P. Mohammed Sherief, Palakkad V. DCIT, Thrissur

ITSSA 111/COCH/2005

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8129 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-04-2012
• Assessment Year: misc
• Appeal Filed On: 26-05-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: C R HARISH
• Keywords: Gift; Income from undisclosed sources
• Section: 133A; 132

Judgement Text

1 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T(SS)A NO. 111/COCH/2005 (BLOCK PERIOD 01-04-1996 TO 28-08-2002) SHRI P MOHANMMED SHERIEF VS THE DY.CIT, CENT.CIR. PAZHERI HOUSE THRISSUR THENKARA, MANNARKKAD PALAKKAD PAN : AJFPS6305L (APPELLANT) (RESPONDENT) I.T(SS)A NO. 139/COCH/2005 (BLOCK PERIOD 01-04-1996 TO 28-08-2002) THE DY.CIT, CENT.CIR. VS SHRI P MOHAMMED SHERIEF THRISSUR PALAKKAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.R. HARISH RESPONDENT BY : S.R. SENAPATI DATE OF HEARING : 26-04-2012 DATE OF PRONOUNCEMENT : 22-06-2012 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE A RE DIRECTED AGAINST THE VERY SAME ORDER OF THE COMMISSIONER OF INCOME-TAX(A) -I, KOCHI DATED 21-03-2005 AND PERTAINS TO BLOCK PERIOD 01-04-1996 TO 28-08-2002. SINCE BOTH THE APPEALS 2 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 ARISE OUT OF THE VERY SAME ORDER OF THE COMMISSIONE R OF INCOME-TAX(A), WE HEARD THEM TOGETHER AND DISPOSE OF THE SAME BY THIS COMMO N ORDER. IT(SS)A. 111/COCH/2005 ASSESSEES APPEAL 2. THE FIRST GROUND IN ASSESSEES APPEAL IS WITH RE GARD TO INVESTMENT IN SANDAL WOOD BUSINESS TO THE EXTENT OF RS.39,71,500. THE D EPARTMENT HAS ALSO FILED AN APPEAL AGAINST THE PARTIAL RELIEF GRANTED BY THE CO MMISSIONER OF INCOME-TAX(A). 3. SHRI C.R. HARISH, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER MADE ADDITION OF RS. 83,42,511 TO WARDS THE UNDISCLOSED PURCHASE OF SANDAL WOOD. ACCORDING TO THE LD.REPRE SENTATIVE, THERE WAS SEARCH IN THE PREMISES OF THE ASSESSEE U/S 132 OF THE ACT ON 28-08-2002 AND 29-08-2002. SOME INCRIMINATING MATERIALS WERE FOUND AND THE SAM E WERE SEIZED. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE WAS A PARTNE R IN M/S M.R. INDUSTRIES, KOLHAPUR, MAHARASHTRA. HOWEVER, EVEN AFTER RETIREME NT, THE ASSESSEES NAME WAS USED AS REFERENCE FOR PURCHASE OF THE PROPERTY BY THE FIRM. HOWEVER, THIS EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER. ON APPEAL BY THE ASSESSEE, THE COMMISSIONER OF INCOME-TAX(A) F OUND THAT THE UNDISCLOSED INCOME OF THE ASSESSEE HAS TO BE ESTIMATED ON THE B ASIS OF THE SALES MADE BY THE ASSESSEE.. THE COMMISSIONER OF INCOME-TAX(A) ESTIMA TED THE PROFIT AT 20% OF THE SALES. BECAUSE OF ESTIMATION MADE BY THE ASSESSING OFFICER HE CONFIRMED THE ADDITION TO THE EXTENT OF RS.49,71,500 AND GAVE REL IEF TO THE EXTENT OF RS.33,71,011. THE ASSESSEE IS CHALLENGING THE ORDE R OF COMMISSIONER OF INCOME- TAX(A) TO THE EXTENT OF INVESTMENT IN SANDAL WOOD C ONFIRMED WHEREAS THE REVENUE FILED THE APPEAL IN RESPECT OF RELIEF GRANT ED BY THE COMMISSIONER OF INCOME-TAX(A) TO THE EXTENT OF RS.33,71,011. 3 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 4. ACCORDING TO THE LD.REPRESENTATIVE, IN A BLOCK AS SESSMENT THE ASSESSING OFFICER IS EXPECTED TO COMPUTE THE UNDISCLOSED AND NOT THE SALES AND PURCHASES. ONE OF THE SEIZED MATERIALS REFERRED TO AS RRA4 PER TAINS TO THE INDIVIDUAL BUSINESS OF THE ASSESSEE. THE LD.REPRESENTATIVE FU RTHER SUBMITTED THAT THE ASSESSEE INVOLVED IN FACILITATING THE SALE AND GUAR ANTEE FOR CREDIT TRANSACTION. THIS FACT WAS NOT TAKEN INTO CONSIDERATION BY THE LO WER AUTHORITY. THE ASSESSING OFFICER HAS CONSIDERED ONLY THE CREDIT ENTRIES. TH EREFORE, ACCORDING TO THE LD.REPRESENTATIVE, THERE IS NO QUESTION OF ESTIMATI ON OF ANY PROFIT. THE ENTIRE ADDITION OUGHT TO HAVE BEEN DELETED BY THE COMMISSI ONER OF INCOME-TAX(A). 5. ON THE CONTRARY, SHRI S.R. SENAPATI, THE LD.DR S UBMITTED THAT THE SEIZED MATERIAL DISCLOSED SALES, COLLECTION AND EXPENSES. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) IS NOT JUSTIFIED IN IGNORING THE SE IZED DOCUMENTS. THERE WAS A CREDIT FOUND IN THE SEIZED MATERIAL TO THE EXTENT O F RS.10 LAKHS AS ON 05-05-2002 AND RS.15,000 AS ON 23-06-2002 RELATING TO THE FIRM, M/S SOUTH INDIA PERFUMERS. ACCORDING TO THE LD.DR, THE ASSESSEE IS A PARTNER I N SOUTH INDIA PERFUMERS. THIS CREDIT, ACCORDING TO THE LD.REPRESENTATIVE, RELATES TO SANDAL WOOD BUSINESS OF THE ASSESSEE. THE LD.DR FURTHER SUBMITTED THAT A FURTH ER ENTRY WAS FOUND IN THE SEIZED DOCUMENT IN RESPECT OF FINANCIAL TRANSACTION WITH M.R. INDUSTRIES TO THE EXTENT OF RS.24 LAKHS AND RS.49,32,511. IN RESPECT OF CREDIT FOUND TO THE EXTENT OF R.10 LAKHS AND RS.15,000 THE ASSESSEE ADMITTED THAT THIS IS THE BUSINESS TRANSACTION AND HE WILL PAY THE TAX AFTER DUE VERIF ICATION. AS REGARDS THE REFERENCE OF RS.49,32,511 THE ASSESSEE STATED THAT IT RELATES TO M.R. INDUSTRIES. REFERRING TO THE AMOUNT OF RS. 24 LAKHS THE LD.DR SU BMITTED THAT THE ASSESSEE STATED BEFORE THE REVENUE AUTHORITIES THAT HE CAN G IVE EXPLANATION ONLY AFTER 4 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 EXAMINATION OF THE PAPER. THEREFORE, IT IS OBVIOUS THAT THE ASSESSEE HAS NOT COME OUT WITH TRUE FACTS REGARDING THE SANDAL WOOD BUSINESS. THEREFORE, THE ASSESSING OFFICER HAS MADE THE ADDITION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE INCRIMINATING MATERIALS WERE FOUND IN RESPECT OF INVESTMENT MADE BY THE ASSESSEE IN THE SANDAL WOOD BUSINESS. THE ASSESSEE TRIED TO EXPLAIN THAT HE RE TIRED FROM THE FIRM AND AFTER RETIREMENT HE HAD NO CONNECTION WHATSOEVER EXCEPT A CTING AS NODAL AGENCY. THE COMMISSIONER OF INCOME-TAX(A) ESTIMATED THE PROFIT A T 20% ON THE SANDAL WOOD BUSINESS. HE HAS NOT REFERRED TO ANY OF THE SEIZED MATERIAL. WHEN THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION DISCLOS ES THE INVESTMENT MADE BY THE ASSESSEE AND THE ASSESSEE HAS ALSO ACCEPTED THE STATEMENT FOUND IN THE SEIZED MATERIAL, THIS TRIBUNAL IS OF THE OPINION TH AT THERE IS NO NEED FOR THE COMMISSIONER OF INCOME-TAX(A) TO ESTIMATE THE PROFIT . ONCE THE ASSESSEE ADMITS THE CREDIT IT IS FOR THE ASSESSEE TO EXPLAIN THE SO URCE OF SUCH CREDIT FOR MAKING INVESTMENT IN THE SANDAL WOOD BUSINESS. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) DELETED THE ADDITION TO THE EXTENT OF RS.33,71,011 WITHOUT REFERRING TO THE SEIZED MATERIAL. THEREFORE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDER OF COMMISSIONER OF INCOME-TAX(A). HOWEVER, TH E MATTER NEEDS TO BE RECONSIDERED IN THE LIGHT OF THE SEIZED MATERIAL FO UND DURING THE COURSE OF SEARCH OPERATION AND THE SUBSEQUENT EXAMINATION OF THE ASS ESSEE IN REFERENCE TO THE SEIZED MATERIAL. ACCORDINGLY, THE ORDER OF THE COM MISSIONER OF INCOME-TAX(A) IS SET AIDE AND THE ISSUE OF INVESTMENT IN SANDAL WOOD BUSINESS TO THE EXTENT OF RS.83,42,511 IS REMITTED BACK TO THE FILE OF THE COM MISSIONER OF INCOME-TAX(A). THE COMMISSIONER OF INCOME-TAX(A) SHALL RECONSIDER T HE ISSUE IN RESPECT OF THE 5 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 INVESTMENT MADE IN SANDAL WOOD BUSINESS AND THEREAF TER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING REASONABLE OPPORTU NITY TO THE ASSESSEE. 7. THE NEXT GROUND RAISED BY THE ASSESSEE IS WITH R EGARD TO THE BIRTHDAY AND ANNIVERSARY GIFT. DURING THE COURSE OF HEARING, TH E LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS NOT PRESSIN G THIS GROUND. ACCORDINGLY, THE GROUND RELATING TO BIRTHDAY AND ANNIVERSARY GIF T TO THE EXTENT OF RS.67,329 IS DISMISSED AS NOT PRESSED. 8. THE NEXT GROUND OF APPEAL IS WITH REGARD TO TREA TMENT OF AGRICULTURAL INCOME AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD T O THE EXTENT OF RS.3,20,000. 9. THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001-02 TO 2003-04. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE OW NS 10.94 ACRES OF AGRICULTURAL LAND CONSISTING OF 8 ACRES OF RUBBER PLANTATION AND IN THE REMAINING LAND ABOUT 3 ACRES ARE CULTIVATED WITH COCONUT, ARACANUT, PLANTA IN AND MISCELLANEOUS CROPS. THE ASSESSEE CLAIMED RS.4,06,255 AS AGRICULTURAL IN COME ON THE BASIS OF THE RUBBER BOARD SPECIFICATION. THE ASSESSING OFFICER, HOWEVER, FOUND THAT THE RUBBER BOARD SPECIFICATION SHOWS THE POSSIBLE YIELD PER ACRE FROM THE RUBBER ESTATE PROVIDED THE TREES ARE MANURED AND MAINTAINE D PROPERLY AND THAT THE MAINTENANCE OF RUBBER TREES WOULD COME APPROXIMATEL Y RS.21,000 PER ACRE. CONSIDERING ALL THESE FACTS, THE ASSESSING OFFICER FOUND THAT THERE WAS A DIFFERENCE OF RS.8,24,706 WHICH WAS ASSESSED AS UNDISCLOSED IN COME FOR THE BLOCK PERIOD. HOWEVER, ON