Madhupuri chits & finance Co.P.Ltd, Calicut V. DCIT, Calicut

ITSSA 2/COCH/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0378 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-11-2014
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 13-10-2014
• Assessment Year: misc
• Appeal Filed On: 30-11-2012
• Court: TRIBUNAL
• Department Lawyers: K K JOHN
• Assessee Lawyers: MOHAN PULICKAL
• Section: 132

Judgement Text

1 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S. GANESAN, JM & CHANDRA POOJARI, AM IT(SS)A NO.02/COCH/2012 (BLOCK PERIOD 1.4.1995 TO 18.10.2001 ) M/S MADHURAPURI CHITS & FINANCE CO P LTD MEESAKKARAN BUILDING M M ALI ROAD KOZHIKODE THE DYCOMMR OF INCOME TAX CEN CIR KOZHIKODE ( APPELLANT) V S (RESPONDENT) PAN NO. AABCH5271C ASSESSEE BY SHRI MOHAN PULICKAL REVENUE BY SHRI K K JOHN, SR DR DATE OF HEARING 10 TH OCT 2014 DATE OF PRONOUNCEMENT 21S NOV 2014 ORDER PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 7TH SEPT 2012 OF THE CIT(A)-I, KOZHIKODE AND ITS RELATES TO THE BLOCK PERIOD FROM 1.4.1995 TO 18.10.2001. 2 THE SOLITARY ISSUE INVOLVED IN THIS APPEAL IS WI TH REGARD TO THE ASSESSMENT OF UNDISCLOSED INCOME FROM CHIT BUSINESS AT RS. 1,49,8 9,663/-.. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PRIVATE LIMITED COMPANY ENGAGED PRIMARILY IN THE BUSINESS OF RUNNING CHITTI ES AND ALSO IN PRIVATE FINANCING. THERE WAS A SEARCH U/S 132 OF THE I T A CT AT THE BUSINESS PREMISES OF 2 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) THE ASSESSEE COMPANY AND AT THE RESIDENTIAL PREMISE S OF THE DIRECTORS ON 18.10.2001. DURING THE COURSE OF SEARCH AN AMOUNT O F RS. 77,750/- WAS FOUND AT THE BUSINESS PREMISES OF THE ASSESSEE COMPANY AND 2 84 GMS OF GOLD WAS ALSO FOUND AT THE RESIDENTIAL PREMISES OF THE DIRECTORS; BUT THESE HAVE NOT BEEN SEIZED. HOWEVER, DURING THE SEARCH VARIOUS INCRIMI NATING DOCUMENTS WHICH CONTAINED ENTRIES RELATING TO UNDISCLOSED INCOME WE RE FOUND AND SEIZED. THE AO ISSUED NOTICE U/S 158BC OF THE I T ACT AND SERVE D ON THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED ITS RETU RN OF INCOME ON 19 TH JULY 2002 DECLARING UNDISCLOSED INCOME AT NIL. HAVING REGARD TO THE NATURE AND COMPLEXITY OF THE ACCOUNTS OF THE ASSESSEE, THE AO AFTER THE PRIOR APPROVAL OF THE CIT CENTRAL, KOCHI, REFERRED THE MATTER FOR S PECIAL AUDIT U/S 142(2A) OF THE ACT. 2.2 DURING THE AUDIT, THE SPECIAL AUDITORS SELECTE D 8 C HITTIES F OR VER I F I CATION AND COMPUTED I NCOME FR OM THESE 8 CHIT TI ES AS P E R COMPUTATION GIVEN IN A NNEXURE -14 OF THE A UDIT REPORT . THOUGH THE CH I LTTES CONDUCTE D BY THE ASSESSEE COMPANY DURING THE PERIOD COVERED BY THE B LOCK PERIOD WERE 8 4 IN NUM B ER , VERIFICATION WAS CONFINED TO 8 CHITTI E S BECAUSE SU CH V ER IF I C ATION O F A LL TH E 8 4 C HITT IE S I N T H E MANNER IN WHICH I T REQUIRED T O B E D ON E WAS NOT POSS I BLE WITHIN T HE MAXIMUM 180 DA Y S ALLO WED FO R AUDIT U N DER THE INCOME T A X ACT, 1 96 1. 