Shri V.K.Sreenivasan, Cochin v. ACIT, Ernakulam

ITA 2/COCH/2002 | misc
Pronouncement Date: 19-05-2010

Appeal Details

RSA Number 221914 RSA 2002
Assessee PAN AYKPS1098N
Bench Cochin
Appeal Number ITA 2/COCH/2002
Duration Of Justice 8 year(s) 4 month(s) 15 day(s)
Appellant Shri V.K.Sreenivasan, Cochin
Respondent ACIT, Ernakulam
Appeal Type Income Tax Appeal
Pronouncement Date 19-05-2010
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 19-05-2010
Assessment Year misc
Appeal Filed On 04-01-2002
Judgment Text
IN THE INCOME TAX APPELLATE T RIBUNAL COCHIN BENCH COC HIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY ARORA AM I.T.A. NOS. 01 02/COCH./2002 & 26/COCH.1 999 ASSESSMENT YEARS : 1977-78 1978-79 & 1982-83 SHRI V.K. SRINIVASAN OMEGA HOTEL COMPLEX KALATHIPARAMBIL ROAD COCHIN-16 [PAN: AYKPS 1098N] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX INVESTIGATION CIRCLE-1 DIV. I ERNAKULAM. THE ASSISTANT COMMISSIONER OF INCOME TAX INVESTIGATION CIRCLE-2 DIV. I ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) I.T.A. NOS. 151 & 152/COCH./1997 ASSESSMENT YEARS : 1984-85 & 1985-86 SHRI V.K. SRINIVASAN OMEGA HOTEL COMPLEX KALATHIPARAMBIL ROAD COCHIN-16 [PAN: AYKPS 1098N] VS. THE ASSISSTANT COMMISSIONER OF INCOME TAX INVESTIGATION CIRCLE-3 DIV. I ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE-RESPONDENT) ASSESSEE BY SHRI K.M.V.PANDALAI CA REVENUE BY SHRI T.J.VINCENT DR O R D E R PER SANJAY ARORA AM: THESE ARE A SET OF FIVE APPEALS BY THE ASSESSEE AR ISING OUT OF THE TWO SEPARATE ORDERS BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- I KOCHI (CIT(A) FOR SHORT) DATED 30.10.1996 (FOR ASSESSMENT YEARS (AYS) 1977-7 8 1978-79 AND 1982-83) AND 12.2.1997 (A.YS. 1984-85 AND 1985-86). 2. THE APPEALS RAISE COMMON ISSUES ARISING OUT OF T HE ASSESSMENTS FRAMED U/S. 143(3) OF THE INCOME TAX ACT 1961 (THE 'ACT' HEREINAFTER) PASSED BY THE ASSISTANT COMMISSIONER OF INCOME-TAX INVESTIGATION CIRCLE-1/2/3 ERNAKULAM . THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 2 3. AT THE OUTSET WE FIND THAT THE APPEALS FOR AYS 1977-78 AND 1978-79 STAND FILED BEFORE THE TRIBUNAL WITH A DELAY OF 1830 DAYS EACH . THEREFORE THEY WOULD BE FIRST REQUIRED TO BE ADJUDICATED ON THEIR ADMISSION. BOTH THE APPEALS ARE ACCOMPANIED BY AN AFFIDAVIT DATED 25.11.2006. THE SAME STATES THAT TH E ORDER BY THE FIRST APPELLATE AUTHORITY PASSED FOR BOTH THE YEARS ON 30.10.1996 STOOD RECEIVED BY THE ASSESSEE ON 18.11.1996. THE SAME WERE ACCORDINGLY GIVEN TO SH. M. MOHAMMED MOOPAN ADVOCATE FOR FILING APPEALS BEFORE THE APPELLATE TRIBUNAL D ULY EXECUTING A VAKALATHNAMA IN HIS FAVOUR. THE ASSESSEE WAS THEREFORE UNDER THE BONA FIDE BELIEF THAT THE APPEALS FOR THE SAID YEARS WERE FILED BY HIS COUNSEL ON TIME. HOWEV ER IT WAS ONLY ON THE PASSING AWAY OF SHRI MOOPAN IN 1999 WHEN HE APPROACHED HIS OFFICE FOR TAKING BACK THE CASE RECORDS FOR ENTRUSTING THE SAME TO SOME OTHER ADVOCATE THAT IT CAME TO LIGHT THAT THE APPEALS HAD NOT ACTUALLY BEEN FILED. THE RECORDS WERE RECEIVED BACK ON 13.12.2001 AND THE APPEALS SUBSEQUENTLY FILED ON 22.1.2002 . UNDER THE CIRCUMSTANCES THERE WAS NO WILFUL INTE NTION OR LACHES ON THE PART OF THE ASSESSEE IN PREFERRING THE APPEALS SO THAT THESE MAY BE ADMITTED AND DECIDED ON MERITS BY CONDONING THE DE LAY. THERE IS SIMILARLY A DELAY OF 735 DAYS IN FILING OF THE APPEAL BEFORE THE TRIBUNAL FOR AY 1982-83 WHICH IS AGAIN ACCOMPANIED BY AN AFFIDAVIT DATED 25.11.2006 STATI NG THE SAME REASON FOR THE DELAY; THE ONLY DIFFERENCE BEING THAT THE APPEAL STANDS FILED ON 22.1.1999 . 