ACIT, Ernakulam v. Smt N.M.Suhara, Ernakulam

ITSSA 107/COCH/2005 | misc
Pronouncement Date: 15-03-2011

Appeal Details

RSA Number 10721916 RSA 2005
Assessee PAN SINCE1970S
Bench Cochin
Appeal Number ITSSA 107/COCH/2005
Duration Of Justice 5 year(s) 9 month(s) 20 day(s)
Appellant ACIT, Ernakulam
Respondent Smt N.M.Suhara, Ernakulam
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 15-03-2011
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 15-03-2011
Date Of Final Hearing 15-12-2010
Next Hearing Date 15-12-2010
Assessment Year misc
Appeal Filed On 25-05-2005
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.(SS)A. NOS. 10/COCH/2004 & 88/COCH/2005 BLOCK PERIOD :01-04-1990 TO 25.10.2000 SHRI M.A. ASHRAF MAHIMA JEWELLERY BROADWAY ERNAKULAM. SMT. N.M. SUHARA MAHIMA JEWELLERY BROADWAY ERNAKULAM. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI DAVIS CHACKKALAKKAL ADV.-AR REVENUE BY SHRIS.C.SONKAR CIT(DR) I.T.(SS)A. NOS. 19/COCH/2004 & 107/COCH/2005 BLOCK PERIOD :01-04-1990 TO 25.10.2000 THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1 ERNAKULAM. VS. SHRI M.A. ASHRAF MAHIMA JEWELLERY BROADWAY ERNAKULAM. SMT. N.M. SUHARA MAHIMA JEWELLERY BROADWAY ERNAKULAM. (REVENUE-APPELLANT) (ASSESSEE - RESPONDENT) REVENUE BY SHRIS.C.SONKAR CIT(DR) ASSESSEE BY SHRI DAVIS CHACKALAKKAL ADV.-AR O R D E R PER SANJAY ARORA AM: . THESE ARE A SET OF TWO CROSS APPEALS I.E. B Y THE ASSESSEE AND THE REVENUE IN THE CASE OF A HUSBAND AND WIFE PURSUANT TO ASSESSM ENTS FRAMED U/S. 158BC OF THE IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 2 INCOME-TAX ACT 1961 (THE 'ACT' HEREINAFTER) THEREO N CONSEQUENT TO A SEARCH ACTION U/S. 132 OF THE ACT ON 25.10.2000 IN THE CASE OF BOTH. M.A. ASHRAF (IT(S&S)A NO. 10 & 19/COCH/2004) 2. WE SHALL TAKE THE CASE OF THE HUSBAND FIRST. NAR RATING THE BACKGROUND FACTS OF THE CASE IT WAS SUBMITTED BY THE LD. AR THE ASSESSEE S COUNSEL THAT THE ASSESSEE IS ENGAGED IN JEWELLERY BUSINESS THROUGH A PARTNERSHIP FIRM BY THE NAME MAHIMA JEWELLERY AT BROADWAY ERNAKULAM. HE WAS ALSO DOING ODD BUSINES S VIZ. A WHOLESALE FRUIT STALL AT JEWS STREET STATIONERY SHOP AT BROADWAY. HE ALSO E NTERED IN REAL ESTATE BUSINESS I.E. BUYING AND SELLING LANDS IN EARLY 80S EARNING HA NDSOME AMOUNTS (AND WHICH STOOD ROUTED IN ACCOUNTS AS NRE GIFTS) EVEN AS HIS RETUR NS OF INCOME FILED WITH THE REVENUE WERE FOR NOMINAL AMOUNTS (STATED TO BE IN THE RANGE OF ` 1 LAKHS). ON BEING SUBJECT TO THE SEARCH UNDER REFERENCE THE ASSESSEE CONCEDED TO TH ESE SET OF FACTS PER HIS STATEMENT U/S. 132(4) RECORDED AT AN UNEARTHLY HOUR OF 1 A.M. TH E ASSESSEE THOUGH ABIDING BY HIS SAID STATEMENT I.E. GENERALLY HOWEVER DISCOVERED CER TAIN FACTUAL ERRORS THEREIN AND WHICH WERE SOUGHT TO BE RECTIFIED LATER I.E. VIDE LETTE R DATED 5.7.2001. THE SAME IN FACT OUGHT NOT TO BE CONSIDERED AS A `RETRACTION AS WRONGLY INTERPRETED BY THE ASSESSING OFFICER (AO) IN VIEW OF THE SAME BEING IMPELLED BY THE FAC TUAL INACCURACIES IN HIS ORIGINAL STATEMENT. ALL THAT THE ASSESSEE ESSENTIALLY PLEADS FOR PER HIS SAID CLAIM IS THAT THE SAME BE NOT CONSIDERED AS RETRACTION PER SE AND THE ASSESSEE ALLOWED THE BENEFIT OF HIS CLAIMS MADE VIDE THE SAID LETTER BEING BASED ON VALID FAC TUAL POSITION AS OBTAINING. ON BEING POINTED OUT THAT THE RETRACTION LETTER DATED 5.7.20 01 STOOD SUBSEQUENTLY WITHDRAWN BY THE ASSESSEE HIMSELF I.E. VIDE A LETTER WHICH STANDS REPRODUCED AT PG. 2 OF THE ASSESSMENT ORDER IT WAS SUBMITTED BY HIM THAT IT WAS TRAGEDY OF ERRORS AND AS WOULD BE APPARENT THEREFROM IS ON THE BASIS THAT THE TOTAL INCOME WO ULD STAND ASSESSED AT ` 79 20 943/- AS STATED IN THE SAID LETTER ITSELF WHILE THE ASSESSM ENTS STOOD FINALLY FRAMED IN THE SAME RANGE OF ` 100 LAKHS. IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 3 3. PROCEEDING GROUND-WISE THE APPEAL RAISES S IX GROUNDS AND ONE ADDITIONAL GROUND. THE FIRST GROUND AND ONE ADDITIONAL GROUND. THE FI RST AND THE PRINCIPAL GROUND CONCERNS RETRACTION WHICH WAS THE SUBJECT MATTER OF VEHEMEN T ARGUMENT BY BOTH THE SIDES AND READS AS UNDER:- THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION MADE BY THE ASSESSING AUTHORITY SOLELY ON THE BASIS OF ADMISSION BY THE APPELLANT WHICH WAS RETRACTED BY THE APPELLANT. 3.1 IT WOULD AT FIRST BE IN ORDER TO DELINEATE THE LAW IN THE MATTER AND THEN PROCEED TO APPLY THE SAME IN THE FACTS AND CIRCUMSTANCES OF TH E CASE. THE LAW IN THE MATTER IS TRITE. TECHNICAL RULES OF EVIDENCE HAVE NO APPLICATION IN TAX PROCEEDINGS EVEN AS THE ASSESSMENT HAS NECESSARILY TO BE FRAMED OBSERVING T HE PRINCIPLES OF NATURAL JUSTICE WHICH IS A FUNDAMENTAL RIGHT. IT MANDATES AFFORDING PROPE R OPPORTUNITY OF HEARING INCLUDING TO CONTROVERT OR OTHERWISE MEET THE EVIDENCES ON WHICH THE DEPARTMENT WISHES TO PLACE RELIANCE ON. ADMISSION IS THE BEST FORM OF EVIDENC E AND A STATEMENT U/S. 132(4) IS ITSELF AN EVIDENCE WHICH COULD BE USED AGAINST THE DEPONE NT OR OTHERWISE IN DRAWING AN INFERENCE FOR THE PURPOSE OF ANY PROCEEDINGS UNDER THE ACT INCLUDING FRAMING OF ASSESSMENT (ALSO REFER SS. 132(4A) AND 292C). HOWE VER AS ANY OTHER IT CANNOT BE USED BEHIND THE ASSESSEES BACK AND REQUIRES BEING PROP ERLY CONFRONTED. RETRACTION IS PERMISSIBLE AND THERE IS NO LAW THAT ADMISSION BIND S AN ASSESSEE WITHOUT RECOURSE. HOWEVER THE ONUS TO SHOW WITH SOME MATERIAL THE N ATURE OF WHICH CANNOT BE DELINEATED OR SPECIFIED AS IT WOULD DEPEND UPON THE FACTS AND CIRCUMSTANCES AND THUS VARY FROM CASE TO CASE THAT THE STATEMENT AS MADE SUFFERS FR OM SOME FACTUAL INACCURACIES IS ON THE ASSESSEE AND HEAVY. THIS IS AS OTHERWISE IT WOULD BE NO MORE THAN A BALD ASSERTION. THE DECISION IN THE CASE OF PULLANGODOE RUBBER PRODUCE COMPANY LTD. VS. STATE O F KERALA (1973) 91 ITR 18 (SC) AND PARITHARAN VS. NARAYANAN (1997) (2) KLT 371 (KER.) RELIED UPON BY THE ASSESSEE ARE TO THE SAME EFFECT. OF COU RSE THE FACTS SUCH AS TIME MANNER AND MODE OF THE ORIGINAL STATEMENT; THE ASSESSEES SUBSEQUENT CONDUCT AS WELL AS TIMING OF RETRACTION ETC. ARE ALL IMPORTANT INGREDIENTS WHICH HAVE BEEN TAKEN INTO CONSIDERATION. IN OTHER WORDS THE ACCEPTANCE (IN PART OR IN FULL) OR REJECTION OF A RETRACTION HAS BOTH IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 4 QUALITATIVE AND QUANTITATIVE ASPECTS TO IT AND IS ESSENTIALLY A MATTER OF FACT BASED ON FACTUAL FINDINGS INCLUDING INFERENTIAL. THE ASSES SING AUTHORITY IN ANY CASE HAS TO ACT IN AN OBJECTIVE FAIR AND HONEST MANNER; ASSESSMENT BE ING A QUASI-JUDICIAL PROCESS. 3.2 THE STATEMENT U/S. 132(4) EVIDENTIARY VALUE OF WHICH IS MANDATED BY LAW [ALSO REFER TO V.KUNHAMBU & SONS VS. CIT 219 ITR 235 (KER.)] WAS IN THE PRESENT CASE DEPOSED BY THE ASSESSEE THE HUSBAND ON 25.10.2000 THE DATE OF SEARCH. THOUGH IN HIS RETRACTION LETTER DATED 5.7.2001 HE STATES OF THE SAME EXTENDING UPTO 1 A.M. OF THE NEXT DAY I.E. 26.10.2000 IT IS SIGNED AND DATED `25.1 0.2000. THIS ASPECT HAS NEITHER BEEN PURSUED NOR EXAMINED FURTHER SO THAT THIS MAY NOT DETAIN US. IT APPEARS EVEN AS STATED BY THE ASSESSEE IN HIS LETTER AFORESAID THAT THE GRAP HIC DETAILS WERE GIVEN THEREIN (AS OF HIS FINDING IT DIFFICULT TO BREATH BEING A PATIENT OF ASTHAMA) SO AS TO HIGHLIGHT THE CASUAL APPROACH OF THE REVENUE AUTHORITIES AS WELL AS OF I T BEING THE REASON FOR THE STATEMENT BEING BESET WITH THE CLAIMED (& SEVERAL) FACTUAL IN ACCURACIES. THE SECOND ASPECT OF THE RETRACTION THAT WE OBSERVE IS THAT IT FOLLOWS OVER EIGHT MONTHS AFTER THE DEPOSITION WHILE ONE WOULD EXPECT THE SAME TO FOLLOW IMMEDIATELY AFT ER THE ASSESSEE REGAINS HIS COMPOSURE AND FINDS TIME TO EITHER REFLECT ON THE V ERACITY OF HIS ANSWERS OR EXAMINE THE MATERIALS THAT LED HIM TO THE DISCOVERY OF THE MIST AKES THAT HAD CREPT IN THE STATEMENT. ITS TIMING IS CRUCIAL TO THE RETRACTION AS IT WOULD ES TABLISH THE BONA FIDES AND SECONDLY ALLOWS OPPORTUNITY TO THE INVESTIGATING AUTHORITY T O WHERE IN DOUBT OR OTHERWISE DEEMED FIT BY IT CARRY OUT FURTHER INVESTIGATIONS THAT IT MAY BE OTHERWISE ESTOPPED FROM IN VIEW OF THE ADMISSION. (REFER S. 115 OF THE EVIDENCE ACT). LAPSE OF TIME COULD ALSO ALLOW THE PERSON SEARCHED TO DESTROY OR REMOVE EVIDENCE THAT MAY NOT HAVE BEEN FOUND YET. IN OTHER WORDS RETRACTION CANNOT BE ALLOWED TO BE USE D AS A PLOY. THE MATTER HAS BEEN EXTENSIVELY DISCUSSED BY THE TRIBUNAL IN THE CASE O F HIRALAL MAGANLAL VS CIT (DY.) CIT 96 ITD 113 (MUM.). ALSO TIME WOULD ALSO ALLOW TH E ASSESSEE AN OPPORTUNITY TO RETRACT WHATEVER ONLY HE IS IN INTIMATE KNOW OF AND POSSIB LY EXPLAIN BEST I.E. WHICH MAY NOT BE SUPPORTED BY ANY MATERIALS EXCEPT CIRCUMSTANTIAL A ND THE REVENUE CONSEQUENTLY LOOSE THE BEST SOURCE OF EVIDENCE. THE ASSESSEE IN THE P RESENT CASE STATES THAT HE HAD OBTAINED A COPY OF THE STATEMENT ONLY TWO DAYS AGO FROM THE DE PARTMENT DESPITE REPEATED REQUESTS IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 5 THEREFOR. WHILE WE WOULD DISAPPROVE OF THE REVENUE S CONDUCT I.E. ASSUMING THE STATED REQUESTS FOR WHICH NO MATERIAL STANDS ADDUCED IN S UBSTANTIATION; ACCESS TO HIS STATEMENT BEING A MATTER OF RIGHT (S. 132(9)); WE DO NOT CONS IDER THE REVENUES ACTION LEADING TO THE DELAY AS BEING MOTIVATED. HOW WAS IT TO KNOW THAT T HE ASSESSEE WISHES TO RETRACT? AND WHICH IT IN ANY CASE CANNOT ESTOP THE ASSESSEE FROM ? CLEARLY HE KNEW THE MATTERS ON WHICH HE WAS QUESTIONED AND MORE IMPORTANTLY THE CORRECT ANSWERS AS HE COULD NOT POSSIBLY RECOLLECT THE SAME IMMEDIATELY ON THE RECE IPT OF THE COPY OF THE STATEMENT; THE RETRACTION LETTER SPREADING OVER 5 PAGES AND RETRAC TING ALMOST EVERY ADMISSION FOLLOWING IMMEDIATELY AFTER. AS SUCH HE COULD EASILY HAVE ST ATED THE TRUTH IMMEDIATELY ON THE DISCOVERY OF HIS ERROR(S) ALONG WITH THE BASIS OF HIS STATING SO. A PERSON SPEAKING TRUTH IS NOT IMPEDED OR RESTRAINED BY WHAT HE HAD SUBMITTED EARLIER . HE MAY NOT REMEMBER THE QUESTION NO. BUT THAT IS NOT IMPORTANT BUT THE TR ANSACTIONS PERTAINING TO WHICH HE HAD BEEN QUESTIONED AND HAD ERRED. AGAIN WITHOUT DOUB T IT MAY NOT BE COMPLETE AND HE MAY WELL MISS OUT ON SOME TRANSACTIONS CONCENTRATI NG ON THE CRUCIAL ONES BUT THAT WOULD AT ONCE ESTABLISH HIS BONA FIDES . THIS IS ALSO THE REASON WHY LAW ACCORDS OR ATTAC HES SPECIAL SIGNIFICANCE TO THE FIRST STATEMENT BEING PRESUMABLY NOT CALIBRATED OR CALCULATED AND ALSO EXPLAINS WHY ADMISSION IS CONSIDERED AS TH E BEST FORM OF EVIDENCE. WHY ELSE WOULD SOMEONE ADMIT PARTICULARLY KNOWING THAT THE SAME COULD BE USED AGAINST HIM. ALSO IT WOULD BE RELEVANT TO STATE THAT THE `STRES S FACTOR APART WHICH IS UNDERSTANDABLE THERE IS NO CHARGE OF COERCION OR EXERCISE OF UNDUE INFLUENCE ETC.; BY THE ASSESSEE ON THE REVENUE. UNDER THE CIRCUMSTANCES THEREFORE THOUGH FINDING MERIT IN THE ASSESSEES CLAIM THAT HE COULD NOT POSSIBLY REMEMBER THE EXACT DETAILS OF THE TRANSACTIONS CONDUCTED 1-8 YEARS AGO WE ARE INCLINED TO DEAL WITH THE RET RACTION ON ITS MERITS RATHER THAN TAKING IT AS A GOSPEL TRUTH. HOWEVER BEFORE WE PROCEED T O EXAMINE THE SAME IT WOULD BE RELEVANT TO SET OUT THE BACKGROUND FACTS OF THE CAS E. 3.3 THE ASSESSEE IS IN THE BUSINESS SINCE 197 0S GETTING MARRIED AROUND 1975 WITH TWO DAUGHTERS MARRIED IN 1998 AND 2000) AND A SON (STUDYING IN FIRST YEAR B.COM IN OCTOBER 2000). THE FAMILY RESIDES IN THEIR OWN HO USE SUMAYYA PRASANTH NAGAR EDAPALLY ERNAKULAM SINCE ABOUT THE YEAR 1986. TH E UPPER STOREY OF THE HOUSE IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 6 CONSISTING OF INTER ALIA 4 BEDROOMS WAS BUILT ABOUT 3 YEARS AGO (1997) AT A COST OF WHICH COULD NOT BE LESS THAN ` 4 LAKHS. THE ASSESSEE STARTED AS A WHOLESALE FRUIT DEALER (AT JEWS STREET) AND THEN ADDED A STATIONERY SHOP. HE VENTURED INTO REAL ESTATE BUSINESS I.E. BUYING AND SELLING LANDS IN THE 1980S EARNING HAN DSOME AMOUNTS BY CAPITALISING ON THE SPIRALLING LAND PRICES WITNESSED IN MOST PROGRESSIN G URBAN CENTRES IN THE COUNTRY AS COCHIN. THE MODUS OPERANDI AS EXPLAINED WAS TO PURCHASE LAND ON AGREEMENT BASIS PAYING THE WHOLE OR PART OF THE BARGAIN PRICE. A B UYER WAS THEN SCOUTED FOR IN WHOSE NAME THE DOCUMENT WAS FINALLY PREPARED WITH THE AS SESSEE NETTING THE DIFFERENCE; I.E. THE AMOUNT AT WHICH THE PURCHASE AND `SALE PRICE QUA THE RIGHTS IN LAND WAS FINALLY STRUCK. A GOOD PART OF ITS EARNINGS WAS UNACCOUNTED FOR THE REASON THAT THE DOCUMENTS BORE A LESSER VALUE FOR WHICH THE REASONS ARE OBVIOUS (VIZ INCOME TAX STAMP DUTY REGISTRATION COST ETC.). TO BRING A PART OF THE EARNINGS IN BOO KS THE ASSESSEE ADOPTED THE ROUTE OF NRE GIFTS. DISTANT AND NOT SO DISTANT RELATIVES R ESIDING ABROAD WERE APPROACHED AND ACCOMMODATION ENTRIES OBTAINED. HE CLEARLY ADMITTE D TO THE SAID PRACTICE EXPRESSING IGNORANCE WHEN QUESTIONED ON THE PRESENT DETAILS OF THE DONORS VIZ. ADDRESSES PHONE NOS. EDUCATION EMPLOYMENT DETAILS CHILDREN ETC. TO SOME OF WHICH HE HAD NOT SPOKEN TO EVEN TELEPHONICALLY LEAVE ALONE PERSONALLY. TH E LD. AR STATED DURING THE HEARING THAT THE ASSESSEE THUS CAME OUT CLEAN DURING SEARCH. THE ASSESSEE ENTERED IN THE JEWELLERY BUSINESS IN THE YEAR 1990 BY JOINING AS A PARTNER I N THE FIRM BY THE NAME SARITHA JEWELLERY AT BROADWAY ERNAKULAM WHICH WAS DISSOLV ED IN OCTOBER 1993. THE ASSESSEE AND HIS WIFE FORMED ANOTHER PARTNERSHIP FIRM (MAHIM A JEWELLERY) BROADWAY ERNAKULAM WHICH CONTINUES TO FUNCTION TO DATE. DURING SURVEY UNDER 133A ON 25.10.2000 THEREAT WHICH WAS LATER CONVERTED INTO A SEARCH U/S. 132 T HE SAID FIRM WAS FOUND TO BE IN POSSESSION OF GOLD AND SILVER ORNAMENTS IN EXCESS B Y 4869.740 GRAMS AND 1763.270 GMS. RESPECTIVELY BESIDES EXCESS CASH AT ` 112581/-. THE ASSESSEE EXPLAINED THE SAME AS INVESTMENT OUT OF HIS UNDISCLOSED INCOME FURTHER S TATING OF HAVING DECLARED 4 KGS. OF GOLD UNDER VDIS 1997 ALONG WITH HIS WIFE AND WHI CH STOOD INVESTED IN THE PARTNERSHIP FIRM SO THAT CREDIT FOR THE SAME BE ALLOWED. THE CONSTRUCTION OF ALL THE BUILDINGS CONSTRUCTED BY HIM DURING THE PAST YEARS COMPRISIN G THE BLOCK PERIOD I.E. ON LANDS BOUGHT EITHER IN THE NAME OF SELF AND WIFE OR HIS C HILDREN SOME OF WHICH WERE ON RENT IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 7 WAS SUBSTANTIALLY OUT OF THE UNACCOUNTED INCOME. B ESIDES SEVERAL BANK ACCOUNTS DEPOSITS ETC. WERE FOUND AND WHICH WERE AGAIN EXP ECTED TO BE SOURCED FROM OR REPRESENTING INVESTMENT OF UNACCOUNTED INCOME. TAB ULATION OF THE SEVERAL SUCH DISCLOSURES AGGREGATING TO ` 79.21 LAKHS WAS ADMITTED TO IN QUESTION NO. 43 OF T HE DEPOSITION WHICH WAS BESIDES NRE GIFTS ACCEPTED AS THE UNDISCLOSED INCOME AGREEING TO PAY TAX THEREON. THE SAME STOOD RETRACTED VIDE LETTER DATED 5.7.2001 ALMOST IS WHOLESALE I.E. EXCEPT FOR TRANSACTIONS WHICH COUL D NOT BE DENIED BEING VALIDATED BY TANGIBLE PROOF VIZ. BUILDINGS CONSTRUCTED BANK DE POSITS/ACCOUNTS AND OTHER VALUABLES FOUND. HOWEVER THE RETRACTIONS STOOD WITHDRAWN PE R A SUBSEQUENT LETTER I.E. WHEN CALLED UPON TO FILE A SWORN AFFIDAVIT STATING THAT HE WAS WILLING TO ADHERE TO THE ADMISSION MADE I.E. ` 7920943/-. WHEN QUESTIONED AS REGARDS THE VALIDITY OF THE RETRACTION IN VIEW OF ITS SUBSEQUENT WITHDRAWAL I T WAS SUBMITTED BY THE LD. AR THAT THE SAME WAS SUBJECT TO THE ASSESSMENT BEING MADE AT TH E SAID FIGURE OF ` 79.21 LAKHS WHICH HAS NOT BEEN ADHERED TO BY THE REVENUE SO THAT THE SAME IS NOT BINDING ON THE ASSESSEE. WE ARE UNABLE TO UNDERSTAND THE SAME. WHEN THE BASI S OF THE RETRACTION IS THE FACTUAL INACCURACIES (IN THE STATEMENT) HOW COULD THE ASSE SSEE FIRSTLY AGREE THERE-TO AND SECONDLY EVEN SO SUBJECT IT TO THE FIGURE AS PER THE SAID STATEMENT ITSELF. THE SAID AMOUNT IS ONLY AS WORKED OUT ON THE BASIS OF DISCLOSURES M ADE SO THAT THE ONLY INFERENCE IS THAT HE IS AGREEABLE TO WHAT STANDS STATED THEREIN. ANY OTHER INFERENCE WOULD NOT LOGICALLY FLOW BESIDES CAUSING TO CHANGE THE CHARACTER OF TH E DISCLOSURE FROM BEING TRANSACTION SPECIFIC TO A SUMMARY ONE WHICH IS HIGHLY SUSCEPTI BLE BOTH IN LAW AND ON FACT. THE AMOUNT IT NEEDS TO BE APPRECIATED IS A RESULT OF THE DISCLOSURES AND NOT THE OTHER WAY AROUND AND IS SUBJECT TO VARIATION EITHER WAY ON ACCOUNT OF FACTUAL INPUTS/MISTAKES. 3.4 WE MAY NEXT DEAL WITH THE RETRACTION ON MERITS. AS IT OUTSTANDS THE SAME CONCERNS PRINCIPALLY FOUR ISSUES I.E. WITH REFERE NCE TO PARA NOS. 2 3 6 AND 20 OF THE RETRACTION LETTER WHICH ARE QUA QUESTION NOS. 2 2 21 AND 42 OF THE DEPOSITION RESPECTIVELY. THE FIRST TWO CONCERN THE ON-MONEY P AID FOR SIX CENTS OF LAND (IN NOV. 1993) BY THE ASSESSEE ALONG WITH HIS WIFE (AT ` 7000/- PER CENT) AND QUA 31 CENTS OF LAND PURCHASED IN THE NAME OF HIS SON M.A.ANAZ IN MAY 1 998 (AT ` 15 000/- PER CENT). WHILE IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 8 THE FORMER IS RETRACTED IN FULL THE LATTER IS TO T HE EXTENT OF ` 5000 PER CENT SO THAT ON- MONEY IS TO THE EXTENT OF THE BALANCE ` 10 000/- PER CENT IS ADMITTED AS CORRECT. THE SAME BY ITSELF CONFIRMS THE PAYMENT OF ON-MONEY AS A MAT TER OF PRACTICE (AS INDEED FROM THE OTHER TRANSACTIONS IN LAND QUA WHICH THE RETRACTION IS NOT BEING PRESSED AND/OR THE STATEMENT HONOURED) BUT FOR WHICH THE UNACCOUNTED INCOME WHICH IS ADMITTEDLY PRIMARILY FROM THE REAL ESTATE BUSINESS ITSELF WOU LD NOT BE GENERATED. WE THEREFORE ARE INCLINED TO ACCEPT THE PART RETRACTION QUA 31 CENTS OF LAND I.E. AT ` 1.55 LAKHS (FOR A.Y. 1999-2000). WE ARE SUPPORTED IN OUR DECISION BY THE DECISION IN THE CASE OF CIT VS. P.V.KALYANASUNDARAM 294 ITR 49 (SC). AS REGARDS THE FORMER WHICH COULD WORK TO ` 21 000/- EACH FOR THE ASSESSEE AND HIS WIFE WE FIND THE ASSESSEES CLAIM AS TO NO ON- MONEY AS NOT VALID. FIRSTLY THE RETRACTION IS TOTALLY UNSUBSTANTIATED. THE LAND IS IN A COMMERCIAL AREA; A DIFFERENCE BETWEEN THE STATED (DOCUMENTED) CONSIDERATION AND T HE MARKET RATE VARYING BETWEEN ` 5000/- PER CENT TO ` 10 000 PER CENT WE FIND AS OBTAINING FOR OTHER TRAN SACTIONS AND WHICH STAND ACCEPTED. SECONDLY THE ASSESSEE IN F ACT VIDE ANSWER TO QUESTION NO. 38 OF HIS STATEMENT CONFIRMED THE VDIS DISCLOSURE `FOR L AND AT ` 1.75 LACS TO BE IN RESPECT OF THIS INVESTMENT (AS WELL) DISPROVING THE ASSESSEE S CASE. ALSO CREDIT STANDS ALLOWED TO HIM IN RESPECT OF VDIS DISCLOSURE IN COMPUTING HIS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. SO HOWEVER A PERUSAL OF Q. # 2 REVEALS TH AT THE DISCLOSURE WAS FOR ` 5000/- PER CENT AND NOT ` 7000/- PER CENT AS BEING TAKEN BY THE PARTIES. THE ASSESSEE THEREFORE GETS PARTIAL RELIEF FOR EQUIVALENT TO ` 2000/- PER CENT I.E. AT ` 7000/- EACH FOR THE HUSBAND AND WIFE. THE THIRD RETRACTION IS QUA THE AMOUNT REALIZED ON RETIRING FROM THE FIRM SAR ITHA JEWELLERY. WHILE THE ASSESSEE STATES IT TO BE AT ` 55000/- IN DEPOSITION IT IS WITH REFERENCE TO THE ACCOUNTS BEING THE BALANCE SHEET OF THE SAI D FIRM AS ON 31/3/1994 AND 31/3/1995 AS WELL AS THE LEDGER ACCOUNT OF THE ASSESSEE WITH THE FIRM FOR F.Y. 1995-96 CONTENDED IT AT ` 3.56 LACS. THE RETRACTION THOUGH SUPPORTED IS IN FLICTED WITH TWO MAJOR INFIRMITIES. FIRSTLY THE SAID MATERIAL WAS NOT BEFORE ANY AUTHO RITY. THOUGH THE HAS SUPPORTED HIS RELIANCE WITH AN APPLICATION FOR ADMISSION OF THE S AME BY WAY OF ADDITIONAL EVIDENCE BEFORE THE TRIBUNAL THE SAME IS COMPLETELY SILENT ON WHY THE SAME COULD NOT BE PRODUCED IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 9 BEFORE THE REVENUE AUTHORITIES. THIS IS ALL THE MOR E SURPRISING AS THE ASSESSEE CLEARLY STATES VIDE PARA 6 OF HIS RETRACTION LETTER DATED 5/7/2001 OF HIS HAVING IN FACT SECURED ` 3.56 LACS ON RETIREMENT FROM THE SAID FIRM SO THAT HE WAS AT THE RELEVANT TIME IN POSSESSION OF MATERIALS IN SUPPORT OF HIS CLAIM. TH E SAME AS POINTED OUT BY THE LD. DR CAN NOT BE VERIFIED BY THE REVENUE AT THIS STAGE; I T WEEDING OUT RECORDS MORE THAN SIX YEARS OLD WHERE NOT SUBJECT TO LITIGATION. THE SAME COULD HAVE EASILY BEEN BY THE OFFICER SEIZED WITH THE ASSESSEES CASE AT TIME; THE WEEDIN G TIME AT THE RELEVANT STAGE BEING EVEN HIGHER AT 10 YEARS. SECONDLY ON MERITS THE DISSOL UTION DEED DATED 13/10/1993 ITSELF CONFIRMS THE PAYMENT OF AMOUNT PAYABLE TO THE ASSES SEE THE RETIRING PARTNER WHO THEREBY ACKNOWLEDGES THE RECEIPT THEREOF; IT STATING OF THE ACCOUNTS HAVING BEEN DISCUSSED VALUED FOUND CORRECT AND SETTLED. NOT SURPRISINGL Y THEN NO CREDIT STANDS ALLOWED TO THE ASSESSEE QUA THE SAME BY THE AO IN WHICH CASE HE WOULD BE ENTI TLED TO IF AT ALL AT ` 3.01 LACS AS AGAINST ` 3.56 LACS AS BEING CLAIMED. FINALLY WE ALSO FIND MERIT IN THE ARGUMENT OF THE LD. DR THAT THE CAPITAL WOULD ONLY HAVE BEEN DE POSITED IN HIS JEWELLERY BUSINESS COMMENCED FORTHWITH IN PARTNERSHIP WITH HIS WIFE A ND FOR THE OPENING CAPITAL TOWARD WHICH NO SEPARATE ADDITION HAS BEEN MADE BY THE ASS ESSING AUTHORITY. THE SAME APPEALS AND IS BORNE OUT OF THE RECORD; AS ALSO OBSERVED BY THE BENCH IT WOULD BE HIGHLY IMPROBABLE FOR ANYONE TO CONVERT HIS ACCOUNTED MONE Y INTO UNACCOUNTED MONEY I.E. BY INVESTING IN UNACCOUNTED ASSETS SO THAT THE CLAIM IN ORDER TO BE COMPLETE OUGHT TO HAVE BEEN ACCOMPANIED BY THE ACCOUNT STATEMENTS OF THE F IRM MAHIMA JEWELLERY FOR THE RELEVANT PERIOD AS WELL. THE ASSESSEES CLAIM IS W ITHOUT MERIT AND STANDS RIGHTLY REJECTED. THE LAST RETRACTION IS QUA Q. # 42 OF HIS DEPOSITION VIDE PARA # 13 (AND NOT # 20 AS STATED) OF THE RETRACTION LETTER. VIDE THE SAME IT IS AVERRED THAT THE SAVING BANK ACCOUNT (# 61590) WITH CANARA BANK IN THE NAME OF THE ASSESSEE S ELDER DAUGHTER SUMAYYA AYUB IS HER OWN ACCOUNT I.E. THE BALANCE THEREIN REPRESEN TS HER OWN MONIES AND WHO THOUGH MARRIED STAYS WITH THE ASSESSEE. THE SOURCE OF THE FUNDS THEREIN WAS EXPLAINED DURING SEARCH AS OUT OF RENT RECEIPTS AND NRE GIFTS. WE CO NSIDER IRRESPECTIVE OF WHETHER THE ASSESSEES MARRIED DAUGHTER STAYS WITH HIM OR NOT ON WHICH THERE IS NO FINDING BY THE AUTHORITIES BELOW THE CLAIM BEING SUPPORTED BY MA TERIALS AS VALIDLY MADE. FURTHER EVEN IF THE INVESTMENT IN THE PROPERTY IS AS ADMITTED MADE BY THE PARENT THE RENTAL INCOME IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 10 BEING A MAJOR WOULD BE HERS UNLESS THE INVESTMENT REPRESENTS THE ASSESSEES BENAMI PROPERTY. THE TEST FOR THE SAME WOULD BE TO SEE IF THE RENT IS BEING REGULARLY DEPOSITED IN THE SAID ACCOUNT AND THE WITHDRAWALS THEREFROM ARE BEING USED FOR HER PURPOSES AND NOT DEPLOYED BY THE ASSSESSEE FOR HIS OWN PURPOSES. FUR THER TO THE EXTENT THE BALANCE IN THE SAID ACCOUNT IS SOURCED FROM NRE GIFTS THE SAME WO ULD NEVERTHELESS REPRESENT THE ASSESSEES OWN MONEY; THE DAUGHTER HAVING NO OTHER STATED SOURCE OF INCOME AS ALSO THE ASSESSEES ADMISSION QUA NRE GITS. WE DECIDE ACCORD INGLY; THE AO SHALL DETERMINE THE RELEVANT FACTS ON THE BASIS OF THE INFORMATION AND MATERIALS FURNISHED BY THE BEFORE HIM PER A SPEAKING ORDER. FINALLY WE MAY ALSO ADVERT TO THE RESID UARY CLAUSE OF THE RETRACTION VIDE CLAUSE/PARA # 43 THEREOF. THE ASSSESSEE HAS CLAIMED THAT HE COULD NOT BE TAXED BOTH ON THE BASIS OF THE NRE GIFTS AS WELL AS THE INVESTMENT UN EARTHED IN SEARCH; THE LATTER ONLY REPRESENTING THE APPLICATION OF THE FUNDS SOURCED T HROUGH THE CHANNEL OF GIFTS. THE CLAIM THOUGH APPEALING IS NOT VALID. FIRSTLY THERE HAS BEEN NO ADDITION WITH REFERENCE TO NRE GIFTS FOR THE ASSSESSEE TO CLAIM DUPLICATION OF ADD ITION AND NEITHER HAS ANY SUCH BEEN SHOWN TO US. SECONDLY THE UNACCOUNTED MONEY ONCE B ROUGHT IN BOOKS GOES TO FUND OR FINANCE ACCOUNTED ASSETS WHILE THE ADDITIONS IN TH E PRESENT CASE HAVE BEEN MADE ONLY IN RESPECT OF THE ASSETS WHICH REMAINED UNACCOUNTED FO R AS ON THE DATE OF SEARCH. 4. COMING TO THE MERITS OF THE APPEAL THE SECOND G ROUND OF APPEAL READS AS: ` THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GO NE WRONG IN CONFIRMING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE CONTEXT OF JEWELLERY GIVEN BY THE APPELLANT TO HIS TWO DAUGHTERS AT THE TIME OF T HEIR MARRIAGE . THE REVENUE BEING NOT IN APPEAL WE PROCEE D WITH THE AOS TREATMENT AND THE DISCUSS THE MODIFICATION EFFECTED BY THE LD. CIT(A) WHICH IS UNDER APPEAL BY THE ASSESSEE: (WT. IN GMS.) PARTICULARS/ACTION BY A.O. CIT(A) TOTAL GOLD ORNAMENTS FOUND 2 453.800 2453. 800 IN SEARCH FROM RESIDENCE IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 11 TREATED AS EXPLAINED: - AS BROUGHT BY WIFE IN MARRIAGE 480 480 - PERSONAL (OF DAUGHTER 1) - 200 - PERSONAL (OF DAUGHTER 2) - 200 - PERSONAL (OF SON) 100 580.000 100 980.000 BALANCE UNEXPLAINED 1873.800 14 72.800 ======= ======== VALUED AT ( ` ` ) 7869 96/- 591516 /- ======= ======== AS APPARENT THE RELIEF ALLOWED BY THE LD. CIT(A) I S QUA THE FOLD CONSIDERED EXPLAINED ON ACCOUNT OF GIFTS RECEIVED BY HIS DAUGHTERS FROM FRI ENDS AND RELATIVES (AT 150 GMS. EACH) AND ON THE OCCASION OF THEIR MARRIAGES (AT 50 GMS. EACH) WHICH TOOK PLACE IN THE YEARS 1998 & 2000 RESPECTIVELY FOR THE ELDER AND YOUNGER DAUGHTER. HIS BASIS FOR THE RELIEF WAS THAT IF THE ASSESSEES THIRD CHILD A MALE COULD B E CONSIDERED AS HAVING RECEIVED 100 GMS. IN GIFTS THE GIRLS OF THE FAMILY ARE BOUND TO BE S IMILARLY FAVOURED RATHER ONLY MORE BESIDES RECEIVING SOME GOLD AT THE TIME OF THEIR MA RRIAGES. HE FURTHER ALLOWED RELIEF ON THE BASIS OF THE RATE OF GOLD. WHILE THE AO VALUED THE SAME AT A CONSTANT RATE OF ` 420/- PER GM. THE LD. CIT(A) APPLIED THE RATE OF ` 356/- & ` 385/- PER GM. TO THE NET (NET OF IMPURITIES RECKONED AT 12%) OF THE GOLD WITH THE DA UGHTERS AS INCLUDED IN THE UNEXPLAINED GOLD ORNAMENTS. THE ASSESSEES CHALLENGE IS TO THE CREDIT ALLOWED TOWARD THAT BROUGHT BY THE WIFE N.M. SUAHARA AT THE TIME OF HER MARRIAGE . BOTH THE AUTHORITIES BELOW HAVE AGREED TO THE PROPOSITION IN PRINCIPLE THOUGH REJE CTED THE ASSESSEES CONTENTION FOR A HIGHER QUANTITY BEING DE HORS ANY EVIDENCE; THE AS SESSEE BEING ESSENTIALLY A SELF-MADE MAN WHO HAS HAD TO STRUGGLE IN HIS INITIAL DAYS. T HAT IS HE HAVING A MODEST BACKGROUND WOULD ONLY HAVE BEEN ABLE TO SECURE ALLIANCE FROM A FAMILY WITH A SIMILAR STANDING AS AGAINST ONE WHICH COULD GIVE 1000 GMS. AS CLAIMED. ACCORDINGLY THE SAME STANDS ESTIMATED AT 480 GMS. THE ASSESSEES CLAIM BEING UNSUBST ANTIATED WITH ANY EVIDENCE OR MATERIAL THE ISSUE BEFORE US IS THE REASONABILITY OF THE ESTIMAT E IN LIGHT OF THE MATERIAL ON RECORD. EVEN THOUGH WE FIND AN APPLICATION FOR ADMISSION OF ADDI TIONAL EVIDENCE TOWARD THIS CLAIM NO LEAVE OF THE COURT WAS SOUGHT AND THUS OBTAINED AN D NEITHER ANY REFERENCE THERETO MADE DURING HEARING. THE SAME IT MAY BE CLARIFIED IS O NLY A SALE DEED (DATED 18/11/1987) OF A IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 12 PROPERTY INHERITED BY THE ASSESSEE FROM HIS FATHER WHICH WE CONSIDER AS OF NO MOMENT. IN FACT THE ASSESSEE HAD RAISED A SPECIFIC GROUND (#4 ) IN RELATION TO THIS ASPECT OF THE CASE WHICH WAS SPECIFICALLY NOT PRESSED BY THE LD. AR DU RING HEARING. COMING BACK TO THE MERITS OF THE ISSUE WE FIND THAT THERE IS NO CLAIM TOWARD THE SAME EITHER IN THE STATEMENT U/S. 132(4) (DATED 25/10/2000) (REFER ANSWERS TO Q. # 35 37) OR THE RETRACTION LETTER DATED 05/7/2001 WHICH BEARS REFERENCE TO THE GOLD/GOLD O RNAMENTS AT PARA NOS. 9 11 15 & 17 THEREOF. AS REGARDS THE REASONABILITY OF THE ESTIM ATE WE FIND IT AS MORE THAN REASONABLE. THE ASSESSEE WHOSE SOCIO-ECONOMIC STANDING HAS ADM ITTEDLY WITNESSED A QUANTUM JUMP OVER THE YEARS HAS GIFTED 920 GMS. TO HIS TWO DAUG HTERS IN MARRIAGE WE WONDER HOW HE QUESTIONS THE ESTIMATE OF 480 GMS. BY THE REVENUE A S BROUGHT BY HIS WIFE IN MARRIAGE 25 YEARS AGO. THE SAME ALSO AGREES WITH THAT DEEMED AS AVAILABLE WITH A MARRIED WOMAN IN OUR SOCIETY BY THE CBDT SO THAT WHERE UNEXPLAINED MAY NOT BE SUBJECT TO SEIZURE. UNDER THE CIRCUMSTANCES WE FIND NO MERIT WHATSOEVE R IN THE ASSESSEES CLAIM AND UPHOLD THE IMPUGNED ORDER ON THIS GROUND. 5. GROUND NOS. 3 AND 4 WERE NOT PRESSED AT THE TIME OF HEARING AND ARE ACCORDINGLY DISMISSED AS NOT PRESSED. 6. GROUND # 5 PERTAINS TO THE RESTRICTION OF C REDIT IN RESPECT OF THE OPENING CAPITAL AS AVAILABLE WITH IT AS ON 1/4/1990 AT ` 5.0 LACS AS AGAINST THE CLAIMED AMOUNT OF ` 8.0 LACS . THE BASIS OF THE AOS RESTRICTION WAS THE NON-SUBST ANTIATION BY THE ASSESSEE OF HIS CLAIM; HE IN FACT TAKING NO CONSISTENT STAND WHO COULD FI NALLY ADDUCE EVIDENCE ONLY QUA THE FOLLOWING IN SUPPORT SO THAT THE SAME STOOD ADOPTE D AT ` 5.0 LACS: (AMOUNT IN ` ) - IN VARIOUS BANK ACCOUNTS 42 058 - RENT RECEIPTS 265000 - CAPITAL IN REAL ESTATE BUSINESS 2000 00 4 95 098/- THE LD. CIT(A) IN APPEAL STATED THAT HE HAVING AL LOWED A FURTHER RELIEF OF ` 1.0 LAC WHILE DECIDING OTHER GROUNDS NO FURTHER RELIEF ON THIS S CORE COULD BE CONSIDERED. IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 13 NO SPECIFIC ARGUMENTS STOOD RAISED BY THE ASSESSEE IN THIS REGARD BEFORE US WHOSE CASE REMAINS THE SAME. THOUGH THERE IS MERIT IN THE ARGU MENT THAT HE HAVING BEEN IN BUSINESS FOR ALMOST 25 YEARS PRIOR TO THE DATE OF SEARCH WO ULD HAVE EARNED AND SAVED SOME SUMS AS HIS CAPITAL OVER THE 15 YEAR PERIOD PRIOR TO THE COMMENCEMENT OF THE BLOCK PERIOD. HOWEVER THE SAME CANNOT BE A MATTER OF PRESUMPTION AND HAS TO BE EVIDENCED IN SOME MANNER. THE LAW DEEMS THE ASSSESSEE TO BE THE OWNER OF THE VALUABLES FOUND IN HIS POSSESSION AND WHERE UNEXPLAINED AS TO ITS NATURE A ND SOURCE AS HIS UNEXPLAINED INCOME FOR THE RELEVANT YEAR . THUS IT IS ONLY WHERE THE ASSESSEE ADDUCED SOME EVIDENCE TO EXHIBIT THAT THE SAME ARE NOT HIS PROPERTY OR OF IT S EXISTENCE PRIOR TO THE RELEVANT PERIOD (IN THIS CASE THE BLOCK PERIOD COMMENCING 1/4/1990) THAT IT COULD BE ALLOWED CREDIT IN ITS RESPECT. THE REVENUE HAS VERY REASONABLY ESTIMATED THE SAME IN VIEW OF FACT ON RECORD THAT THE ASSESSEE HAD SOURCES OF INCOME PRIOR TO TH AT DATE AT ` 6.0 LACS. NO INTERFERENCE UNDER THE CIRCUMSTANCES AT OUR END IS CALLED FOR. 7. THE LAST AND FINAL GROUND RELATES TO THE IN TEREST CHARGED U/S 158BFA(1) AT ` 80351/- I.E. FOR A PERIOD OF ONE MONTH ON THE AMOUNT OF TA X PAYABLE. INTEREST U/S. 158BFA(1) IS LEVIABLE WHERE THE RETURN IS NOT FILED WITHIN THE P RESCRIBED TIME I.E. AS SPECIFIED IN THE NOTICE U/S. 158BC AND IS TO RUN FOR THE PERIOD OF DELAY OR WHERE NO RETURN IS FILED UP TO THE DATE OF COMPLETION OF ASSESSMENT U/S. 158BC ON THE AMOUNT OF TAX ASSESSED ON THE UNDISCLOSED INCOME. IN THE FACTS OF THE PRESENT CAS E AS GATHERED FROM THE RECORD THE ASSESSEE HAVING BEEN ALLOWED A LESSER TIME THAN TH E MAXIMUM PERIOD OF 45 DAYS ALLOWABLE UNDER THE ACT FOR THE FILING OF RETURN IN RESPONSE TO NOTICE U/S. 158BC MADE A REQUEST ADDITIONAL TIME AS IT APPEARS WITHIN THE MAXIMUM TIME PERIOD OF 45 DAYS WHICH HOWEVER WAS NOT RESPONDED TO BY THE AO. THE ASSESSE ES CONTENDS THAT THE RETURN HAVING BEEN FILED WITHIN THE MAXIMUM TIME AVAILABLE NO IN TEREST U/S. 158BFA(1) IS LEVIABLE. THE SAME STOOD REJECTED IN APPEAL BY THE LD. CIT(A) ON THE GROUND THAT THERE IS NO PROVISION FOR EXTENSION OF TIME I.E. ONCE A PERIO D FALLING WITHIN THE RANGE BETWEEN MINIMUM (15 DAYS) AND MAXIMUM (45 DAYS) PERIOD STAN DS STIPULATED BY THE AO PER THE NOTICE. IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 14 8. WE HAVE HEARD THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE CLAIM OF EITHER PARTY IS NOT SUPPORTED BY ANY JUDICIAL PRECEDENTS. CONSEQUENTLY THE ASSESSEES LEGAL CLAIM HAS TO BE CONSIDERED IN LIGHT OF AND IN AGREE MENT AND CONFORMITY WITH THE JUDICIAL THINKING AND PRONOUNCEMENTS IN THE MATTER UNINFLUE NCED BY CONSIDERATIONS AS TO EQUITY. THE REVENUES CASE IS THAT THERE IS NO PROVISION FO R EXTENSION OF TIME ONCE THE SAME IS FIXED BY THE AO WHILE ISSUING THE NOTICE. WE DO NOT THINK SO. ONCE THE ACT PRESCRIBES THE MINIMUM AND THE MAXIMUM TIME PERIOD WITHIN WHICH TH E AO AT HIS DISCRETION COULD REQUIRE THE AO TO FILE THE RETURN OF INCOME FOR THE BLOCK PERIOD TO SAY THAT HE HAS NO POWER TO EXTEND THE TIME WITHIN THE TIME AVAILABLE UNDER LAW WOULD BE A CONTRADICTION. OF COURSE THE SAME CANNOT BE CLAIMED BY THE ASSESS EE AS A RIGHT IN WHICH CASE THE STIPULATION OF THE TWO TIME LIMITS WOULD BE OF NO M OMENT SO THAT WHERE DENIED IT WOULD NOT BE OPEN TO IT TO CONTEND THAT IT HAVING BEEN AL LOWED A TIME LESSER THAN THE MAXIMUM TIME THE SAME SHOULD SAVE INTEREST I.E. WHERE TH E DEFAULT STANDS COMMITTED. HOWEVER IN THE PRESENT CASE THE AO HAS NOT EXERCISED HIS JUDI CIAL DISCRETION AND WHICH CANNOT WORK TO THE ASSESSEES PREJUDICE. SO HOWEVER THE RELE VANT DATES I.E. THE DATE OF SERVICE OF THE NOTICE AND OF THE FURNISHING OF THE RETURN IN FORM 2B WE HOLD THAT IF THE SAME IS SUBJECT TO THE MAXIMUM TIME AVAILABLE U/S. 158BC(A) WITHIN THE TIME PERIOD APPLIED FOR BY THE ASSESSEE NO INTEREST U/S. 158BFA(1) IS LEVIABLE W HERE THE ASSEESSEES REQUEST IS MADE WITHIN THE TIME PERIOD PRESCRIBED PER THE NOTICE AS ISSUED. WE SAY SO AS IF THE APPLICATION IS MADE AFTER THE SAID PERIOD THE DEFAULT IN TERMS OF THE SAID SECTION STANDS ALREADY COMMITTED SO THAT THE ASSESSEES REQUEST IS OF NO CONSEQUENCE. WE DECIDE ACCORDINGLY. 9. THE ASSESSEE HAS RAISED AN ADDITIONAL GROU ND WHICH READS AS: ` THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WENT W RONG IN GIVING A DIRECTION TO DEDUCT HOUSEHOLD EXPENSES PAYMENT OF TAXES CONTRI BUTION TO LIP AND INVESTMENT IN THE FIRM ETC. FROM THE UNDISCLOSED INCOME. THIS DIRECT ION IS VERY MUCH CONTRARY TO SECTION 158BB WHICH PROVIDES THE METHOD BY WHICH UNDISCLOSE D INCOME IS TO BE COMPUTED. AS PER THIS SECTION RETURNED INCOME IS TO BE DEDUCTED FROM THE UNDISCLOSED INCOME . 9.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASS ESSEE RAISED A PLEA THAT ITS INCOME AS DISCLOSED PER HIS REGULAR RETURNS FOR THE ASSESSMEN T YEARS 1997-98 TO 2000-01 I.E. PRIOR IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 15 TO THE DATE OF SEARCH BE REDUCED FROM THE UNDISCLO SED INCOME AS THE ASSESSEE HAD SOURCE OF INVESTMENT TO THAT EXTENT. THE AO FOUND THAT THE INCOME DECLARED BEING SALARY INTEREST AND SHARE INCOME FROM THE PARTNERSHIP FIRM `MAHIMA JEWELLERY; RENT FROM THE BUILDINGS ETC. STAND ACCOUNTED FOR IN THE CURRENT ACCOUNT WITH THE FIRM. SINCE THE ASSESSEE CONTINUED TO MAINTAIN THE SAID ACCOUNT TH E FUNDS REMAINED WITH THE SAID FIRM AND THUS THE ASSESSEE DID NOT HAVE FUNDS AVAILABL E FOR INVESTMENT (I.E. TOWARD THE UNDISCLOSED ASSETS). HE ACCORDINGLY REJECTED THE ASSESSEES CLAIM. THE SAME WAS CONFIRMED BY THE LD. CIT(A) ON THE SAME BASIS. BEFO RE HIM HOWEVER THE ASSESSEE CLAIMED THAT WHAT IT WAS ASKING FOR IS THE CREDIT F OR THE FUNDS AVAILABLE OUT THE INCOME RETURNED FOR THE OTHER YEARS COMPRISING THE BLOCK P ERIOD. THE LD. CIT(A) AGREED TO THE PROPOSITION IN PRINCIPLE OBSERVING AS: ` 13. . AS THE CREDIT ACCOUNT BALANCES ARE NOT CONSI DERED AS PART OF UNDISCLOSED INCOME THE ASSESSING OFFICER DECLINED TO GIVE CREDIT FOR T HE INCOME RETURNED FOR THE ASSESSMENT YEARS 1997-98 TO 2000-01. THE ACTION OF THE ASSESSI NG OFFICER IS SUSTAINED. BEFORE ME THE APPELLANT IS CLAIMING SET OFF FOR THE INCOME RETURN ED FOR THE REMAINING ASSESSMENT YEARS IN THE BLOCK PERIOD. THE ASSESSING OFFICER HAS NOT CONSIDERED THE AVAILABILITY OF FUNDS OUT OF THE INCOME RETURNED FOR THESE YEARS. THE ASSESSI NG OFFICER IS DIRECTED TO ASCERTAIN THE SURPLUS AVAILABLE AFTER MEETING THE HOUSEHOLD EXPEN SES PAYMENT OF TAXES CONTRIBUTION TO LIP INVESTMENT IN FIRM ETC. AND IF ANY SURPLUS M ONEY IS AVAILABLE THAT WOULD BE GIVEN CREDIT TO. WITH THESE REMARKS THE GROUND IS ALLOWE D . 9.2 THE ASSESSEE AS IS EVIDENT FROM ITS G ROUND AGGRIEVED BY THE SAID DIRECTION I.E. TO DEDUCT HOUSEHOLD EXPENSES PAYMENT OF TAXES CON TRIBUTION TO LIP INVESTMENT IN FIRM ETC. FROM THE RETURNED INCOME IN COMPUTING THE FUN DS AVAILABLE WITH THE ASSESSEE. WE ARE UNABLE TO UNDERSTAND THE ASSESSEES GRIEVANCE. WHEN ITS CLAIM ITSELF IS THAT IT BE ALLOWED CREDIT IN RESPECT OF FUNDS AVAILABLE OUT OF ITS RET URNED INCOME WHAT QUARREL IT COULD POSSIBLY HAVE WITH THE IMPUGNED DIRECTION THAT BEI NG PRECISELY WHAT THE LD. CIT(A) HAS HELD REQUIRING THE AO TO WORK OUT THE FUNDS AVAILA BLE WITH THE ASSESSEE BY DEDUCTING THE STATED OUTGOINGS FROM THE RETURNED INCOME. ALL THAT HE HAS DONE BY SPECIFYING CERTAIN OUTGOINGS WHICH WE CONSIDER AS ONLY INDICATIVE AND NOT EXHAUSTIVE IS TO BE EXPLICIT WITH A VIEW TO CLARIFY HIS DECISION IN CLEAR TERMS. IN F ACT THE ASSESSEES CLAIM ITSELF SHOULD NOT HAVE BEEN ADMITTED BY THE REVENUE IN THE ABSENCE OF IT MAKING OUT A PRIMA FACIE CASE; IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 16 THE ONUS TO EXHIBIT AVAILABILITY OF FUNDS FOR WHIC H WE OBSERVE NO CASH FLOW STATEMENT BY IT BEING SQUARELY ON IT. THE REFERENCE TO THE COMP UTATION U/S. 158BB IS ALSO UNWARRANTED. THE SAME POSTULATES THE COMPUTATION OF THE TOTAL IN COME DISCLOSED AND UNDISCLOSED AND THEN CREDIT IN RESPECT OF THE DISCLOSED/RETURNED IN COME IN COMPUTING THE FINAL UNDISCLOSED INCOME. WHEN THE DISCLOSED INCOME ITSELF HAS NOT BE EN ADDED AND THE INCOME FOR THE BLOCK PERIOD COMPUTED ON THE BASIS OF UNDISCLOSED A SSETS/INVESTMENTS WHERE IS THE QUESTION OF ALLOWING DEDUCTION IN RESPECT OF RETURN ED INCOME. AS AFORE-SAID THE ASSESSEE IS RAISING PLEAS WITHOUT SHOWING THE PREJUDICE WH ILE ALL IT NEEDED TO DO WAS TO COMPUTE THE INCOME IN THE MANNER HE SUGGESTS EXHIBITING TH E PREJUDICE WHICH HAS NEITHER BE SHOWN NOR DO WE FIND ANY. THE MATTER HAS BEEN CORRE CTLY DECIDED BY THE LD. CIT(A) AND REQUIRES NO INTERFERENCE AT OUR END. WE DECIDE ACCO RDINGLY. 10. WE NEXT TAKE UP THE REVENUES APPEAL (IT( S&S) NO. 19/COCH/2004). THE SAME RAISES TWO GROUNDS. THE FIRST IS IN RESPECT OF RELI EF FOR ` 4.70 LACS ALLOWED BY THE LD. CIT(A) VIDE PARA 6 (PG.4) OF HIS ORDER. IT WAS SUBM ITTED BY THE ASSESSEE THAT WHILE COMPUTING HIS INCOME FOR AY 1998-99 THE AO HAD IN ALLOWING IT CREDIT IN RESPECT OF AMOUNT DISCLOSED UNDER VDIS97 BY MISTAKE ALLOWED IT CREDIT AT ` 16 02 500/- AS AGAINST THE CORRECT AMOUNT OF ` 20 72 500- THE AMOUNT DECLARED UNDER VDIS97 AND TOWARD WHICH THE CERTIFICATE UNDER VDIS97 WAS PRODUCED. I T STOOD ALLOWED RELIEF ON THAT BASIS FOR THE DIFFERENCE OF ` 4.70 LACS. THE REVENUES CASE IS THAT NO ERROR HAS BEEN COMMITTED BY THE AO WHO HAD EXCLUDED THE AMOUNT OF GOLD SURR ENDERED UNDER VDIS97 AS INCOME FOR AY 1987-88. 11. WE HAVE HEARD THE PARTIES AND PERUSED THE M ATERIAL ON RECORD INCLUDING THE VDIS CERTIFICATE (PB PG. 4). WE ARE AGAIN UNABLE TO APPR ECIATE THE ASSESSEES CLAIM. THE ASSESSE CLAIMS CREDIT IN RESPECT OF GOLD DECLARED UNDER VDI S97. THE SAME AS CLAIMED STANDS DISCLOSED AT 4 KGS. IN THE HANDS OF SELF AND WIFE A ND FURTHER INVESTED IN THE STOCK OF THEIR PARTNERSHIP FIRM MAHIMA JEWELLERY. REFERENCE IN T HIS CONTEXT IS DRAWN TO ANSWERS TO Q. # 14 15 35 36 OF THE STATEMENT DATED 25/10/2000 AND PARA # 9 OF THE LETTER DATED 5/7/2001 POINTING OUT THAT OF THE EXCESS 4869.740 KGS FOUND ON INSPECTION WITH THE SAID IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 17 FIRM CREDIT FOR 4 KGS. SO DECLARED BE ALLOWED. W E FIND THAT NO ADDITION QUA THIS 4869.740 KGS. OF GOLD ORNAMENTS FOUND IN SURVEY/SEA RCH HAS BEEN MADE IN THE HANDS OF THE ASSESSEE. THE AO HAS CLEARLY NOT MADE ANY MISTA KE; THE ASSESSEE BY HIS OWN ADMISSION HAVING INVESTED THE GOLD DECLARED UNDER V DIS97 IN THE FIRM AND WHICH WAS FOUND TO BE IN POSSESSION OF EXCESS STOCK IN EXCESS OF THE QUANTITY DECLARED. THE LD. CIT(A) IT APPEARS HAS NOT EXAMINED ALL THE RELEVA NT FACTS. HIS ORDER IS ACCORDINGLY SET ASIDE TO THAT EXTENT AND THE DELETION AS DIRECTED BY HIM FOR WHICH WE FIND NO CLAIM BY THE ASSESSEE BEFORE THE AO WHO HAS NARRATED THE FU LL FACTS IN HIS ORDER REVERSED. THE REVENUE SUCCEEDS. WE DECIDE ACCORDINGLY. 12. THE REVENUES SECOND GROUND IS IN RESPECT O F DELETION OF LEVY OF SURCHARGE U/S. 113 OF THE ACT WHICH HAS BEEN CHARGED AT 17% OF THE TA X ON UNDISCLOSED INCOME. THE BASIS OF THE RELIEF BY THE LD. CIT(A) IS THE ORDER BY THE JU RISDICTIONAL (COCHIN) BENCH OF TRIBUNAL IN THE CASE OF D. RAJKUMAR (IN IT(S&S) A NO.12/COCH./2 002 DATED 9/5/2003). THIS TRIBUNAL HAS SINCE BEEN CONSISTENTLY FOLLOWING THE DECISION BY THE APEX COURT INTER ALIA IN THE CASE OF CIT V. SURESH N. GUPTA 297 ITR 322 (SC) HOLDING THE PROVISO TO S. 113 W.E.F. 1/6/2002 AS RETROSPECTIVE IN NATURE SO THAT IT WOU LD APPLY TO ASSESSMENT MADE IN PURSUANCE TO SEARCH CONDUCTED PRIOR TO THAT DATE AS WELL. WE ACCORDINGLY VACATE THE DELETION OF THE SURCHARGE LEVIED BY THE LD. CIT(A). WE DECIDE ACCORDINGLY. 13. IN THE RESULT THE ASSESSEES APPEAL IS PA RTLY ALLOWED AND THE REVENUES APPEAL IS ALLOWED. N.M. SUHARA (IT(S&S)A NO. 88 & 107/COCH/2005) 14. WE NEXT TAKE UP THE CASE OF THE WIFE OF T HE PERSON SEARCHED N.M. SUHARA. TAKING UP THE ASSESSEES APPEAL FIRST WE FIND THAT THE PR INCIPAL ISSUE RAISED IN APPEAL RELATES TO THE NON-ACCEPTANCE OF EXPLANATION WITH REGARD TO ` 1.20 LACS AND ` 0.50 LACS CREDITED TO HER CURRENT ACCOUNT IN THE FIRM MAHIMA JEWELLERY IN W HICH SHE IS A PARTNER ALONG WITH HER HUSBAND FOR THE YEARS RELEVANT TO ASSESSMENT YEARS 1993-94 & 1994-95 (FALLING WITHIN THE BLOCK PERIOD) RESPECTIVELY. THE SOURCE OF THE F UNDS WAS STATED AND FOUND TO BE BY WAY IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 18 OF NRE GIFTS. THE CLAIM FOR CREDIT OR ACCEPTANCE OF THE EXPLANATION STOOD FOR THE CREDIT IN THE BOOKS OF ACCOUNT OF THE FIRM STOOD REJECTED IN VIEW OF THE ADMITTED POSITION OF THE SAME REPRESENTING THE UNDISCLOSED INCOME EARNED PRI MARILY FROM THE REAL ESTATE BUSINESS ROUTED IN BOOKS THUS. BEFORE THE LD. CIT(A) IT WA S CONTENDED THAT THE AMOUNT STOOD REALIZED ON SALE OF 800 GMS. OF GOLD ORNAMENTS OUT OF 1300 GMS. WITH HER I.E. 1000 GMS. BROUGHT BY HER IN MARRIAGE AND 300 GMS. RECEIVED FR OM NEAR AND DEARS BY HER THREE CHILDREN. HOWEVER AS NO EVIDENCE QUA THE STATED SALE WAS ADDUCED THE SAME STOOD REJECTED. AGGRIEVED THE ASSESSEE IS IN APPEAL. 15. THE PRINCIPAL CONTENTION BEFORE US WAS THAT THE STATEMENT OF HER HUSBAND CANNOT BIND THE ASSESSEE-WIFE A SEPARATE INDIVIDUAL WHO ADMITTEDLY WAS NOT EXAMINED DURING SEARCH EVEN AS SHE TOO WAS ENGAGED IN THE REAL EST ATE BUSINESS WITH HER HUSBAND IN WHOSE CASE CREDIT FOR OPENING CAPITAL HAS BEEN ALLO WED AT ` 6.0 LACS AS AGAINST NIL IN HER CASE. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDERS OF THE AUTHORITIES BELOW STATING OF THEM TO HAVE ACTED REASONABLY ON THE MATERIALS A ND EVIDENCES BEFORE THEM. 16. WE HAVE HEARD THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE ARE UNABLE TO APPRECIATE THE ASSESSEES CASE WHICH HAS WITNESSED VARYING STANDS. THE SHORT QUESTION IS WHETHER THE ASSESSEE HAS ANY EXPLANATION QUA THE CREDITS AGGREGATING TO ` 1.70 LACS IN HER ACCOUNT WITH THE PARTNERSHIP FIRM RECEIVED BY WAY OF NRE GIFTS DURING THE PREVIOUS YEARS RELEVANT TO AY 1993-94 & 1994-95 IN VIEW OF THE FACT THAT IT WAS FOUND ON THE BASIS OF THE MATERIAL FOUND IN SEARCH THAT THE SAID GIFTS ONLY REPRESENTED THE MODUS OPERANDI BEING ADOPTED FOR ROUTING OF THE UNACCOUNTED MONEY IN BOOKS OF ACCOUNT. THE ONLY ANSWER IS `NO. IF THE GIFT IS A GENUINE CREDI T I.E. INDEED REPRESENTS A GIFT IT IS ONLY FOR THE ASSESSEE TO PROVE SO WHILE HERE WE FIND TH AT EVEN THE NAME OF THE DONOR/S STANDS NOT FURNISHED. AGAIN IF IT IS A CASE OF SALE OF GO LD ORNAMENTS IT IS ONLY FOR THE ASSSESSEE TO SHOW SO. IN FACT CREDIT QUA GOLD JEWELLERY BROUGHT IN MARRIAGE (AT 480 GMS.) A ND THAT WITH CHILDREN STANDS ALREADY ALLOWED IN BRINGING T HE JEWELLERY FOUND FROM HER RESIDENCE TO TAX IN THE CASE OF HER HUSBAND. THERE IS NO QUE STION OF HER BEING BOUND BY HER HUSBANDS STATEMENT AND IS AT LIBERTY TO MAKE OUT A DIFFERENT CASE AS LONG AS SHE IS ABLE IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 19 TO SUBSTANTIATE IT I.E. ON FACTS; THE ONUS BEING ALL THE MORE IN CASE OF A CONTRADICTION BETWEEN THE TWO STATEMENTS THE HUSBANDS AND WHAT IS BEING CLAIMED BY HER AS ONLY ONE OF THEM COULD BE STATING THE TRUTH. IT IS OPEN FOR HER TO CONTEND THAT WHILE HER HUSBAND WAS UNDERTAKING UNACCOUNTED TRANSACTIONS SHE WAS N OT DULY SUPPORTING HER CASE. THE LAW DEEMS AN UNEXPLAINED CREDIT OR ASSET AS THE INC OME FOR THE YEAR IN WHICH THE SAME IS FOUND CREDITED IN BOOKS OF ACCOUNT OR FOUND BY THE REVENUE AS THE CASE MAY BE WHERE UNEXPLAINED AND THE ONUS IS HEAVY ON THE ASSESSEE TO SHOW THAT THOUGH IT STANDS CREDITED IN BOOKS OR SO FOUND IN A LATER YEAR THE SAME DOES NOT REPRESENT HER INCOME OR REPRESENTS HER INCOME OF AN EARLIER YEAR. THE ASSESSEES CASE AND/OR EXPLANATION/S ARE ONLY INGENIOUS ARGUMENTS SANS ANY MATERIALS RAISED ONLY TO OBFUSCATE THE ISSUE AT LARGE. THIS ALSO EXPLAINS THE VACILLATING STANDS TAKEN FURTHER REIN FORCING THE INFERENCE AFORE-STATED. 17. THE SECOND ISSUE IN APPEAL IS PER GD. # 4 I.E. OF THE UNDISCLOSED INCOME BEING COMPUTED WITHOUT DEDUCTION FOR THE RETURNED INCOME IN CONTRAVENTION OF THE MANDATE OF S. 158BB OF THE ACT. THE FACTS OF THE CASE AND THE PLEADINGS ARE IDENTICAL TO THAT RAISED IN THE CASE OF M.A. ASHRAF VIDE THE ADDITIONAL GROUND WHICH STANDS DISCUSSED AND ADJUDICATED VIDE PARA 9 OF THIS ORDER. OUR FINDINGS AND THE DECISION WILL ACCORDINGLY APPLY WITH EQUAL FORCE IN THE INSTANT CASE AS WELL. WE DECIDE ACCORDINGLY. 18. THE ASSESSEE HAS RAISED TWO ADDITIONAL GROU NDS WHICH READ AS UNDER: ` 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) WE NT WRONG IN CONFIRMING THE ADDITION OF ` 417375/- IN RESPECT OF PONEKKARA PROPERTY IN THE FA CTS AND CIRCUMSTANCES OF THE CASE ESPECIALLY ON THE FACE OF THE CATEGORICAL ADMISSION BY HER HUSBAND IN HIS SWORN STATEMENT IN REPLY TO QUERY NO. 2 THAT THIS PROPERTY HAD BEEN PURCHASED BY HIM AND THE OFFICE CUM GODOWN WAS BUILT BY HIM MEETING THE COST OF CONSTRU CTION. 2. SIMILARLY THE COMMISSIONER OF INCOME-TAX (APPEA LS) EQUALLY WENT WRONG IN AFFIRMING ADDITION ON THE BASIS OF SWORN STATEMENT TAKEN FROM HER HUSBAND AND THE ADMISSION CONTAINED THEREIN. HE OUGHT HAVE TO HAVE NOTED THAT NO STATEMENT WAS TAKEN FROM ME NOR WAS THERE ANY ADMISSION BY ME . 18.1 THE FACTS IN RELATION TO THIS GROUND ARE THA T THE ASSESSEES HUSBAND VIDE HIS SWORN STATEMENT U/S. 132(4) ADMITTED TO HAVE PURCHASED 5 CENTS OF LAND AT PANNAKKARA IN 1991. IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 20 A TWO STOREY BUILDING WAS BUILT THEREON AT A COST O F ` 3.75 LACS (Q. # 2). ON BEING QUESTIONED AS TO THE SOURCE OF FUNDS HE STATED THA T ` 1.0 LAC WAS RECEIVED BY WAY OF RENT AND THE BALANCE WAS FROM UNACCOUNTED INCOME. HE ALS O ADMITTED TO THE PURCHASE PRICE OF LAND BEING MET OUT OF UNDISCLOSED INCOME THOUGH TH E SAME WAS ONLY AS PER THE PRICE DOCUMENTED (Q. # 23 TO 25). ACCORDINGLY ` 3.18 LACS I.E. INCLUDING REGISTRATION COST AT ` 43 000/- WAS ADMITTED BY HIM AS HIS UNDISCLOSED INC OME OF ` 79.21 LACS (Q. # 43). HOWEVER NEITHER WAS THE SAME RETURNED BY HIM PER H IS RETURN OF UNDISCLOSED INCOME NOR STOOD ADDED BY THE AO IN FRAMING HIS ASSESSMENT. TH IS WAS FOR THE REASON THAT THE PURCHASE DEED; THE DAUGHTER IN WHOSE NAME THE LAND WAS PURCHASED BEING A MINOR WAS EXECUTED BY HER MOTHER THE ASSESSEE. THE SAME THE REFORE STANDS INCLUDED IN THE ASSESSEES ASSESSMENT AT ` 417375 I.E. WITHOUT ALLOWING ANY CREDIT FOR ` 1.0 LAC BY WAY OF RENT RECEIPT. THOUGH THE ASSESSEE AGITATED THE SAME BEFORE THE LD. CIT(A) THE GROUND WAS NOT PRESSED DURING HEARING AND STOOD ACCORDINGLY DISMISSED BY HIM AS NOT PRESSED. THE SAME STANDS NOW RAISED BEFORE US BY WAY OF AN ADDIT IONAL GROUND. WE FIND THE SAME AS NOT LIABLE TO BE ADMITTED AND FURTHER NOT MAINTAI NABLE. NO PLEA FOR ADMISSION OF THE ADDITIONAL GROUND WAS RAISED DURING HEARING. THEN AGAIN THE SAME HAVING NOT BEEN PRESSED BEFORE THE FIRST APPELLATE AUTHORITY THE S AME DOES NOT ARISE OUT OF HIS ORDER INASMUCH AS THERE IS NO CAUSE OF GRIEVANCE. THE RAI SING OF THE GROUND IS ALSO UNSUPPORTED BY ANY MATERIAL ON RECORD. THE FIRST ADDITIONAL GRO UND IS THEREFORE WITHOUT ANY MERIT AND IS ACCORDINGLY DISMISSED AS NOT MAINTAINABLE. 18.2 WITH REGARD TO THE SECOND ADDITIONAL GROUN D APART FROM THE FACT THAT NO PLEA FOR ITS ADMISSION STOOD RAISED THE SAME IS ONLY SUPPOR TIVE IN NATURE I.E. OF THE ASSESSEES CASE WARRANTING NO SPECIFIC ADJUDICATION. THE SAME IN FACT STANDS CONSIDERED AND DISCUSSED AT PARA 9 OF THIS ORDER WHILE DEALING WI TH THE ASSESSEES PRINCIPAL CONTENTION RAISED PER HER APPEAL. SUFFICE TO ADD THAT THE ASSE SSEE HAS BEEN ASSESSED IN RESPECT OF ALL THE JOINT INVESTMENTS WITH HER HUSBAND I.E. AT 50 % ON THE PREMISES AND THE STATED POSITION THAT SHE WAS IN THE REAL ESTATE BUSINESS A LONG WITH HER HUSBAND WHO HAS ACCORDINGLY BEEN ASSESSED FOR THE BALANCE 50%. THE CONTENTION RAISED IS NOTWITHSTANDING THE OTHER OBJECTIONS WITHOUT MERIT . WE DECIDE ACCORDINGLY. IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 21 REVENUES APPEAL (IT(S&S)A NO. 107/COCH/2005) 19. THE SECOND GROUND RAISED; THE FIRST BEING GEN ERAL IN NATURE WARRANTING NO ADJUDICATION CORRESPONDS WITH THE FIRST GROUND OF THE REVENUES APPEAL IN THE CASE OF THE HUSBAND (IT(S&S) A NO. 19/COCH/2004) WHICH STANDS DECIDED BY US IN FAVOUR OF THE REVENUE PER PARA NOS. 10 TO 11 OF THIS ORDER. THE F ACTS AND CIRCUMSTANCES ARE IDENTICAL AS ALSO THE CASE OF THE OPPOSING PARTIES AND ACCORDIN GLY WILL APPLY IN EQUAL MEASURE IN THIS CASE ALSO. WE DECIDE ACCORDINGLY. 20. THE THIRD GROUND CONTESTS THE DELETION OF TH E LEVY OF INTEREST U/S. 158BFA(1) WHICH FORMS THE SUBJECT MATTER OF ADJUDICATION BY US IN P URSUANCE TO THE LAST (SIXTH) GROUND OF THE ASSESSEES APPEAL IN CASE OF THE HUSBAND VIDE P ARA NOS. 7 & 8 OF THIS ORDER. THE PRINCIPLE WOULD APPLY EQUALLY IN THE INSTANT CASE A S WELL; THE REQUEST LETTERS HAVING BEEN FILED FOR BOTH THE CASES WITH THE REVENUE SIMULTANE OUSLY. WE DECIDE ACCORDINGLY SO THAT OUR DIRECTIONS AFORESAID WOULD HOLD. WE DECIDE ACCO RDINGLY. 21. THE LAST ISSUE RAISED VIDE GROUND NOS. 4 TH ROUGH 7 OF THE REVENUES APPEAL RELATES TO THE LEVY OF SURCHARGE ON THE TAX ON THE UNDISCLO SED INCOME ON THE BASIS OF THE PROVISO TO S. 113 BEING CURATIVE AND THUS RETROSPECTIVE WHICH STANDS DECIDED BY US IN FAVOUR OF THE REVENUE FOLLOWING THE DECISION BY THE APEX COU RT VIDE PARA # 12 OF THIS ORDER. WE DECIDE LIKEWISE. 22. IN THE RESULT THE ASSESSEES APPEAL IS PART LY ALLOWED AND THE REVENUES APPEAL IS ALLOWED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 15TH MARCH 2011 GJ COPY TO: IT(SS)A.NOS.19 & 10/COCH/2004 & 88 & 107 / 2005 22 1. SHRI M.A. ASHRAF MAHIMA JEWELLERY BROADWAY ER NAKULAM. 2. SMT. N.M.SUHARA MAHIMA JWELLERY BROADWAY ERNA KULAM. 3. THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRA L CIRCLE-1 ERNAKULAM. 4. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I KOCH I. 5. THE COMMISSIONER OF INCOME-TAX CENTRAL KOCHI 6. D.R. I.T.A.T. COCHIN BENCH COCHIN. 7. GUARD FILE. BY ORDER (ASSSITANT REGISTRAR)