Smt. Rajeswari Bai, Aged 71 Years, W/O. Late Kesava Pillai and K. Saileshkumar, S/O. Late Kesava Pillai and Smt. Santhi Sudha, D/O. Late Kesava Pillai V. The Commissioner of Income Tax, Kochi and Income Tax Officer, Ward-2, Thiruvalla

ITA/101/2002

AI Insights

The case involves an income tax appeal by the legal heirs of a deceased assessee against the order of the Income Tax Appellate Tribunal, Cochin. The dispute centered on the assessment of unexplained expenditure for the assessment years 1992-93 and 1993-94. The Tribunal had upheld the addition of Rs.36,000 as rental income and Rs.48,650 as unexplained expenditure. The first appellate authority had cancelled the addition of Rs.48,650, leaving only the rental income. The department appealed this decision, leading to the Tribunal's reinstatement of the unexplained expenditure. The High Court, upon review, found procedural errors in the assessment of the maintenance expenditure, leading to its decision in favor of the appellants.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 671172 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 21-02-2008
• Assessment Year: misc
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K R MENON; GEORGE K GEORGE
• Assessee Lawyers: GEORGE CHERIAN
• Keywords: Assessment; Income tax appeal; Legal heirs; Rental income; Unexplained expenditure
• Section: 147; 148; 143(3); 153A; 68

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 21ST FEBRUARY 2008 / 2ND PHALGUNA 1929 ITA.No. 101 of 2002() --------------------- ITA.117/COCH/1997 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANTS:- -------------------- 1. SMT.RAJESWARI BAI, AGED 71 YEARS, W/O. LATE KESAVA PILLAI, KOMMAT HOUSE, ANGADICKAL NORTH, KAIPATTUR, PATHANAMTHITTA. 2. K.SAILESHKUMAR,S/O.LATE KESAVA PILLAI, KOMMAT HOUSE, ANGADICKAL NORTH, KAIPATTUR, PATHANAMTHITTA. 3. SMT.SANTHI SUDHA,D/O.LATE KESAVA PILLAI, KOMMAT HOUSE, ANGADICKAL NORTH, KAIPATTUR, PATHANAMTHITTA. BY ADV. SRI.GEORGE CHERIAN (THIRUVALLA) RESPONDENTS:- ---------------------- 1. THE COMMISSIONER OF INCOME TAX, KOCHI. 2. INCOME TAX OFFICER, WARD-2, THIRUVALLA. BY SRI.P.K.R.MENON, SC, IT. ADV. SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 21/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. Ramachandran Nair & T.R. Ramachandran Nair, JJ. - - - - - - - - - - - - - - - - - - - - - - - - I.T.A.NO.101 of 2002 - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 21st day of February, 2008. JUDGMENT C.N. Ramachandran Nair, J. Heard learned counsel for the appellant and the learned Standing Counsel for the respondents. 2. The appellants are the legal heirs of the deceased assessee. The Tribunals order is for the years 1992-93 and 1993-94 and this appeal is against the order of the Tribunal issued for 1993-94. The total income assessed is Rs.84,650/-. Out of this, Rs.36,000/- is the rental income received by the assessee. The balance addition of Rs.48,650/- is on account of the alleged unexplained expenditure admitted by the assessee. Though the assessee was called upon to file return, the assessee did not file return, but gave a letter to the officer stating his source of income as rentals and balance borrowals. Since the assessee did not prove the source of expenditure, the assessing officer made addition of unexplained expenditure. In first appeal, the appellate authority retained the addition of Rs.36,000/-, but cancelled the balance addition for the reason that the assessing officer has not brought out a case for assessment of the said ITA 101/2002 -2- amount as income from other sources. 3. On appeal by the department, the Tribunal held that onus to prove the source of expenditure is on the assessee. We do not find any ground to interfere with the Tribunal's finding on the legal issue. However, in this case, it is seen that even though the assessee declared annual maintenance expenditure of Rs.2,500/- for the house, the assessing officer has taken it as monthly expenditure incurred by the assessee. This has resulted in mistake in addition of Rs.27,500/-. Balance is only Rs.21,000/-. Learned counsel for the assessee contended that the assessee was very sick and was not in a position to avail the opportunity to explain the source for expenditure. He also stated that the assessee was running a business and the same was closed on account of heavy loss. Since the assessee is no more and since the amount of addition involved is Rs.21,000/-, we do not find any justification for remanding the matter for reconsideration. Learned counsel further submitted that the assessee had in fact paid the tax under the revised order issued based on first appellate authority's order. Since the addition involved is only as low as Rs.21,000/- and since ITA 101/2002 -3- the assessee is no more, we allow the appeal cancelling the order of the Tribunal and restoring the first appellate authority's order. (C.N. Ramachandran Nair, Judge.) (T.R. Ramachandran Nair, Judge.) kav/ ITA 101/2002 -4- C.N. Ramachandran Nair & T.R. Ramachandran Nair, JJ. - - - - - - - - - - - - - - - - - - - - - - I.T.A.. No.101 of 2002 - - - - - - - - - - - - - - - - - - - - - - JUDGMENT 21st February, 2008. "