4. WE HAVE HEARD THE PARTIES IN THE MATTER AS WELL AS PERUSED THE MATERIAL ON RECORD. AFTER GIVING OUR ANXIOUS CONSIDERATION TO THE MATTE R WE ARE OF THE VIEW THAT THE DELAY FOR ALL THE THREE APPEALS IS NOT SATISFACTORILY EXPLAIN ED SO AS TO MERIT CONDONATION. 4.1 THE APPEAL FOR THE THIRD YEAR (AY 1982-83) STA NDS DECIDED BY THE FIRST APPELLATE AUTHORITY TOGETHER WITH THAT FOR THE FIRST TWO YEAR S (AY 1977-78 & 1978-79) PASSING A CONSOLIDATED ORDER FOR FOUR YEARS I.E. INCLUDING AY 1980-81. FIRSTLY HOW COULD THE APPEAL FOR AY 1982-83 BE FILED ON 22.1.1999 GIVEN THAT THE REASON FOR THE DELAY AS PER THE SWORN AFFIDAVIT EXPLAINING THE SAME IS THE EXP IRY OF THE ADVOCATE SHRI MOHAMMED MOOPAN (TO WHOM THE MATTERS FOR ALL THE THREE YEARS STOOD ENTRUSTED) WHICH LED TO THE ASSESSEE TO APPROACH HIS OFFICE FOR TAKING BACK THE CASE RECORDS ON 4.5.1999 I.E. ABOUT 3 ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 3 AND 1/2 MONTHS BEFORE HIS EXPIRY . THE SAME ITSELF BEARS OUT THE UNTRUTH OF THE STA TEMENTS MADE THEREIN. SECONDLY EVEN IGNORING THE SAME FOR A MOMENT THE QUESTION WOULD ARISE AS TO WHY THE APPEALS FOR THE EARLIER TWO YEARS (AY 1977-78 & 1978-79) STOOD ALSO NOT FILED IN JANUARY 1999 I.E. ALONG WITH THE APPEAL FOR AY 1982-83. IT IS INCOMPREHENSIBLE THAT THE ADVOCATE OFFICE WHILE RETURNING BACK (EI THER DURING HIS LIFE TIME OR AFTER HIS DEATH) THE CASE RECORDS FOR A.Y. 1982-83 DID NOT D O SO FOR AYS 1977-78 AND 1978-79 OR ACTUALLY DID SO WITH A FURTHER DELAY OF 3 YEARS ; THAT FOR THE FORMER BEING ONLY BEFORE 31.12.1998 THE DATE OF SIGNING/VERIFICATION OF THE APPEAL MEMO FOR THAT YEAR. THIRDLY EVEN THE CONTENTION OF ENTERTAINING A BONA FIDE BELIEF AS TO THE FILING OF THE APPEALS BY THE ADVOCATE IS NOT PALATABLE OR (AT LEAST) UNDERSTAN DABLE ON THE BASIS OF THE STATED FACTS. HE DID NOT REPRESENT THE ASSESEES CASE BEFORE THE FIR ST APPELLATE AUTHORITY NOR IS THERE ANYTHING TO SHOW THAT HE WAS THE ASSESSEES COUNSEL AT THE RELEVANT TIME. BY ALL AVAILABLE ACCOUNTS IT APPEARS TO BE ONE SH. N. BALAKRISHNA PILLAI ADVOCATE WHO PLEADED THE ASSESSEES CASE FOR AYS 1984-85 & 1985-86 BEFORE TH E FIRST APPELLATE AUTHORITY. AS SUCH THE ASSESSEE WOULD HAVE ONLY TAKEN BACK THE SAME FR OM HIM OR WHOEVER SO AS TO MAKE OVER THE SAME TO HIS NEW COUNSEL MR. MOOPAN WHO W OULD NEED TO BE PROPERLY BRIEFED OF THE FACTS OF THE CASE BEARING A CONSIDERABLE AND E VENTFUL HISTORY. IT IS ONLY AFTER GOING THROUGH THE CASE RECORDS OBTAINING CLARIFICATIONS ON VARIOUS POINTS IF NOT ALSO REQUIRING ADDITIONAL MATERIALS/EXPLANATIONS AND AFTER OBTAIN ING HIS SIGNATURES ON THE APPEAL MEMO (IN ALL PROBABILITY ONLY AFTER GETTING THE FINAL PR OOF VETTED BY THE ASSESSEE) AND PAYING THE FILING FEES COULD LEAD ONE TO BE SATISFIED THAT HI S COUNSEL IS IN A POSITION TO AND WOULD NOW FILE THE APPEALS. THERE IS NO QUESTION OF ENTE RTAINING ANY BELIEF AS TO THE FILING OF APPEALS PARTICULARLY BY A NEW COUNSEL BEFORE THIS AND NOT IN THE LEAST ONLY AFTER HANDING OVER THE PAPERS TO HIM. AGAIN AS IS EVIDENT THE A SSESSEE DID NOT BOTHER TO QUESTION MR. MOOPAN IN RESPECT OF FILING THE APPEALS WHICH IS O NLY A NORMAL HUMAN BEHAVIOUR OR WE WOULD SAY INSTINCT AND FOR MONTHS AND YEARS TOGET HER. FURTHER STILL THE APPEALS ARE NOT FILED THROUGH ANY ADVOCATE FOR ENGAGING WHOM THE A SSESSEE VISITED MR. MOOPANS OFFICE AFTER HIS DEATH. TO ADD FURTHER TO THE STORY WHICH BECOMES INTRIGUING INDEED THE CASE RECORD FOR THE OTHER YEARS INCLUDING AY 1984-85 & 1985-86 (APPEALS FOR WHICH ARE IN TIME AND NOT STAND FILED BY OR THROUGH SH. MOOPAN) WERE NOT TAKEN BACK AND CONTINUED TO BE WITH THE ASSESSEES OLD COUNSEL SH. N. BALAK RISHNA PILLAI ADVOCATE REPRESENTING ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 4 THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY F OR THOSE YEARS ONLY SUGGESTING OF THE ASSESSEE CONTINUING TO BE SATISFIED WITH HIS PERFOR MANCE SO THAT THE `WITHDRAWAL OF THE CASES FOR THESE YEARS FROM HIM IS INEXPLICABLE. THE AVERMENTS MADE ARE THUS INCONSISTENT AND UN-RECONCILABLE WITH THE OTHER CLEAR FACTS SHO WING THEM TO BE PATENTLY INCORRECT. 4.2 IN VIEW OF THE FOREGOING IT IS DIFFICULT TO TREAT THE IMPUGNED NO INSIGNIFICANT DELAY AS EXPLAINED BY THE ASSESSEE WITH ANY CAUSE THE ON US TO PROVE WHICH IS ONLY ON IT LEAVE ALONE A SUFFICIENT CAUSE SO AS TO CONSIDER CONDONA TION OF THE SAID DELAY THAT ATTENDS THE FILING OF ITS APPEALS AS JUSTIFIABLE. THE TIME LIMI T PROVIDED UNDER THE ACT IS MANDATORY ( S. 253(3) ). THOUGH THE TRIBUNAL IS EMPOWERED TO ADMIT THE S AME EVEN THEREAFTER IT IS ONLY ON THE RECORDING OF A FINDING AS TO THE EXISTENCE O F A SUFFICIENT CAUSE WHICH WE HAVE HELD AS MISSING IN THE PRESENT CASE WITH THE ASSESSEES EXPLANATION BEING FOUND TO BE INCONSISTENT AND CONTRADICTORY. WE RESULTANTLY HO LD THE ASSESSEES APPEALS AS NOT FIT FOR CONDONATION OF THE DELAY. IN DECIDING SO WE DERIVE SUPPORT FROM THE DECISIONS IN THE CASE OF CIT V. RAM MOHAN KABRA 257 ITR 773 (P&H) AND SRI VENKATESA PAPER & BOARDS LTD. V. DY. CIT 98 ITD 200 (CHENNAI) WHEREAT THE LAW IN THE MATT ER STANDS ELABORATELY DISCUSSED AND APPLIED. THE ASSESSEES APPEALS FOR A YS 1977-78 1978-79 AND 1982-83 ARE ACCORDINGLY DISMISSED AS NOT MAINTAINABLE. 5. COMING TO THE ASSESSEES APPEALS FOR AY 1984-85 & 1985-86 BEFORE WE PROCEED TO RECOUNT THE FACTS OF THE CASE IT WOULD BE PERTI NENT TO STATE THAT THE INSTANT APPEALS FOLLOW THE ASSESSMENTS U/S. 143(3) OF THE ACT (ON 2 2.3.1995) FOR BOTH THE YEARS FOR THE THIRD TIME; THAT ON THE EARLIER TWO OCCASIONS HAVIN G BEEN SET ASIDE BY THE LD. CIT (A) FOR MAKING FRESH ASSESSMENT AFTER VERIFYING CERTAIN PO INTS WITH THE HELP AND COOPERATION OF THE ASSESSEE. IN FACT EVEN THIS TIME WHICH WAS ES SENTIALLY TO AFFORD AN OPPORTUNITY TO THE ASSESSEE IN THE INTEREST OF JUSTICE THE ASSESSEE D ID NOT EXTEND COOPERATION FURNISHING THE RELEVANT DETAILS. IT WAS ONLY ON THE INTERVENTION O F THE LD. CIT (A) DURING THE COURSE OF HEARING OF THE APPEAL FOR OTHER YEARS (AY 1977-78 O NWARDS) THAT IT WAS MUTUALLY AGREED THAT THE ASSESSEE SHALL APPEAR BEFORE THE AO I.E. ACIT INVESTIGATION CIRCLE-3 DIVISION I ERNAKULAM ON DEFINED DATES THAT THE PRESENT AS SESSMENTS COULD BE FINALIZED. WE SHALL DISCUSS THE FACTS IN RELATION TO THE GROUNDS TO ENA BLE THEIR ADJUDICATION. ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 5 6. VIDE THE FIRST GROUND (FOR AY 1984-85) THE ASSESSE E AGITATES THE NON-ACCEPTANCE OF THE EXPLANATION TOWARD THE SUM OF RS. 1 50 000/- CREDITED TO HIS CAPITAL ACCOUNT. THE SAID ADDITION FORMS PART OF THE TOTAL ADDITION OF R S. 17 03 728/- ASSESSED AS INCOME FROM OTHER SOURCES IN RESPECT OF UNEXPLAINED CREDITS IN THE NAME OF THE ASSESSEE HIS WIFE HIS TWO SONS AND THREE DAUGHTERS; THE BALANCE BEING AGI TATED PER GROUND # 2. THE ASSESSEES EXPLANATION TOWARD THE SOURCE OF THE SAME; THE IDEN TITY BEING NOT IN DOUBT WAS THE AGRICULTURAL INCOME ARISING TO THE ASSESSEE AND HIS FAMILY MEMBERS FROM THE FIRM G.P.NAIR PLANATATIONS PALAKKAD WHICH OWNED LARGE AGRICULTURAL ESTATE AND IN WHICH THEY HAD SUBSTANTIAL INTEREST. THE AO DID NOT FIND THIS AS SATISFACTORY AS NO EVIDENCE WHATSOEVER IN SUBSTANTIATION OF THE SAID EXPLANATIO N STOOD FURNISHED. EVEN QUA THE FIRM IN WHICH THE ASSESSEE WAS REPORTEDLY A MANAGING PAR TNER NO EVIDENCE OR BOOKS OF ACCOUNTS WHICH IT OUGHT TO BE MAINTAINING BEING S UBJECT TO AGRICULTURAL INCOME-TAX WAS SUBMITTED. IT IS ONLY ON THE WITHDRAWAL OF HIS (THE IR) SHARE OF INCOME (OR CAPITAL) FROM THE FIRM WOULD THE FUNDS OF THE FIRM BE AVAILABLE WITH HIM (THEM) AND THE EXPLANATION TO THAT EFFECT VALID. AS SUCH THE ASSESSEES EXPLANATION OF THE SAID SOURCE WAS NOT FOUND ACCEPTABLE. FURTHER EVEN THOUGH THE ASSESSEE HAD NOT MADE ANY CLAIM IN THE MATTER IT WAS FOUND TO HAVE SOLD ONE PROPERTY AT CHANDRAPINNY DURING THE RELEVANT PREVIOUS YEAR FOR RS. 91 500/-. HE THEREFORE CONSIDERED THE CRE DIT AS EXPLAINED TO THAT EXTENT AND BROUGHT THE BALANCE AMOUNT OF RS. 58 500/- (1 50 00 0 91 500) TO TAX. IN APPEAL THE LD. CIT(A) CONFIRMED THE FINDINGS AND THUS THE SAID AD DITION IN RELATION TO THE ENTIRE CREDITS FOR RS. 17 03 728/- INCLUDING RS. 58 500/- IN RESP ECT OF THE BALANCE CREDIT IN THE ASSESSEES CAPITAL ACCOUNT HOLDING AS UNDER: (PG. 5) 8. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE. FROM 1987 ONWARDS THE APPELLANT HAS NOT FURNISHED EVIDE NCES REQUIRED FOR COMPLETION OF HIS ASSESSMENTS. BEFORE ME ALSO IT IS ONCE AG AIN STATED THAT HE AND HIS FAMILY MEMBERS ARE HAVING SUBSTANTIAL INCOME FROM G.P. NAI R PLANTATIONS. HOWEVER NO EVIDENCE HAS BEEN PRODUCED IN SUPPORT OF THE APPELL ANTS CLAIM THAT HE AND HIS FAMILY MEMBERS ARE EARNING SUBSTANTIAL AMOUNTS FROM G.P. NAIR PLANTATIONS. THE APPELLANT HAS ALSO NOT FURNISHED THE BASIS ON WHICH THE DEPOSITS WERE MADE BY HIS CHILDREN. THEREFORE I AM UNABLE TO ACCEPT THE CON TENTION OF THE APPELLANT THAT THE AMOUNTS SHOWN AS CASH CREDITS AND LOAN HAD COME FRO M THE INCOME EARNED BY THE VARIOUS FAMILY MEMBERS AS PARTNERS OF G.P. NAIR PLA NTATIONS. THE ADDITION MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT IS THEREF ORE SUSTAINED. ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 6 7. BEFORE US LIKE SUBMISSIONS STOOD RAISED BY EITH ER SIDE. THE ASSESSEE HAS FILED A PAPER-BOOK CONSISTING OF 75 PAGES FOR THE CURRENT A ND IMMEDIATELY SUCCEEDING YEAR ON 20/11/2002. THE SAME IS NOT ACCOMPANIED BY ANY CERT IFICATE TO THE EFFECT THAT THE DOCUMENTS FORMING PART THEREOF STOOD FURNISHED BEFO RE THE AUTHORITIES BELOW AS REQUIRED BY THE INCOME TAX (APPELLATE TRIBUNAL) RULES 1963. SO HOWEVER TO THE EXTENT THE SAME FORMS PART OF THE RECORDS OF THE AUTHORITIES B ELOW AS (SAY) THE ASSESSMENT ORDER; ARGUMENT NOTES ETC. THE SAME COULD BE ACCEPTED AS FORMING PART OF THE TRIBUNALS RECORD AND THE BALANCE NOT. BESIDES THE LD. AR ALSO HAS F ILED ARGUMENT NOTES FOR ALL THE YEARS WHICH INCLUDES A CERTIFICATE DATED 23/2/2010 . CONSEQUENTLY OUR AFOREMENTIONED OBSERVATION WOULD APPLY THERETO AS WELL. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 8.1 TO BEGIN WITH THE REVENUE HAS RELIED ON TWO DECISIONS VIZ. CIT VS. RANJIT KUMAR CHOUDHURY 288 ITR 179 (GAU.) AND C. UNNIKRISHNAN VS. CIT 233 ITR 485 (KER.). PER THE LATTER DECISION THE HONBLE JURISDICTIONAL HIG H COURT CONFIRMED THE UPHOLDING OF THE NON-CONSIDERATION OF THE ADDITIONAL EVIDENCE BY THE FIRST APPELLATE AUTHORITY BY THE TRIBUNAL. A REFERENCE COURT HAS TO ACT ONLY ON THE BASIS OF THE STATEMENT OF CASE BEFORE IT WHILE IT OBSERVED THAT NEITHER AN ATTEMPT WAS MADE BY THE ASSESSEE TO FURNISH OR BRING ANY MATERIAL ON RECORD BEFORE THE AO NOR THERE WAS ANYT HING TO SHOW THAT IT WAS PRODUCED BEFORE THE FIRST APPELLATE AUTHORITY. UPHOLDING THE PRIMACY OF RULE 46A (OF THE INCOME- TAX RULES 1962 OR THE `RULES HEREINAFTER) IT HE LD THAT THE EVIDENCE COULD BE LED ONLY ON SATISFACTION OF ITS REQUIREMENTS. IN THE CASE OF RANJIT KUMAR CHOUDHURY (SUPRA) IT WAS HELD THAT EVEN WHERE THE EVIDENCE IS ACCEPTED BY TH E FIRST APPELLATE AUTHORITY ON ITS OWN CALLING UNDER SUB-RULE (4) OF RULE 46A THE AUTHORI TY WAS OBLIGED TO RECORD HIS REASONS FOR THE SAME AND SECONDLY TO TAKE IT INTO ACCOUNT ONL Y AFTER ALLOWING A REASONABLE OPPORTUNITY TO THE AO TO EXAMINE THE SAME INCLUDIN G PRODUCING THE EVIDENCE IN REBUTTAL THEREOF I.E. HAD TO OBSERVE THE REQUIREMENTS OF S UB-RULE (2) AND (3). AS AFORE-STATED THE PRESENT ASSESSMENTS ARE FRAMED U/S. 143(3) OF THE A CT FOR THE THIRD TIME. AS SUCH THE LAW BEING AMPLY CLEAR AND WHICH WE ARE OBLIGED TO FOLL OW WE WOULD BE EXTREMELY CIRCUMSPECT IN PLACING RELIANCE ON THE DOCUMENTS WH ICH DO NOT STAND FURNISHED AND CONSEQUENTLY NOT CONSIDERED BY THE AUTHORITIES BEL OW NOTWITHSTANDING THE SUBMISSION OF ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 7 THE AFORESAID PAPER-BOOK BY THE ASSESSEE WHICH WE MAY ADD IS ALSO NOT ACCOMPANIED BY ANY APPLICATION U/R. 29 OF THE APPELLATE TRIBUNAL R ULES 1963 I.E. FOR THE ADMISSION OF ADDITIONAL EVIDENCE THE REQUIREMENTS OF WHICH BEI NG BEFORE THE SECOND APPELLATE AUTHORITY ARE AGAIN STRINGENT. 8.2 COMING BACK TO THE FACTS OF THE CASE THE ASSES SEE HAS NOT ADVANCED ANY PLEADING NOR LED ANY EVIDENCE TO MEET OR REBUT THE FINDING(S ) OF FACT BY THE LD. CIT (A). THE JUDICIAL REVIEW OF THE NON-SATISFACTION OF THE AO W ITH REGARD TO THE CREDITS FOUND IN THE ASSESSEES BOOKS OF ACCOUNTS FOR THE RELEVANT PREVI OUS YEAR COULD ONLY BE ON THE BASIS OF THE EXPLANATIONS FURNISHED SUBSTANTIATED BY THE MA TERIALS LED BY THE ASSESSEE. IN THE ABSENCE THEREOF NO FAULT WITH THE NON-SATISFACTION WHICH LED TO THE INVOCATION AND SUBSEQUENT CONFIRMATION BY S. 68 DEEMING THE SAID CREDITS AS INCOME FOR THE YEAR COULD BE FOUND; THE TERMS OF THE PROVISION BEING EXPLICIT AND DEFINITE. THE ASSESSEE ALONG WITH HIS FAMILY MEMBERS REPORTEDLY OWNS A LARGE ESTATE IN PALAKKAD DISTRICT ON LEASE. SO HOWEVER AS POINTED OUT BY THE AUTHORITIES BELOW T HE SAME IS ONLY THROUGH A FIRM G.P. NAIR PLANTATIONS SO THAT THE ASSESSEES CLAIM COUL D ONLY BE FOLLOWED ON THE BASIS OF ITS AUTHENTICATED ACCOUNTS PARTICULARLY CONSIDERING TH AT THE SAME IS SUBJECT TO AGRICULTURAL INCOME-TAX SO THAT IT IS MAINTAINING REGULAR ACCOU NTS FOR THE SAME. THE ASSESSEE HAS ALSO NOT AT ANY STAGE STATED OF ANY REASON FOR IT NOT BE ING ABLE TO DO SO OR FURNISHING ANY MATERIAL WHICH COULD INDIRECTLY SUPPORT ITS CLAIM I N THIS REGARD. ALSO WE FIND THAT IT HAS CLAIMED AND BEEN ALLOWED CERTAIN AMOUNT AS AGRICULT URAL INCOME WHICH HAS BEEN DULY ACCOUNTED FOR AND TAKEN INTO CONSIDERATION IN THE C ASH FLOW/ FUND AVAILABILITY STATEMENT FOR THE RELEVANT YEARS. HOWEVER THERE IS NO EVIDEN CE OF PLOUGHING BACK THE SAVINGS BY THE ASSESSEE AND THE FAMILY MEMBERS ACCUMULATED OVE R THE PAST WHICH COULD AGAIN BE RELEVANT TO AND SUPPORTIVE OF ITS CASE; THE ENTIRE AMOUNT HAVING BEEN CREDITED DURING THE RELEVANT PREVIOUS YEAR IN THE ASSESSEES BOOKS OF A CCOUNTS AND AS IT APPEARS IN CASH. WE HAVE ALREADY DWELT UPON THE ADMISSIBILITY OF EVIDEN CE BEFORE US THE SECOND APPELLATE AUTHORITY AND IN FACT NO REFERENCE TO ANY DOCUMENT IN THE PAPER-BOOK STOOD MADE BY THE LD. AR DURING THE COURSE OF HEARING. UNDER THE CIRC UMSTANCES WE FIND NO MERIT IN THE ASSESSEES CASE ON ITS GROUND NOS. 1 AND 2. ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 8 9. THE THIRD AND FOURTH GROUNDS OF THE ASSESSEE REL ATE TO THE ASSESSMENT OF HIS BUSINESS INCOME FROM OMEGA HOTEL AT RS. 4 LAKHS BY REJECTING THE ASSESSEES BOOKS OF ACCOUNTS THOUGH DID NOT MAKE ANY SEPARATE ADDITION ON THIS SCORE ON THE GROUND OF THE SAME HAVING BEEN ROUTED BY THE ASSESSEE IN HIS BOOK S OF ACCOUNT IN HIS OWN NAME OR THAT OF HIS FAMILY MEMBERS. THE LD. CIT (A) CONFIRMED TH E ADDITION HOLDING AS: (PG. 6 7) 11. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIR CUMSTANCES OF THE CASE AND THE SUBMISSIONS MADE BY THE APPELLANT. IN THE ASSESSM ENT ORDER THE ASSESSING OFFICER HAS CLEARLY BROUGHT OUT THAT THE ASSESSEE WAS REQU ESTED TO FURNISH THE ADDRESS OF SHRI S.C. BOSE AND SHRI K.K. SOMAN WHEREBY THE AP PELLANT SUBMITTED THAT THESE PARTIES WERE ABROAD AND THEIR PRESENT ADDRESSES WE RE NOT AVAILABLE WITH HIM. THUS IT CANNOT BE HELD THAT THE ASSESSING OFFICER HAD NOT GIVEN AN OPPORTUNITY TO THE APPELLANT TO PRODUCE THE PARTIES CONCERNED. WI TH REGARD TO THE INCOME FROM THE HOTEL THE ASSESSING OFFICER HAS RELIED UPON T HE RECORDS SEIZED DURING THE SEARCH AND SEIZURE OPERATION WHEREIN IT HAS ALREA DY BEEN BROUGHT OUT THAT THE APPELLANT IS HAVING SUBSTANTIAL DAILY INCOME FROM THE HOTEL. HENCE IT CANNOT BE HELD THAT THE ASSESSING OFFICER WAS PREJUDICED AGA INST THE ASSESSEE AND THE ADDITIONS WERE MADE IN ORDER TO HARASS THE ASSESSE E. THOUGH NO SEPARATE ADDITIONS HAVE BEEN MADE THE CONCLUSION ARRIVED A T BY THE ASSESSING OFFICER THAT THE APPELLANT WAS HAVING CERTAIN INCOME FROM THE R UNNING OF THE HOTEL IS UPHELD. 10. WE HAVE HEARD THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. HERE IT MAY BE RELEVANT TO STATE THAT THE ASSESSEE IS RUNNING A HO TEL IN THE NAME AND STYLE OMEGA HOTEL AT KALATHIPARAMBIL ROAD COCHIN WHICH WAS SUBJECT TO SEARCH U/S. 132(1) OF THE ACT ON 13.3.1985. THE PRESENT ASSESSMENTS ARE PURSUANT TO THE SAID SEARCH AND THE MATERIALS AND INFORMATION FOUND THEREAT. THE AO HAS PASSED A DETA ILED ORDER DRAWING COGENT INFERENCES BY RELYING ON VALID MATERIALS SOME OF W HICH STAND MADE A PART OF HIS ORDER BY WAY OF ANNEXURES THERETO. THE FINDINGS OF THE LD. C IT (A) ARE AGAIN DEFINITE AND DO NOT STAND IN ANY MANNER REBUTTED BY THE ASSESSEE BEFORE US. IN FACT HE ONLY CONFIRMS THE ORDER BY THE AO SO THAT THE REVENUES CASE REMAINS THE SAME WHICH HAS NOT BEEN MET BY THE ASSESSEE AT ANY STAGE I.E. EXCEPT FOR MAKING BALD ASSERTIONS. THE REJECTION OF BOOKS OF ACCOUNT IS BASED ON THE FINDING IN VIEW OF THE ESTABLISHED SUPPRESSION OF INCOME AND BOOKING OF UNSUBSTANTIATED EXPENDITURE OF THEIR NO T FORMING RELIABLE MATERIAL FOR DEDUCTION OF THE CORRECT PROFITS SO THAT NO INFIRM ITY INFLICTS THE SAME. ALSO THE GROUNDS STAND RENDERED ACADEMIC IN VIEW OF THE FACT THAT TH E AO HAS NOT MADE ANY ADDITION TOWARDS THE SAID INCOME TREATING THE SAME AS HAVIN G BEEN PLOUGHED BACK INTO HIS HOTEL BUSINESS BY THE ASSESSEE IN THE NAMES OF SELF AND F AMILY MEMBERS VIDE PARA # 17 (PG. 8) ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 9 OF HIS ORDER SO THAT THERE IS TELESCOPING BY HIM T O THAT EXTENT TAKING A HOLISTIC OF THE MATTER WHICH IS APPROPRIATE UNDER THE CIRCUMSTANCE S. WE THEREFORE CONFIRM THE ADDITION FOR THE STATED REASON(S); THE FINDINGS BY THE AUTHO RITIES BELOW BEING FIRM AND UNREBUTTED. THE SAME HOWEVER WOULD BECOME MATERIAL ONLY ON TH E DELETION OF THE ADDITION FOR RS. 17. 04 LACS SUSTAINED VIDE PARA 8 OF THIS ORDER. WE DECIDE ACCORDINGLY. 11. THE LAST GROUND OF THE ASSESSEES APPEAL RELATE S TO THE ASSESSMENT OF SHORT TERM CAPITAL GAINS IN THE SUM OF RS. 66 500/- ON THE SA LE OF LAND MEASURING 1.41 ACRES IN CHANDRAPINNY FOR RS. 91 500/- DURING THE RELEVANT Y EAR I.E. AFTER TAKING ITS COST OF ACQUISITION AT RS. 25 000/-. THOUGH THE ASSESSEE C LAIMED BEFORE THE AUTHORITIES BELOW THAT NO LIABILITY TO INCOME-TAX AROSE AS THE LAND W AS AGRICULTURAL IN NATURE IT COULD NOT PROVE THE SAME LEADING TO THE IMPUGNED ASSESSMENT AND ITS CONFIRMATION. THE LD. AR HAS ALONG WITH ARGUMENT NOTES SUBMITTED A COPY OF THE CERTIFICATE DATED 23.2.2010 ISSUED BY EDATHIRUTHY GRAMA PANCHAYAT OFFICE TO THE EFFECT THAT THE PLACE CHANDRAPINNY FELL WITHIN THE EDATHIRUTHY GRAMA PANCHAYAT DURING THE FINANCIAL YEAR 1983-84 THE RELEVANT PREVIOUS YEAR. 12. WE HAVE HEARD THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. THERE IS NO DISPUTE WITH REGARD TO THE BASIC FACTS; THE ONLY ISSUE BEIN G WHETHER THE ASSESSEES CONTENTION AS MADE BEFORE THE AUTHORITIES BELOW I.E. OF ITS SAI D CAPITAL ASSET BEING AN AGRICULTURAL LAND NOT LIABLE TO TAX ON THE INCOME ARISING ON ITS TRAN SFER IS ACCEPTABLE OR NOT. BOTH THE AUTHORITIES BELOW HAVE ALREADY STATED THAT IN THE A BSENCE OF ANY EVIDENCE ADDUCED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM DESPITE GRANT OF SUFFICIENT OPPORTUNITY IT COULD NOT BE ACCEPTED. THE TRUTH OF THE SAME IS ITSELF BORNE OUT BY THE SILENCE OF THE ASSESSEE ON THE POINT WHICH FORMS THE BASIS OF THEIR DECISION. AS REGARDS THE CERTIFICATE FURNISHED BEFORE US WE DO NOT CONSIDER THE SAME AS VALID; THE SAME BEING NOT ACCOMPANIED BY AN APPLICATION REQUESTING ITS ADMISSION IN EVIDENCE U /R. 29 OF THE APPELLATE TRIBUNAL RULES WHICH WOULD ALSO REQUIRE STATEMENT OF THE REASONS W HY THE SAME COULD NOT BE ADDUCED UPTO THE FIRST APPELLATE STAGE. EVEN IN THE ARGUMEN T NOTES OR DURING HEARING NO REASON FOR NOT BEING ABLE TO FURNISH ANY EVIDENCE INCLUDING T HE CERTIFICATE UNDER REFERENCE IN SUPPORT OF ITS CLAIM UP TILL NOW IS ADVANCED. NOT ALL AGRICULTURAL LANDS BUT ONLY THOSE ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 10 FALLING OUTSIDE THE PRESCRIBED LIMIT OF THE MUNICIP AL CORPORATION ARE EXEMPT FROM TAX UNDER THE ACT ( S. 2(14)(III) ). AS SUCH ALL THAT WAS REQUIRED TO BE DONE WAS TO LEAD EVIDENCE TO THAT END. IN FACT THE SAID CERTIFICATE ALSO DOES NOT SHED ANY LIGHT ON THIS VITAL AND THE ONLY RELEVANT ASPECT I.E. OF THE SAID LAN D AS SATISFYING THE QUALIFYING CONDITIONS FOR BEING EXEMPT FROM TAX. UNDER THE CIRCUMSTANCES WE DO NOT FIND THE ASSESSEES CLAIM AS ACCEPTABLE OR ANY INFIRMITY IN THE ORDER OF THE AUTHORITIES BELOW AND CONFIRM THE SAME. 13. THE ASSESSEE HAS RAISED THE FOLLOWING CONCISE G ROUNDS BEFORE THE TRIBUNAL FOR A.Y. 1985-86: 1. THE ASSESSING OFFICER ERRED IN WHOLESALE REJECT ION OF ACCOUNTS AND ESTIMATING THE INCOME FROM BUSINESS WITHOUT ANY BASIS AND ON REASONS EXTRANEOUS TO THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSING OFFI CER OUGHT TO HAVE ACCEPTED THE BUSINESS LOSS RETURNED BY THE APPELLANT. 2. THE FINDING ENTERED INTO BY THE ASSESSING OFFIC ER THAT MR. S.C. BOSE WAS MANAGER IN THE HOTEL AND THAT HOTEL WAS BEING USED FOR IMMORAL TRAFFIC PURPOSE AND THE APPELLANT WAS DERIVING SUBSTANTIAL UNACCOU NTED RECEIPTS ARE BASELESS AND UNWARRANTED. THE TOTAL INCOME ESTIMATED ON THE BAS IS OF STATEMENT GIVEN BY MR. S.C. BOSE IS ILLEGAL AND UNSUSTAINABLE IN THE CIRC UMSTANCES OF THE CASE. 14. TO BE ABLE TO APPRECIATE THE CASE FACTUALLY IT WOULD BE NECESSARY TO RECOUNT THE BACKGROUND FACTS OF THE CASE. AS ALSO NOTED EARLIER THERE WAS A SEARCH AT THE ASSESSEES BUSINESS PREMISES ON 13.3.1985. IN THE COURSE THER EOF SEVERAL INCRIMINATING DOCUMENTS WERE FOUND. STATEMENTS OF HIS MANAGER ONE SHRI S.C . BOSE AND ANOTHER SHRI K.K. SOMAN WERE ALSO RECORDED U/S. 132(4) OF THE ACT. T HE ASSESSEE WAS ALSO EXAMINED SUBSEQUENTLY. THE SAID MATERIALS INCLUDING THAT WH ICH EXHIBIT THEM TO BE THE MANAGERS AT THE RELEVANT TIME AND THEIR SWORN STATEMENTS WHIC H WERE DULY CONFRONTED TO THE ASSESSEE STAND LISTED IN DETAIL VIDE PARA 5 TO 9 OF THE ASSE SSMENT ORDER AS ALSO DISCUSSED BY THE FIRST APPELLATE AUTHORITY AT PARA 2 OF HIS ORDER. THE SAM E INCLUDING THE FACT THAT THE BUSINESS PREMISES WAS SUBSEQUENTLY RAIDED BY THE POLICE ON 1 5.5.1986 AND 26.6.1986 AND CRIMINAL CHARGES IN ITS RESPECT PRESSED WITH THE M ORE RELEVANT ONES FORMING PART OF THE ASSESSMENT ORDER BY WAY OF ANNEXURES THERETO LEAD TO THE UNMISTAKABLE INFERENCE OF THE ASSESSEE BEING ENGAGED