M.A.ANTO, PUTHENCHIRA, TRICHUR DIST. V. THE COMMISSIONER OF INCOME TAX, TRICHUR

ITA/1552/2009

AI Insights

The case involves an income tax appeal by M.A. Anto against the Commissioner of Income Tax, Trichur, concerning additions made in block assessment. The primary issues were the addition of Rs.5.85 lakhs as unexplained investment in a firm and Rs.1,43,660/- as undisclosed income for the year 1997-98. The first appellate authority had deleted these additions, but the Tribunal restored them. The High Court, after hearing arguments from both sides, upheld the Tribunal's decision, finding that the appellant failed to provide sufficient evidence to justify the cash transactions and that the income was not accounted for in the required manner.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 700919 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-12-2009
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: JOSE JOSEPH
• Assessee Lawyers: P BALAKRISHNAN
• Keywords: Account payee cheques; Block assessment; Cash transaction; Demand drafts; Undisclosed income; Unexplained investment
• Section: 158B(b)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN FRIDAY, THE 18TH DECEMBER 2009 / 27TH AGRAHAYANA 1931 ITA.No. 1552 of 2009() ---------------------- ITA.120/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: ------------------------------ M.A.ANTO, MALIAKKAL KOONAN HOUSE, PUTHENCHIRA, TRICHUR DISTRICT. BY ADV. SRI.P.BALAKRISHNAN (E) RESPONDENT(S): --------------- THE COMMISSIONER OF INCOME TAX, TRICHUR. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. .................................................................... I.T. Appeal No.1552 of 2009 .................................................................... Dated this the 18th day of December, 2009. JUDGMENT Ramachandran Nair, J. Heard counsel appearing for the appellant and Standing Counsel appearing for the respondent. Both the questions raised for our decision relate to additions made in block assessment, which though deleted by the first appellate authority, were restored by the Tribunal. Counsel contended that there was no justification for the Tribunal to sustain the addition of Rs.5.85 lakhs which was assessed as unexplained investment made by the assessee in a firm. Even though assessee tried to prove source towards loan taken from brother, sister, nephew and other close relatives, the Assessing Officer found there is unexplained time lag between the alleged loan and the actual investment. In any case loans were allegedly taken in cash which is against the provisions of the Income Tax Act. We are of the view that when the Income Tax Act provides that taking of loan and repayments in excess of Rs.20,000/- should be only through Account Payee 2 Cheques or Demand Drafts, cash transaction can be justified only in emergencies. Admittedly there is substantial time lag between the alleged loan in cash and later investment. Therefore, in our view, the Assessing Officer rightly disbelieved the transaction and the Tribunal confirmed it. We do not find any substantial question of law arising from the order of the Tribunal on this issue for our decision. 2. The next question also pertains to the addition of Rs.1,43,660/- for the year 1997-98. Even though assessee contended that time for filing return was not over as on date of search i.e. 30.7.1998, it is the finding of the Tribunal that there was no evidence to prove that income was accounted, which is the requirement under Section 158B(b) of the Income Tax Act, for exclusion from assessment as undisclosed income. Assessee has no case that assessee has paid advance tax on this amount or has accounted the share income from the firm as on the date of search. Even though counsel for the assessee contended that accounts maintained by the firm is sufficient for exclusion under Section 158B (b), we are unable to accept this contention because it is the assessee who gets the salary income from the firm and as and when income is 3 received, the assessee should account the same and should pay advance tax which is not done here. In the circumstances, the Tribunal rightly held that the share income from the firm was not accounted by the assessee. Consequently we dismiss the appeal on this issue as well. C.N.RAMACHANDRAN NAIR Judge V.K.MOHANAN Judge pms "