Abdul Nazar Azad,, Trivandrum v. ACIT, Trivandrum

ITA 559/COCH/2010 | 2007-2008
Pronouncement Date: 25-07-2011

Appeal Details

RSA Number 55921914 RSA 2010
Assessee PAN ACOPA4918M
Bench Cochin
Appeal Number ITA 559/COCH/2010
Duration Of Justice 8 month(s) 29 day(s)
Appellant Abdul Nazar Azad,, Trivandrum
Respondent ACIT, Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 25-07-2011
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 25-07-2011
Date Of Final Hearing 16-06-2011
Next Hearing Date 16-06-2011
Assessment Year 2007-2008
Appeal Filed On 26-10-2010
Judgment Text
IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY AR ORA AM I.T.A. NO. 559/COCH/2010 ASSESSMENT YEAR:2007-08 SHRI ABDUL NAZAR AZAD AZAD HOTEL PROPRIETOR AZAD RESTAURANT OVER BRIDGE TRIVANDRUM-1 [PAN: ACOPA 4918M] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE-1(2) TRIVANDRUM. (ASSESSEE -APPELLANT) (REVENUE-RES PONDENT) ASSESSEE BY SHRI V.SREEKUMAR ADV.-AR REVENUE BY MS. VIJAYAPRABHA DR O R D E R THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIVANDRUM (`CIT(A) FOR SH ORT) DATED 31.8.2010 AND THE ASSESSMENT YEAR (A.Y.) UNDER REFERENCE IS 2007-08. THE APPEAL RAISES THREE ISSUES PER FIVE GROUNDS WHICH WE SHALL TAKE UP IN SERIATIM. 2. THE FIRST ISSUE PROJECTED PER GROUND NOS. 2 & 3 OF ITS APPEAL; GROUND NO.1 BEING GENERAL IN NATURE WARRANTING NO ADJUDICATION IS I N RESPECT OF ADDITION ON ACCOUNT OF LOW GROSS PROFIT CONSEQUENT TO THE REJECTION OF ITS BO OK RESULTS. THE ASSESSEE IS AN INDIVIDUAL RUNNING A RESTAURANT (NON-VEGETARIAN) AT TRIVANDRUM . ON EXAMINATION OF THE BOOKS OF ACCOUNTS AND OTHER DETAILS CALLED FOR AND FURNISHED BY THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER (AO) OBSERVED SEVERAL DISCREPANCIES. NO DETAILS IN RESPECT OF PURCHASE OF `MUTTON AT ` 13.30 LAKHS WHICH CONSTITUTED THE HIGHEST PURCHASE (FOR A SINGLE ITEM) COULD BE FURNISHED. T HE ASSESSEE ALSO COULD NOT FURNISH THE PURCHASE BILLS FROM M/S. A.A. TRADERS TRIVANDRUM THE MAIN SUPPLIER NOR THE QUANTITATIVE DETAILS I.E. IN RESPECT OF `CHICKEN THE SECOND MAJOR COMMODITY PURCHASED. THE COPIES OF SOME BILLS PRODUCED REVEALED THEM TO BE NOT SERIALLY NUMBERED. ALSO THE I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 2 ASSESSEE COULD NOT EXPLAIN ITS METHOD OF BILLING AS WELL AS THE RECORDING OF SALES IN RESPECT OF THE AIR CONDITIONED (AC) PART OF THE RESTAURANT FOR WHICH A SEPARATE BILL COUNTER WAS MAINTAINED. IN FACT THE ASSESSEE CONCEDED TO OMISS IONS THEREIN VIDE ITS STATEMENT DATED 18.12.2009. FURTHER