DCIT, Ernakulam V. Joy Thomas, Thrissur

ITSSA 144/COCH/2004

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7681 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-03-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-02-2012
• Assessment Year: misc
• Appeal Filed On: 17-12-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: K K CHANDRASEKHARAN
• Keywords: Unexplained investment; Block assessment
• Section: 69

Judgement Text

1 IT(SS)A NO.144/COCH/2004 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. 144/COCH/2004 (BLOCK PERIOD 01-04-1988 TO 30-07-1998) DY.C.I.T., CENTRAL CIR.II VS SHRI JOY THOMAS ERNAKULAM PUTHUR HOUSE, PARAPPUR TRICHUR PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. VIJAYAPRABHA RESPONDENT BY : SHRI K.K. CHANDRASEKHARAN DATE OF HEARING : 16-02-2012 DATE OF PRONOUNCEMENT : 09-03-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE WAS DISPOSED OF EARLIER BY AN ORDER DATED 12- 03-2010. HOWEVER, THE ASSESSEE FILED A MISCELLANEOU S APPLICATION IN M.A. NO.39/COCH/2010. THIS TRIBUNAL BY AN ORDER DATED 0 7-09-2010 RECALLED THE ORDER OF THIS TRIBUNAL DATED 12-03-2010 AND RESTORED THE AP PEAL ON FILE. ACCORDINGLY THE APPEAL IS POSTED AGAIN FOR DISPOSAL BEFORE THIS BENCH. 2. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE FIRST GROUND OF APPEAL PERTAINS TO ADDITION WITH REGARD TO INVESTMENT IN M UTHALAMALA PROPERTY. ACCORDING TO THE LD.DR, THE ASSESSEE PURCHASED MUTH ALAMALA PROPERTY JOINTLY 2 IT(SS)A NO.144/COCH/2004 WITH E UNNIKRISHNAN DURING THE FINANCIAL YEAR 1996-97 . THE SALE CONSIDERATION FOR THE ENTIRE LAND WAS SHOWN AT RS.2,18,776. THE ASSE SSEE HAS DISCLOSED THE SOURCE OF INCOME FROM THE AMOUNT WITHDRAWN FROM THE PARTNE RSHIP FIRM, M/S COSMO PHARMA. SUBSEQUENTLY IN FEBRUARY, 1997, 50% SHARE OF SHRI E UNNIKRISHNAN WAS TAKENOVER BY M/S VRIDHI LEASING & FINANCE (P) LTD AG AINST LOAN OF R.10 LAKHS DUE FROM SHRI E UNNIKRISHNAN. THEREFORE, THE ASSESSING OFFICER HELD THAT THE ACTUAL PRICE OF THE LAND IS RS.8 LAKHS AND THE ASSESSEES S HARE WAS RS.4 LAKHS. BY TAKING INTO CONSIDERATION THE WITHDRAWAL FROM COSMO PHARMA TO THE EXTENT OF RS.2.2 LAKHS ON 27-09-1996, RS.2 LAKHS WAS TREATED AS UNACCOUN TED INVESTMENT BY THE ASSESSEE IN MUTHALAMALA PROPERTY. HOWEVER, THE COM MISSIONER OF INCOME-TAX(A) WITHOUT ANY REASON DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. 3. ON THE CONTRARY, SHRI K.K. CHANDRASEKHARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT ADMITTEDLY, THE SALE CONSID ERATION OF THE LAND AS DISCLOSED IN THE SALE DEED IS RS.2,18,776. THE REV ENUE AUTHORITIES FOUND NO MATERIAL DURING THE COURSE OF SEARCH OPERATION. M/ S VRIDHI LEASING & FINANCE (P) LTD TOOKOVER THE SHARE OF SHRI E UNNIKRISHNAN IN THE LAND IN FEBRUARY, 1997 AGAINST OUTSTANDING LOAN OF RS.10 LAKHS. THE ASSESS ING OFFICER THEREFORE HAS TAKEN THE VALUE OF THE LAND AT RS.8 LAKHS. THE SHARE OF T HE ASSESSEE IN THE LAND WAS ONLY 50%. THE ASSESSING OFFICER WITHOUT ANY MATERIAL PR ESUMED THAT THE COST OF THE LAND AS RS.8 LAKHS AND THE ASSESSEES SHARE BEING , RS.4 LAKHS WAS CONSIDERED IN THE HANDS OF THE ASSESSEE. ACCORDING TO THE LD.REP RESENTATIVE, THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE COST OF LAND WA S RS.10 LAKHS. MERELY BECAUSE A FINANCE COMPANY HAS TAKENOVER THE 50% SHARE OF SHR I E UNNIKRISHNAN AGAINST A LOAN OF RS.10 LAKHS, IT WOULD NOT MEAN THAT THE ASSE SSEE HAS INVESTED MORE MONEY THAN WHAT WAS DISCLOSED IN THE REGISTERED DOC UMENT. IN THE ABSENCE OF 3 IT(SS)A NO.144/COCH/2004 ANY MATERIAL, ACCORDING TO THE LD.REPRESENTATIVE, T HE COMMISSIONER OF INCOME- TAX(A) HAS RIGHTLY DELETED THE ADDITION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAR EFULLY GONE THROUGH THE ORDER OF THE ASSESSING OFFICER AND THE COMMISSIONER OF IN COME-TAX(A). THE ASSESSING OFFICER MADE THE ADDITION ON THE GROUND THAT M/S VR IDHI LEASING & FINANCE (P) LTD TOOKOVER 50% SHARE IN THE PROPERTY JOINTLY HELD WITH THE ASSESSEE AGAINST A LOAN OF RS.10 LAKHS. EXCEPT THIS NO OTHER MATERIAL IS ON RECORD TO SUGGEST THAT THE ASSESSEE HAS INVESTED MONEY OVER AND ABOVE WHAT WAS DISCLOSED IN THE SALE DEED. IT IS ALSO AN ADMITTED FACT THAT THE ASSESSE E HAS WITHDRAWN FUNDS FROM COSMO PHARMA TO THE EXTENT OF RS.2.2 LAKHS. THIS TR IBUNAL IS OF THE OPINION THAT THE SUBSEQUENT TAKEOVER OF THE LAND BY A FINANCE COM PANY AGAINST OUTSTANDING LOAN FROM ONE OF THE JOINT OWNERS OF THE LAND CANNO T BE A REASON TO DOUBT THE INVESTMENT MADE BY THE ASSESSEE. IN OTHER WORDS, S UBSEQUENT TAKE OVER OF THE PROPERTY OF THE JOINT OWNER CANNOT BE A REASON TO M AKE ANY ADDITION IN THE HANDS OF THE PRESENT ASSESSEE. ACCORDINGLY THIS TRIBUNAL FINDS THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION MADE IN THE HANDS OF THE ASSESSEE. IN VIEW OF THE ABOVE, THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) IS CONFIRMED. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADDI TION OF R.11,16,769 OUT OF THE TOTAL ADDITION OF R.37,21,135. 6. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER FOUND VARIOUS INVESTMENTS BY THE ASSESSEE AS SHOWN AT PAR AGRAPH 5 OF THE ASSESSMENT ORDER. THE ASSESSEE COULD NOT PRODUCE ANY MATERIAL TO BIFURCATE THE YEAR IN 4 IT(SS)A NO.144/COCH/2004 WHICH THE INVESTMENT WAS MADE. IN THE ABSENCE OF A NY MATERIAL TO BIFURCATE THE YEAR IN WHICH THE INVESTMENT WAS MADE, THE ENTIRE A MOUNT WAS TREATED AS UNEXPLAINED INVESTMENT FOR THE FINANCIAL YEAR ENDED ON 30-07-1998. ON APPEAL BY THE ASSESSEE, THE COMMISSIONER OF INCOME-TAX(A) R ELYING UPON THE YEAR-WISE DETAILS FILED BY THE ASSESSEE BEFORE HIM DELETED TH E ADDITION TO THE EXTENT OF RS.11,16,769. THE DETAILS FURNISHED BY THE ASSESSE E WITH REGARD TO YEAR-WISE INVESTMENT WERE NOT CONFRONTED TO THE ASSESSING OFF ICER. THE COMMISSIONER OF INCOME-TAX(A) WITHOUT GIVING OPPORTUNITY TO THE ASSE SSING OFFICER TO EXAMINE THE YEAR-WISE DETAILS FURNISHED BY THE ASSESSEE DELETED THE ADDITION. THEREFORE, ACCORDING TO THE LD.DR, THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-EXAMINATION. 7. ON THE CONTRARY, SHRI K.K. CHANDRASEKHARAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FURNISHED THE YEAR-WISE DETAILS AS PER ANNEXURE B OF THE COMMISSIONER OF INCOME-TAX(A)S O RDER. THE COMMISSIONER OF INCOME-TAX(A), AFTER VERIFICATIONS OF THE DETAILS FU RNISHED BY THE ASSESSEE DELETED THE ADDITION TO THE EXTENT OF RS. 11,16,769. THERE FORE, NO INTERFERENCE IS CALLED FOR. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. DURING THE COURS E OF BLOCK ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT FURNISH ANY DET AILS WITH REGARD TO YEAR-WISE INVESTMENT MADE. IN THE ABSENCE OF ANY MATERIAL, T HE ASSESSING OFFICER TREATED THE ENTIRE INVESTMENT AS UNEXPLAINED FOR THE YEAR E NDED 30-07-1998. HOWEVER, DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASS ESSEE FURNISHED THE DETAILS OF YEAR-WISE INVESTMENT. THE COMMISSIONER OF INCOME-TAX (A) WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER DELETED THE AD DITION TO THE EXTENT OF 5 IT(SS)A NO.144/COCH/2004 RS.11,16,769 ON THE BASIS OF THE YEAR-WISE INVESTMEN T DETAILS FILED BY THE ASSESSEE. ONCE THE ASSESSEE HAS FILED THE YEAR-WISE INVESTMENT DETAILS, THE COMMISSIONER OF INCOME-TAX(A) OUGHT TO HAVE GIVEN OP PORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME EITHER BY CALLING FOR R EMAND REPORT OR OTHERWISE. SINCE SUCH AN OPPORTUNITY WAS NOT GIVEN, THIS TRIBU NAL IS OF THE OPINION THAT THE MATTER MAY BE REMANDED BACK TO THE ASSESSING OFFICER FOR RE-EXAMINATION. ACCORDINGLY, THE ORDER OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ISSUE OF INVESTMENT TO THE EXTENT OF RS.37,21,135 IS REMANDE D BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL REC ONSIDER THE ISSUE IN THE LIGHT OF THE YEAR-WISE DETAILS FURNISHED BY THE ASSESSEE FOR INVESTMENT BEFORE THE COMMISSIONER OF INCOME-TAX(A) AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING A REASONABLE OPPORTUNITY TO T HE ASSESSEE. IT IS ALSO OPEN TO THE ASSESSEE TO FILE ANY OTHER MATERIAL TO SUBSTANT IATE THE SOURCE OF INVESTMENT AND THE PERIOD OF INVESTMENT BEFORE THE ASSESSING O FFICER DURING THE RE- ASSESSMENT PROCEEDINGS. 9. THE NEXT GROUND IS WITH REGARD TO ADDITION OF RS . 10,15,000 FOR THE ASSESSMENT YEAR 1997-98 IN MOVABLES. 10. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT AS ON 31-03-1997 M/S VRIDHI LEASING & FINANCE (P) LTD SHOWED DEPOSIT OF RS.10,1 5,000 IN THE NAME OF THE ASSESSEE. THE ASSESSEE EXPLAINED BEFORE THE ASSESS ING OFFICER THAT THE DEPOSIT OF RS.10,15,000 WAS CANVASSED BY THE ASSESSEE AND THE LIST OF REAL DEPOSITORS TO THE EXTENT OF 136 PERSONS WERE FURNISHED BEFORE THE ASS ESSING OFFICER. HOWEVER, INDIVIDUAL CERTIFICATE IN RESPECT OF THESE PERSONS WERE NOT ISSUED BY THE COMPANY. THE COMPANY HAS ALSO NOT PAID ANY INTEREST ON THESE DEPOSITS TO THE INDIVIDUALS. THEREFORE, THE ASSESSING OFFICER TREATED THE ENTIRE DEPOSIT OF RS.10,15,000 IN THE 6 IT(SS)A NO.144/COCH/2004 NAME OF THE ASSESSEE AS UNDISCLOSED INVESTMENT U/S 69 OF THE INCOME-TAX ACT. ACCORDING TO THE LD.DR, IN THE ABSENCE OF ANY MATER IAL TO SUGGEST THAT THE INVESTMENT WAS MADE IN THE NAME OF 136 PERSONS AS C LAIMED BY THE ASSESSEE, THE ADDITION HAS TO BE CONFIRMED ONLY IN THE HANDS OF T HE PRESENT ASSESSEE. 11. ON THE CONTRARY, SHRI K.K. CHANDRASEKHARAN, THE LD .REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS ONLY A CANV ASSING AGENT FOR THE DEPOSITS. THE COMPANY HAS ISSUED COUPONS TO THE VALUE OF RS.5 ,000 EACH TO ALL THE DEPOSITORS. THE COMMISSIONER OF INCOME-TAX(A) AFTER VERIFYING THE ACCOUNTS OF THE COMPANY AND THE COUPONS ISSUED BY THE COMPANY F OUND THAT THE DEPOSITS WERE MADE BY INDIVIDUALS AND THE ASSESSEE WAS ONLY A CANVASSING AGENT. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIG HTLY DELETED THE ADDITION. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OF FICER MADE THE ADDITION ONLY ON THE GROUND THAT NO INDIVIDUAL DEPOSIT CERTIFICATE W AS ISSUED IN THE NAME OF THE DEPOSITORS. THE ASSESSEE HAS GIVEN A LIST OF 136 P ERSONS WHO HAVE MADE THE DEPOSITS. THEREFORE, IT IS FOR THE ASSESSING OFFIC ER TO EXAMINE THE SAME AND FIND OUT WHETHER THESE 136 PERSONS HAVE REALLY DEPOSITED THE MONEY AS CLAIMED BY THE ASSESSEE. WITHOUT MAKING ANY EXAMINATION, THE A SSESSING OFFICER MADE THE ADDITION AS UNDISCLOSED INVESTMENT BY THE ASSESSEE. WHEN THE ASSESSEE WAS CANVASSING AGENT AND THE COUPONS WERE ISSUED BY THE COMPANY AND THE ACCOUNTS OF THE COMPANY SHOW INVESTMENT IN THE NAMES OF INDI VIDUAL PERSONS, THIS TRIBUNAL IS OF THE OPINION THAT THERE CANNOT BE ANY ADDITION AS UNDISCLOSED INVESTMENT IN THE HANDS OF THE PRESENT ASSESSEE. T HEREFORE, THIS TRIBUNAL FIND NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOM E-TAX(A). ACCORDINGLY, THE SAME IS CONFIRMED. 7 IT(SS)A NO.144/COCH/2004 13. THE NEXT GROUND OF APPEAL PERTAINS TO ADDITION OF RS.1,59,000 BEING THE INVESTMENT IN M/S AVOKARAN MEDICALS. 14. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS MADE INVESTMENT TO THE EXTENT OF RS.1,59,000 FROM 15-01- 1992 TO 30-01-1992 IN AVOKARAN MEDICALS. SINCE THIS I NVESTMENT WAS NOT REFLECTED IN THE CASH FLOW STATEMENT, THE ASSESEE W AS ASKED TO EXPLAIN THE INVESTMENT. THE ASSESSEE CLARIFIED BEFORE THE ASSE SSING OFFICER THAT IN THE ROUGH BOOK THE LOANS RECEIVED FROM CREDITORS WERE CREDITE D IN THE NAME OF THE PARTNERS AND SUBSEQUENTLY IT WAS TRANSFERRED AND CR EDITED IN THE NAME OF THE RESPECTIVE PERSONS. ACCORDING TO THE ASSESSEE, THE LOANS RECEIVED BY EACH PARTNER WERE TREATED AS LOAN RECEIVED BY THE FIRM. HOWEVER, THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE OR THE DETAILS OF THE LOA N CREDITORS. THEREFORE, THE INVESTMENT OF RS.1,59,000 WAS TREATED AS UNEXPLAINE D INVESTMENT U/S 69 OF THE INCOME-TAX ACT. 15. ON THE CONTRARY, SHRI K.K. CHANDRASEKHARAN, THE LD .REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE MEDICAL SHOP WAS PURCHA SED FOR A TOTAL CONSIDERATION OF RS.2,10,000 FROM THE LOAN RECEIVED FROM THE CREDITORS. THE LOAN RECEIVED BY EACH PARTNER WAS TREATED AS LOAN RECEIV ED BY FIRM. THEREFORE, IT CANNOT BE TREATED AS UNDISCLOSED INVESTMENT IN THE HANDS OF THE ASSESSEE. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE CASH FL OW STATEMENT FILED BY THE ASSESSEE, THE ASSESSING OFFICER CAME TO KNOW THAT T HE INVESTMENT MADE IN AVOKARAN MEDICAL WAS NOT DISCLOSED TO THE DEPARTMENT . NO SEIZED MATERIAL IS 8 IT(SS)A NO.144/COCH/2004 AVAILABLE ON RECORD IN RESPECT OF THIS INVESTMENT. THE ASSESEE EXPLAINED THAT THE LOAN RECEIVED FROM CREDITORS WAS INVESTED FOR PURCH ASING THE MEDICAL STORE. THE LOANS RECEIVED BY THE PARTNERS WERE TREATED AS LOAN S RECEIVED BY THE FIRM. ONCE THE LOANS RECEIVED BY THE PARTNERS WERE TREATED AS LOAN RECEIVED BY THE FIRM IT IS FOR THE FIRM TO SUBSTANTIATE THE RECEIPT OF LOAN. IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, NO ADD ITION COULD BE MADE IN THE HANDS OF THE PRESENT ASSESSEE. THEREFORE, THIS TRI BUNAL IS OF THE OPINION THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED TH E ADDITION OF RS.1,59,000. HIS ORDER ON THIS ISSUE IS HEREBY UPHELD. 17. THE NEXT GROUND OF APPEAL IS WITH REGARD ADDITI ON OF RS. 3,72,125 TOWARDS KURIE CANVASSING COMMISSION. 18. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSEE HAS NOT DISCLOSED THE KURIE CANVASSING COMMISSION IN THE RET URN OF INCOME. THEREFORE, THE ASSESSING OFFICER MADE SEPARATE ADDITION WITH R EGARD TO KURIE CANVASSING COMMISSION. HOWEVER, ON APPEAL BY THE ASSESSEE THE COMMISSIONER OF INCOME- TAX(A) FOUND THAT THE ASSESSEE HAS INCLUDED THE KURI E CANVASSING COMMISSION IN THE INCOME RETURNED. THEREFORE, THE COMMISSIONER O F INCOME-TAX(A) FOUND THAT IT WAS ONLY REPETITION OF WHAT WAS ALREADY DECLARED IN THE RETURN OF INCOME. ACCORDING TO THE LD.DR, THE KURIE CANVASSING COMMISS ION WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THEREFORE, IT IS TO BE TR EATED AS UNDISCLOSED INCOME. 19. ON THE CONTRARY, SHRI K.K. CHANDRASEKHARAN, THE LD .COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME-T AX(A) ON VERIFICATION FOUND THAT THE KURIE CANVASSING COMMISSION RECEIVED WAS IN CLUDED IN THE INCOME 9 IT(SS)A NO.144/COCH/2004 RETURNED BY THE ASSESSEE; HENCE IT WAS FOUND THAT T HE ADDITION MADE BY THE ASSESSING OFFICER WAS ONLY REPETITION. THEREFORE, HE DELETED THE ADDITION. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY CONTENT ION OF THE REVENUE IS THAT THE KURIE CANVASSING COMMISSION WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNT. THEREFORE, IT HAS TO BE TREATED AS UNDISCLOSED INCO ME. NO DOUBT, IF THE INCOME IS NOT RECORDED IN THE BOOKS OF ACCOUNT, IT HAS TO BE T REATED AS UNDISCLOSED INCOME. BUT IN THE PRESENT CASE, THE ASSESSEE HAS DECLARED THE INCOME IN THE RETURN FILED BY THE ASSESSEE FOR THE BLOCK PERIOD. THE COMMISSIO NER OF INCOME-TAX(A), AFTER VERIFICATION OF THE RECORD FOUND THAT THE AMOUNT RE CEIVED WAS ALREADY RETURNED BY THE ASSESSEE; HENCE IT WAS ONLY A REPETITION. O NCE THE COMMISSIONER (APPEALS) VERIFIED THE RECORDS AND FOUND THAT IT WA S ALREADY DISCLOSED IN THE RETURN, THIS TRIBUNAL IS OF THE OPINION THAT THERE IS NO NEED FOR ANY FURTHER ADDITION. ACCORDINGLY, THIS TRIBUNAL FIND THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED THE ADDITION. WE UPHOLD HIS OR DER ON THIS ISSUE. 21. THE NEXT GROUND OF APPEAL IS WITH REGARD TO THE DIRECTION GIVEN BY THE COMMISSIONER OF INCOME-TAX(A) TO GIVE CREDIT TO THE WITHDRAWALS IN VARIOUS YEARS TO EXPLAIN THE INVESTMENTS AND OUTGOINGS. 22. WE HEARD THE LD.DR AND THE LD.COUNSEL FOR THE A SSESSEE. THE ONLY CONTENTION OF THE LD.DR IS THAT THE ASSESSEE HAS NO T ADVANCED ANY ARGUMENT ON THIS ISSUE BEFORE THE ASSESSING OFFICER; THEREFORE, THE COMMISSIONER OF INCOME- TAX(A) IS NOT CORRECT IN GIVING DIRECTION. WHEN TH E ASSESEE MADE WITHDRAWALS, IT IS FOR THE ASSESSING OFFICER TO GIVE CREDIT TO THE WIT HDRAWALS MADE BY THE ASESSEE IN RESPECT OF INVESTMENTS AND THE OUTGOINGS. THEREFOR E, IRRESPECTIVE OF THE 10 IT(SS)A NO.144/COCH/2004 DIRECTION OF THE COMMISSIONER OF INCOME-TAX(A), THE ASSESSING OFFICER IS BOUND TO GIVE SUCH CREDIT. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE DIRECTION OF THE COMMISSIONER OF INCOME-TAX(A) TO GI VE CREDIT TO THE WITHDRAWALS MADE BY THE ASSESSEE. THE GROUND OF THE REVENUE FA ILS. 23. THE NEXT GROUND OF APPEAL IS WITH REGARD TO THE DISALLOWANCE OF RS.2,44,070. 24. SMT. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1998-99 ADMITTING AN INCOME OF RS.2,44,070 AFTER THE EXPIRY OF DUE DATE OF FILING THE RETURN O F INCOME. THEREFORE, THE ASSESSING OFFICER HAS TAKEN THE DISCLOSED INCOME FOR THE BLOCK PERIOD AS NIL AND ADDITION WAS MADE TO THE EXTENT OF RS.2,44,070. 25. ON THE CONTRARY, SHRI K.K. CHANDRASEKHARAN, THE LD .REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT NO MATERIAL WAS FOUND DURIN G THE COURSE OF SEARCH OPERATION. THE ENTIRE ADDITION WAS MADE ON THE BAS IS OF THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1998-99. ACCORDING TO THE LD.REPRESENTATIVE, IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH, THE RETURN FILED BY THE ASSESSEE CANNOT BE THE BASIS FOR MAKING ANY ADDI TION. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THE SEARCH TOOK PLACE ON 30-07 -1998 AND THE TIME LIMIT FOR FILING THE RETURN OF INCOME HAS NOT BEEN EXPIRED FO R THE ASSESSMENT YEAR 1998-99. THEREFORE, THIS AMOUNT CANNOT BE TREATED A UNDISCLO SED INCOME FOR THE BLOCK PERIOD. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE SEARCH TOOK PLACE ON 30-07- 11 IT(SS)A NO.144/COCH/2004 1998 AND THE DUE DATE FOR FILING THE RETURN OF INCO ME U/S 139(1) HAS NOT BEEN EXPIRED AS ON THE DATE OF SEARCH. THEREFORE, THE A SSESSING OFFICER CANNOT SAY THAT THE ASSESSEE WOULD NOT HAVE DISCLOSED THE INCOME FO R THE BLOCK PERIOD. EVEN THOUGH THE REVENUE CLAIMS THAT THE ASSESSEE HAS NOT MAINTAINED ANY REGULAR BOOKS OF ACCOUNT, NO MATERIAL WAS FOUND WITH REGARD TO THE INCOME WHICH WAS ASSESSED FOR THE ASSESSMENT YEAR 1998-99. IN THE AB SENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THE AMOUNT O F RS.2,44,070 CANNOT BE TREATED AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITY. WE CONFIRM THE ORDER OF COMMISSIONER OF INCOME-TAX(A). 27. THE REVENUE HAS TAKEN ONE ADDITIONAL GROUND OF A PPEAL WITH REGARD TO LEVY OF SURCHARGE U/S 113 OF THE INCOME-TAX ACT. SINCE T HIS IS A LEGAL ISSUE, AFTER HEARING BOTH THE PARTIES, THE ADDITIONAL GROUND RAI SED BY THE REVENUE IS ADMITTED. 28. IN VIEW OF THE JUDGMENT OF THE APEX COURT IN TH E CASE OF COMMISSIONER OF INCOME-TAX VS SURESH N GUPTA 298 ITR 323 (SC), SURCHA RGE IS LEVIABLE ON THE UNDISCLOSED INCOME. THEREFORE, BY RESPECTFULLY FOL LOWING THE JUDGMENT OF THE APEX COURT, THE ORDER OF THE COMMISSIONER OF INCOME -TAX(A) IS SET ASIDE AND THAT OF THE ASSESSING OFFICER IS RESTORED. HOWEVER, THE ASSESSING OFFICER SHALL RECOMPUTE THE SURCHARGE WHILE GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL. 29. IN THE RESULT, THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MARCH, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 09 TH MARCH, 2012 PK/- 12 IT(SS)A NO.144/COCH/2004 COPY TO: 1. DY.C.I.T., CENT.CIR.II, ERNAKULAM 2. SHRI JOY THOMAS, PUTHUR HOUSE, PARAPPUR, TRICHUR 3. THE COMMISSIONER OF INCOME-TAX(A)-I, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH