C. Kunhammad, Kasargode V. ACIT, Calicut

ITSSA 58/COCH/2008

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8377 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 06-08-2012
• Assessment Year: misc
• Appeal Filed On: 02-12-2008
• Court: TRIBUNAL
• Department Lawyers: VANI RAJ
• Assessee Lawyers: NONEWRITTEN SUBMISSION
• Keywords: Search and seizure; Block assessment; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.(SS)A. NO. 54/COCH/2008 BLOCK PERIOD : 1997-98 TO 2003-04 (01-04-1996 TO 2 9-08-2002) THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, CALICUT. VS. SHRI C. KUNHAMMED, PROP. MANZOOR HOSPITAL, MANIKKOTH POST, KANHANGAD, KASARGODE DIST. [PAN: AKYPK 3529Q] (REVENUE-APPELLANT) (ASSESSEE- R ESPONDENT) I.T.(SS)A. NO. 58/COCH/2008 BLOCK PERIOD : 1997-98 TO 2003-04 (01-04-1996 TO 29-08-2002) SHRI C. KUNHAMMED, PROP. MANZOOR HOSPITAL, MANIKKOTH POST, KANHANGAD, KASARGODE DIST. [PAN: AKYPK 3529Q] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, CALICUT. (ASSESSEE -APPELLANT) (REVENUE-R ESPONDENT) REVENUE BY MS. VANI RAJ, JR. DR ASSESSEE BY NONE-WRITTEN SUBMISSION DATE OF HEARING 06/08/2012 DATE OF PRONOUNCEMENT 28/09/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THESE CROSS APPEALS ARE DIRECTED AGAINST THE ORDER DATED 14/03/2008 PASSED BY THE LD. CIT(A)-I, KOCHI AND THEY RELATE TO THE BLOC K PERIOD ENDING 29-08-2002. 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY LIMITATION BY 131 DAYS. THE ASSESSEE FILED A PETITION REQUESTING THE BENCH TO C ONDONE THE DELAY, WHERE IT IS STATED THAT THE APPELLATE ORDER WAS SERVED ON HIS YOUNGER BROTHER SHRI C. KHALID AND HE MISPLACED THE SAME. IT IS FURTHER SUBMITTED THAT T HE ASSESSEE CAME TO KNOW OF THE SAID I.T.(SS)A. NOS.55 & 58 /COCH/2008 2 ORDER ONLY WHEN HE RECEIVED A NOTICE ISSUED U/S. 22 1(1) OF THE ACT FROM THE ASSESSING OFFICER/ASSESSING AUTHORITY DEMANDING THE OUTSTANDI NG TAX. THEREAFTER, THE ASSESSEE HAS TAKEN STEPS TO FILE THE APPEAL. ACCORDINGLY, I T IS PRAYED THAT THE DELAY MAY BE CONDONED. WE HAVE ALSO HEARD THE LD. DR IN THIS REG ARD. HAVING REGARD TO THE SUBMISSIONS MADE IN THE PETITION, WE CONDONE THE DE LAY AND ADMIT THE APPEAL FOR HEARING. 3. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING. HOWEVER, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS FILED A LETTER WHEREIN IT IS STATED THAT THE TRIBUNAL MAY DISPOSE OF THE APPEAL BY CONSIDERING T HE WRITTEN SUBMISSION FILED BEFORE THE BENCH. WE HAVE HEARD THE LD. DR. 4. THE FACTS RELATING TO THE CASE ARE STATED IN BRI EF. THE ASSESSEE IS ENGAGED IN THE GROCERY BUSINESS AND HE ALSO MANAGES A HOSPITAL RUN BY