2.3 THE SPECIAL AUDITORS, DURING THE COURSE OF AUDI T HAVE POINT OUT VARIOUS 3 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) OMISSIONS, MISTAK E S AND DISCREPANCIES WHICH ARE REPRODUCED HEREUNDER: I) THE CHIT PAYMENTS M A DE T O ' WI N NE R S W E RE ACTUALL Y LESSER TH A N THE AMOUNTS ACCOUNTED I N ' THE BOOKS. II) THE SUBSCRIPTION COLLECTED WERE ACTUALLY MORE THAN THOSE ACCOUNTED . I I I) FO R FE I TED DIVID EN D IS NO T OFFE R ED A S I NCOME I V ) TH E C ASH BAL A NCE DRAWN IN THE CASH BOOK WAS NO T REA L . V) THE B A LANCE S REC E I VA B LE I N CHITTY RECEIVABL E A N D CHITTY PAYABLE ACCOU N TS IN R ESPECT OF 9 CHTTTTES ARE FO UND W R ITTE N OFF IN THE A CC O UNTS FO R THE Y EAR ENDE D 31. 3 .2 0 01. T H E R E A SON HAS NOT B E E N E XP LAI N ED. V A) T HE B A LANCES DUE TO AN D DUE B Y SUBSCR I BERS O F THE 8 C H I TTIES S ELECTE D BY T HE A UD I T O R FOR DETAI LE D VER I FICATION WERE GIVEN IN ANNEXURE V I T O XLII . T HOUG H TH ERE WERE OUT S TAN D IN G B A L ANC E S, HO W E VE R IN THE L E D GE R THE BAL A NCE WAS SHO W N AT A NIL FI GUR E. T H IS FACT IS C L E AR FROM THE A UDIT O RS R EPO RT UNDER THE HEAD CHIT AC C OUNT S'. THIS IS A MAJO R DISCREPANCY FOUND IN THE ACCO U N T S OF THE ASSESSEE WHICH HAS NO T BEEN EXPLAI N ED . V I ) I N TE R ES T DUE O N LO A NS ARE NOT F OUN D A CC OUNTE D F OR I N TH E BOOKS. EVEN ON THE LOANS A DV ANCE D TO TH E DIR EC TORS , NO I NTERES T HAS B E EN C HAR GED . THE INTER E ST COLL E CTED IS AT THE RATE OF 13 . 5 TO 18% F ROM OUTS I DERS . W H Y NO I NTERES T H AS NOT BE EN C H ARG E D FR O M THE DIRECTORS HAS NOT B EE N EXPL A I N ED . VII ) THE I RR EGULA R ITIES / E R RORS FO U ND O N V ER IFI CAT I ON OF PR OFIT AND LOSS ACCOU N T A R E NUMEROUS A N D H A VE B E EN P OIN TED OUT B Y T HE AU DITOR AT P A GES 11,12,13 A N D 14 OF TH E A U DIT REPORT . I X ) CA SH BROUGHT F ROM B A N K AC COUNT DHA NA LA K S HM I B A N K LTD A N D ORIENTAL BAN K LTD IS EN TERED I N THE DA Y B O O K T O SU I T T HE CONVEN I ENC E O F T H E A SSE SS E E AND TO TI DE OVER THE C A SH DEFI CIT . THE CASH IS NEVER FOUND CREDITED TO THE ACCOUNT ON TH E DA Y OF D RAWAL OF C ASH F R OM THE BANK ACCO U NT . IT IS ACCO U NTED FOR A FTER ONE OR TWO DAYS OF THE A CTU AL D R AW A L O F C A SH . R EA S ONS NOT EXP L A I NE D. X) DEPO SIT OF CA S H OFRS.1,9 7, 282 + R S .6 4,212 = RS . 2,61 , 494, TO THE BANK IS NOT AT AL L E N TE R E D I N THE CASH BO O K . LIKEWI SE , WITHDRAWALS M ADE FROM BANK RS. L , 38 , 9 7 7 IS ALSO N O T E NT E R ED I N T HE C ASH BOOK . . XI ) A NN E XUR E I V O F THE A UDIT REPORT S HOWED CASH DEFICIT ON DIFFERENT DATES AND T H E DE FIC IT HAS NOT BEEN SATIS F ACTO R IL Y EX P LAI N ED 4 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) 2.4 AFTER CONSIDERING THE AUDIT REPORT, THE AO CAME TO THE CONCLUSION THAT THE ACCOUNTS O F THE ASSESSEE ARE UNRE L IAB L E AN D T H E TRUE I N COME CA NNO T BE DEDUCED T H E RE F R O M AND ACCORDINGLY, T HE AO REJECTED THE BOOKS RESULTS AND WAS OF THE OPINION THAT THE P R OFI T S F R OM CHIT B U S I NESS HAS TO BE ESTIMATED. FOR THIS PURPOSES, THE AO REFERRED THE S UB PARA 22 OF P AR A VII UNDER THE CAPTION ' CHIT ACCO UN TS ' OF THE AUDITO R S REPORT WHICH WE REPRODUCE HERE AS UN D E R: ' T H E INCOME OF TH E C O M PA N Y FRO M T HE E I G HT CHI TT IES SEL E CT E D BY M E FO R V ER IFICATION A S C O MPUTED IN A NN E XUR E14 IS RS. 76, 7 8 , 33 4/- AS AGA I N ST THE I N CO M E O F R S. 23 ,51 , 250 C R E DITED BY TH E COMPANY TO T H E PRO FI T AND LOSS AC COUN T AS UNDE R : AS PER ACCOUNTS AS PER ANNEXURE 14 DIFFERENCE FOREMANS COMMISSION 23,51,250 37,17,650 13,66,400 DIVIDEND: ON COMPANYS TICKET/S NIL 11,29,533 11,29,53 3 ON DEFAULTERS TICKETS NIL 20,35,551 20,33,.55 1 FORFEITED DIVIDEND NIL 7,97,600 7,97,600 TOTAL RS. 23,51,250 RS. 76,78,334 RS. 53,27,084 THE D IF FERENCE I N I N CO ME AMOUNT I NG TO RS. . 53 ,27,084 COMPUTE D A S A BO V E , IS H O WEVER , DEPENDENT ON T HE ACCU R A C Y AND RE L IA B I LIT Y OF T HE INF OR M AT I ON R EGA R DI N G C H I T T Y I NST AL L M E NTS FURNISHED TO M E , O F WH I CH I HAVE ALREADY EXPR ESS DOUBT IN PARA 1 2 ABOVE ' . 2.5 ACCORDING TO THE AO, FROM THE ABO VE R E P O RT OF THE A UDITOR, IT WOULD BE CLEAR THA T TH E I NCOME F ROM 8 CHI TTIE S WAS RS. 7 6 ,7 8,334/- , O UT OF WHICH RS. 23 , 5 1,2 50 WA S ACCOUNTED FOR AND TH E B ALANCE RS. 53 , 2 7, 084 WAS UNACCOUNTED OR UNDISCLOSED AGAINST 8 CH I TTIES I.E MA P AN( 1 ) , M PB ( 1 ),M PB (2), M PD ( 1 ), M PE ( 02 ), M PF (J), M PF (2) A N D MPA(O1) WHICH HAVE BEEN SEPARATELY I DENT I F IED IN T HE A NN E XUR E ' A' AT T A C HED TO THE REPORT. 5 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) 2.6 IT WAS NOTICED BY THE AO THAT TH E TOTAL CASH C OLLECTION F ROM THE S UBSCRIBER S AG AI NS T THE S E 8 CH I TTI ES WAS RS. 3,55,35,144/- , WHICH I S AGAI NST TH E TOT AL SALA A MOUNT O F RS . 6 , 64 . 00 , 000. T HE WORD ' SALA ' AND ' SAL A AMOUN T' WAS DESCRIBED I N T H E F OOT NO T E T O T HE A NNEXURE 14 ATTA C HE D TO THE AUDIT REPORT. FURTHER, T HE PERCENTAGE O F C ASH COLLEC TI ON O VER THE 'S A L A AMOUNT ' WORKS OUT TO 53.5% . ( R S. 3 ,5 5 , 3 5 , 144 DIVID E D BY RS . 6,64 , 00 , 00 0 X 100) AND T HE PE R CE N TA GE OF UNDIS C L OSED P R OFIT WITH ' RE F E R ENCE T O CASH COLLECTION WO R K S O U T TO 15 % . ( RS . 53 , 2 7, 084 DIVIDED BY RS . 3,55,35,144 X 100). IT WAS OBSERVED THAT THE SALA AMOUNT COLLECTED FR OM THE 84 CHITTY HOLDERS B Y THE ASSE S SEE COMPANY, AS P E R THE LIST SU BM I TTE D B Y T HE AS S ESSEE, WAS RS 22 ,10, 55 ,000. IT WAS NOTICED THAT THE LI ST, A S S UBM I T TED BY THE A SS ES SE E, WAS VERIFIED WITH THE ASSISTANC E OF T H E ASSESSEE WHICH FORMS PAR T OF THE ORDER . ACCORDINGLY, THE AO BY FOLLOWING THE ABOV E METHOD, THE PROFIT FROM 84 CHIT S CONDUCTED B Y THE ASSESSEE, DUR I NG T HE B LOCK P E RIOD WAS ESTIMATED AS UNDER : TOTAL SALA AMOUNT AS PER ANNEXURE RS. 22,10,55,000 CASH COLLECTION ESTIMATED @ 53.5% RS. 11,82,64,425 /- PROFIT BY APPLYING THE PROFIT PERCENTAGE OF 15% ON THE ABOVE RS. 1,77,39,663/ 6 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) ACCORDING TO THE AO, E VEN F OR EARNIN G UN D IS C LO S E D INCOME SOME EXPENDITU R E HAS TO BE NECESSARILY I NC URR ED . CONSIDE R I N G THE F ACT T H AT THE ASSESSEE HAS CL A IMED EXPENDITU R E OU T OF HIS RE GUL A R I N C O ME AND THEREFORE, THE AO ALLOWED A DEDUC T ION @ 15 . 5 % OUT O F THE UNDISCLOS E D PRO FIT A S C OMPUTED ABOVE AND ACCORDING THE UND I SC LOS E D I NCOME WAS BROUGHT TO TAX FOLLOWING FIGURE: 15% PROFIT AS (UNDISCLOSED) RS. 1,77,39,663/- LESS: EXPENDITURE FOR EARNING THE ABOVE INCOME @ 15.5% RS. 27,50,000/- UNDISCLOSED INCOME RS. 1,49,89,663/- AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A ), WHO, AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CONFIRMED THE ORDER OF THE AO, AGAINST WHICH THE ASSESSEE IS IN APPEAL BEFORE US. 3 THE LD AR OF THE ASSESSEE SUBMITTED THAT THE HIGH COURT OF KERALA B Y JUD G MENT DATED 02.06.2011 IN I . T .A. NO. 1 36 / 2010 PARTLY SE T A S ID E TH E O RD E R OF THE TRIBUNAL A ND DI R ECTED T H E FI R ST A PP ELLATE A U THO R ITY TO RESTORE T H E APPEAL TO HIS FILE FOR D ECIDING THE CORRECTNESS OF THE UNDIS C LOSED INCOME ASSESSE D. IT WAS FURTHER SUBMITTED THAT AO CAL C ULATED THE UNDI SC LO S ED INCOME IN AN ERRONEOU S M E TH O D WITHOUT REGARD TO THE BASIC PRINCIPL ES OF ACCOUNTING S TANDARD S . THE LD AR SUBMITTED THAT A CCO RD I N G TO THE ASSESSEE , ON THE BASI S O F THE REPORT O F T H E S PEC IA L A UDIT OR, T HE U NDI SC L OSE D INCOME O F TH E ASSESSEE FROM THEIR CHITTY BUSIN ESS CAN B E CALCULATED ON THE BASIS OF THE REPO RT OF THE SPECIAL AUDITOR, WHO HAS GI VE N T H E S U M M A R Y OF I N FO R MATION R EGARDING THE C H ITT IES SE LE C TED F OR V ERIFI C ATION. THE NE T EXCESS CASH COLLECTION AFTER M A KI N G T H E PAYME NT S TO 7 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) SUBSCRIBERS FOR THE 8 CHITTIE S S ELECTED B Y THE SPEC IAL AUDIT O R WAS R S . 3 9 , 17 , 984 / - , WHICH WAS 5.90 % O F TH E TO TAL S AL A O F TH E 8 CHITTIES AMOUNTING TO RS . 6, 64 ,00 , 000 1 - AC C O RDINGLY , THE LD AR SUBMITTED THAT T HE NET EXCE S S CA S H C OL L E CT I O N FROM THE TOTA L 8 4 CHITTIES WILL BE 5.90 % OF THE TOTAL SALA OF 84 CHITTIES OF RS . 22 , 1 0, 55,000 / - , I .E R S . L , 30 , 42 , 245 / - IT WAS FURTHER SUBMITTED THAT T HE ASSE S SEE'S INCOM E FR OM THE C HITT Y BU S INE SS WIL L NOT B E HIGHER THAN T H E EXCE SS OF C AS H CO LLECTION FROM THE S UB S CRIB E R S, A FTE R MAKIN G THE PA Y MEN TS DU E TO THEM. T H EREFORE , THE MAXI MUM POSSIBLE INCOME FROM 84 CHITTIE S WILL BE R S. L , 30 , 4 2,2 4 5 / - . THE LD AR SUBMITTED THAT THE AO ALLOWED ONLY 15 . 50 % T OW A R D S THE E X PEN S E S FO R E AR NING THE INCOME . THEREFORE, IT WAS SUBMITTED THAT THE ALLOWED EXPENDITURE WAS INADEQUATE AND N O T J USTIF IA BLE . T H E C ON SO LI DATED PROFIT AND LO SS AC C O UNT SUBMITTED BY THE SPECIAL AUDITOR G I V E S THE TOTAL E X PENDI T U RE F OR TH E BL OC K PERIOD AT R S . 81 , 95 , 150 / -. IT WAS FURTHER SUBMITTED THAT WHEN THE A UDITED EX P E NDITUR E WAS A V AILAB LE , THEN T H ERE WAS NO NEE D TO GO F OR ES T I MATI ON. ACCORDINGLY, THE HE WORKED OUT THE POSSIBLE UNDISCLOSED INCOME AT RS. 4 8,47,095/- . 3.1 ON THE OTHER HAND, THE LD DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE RELEVANT MATERIAL ON RECORD. IN THIS CASE, THE ACCOUNTS WE RE NOT RELIABLE AND HENCE, THE AO REFERRED THE MATTER FOR SPECIAL AUDIT U/S 142(2A ) OF THE I T ACT. THE QUESTION BEFORE US IS WHETHER THE ESTIMATION OF THE INCOME I S JUSTIFIED OR NOT. THE AO, IN THIS CASE MADE HIS CONCLUSION ON THE BASIS OF THE MATERIAL UNEARTHED DURING THE COURSE OF SEARCH ACTION. THE CONTENTION OF THE LD AR OF THE ASSESSEE IS THAT THE 8 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) ASSESSMENT MADE BY THE AO WAS ON HIGHER SID BBE. IN ESTIMATING THE ESCAPED TURNOVER, IT IS INEVITABLE THAT THERE IS SOME GUESS -WORK. THE ASSESSING AUTHORITY WHILE MAKING THE 'BEST JUDGMENT' ASSESSMENT, NO DOU BT SHOULD ARRIVE AT IHIS CONCLUSION, WITHOUT ANY BIAS AND ON RATIONAL BASIS. THAT AUTHORITY SHOULD NOT BE VINDICTIVE OR CAPRICIOUS. IF THE ESTIMATE MADE BY T HE ASSESSING AUTHORITY IS A BONA FIDE, AND IS BASED ON A RATIONAL BASIS, THE FA CT THAT THERE IS NO GOOD PROOF IN SUPPORT OF THAT ESTIMATE IS IMMATERIAL. PRIMA FA CIE, THE ASSESSING AUTHORITY IS THE BEST JUDGE OF THE SITUATION AND IN THE PRESENT CASE, THE AO REFERRED THE MATTER TO THE SPECIAL AUDITOR AND HE HAS FOUND THE BOOKS OF ACCOUNT WAS NOT RELIABLE AND HE MADE ESTIMATION OF INCOME ON THE BA SIS OF THE MATERIAL AVAILABLE ON RECORD. THERE IS A CONCEALMENT OF INC OME BY THE ASSESSEE IN THIS ASSESSMENT YEAR WHICH WAS UNEARTHED DURING THE SEAR CH ACTION AND THE SPECIAL AUDITOR HAS CONFIRMED THE SAME. THE AO VERIFIED WI TH THE AVAILABLE FIGURES IN RESPECT OF 8 CHITTIES AT RS. 76,78,334/- AGAINST WH ICH THE ASSESSEE DECLARED ITS INCOME AT RS. 23,51,250/-. IN THE SAME PROPOSITION , HE WORKED OUT THE INCOME FOR 84 CHITTIES ON THE REASONS THAT THE ASSESSEE IS FOLLOWING THE SAME METHOD OF CONCEALMENT OF INCOME. IT IS JUST AND REASONABLE TO PRESUME THAT THE SAME PRACTICE WAS FOLLOWED BY THE ASSESSEE THROUGHOUT AL L THE ASSESSMENT YEARS. HOWEVER, THE PRESUMPTION IS REBUTTABLE IN THE EVENT IF THE ASSESSEE TO ESTABLISH THAT THE SAME METHOD OF CONCEALMENT WAS NOT FOLLOWE D CONTINUOUSLY THROUGHOUT THE ASSESSMENT YEARS IN QUESTION AND THA T THE METHOD OF CONCEALMENT DETECTED WAS PRACTICED ONLY FOR A PARTI CULAR PERIOD. IN THIS CASE, 9 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) THE ASSESSEE HAD NOT ADDUCED ANY EVIDENCE TO REBUT THE PRESUMPTION OR TO COME TO A CONTRARY FINDING. ON THE OTHER HAND, THE MATERIAL BROUGHT ON RECORD SUGGESTS THAT THE ASSESSEE IS IN THE HABIT OF CONCE ALING THE INCOME AND NOT COOPERATE NEITHER WITH THE SPECIAL AUDITORS NOR WIT H THE AUTHORITIES. IN THE SITUATION OF NON COOPERATION BY THE ASSESSEE, IT IS APPROPRIATE TO PRESUME THAT WHAT IS DETECTED OUT BY THE AUTHORITIES AS WELL AS THE SPECIAL AUDITORS IS CORRECT AND THE SAME METHOD OF CONCEALMENT IS ADOPTED BY TH E ASSESSEE THROUGHOUT BLOCK PERIOD AND WE HAVE NO REASON TO DISTURB THE E STIMATED INCOME MADE BY THE AUTHORITIES BELOW. THE MATERIAL BROUGHT ON RE CORD SHOWS THAT ENOUGH MATERIAL EVIDENCE TO PRESUME THE NATURE OF UNACCOUN TED INCOME AND ALSO NEGLIGENCE IN MAINTAINING THE RECORDS BY THE ASSESS EE. FURTHER, THE MATERIAL FOUND FOR THE PARTIAL PERIOD COULD BE USED FOR ESTI MATING THE INCOME OF THE WHOLE YEAR. TO ARRIVE AT THE ABOVE CONCLUSION, WE PLACE RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CST V. ESUFALI (H.M.) ABDULALI (H.M.) REPORTED IN 90 ITR 271 (SC); THE DE CISIONS OF THE HONBLE KERALA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TA X V. HOTEL MERIYA REPORTED IN 332 ITR 537 AND IN THE CASE OF SUNNY JACOB JEWEL LERS AND WEDDING CENTRE VS DCIT REPORTED IN 48 TAXMANN.COM.347 (KERALA). 5 IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE CO NSIDERED OPINION THAT THE LOWER AUTHORITIES ARE JUSTIFIED IN MAKING THE ADDIT ION AND ACCORDINGLY CONFIRM THE ORDER OF THE CIT(A) ON THIS ISSUE. 10 IT(SS)A NO.02/COCH/2012 (BP 1.4.1995 TO 18.10.2001 ) 6 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 DAY OF NOV 2014. SD/- SD/- (N.R.S. GANESAN) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED 21ST NOV 2014 RAJ* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT, 5. DR 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN 1 DATE OF DICTATION 28 OCT 2014 2 DT ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31 OCT 2014 3 DT ON WHICH THE APPROVED DRAFT COMES TO THE SR P S/PS 4 DT ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER 5 DICTATION PAID PLACED IN THE ORIGINAL FILE (NO.OF PAGES) 6 DT OF PRONOUNCEMENT 7 DT ON WHICH THE FILE GOES TO THE BENCH CLERK 8 DT ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DT ON WHICH THE FILE GOES TO AR 10 DT OF DISPATCH OF THE ORDER