THE BOOKS REVEALED THE DISCLO SED GROSS PROFIT (G.P.) RATE I.E. AT 24% TO BE ON THE LOWER SIDE VIS-A-VIS THAT OBTAINI NG IN THE SAID TRADE. THE GP RATE OF ANOTHER SUCH RESTAURANT IN THE LOCALITY I.E. HOTE L VAYALIL TRIVANDRUM DISCLOSED THE G.P. RATE OF 43%. AS SUCH IT WAS INFERRED THAT THERE WA S A SUPPRESSION IN THE GROSS PROFIT BETWEEN 15% TO 20% AND ACCORDINGLY 15% OF THE DIS CLOSED SALES OF ` 85 LAKHS I.E. ` 12.50 LAKHS WAS CONSIDERED AS UNDISCLOSED INCOME B Y WAY OF SUPPRESSED TRADING PROFIT. THE SAME WAS CONFIRMED IN APPEAL BY THE LD. CIT(A); HE FINDING THAT THE ASSESSEE HAD NOT BEEN ABLE TO SUPPORT ITS CASE OF ITS ACCOUNTS AS RE FLECTING TRUE AND CORRECT OPERATING RESULTS IN ANY MANNER. AGGRIEVED THE ASSESSEE IS IN APPEA L. 3.1 BEFORE US IT WAS SUBMITTED BY THE LD. AR THE ASSESSEES COUNSEL THAT THE AO HAD GRIEVOUSLY ERRED WHILE COMPARING THE GROSS PROFIT D ISCLOSED PER ITS ACCOUNTS WITH THAT BY THE ACCOUNTS OF THE COMPARABLE CASE OF HOTEL VAYALI L. ADVERTING TO THE RELEVANT DOCUMENTS (PB PGS. 5-7) IT WAS BROUGHT FORTH THAT WHILE IN ITS CASE THE GROSS PROFIT RATE OF 23.21% (AND NOT 24% AS STATED BY THE AO) TAKES INTO ACCOUNT THE ENTIRE COST OF PRODUCTION THE `GROSS PROFIT AND CONSEQUENTLY I TS RATE AS REFLECTED FOR THE SAID CASE IS BY RECKONING ONLY THE RAW MATERIAL PURCHASES. FURTH ER IF THE SAME METHOD IS ADOPTED IN ITS CASE THE GP RATE WOULD WORK TO OVER 41% LEADI NG TO MARGINAL DIFFERENCE BETWEEN THE TWO CASES AND WHICH IS NORMAL AND COULD NOT LEAD TO AN INFERENCE OF THE REJECTION OF ACCOUNTS. ACCORDINGLY THE ENTIRE ADDITION IS PRES UMPTUOUS AND NEEDS TO BE STRUCK DOWN AND IN ANY CASE MAY BE DIRECTED FOR REASONABLE AS SESSMENT. 3.2 THE LD. DR ON THE OTHER HAND WOULD SUBMIT THA T THE ASSESSEE HAD NOT SUBSTANTIATED ITS PURCHASES AS CLAIMED WITH ANY SOU RCE DOCUMENT DESPITE ALLOWANCE OF SUFFICIENT OPPORTUNITY BY THE ASSESSING AUTHORITY. THE REJECTION OF ITS ACCOUNTS AND ASSESSMENT OF INCOME UNDER SUCH CIRCUMSTANCES WAS L EGALLY VALID AND MERITS BEING I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 3 UPHELD. WITH REGARD TO THE ESTIMATION IT WAS SUBM ITTED THAT NO SUCH CONTENTION/S STOOD RAISED BEFORE THE AUTHORITIES BELOW AND WHICH HAS THEREFORE NOT BEEN FACTUALLY EXAMINED. 4. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. 4.1 NO DOUBT THE ASSESSEE HAS NO CASE FOR THE NON REJECTION OF ITS ACCOUNTS; IT FAILING ABYSMALLY IN SUBSTANTIATING ITS CLAIMS WITH EVIDENC E. THE ASSESSEE EVEN AS OBSERVED BY THE LD. CIT(A) DID NOT PRODUCE EVEN A SINGLE BILL FOR THE PURCHASE OF MUTTON AND ITS CLAIM OF THE SAME BEING FOR THE REASON OF IT BEING FROM NON-REGISTERED DEALERS WAS ALSO FOUND UNACCEPTABLE BY HIM AS MUTTON IS NOT TAXABLE UNDER THE KERALA VAT. SIMILARLY CHICKEN PURCHASES THE SECOND MAJOR ITEM WERE ALSO NOT ADEQUATELY EVIDENCED WHILE THE ACCOUNTED PURCHASES ITSELF REVEALED TIME GAPS I.E. FOR WHICH THERE WERE NO PURCHASES AND WHICH IS NOT COMPREHENSIBLE IN VIEW OF THE REGU LAR SALES AND ALSO NOT FEASIBLE GIVEN THE LIMITED STOCK THAT THE RESTAURANT COULD CARRY. BESIDES THE PURCHASES WERE SETTLED IN CASH AND NO QUANTITATIVE DETAILS IN ITS RESPECT CO ULD BE FURNISHED. THE SUPPRESSION IN SALES IS ALSO ADMITTED. WE THEREFORE UPHOLD THE N ON-ACCEPTANCE OF THE ASSESSEES BOOK RESULTS QUA ITS TRADING PROFIT. 4.2 COMING TO THE NEXT ISSUE OF ESTIMATION THE SAM E WITHOUT DOUBT HAS TO BE ON A REASONABLE BASIS WHILE WE FIND THAT IT STANDS ENHA NCED FROM THE DISCLOSED 23.2% BY 15%. THE MISTAKE IN RECKONING THE DIFFERENCE OBTAINING I N TRADING PROFIT WITH REFERENCE TO THE COMPARABLE CASE AND BY IMPLICATION THE EXTENT OF SUPPRESSION THEREIN BY THE ASSESSEE BY THE AO IS PATENT IN-AS-MUCH AS THE BASIS FOR ARRI VING AT THE TWO G.P. RATES I.E. BY THE ASSESSEE AND THE COMPARABLE CASE IS CLEARLY DIFFER ENT. THE REVENUES OBJECTION IN THIS REGARD I.E. OF THE SAME HAVING NOT BEEN EXAMINED BY THE AO IS NOT MAINTAINABLE AS THE DOCUMENT WITH REFERENCE TO WHICH THE ASSESSEE STATE S ITS CASE IN THIS REGARD IS THE SAME ON WHICH THE AO HAS HIMSELF RELIED UPON FOR THE PURPOS E. THE SAME SHOWS GP RATE OF 21.37% EVEN AS STATED BY THE LD. AR WHEN THE TOTA L COST OF PRODUCTION INCLUDING THE EXPENSES IS TAKEN INTO ACCOUNT AND WHICH IS LESS T HAN THAT BY THE ASSESSEE I.E. AT 23.21%. AT THE SAME TIME ADMITTEDLY THE ASSESSEES ACCOUN TS ARE NOT CORRECT AND COMPLETE AS SUFFICIENTLY EXHIBITED BY THE EXAMINATION CONDUCTED BY THE AO. THE TRADING RESULTS ARE I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 4 NOT RELIABLE AS THE MAJOR PURCHASES ARE UNPROVED AND THE OMISSION IN SALES IS ADMITTED BY THE ASSESSEE. ALTHOUGH THE REFERENCE TO THE COM PARABLE CASE (TRADING RESULTS) SHOWS THAT THE MANUFACTURING EXPENSES CLAIMED BY THE ASSE SSEE ARE LOWER THAN THAT OBTAINING IN THE SAID CASE THE SAME IN FACT HAVE NOT BEEN PUT TO ANY VERIFICATION BY THE AO NOR ANY INFIRMITY CONSEQUENTLY POINTED OUT BY HIM WITH REFE RENCE THERETO. AS SUCH ALLUDING THERETO IN SUPPORT OF AN OVERALL FAVOURABLE GP RAT E BY THE ASSESSEE SO AS TO PLEAD FOR ACCEPTANCE OF ITS TRADING RESULTS IS NOT TENABLE. THE TOTAL PURCHASES IN THE ASSESSEES CASE WORK TO 58.83% (REFER ANNEXURE B) AS AGAINST AT 57.05% FOR THE COMPARABLE CASE LEADING TO A DIFFERENCE OF ABOUT 2%. AS ANY MODIFI CATION HAS NECESSARILY TO BE BASED ON SOME MATERIALS DRAWING REASONABLE INFERENCE/S THER E-FROM WE CONSIDER AN ADDITION TO THE TUNE OF 2% AS REASONABLE. ACCORDINGLY WE DIRE CT FOR THE ADOPTION OF A GP RATE OF 25% AS AGAINST THE DISCLOSED GP RATE OF 23.21%. FU RTHER WE ARE CONSCIOUS THAT THE AO HAS ALSO FOUND OMISSION IN THE RECORDING OF SALES F OR THE AC SEGMENT OF THE RESTAURANT; SO HOWEVER HE DID NOT PURSUE THE MATTER FURTHER SO THAT THERE IS NO MATERIAL ON RECORD TOWARD ESTIMATING THE SAME I.E. THE ACTUAL TURNOV ER. WE ARE THEREFORE UNABLE TO DIRECT ANY MODIFICATION QUA THE SAME. WE DECIDE ACCORDINGLY PARTLY ALLOWING T HE ASSESSEES RELEVANT GROUNDS. 5. THE NEXT AND THE FOURTH GROUND OF THE ASSESSEES APPEAL IS IN RESPECT OF ADDITION IN THE SUM OF ` 22 LAKHS ADDED AS UNEXPLAINED CREDIT UNDER SECTION 68 OF THE ACT. THE ASSESSEES CAPITAL ACCOUNT REVEALED A CREDIT OF ` 22 LAKHS WHICH WAS EXPLAINED BY IT TO BE ON ACCOUNT OF SALE OF LAND ADMITTING TO A SHORT TE RM CAPITAL GAIN OF ` 589100/-. HOWEVER AS THE ASSESSEE COULD NOT DESPITE SUFFICIENT OPPOR TUNITY FURNISH THE COPY OF THE SALE DEED/S OR THE DETAILS OF THE PURCHASER/S THE CREDI T WAS CONSIDERED AS UNEXPLAINED LIABLE FOR ADDITION U/S. 68. THE ASSESSEE COULD NOT PROVE ITS CASE IN ANY MANNER BEFORE THE FIRST APPELLATE AUTHORITY RESULTING IN THE CONFIRMATION OF THE SAME. 6. BEFORE US THE ASSESSEE HAS MADE A PETITION FOR PRODUCTION OF ADDITIONAL DOCUMENTS. IT IS SUBMITTED THAT THE INFORMATION FU RNISHED EARLIER BORE FACTUAL ERRORS AS HE WAS DEPENDENT ON HIS ACCOUNTANT SHRI RAMAN NAIR A GED 85 WHO WAS SUFFERING FROM I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 5 HEALTH-RELATED PROBLEMS AND COULD NOT REVEAL THE C ORRECT FACTS DUE TO MEMORY LOSS. THAT HE HAD IN FACT SOLD ONLY ONE PROPERTY BEING 15 C ENTS OF LAND AN INHERITED PROPERTY AT THIRUMALA VILLAGE AS AGAINST THE TWO STATED EARLIE R TO SMT. RAMLA WIFE OF SHRI M.MOHAMMED R/O 5/1299 KOWDIAR GARDENS TRIVANDRUM AND RECEIVED AN OSTENSIBLE SALE CONSIDERATION OF ` 7.5 LAKHS ENCLOSING THE COPY OF THE SALE DEED DATE D MAY 12 2006 AS WELL AS ITS WRITTEN EXPLANATION (COPY ON RECORD) . THE RECEIPT BY CHEQUE ON THAT DATE IN THE BANK ACCOUNT (WITH FEDERAL BANK TRIVANDRUM) (N O. SB 10841) IS TOWARD THE SAME. THE PRIOR CREDIT OF ` 7.5 LAKHS I.E. IN CASH ON 11.5.2006 REPRESENTS T HE AMOUNT RECEIVED IN EXCESS OVER THE DOCUMENTED CONSIDERATION; THE TO TAL SALE CONSIDERATION BEING ` 15 LAKHS. THE THIRD CREDIT FOR ` 7 LAKHS IN ITS BANK ACCOUNT ON 13.5.2006 AGAIN BY CHEQUE REPRESENTS THE TRANSFER OF FUNDS FROM HIS OTHER BAN K ACCOUNT I.E. SAVING BANK ACCOUNT NO. 22021064 (OLD NO. 28258) WITH SYNDICATE BANK (R EFER PB PG. 27 ANNEXURE H/30- 31). THE SAID BANK ACCOUNT BEING ONLY A DISCLOSED ACCOUNT THE SAME IS ONLY A TRANSFER OF FUNDS FROM ONE BANK ACCOUNT TO ANOTHER AND THUS F ULLY EXPLAINED SO THAT NO CAUSE OF ACTION U/S. 68 WOULD LIE. HE ACCORDINGLY PLEADED FOR THE DELETION OF THE IMPUGNED ADDITION AND DIRECTION FOR RE-COMPUTATION OF THE CA PITAL GAINS WITH REFERENCE TO THE SALE CONSIDERATION OF ` 15 LAKHS. ON AN ENQUIRY BY THE BENCH THAT IF THE ACCOUNT WITH SYNDICATE BANK IS AN ACCOUNTED ONE AS CONTENDED I T WOULD ONLY HAVE FOUND REFLECTION IN THE ASSESSEES BOOKS THE LD. AR COULD NOT FURNISH ANY SATISFACTORY ANSWER. THE LD. DR ON THE OTHER HAND WOULD SU BMIT THAT THE ASSESSEES CASE AS BEING NOW MADE OUT I.E. BEFORE THE APPELLATE TRIBUNAL IS IN COMPLETE VARIANCE WITH THAT AS BEFORE THE AUTHORITIES BELOW. WHILE ITS EXPLANATIO N IN THE ASSESSMENT AND APPELLATE PROCEEDINGS WAS WITH RESPECT TO THE SALE OF TWO LAN DS ADMEASURING 6 CENTS AND 18.15 CENTS RESPECTIVELY IT NOW CONTENDS OF HAVING ACTUA LLY SOLD ANOTHER LAND MEASURING 15 CENTS. FURTHER THE COMPUTATION OF THE ADMITTED SHO RT TERM CAPITAL GAINS ( ` 5.89 LAKHS) SHOWS A COST OF ACQUISITION FOR WHICH THERE IS NO B ASIS. AS SUCH THE EVIDENCE BEING NOW SUBMITTED HAS NO BEARING SO THAT THE SAME MERITS B EING REJECTED AT THE OUTSET. THE SAME WOULD EVEN OTHERWISE BE SUBJECT TO RULE 29 30 AND 31 OF THE APPELLATE TRIBUNAL RULES 1963. I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 6 7. WE HAVE HEARD THE PARTIES AND PERUSED THE MATER IAL ON RECORD. 7.1 THE MATTER IS PURELY FACTUAL. HOWEVER ADMIT TEDLY THERE HAS BEEN A CHANGE OF EXPLANATION BY THE ASSESSEE BEFORE US I.E. VIS-- VIS AS BEFORE THE AUTHORITIES BELOW. THE SECOND THING THAT WE OBSERVE AND SURPRISINGLY AT T HAT IS THAT WHILE THE CREDIT OF ` 22 LAKHS HAS BEEN ADDED AS UNEXPLAINED CREDIT U/S. 68 NO RE LIEF OR DEDUCTION IN RESPECT OF THE INCOME OF ` 5.89 LAKHS ARISING THERE-FROM AND ALREADY ADMITTE D BY THE ASSESSEE AS SHORT TERM CAPITAL GAINS INCLUDED IN ITS RETURNED INCOME OF ` 13.54 LAKHS HAS BEEN ALLOWED SO THAT THERE HAS BEEN A CLEAR OMISSION BY THE REVENUE AUTHORITIES. IT ALSO INCIDENTALLY POINTS TO A COMPLETE LACK OF PROPER REPRESENTATION ON