ACIT, Calicut V. Shri Maruthi Babu Rao Jadhav, Calicut

ITSSA 193/COCH/2005

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7691 (ITAT-COCHIN)
• Duration Of Justice: 6 year(s) 3 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-02-2012
• Assessment Year: misc
• Appeal Filed On: 17-11-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: JOSEPH SEBASTIAN
• Section: 131; 132; 15

Judgement Text

1 ITSSA NO.193/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. 193/COCH/2005 (BLOCK PERIOD 01-04-1990 TO 15-11-2000) THE A.C.I.T., CENT.CIRCLE VS SHRI MARUTHI BABURAO JADHAV CALICUT PROP, DHANALAKSHMI REFINERY SANTHAPURAM LODGE PERINTHALMANNA PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. S VIJAYAPRABHA RESPONDENT BY : SHRI JOSEPH SEBASTIAN DATE OF HEARING : 09-02-2012 DATE OF PRONOUNCEMENT : 17-02-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, KOCHI DATED 08-08-2005 FOR THE BLOCK PERIOD 01-04-1990 TO 15-11-2000. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DELET ION OF ADDITION OF RS.5,70,637 TOWARDS INCOME FROM REFINERY WORK. 2 ITSSA NO.193/COCH/2005 3. SMT. S. VIJAYAPRABHA, THE LD.DR SUBMITTED THAT T HE COMMISSIONER OF INCOME-TAX(A) DELETED THE ADDITION ON THE GROUND THA T THE ASSESSING OFFICER HAS NOT POINTED OUT ANY MATERIAL FOUND DURING THE COURS E OF SEARCH AND THE ADDITION WAS MADE ONLY ON THE BASIS OF THE STATEMENT RECORDE D FROM THE ASSESSEE. REFERRING TO THE JUDGMENT OF THE KERALA HIGH COURT I N KUNHAMBU & SONS VS COMMISSIONER OF INCOME-TAX (1996) 219 ITR 235, THE L D.DR SUBMITTED THAT THE ADDITION MADE ON THE BASIS OF THE STATEMENT RECORDE D FROM THE ASSESSEE IS VALID AND, THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) IS NOT CORRECT IN DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI JOSEPH SEBASTIAN, THE LD.R EPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT FOR THE BLOCK PERIOD THE UND ISCLOSED INCOME HAS TO BE COMPUTED ONLY ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN THIS CASE THE ADDITION WAS MADE ONLY ON THE BASIS OF THE STATEMENT RECORDED FROM THE ASSESSEE U/S 131 OF THE INCOME-TAX IN THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THERE CANNOT BE ANY ADDITION ON THE BASIS OF THE STATEMENT RECORDED U/S 131 OF THE ACT IN THE AB SENCE OF ANY OTHER MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. 5. WE HAVE CONSIDERED THE SUBMISSIONS ON EITHER SID E AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE ARISE S FOR CONSIDERATION IS WHETHER ANY ADDITION COULD BE MADE AS UNDISCLOSED INCOME FO R THE BLOCK PERIOD ON THE BASIS OF THE STATEMENT RECORDED U/S 131 OF THE INCO ME-TAX ACT, 1961. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 15 8BB(1) OF THE ACT. SECTION 158BB(1) CLEARLY STATES THAT THE ASSESSING OFFICER HAS TO COMPUTE THE UNDISCLOSED INCOME ON THE BASIS OF THE MATERIAL FOUND DURING TH E COURSE OF SEARCH OPERATION OR ANY INFORMATION WHICH RELATED TO THE MATERIAL FO UND DURING THE COURSE OF 3 ITSSA NO.193/COCH/2005 SEARCH OPERATION. IN THIS CASE NO MATERIAL EVIDENC E WAS FOUND DURING THE COURSE OF SEARCH OPERATION WHICH IS RELATED TO THE ADDITIO N OF INCOME FROM REFINERY WORKS. THE ASSESSING OFFICER APPARENTLY ESTIMATED T HE INCOME ON THE BASIS OF THE STATEMENT RECORDED FROM THE ASSESSEE U/S 131 OF THE INCOME-TAX ACT. IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THE ASSESSING OFFICER CANNOT MAKE ANY ADDITION AS UNDISC LOSED INCOME FOR THE BLOCK PERIOD. STATEMENT RECORDED U/S 131 OF THE INCOME-TA X ACT, IN THE COURSE OF ASSESSMENT PROCEEDINGS, CANNOT BE TREATED AS MATERI AL FOUND DURING THE COURSE OF SEARCH OPERATION. IF THE STATEMENT RECORDED U/S 131 OF THE INCOME-TAX ACT RELATES TO ANY OTHER MATERIAL FOUND DURING THE COUR SE OF SEARCH OPERATION, THE MATTER WOULD STAND ON DIFFERENT FOOTING. IN THE AB SENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, COMPUTING TH E UNDISCLOSED INCOME ONLY ON THE BASIS OF THE STATEMENT RECORDED U/S 131 OF THE INCOME-TAX ACT IS NOT JUSTIFIED AT ALL. 6. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF K ERALA HIGH COURT IN KUNHAMBU & SONS (SUPRA). IN THE CASE BEFORE THE KERA LA HIGH COURT, THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEE U/S 132 OF T HE INCOME-TAX ACT. IN THE COURSE OF SEARCH OPERATION, A STATEMENT WAS RECORDE D FROM THE MANAGING PARTNER OF THE ASSESSEE. THE MANAGING PARTNER, DUR ING THE COURSE OF SEARCH OPERATION, ADMITTED THAT THERE WERE CERTAIN DISCREP ANCIES IN THE ACCOUNTS OF THE ASSESSEE. ON THE BASIS OF THIS STATEMENT RECORDED U/S 132(4) OF THE INCOME-TAX ACT DURING THE COURSE OF SEARCH OPERATION, THE ADDI TION WAS MADE BY THE ASSESSING OFFICER WHICH WAS CONFIRMED BY THE HIGH C OURT. THE HIGH COURT, AFTER REFERRING TO THE EXPLANATION INSERTED BY DIRECT TAX LAWS (AMENDMENT) ACT, 1987 WITH EFFECT FROM 01-04-1989 FOUND THAT INTERROGATION U/S 132(4) OF THE INCOME- TAX ACT CAN BE MADE NOT ONLY ON THE BASIS OF THE BO OKS OF ACCOUNT FOUND AS A 4 ITSSA NO.193/COCH/2005 RESULT OF SEARCH BUT ALSO ANY OTHER MATERIAL RELEVA NT FOR IN THE PROCEEDINGS UNDER THE INCOME-TAX ACT. IN THIS CASE, ADMITTEDLY, NO ST ATEMENT WAS RECORDED IN THE COURSE OF SEARCH PROCEEDINGS U/S 132(4) OF THE INCO ME-TAX ACT. ADMITTEDLY, THE STATEMENT WAS RECORDED U/S 131 OF THE INCOME-TAX ACT IN THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THIS JUDGMENT O F THE KERALA HIGH COURT IN THE CASE OF KUNHAMBU & SONS (SUPRA) MAY NOT BE APPLI CABLE TO THE FACTS OF THE CASE. 7. IN VIEW OF THE ABOVE DISCUSSION THIS TRIBUNAL IS OF THE OPINION THAT THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY DELETED TH E ADDITION MADE BY THE ASSESSING OFFICER. THIS TRIBUNAL HAS NO HESITATION TO CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A). ACCORDINGLY, THE ORD ER OF THE COMMISSIONER OF INCOME-TAX(A) IS CONFIRMED AND THE APPEAL OF THE REV ENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF FEBRUARY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 17 TH FEBRUARY, 2012 PK/- COPY TO: 1. THE A.C.I.T., CENT. CIR., CALICUT 2. SHRI MARUTHI BABU RAO JADHAV, PROP DHANALAKSHMI REFI NERY, SANTHAPURAM LODGE, PERINTHALMANNA 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