HIS DAUGHTER NAMED SMT. C. SABIRA UNDER THE NAME AND STYLE OF MANZOOR HOSPITAL , KANHANGAD. THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE PROCEEDINGS U/S. 13 2 OF THE ACT IN THE HANDS OF THE DAUGHTER SMT. C. SABIRA, DURING THE COURSE OF WHICH CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE UNEARTHED. ACCORDINGLY, PROCEEDINGS U /S. 158BD OF THE ACT WAS INITIATED IN THE HANDS OF THE ASSESSEE AND THE ASSESSING OFFI CER COMPLETED THE BLOCK ASSESSMENT BY MAKING FOLLOWING TWO ADDITIONS:- A) UNDISCLOSED PAYMENT FOR PURCHASE OF LAND IN THE RS. 4,93,000/- NAME OF HIS DAUGHTER B) UNDISCLOSED INVESTMENT IN FIXED DEPOSITS RS.13,98,590/- WITH VARIOUS BANKS ALONG WITH ACCRUED INTEREST THE REON -------------------- RS.18,91,590 ========== IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DELETE D THE FIRST ADDITION CITED ABOVE AND CONFIRMED THE SECOND ADDITION RELATING TO UNDISCLOS ED INVESTMENT IN FIXED DEPOSITS. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), BOTH THE PARTIES ARE IN APPEAL BEFORE US I.T.(SS)A. NOS.55 & 58 /COCH/2008 3 5. THE FIRST ISSUE RELATES TO THE ADDITION OF RS. 4,93,000/- RELATING TO THE UNDISCLOSED PAYMENT IN THE PURCHASE OF LANDED PROPERTY. THE FAC TS RELATING TO THE SAME ARE STATED IN BRIEF. IN ONE OF THE DOCUMENTS SEIZED DURING TH E COURSE OF SEARCH, IT WAS FOUND NOTED THAT A LANDED PROPERTY ADMEASURING 9 CENTS WA S NOTED AS SOLD TO THE ASSESSEE AT THE RATE OF RS. 63,000/- PER CENT. WHEN ENQUIRED, IT WAS NOTICED THAT A COMPANY BY NAME M/S ALIF PRINTING AND PUBLISHING PVT. LTD. WAS INCORPORATED 22.12.1993, WHEREIN THE ASSESSEE WAS ONE OF THE SHAREHOLDERS. THE SAID COMPANY PURCHASED 9 CENTS OF LAND ON 15-11-1993 FROM THE ASSESSEE FOR A SUM OF RS. 2, 91,000/-. SUBSEQUENTLY, THE SAID PROPERTY WAS SOLD BY THE SAID COMPANY TO THE DAUGHT ER OF THE ASSESSEE NAMED SMT. C. SABIRA VIDE DOCUMENT NO. 3232/97 DATED 20-09-1997 F OR A CONSIDERATION OF RS.74,000/- BASED ON THE NOTING FOUND IN THE SEIZED RECORD, THE ASSESSING OFFICER TOOK THE SALE CONSIDERATION OF THE SAID PROPERTY AT RS. 5,67,000/ -. THE DIFFERENCE IN THE CONSIDERATION AMOUNTING RS. 4,93,000/- (RS. 5,67,000 RS. 74,00 0) WAS CONSIDERED AS UNACCOUNTED PAYMENT MADE BY THE ASSESSEE HEREIN FOR THE PURCHAS E OF SAID LAND IN THE NAME OF SMT. C. SABIRA. THE ASSESSING OFFICER ASSESSED THE SAID AMOUNT OF RS.4,93,000/- IN THE HANDS OF THE ASSESSEE HEREIN. THE LD. CIT(A) DELET ED THE SAID ADDITION ON THE GROUND THAT THERE IS NO PROOF THAT THE EXTRA CONSIDERATION HAS ACTUALLY BEEN PASSED FROM THE ASSESSEE. 6. THE UNDISPUTED FACT REMAINS THAT THE SAID PROPER TY CONSISTING OF 9 CENTS WAS PURCHASED IN THE NAME OF THE ASSESSEES DAUGHTER SM T. C. SABIRA FOR A CONSIDERATION OF RS. 74,000/-. AS PER THE NOTING FOUND IN THE SEIZED RECORD, THE SALE CONSIDERATION FOR THE SAID PROPERTY WAS SHOWN AT RS. 5,67,000/- APPA RENTLY, THERE IS UNDERSTATEMENT OF ACTUAL CONSIDERATION OF RS. 4,93,000/-, IF THE NOTI NG MADE IN THE SEIZED RECORD IS CONSIDERED. HOWEVER, AS POINTED OUT BY THE LD. CIT (A) THE AO HAS FAILED TO PROVE THE VERACITY OF THE SAID NOTING BY MAKING FURTHER ENQUI RIES EITHER FROM THE COMPANY OFFICIALS OR FROM SMT. C. SABIRA. ANOTHER FACT IS THAT THE S AID PROPERTY HAS ACTUALLY BEEN PURCHASED BY THE DAUGHTER OF THE ASSESSEE NAMED SMT . C.SABIRA AND HENCE THE AO HAS FAILED TO PROVE HOW THE DIFFERENCE CONSIDERATION, I F ANY, CAN BE CONSIDERED IN THE HANDS OF THE ASSESSEE HEREIN. UNDER THESE CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN MAKING I.T.(SS)A. NOS.55 & 58 /COCH/2008 4 THE ADDITION OF RS. 4,93,000/- IN THE HANDS OF THE ASSESSEE HEREIN. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 7. THE NEXT ISSUE RELATES TO THE ADDITION ON BANK D EPOSITS ALONG WITH INTEREST ACCRUED THEREON. THE MAIN CONTENTION OF THE ASSESS EE IS THAT THE INVESTMENTS IN THESE BANK DEPOSITS HAVE BEEN MADE BY THE ASSESSEES DAUG HTER, THOUGH THEY STAND IN THE ASSESSEES NAME. IT IS FURTHER CONTENDED THAT THES E DEPOSITS HAVE ALREADY BEEN CONSIDERED IN THE HANDS OF THE ASSESSEES DAUGHTER, SMT. C. SABIRA. HOWEVER, WE NOTICE THAT THE LD. CIT(A) HAS GIVEN A CLEAR FINDIN G THAT THE SAID DEPOSITS, STANDING IN THE NAME OF THE ASSESSEE, HAVE NOT BEEN ASSESSED IN THE HANDS OF SMT. C. SABIRA. THE ASSESSING OFFICER HAS ALSO NOTED THAT THESE DEPOSIT S HAVE NOT BEEN FINALLY ASSESSED IN THE HANDS OF THE ASSESSEES DAUGHTER SMT. C. SABIRA . FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT OBSERVATIONS MADE BY THE LD. CIT(A):- I HAVE PERUSED THE RECORDS AND EXAMINED THE FACT S OF THE CASE. IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER HA S CONCLUSIVELY ESTABLISHED THE FACT THAT THE DEPOSITS THAT ARE NOW BEING ADDED TO THE APPELLANTS UNDISCLOSED INCOME WERE ALL DEPOSITS MADE IN THE NAME OF THE A PPELLANT AND WERE NOT CONSIDERED IN THE ASSESSMENT COMPLETED IN THE HAND S OF SMT. C. SABIRA. I TOO FIND THAT THESE DEPOSITS DOES NOT FIND A PLACE IN THE ASSESSMENT ORDER IN HIS DAUGHTERS CASE. THUS THE APPELLANTS CONTENTION THAT THE INCOME HA S BEEN ALREADY ASSESSED IN THE HANDS OF HIS DAUGHTER DOES NOT MERIT ANY CONSI DERATION. IT IS CLEARLY PROVED THAT THE APPELLANT HAD IN EFFECT MADE CERTAIN DEPO SITS DURING THE BLOCK PERIOD WHICH WERE NOT REFLECTED EITHER IN THE ORIGINAL RE TURNS FILED BY HIM NOR IN THE CASH FLOW STATEMENTS OR ASSETS AND LIABILITIES STATEMEN TS FILED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 158BD. OTHER THAN STATING THAT THESE DEPOSITS WERE CONSID ERED IN THE HANDS OF HIS DAUGHTER, THE APPELLANT HAS NOT BEEN IN A POSITION TO ESTABLISH CLEARLY THAT IT HAS BEEN SO DONE WITH THE HELP OF DOCUMENTARY EVIDENCE AND HENCE THE ADDITION MADE ON THIS SCORE IN THE ASSESSMENT APPEARS TO BE REASONABLE AND JUSTIFIED. I.T.(SS)A. NOS.55 & 58 /COCH/2008 5 8. WE NOTICE THAT THE LD CIT(A) HAS RECORDED A CLEA R FINDING IN RESPECT OF THE BANK DEPOSITS AND THE ASSESSEE HAS ALSO FILED TO PROVE T HAT THESE DEPOSITS WERE ASSESSED IN THE HANDS OF THE DAUGHTER OF THE ASSESSEE. WE NOTI CE THAT THE ADDITION IN THE HANDS OF SMT. C SABIRA WAS MADE IN RESPECT OF THE DIFFERENCE IN THE COST OF CONSTRUCTION AND HENCE THE AO, IN THAT CASE, DID NOT MAKE ANY SEPARA TE ADDITION TOWARDS FIXED DEPOSITS, MAY BE BY GIVING TELESCOPING BENEFIT. IT WAS STATE D BY THE AO THAT THE ADDITION RELATING TO THE DIFFERENCE IN THE COST OF CONSTRUCTION WAS D ELETED BY LD CIT(A). IN VIEW OF THE TELESCOPING BENEFIT, IF ANY, THE ASSESSEE IS NOW CO NTENDING THAT THE DEPOSITS STAND EXPLAINED IN THE HANDS OF SMT. C. SABIRA. IF THERE IS ACTUALLY TELESCOPING BENEFIT, IF ANY AS CONTENDED BY THE ASSESSEE, THEN THE ADDITIONS RE LATING TO THE BANK DEPOSITS WOULD AUTOMATICALLY REVIVE IF THE ADDITION PERTAINING TO THE DIFFERENCE IN COST OF CONSTRUCTION STOOD DELETED. IT IS NOT SHOWN THAT THE DEPOSITS A SSESSED IN THE HANDS OF THE ASSESSEE HEREIN AUTOMATICALLY STOOD REVIVED IN THE HANDS OF THE SMT. C. SABIRA. IT IS ALSO NOT SHOWN THAT THE AO HAS GIVEN A CATEGORICAL FINDING I N THE ASSESSMENT OF SMT C. SABIRA THAT THE IMPUGNED DEPOSITS ASSESSED IN THE HANDS OF THE ASSESSEE HEREIN ACTUALLY BELONGED TO SMT. C. SABIRA. IN THE ABSENCE OF SUCH CATEGORICAL FINDINGS AND OTHER SUPPORTING DOCUMENTS, ONE CANNOT PRESUME THAT THE I MPUGNED DEPOSITS STAND ASSESSED IN THE HANDS OF SMT C. SABIRA. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) ON THIS ISSUE ALSO. 9. IN THE RESULT, THE APPEALS FILED BY BOTH THE ASS ESSEE AS WELL AS THE REVENUE ARE DISMISSED. PRONOUNCED ACCORDINGLY ON 2 8-09-2012. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28TH SEPTEMBER, 2012 GJ I.T.(SS)A. NOS.55 & 58 /COCH/2008 6 COPY TO: 1. SHRI C. KUNHAMMED, PROP. MANZOOR HOSPITAL, MANIK KOTH POST, KANHANGAD, KASARGODE DIST. 2.THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, CALICUT. 3.THE COMMISSIONER OF INCOME-TAX(APPEALS)-I, KOCHI. 4.THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN