ACIT, Ernakulam V. Universal Empire Education Society, Cochin

ITSSA 61/COCH/2006

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8373 (ITAT-COCHIN)
• Duration Of Justice: 5 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-08-2012
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 18-07-2012
• Assessment Year: misc
• Appeal Filed On: 18-12-2006
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: R KRISHNA IYER
• Keywords: Income from undisclosed sources; Search and seizure; Block assessment
• 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 IT(SS)A NO. 61/COCH/2006 BLOCK PERIOD :01-04-1996 TO 11-06-2002 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. VS. M/S. UNIVERSAL EMPIRE EDUCATION SOCIETY, MERCY ESTATE, KOCHI-35. [PAN: AAATU 1130B] (REVENUE-APPELLANT) (ASSESSEE-R ESPONDENT) REVENUE BY SMT. A.S. BINDHU, SR. DR ASSESSEE BY SHRI R. KRISHNA IYER, CA DATE OF HEARING 18-07-2012 DATE OF PRONOUNCEMENT 10/08/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 25-09-2006 PASSED BY THE LD. CIT(A)-I, KOCHI AND IT RELATES TO THE BL OCK PERIOD ENDING 11-06-2002. 2. THE ONLY ISSUE URGED IN THIS APPEAL IS WHETHER T HE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS. 16,67,250/- DETERMINED BY THE ASSESSING OFFICER AS UNDISCLOSED INCOME OF THE ASSESSEE. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A SOCIETY INCORPORATED ON 12-09-2001. THE DEPARTMENT CARRIED OUT SEARCH AND SEIZURE OPERATIONS U/S. 132 OF THE ACT ON 11-06-2002 IN THE HANDS OF M/S. UNIVERSAL INSTITUTE OF ADVANCED STUDIES AND RESEARCH (PVT.) LTD., COCHIN A ND ALSO IN THE HANDS OF SHRI SUDHIR GOPI. DURING THE COURSE OF SEARCH, SOME DOCUMENTS CONNECTED WITH THE ASSESSEE VIZ. TVS-B-6, TVS-C-23, TVS-B-5, TVS-B-14 AND ALSO A COM PUTER PRINT OUT MARKED AS RRO-1 WERE SEIZED FROM SHRI SUDHIR GOPI. IT WAS NOTICED THAT THE SAID COMPUTER PRINT-OUT IS A I.T(SS).A. NO.61 /COCH/2006 2 TRIAL BALANCE RELATING TO THE ASSESSEE. FROM THE S AID DOCUMENTS, IT WAS NOTICED THAT THE ASSESSEE HAD PURCHASED 3 ACRES, 87 CENTS AND 100 LI NKS OF LAND AT URAKKADU VIDE REGISTERED DOCUMENT NO. 3634/2001 DATED 08-10-2001 FOR A CONSIDERATION OF RS.13,55,350/- AND THE SAID AMOUNT ONLY WAS FOUND A CCOUNTED IN THE COMPUTER PRINT OUT. HOWEVER, IT WAS NOTICED THAT THE ASSESSEE HAD ACTUALLY PAID A SUM OF RS. 23,22,600/- FOR PURCHASING THE ABOVE SAID LAND. IT WAS FURTHER NOTICED THAT THE ASSESSEE HAD PAID RS.7 LAKHS AS ADVANCE FOR PURCHAS ING ANOTHER LAND, WHICH WAS NOT FOUND REFLECTED IN THE COMPUTER PRINT OUT. ACCORDI NGLY, BLOCK ASSESSMENT PROCEEDINGS U/S. 158BD WAS INITIATED IN THE HANDS OF THE ASSESS EE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE PRODUCED REGULAR BOOKS OF ACCOUNTS WHERE IN IT HAD ACCOUNTED FOR THE FULL VALUE OF PURCHASE OF RS. 23,22,600/- AND ALSO THE PAYMENT OF ADVANCE OF RS. 7 LAKHS. HOWEVER, THE ASSESSING OFFICER CONSIDERED THE COMPUTER PRINT-OUT AS THE TR UE BOOKS OF ACCOUNT AND ASSESSED THE DIFFERENCE AMOUNT IN PURCHASE OF LAND AMOUNTING TO RS.9,67,250/-(RS.23,22,600 (-) RS.13,55,350/-) AND THE ADVANCE AMOUNT OF RS.7,00,0 00/-, BOTH AGGREGATING TO RS.16,67,250/- AS UNDISCLOSED INCOME IN THE HANDS O F THE ASSESSEE. 5. THE LD. CIT(A) NOTICED THAT THE ASSESSEE HAD TAK EN LOANS FROM TWO PERSONS NAMED SHRI K. BALACHANDRAN NAIR AND SHRI K. RAJAGOP ALAN AS DETAILED BELOW AND THE SAME WERE UTILISED FOR MAKING INVESTMENT IN THE LAN D AND ALSO FOR MAKING ADVANCE FOR PURCHASE OF LAND. NAME OF THE PERSON FROM WHOM AMOUNT RECEIVED PERIOD OF RECEIPT AMOUNT 1. K.BALACHANDRAN NAIR, VRINDAVAN, EVOOR NORTH, HARIPAD F.Y. 2001-02 F.Y. 2002-03 9,92,656.00 6,30,000.00 2. K. RAJAGOPALAN, NARAYANEEYAM, KOCHI F.Y. 2001-02 F.Y. 2002-03 26,00,000.00 2,50,000.00 TOTAL 44,72,656.00 I.T(SS).A. NO.61 /COCH/2006 3 IT WAS FURTHER NOTICED THAT THE ABOVE SAID TWO PERS ONS ARE INCOME TAX ASSESSES IN THE FILES OF THE VERY SAME ASSESSING OFFICER AND THE IN VESTMENTS SHOWN IN THEIR RESPECTIVE RETURNS OF INCOME HAD BEEN ACCEPTED. ACCORDINGLY, THE LD. CIT(A) TOOK THE VIEW THAT THE INVESTMENTS MADE BY THE ASSESSEE-SOCIETY STANDS FULLY EXPLAINED AND ACCORDINGLY, HE DELETED THE ADDITION OF RS. 16,67,250/- MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE SAID ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE RECORD. WE NOTICE THAT THE ASSESSEE-SOCIETY WAS INCORPORATED ON 12-09 -2001. THE LAND CITED ABOVE WAS PURCHASED ON 08-10-2001. IT HAS BEEN STATED THAT T HE ASSESSEE-SOCIETY DID NOT CARRY ON ANY BUSINESS TILL THE DATE OF SEARCH, I.E., TILL 11-06-2002, MEANING THEREBY THAT THE ASSESSEE-SOCIETY HAS PURCHASED THE LAND AND ALSO MA DE THE ADVANCE ONLY FROM OUT OF THE LOANS AVAILED BY IT FROM THE TWO PERSONS MENTIO NED ABOVE. THE ASSESSEE SOCIETY COULD NOT HAVE GENERATED ANY UNACCOUNTED INCOME UND ER THESE CIRCUMSTANCES. IT HAS ALSO BEEN FURTHER NOTICED BY LD CIT(A) THAT THE ABO VE SAID TWO LENDERS WERE ALSO ASSESSED TO INCOME TAX AND THEY HAVE DULY REFLECTED THE LOANS GIVEN TO THE ASSESSEE- SOCIETY IN THEIR RESPECTIVE RETURNS OF INCOME, WHIC H HAS ALSO BEEN ACCEPTED BY THE VERY SAME ASSESSING OFFICER. WE NOTICE THE ASSESSING OFF ICER DID NOT ASK QUESTION WITH REGARD TO THE UNDERSTATEMENT OF THE CONSIDERATION I N THE REGISTERED DOCUMENT. IN ANY CASE, IT WAS FOUND THAT THE ASSESSEE-SOCIETY HAS AC COUNTED FOR THE ENTIRE PAYMENT IN THE REGULAR BOOKS OF ACCOUNTS SUBMITTED BEFORE THE ASSESSING OFFICER. THOUGH THE ASSESSING OFFICER HAS TAKEN THE VIEW THAT THE COMPU TER-PRINT OUT REPRESENTS THE TRUE BOOKS OF ACCOUNT, YET HE HAS NOT CITED ANY REASON F OR DISBELIEVING THE BOOKS OF ACCOUNTS PRODUCED BEFORE HIM. UNDER THE ABOVE CIRC UMSTANCES, IN OUR VIEW, IT CAN ONLY BE HELD THAT THE ASSESSEE HAS FULLY EXPLAINED THE I NVESTMENTS BY PROPERLY EXPLAINING THE SOURCES THERE OF. ACCORDINGLY, WE UPHOLD THE ORDER OF THE LD. CIT(A). I.T(SS).A. NO.61 /COCH/2006 4 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY O N 10-08-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 10TH AUGUST, 2012 GJ COPY TO: 1.UEG HOUSE, NH 47, PADIVATTOM, EDAPALLY SOUTH, ERNAKU LAM-682024. 2.THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. 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