K.P.BEERAN V. THE ASST COMMISSIONER OF INCOME TAX

ITA/183/2010

AI Insights

The case involves K.P. Beeran, a gold dealer, who faced a block assessment following a search by the Income Tax Department, during which unaccounted gold was recovered. Beeran claimed that the gold belonged to 27 goldsmiths who worked for him, asserting it was given as security. However, he failed to provide convincing evidence to support this claim, and the goldsmiths' testimonies were found to be unconvincing and stereotyped. The initial assessment granted some relief to Beeran, but both he and the department appealed to the Tribunal, which remanded the case for a fresh assessment. The High Court dismissed both appeals, supporting the Tribunal's findings and the need for a detailed reassessment by the CIT (Appeal).

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 766946 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 17-11-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: P K R MENON; JOSE JOSEPH
• Assessee Lawyers: K B KUTTY; K M FIROZ; M SHAJNA
• Keywords: Block assessment; Goldsmiths; Income tax appeal; Search and seizure; Unaccounted Gold
• Section: 69B

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN THURSDAY, THE 17TH DAY OF NOVEMBER 2011/26TH KARTHIKA 1933 ITA.No. 183 of 2010 ======= APPELLANT/APPELLANT/RESPONDENT IN ITA ======================================== 1 K.P.BEERAN, PROPRIETOR RIYAZ JEWELLERY WORKS KAMATH LANE PALAYAM CALICUT. BY ADV.DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ SMT.M.SHAJNA RESPONDENT /APPELLANT IN ITA ============================== 1 THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE CALICUT. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 17-11-2011 , ALONG WITH ITA. 223/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA.No. 183 of 2010 APPENDIX APPELLANT'S ANNEXURES: ANNEXURE A : TRUE COPY OF ASSESSMENT ORDER DATED 30.9.2002 ANNEXURE B : TRUE COPY OF THE GROUNDS OF APPEAL BEFORE THE FIRST APPELLATE AUTHORITY ANNEXURE C : TRUE COPY OF THE APPEAL ORDER DATED 8.10.2004 ANNEXURE D : TRUE COPY OF THE MODIFIED ORDER GIVING EFFECT TO THE FIRST APPEAL ORDER ANNEXURE E : TRUE COPY OF THE GROUNDS OF APPEAL FILED BY THE APPELLANT BEFORE THE APPELLATE TRIBUNAL ANNEXURE F : TRUE COY OF THE PETITION FOR ADDITIONAL GROUND FILED BY THE APPELLANT ANNEXURE G : TRUE COPY OF THE PETITION FOR ADDITIONAL GROUND FILED BY THE APPELLANT ANNEXURE H : TRUE COPY OF THE APPELLATE TRIBUNAL ORDER(COMMON ORDER) DATED 18.9.2009 RESPONDENTS' ANNEXURES: NIL //TRUE COPY// P.A. TO JUDGE jma C.N. RAMACHANDRAN NAIR, & K. VINOD CHANDRAN, JJ ---------------------------------------------------- I T A Nos.183 & 223 of 2010 ---------------------------------------------------- Dated this the 17th day of November, 2011 J U D G M E N T C.N. Ramachandran Nair , J Heard the learned senior counsel Dr. K.B. Mohamed Kutty appearing for the appellant and learned Standing Counsel for the respondent. 2. Both the appeals arise from block assessment completed after search on the appellant/assessee who was a dealer in Gold ornaments. During search conducted by the department, unaccounted gold was recovered and the assessee was required to explain the source. Even though, assessee tried to explain stating that 27 goldsmiths working for him gave gold as security, in the course of enquiry and evidence, assessee could not establish it with evidence. His explanation was that the seized gold belongs to goldsmiths. Even though, goldsmiths were examined they did not give any convincing evidence to establish assessee's case. Further, confirmation letters issued by the goldsmiths were ITA 183 & 223 of 2010 : 2 : stereotyped bearing same date. Receipts issued accepting the gold deposits were found to be too stereotyped forms without itemized details, but only the weight of gold. The letters issued by the goldsmiths were also found to be not genuine, because all the letters demanding return of gold were retained in the same stereotyped form with same date on the letters. The appellant was granted substantial relief in CIT(Appeal) against which assessee as well as the department filed appeals before the Tribunal. The Tribunal dismissed the said appeals, but, remanded the Revenues Appeal for the reason that CIT (Appeal) has not considered the assessment order on the basis of the materials on which the assessment is made. 3. So far as the appeal filed against the order of remand is concerned, we feel that what the Tribunal stated is that the CIT (Appeal) has not considered the findings in the assessment order on the basis of the materials relied on with reference to Section 69B of the Act. So much so, we do not find any grievance for the assessees because assessee gets opportunity before the CIT (Appeal) in fresh proceedings to substantiate his case. We therefore, dismiss this appeal. 4. So far as the appeal filed against the order of the Tribunal dismissing the assessee's appeal is concerned, what ITA 183 & 223 of 2010 : 3 : we notice is that the Tribunal reconfirmed the findings on additions based on evidence recovered in the course of search. This is a case where assessment is only based on recovery of Gold. Admittedly, the assessee had to explain the source failing which the value of gold is to be assessed as unaccounted income. Assessee's attempt to prove the source of the gold seized through the 27 goldsmiths miserably failed before the 3 authorities, namely the Assessment Officer, the first appellate authority as well as the Tribunal. We do not find any reason to interfere with the findings of the Tribunal on the additions made based on recovery of gold, the source of which could not be explained by the assessee. In view of the findings above, we dismiss both the appeals leaving it open to the assessee to pursue the remanded case before the first appellate authority. Sd/- C.N. RAMACHANDRAN NAIR (Judge) Sd/- K. VINOD CHANDRAN (Judge) jma //true copy// P.A to Judge "