IN IMMORAL TRAFFICKING THROU GH THE SAID HOTEL GENERATING ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 11 UNACCOUNTED RECEIPTS; THEIR RESPECTIVE FINDINGS BEI NG LISTED AT PARA 10 AND PARA 4 OF THE ASSESSMENT AND APPELLATE ORDER RESPECTIVELY. THE LA TTER READS AS UNDER (REFER PG. 3 4): 4. I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. I AM UNABLE TO A CCEPT THE APPELLANTS CONTENTION THAT THE ASSESSING OFFICER DID NOT GIVE AN OPPORTUNITY TO CROSS- EXAMINE SHRI S.C. BOSE. THE ASSESSING OFFICER HAD REQUESTED THE ASSESSEE TO PRODUCE SHRI S.C. BOSE AND SHRI K.K. SOMAN WHEN THE ASSESSEE INFORMED THE ASSESSING OFFICER THAT BOTH SHRI BOSE AND SOMAN WER E ABROAD AND THEIR PRESENT ADDRESSES WERE NOT AVAILABLE WITH HIM. I AM ALSO UNABLE TO ACCEPT THE CONTENTION THAT THE ASSESSING OFFICER HAD NOT TAKEN ANY STEPS TO COMPEL THE SAID WITNESSES TO BE PRESENT FOR CROSS-EXAMINATION. THE ASSESSING OFFICER DID NOT HAVE THE ADDRESSES OF THE PARTIES CONCERNED AN D IT WAS FOR THE ASSESSEE TO FURNISH THE ADDRESS OF THE CONCERNED PARTIES. WITH REGARD TO THE ESTIMATED ADDITION O RS. 4 00 000/- ON ACCOUNT OF BUSINESS IN COME IT IS SEEN THAT THE ASSESSING OFFICER HAS RELIED UPON THE VARIOUS SLIP S AND OTHER DOCUMENTS SEIZED AT THE TIME OF SEARCH AND THE APPELLANT HAS NOT BEE N ABLE TO REBUT THE BASIS ON WHICH THE ASSESSING OFFICER HAS ESTIMATED THE INCOM E. UNDER THE CIRCUMSTANCES IT IS HELD THAT THE ASSESSING OFFICE R WAS JUSTIFIED IN ESTIMATING THE INCOME FROM THE HOTEL AT RS. 4 00 000/-. THE AD DITION MADE BY THE ASSESSING OFFICER IS THEREFORE SUSTAINED. 15. BEFORE US THE ASSESSEE REITERATED ITS CASE AS BEFORE THE AUTHORITIES BELOW. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL ON RECOR D. WE FIND NO SUBSTANCE IN THE ASSESSEES CASE WHICH AS WELL AS THAT OF THE REVE NUE IS ESSENTIALLY THE SAME AS FOR THE IMMEDIATELY PRECEDING YEAR WHICH STANDS CONFIRMED BY US VIDE PARA # 10 OF THIS ORDER ON FINDINGS PER WHICH WE DRAW ON. THE AUTHORITIES B ELOW HAVE TAKEN A HOLISTIC VIEW OF THE ENTIRE GAMUT OF FACTS AND CIRCUMSTANCES OF THE CASE WHICH REVEALED BOTH UNACCOUNTED AND ACCOUNTED RECEIPTS RUNNING INTO FEW THOUSAND F OR EACH DAY AS WELL AS UNSUBSTANTIATED BOOKING OF EXPENDITURE BY THE ASSES SEE. ASSESSMENT OF ITS INCOME AT RS. 4 LAKHS I.E. RS. 1333 PER DAY ASSUMING A 300 WOR KING DAY YEAR EVEN AS THERE ARE NO OFF DAYS IN THE HOTEL BUSINESS GENERATING RATHER HIG HER BUSINESS ON THE WEEKENDS WE FIND AS REASONABLE. FURTHER IN VIEW OF CONGRUITY OF FINDI NGS WE DO NOT CONSIDER IT NECESSARY TO ENLIST AND DWELL ON THE INDIVIDUAL FACTS BEFORE EX PRESSING OUR AFORE-STATED VIEW IN THE MATTER (REFER: CIT V. K.Y. PILLIAH & SONS 63 ITR 411 (SC)). UNDER THE CIRCUMSTANCES SUFFICE IT TO SAY THAT WE FIND NO INFIRMITY AND CO NSEQUENTLY NO REASON TO INTERFERE WITH THE IMPUGNED ORDERS SO THAT THE SAME ARE UPHELD. WE DECIDE ACCORDINGLY. ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 12 16. IN THE RESULT ALL THE APPEALS OF THE ASSESSE E ARE DISMISSED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 19TH MAY 2010 GJ COPY TO: 1. SHRI V.K.SRINIVASAN 35/202 KALATHIPARAMBIL ROA D COCHIN-16. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX INVEST IGATION CIRCLE-1 DIV. I ERNAKULAM. 3. THE ASSISTANT COMMISSIONER OF INCOME-TAX INVEST IGATION CIRCLE-2 DIV. I ERNAKULAM. 4. THE ASSISTANT COMMISSIONER OF INCOME-TAX INVEST IGATION CIRCLE-3 DIV. I ERNAKULAM. 5. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I KOCH I. 6. THE COMMISSIONER OF INCOME-TAX KOCHI. 7. D.R./I.T.A.T. COCHIN BENCH COCHIN. 8. GUARD FILE. BY ORDER (ASSISTANT REG ISTRAR) ITA. NOS. 151 & 152COCH./1997 & 01 & 02/COCH.20 0 2 & 26/COCH/1999 13