THE ASSESSEES BEHALF BEFORE THE REVENUE AUTHORITIES. AS REGARDS THE ADMISSION OF AD DITIONAL EVIDENCE WITHOUT DOUBT THE EXPLANATION BEING NOW ADVANCED IS AT COMPLETE VARIA NCE WITH THAT ADVANCED EARLIER. IT IS ALSO SURPRISING INDEED THAT THE ASSESSEE WAS EVEN AS ASSEVERATED BY THE LD. DR UNAWARE OF THE PROPERTY TRANSACTIONS UNDERTAKEN BY HIM AND AGAINST WHICH HE HAD RECEIVED LAKHS OF RUPEES. AT THE SAME TIME IT NEEDS TO BE APPREC IATED THAT THE ASSESSEE DOES NOT GAIN IN ANY MANNER BY TAKING A DIFFERENT STAND BEFORE US A ND STATING `FACTS WHICH HE KNOWS ARE NOT TRUE OR CAN NOT BE SUBSTANTIATED AS SO. THIS I S AS THE SAME WOULD IN ANY CASE NEED TO BE POSITIVELY ESTABLISHED; THE ONUS TO PROVE ITS EX PLANATION ON FACTS BEING ONLY ON THE ASSESSEE. RATHER HE RUNS THE RISK OF EXPOSING ANOT HER OF HIS PROPERTY I.E. APART FROM THE TWO DISCLOSED EARLIER I.E. WITH REFERENCE TO WHIC H HE HAD HITHERTO SOUGHT TO EXPLAIN HIS CASE TO THE REVENUE SO THAT HE HAD ADMITTEDLY THR EE PROPERTIES. THE REVENUES CASE ON THE OTHER HAND AGAINST THE ASSESSEE REMAINS ESSENTI ALLY THE SAME I.E. ABSENCE OF A SATISFACTORY EXPLANATION. IT CANNOT BE THEREFORE SA ID THAT THE AVERMENTS BEING NOW MADE BY THE ASSESSEE HAVE NO RELATION OR BEARING ON ITS CASE. IF AS CONTENDED THE CHEQUE FOR ` 7.50 LAKHS CREDITED TO HIS BANK ACCOUNT ON 12.5.20 06 IS CONFIRMED TO BE THE SALE PROCEEDS OF THE 15 CENTS OF LAND AT THIRUMALA VILLA GE AS STATED BEFORE US IT WOULD AT ONCE ESTABLISH THE ASSESSEES BONA FIDES AS WELL AS THAT HE WAS INDEED MISLED INTO STATING WHAT HE HAD EARLIER. SIMILARLY FOR THE OTHER CHEQUE TRANSACTION FOR ` 7 LAKHS WHICH IS STATED TO BE A TRANSFER FROM ANOTHER `DISCLOSED BA NK ACCOUNT OF THE ASSESSEE. THE DETAILS BEING NOW FURNISHED IN EXPLANATION ARE ONLY TOWAR D THE CREDITS OWNED UP BY THE ASSESSEE THE TRUTH OR THE ANTECEDENTS QUA WHICH IS NOT SUBJECT TO CHANGE OVER TIME. IF I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 7 ANYTHING IT ONLY EXHIBITS THE EXTENT OF AS ALSO N OTED EARLIER BOTH IMPROPER ACCOUNTING/BOOK-KEEPING AS WELL AS REPRESENTATION OF ITS CASE BEFORE THE REVENUE. IT IS ALSO TO BE BORNE IN MIND THAT THE ADDITION IF SUST AINED AND WHICH WOULD ONLY BE FOR THE REASON OF IT BEING UNSUBSTANTIATED HAS PENAL IMPLI CATIONS FOR THE ASSESSEE AS WELL. IT IS THUS IMPERATIVE THAT THE MATTER IS FACTUALLY DETERM INED; TWO OF THE THREE CREDITS COMPRISING THE IMPUGNED CREDIT OF ` 22 LAKHS BEING ONLY BY WAY OF CHEQUE PROCEEDS SO THAT THEIR ANTECEDENTS COULD BE EASILY ASCERTAINED WITH THE THIRD BEING STATED TO BE AN ADJUNCT TO ONE OF THEM AND ON A FIRM AND DEFINITE BASIS. WE ACCORDINGLY CONSIDER IT REASONABLE AND JUSTIFIABLE UNDER THE CIRCUMSTANCES TO ALLOW ADMISSION OF THE ASSESSEES ALTERNATIVE FACTUAL CLAIM/S AS MADE BEFORE US AS WELL AS THE CONCOMITANT PRODUCTION OF DOCUMENTS BEING RELIED UPON IN SUPPORT. WE ARE GUID ED IN OUR DECISION BOTH BY THE OVERRIDING CONSIDERATION TO PROMOTE THE CAUSE OF JU STICE; THE ASSESSEE HAVING BEEN FOUND TO HAVE NOT BEEN PROPERLY ASSISTED IN PRESENTING IT S CASE SO THAT IT IS ESSENTIALLY AN EXTENSION OF OPPORTUNITY TO THE ASSESSEE TO PROVE I TS CASE ON FACTS TO THE SATISFACTION AGAIN ONLY OF THE ASSESSING AUTHORITY. 7.2 COMING TO THE MERITS THE EVIDENCE HAVING BEEN FURNISHED BEFORE US FOR THE FIRST TIME WOULD DEFINITELY WARRANT AN EXAMINATION AND V ERIFICATION AT THE END OF THE ASSESSING AUTHORITY AND CONSEQUENTLY A REMISSION THERETO. S O HOWEVER SOME PRELIMINARY OBSERVATIONS/FINDINGS AT OUR END ARE PERTINENT AND MAY BE MADE AS UNDER: A). THERE IS NO REFERENCE TO THE CHEQUE NUMBER IN THE SALE DEED DATED 12.5.2006 (PB PG. 23 24) SO THAT IT NEEDS TO BE FACTUALLY EXAMINED IF THE CHEQUE PROCEEDS (CHEQUE NO. 743678) CREDITED TO THE ASSESSEES ACCOUNT (WITH FE DERAL BANK) AT ` 7.5 LAKHS ON 12.5.2006 FLOWS FROM THE BANK ACCOUNT OF SMT. R.RAM LA THE PURCHASER OR ANOTHER. B). THE ASSESSEE HAD ADMITTEDLY COMPUTED THE CAPIT AL GAINS WITH REFERENCE TO THE ACQUISITION COST OF SOME OTHER LAND WHILE THE LAND SOLD IS ADMITTEDLY AN INHERITED PROPERTY. AS SUCH THE SAID FACT WOULD WARRANT REVI SION OF THE COST OF ACQUISITION AS WELL CONSISTENT WITH THE OBTAINING FACTS AND LAW AS APPL ICABLE. FURTHER THE COMPUTATION OF THE SAID GAINS MAY ALSO BE IMPACTED BY SECTION 50C OF T HE ACT. I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 8 C). THE ASSESSEE ADMITS OF HAVING RECEIVED AN EXC ESS (OVER THE DOCUMENTED) SALE CONSIDERATION IN CASH AT ` 7.5 LAKHS SO THAT THE ACTUAL SALE CONSIDERATION IS AT ` 15 LAKHS. THE SAID CREDIT/RECEIPT COULD BE CONSIDERED AS A PA RT OF THE SALE CONSIDERATION ONLY WHERE THE SAME IS ADMITTED TO BY THE SELLER ELSE NOT IN WHICH CASE IT WOULD BE ONLY A BALD ASSERTION. THERE BEING NOTHING ON RECORD TO SUBSTAN TIATE THIS CLAIM SO THAT THERE IS ESSENTIALLY NO CHANGE IN THE ASSESSEES CASE QUA THE SAME WHICH THUS REMAINS UNPROVED. SO HOWEVER IF AND TO THE EXTENT THERE IS APPLICAT ION OF S. 50C IN COMPUTING THE SALE CONSIDERATION THE EXCESS OVER THE DOCUMENTED CONSI DERATION TO THE EXTENT OF THE SAID CREDIT COULD BE TELESCOPED AGAINST THIS CREDIT OF ` 7.5 LAKHS; THE ASSESSEE CLAIMING TO HAVE RECEIVED MORE AND WHICH CORROBORATES WITH THE HIGH ER SALE PRICE IMPUTED U/S. 50C. D). AS REGARDS THE THIRD COMPONENT OF THE IMPUG NED CREDIT OF ` 22 LAKHS I.E. THE CHEQUE PROCEEDS (OF CHEQUE NO. 729092) CREDITED TO THE ASS ESSEES BANK ACCOUNT ON 13.5.2006 AT ` 7 LAKHS THE SAME WOULD BE REQUIRED TO BE FACTUALLY VERIFIED. THE ASSESSEES CONTENTION OF IT REPRESENTING THE TRANSFER OF FUNDS FROM THE B ANK ACCOUNT (WITH SYNDICATE BANK) IS NOT COMPREHENSIBLE EVEN AS OBSERVED BY THE BENCH D URING THE HEARING TO NO SPECIFIC ANSWER BY THE LD. AR. IF THAT BE SO THE SAID ACCOU NT WOULD ONLY FORM A PART OF THE ASSESSEES BOOK OF ACCOUNTS. SECONDLY IN THAT CAS E WHERE IS THE QUESTION OF THE SAID AMOUNT BEING CREDITED TO THE ASSESSEES CAPITAL ACC OUNT AND WOULD STAND TO BE CREDITED TO THE SAID (BANK) ACCOUNT. THIRDLY THE LD. AR COULD NOT SPECIFICALLY ANSWER AS TO THE SOURCE OF THE CREDITS IN ITS SAID (TRANSFEREE) BANK ACCOUNT WITH SYNDICATE BANK; THE CREDITS APPEARING DURING THE PERIOD 6.3.2006 TO 13.5.2006 I.E. FOR WHICH THE ACCOUNT STATEMENT STANDS SUBMITTED BEFORE US BEING IN CASH AND AGGR EGATING TO A MERE ` 50 000/-. THE SAME WOULD THUS BE REQUIRED TO BE FACTUALLY EXAMINE D FOR VALIDITY AND DECIDED ON MERITS. E). THE AO SHALL ALSO ENSURE THAT THERE IS NO DUPL ICATION OF ANY ADDITION I.E. QUA THE IMPUGNED CREDIT OF ` 22 LACS AS WAS OBSERVED BY US IN THE ASSESSMENT FR AMED TO THE EXTENT OF ` 5.89 LACS (REFER PARA 7.1). 8. ACCORDINGLY THE ASSESSING OFFICER SHALL DECIDE THE SAME PER A SPEAKING ORDER ISSUING DEFINITE FINDINGS OF FACT AND AFTER ALLOWI NG A REASONABLE OPPORTUNITY TO THE ASSESSEE FAILING WHICH PARTICULARLY CONSIDERING T HAT THESE ARE ESSENTIALLY TO PROVIDE AN OPPORTUNITY TO THE ASSESSEE TO STATE ITS CASE BEIN G NOT ADEQUATELY ASSISTED EARLIER THE ASSESSING OFFICER WOULD BE FREE TO DRAW ANY INFEREN CES PERMISSIBLE UNDER LAW UNDER THE CIRCUMSTANCES. WE DECIDE ACCORDINGLY. 9. THE LAST AND FIFTH GROUND OF THE ASSESSEES APPE AL WAS NOT PRESSED AT THE TIME OF HEARING AND IS CONSEQUENTLY DISMISSED AS NOT PRESSE D. I.T.A.NO. 559/COCH/2010 (FOR A.Y. 2007-08) 9 10. IN THE RESULT THE ASSESSEES APPEAL IS PARTLY ALLOWED AND PARTLY ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 25TH JULY 2011 GJ COPY TO: 1. SHRI ABDUL NAZAR AZAD AZAD HOTEL PROPRIETOR A ZAD RESTAURANT OVER BRIDGE TRIVANDRUM-1 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE -1(2) TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE.