUT OF THE PROPER TY IS NOT SALE OF GOODS. AT THE BEST, THE TAXPAYER MIGHT HAVE FILED THE RETURNS FOR PAYMENT OF THE LUXURY TAX AND FOR THE PURPOSE OF CONDUCTING THE HO TEL BUSINESS. WHEN THE TAXPAYER DISCLOSED THE GROSS RECEIPT OF RS.1,49,700 FOR A.Y. 2003-04; RS.3,07,720 FOR A.Y. 2004-05; RS.1,91,725 FOR A.Y. 2005-06 FOR THE PURPOSE OF LUXURY TAX WITHOUT DEDUCTING THE EXPENDITURE FOR WATER, ELECTRICITY AND SERVICE OF STAFF, THE SAME HAS TO BE NECESSARILY DE DUCTED WHILE COMPUTING THE TAXABLE INCOME WHILE COMPUTING THE INCOME UNDER THE INCOME-TAX ACT. WATER TAX MIGHT HAVE BEEN PAID TO THE LOCAL AUTHORI TY AND ELECTRICITY MIGHT HAVE BEEN PAID TO THE ELECTRICITY BOARD. THE TAXPA YER MIGHT HAVE MAINTAINED THE BOOKS OF ACCOUNT IN THE HOTEL BUSINE SS SINCE THE TAXPAYER IS EXPECTED TO MAINTAIN REGISTER OF THE INMATES. THER EFORE, THE INCOME-TAX AUTHORITY COULD VERY WELL FIND OUT THE ACTUAL GROSS RECEIPT FROM THE LETTING OUT OF ROOMS IN THE HOTEL. ONCE THE RENT FOR THE R OOMS LET OUT TO THE GUESTS IS FOUND OUT, THE GROSS RECEIPT COULD BE ASCERTAINE D FROM THE TARIFF REGISTER MAINTAINED BY THE TAXPAYER FOR ITS HOTEL BUSINESS. FROM THERE IT COULD BE ASCERTAINED WHETHER THE ACTUAL EXPENDITURE TOWARDS WATER, ELECTRICITY, SERVICE OF STAFF INCURRED BY THE TAXPAYER IS DEDUCT ED FROM THE GROSS RECEIPT 5 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 OR NOT. THE LOWER AUTHORITIES HAVE NOT TAKEN ANY P AIN TO FIND OUT THE ACTUAL GROSS RECEIPT FROM THE HOTEL BUSINESS. EVEN THE TA XPAYER IS EXPECTED TO MAINTAIN THE REGISTER UNDER THE STATUTORY ENACTMENT S FOR THE PURPOSE OF RUNNING THE HOTEL BUSINESS. THEREFORE, THIS TRIBUN AL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS TO RECONSIDER THE ISSUE I N THE LIGHT OF THE BOOKS OF ACCOUNT AND OTHER REGISTERS MAINTAINED BY THE TAXPA YER IN THE COURSE OF ITS REGULAR BUSINESS ACTIVITY UNDER THE STATUTORY REQUI REMENT. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SET ASIDE AND THE I SSUE OF ADDITION OF RS.29,700 FOR A.Y. 2003-04; RS.1,87,120 FOR A.Y. 2 004-05; RS.71,725 FOR A.Y. 2005-06 IS REMITTED BACK TO THE FILE OF THE ASSESSI NG OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE SAME AFRESH IN THE LIG HT OF THE OBSERVATIONS MADE ABOVE AND THEREAFTER DECIDE THE SAME IN ACCORD ANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO THE TAXPAYER. 7. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ADDIT ION ON ACCOUNT OF SALE OF EMPTY BOTTLES. 8. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR T HE TAXPAYER SUBMITTED THAT THE TAXPAYER RETURNED INCOME FROM SALE OF LIQU OR AT 30% OF PURCHASES. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THER E WAS NO NEED FOR ANY ADDITION ON ACCOUNT OF SALE OF BOTTLES. THE LD.REP RESENTATIVE FURTHER SUBMITTED THAT NET PROFIT ESTIMATED FOR THREE MONTH S CANNOT BE THE BASIS FOR ACTUAL SALES FOR THE WHOLE YEAR. THE ESTIMATED INCOME ON THE PURCHASE TURNOVER AT 30% INCLUDED SALE PROCEEDS FOR EMPTY BO TTLES / CARTONS ALSO. 6 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 ACCORDING TO THE LD.REPRESENTATIVE EMPTY BOTTLE IS PART OF LIQUOR BUSINESS. FOR THE PURPOSE OF SALES-TAX, THE TAXPAYER IS EXPEC TED TO PAY TURNOVER TAX AND NO TAX IS LEVIED ON SALE. AS PER THE KERALA GE NERAL SALES-TAX ACT, SALE PROCEEDS OF EMPTY BOTTLES ARE TAXABLE AT 4%. ACCOR DING TO THE LD.REPRESENTATIVE TAXPAYER HAS DISCLOSED THE SALES PROCEEDS OF EMPTY BOTTLES / CARTONS SEPARATELY IN THE SALES-TAX RETUR N AS IT WAS SEPARATELY TAXABLE UNDER THE SALES-TAX ACT. ACCORDING TO THE LD.REPRESENTATIVE, WHEN THE INCOME WAS ESTIMATED ON THE PURCHASE VALUE OF T HE LIQUOR IT IS NOT CORRECT TO ADD SEPARATELY THE SALE PROCEEDS OF EMPT Y BOTTLES / CARTONS. THE LD.RERESENTATIVE FURTHER SUBMITTED THAT ONCE THE IN COME IS ESTIMATED, THERE CANNOT BE ANY FURTHER ADDITION ON THE SALE OF LIQUO R. 9. ON THE CONTRARY, MS. A.S. BINDU, THE LD.DR SUBMI TTED THAT THE TAXPAYER ESTIMATED THE PROFIT AT 30% OF THE PURCHAS E TURNOVER. FOR ESTIMATING THE INCOME, THE TAXPAYER HAS ESTIMATED T HE GROSS PROFIT AT 40% OF THE TURNOVER. THEREFORE, THE ASSESSING OFFICER HAS NOT MADE ANY SEPARATE ADDITION IN RESPECT OF INCOME FROM SALE OF IMFL. A CCORDING THE LD.DR FROM THE PROFIT & LOSS ACCOUNT FILED BEFORE SALES-TAX DE PARTMENT, AN AMOUNT OF RS.1,15,000 FOR A.Y 2003-04; RS.1,19,553 FOR A.Y. 2 004-05; RS.27,612 FOR A.Y. 2005-06; RS.50,000 EACH FOR A.Y. 2006-07 AND 2 007-08 WAS FOUND CREDITED FROM SALE OF BOTTLES / CARTONS. THESE SAL E PROCEEDS OF EMPTY BOTTLES / CARTONS WERE NOT RETURNED IN THE RETURNS OF INCOME FILED. THEREFORE, THE LOWER AUTHORITIES MADE THE ADDITION. ACCORDING TO THE 7 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 LD.REPRESENTATIVE, INCOME FROM SALE OF BOTTLES / C ARTONS IS SEPARATE AND IT CANNOT BE CONSTRUED AS INCOME FROM SALE OF IMFL. 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND ALSO P ERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE TAXPAYER HAS ESTIMATED THE GROSS PROFIT AT 40% OF THE TURNOVER AND NET PROFIT AT 30% OF THE PURCHASE TURNOVER. THE ESTIMATION MADE BY THE TAXPAYER WAS ACCEPTED BY THE LOWER AUTHORITIES IN RESPECT OF SALE OF IMFL. HOWEVER, I N THE PROFIT & LOSS ACCOUNT FILED BEFORE THE LOWER AUTHORITIES, THE TAXPAYER HA S SEPARATELY DISCLOSED THE SALE PROCEEDS OF EMPTY BOTTLES / CARTON SINCE THE S AME WAS CHARGEABLE TO SALES-TAX @4%. THE QUESTION ARISES FOR CONSIDERATI ON IS WHEN THE INCOME WAS ESTIMATED ON SALE OF IMFL ON PURCHASE TURNOVER WHETHER THE SALE PROCEEDS OF EMPTY BOTTLES / CARTON WOULD FORM PART OF THE PROFITS ESTIMATED ON THE BASIS OF THE PURCHASE TURNOVER. T HE COST OF PURCHASE OF IMFL INCLUDES THE BOTTLES AND CARTONS. IN OTHER WO RDS THE PURCHASE PRICE OF IMFL INCLUDES THE COST OF BOTTLES AND CARTON. THE TAXPAYER ESTIMATED THE PROFIT ON THE PURCHASE TURNOVER @30%. WHEN THE PRO FIT WAS ESTIMATED ON THE PURCHASE TURNOVER, IT IS DEEMED THAT ALL INCOME ARISING ON SUCH PURCHASES ARE INCLUDED IN THE ESTIMATED INCOME AND ALL EXPENDITURE FOR EARNING THAT INCOME IS DEEMED TO BE ALLOWED. THERE FORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT MAKING ANY FURTHER ADDI TION TOWARDS THE SALE PRICE OF EMPTY BOTTLES AND CARTON MAY NOT BE JUSTIFI ED. UNDER THE SALES-TAX ACT, THE SALE PRICE OF EMPTY BOTTLES / CARTON IS CH ARGEABLE SEPARATELY @4%. THEREFORE, THE TAXPAYER HAS TO NECESSARILY SHOW IN THE PROFIT & LOSS ACCOUNT 8 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 FOR THE PURPOSE OF SALES-TAX ACT. HOWEVER, UNDER T HE INCOME-TAX ACT, THE ESTIMATED PROFIT ON SALE OF IMFL ON THE PURCHASE TU RNOVER INCLUDES THE SALE CONSIDERATION OF EMPTY BOTTLES / CARTON ALSO. THER EFORE, THIS TRIBUNAL IS OF THE OPINION THAT THERE IS NO JUSTIFICATION FOR MAKIN G FURTHER ADDITION. ACCORDINGLY THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ADDITION MADE BY THE LOWER AUTHORITIES IS DELETED I N ALL THE YEARS UNDER CONSIDERATION. 11. THE NEXT ISSUE ARISES FOR CONSIDERATION IS ESTI MATION OF PROFIT FROM ROHINI GOLD PALACE. 12. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE TAXPAYER ESTIMATED PROFIT FROM ROHINI GOLD PALACE AT 5%. HOWEVER, THE ASSESSING OFFICER ESTIMATED THE SAME A T 8% OF THE TURNOVER. THE COMMISSIONER OF INCOME-TAX(A) RESTRICTED THE PR OFIT AT 6.5%. ACCORDING TO THE LD.REPRESENTATIVE, IN THE ABSENCE OF ANY MAT ERIAL TO SHOW THAT THE TAXPAYER HAS EARNED MORE MONEY, THE PROFIT ESTIMATE D @5% OUGHT TO HAVE BEEN ACCEPTED. 13. ON THE CONTRARY, MS. A.S. BINDU, THE LD.DR SUBM ITTED THAT THE REPRESENTATIVE FOR THE TAXPAYER AGREED BEFORE THE A SSESSING OFFICER FOR ESTIMATION OF PROFIT AT 8%. THEREFORE, THE COMMISS IONER OF INCOME-TAX(A) IS NOT JUSTIFIED IN RESTRICTING THE PROFIT AT 6.5% W HEN THE TAXPAYERS REPRESENTATIVE ADMITTED BEFORE THE ASSESSING OFFICE R THAT THE PROFIT RATIO IS 9 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 AT 8%. ON A QUERY FROM THE BENCH, WHETHER THE DEPA RTMENT HAS FILED ANY APPEAL BEFORE THIS TRIBUNAL, THE LD.DR VERY FAIRLY SUBMITTED THAT THE DEPARTMENT HAS NOT FILE ANY APPEAL. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD.DR, IT APPEARS FROM THE ORDER OF THE LOWER AUTHORITIES THAT THE AS SESSING OFFICER PROPOSED TO ESTIMATE THE PROFIT AT 8%. THE AUTHORIZED REPRE SENTATIVE OF THE TAXPAYER HAS AGREED TO THE PROPOSAL OF THE ASSESSING OFFICER . IN SPITE OF THAT THE COMMISSIONER OF INCOME-TAX(A) ESTIMATED THE PROFIT AT 6.5%. IN THE ABSENCE OF ANY FURTHER APPEAL BY THE DEPARTMENT BEF ORE THIS TRIBUNAL, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A). ACCORDINGLY, THE PROFIT ESTIMATED B Y THE COMMISSIONER OF INCOME-TAX(A) AT 6.5% IS CONFIRMED AND THE GROUND O F THE TAXPAYER ON THIS ISSUE IS DISMISSED. 15. THE OTHER ISSUE PERTAINING TO ASSESSMENT YEAR 2 007-08 ESTIMATION OF PROFIT AT 30% IN RESPECT OF INCOME FROM HOTEL AKASH AS AGAINST 25% DISCLOSED BY THE TAXPAYER. 16. THE ASSESSING OFFICER FOUND THAT FOR THE ASSESS MENT YEAR 2006-07 THE PROFIT WAS ESTIMATED @30% ON THE PURCHASE TURNOVER BY THE TAXPAYER. FROM THE MATERIAL AVAILABLE ON RECORD IT APPEARS TH AT THE TAXPAYER HAS NOT GIVEN ANY SPECIFIC REASONS FOR DECLARING THE PROFIT @25%. FOR EARLIER 10 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 ASSESSMENT YEARS, THE TAXPAYER HIMSELF HAD DISCLOSE D THE GROSS PROFIT @40% AND NET PROFIT @30%. WHEN THE PROFIT IS TO BE ESTIMATED, THE PROFIT DISCLOSED IN THE EARLIER ASSESSMENT YEAR HAS A ROLE TO PLAY. PROFIT MAY NOT BE A CONSTANT FIGURE. IT WOULD DEPEND UPON VARIOUS FACTORS AND FLUCTUATE DEPENDING UPON VARIOUS CIRCUMSTANCES. HOWEVER, FOR DECLARING THE LOWER PROFIT, THE TAXPAYER HAS TO MAINTAIN THE BOOKS AND HAS TO DEMONSTRATE BEFORE THE LOWER AUTHORITIES HOW THE PROFIT WAS LOW ERED DOWN DURING THE YEAR UNDER CONSIDERATION. IN THE ABSENCE OF ANY MA TERIAL, ESPECIALLY WHEN THE TAXPAYER HIMSELF HAS ADMITTED THE PROFIT AT 30% ON THE PURCHASES, THIS TRIBUNAL DO NOT FIND ANY REASONS FOR DISCLOSING 25% OF THE PROFIT FOR THE ASSESSMENT YEAR 2007-08. THEREFORE, THE COMMISSION ER OF INCOME-TAX(A) HAS RIGHTLY CONFIRMED THE ORDER OF THE ASSESSING OF FICER. THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE COMMISSI ONER OF INCOME-TAX(A). ACCORDINGLY, THE SAME IS CONFIRMED. 17. THE TAXPAYER HAS RAISED ONE MORE GROUND FOR THE ASSESSMENT YEAR 2005-06 WITH REGARD TO ADDITION OF RS. 25,18,168 U/ S 68 OF THE INCOME-TAX ACT. THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMIT TED THAT THE ASSESSING OFFICER FOUND THAT THERE WAS CREDIT IN THE NAME OF ROHINI FINANCE TO THE EXTENT OF RS.11,00,022 AND RS.25,98,000. ACCORDING TO THE LD.REPRESENTATIVE, AFTER CONSIDERING THE AVAILABILI TY OF FUNDS TO THE EXTENT OF RS.11,79,854 IN RESPECT OF PROFIT IN THE CASE OF RO HINI GOLD PALACE AND HOTEL AKASH THE ASSESSING OFFICER GAVE SET OFF AND THE BA LANCE AMOUNT OF RS.25,18,168 WAS ADDED AS CASH CREDIT U/S 68 OF THE INCOME-TAX ACT. 11 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 ACCORDING TO THE LD.REPRESENTATIVE, THE TAXPAYER HA S FILED A DETAILED CASH FLOW STATEMENT BEFORE THE LOWER AUTHORITIES EXPLAIN ING THE TRANSACTION AND THEREFORE, NO ADDITION IS CALLED FOR. FURTHERMORE, THE ENTIRE PROFIT OF THE TAXPAYERS BUSINESS WAS ESTIMATED. ONCE THE PROFIT WAS ESTIMATED, THERE CANNOT BE ANY ADDITION U/S 68 OF THE INCOME-TAX ACT . 18. ON THE CONTRARY, THE LD.DR SUBMITTED THAT THERE WAS A CREDIT FOUND IN THE CASE OF ROHINI FINANCE TO THE EXTENT OF RS.11,0 0,022 AND IN THE CASE OF ROHIL GOLDEN SUPER MARKET TO THE EXTENT OF RS.25,98 ,000. THE TOTAL CREDIT FOUND WAS RS.36,98,022. AFTER CONSIDERING THE SEPA RATE ADDITION MADE TO THE EXTENT OF RS. 10,80,517 TOWARDS LOW PROFIT IN T HE CASE OF ROHINI GOLD PALACE AND RS.71,725 TOWARDS ROOM RENT AND SALE OF BOTTLES AT RS.27,612 THE ASSESSING OFFICER ULTIMATELY MADE ADDITION OF R S.25,18,168 U/S 68 OF THE INCOME-TAX ACT. ACCORDING TO THE LD.DR, WHEN A CAS H CREDIT IS FOUND IT IS FOR THE TAXPAYER TO PROVE THE IDENTITY, CREDITWORTHINES S AND GENUINENESS OF THE TRANSACTION. IN THE ABSENCE OF ANY MATERIAL, ACCOR DING TO THE LD.DR, THE ADDITION WAS MADE U/S 68 OF THE INCOME-TAX ACT. 19. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE PROF IT FROM SALE OF LIQUOR WAS ESTIMATED AT 30% ON THE PURCHASE TURNOVER. THIS ES TIMATE MADE BY THE TAXPAYER WAS ADMITTED BY THE ASSESSING OFFICER. TH E ISSUE IN RESPECT OF DIFFERENCE BETWEEN THE ROOM RENT DISCLOSED IN THE S ALES-TAX RETURN AND THE INCOME-TAX RETURN HAS BEEN SET ASIDE BY THE TRIBUNA L FOR RECONSIDERATION IN 12 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 THE LIGHT OF THE MATERIAL THAT WAS MAINTAINED IN TH E COURSE OF RUNNING THE HOTEL BUSINESS. THE PROFIT RATIO ESTIMATED BY THE LOWER AUTHORITIES IN ROHINI GOLD PALACE @6.5% ON THE TOTAL TURNOVER HAS ALSO BE EN CONFIRMED BY THIS TRIBUNAL. THE ASSESSING AUTHORITY FOUND SOME DIFFE RENCE IN THE RECEIPT AND PAYMENT IN ROHINI FINANCE AND ROHINI GOLDEN SUPER M ARKET. THE ASSESSING OFFICER FOUND THAT THE TAXPAYER COULD NOT EXPLAIN S ATISFACTORILY EXPLAIN THE DAY TO DAY TRANSACTION. THE FACT REMAINS THAT THE PROFIT WAS ESTIMATED. ONCE PROFIT WAS ESTIMATED, THIS TRIBUNAL IS OF THE OPINION THAT THERE CANNOT BE ANY ADDITION ON ACCOUNT OF DIFFERENCE IN PAYMENT AND RECEIPT FOUND IN THE CASH FLOW STATEMENT. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON FOR MAKING ADDITION U/S 68 OF THE INCOME-TAX ACT TO THE EXTENT OF RS.25,18,168. THEREFORE, THE ADDITION MADE BY THE LOWER AUTHORITIES IS DELETED. 20. NOW WE MAY MOVE ON TO DISPOSE OF THE APPEALS FI LED BY THE TAXPAYER SHRI G SOMAN IN ITA NOS.593 TO 598/COCH/2011. 21. THE FIRST GRIEVANCE OF THE TAXPAYER FOR THE ASS ESSMENT YEAR 2002-03 IS WITH REGARD TO THE ADDITION OF RS.13,20,528 TOWARDS INCOME FROM BUSINESS. 22. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE TAXPAYER PAID KISTHU / LICENCE FEE. THE C LAIM OF THE TAXPAYER TOWARDS KISTHU / LICENCE FEE WAS DISALLOWED ONLY ON THE GROUND THAT THERE IS NO REVISED AUDIT REPORT FILED. ACCORDING TO THE LD.REPRESENTATIVE, REVISED 13 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 AUDIT REPORT IS NOT NECESSARY. WHEN THE MATERIAL F OUND DURING THE COURSE OF SEARCH ESTABLISHES THE PAYMENT OF KISTHU / LICEN CE FEE THE SAME HAS TO BE ALLOWED FOR COMPUTING THE TOTAL INCOME. THE LD. REPRESENTATIVE SUBMITTED THAT BEFORE COMPLETION OF THE ASSESSMENT THE CLAIM WAS MADE. ACCORDING TO THE LD.REPRESENTATIVE, IT IS A STATUTO RY PAYMENT. THEREFORE, IT HAS TO BE ALLOWED WHEN IT WAS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER. THE LD.REPRESENTATIVE HAS PLACED HIS RELI ANCE ON THE CIRCULAR ISSUED BY CBDT IN CIRCULAR NO.14 DATED 11-04-1955. 23. ON THE CONTRARY, THE LD.DR SUBMITTED THAT DURIN G THE COURSE OF SEARCH SEVERAL INCRIMINATING MATERIALS WERE FOUND. THE PR OFIT & LOSS ACCOUNT NOW FILED BY THE TAXPAYER CLAIMING THE PAYMENT OF RS.13 ,20,528 TOWARDS KISTHU / LICENCE FEE WAS NOT SUPPORTED BY ANY REVISED AUDI T REPORT. THEREFORE, THE ASSESSING OFFICER HAS NOT ADMITTED THE INCOME DISCL OSED IN THE REVISED PROFIT & LOSS ACCOUNT. ACCORDING TO THE LD.DR, WHEN THE T AXPAYER FILED THE REVISED PROFIT & LOSS ACCOUNT, IT HAS TO BE SUPPORTED BY TH E REVISED AUDIT REPORT. IN THE ABSENCE OF ANY REVISED AUDIT REPORT, THE CLAIM OF THE TAXPAYER FOR DEDUCTION OF RS.13,20,528 HAS RIGHTLY BEEN DISALLOW ED. 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE TAXP AYER HAS FILED REVISED PROFIT & LOSS ACCOUNT CLAIMING THE PAYMENT OF KISTH U / LICENCE FEE FOR RUNNING THE BAR. ADMITTEDLY, PAYMENT OF KISTHU / L ICENCE FEE IS A STATUTORY PAYMENT FOR RUNNING THE BUSINESS OF BAR. THE LOWER AUTHORITIES HAVE 14 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 DISALLOWED THE CLAIM OF THE TAXPAYER ON THE GROUND THAT THE PAYMENT WAS NOT SUPPORTED BY REVISED AUDITED STATEMENT. THE FA CT THAT THE REVENUE AUTHORITIES SEIZED THE MATERIAL WHICH INDICATES THE PAYMENT OF KISTHU / LICENCE FEE IS NOT IN DISPUTE. ONCE THERE IS A PAY MENT TOWARDS KISTHU / LICENCE FEE AS PER THE STATUTORY PROVISIONS, THE SA ME HAS TO BE CONSIDERED FOR COMPUTING THE TOTAL INCOME. HOWEVER, IN THIS C ASE, THE PROFIT FROM HOTEL AKASH & ROHINI WAS ESTIMATED AT 30% OF THE PU RCHASE TURNOVER. ONCE THE PROFIT IS ESTIMATED AT 30% OF THE PURCHASE TURNOVER, ALL EXPENDITURE ARE DEEMED TO BE ALLOWED. THEREFORE, T HERE IS NO QUESTION OF ANY SEPARATE ALLOWANCE FOR PAYMENT OF KISTHU / LICE NCE FEE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDE R OF LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 25. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.16,48,050 TOWARDS CAPITAL INTRODUCED IN ROHINI GOLD PALACE. 26. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT INCOME OF RS.16,48,050 WAS OFFERED AS INCOME FROM OTHER SOURCES. ACCORDING TO THE LD.REPRESENTATIVE, THIS AMOUNT WAS INTRODUCED IN THE EARLIER YEARS AND ACQUISITION OF BUILDING AND FURNI TURE WAS ACCOUNTED FROM THE INCOME DISCLOSED UNDER THE HEAD OTHER SOURCES . THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE TAXPAYER ON THE GROUND THAT IT WAS NOT DISCLOSED BY WAY OF A REVISED RETURN. ACCORDING TO THE LD.REPRESENTATIVE, THIS IS NOT A BUSINESS INCOME. HOWEVER, TO CO-OPER ATIVE WITH THE 15 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 DEPARTMENT THIS WAS DISCLOSED AS INCOME FROM OTHER SOURCES. ONCE IT WAS DISCLOSED AS INCOME FROM OTHER SOURCES, ACCORDI NG TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY ADDITION. 27. ON THE CONTRARY, THE LD.DR SUBMITTED THAT THE T AXPAYER HAS OFFERED A SUM OF RS.16,48,050 BEING THE CAPITAL INTRODUCED IN ROHINI GOLD PALACE FOR TAXATION. BY A LETTER DATED 08-09-2008, THE TAXPAY ER REQUESTED THE ASSESSING OFFICER TO EXCLUDE THIS AMOUNT FROM THE T AXABLE INCOME. ACCORDING TO THE LD.DR, THE TAXPAYER CLAIMED THAT T HIS AMOUNT OF RS.16,48,050 WAS THE CAPITALIZED VALUE OF THE BUILD ING AND FURNITURE. SINCE REVISED RETURN WAS NOT FILED, ACCORDING TO THE LD.R EPRESENTATIVE, THE CLAIM OF THE TAXPAYER TO EXCLUDE THE CAPITALIZATION OF BUILD ING AND FURNITURE WAS NOT CONSIDERED BY THE LOWER AUTHORITIES. 28. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICE R DISALLOWED THE CLAIM OF THE TAXPAYER ON THE BASIS OF THE JUDGMENT OF THE APE X COURT IN THE CASE OF GOETZE INDIA LTD VS COMMISSIONER OF INCOME-TAX 283 ITR 323. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE APEX COUR T IN THE CASE OF GOETZE INDIA LTD (SUPRA). NO DOUBT, THE APEX COURT FOUND THAT MAKING ANY CLAIM IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE TAXPAYER HAS TO NECESSARILY FILE A REVISED RETURN. IN THE VERY SAM E JUDGMENT, THE APEX COURT FOUND THAT IT DOES NOT IMPINGE ON THE POWER OF THIS TRIBUNAL U/S 254 OF THE INCOME-TAX ACT. THEREFORE, THIS TRIBUNAL CAN ENTER TAIN THE CLAIM FOR THE 16 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 FIRST TIME U/S 254 OF THE ACT IN VIEW OF THE JUDGMEN T OF THE APEX COURT IN THE CASE NATIONAL THERMAL POWER CORPORATION 229 ITR 383. THE TAXPAYER IN THE COURSE OF ASSESSMENT BY A LETTER DATED 08-09-20 08 EXPLAINED TO THE ASSESSING OFFICER THAT THE AMOUNT OF RS.16,48,050 W AS THE CAPITALIZED VALUE OF THE BUILDING AND FURNITURE ACQUIRED EARLIER OUT OF THE ACCOUNTED SOURCE AND NOW CAPITALISED IN THE BOOKS OF ACCOUNT. THIS CLAIM OF THE TAXPAYER WAS NOT EXAMINED BY THE LOWER AUTHORITY IN THE ABSENCE OF A REVISED RETURN. THOUGH THE ASSESSING OFFICER MAY BE JUSTIFIED IN REV ISING THE CLAIM OF THE TAXPAYER IN THE ABSENCE OF REVISED RETURN, IN VIEW OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO RPORATION (SUPRA), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CLAI M OF THE TAXPAYER THAT THE AMOUNT OF RS.16,48,050 REPRESENTS THE CAPITALIZED V ALUE OF BUILDING AND FURNITURE NEEDS TO BE EXAMINED. SINCE THE LOWER AU THORITIES HAD NO OCCASION TO EXAMINE THE SAME IN THE ABSENCE OF A RE VISED RETURN, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFIC ER HAS TO FIRST EXAMINE THE SAME. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORI TIES ARE SET ASIDE AND THE ISSUE OF ADDITION OF RS. 16,48,050 IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE- EXAMINE THE ISSUE AFRESH ON THE BASIS OF THE CLAIM OF THE TAXPAYER AND FIND OUT WHETHER IT WAS THE CAPITALIZED VALUE OF THE BUILDING AND FURNITURE AS CLAIMED BY THE TAXPAYER AND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH L AW. 29. THE NEXT COMMON ISSUE ARISES FOR CONSIDERATION IS ADDITION WITH REGARD TO ALE OF EMPTY BOTTLES. THIS ISSUE WAS EXA MINED BY THIS TRIBUNAL IN THE CASE OF HOTEL AKASH & ROHINI. SINCE THE PROFIT ON SALE OF LIQUOR WAS 17 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 DISCLOSED ON ESTIMATE BASIS @30% OF THE PURCHASE TU RNOVER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY FURTHER ADDITION ON SALE OF EMPTY BOTTLES. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON FOR MAKING ANY ADDITION TOWARDS SALE OF EMPTY BOTTLES. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE ON THIS ISSU E. 30. THE NEXT GROUND OF ADDITION IS WITH REGARD TO R OHINI SUPER MARKET TO THE EXTENT OF RS.1,36,489 FOR THE ASSESSMENT YEAR 2 005-06. 31. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE FOR THE TAXPAYER SUBMITTED THAT THE RETURNED INCOME @5% OF THE SALES TURNOVER. AS PER THE SEIZED DOCUMENT, THE REVENUE AUTHORITIES ESTIMATED THE SAL ES FOR 7 MONTHS AT RS.40,05,916. THE ASSESSING OFFICER ESTIMATED THE SALES FOR THE WHOLE YEAR ON THE BASIS OF THE SALES FOR 7 MONTHS AND WORKED O UT THE TURNOVER AT RS.58,67,284 AND THEREAFTER ESTIMATED THE PROFIT @5 %. ACCORDING TO THE LD.REPRESENTATIVE, THERE IS NO MATERIAL AVAILABLE O N RECORD TO SHOW ANY DIFFERENCE FOR THE REMAINING 5 MONTHS. IN THE ABSEN CE OF ANY MATERIAL, ACCORDING TO THE LD.REPRESENTATIVE, THE ESTIMATION OF PROFIT FOR THE WHOLE YEAR IS NOT JUSTIFIED. 32. ON THE CONTRARY, THE LD.DR SUBMITTED THAT AS PE R THE SEIZED DOCUMENT, THE TOTAL SALES FOR 7 MONTHS UPTO OCTOBER , 2004 WAS RS.40,05,916. THE TOTAL SALES FOR 7 MONTHS ON THE BASIS OF THE SEIZED DOCUMENT WORK OUT TO RS.58,68,284. THE ASSESSING O FFICER ESTIMATED THE 18 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 ADMITTED PROFIT OF 5% ON THE SALES TURNOVER. ACCOR DING TO THE LD.DR, WHEN THE SEIZED MATERIAL DISCLOSES MORE SALES TURNOVER F OR 7 MONTHS THE SAME HAS TO BE ADOPTED FOR THE WHOLE YEAR. 33. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE SEIZED DOCUMENT DISCLOSES SALES TURNOVER OF RS.40,05,916 FOR 7 MONT HS UPTO OCTOBER, 2004. WHEN THE SEIZED DOCUMENTS DISCLOSE SALES FOR 7 MONT HS, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN ADOPTING THE VERY SAME BA SIS FOR ESTIMATING THE TURNOVER FOR WHOLE YEAR. THEREFORE, ESTIMATION OF PROFIT AT 5% AS ADMITTED BY THE TAXPAYER CANNOT BE DISPUTED AT THIS STAGE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUT HORITY. ACCORDINGLY THE SAME IS CONFIRMED. 34. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION TOWARDS CASH BALANCE OF RS.9,16,214. 35. SHRI R KRISHNA IYER, THE LD.REPRESENTATIVE SUBM ITTED THAT THE TAXPAYER IS THE MAIN PERSON FOR CARRYING ON THE BUSINESS IN THE NAME OF ROHINI BAR & GOLDEN SUPER MARKET, ROHINI HOTEL, ROHINI FINANCE, ETC. WHENEVER THERE IS NECESSITY OF CASH, THE TAXPAYER USED TO USE THE AVA ILABLE CASH FROM ONE BUSINESS TO ANOTHER. THE TAXPAYER HAS ALSO FILED A DETAILED CASH FLOW STATEMENT. FROM THE CASH FLOW STATEMENT, ACCORDING TO THE LD.REPRESENTATIVE, AT THE CLOSE OF THE YEAR, THE TA XPAYER HAD A CASH BALANCE 19 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 OF RS.23,97,529 IN THE ROHINI GROUP. ACCORDING TO THE LD.REPRESENTATIVE, THE INCOME WAS ESTIMATED FROM LIQUOR BUSINESS AND ROHIN I SUPER MARKET. THERE IS NO DISCREPANCY IN THE CASH FLOW STATEMENT. IN THE ABSENCE OF ANY DISCREPANCY IN THE CASH FLOW STATEMENT, ACCORDING T O THE LD.REPRESENTATIVE, ADDITION ON ACCOUNT OF DIFFERENCE IN CASH BALANCE I S NOT WARRANTED. 36. ON THE CONTRARY, THE LD.DR SUBMITTED THAT AS PE R THE CASH BOOK FOR THE PERIOD FROM 01-04-2004 TO 31-03-2005 IT WAS FOU ND DURING THE COURSE OF SEARCH OPERATION THAT THE TAXPAYER HAS MADE SEVE RAL DEPOSITS AND WITHDRAWALS FROM M.DS ACCOUNT IN ROHINI FINANCIERS . THE DIFFERENCE OF DEPOSITS AND WITHDRAWALS COMES TO RS.12,73,954. AF TER EXCLUDING THE PROFIT MADE IN ROHINI BAR TO THE EXTENT OF RS.3,57,740 THE BALANCE OF RS. 9,16,214 WAS ADDED AS TOTAL INCOME OF THE TAXPAYER. ACCORDI NG TO THE LD.REPRESENTATIVE, THE TAXPAYER DID NOT HAVE ANY SE PARATE CASH BALANCE FOR EACH CONCERN. IN THE ABSENCE OF ANY SEPARATE CASH BALANCE, IT CANNOT BE CONCLUDED THAT THE CASH BALANCE OF RS. 12,73,954 WA S AVAILABLE ON ROHINI FINANCIERS AS ON 31-03-2005. 37. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT SEVERAL WITHDRAWALS AND DEPOSITS ARE FOUND DURING THE COURSE OF SEARCH OPERATION. THE CLAIM OF THE TAXPAYER IS THAT A DETAILED CASH FLOW STATEMENT WAS FILED EXPLAINING THE AVAILABILITY OF CASH BALANCE TO THE EXTENT OF RS.23 ,97,529 IN THE ROHINI GROUP. THE ONLY CONTENTION OF THE LD.REPRESENTATIV E FOR THE TAXPAYER IS THAT 20 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 THE ASSESSING OFFICER DID NOT FIND ANY DISCREPANCY IN THE CASH FLOW STATEMENT. THEREFORE, THERE CANNOT BE ANY ADDITION . THE DIFFERENCE BETWEEN THE WITHDRAWALS AND DEPOSITS MADE FROM 01-0 4-2004 TO 31-03- 2005 IS RS.12,73,954. THIS DIFFERENCE WAS FOUND TO BE UNDISCLOSED INCOME BY THE ASSESSING OFFICER. AFTER REDUCING A SUM OF RS. 3,57,740 THE ASSESSING OFFICER ADDED THE REMAINING AMOUNT OF RS.9,16,214 A S UNDISCLOSED INCOME. THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THE AD DITION IS ON FACTS AND THE TAXPAYER HAS RETURNED THE INCOME ON ESTIMATE BA SIS EVEN THOUGH BOOKS OF ACCOUNT AND CASH BOOK WAS MAINTAINED. THE COMM ISSIONER OF INCOME- TAX(A) HAS NOT EXAMINED THE ISSUE IN THE RIGHT PERS PECTIVE. THE COMMISSIONER OF INCOME-TAX(A) HAS SIMPLY PROCEEDED ON THE GROUND THAT ADDITION IS PURELY ON FACTS. THE COMMISSIONER OF I NCOME-TAX(A) BEING THE FIRST APPELLATE AUTHORITY IS EXPECTED TO EXAMINE TH E ISSUE ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ENTR IES WERE FOUND IN THE BOOKS OF ACCOUNT OF ROHINI FINANCIERS. IT IS NOT K NOWN WHETHER THE INCOME OF ROHINI FINANCIERS WAS ASSESSED ON ESTIMATE BASIS . THEREFORE, IT NEEDS A FACTUAL VERIFICATION BY THE ASSESSING OFFICER. SIN CE THE METHOD OF ASSESSMENT OF INCOME IN THE CASE OF ROHINI FINANCIE RS IS NOT AVAILABLE ON RECORD, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED. ACCORDINGLY, THE ISSUE OF ADDITIO N OF RS. 9,16,214 IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE ISSUE IN THE LIGHT OF OBSERVATIONS A BOVE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING OPPOR TUNITY OF HEARING TO THE TAXPAYER. 21 ITA NOS.599-603/COCH/2011 ITA NOS.593-598/COCH/2011 38. IN THE RESULT, APPEALS IN ITA NOS 599 TO 603/CO CH/2011 ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE AND APPEALS IN ITA NOS 593 & 594 & 596 TO 598/COCH/2011 AND PARTLY ALLOWED AND APPEAL IN ITA NO.595/COCH/2011 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH OCTOBER, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 25 TH OCTOBER, 2012 PK/- COPY TO: 1. THE APPELLANTS 2. THE RESPONDENTS 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