Shri P.C.Francis, Trichur V. DC IT, Trichur

ITSSA 95/COCH/2004

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7814 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 03-01-2012
• Assessment Year: misc
• Appeal Filed On: 13-10-2004
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: DALE P KURIAN
• Keywords: Search and seizure; Document seized; Cost of acquisition; Documents seized

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKARA N, AM I.T.(SS)A NO. 95/COCH/2004 BLOCK PERIOD: 1-4-1988 TO 30-7-1998 SHRI P.C.FRANCIS, POOKKODAN HOUSE, ALAGAPPA NAGAR P.O., THRISSUR DISTRICT. [PAN: AABPF 8998D] VS. THE DEPUTY COMMISSIONER OF INCOME TAX, INVESTIGATION CIRCLE, DIV. 1, THRISSUR. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI DALE P.KURIAN, ADV. REVENUE BY MS. S. VIJAYAPRABHA, JR. DR DATE OF HEARING 03/01/2012 DATE OF PRONOUNCEMENT 6 /01/2012 O R D E R PER B.R.BASKARAN, AM THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19-7-2004 PASSED BY THE LD. CIT(A)-V, KOCHI AND IT RELATES TO THE BLOC K PERIOD ENDING 30-7-1998. 2. IN THIS APPEAL, THE ASSESSEE IS ASSAILING THE DE CISION OF THE LD. CIT(A) IN CONFIRMING THE ASSESSMENT OF ` 4,21,344/- AS UNDISCLOSED INCOME OF THE ASSESSEE U /S. 158BD OF THE ACT. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE DEPARTMENT CARRIED OUT A SEARCH AND SEIZURE OPERATION AT THE BUSINESS PREMIS ES OF THE CONCERN NAMED M/S. PUTHUR DRUGS, TRICHUR ON 30-7-1998. IN THE COURSE OF THE SAID SEARCH PROCEEDINGS, SOME SEIZED DOCUMENTS INDICATED THAT THE ASSESSEE HAD MADE INVE STMENTS IN A PARTNERSHIP FIRM NAMED M/S. HOTEL LUCIYA DRIVE IN RESTAURANT, CHALAKUDY AS HIS CAPITAL CONTRIBUTION (HEREIN AFTER I.T.(SS)A. NO.95 /COCH/2004 2 PARTNERSHIP FIRM). SINCE THE SAID INVESTMENT WAS NOT REFLECTED BY THE ASSESSEE IN THE CASH FLOW STATEMENT FILED BY HIM BEFORE THE DEPARTM ENT EARLIER, A NOTICE U/S. 158BD R.W.S.158BC WAS ISSUED. BEFORE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT HE HAS INVESTED ONLY A SUM OF ` 1,50,000/- IN THE ABOVE SAID PARTNERSHIP FIRM AND THE SOURCE FOR THE SAME WAS ALSO EXPLAINED. HOWEVER, THE SEIZED R ECORD NUMBERED AS A-20 DEPICTED THAT THE ASSESSEE HAS MADE INVESTMENTS OVER AND ABO VE THE CONTRIBUTION OF RS.1.50 LAKHS AS DETAILED BELOW:- DATE AMOUNT (IN `) 5.4.1995 50,000/- 25.4.1995 2,50,000/- 4.5.1995 50,000/- 8.5.1995 15,000/- BY DECISION DATED 30-4-95 5 5,000/- --------------- 4,20,000/- ========= THE SEIZED RECORD NO. A-20 CONTAINED THE DETAILS OF TOTAL INVESTMENTS IN THE PARTNERSHIP FIRM, MINUTES OF PARTNERS MEETING AND ALSO CONTAIN ED SIGNATURE OF PARTNERS WHO ATTENDED THE MEETING. THOUGH THE ASSESSEE STATED THAT THE TOTAL INVESTMENT OF THE FIRM M/S. HOTEL LUCIYA DRIVE IN RESTAURANT WAS ` 30 LAKHS, WHICH WAS CONTRIBUTED EQUALLY BY 20 PARTN ERS, YET THE SAID SEIZED RECORD A-20 CONTAINED A NOTING WHICH SHOWED THAT THE TOTAL INVESTMENT WAS ABOUT ` 95 LAKHS. SINCE THE ADDITIONAL INVESTMENT MADE BY THE ASSESSEE WAS CORROBORATED WITH THE TOTAL AMOUNT OF INVESTMENT, T