APPEAL BY THE ASSESSEE, THE COMMISSIONE R OF INCOME-TAX(A) FOUND THAT THE AGRICULTURAL INCOME DISCLOSED BY THE ASSES SEE FOR THE PERIOD 01-04-2001 6 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 TO 31-03-2002 IS REASONABLE. THE COMMISSIONER OF INC OME-TAX(A) FURTHER HELD THAT THE AGRICULTURAL INCOME SHOWN TO THE EXTENT OF RS.3,20,000 WAS TO BE ASSESSED AS INCOME FROM OTHER SOURCES AND REDUCED T HE AGRICULTURAL INCOME TO THE EXTENT OF RS.3,20,000 FROM RS.8,24,706. ACCORD ING TO THE LD.REPRESENTATIVE, THE COMMISSIONER OF INCOME-TAX(A) OUGHT TO HAVE DELE TED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER. 10. ON THE CONTRARY, SHRI S.R. SENAPATI, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME IN THE CASH FLOW STATEMENT. THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME IN THE RETURN AND ALS O OFFERED AGRICULTURAL INCOME FOR TAXATION. THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT FOR THE AGRICULTURAL INCOME. THEREFORE, THE ASSESSING OFFI CER HAS RIGHTLY ESTIMATED THE INCOME AFTER CONSIDERING ALL THE MATERIAL AVAILABLE ON RECORD. ON ESTIMATION THE ASSESSING OFFICER FOUND DIFFERENCE OF RS.8,24,706 F ROM THE TOTAL INCOME RETURNED AND DISCLOSED AS AGRICULTURAL INCOME. THEREFORE, A CCORDING TO THE LD.REPRESENTATIVE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY CONFIRMED THE ADDITION TO THE EXTENT OF RS.3,20,000 AS INCOME FR OM OTHER SOURCES. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER O F THE COMMISSIONER OF INCOME- TAX(A) IT APPEARS THAT THE ASSESSEE HAS RETURNED AG RICULTURAL INCOME REGULARLY FOR THE ASSESSMENT YEARS 1997-98 TO 2000-01. THE ASSESSI NG OFFICER HAS NOT POINTED OUT ANY MATERIAL REGARDING THE SEARCH. THE COMMISS IONER OF INCOME-TAX(A) HAS NOT REFERRED TO ANY SEIZED MATERIAL. THE AGRICULTU RAL INCOME SHOWN IS ONLY IN THE CASH FLOW STATEMENT. THE ASSESSING OFFICER HAS ALS O ESTIMATED THE AGRICULTURAL INCOME WITHOUT REFERRING TO ANY SEIZED MATERIAL. I T IS WELL SETTLED PRINCIPLES OF 7 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 LAW THAT THE UNDISCLOSED INCOME HAS TO BE COMPUTED ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION AND THE INFORMATION RELATABLE TO MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N. THEREFORE, MERE CASH FLOW STATEMENT CANNOT BE A BASIS FOR MAKING ANY ADDITION. THE CASH FLOW STATEMENT HAS TO BE CO-RELATED WITH MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. FROM THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) IT APPEARS THAT THE ASSESSEE HAS ALSO RETURNED AGRICULTURAL INCOME IN T HE REGULAR COURSE TO THE EXTENT OF RS.10,19,706. FOR THE BLOCK PERIOD, THE ASSESSEE HAS SHOWN THE AGRICULTURAL INCOME TO THE EXTENT OF RS.3,20,000 OVER AND ABOVE WHAT WAS DISCLOSED IN THE REGULAR RETURN. THIS RS.3,20,000 WAS RETURNED BY T HE ASSESSEE AS AGRICULTURAL INCOME OVER AND ABOVE WHAT WAS DISCLOSED IN THE REG ULAR COURSE. SINCE THE ASSESSEE HIMSELF RETURNED THIS INCOME, THE COMMISSI ONER OF INCOME-TAX(A) SUSTAINED THE ADDITION AS INCOME FROM OTHER SOURCE S. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHOR ITY. ACCORDINGLY THE SAME IS CONFIRMED. REVENUES APPEAL ITSS 139/COCH/2005 12. NOW THE NEXT GROUND OF APPEAL IN THE REVENUES APPEAL IS WITH REGARD TO THE ADDITION OF RS.58,24,931 TOWARDS THE INVESTMENT IN SHARES OF M.A MOTORS. ACCORDING TO THE LD.DR, THE ACTUAL INVESTMENT OF TH E ASSESSEE IN M.A MOTORS AS PER THE SEIZED MATERIAL IS RS.78,23,054. HOWEVER, THE ASSESSEE HAS SHOWN THE INVESTMENT ONLY TO THE EXTENT OF RS.19,98,123 IN TH E BOOKS OF ACCOUNT. THEREFORE, THE BALANCE OF RS.58,24,931 WAS ASSESSED AS INCOME FROM UNDISCLOSED SOURCES FOR THE BLOCK PERIOD. HOWEVER, THE COMMISS IONER OF INCOME-TAX(A) DELETED THE ADDITION ON THE GROUND THAT THE SEIZED MATERIAL IS AN ESTIMATE OF EXPENDITURE FOR THE FORTHCOMING PERIOD. THEREFORE, THE ESTIMATED FIGURE IS ONLY 8 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 FOR PLANNING PURPOSE AND HENCE, THERE CANNOT BE ANY ADDITION. ACCORDING TO THE LD.REPRESENTATIVE, THE SEIZED DOCUMENT CLEARLY INDI CATE THE ASSESSEES INVESTMENT IN THE CAPITAL OF M.A MOTORS AS ON 31-12-200 AT RS.78 ,23,054; THEREFORE, IT IS NOT CORRECT TO SAY THAT IT IS ONLY ESTIMATE FOR THE FOR THCOMING PERIOD. 13. ON THE CONTRARY, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ADDITION WAS MADE BASED ON TWO LOOSE SHEETS. THE L OOSE SHEETS CONTAINED THE COST OF THE LAND PROPOSED TO BE ACQUIRED. ACCORDIN G TO THE LD.REPRESENTATIVE, THE COST OF LAND AS PER THE LOOSE SHEET FOUND DOES NOT REFLECT THE STAMP DUTY, REGISTRATION CHARGES, ETC. ANOTHER LOOSE SHEET REL ATES TO PROJECTED BALANCE-SHEET FILED BEFORE THE CANARA BANK, MANNARKAD BRANCH. THE REFORE, THE PROJECTED FIGURE FOR THE PURPOSE OF FILING THE SAME BEFORE THE BANKIN G AUTHORITIES CANNOT BE A BASIS FOR MAKING ADDITION. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE ORDER O F THE ASSESSING OFFICER, IT APPEARS THAT DOCUMENT MARKED AS RRA3 WAS SEIZED FROM THE RESIDENCE OF THE ASSESSEE. THIS DOCUMENT SHOWS THE CAPITAL INVESTME NT OF ASSESSEE AS ON 31-12- 2000 AT RS.78,23,054. HOWEVER, BOTH THE PARTIES HA VE NOT FILED THE COPIES OF THE DOCUMENT MARKED AS RRA3 BEFORE THIS TRIBUNAL. THERE FORE, THIS TRIBUNAL HAD NO OCCASION TO VERIFY THE ENTRIES IN THE SEIZED DOCUME NT. FROM THE ORDER OF THE ASSESSING OFFICER IT APPEARS THAT THERE WAS A SURVE Y IN THE PREMISES OF M/S M.A. MOTORS U/S 133A OF THE ACT. THE COMMISSIONER OF IN COME-TAX(A) FOUND THAT ONE OF THE LOOSE SHEETS FOUND IS TRIAL BALANCE WHICH DO ES NOT CONTAIN ANY DATE. THE OTHER SHEET CONTAINS THE ENTRIES RELATING TO INVEST MENT IN THE LAND AND BUILDING. SINCE BOTH THE PARTIES HAVE NOT FILED THE SEIZED DO CUMENT BEFORE THIS TRIBUNAL, 9 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 WE ARE UNABLE TO EXPRESS ANY OPINION ABOUT THE SEIZ ED MATERIAL. IT IS WELL SETTLED PRINCIPLES OF LAW THAT THE UNDISCLOSED INCOME FOR T HE BLOCK PERIOD HAS TO BE COMPUTED ONLY ON THE BASIS OF THE SEIZED MATERIAL A ND ANY OTHER INFORMATION WHICH IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN THE ABSENCE OF ANY SEIZED MATERIAL ON THE FILE OF T HIS TRIBUNAL, WE FIND THAT THE MATTER NEEDS TO BE RECONSIDERED BY THE COMMISSIONER OF INCOME-TAX(A) AFTER CONSIDERING THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION AND THE INFORMATION COLLECTED BY THE ASSESSING OFFICER WHIC H IS RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. ACCOR DINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET AIDE AND THE ISSUE RELATI NG TO INVESTMENT IN THE CAPITAL OF M.A MOTORS IS REMITTED BACK TO THE FILE OF THE AS SESSING OFFICER FOR RECONSIDERATION IN THE LIGHT OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. 15. THE NEXT GROUND OF APPEAL IN THE REVENUES APPE AL IS WITH REGARD TO NRI LOAN TO THE EXTENT OF RS.5,97,574. THE LD.DR SUBMI TTED THAT IN THE CASH FLOW STATEMENT, THE ASSESSEE HAS SHOWN THE LOAN OF RS.5, 97,574 FROM THREE PARTIES. THE COMMISSIONER OF INCOME-TAX(A) DIRECTED THE ASSES SING OFFICER TO VERIFY THE CONFIRMATION LETTER FILED BY THE ASSESSEE. ACCORDI NG TO THE LD.DR, THE DIRECTION OF THE COMMISSIONER OF INCOME-TAX(A) TO VERIFY THE CONF IRMATION LETTER TANTAMOUNT TO SETTING ASIDE THE ASSESSMENT ORDER FOR RECONSIDE RATION. THE LD.DR SUBMITTED THAT THE COMMISSIONER OF INCOME-TAX(A) HAS NO POWER TO SET ASIDE THE ASSESSMENT FOR RECONSIDERATION. THEREFORE, THE ORD ER OF COMMISSIONER OF INCOME-TAX(A) IS NOT JUSTIFIED. 10 IT(SS)A NO. 111/COCH/2005 IT(SS)A NO.139/COCH/2005 16. WE HAVE HEARD THE LD.REPRESENTATIVES FOR THE RE VENUE AND THE ASSESSEE. NO DOUBT, THE COMMISSIONER OF INCOME-TAX(A) HAS NO POWER TO SET ASIDE THE ASSESSMENT FOR RECONSIDERATION. BUT THE FACT REMAI NS IS THAT THE ASSESSEE HAS FILED THE CONFIRMATION LETTERS FROM THE CREDITORS W HICH NEEDS TO BE CONSIDERED BY THE ASSESSING OFFICER IN ACCORDANCE WITH LAW. THER EFORE, THIS TRIBUNAL FINDS THAT THE ASSESSING OFFICER HAS TO CONSIDER THE CONFIRMAT ION LETTER FILED BY THE ASSESSEE. ACCORDINGLY, IN EXERCISE OF THE APPELLATE POWER OF THIS TRIBUNAL, THE ISSUE RELATING TO NRI LOAN TO THE EXTENT OF RS.5,97,594 IS REMITTE D BACK TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION IN THE LIGHT OF THE CONFIRMATION LETTER SAID TO BE FILED BY THE ASSESSEE. 17. IN THE RESULT, BOTH THE APPEAL OF THE ASSESSEE AND THE REVENUE ARE PARTLY ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 ND JUNE, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 22 ND JUNE, 2012 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