M/s AVJ Jewellery, Cherthala V. ACIT, Kottayam

MA 31/COCH/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4920 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-09-2010
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 03-05-2010
• Court: TRIBUNAL
• Department Lawyers: T J VINCENT
• Assessee Lawyers: R KRISHNAN
• Keywords: Onus to prove
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH, COC HIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY ARORA, AM M/S. AVJ JEWELLERY, A.S. ROAD, CHERTHALA. [PAN: AAAEFA 6003F] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOTTAYAM. (ASSESSEE-APPLICANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI R.KRISHNAN, CA REVENUE BY SHRI T.J.VINCENT, DR O R D E R PER SANJAY ARORA, AM: THIS IS A MISCELLANEOUS APPLICATION BY THE ASSESS EE, ARISING OUT OF THE ORDER BY THE TRIBUNAL IN ITS CASE DATED 29.1.2010, DISPOSING OF THE REVENUES APPEAL AGITATING THE ORDER BY THE FIRST APPELLATE AUTHORITY DATED 14/2/2 005 IN RELATION TO ITS ASSESSMENT U/S. 143(3) R.W.S 158BC OF THE INCOME-TAX ACT, 1961 ('TH E ACT', HEREINAFTER) FOR THE BLOCK PERIOD 1.4.1990 TO 9.11.2000 VIDE ORDER DATED 27.11 .2002. 2. PER ITS PRESENT PETITION, THE ASSESSEE CONTENDS THAT THE IMPUGNED TRIBUNAL ORDER SUFFERS FROM THE FOLLOWING MISTAKES:- A) VIDE PARA 5.1 AND 5.2, THE TRIBUNAL ITSELF RECO RDS ITS SATISFACTION TO THE EFFECT THAT THE AUTHORITIES BELOW OUGHT TO HAVE MADE FURT HER INVESTIGATION IN THE MATTER, SO AS TO ELICIT THE TRUTH THEREOF. AS SUCH, ITS P ROCEEDING TO DECIDE THE CASE ON THE BASIS OF SUCH ADMITTED INCOMPLETE INVESTIGATION, I S A MISTAKE. B) EVEN AS THERE HAS BEEN.AN ATTEMPT BY THE ASSESS EE, IN CONFIRMING THE STATEMENT U/S. 132(4) OF THE ACT, THE SAME IN THE ABSENCE OF CORROBORATIVE EVIDENCE, CANNOT BE SAID TO BE CONCLUSIVE. RELIANCE STANDS PLACED FOR THE PURPOSE ON THE DECISION IN THE CASE OF PULLENGODE RUBBER PRODUCE CO. LTD. VS. STATE OF KER ALA, 91 ITR 18 (SC) AND PANGAMBAM KALANJAY SINGH VS. STATE OF MANIPUR AIR 1956 SC 9. M.P. NO. 31/COCH/ 20 10 (ASG OUT OF IT(SS)A NO. 117/COCH/ 2005) BLOCK PERIOD: 1.4.1990 TO 9.11.2000 M.P. NO. 31/COCH./2010 2 3. BEFORE US, THE REPRESENTATIVES OF BOTH THE PARTI ES MADE VEHEMENT ARGUMENTS. THE LD. AR READ OUT PARAS 5.1 AND 5.2 OF THE IMPUGNED O RDER TO BUTTRESS HIS STAND AFORE-STATED. THE ASSESSEE HAD SUBSEQUENTLY AGITATED BEFORE THE F IRST APPELLATE AUTHORITY THAT THE INSPECTORS REPORT DATED 9.11.2000 IN RESPECT OF TH E CLOSURE OF THE SUPPLIERS SHOP (SINCE 26.10.2000) WAS NOT CONFRONTED TO IT AND, THUS, COU LD NOT BE USED IN EVIDENCE AGAINST THE ASSESSEE. THE CIT(A) HAD RENDERED SPECIFIC FINDING S IN THE MATTER, WHICH, HOWEVER, STAND REVERSED BY THE TRIBUNAL. THE LD. DR, ON THE OTHER HAND, EXHORTED OF THE TRIBUNALS ORDER BEING A WELL-REASONED, RENDERING A CONSIDERED DECISION, SO THAT WHAT THE ASSESSEE WAS SEEKING UNDER THE GARB OF RECTIFICATION OF A MI STAKE IS ONLY A REVIEW OF ITS ORDER BY THE TRIBUNAL AND WHICH IS NOT PERMISSIBLE IN LAW. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 4.1 WE SHALL ADDRESS BOTH THE ISSUES RAISED BY T HE ASSESSEE PER ITS PRESENT PETITION WHICH STAND DELINEATED AT PARA 2 ABOVE. THE TRIBUNAL IS A N APPELLATE AUTHORITY, WHICH IS TO DECIDE THE ISSUES ARISING OUT OF THE TAX ASSESSMENTS OF TH E ASSESSEE AS RAISED BEFORE IT BASED ON THE MATERIALS ON RECORD, WHOSE DECISION IS FURTHER SUBJECT TO APPEAL BY EITHER PARTY AGGRIEVED BY ITS ORDER. IN ADDITION, IT IS A FINAL FACT FINDING AUTHORITY, SO THAT ITS FACTUAL FINDINGS, UNLESS HELD AS PERVERSE, OR NOT ARISING O UT OF THE MATERIAL ON RECORD - BOTH OF WHICH CONSTITUTE QUESTIONS OR MATTERS OF LAW - UPON REVIEW BY A HIGHER APPELLATE FORUM, ARE CONSIDERED FINAL. 4.2 COMING TO THE TRIBUNALS ORDER, PARAS 2 & 3 NAR RATES THE FACTS OF THE CASE AS GLEANED FROM THE MATERIAL ON RECORD AND THE PLEADIN GS BEFORE IT. VIDE PARA 4, THE TRIBUNAL RECORDS THE ARGUMENTS ADVANCED BY BOTH THE PARTIES, I.E., THE REVENUE-APPELLANT AND THE ASSESSEE-RESPONDENT. NO MISTAKE WHATSOEVER HAS BEEN POINTED OUT BY THE ASSESSEE UP TO THIS PART OF THE ORDER, SO THAT IT HAS TO BE TAKEN AS CORRECT, AND A FAITHFUL REPRODUCTION OF THE MATERIAL ON RECORD AS WELL AS WHAT TRANSPIRED D URING THE HEARING. VIDE PARA 5, WHICH CONTAINS SEVEN SUB-PARAS, I.E., # 5.1 TO 5.7, THE T RIBUNAL RECORDS ITS FINDINGS IN RESPECT OF AND TOWARD THE ISSUE BEFORE IT, AS DISCERNED, I.E., WHETHER THE ASSESSEE, UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, BE CONSIDERED AS HAVING BEEN SATISFACTORILY EXPLAINED TO THE AO THE ADMITTED INVESTMENT IN 2105.2 GMS. OF GOLD O UT OF 5575.48 GMS. OF GOLD M.P. NO. 31/COCH./2010 3 ORNAMENTS FOUND IN EXCESS WITH IT DURING SEARCH (AT ITS BUSINESS PREMISES ON 9.11.2000), I.E., WITH REFERENCE TO ITS ACCOUNTS, AND WHICH WER E ACCORDINGLY SEIZED. THE ISSUE STANDS FORMULATED BY IT TOWARD THE END OF PARA 5.2. IT FOU ND THE SAME AS NOT, RENDERING A CATEGORICAL FINDING TO THIS EFFECT VIDE PARA 5.7 OF ITS ORDER, ON THE BASIS OF THE REASONS ENUMERATED IN THE PRECEDING PARAS. THE SAID FINDING , A FINDING OF FACT, COULD ONLY BE CHALLENGED, AS AFORE-STATED, IN APPELLATE PROCEEDIN GS, WHEREAT THE SAME WOULD BE SUBJECT TO REVIEW, CONTENDING THE FACTUAL FINDINGS TO BE PE RVERSE OR AS NOT ARISING OUT OF THE MATERIAL ON RECORD. A RECTIFICATION, ON THE OTHER H AND, WOULD LIE ONLY WHERE IT COULD BE SHOWN THAT IN DECIDING THE ISSUE THERE HAS BEEN AN INCORRECT ASSUMPTION OF AN UNDERLYING FACT, VITIATING THE ORDER. THIS IS AS IN THAT CASE THE WHOLE EDIFICE ON WHICH THE FACTUAL FINDING/S ARE BASED GETS WHOLLY OR SUBSTANTIALLY ER ODED. CLEARLY, THE ONUS TO EXHIBIT THE SAID INFIRMITY IN THE ORDER, AND WHICH SHOULD BE AN APPARENT ONE, IS ON THE APPLICANT. THE ASSESSEE-APPLICANTS CASE BEFORE US DOES NOT FALL U NDER EITHER CATEGORY, ON WHICH ALONE THE TRIBUNALS ORDER COULD BE IMPUGNED IN RECTIFICATION PROCEEDINGS, AS WOULD BE APPARENT FROM THE `MISTAKE/S ALLEGEDLY ATTENDING ITS ORDER AS LISTED IN ITS PETITION. THE PETITION, THUS, FAILS ON THE PRELIMINARY GROUND OF JURISDICTI ON. 4.3 WE, NEXT, EXAMINE THE ASSESSEES APPLICATION ON ITS MER ITS. THE ENTIRE FINDINGS OF THE TRIBUNAL, AS LISTED AT PARA 5 OF ITS ORDER HAVE TO BE READ AS A WHOLE IN ANSWER TO THE QUESTIONS POSED BEFORE IT; IT BEING TRITE THAT ANY DOCUMENT HAS TO READ AS A WHOLE AND ITS VARIOUS PARTS, HARMONIOUSLY WITH EACH OTHER. IT IS NOT OPEN TO TAKE AN OBSERVATION IN ISOLATION OR SELECTIVELY AND DRAW SOME CONCLUSIONS BASED THEREON (REFER: SUN ENGINEERING , 198 ITR 297 (SC)). PARAS 5.1 & 5.2 RECOUNT THE BA SIS OF THE FINDINGS OF THE AUTHORITIES BELOW, OBSERVING THAT A FURTHER INVESTI GATION OF FACTS, TO UNEARTH THE TRUTH, WAS A PREFERABLE COURSE. IN FACT, IT ALSO SIMULTANEOUSL Y EXAMINES AND IMPUGNS THE ASSESSEES CONDUCT (AT PARA 5.2), AS ALSO FOUND THAT OF THE FI RST APPELLATE AUTHORITY, WHOSE POWERS ARE CO-TERMINUS WITH THAT OF THE ASSESSING AUTHORITY, A S WANTING (PARA 5.1,5.2), EVEN AS HE DECIDES THE ISSUE, BEING THE SAME, IN ASSESSEES FA VOUR. IN FACT, IT ALSO THEREIN THE BASIS OF THE FORMULATION OF THE ISSUE BY IT, I.E., INSPITE T HE SAID OBSERVATION. IT MAY BE BE EMPHASIZED THAT THE PROCEEDINGS UNDER THE ACT ARE N OT ADVERSARIAL PROCEEDINGS, AND IN THAT SENSE WHAT IS BEING DECIDED BY THE TRIBUNAL IS NOT A LIS , SO THAT WHAT ALONE IS RELEVANT AND NEEDS TO BE SEEN, SPEAKING IN THE CONTEXT OF TH E PRESENT CASE, IS WHETHER IT (ASSESSEE) M.P. NO. 31/COCH./2010 4 HAS SATISFACTORILY EXPLAINED THE EXCESS INVESTMENT FOUND WITH IT, I.E., WHETHER THE REVENUE AUTHORITIES, IN NOT ACCEPTING THE ASSESSEES EXPLAN ATION/S TOWARD THE SAME HAVE ACTED REASONABLY OR NOT. THE TRIBUNAL, THEREFORE, PROCEED ED TO EXAMINE THE ASSESSEES EXPLANATION, IN THE LIGHT OF MATERIAL ON RECORD, TO OPINE ON THE AOS FINDING OF IT AS NOT SATISFACTORY. IT FOUND, ON APPRECIATION OF THE FACT S AND CIRCUMSTANCES OF THE CASE, FOR WHICH REFERENCE MAY BE MADE TO PARAS 5.3 TO 5.6 OF ITS ORDER, THE ASSESSEES EXPLANATION AS NOT TENABLE SO THAT THE REVENUES FINDING WAS FO UND AS VALID IN LAW. 4.4 COMING TO THE ASPECT OF THE CLOSURE OF THE S HOP BY THE STATED SUPPLIER SINCE 26/10/2000, OR THE INSPECTORS REPORT TO THAT EFFEC T. THIS `FINDING OF FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE, A FACT NOT REBUTTED OR DISPUTED BY IT, RATHER PLEADING OF IGNORANCE OF THE SAME ( REFER PARA 4.2 ), WHILE IT CONTINUES TO TRANSACT BUSINESS WITH IT RIGHT UP TO THE EVENING OF 8/11/2000. THE SAME HOWEVER DO ES NOT FORM PART OF ITS EXPLANATION, AND, THUS, ITS EXAMINATION BY THE TRIBUNAL, EVEN TH OUGH TO THE EXTENT RELEVANT THE SAME STANDS CONSIDERED BY IT. THE TRIBUNAL HAS THUS MOVE D BY THE SAID FACT, AS WOULD BE APPARENT FROM ITS EXAMINATION AFORESAID, AND THE SA ME DOES NOT FORM A PART OF ITS DECISION. WE, THEREFORE, FIND NO MERIT IN THE ASSES SEES CLAIM OF THE TRIBUNALS ORDER BEING VITIATED FOR NON-REMISSION OF THE CASE BACK TO THE REVENUE AUTHORITIES FOR CAUSING FURTHER PROBE IN THE MATTER. THAT, TO OUR MIND, WOULD HAVE BEEN A VALID CHARGE ONLY IF THE SAME HAD FORMED A PART OF THE ASSESSEES EXPLANATION, TH OUGH STOOD IN THE FACTS OF THE CASE NTO CONSIDERED BY THE REVENUE. THE TRIBUNAL FOUND, QUIT E APART FROM THE CLOSURE OR OTHERWISE OF THE SAID SHOP, THE ASSESSEES EXPLANATION AS NOT ACCEPTABLE FOR REASONS MENTIONED AT PARA 5.3 TO 5.6, WHEREIN THE SAME STANDS EXAMINED B Y THE TRIBUNAL IN LIGHT OF THE OBTAINING FACTS AND CIRCUMSTANCES OF THE CASE, RENDERING ITS DECISION AT PARA 5.7 4.5 THE ONUS TO PROVE SATISFACTORILY THE NATU RE AND SOURCE OF THE STOCK FOUND WITH IT, AND ON WHICH THERE IS NO DISPUTE, HAVING BEEN OWNED UP BY IT, IS SQUARELY ON THE ASSESSEE. IT IS ONLY WHERE THE ASSESSEE LEADS SOME EVIDENCE C AN THE ASSESSING OFFICER PROCEED IN THE MATTER. THERE IS, AS SUCH, NO DENIAL OF JUSTICE IN THE PRESENT CASE, WHICH, IN ESSENCE, WE DISCERNED THE ASSESEES GRIEVANCE PER ITS PETITION AS; THE ONUS TO PROVE ITS RETURN, OR FURNISH A SATISFACTORY EXPLANATION BEING ON THE ASS ESSEE. M.P. NO. 31/COCH./2010 5 4.6 IN VIEW OF THE FOREGOING WE DO NOT FIND ANY MERIT IN THE ASSESSEE-APPLICANTS CASE, AND THUS, RECTIFICATION APPLICATION. THE SAME IS AC CORDINGLY DISMISSED. WE DECIDE ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES MISCELLANEOUS A PPLICATION IS DISMISSED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 1 ST SEPTEMBER 2010 GJ COPY TO: 1. M/S. AVJ JEWELLERY, A.S. ROAD, CHERTHALA. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRA L CIRCLE, KOTTAYAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R./I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGIST RAR)