HE ASSESSING OFFICER TREATED THE SAID ADDITIONAL INVESTMENT AS UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE COULD NOT SUCCEED IN THE APPEAL FILED BEFORE THE LD. CIT(A). HENCE, THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE MAIN CONTENTION OF THE ASSESSEE WAS THE IMPUGNED SEIZED MATERIAL NO.A-20, ON WHICH THE RELIANCE WAS PLACED BY THE TAX AUTHORITIE S, ARE NOTHING BUT LOOSE SCRIBBLING SHEETS, TO WHICH MUCH RELIANCE COULD NOT BE PLACED UPON. HE SUBMITTED THAT THE MANAGER OF THE PARTNERSHIP FIRM, WHO HAS WRITTEN THESE DOCU MENTS, WAS NEVER EXAMINED TO FIND OUT I.T.(SS)A. NO.95 /COCH/2004 3 THE VERACITY OF THE CONTENTS OF THE SAID DOCUMENTS. ACCORDINGLY, THE LD. AR CONTENDED THAT THE IMPUGNED SEIZED RECORD COULD NOT BE CONSID ERED AS CREDIBLE EVIDENCE. 5. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE IMPUGNED SEIZED DOCUMENTS CONTAINED MINUTES OF THE MEETING OF THE PARTNERS AN D THE SAME HAS ALSO BEEN SIGNED BY THEM AND HENCE, THEY CANNOT BE BRUSHED ASIDE AS LOO SE SCRIBBLING DOCUMENTS. THE ADDITIONAL INVESTMENTS MADE BY THE ASSESSEE WERE CO RROBORATED BY THE TOTAL PROJECT COST OF THE PARTNERSHIP FIRM AND HENCE THE PREPONDERANCE OF PROBABILITIES CLEARLY SUPPORTS THE CASE OF THE ASSESSING OFFICER. THE LD. DR INVITED OUR ATTENTION TO PG. 34 OF THE PAPER BOOK FILED BY THE ASSESSEE TO CONTEND THAT THE SEIZED DO CUMENT CONTAINS THE SIGNATURE OF THE ASSESSEE ALSO. SHE ALSO TOOK SUPPORT FROM THE DECI SION OF THE THIRD MEMBER OF THE ITAT, DELHI BENCH IN THE CASE OF NAPAR DRUGS (P.)LTD. VS. DCIT, 98 ITD 285 (DEL.) TM. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE IMPU GNED SEIZED DOCUMENTS ARE IN THE HANDWRITING OF THE MANAGER OF THE FIRM. THE ASSESS EE ALSO, VIDE HIS LETTER DATED 08-06- 2001 HAVE ACCEPTED THAT THE IMPUGNED SEIZED RECORDS APPEAR TO BE IN THE HANDWRITING OF THE MANAGER OF THE FIRM. DURING THE COURSE OF ARGU MENTS ALSO, THE LD A.R CONTENDED THAT THE SAID MANAGER SHOULD HAVE BEEN EXAMINED BEF ORE TAKING ADVERSE DECISION AGAINST THE ASSESSEE. IT IS QUIET NORMAL TO ASSUME THAT TH E POST OF MANAGER OF THE FIRM IS NORMALLY OCCUPIED BY A RESPONSIBLE PERSON. IN THAT CASE, IT IS QUIET ILLOGICAL TO ARGUE THAT THE NOTING MADE BY SUCH A RESPONSIBLE PERSON ABOUT THE TOTAL P ROJECT COST, CAPITAL CONTRIBUTION MADE BY THE PARTNERS, MINUTES OF MEETING ETC. ARE MERE S CRIBBLING WHICH WOULD RENDER THE IMPUGNED DOCUMENT AS A DUMB DOCUMENT. IN ADDITION TO THIS, THE SAID DOCUMENTS ALSO CONTAINED THE SIGNATURE OF SOME OF THE PARTNERS WHO HAVE ATTENDED THE MEETING. HENCE, IN OUR VIEW, THE AUTHENTICITY OF THE IMPUGNED SEIZE D DOCUMENTS CANNOT BE DOUBTED WITH. THE LD. CIT(A) HAS EXPLAINED THIS ASPECT IN A LUCID MANNER AND FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW HIS OBSERVATIONS:- I.T.(SS)A. NO.95 /COCH/2004 4 I HAVE GIVEN CAREFUL CONSIDERATIONS ON THE ISSUE R AISED BEFORE ME IN THE APPEAL. I HAVE PERUSED THE FACTS ON THE RECORD AND ALSO CONSIDERED THE ARGUMENTS OF RIVAL PARTIES. FIRST OF ALL, IT IS TO BE MENTIONE D THAT THE DOCUMENTS SEIZED IN THE FORM OF MINUTE BOOKS FROM THE BUSINESS PREMISES OF PUTHUR DRUGS, TRICHUR WAS NOT AROUGH DOCUMENT OR SCRIBBLES OR CASUAL JOTTINGS BY THE MANAGER OF THE FIRM M/S. HOTEL LUCIYA DRIVE-IN RESTAURANT. THE AUTHENTICITY OF THIS DOCUMENT HAS NOT BEEN ALTOGETHER CHALLENGED BY THE APPELLANT. BUT THE AP PELLANT HAS TAKEN AN ARGUMENT THAT IT DOES NOT REPRESENT THE REAL MEETING BY THE PARTNERS. AFTER HAVING A CLOSE ANALYSIS OF THE NATURE OF TRANSACTION MENTIONED IN THE MINUTE BOOKS, IT DOES NOT APPEAR THAT IT IS ONLY A CASUAL WRITING BY THE MANA GER WITHOUT HAVING ANY RELEVANCE WITH THE ACTUAL TRANSACTION. IN FACT, THE DOCUMENT A-20 START WITH THE NOTING DATED 5-4-1995 WHICH TALKS AT FULL LENGTH REGARDING THE T OTAL COST INVOLVED IN PURCHASE OF THE HOTEL LUCIYA DRIVE-IN RESTAURANT. THE COST ALS O MENTIONS ABOUT THE BAR LICENCE FEE STOCK AND PURCHASE COST. THE TOTAL COST HAS BE EN TAKEN AT RS. 95 LAKHS. FURTHER, IT IS UNIMAGINABLE THAT THE HOTEL ALONG WITH BAR LI CENCE CAN BE PURCHASED IN A COST OF RS. 30 LAKHS WHICH INITIALLY THE PARTNERS AGREED TO PAY. THE SEIZED DOCUMENT ITSELF THUS MENTIONS ABOUT THE INITIAL CONTRIBUTION TO BE MADE BY THE PARTNER AT RS. 1,50,000/- EACH. FURTHER, THE PAYMENT MADE BY THE APPELLANT ON VARIOUS DATES HAVE BEEN CLEARLY MENTIONED IN THE MINUTE BOOKS. IN THIS WAY, THE CONTRIBUTION BY ALL THE PARTNERS OF AN ADDITIONAL AMOUNT OF RS. 4,20,000/- OVER AND ABOVE RS. 1,50,000/- EACH MORE OR LESS MATCHES WITH THE TOTAL COST OF TH E DRIVE-IN RESTAURANT. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS N OT DIFFICULT TO HOLD THAT TRANSACTIONS MENTIONED IN THE MINUTE BOOKS DO REPRESENT THE REAL STATE OF AFFAIRS OF THE BUSINESS AND NOT HYPOTHETICAL. SOME OF THE PARTNERS, WHO HA VE ATTENDED THE MEETING, HAVE ALSO SIGNED THE MINUTE BOOKS. 7. FURTHER, AS SUBMITTED BY LD D.R, THE IMPUGNED AD DITIONAL INVESTMENTS ARE CORROBORATED BY THE TOTAL COST OF THE PROJECT, WHIC H WAS ALSO NOTED IN THE SAID SEIZED DOCUMENTS. HENCE, THE LD. CIT(A), BY TAKING SUPPOR T FORM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS.DURGA PRASAD MO RE, 82 ITR 540 (SC), HAS HELD THAT I.T.(SS)A. NO.95 /COCH/2004 5 THE CIRCUMSTANCES FULLY SUPPORT THE CONTENT OF THE IMPUGNED SEIZED DOCUMENTS. ON A CAREFUL ANALYSIS OF THE RATIONALE OF THE DECISION R ENDERED BY LD CIT(A) VIS--VIS THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY I NFIRMITY IN HIS DECISION. ACCORDINGLY, WE UPHOLD THE ORDER OF LD CIT(A). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED ACCORDINGLY ON THIS 6TH DAY OF JANUARY, 2012 SD/- SD /- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 6 TH JANUARY, 2012 GJ COPY TO: 1. SHRI P.C.FRANCIS, POOKKODAN HOUSE, ALAGAPPA NAGA R P.O., THRISSUR DISTRICT 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, INV. CIRC LE, DIV.-1, THRISSUR. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-V, KOCH I 4. THE COMMISSIONER OF INCOME-TAX, TRICHUR. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .