Late.K.V.Damodran Rep. By K.D.Unnikannan, Thrissur V. ACIT, Thrissur

ITSSA 98/COCH/2004

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8815 (ITAT-COCHIN)
• Duration Of Justice: 6 year(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-10-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 01-09-2010
• Assessment Year: misc
• Appeal Filed On: 13-10-2004
• Court: TRIBUNAL
• Keywords: Recovery proceedings
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH, COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY AR ORA, AM IT(SS)A NO. 98/COCH/2004 BLOCK PERIOD : 01-04-1988 TO 16-03-2000 LATE SHRI K.V.DAMODARAN, REP BY L/HR. K.D.UNNIKANNAN, KANADI DEVASTHANAM, PERINGOTTUKARA, TRICHUR. PA NO. D-5, CENTRAL CIRCLE. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, THRISSUR. (ASSESSEE -APPELLANT) (REVENUE -RESPONDENT) IT(SS)A NO. 127/COCH/2004 BLOCK PERIOD : 01-04-1988 TO 16-03-2000 THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, THRISSUR. VS. LATE SHRI K.V.DAMODARAN, REP BY L/HR. K.D.UNNIKANNAN, KANADI DEVASTHANAM, PERINGOTTUKARA, TRICHUR. PA NO. D-5, CENTRAL CIRCLE. (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) ASSESSEE BY SHRI K.R.SUDHAKARAN PILLAI, ADV. REVENUE BY SHRI S.C.SONKAR, CIT-DR O R D E R PER SANJAY ARORA, AM: THESE ARE CROSS APPEALS, I.E., BY THE ASSESSEE AND THE REVENUE, ARISING OUT OF THE ORDER BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I , KOCHI (`CIT(A) FOR SHORT) DATED 5.8.2004 FOR THE BLOCK PERIOD 1.4.1988 TO 16.3.2000 . 2. WE SHALL TAKE UP THE ASSESSEES APPEAL, BEING SE NIOR, FIRST. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE DEVASTHANATHIPATH I OF KANADI DEVASTHANAM, A PRIVATE TEMPLE. THE INCOME OF THE TEMPLE IS PRINCIPALLY OU T OF THE OFFERINGS BY THE DEVOTEES OF LORD KUTTICHATHAN, THE TEMPLE DIETY, TO WHOM THE TE MPLE IS CONSECRATED. THE SAID IT(SS)A NOS. 98 & 127/ COCH./2004 2 INCOME IS BEING ENJOYED AND APPROPRIATED BY THE ASS ESSEE. BESIDES, HE IS ALSO A PARTNER IN THE FIRM RUNNING A CINEMA THEATRE COMPLEX BY THE NA ME DEVA MOVIES AND KANADI DEVASTHANAM KALYANAMANDAPAM. A SEARCH U/S. 132 OF THE INCOME-TAX ACT, 1961 ('THE ACT' HEREINAFTER) WAS CONDUCTED AT THE ASSESSEES R ESIDENTIAL AND THE BUSINESS PREMISES OF THE FIRM ON 16.3.2000 AND VARIOUS INCRIMINATING DOC UMENTS STOOD FOUND AND SEIZED. CASH AMOUNTING TO RS. 8.10 LAKHS FOUND AT THE TEMPLE WAS ALSO SEIZED. IN RESPONSE TO NOTICE U/S. 158BC(A) OF THE ACT, THE ASSESSEE FILED A RET URN IN FORM 2B AT RS. 3,95,000/-. THE ASSESSMENT OF THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD STOOD FINALLY MADE AT RS. 45,24,930/- VIDE ORDER U/S. 158BC R.W.S. 143(3) OF THE ACT DATED 24.4.2002. IN APPEAL, VARIOUS ADDITIONS, WHICH STOOD MADE ON ACCOUNT OF D IFFERENCE IN THE ADMITTED OPENING CASH BALANCE IN THE CASH FLOW STATEMENT SUBMITTED B Y THE ASSESSEE TO EXPLAIN THE VARIOUS INVESTMENTS; DIFFERENCE IN THE COST OF CONSTRUCTION OF THE BUILDING; HOUSEHOLD EXPENSES; LOANS FROM FAMILY MEMBERS; COLLECTIONS RECEIVED FRO M THE PARTNERSHIP FIRM DURING THE PREVIOUS YEAR 1999-2000; AND SERVICE CHARGES AND LI ABILITIES IN RESPECT OF EXPENSES, INCLUDING SERVICE CHARGES TO FAMILY MEMBERS AS CLAI MED IN THE RETURN, WERE CONTESTED AND FOUND FAVOUR WITH HIM EXCEPT IN THE CASE OF THE LAS T TWO, AND IN RESPECT OF WHICH THE ASSESSEE IS IN APPEAL. THE ONLY GROUND OF THE REVENUES APPEAL IS IN RESP ECT OF SURCHARGE WHICH STOOD LEVIED AT THE RATE OF 17% OF THE TAX ON THE UNDISCL OSED INCOME AS PER THE RELEVANT FINANCE ACT. 3. THE FIRST ADDITION SUSTAINED UNDER CHALLENGE IS IN RESPECT OF RS. 5 LAKHS CLAIMED AS RECEIPT FROM THE CINEMA THEATRE DURING THE PREVIOUS YEAR 1999-2000. THE ASSESSING OFFICER (A.O.) DID NOT FIND ANY MERIT IN THE ASSESS EES CLAIM IN THE ABSENCE OF ANY SUPPORTING MATERIAL TO SUBSTANTIATE THE CLAIM; THER E BEING NO CORRESPONDING ENTRY IN THE BOOKS OF THE FIRM. IN APPEAL, THE ASSESSEE SUBMITT ED BEFORE THE LD. CIT(A) THAT THE INCLUSION OF THE SAID AMOUNT AS A RECEIPT WAS ON A CCOUNT OF A CLERICAL MISTAKE. THE SAID AMOUNT IN FACT REPRESENTED THE CASH BALANCE AVAILAB LE WITH ALL THE FAMILY MEMBERS PUT TOGETHER. THE SAME, HOWEVER, FAILED TO IMPRESS HIM , RESULTING IN THE PRESENT APPEAL. IT(SS)A NOS. 98 & 127/ COCH./2004 3 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, AND PERUSED THE MATERIAL AVAILABLE ON RECORD. NO MATERIAL WHATSOEVER STANDS ADDUCED BY THE ASSESS EE IN SUPPORT OF HIS CONTENTION OF THE CASH BALANCE AS BEING AVAILABLE WITH THE FAMILY MEM BERS AND STOOD TENDERED TO THE ASSESSEE, SO AS TO FORM A PART OF HIS CASH FLOW STA TEMENT. IN FACT, WE OBSERVE THE ASSESSEE TO BE TAKING A VACILLATING STAND IN THE MATTER. IF THE AMOUNT STOOD INDEED PAID BY THE FAMILY MEMBERS, HOW COULD IT BE ASCRIBED TO THE PAR TNERSHIP FIRM; THE CATEGORICAL STAND BEFORE THE AO BEING OF THE SAME REPRESENTING COLLEC TION FROM THE CINEMA THEATRE. A MISTAKE IN THIS REGARD, FIRSTLY, IS HIGHLY IMPROBAB LE, CONSIDERING THE NATURE AND VOLUME OF THE AMOUNT AND, SECONDLY, DOES NOT TAKE YEARS TO BE REALIZED. BESIDES, THE LOANS FROM THE DIFFERENT FAMILY MEMBERS TO THE EXTENT OF RS. 5,28, 700/- STAND ALREADY ACCEPTED BY THE LD. CIT(A) IN VIEW OF THEIR BEING INCOME-TAX ASSESSES A ND THE IDENTITY BEING ESTABLISHED. AN `EXPLANATION UNDER THE LAW CAN ONLY MEAN ONE WHICH IS PROPER, REASONABLE AND ACCEPTABLE. ON THE CONTRARY, THE ASSESSEES EXPLANA TION/S ITSELF INDICATE OF THE FIRM AS BEING ALSO ENGAGED IN UNACCOUNTED BUSINESS, AND, SI MILAR OFFERINGS BEING RECEIVED AT THE TEMPLE IN THE PRECEDING YEARS AS WELL. UNDER THE C IRCUMSTANCES, WE FIND NO REASON OR BASIS FOR THE DELETION OF THIS ADDITION FOR WHICH T HE ASSESSEE HAS BEEN UNABLE TO FURNISH ANY EXPLANATION WHATSOEVER. THE ADDITION OF RS. 5 L AKHS, THUS, STANDS CONFIRMED. 5. THE SECOND ADDITION IS IN RESPECT OF DISALLOWA NCE OF RS. 5,40,000/-, CLAIMED AS PAYABLE TO THE FAMILY MEMBERS ON ACCOUNT OF SERVICE CHARGES THERE-TO. THE SAME STOOD CLAIMED, ALONGWITH OTHER EXPENSES (RS. 2.93 LAKHS), I.E., AT A TOTAL OF RS. 8.73 LAKHS, TOWARD EXPENSES. THE LD. CIT(A) FOUND THE ASSESSE E TO HAVE SUPPORTED ITS CLAIM OF EXPENSES OF RS. 2.93 LAKHS WITH PROPER EVIDENCE, AN D ACCORDINGLY ALLOWED IT RELIEF TO THAT EXTENT, SUSTAINING THE IMPUGNED ADDITION FOR RS. 5. 40 LAKHS. 6. IT WAS EXPLAINED BY THE LD. AR BEFORE US THAT IT WOULD BE INCORRECT TO SAY THAT THE ASSESSEE IS OWNER OF THE TEMPLE. HE IS ONLY ITS HE AD PRIEST, SO THAT THE CHARGES TO DIFFERENT FAMILY MEMBERS, WHO ALSO PARTICIPATED IN THE SERVIC ES PERFORMED AT THE TEMPLE, ARE ONLY TO BE ALLOWED AS A REASONABLE OUTGO OR EXPENSES TOW ARDS THE RUNNING OF THE TEMPLE. TO A QUERY BY THE BENCH OF ANY MATERIAL OR EVIDENCE BEIN G FOUND AT THE TIME OF SEARCH, OR EVEN IT(SS)A NOS. 98 & 127/ COCH./2004 4 OTHERWISE OF THE FACT THAT THE SERVICE CHARGES WERE BEING REGULARLY ALLOWED, I.E., IN THE PAST, TO THE FAMILY MEMBERS, THE LD. AR REPLIED IN THE NEGATIVE, THOUGH SUBMITTED THAT THE ANNUAL AND ONLY TEMPLE FESTIVAL WAS CELEBRATED DURI NG THE PERIOD 10 TH TO 15 TH MARCH, 2000, AND WHEREAT DEVOTEES FROM DIFFERENT PLACES CA ME IN LARGE NUMBERS TO PAY THEIR OBEISANCE TO THE LORD. THE SAME IS NOT POSSIBLE TO BE MANAGED BY THE ASSESSEE ALONE AND, THUS, NECESSARILY REQUIRED THE SERVICES OF THE FAMI LY MEMBERS. SECONDLY, THE SAID AMOUNT/S STANDS ALREADY DISCLOSED BY THEM AS PART O F THEIR UNDISCLOSED INCOME FOR THE BLOCK PERIOD. ON THE OTHER HAND, THE LD. DR SUPPOR TED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. 7.1 WITH REGARD TO THE ASSESSEE BEING THE OWNE R OR THE PRIEST OF THE TEMPLE, WE OBSERVE THE ASSESSEES STAND TO BE CONTRADICTORY. IF THE A SSESSEE WAS ONLY A PRIEST OF THE TEMPLE, IT WOULD BE THE OWNED BY SOMEBODY ELSE, INCLUDING THE DEITY. AND, THE ASSESSEE ENTITLED TO, AS HE CLAIMS OTHER FAMILY MEMBERS TO BE, AS ITS EMP LOY EE, ONLY REMUNERATION IN RESPECT OF HIS SERVICES AT THE TEMPLE. WHEREAS, IN THE PRE SENT CASE, THE ASSESSEE ADMITS OF THE OFFERINGS OF THE TEMPLE AS BEING HIS INCOME, THOUGH CLAIMS TO BE ALLOWED AS EXPENSE THEREAGAINST SERVICE CHARGES TO THE FAMILY MEMBERS. THAT HE ENGAGES THEM AND REMUNERATES THEM, AGAIN, PROVES HIS STATUS AS OWNER OF THE TEMPLE. IN FACT, WE OBSERVE THAT THIS WAS NEVER AN ISSUE BEFORE THE AUTHORITIES BELOW NOR THEREFORE A SUBJECT MATTER OF ADJUDICATION BY THEM. THE SAID CONTENTION STANDS RA ISED BY THE LD. AR BEFORE US FOR THE FIRST TIME. IN ANY CASE, WE SEE THE CONTROVERSY RA ISED AS ONLY AN ALIBI: WHY, IT MAY BE ASKED, COULD NOT AN OWNER OF A TEMPLE ALSO ACT AS I TS PRIEST, I.E., IN A DUAL CAPACITY ? 7.2 WITH REGARD TO THE SERVICE CHARGES CLAIMED TO BE PAYABLE TO THE FAMILY MEMBERS, IT DOES NOT TAKE MUCH STRAIN TO INFER THAT THEY WOULD DEFINITELY BE INVOLVED IN THE ANNUAL TEMPLE FESTIVAL WHICH STOOD CELEBRATED FROM 10 TH TO 15 TH MARCH, 2000. THIS IS AS THE PROJECT OF THIS SCALE, INVOLVING WIDE RANGING ACTIV ITIES, INCLUDING POOJAS, PREPARATION OF PRASADAMS, ARRANGEMENT OF BOARDING AND LODGING FACI LITIES FOR THE OUTSTATION DEVOTEES, FIREWORKS, ETC. COULD NOT POSSIBLY BE MANAGED BY TH E ASSESSEE ALONE. THOUGH NO CONTRACTUAL BASIS UNDERLIES THE ASSESSEES CLAIMS, HE CAN ONLY REASONABLY BE CONSIDERED AS IT(SS)A NOS. 98 & 127/ COCH./2004 5 BEING ASSISTED BY HIS FAMILY MEMBERS IN THE PREPARA TIONS FOR AND THE CONDUCT OF THE FESTIVAL. HOWEVER, THERE IS NO BASIS FOR THE CLAIM OF THE EXPENDITURE OF RS. 5.40 LAKHS, WHICH IS FOR SERVICES FOR THE SAID FESTIVAL ALONE, TO WHICH ONLY THE CASH FOUND IS ATTRIBUTED TO, WHICH WOULD INVOLVE A TIME PERIOD OF SAY A FEW WEEKS OR A MONTH OR TWO AT THE MOST. ALSO, THE SERVICES OF THE FAMILY MEMBERS DURING THE REST OF THE YEAR, WHICH AGAIN CANNOT BE RULED OUT, MAY NOT EXTEND TO ALL THE EIGHT MEMBE RS AND, FURTHER, RESTRICTED TO A LIMITED TIME. IN FACT, THE ASSESSEE HIMSELF HAS OTHER ENGA GEMENTS, VOCATIONS, SO THAT THE TEMPLE ACTIVITIES DO NOT ENGAGE HIM FULLY. THERE IS NO MA TERIAL OR EVIDENCE TO SHOW SUCH PAYMENTS, WHICH WOULD ONLY CONSTITUTE THE SALARY IN COME OF THE RECIPIENTS, AS HAVING BEEN MADE AT ANY TIME IN THE PAST AS THE SAME. IT IS NOT UNCOMMON IN THE INDIAN SOCIETY FOR THE FAMILY MEMBERS TO BE ASSISTING THEIR PARENT S IN THEIR VOCATION, I.E., WITHOUT BEING SPECIFICALLY REMUNERATED FOR THE SAME, PARTICULARLY DURING AND FOR SUCH RELIGIOUS FESTIVALS; IT RATHER BECOMING A MATTER OF FAMILY PRIDE TO COND UCT IT SUCCESSFULLY. THE QUESTION IS NOT ONE OF FAMILY INVOLVEMENT, BUT OF WHETHER THE FAMIL Y MEMBERS WERE TO BE ACTUALLY REMUNERATED AND, EVEN MORE SPECIFICALLY: IS THERE A NY EVIDENCE TO SHOW OF SUCH REMUNERATION FOR THE CURRENT YEAR OR EVEN IN THE PA ST, WHICH WOULD ESTABLISH THE PRACTICE. AND TO WHICH WE CONSIDER AN EMPHATIC NO AS THE ANSW ER; THE ASSESSEE HAS NOT EVEN SPELLED OUT THE BASIS ON WHICH THE REMUNERATION IS WORKED OUT, OR WHAT STOOD ALLOWED BY HIM TO THEM IN THE PAST, ALONG WITH ITS BASIS. THI S BECOMES RELEVANT AS IT WOULD DEFINITELY NOT BE A NEW BUT ONLY A REGULAR FEATURE, SO THAT SI MILAR CHARGES WOULD HAVE BEEN PAID TO THEM IN THE PAST AS WELL. RATHER, WHY SHOULD THE AS SESSEE NOT REFLECT THE SAME IN HIS ACCOUNTS, BEING A GENUINE EXPENSE IN THE CONDUCT OF HIS PROFESSION/VOCATION, IS NOT UNDERSTOOD? 7.3 SO HOWEVER, WE FIND THE ASSESSEES CLAIM, M ADE WITHOUT SUBSTANTIATION THOUGH, OF THE SAID INCOME AS HAVING BEEN RETURNED AS UNDISCLO SED INCOME OF THE FAMILY MEMBERS, AS MERITING CONSIDERATION. TRUE, TAX KNOWS NO EQUITY, AND THE INCOME IS TO BE BROUGHT TO TAX ONLY IN THE HANDS OF THE RIGHT PERSON [REFER: ITO V. CH. ATCHAIAH (1996) 218 ITR 239 (SC)]. HOWEVER, HAVING BROUGHT THE INCOME TO TAX IN THE ASSESSEES HANDS, REJECTING HIS CLAIM OF IT REPRESENTING A LIABILITY AGAINST SERVIC ES TO THE FAMILY MEMBERS, THE SAME COULD IT(SS)A NOS. 98 & 127/ COCH./2004 6 BE ASSESSED IN THEIR HANDS BY THE REVENUE ONLY ON A PROTECTIVE BASIS, WHICH, IT IS TRITE, DOES NOT LEAD TO ANY FURTHER RECOVERY OF TAX, BEING MADE ONLY TO PROTECT THE INTEREST OF THE REVENUE. UNDER THE CIRCUMSTANCES, THEREFORE, WE, UP HOLDING THE ASSESSMENT OF THE IMPUGNED INCOME AS THE ASSESSEES UNDISCLOSED INCOM E, FURTHER DIRECT THAT THE TAX DEMAND IN THE INSTANT CASE BE COMPUTING BY REDUCING THE AMOUNT OF TAX PAID, IF ANY, ON THE UNDISCLOSED INCOME REPRESENTED BY THE CLAIMED S ERVICE CHARGES, DETAIL OF WHICH QUA DIFFERENT FAMILY MEMBERS IS ON FILE, BY THEM IN PUR SUANCE TO THEIR SEPARATE ASSESSMENTS UNDER CHAPTER XIV B, BY THE AO AFTER DUE VERIFICAT ION. WE DECIDE ACCORDINGLY. 7.4 THE ASSESSEE HAS PLACED RELIANCE ON THE DECIS ION IN THE CASE OF CIT VS. DHYANESWARAN A. N. (2008) 297 ITR 135 (MAD.). IN THAT CASE, THE ASSE SSEE WAS A CMD OF A PUBLIC SERVICE UNDERTAKING (PSU) ENGAGED IN TH E MANUFACTURE AND EXPORT OF GRANITES, AS ALSO A PATRON-IN-CHIEF OF A SPORTS BOD Y (TNBA). SUBSTANTIAL AMOUNT OF CASH WAS FOUND FROM HIS BEDROOM DURING SEARCH. HE EXPLA INED THE SAME AS AMOUNTS RECEIVED FROM VARIOUS PARTIES AS ADVANCE FOR CONSTRUCTION OF A STADIUM. MOST OF THE PERSONS WERE MEMBERS OF THE BASKETBALL ASSOCIATION (TNBA), WHO L ATER CONFIRMED THE ASSESSEES VERSION, ACCEPTING THE AMOUNTS ASCRIBED TO THEM. TN BA HAD ALSO FILED ITS RETURN SUBSEQUENTLY, WHICH STOOD ACCEPTED. IT WAS UNDER T HESE CIRCUMSTANCES THAT THE HONBLE HIGH COURT FOUND THE TRIBUNALS FINDING OF THE ASSE SSEE HAVING DISCHARGED THE PRIMARY ONUS OF ESTABLISHING THE IDENTITY AND CAPACITY OF T HE LENDERS AND THE GENUINENESS OF ITS TRANSACTIONS, AS CORRECT. WE ARE UNABLE TO SEE ANY CORRELATION OR BEARING OF THE SAID CASE VIS--VIS THE INSTANT CASE. THE SOURCE OF THE CASH FOUND IS NOT THIRD PARTIES (WHO OWN IT), AS IN THE CITED CASE, BUT THE ASSESSEE HIMSELF. HE CLAIMS, WITHOUT ANY DIRECT OR CIRCUMSTANCIAL EVIDENCE THOUGH, OF BEING LIABLE TO PAY HIS FAMILY MEMBERS SERVICE CHARGES AGAINST THE AMOUNT EARNED BY HIM. NO CONTR ACTUAL LIABILITY IS FOUND TO EXIST, AND NO SUCH PAYMENT/S HAS BEEN SHOWN TO HAVE BEEN MADE IN THE PAST AS WELL, SO AS TO BE ABLE TO SECURE A FAVOURABLE VERDICT EITHER ON THE BASIS OF A CONTRACTUAL OBLIGATION/S OR AS A RESULT OF AN ESTABLISHED PRACTICE. THE SAID CASE HA S, AS SUCH, NO APPLICATION IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE. IT(SS)A NOS. 98 & 127/ COCH./2004 7 7.5 THE SECOND ADDITION, IMPUGNED VIDE ITS GROU NDS 1 & 3, IS THUS ALSO DISMISSED IN PRINCIPLE, EVEN AS THE ASSESSEE WOULD BE ELIGIBLE F OR A TAX REBATE AS DIRECTED AT PARA 7.3 ABOVE. 8. THE THIRD ADDITION, I.E, FOR RS. 3,73,839/- TOWARD INTEREST PAYMENT, AGITATED PER HIS FOURTH GROUND, WAS NOT PRESSED BY THE LD. AR AT THE TIME OF HEARING, AND IS THUS, DISMISSED AS NOT PRESSED. 9. THE REVENUE HAS RAISED A SINGLE ISSUE, I.E., OF THE LEVY OF SURCHARGE ON THE ASSESSED TAX, WHICH STANDS DELETED BY THE LD. CIT(A) ON THE BASIS THAT SECTION 113 OF THE ACT, WHEREBY THE LEVY OF SURCHARGE STOOD EXTENDED TO ASS ESSMENTS U/S. 158BC, PER FINANCE ACT, 2001 WITH EFFECT FROM 1.6.2002, IS ONLY PROSPE CTIVE IN NATURE, AND WOULD THUS NOT BE APPLICABLE IN THE PRESENT CASE; THE BLOCK PERIOD EN DING ON 16.03.2000. THE MATTER HAS SINCE BEEN CLARIFIED BY THE HONBLE APEX COURT VIDE ITS DECISIONS IN THE CASE OF CIT V . SURESH N.GUPTA , 297 ITR 322 (SC) AND CIT VS. RAJIV BHATARA , 310 ITR 105 (SC); HOLDING THE PROVISO TO SECTION 113 TO BE CLARIFICATORY AND CURATIVE IN NATURE, SO THAT IT WOULD THEREFORE BE APPLICABLE TO ALL ASSESSMENTS MA DE UNDER CHAPTER XIV-B AS PER THE RATES SPECIFIED IN THE RELEVANT FINANCE ACT, I.E., THAT APPLICABLE TO THE DATE OF SEARCH. THERE IS WE OBSERVE NO DISPUTE WITH REGARD TO THE R ATE OF THE SURCHARGE, WHICH IN ANY CASE IS ONLY A MATTER OF RECORD, BUT ONLY WITH REGARD TO ITS APPLICABILITY. THE ISSUE THUS STANDS RESOLVED IN FAVOUR OF THE REVENUE. 10. IN THE RESULT, THE ASSESSEES APPEAL IS PART LY ALLOWED AND REVENUES APPEAL IS ALLOWED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 19 TH OCTOBER, 2010 GJ IT(SS)A NOS. 98 & 127/ COCH./2004 8 COPY TO: 1. LATE SHRI K.V.DAMODARAN, REP BY L/HR. K.D.UNNIKA NNAN, KANADI DEVASTHANAM, PERINGOTTUKARA, THRISSUR. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL C IRCLE, THRISSUR. 3. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE, THRISSUR. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 5. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 6. D.R./I.T.A.T., COCHIN BENCH, COCHIN. 7. GUARD FILE. BY ORDER (A SSISTANT REGISTRAR)