ACIT, Ernakulam v. M/s Southern Auto Fuels, Kothamangalam

ITSSA 48/COCH/2006 | misc
Pronouncement Date: 05-08-2010

Appeal Details

RSA Number 4821916 RSA 2006
Assessee PAN AATFS9041A
Bench Cochin
Appeal Number ITSSA 48/COCH/2006
Duration Of Justice 4 year(s) 2 month(s) 5 day(s)
Appellant ACIT, Ernakulam
Respondent M/s Southern Auto Fuels, Kothamangalam
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 05-08-2010
Appeal Filed By Department
Bench Allotted DB
Tribunal Order Date 05-08-2010
Date Of Final Hearing 04-08-2010
Next Hearing Date 04-08-2010
Assessment Year misc
Appeal Filed On 31-05-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI T.R. S00D AND SHRI N.VIJAYAKUMARAN I.T.(S&S)A.NO.48/COCH/2006 BLOCK PERIOD:01 - 04 - 1996 60 18 - 12 - 2002 THE ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-II ERNAKULAM. VS. M/S . SOUTHERN AUTO FUELS KOTHAMANGALAM. PA NO.AATFS 9041A (APPELLANT) ( RESPONDENT ) APPELLANT BY SHRI S.C.SONKAR CIT. DR RESPONDENT BY SHRI CBM WARRIER CA O R D E R PER N.VIJAYAKUMARAN J.M: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(APPEALS)-I KOCHI DATED 06-03 -2006. THE ASSESSMENT IS FOR THE BLOCK PERIOD FROM 01-04-1 996 TO 18-12-2002 U/S.158BC OF THEE I.T.ACT. 2. THE FACTS RELEVANT ARE THAT THE ASSESSEE M/S. S OUTHERN AUTO FUELS KOTHAMANGALAM IS A PARTNERSHIP FIRM CONSTITUTED BY A DEED OF PARTNERSHIP EXECUTED ON 01 -04- 2000 AMONG S/SHRI T.J. GEORGE JEEVAN PHILIP AND RE JI ZACHARIA. THIS IS A DOCUMENT SEIZED DURING THE CO URSE OF SEARCH AND MARKED AS KPU-A-62. THE ASSESSEE FIRM IS RUNNING A IBP PETROL PUMP AT KOTHAMANGALAM. THER E WAS A IT(S&S)A NO. 48/COCH/2006 M/S. SOUTHERN AUTO FUELS 2 SEARCH WARRANT IN THE NAME OF SHRI C.P.DAVID AND TH E SEARCH WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSES SEE U/S.132 OF THE I.T.ACT ON 18-12-2002 AND CERTAIN BO OKS AND DOCUMENTS WERE SEIZED AS PER ANNEXURE-A TO THE ASSE SSMENT ORDER. ASSESSEE FILED 2B RETURN ON 01-09-2003 IN RESPONSE TO NOTICE U/S.158BC DECLARING UNDISCLOSED INCOME AT NIL. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE UNDI SCLOSED PROFITS WHICH WERE UNEARTHED DURING THE SEARCH HAS TO BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND ACCORDINGLY HE REDUCED THE DECLARED INCOME AND BOOK S OF ACCOUNTS CLAIMED TO HAVE BEEN MAINTAINED BY THE ASS ESSEE WERE NOT FULL AND TRUE RECORD OF THE BUSINESS TRANS ACTIONS OF THE ASSESSEE. THUS THE ASSESSING OFFICER DETERMI NED THE UNDISCLOSED INCOME AT RS.11 46 645/- (RS.2 82 433/ - RS.5 34 212 AND RS.3 30 000/- RESPECTIVELY FOR A.YS .2001- 02 2002-03 AND 2003-04). 3. ON APPEAL TO THE LD. CIT(APPEALS) IT WAS THE PL EA OF THE ASSESSEE THAT THE ASSESSEES PREMISES WAS SUBJE CTED TO SURVEY ON 18-12-2002 AS EVIDENCED BY THE PANCHNAMA. THEREFORE THE ASSESSMENT U/S.158BC IS INCORRECT AN D ILLEGAL IN THE ABSENCE OF A SEARCH U/S.132. THE LD. CIT(A PPEALS) WHILE DECIDING THE ISSUE FOR THE RELEVANT ASSESSMEN T YEAR- IT(S&S)A NO. 48/COCH/2006 M/S. SOUTHERN AUTO FUELS 3 WISE I.E. 2001-02 2002-03 AND 2003-04 RENDERED TH E DECISION AFTER CONSIDERING THE SUBMISSIONS MADE BY THE REPRESENTATIVE OF THE ASSESSEE BESIDES THE ASSESSM ENT OF UNDISCLOSED INCOME OF THE FIRM CONSISTING OF S/SHR I T.J. GEORGE JEEVAN PHILIP AND REJI ZACHARIA ARE NOT LEG ALLY CORRECT SINCE THE SINCE THE SEARCH WAS CONDUCTED ON SHRI C.P.DAVID WHO WAS NOT A PARTNER OF THE FIRM DURING THE ASSESSMENT YEARS AND ALSO ON THE DATE OF SEARCH. THE LD. CIT(APPEALS) FURTHER OBSERVED THAT THE ASSESSMENT O F UNDISCLOSED INCOME FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03 ARE NOT RELATING TO ASSESSEES FIRM AS PER THE SEIZED DOCUMENT A-19 KPU-A-59 A-21 AND A-22. IN VIEW O F THIS THE ASSESSMENT OF UNDISCLOSED INCOME FOR THE ASSESS MENT YEARS 2001-02 AND 2002-203 WERE CANCELLED. 4. IN RESPECT OF THE ASSESSMENT OF UNDISCLOSED INCO ME FOR THE ASSESSMENT YEAR 2003-04 FOR THE BROKEN PERIOD THE LD. CIT(APPEALS) HELD THAT THE SEARCH IS NOT LEGALLY V ALID IN VIEW OF THE NET PROFIT FOR THE PERIOD IS RS.4 19 881/- A S PER NORMAL BOOKS. THEREFORE THE ASSESSMENT OF UNDISC LOSED INCOME FOR THIS PERIOD IS NOT CORRECT U/S.158BB(1)( D) OF THE ACT AND ACCORDINGLY THE ASSESSMENT OF UNDISCLOSED I NCOME OF RS.3 30 000/- WAS CANCELLED. IT(S&S)A NO. 48/COCH/2006 M/S. SOUTHERN AUTO FUELS 4 5. WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATER IALS AVAILABLE ON RECORD. THE DECISION OF THE LD. CIT (APPEALS) IN RESPECT OF THE ASSESSMENT YEAR 2003-04 IS COVERE D BY THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT VS. BINOY MATHAI 311 ITR 226 WHEREIN THE HONBLE KERALA HIGH COURT HELD THAT WHERE INCOME OF THE PREVIOUS Y EAR FOR WHICH TIME FOR FILING THE RETURN IS NOT OVER AS ON THE DATE OF SEARCH CAN BE EXCLUDED FROM THE BLOCK ASSESSMENT ON LY IF SUCH INCOME OR TRANSACTIONS PERTAINING TO SUCH INCO ME ARE RECORDED IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENT S MAINTAINED IN THE NORMAL COURSE OF BUSINESS ON OR B EFORE THE DATE OF SEARCH. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE JURISDICTIONAL HIGH COURT WE CONFIRM THE FI NDING OF THE LD. CIT(APPEALS) FOR THE ASSESSMENT YEAR 2003-04. 6. COMING TO THE OTHER ASSESSMENT YEARS I.E. FOR T HE ASSESSMENT YEAR 2001-02 AND 2002-03 WHICH IS COMPR ISED IN THE BLOCK PERIOD THE TRIBUNAL VIDE ITS ORDER DA TED 13 TH NOVEMBER 2009 IN IT(S&S)A N0.22/COCH/2006 IN THE CA SE OF ACIT VS. SHRI C.P. DAVID TRIBUNAL HELD THAT THE A SSESSMENT SHOULD HAVE BEEN MADE ON THE AOP AND NOT IN THE NAM E OF THE ASSESSEE PARTICULARLY WHEN THE ASSESSING OFFIC ER HIMSELF HAS HELD THAT THE PETROL PUMP BUSINESS WAS CARRIED ON BY IT(S&S)A NO. 48/COCH/2006 M/S. SOUTHERN AUTO FUELS 5 AOP. AT THIS JUNCTURE WE MAY REPRODUCE GROUND NO .2 OF THE REVENUE: 2. THE LD. CIT(APPEALS) ERRED IN DELETING THE UNDI SCLOSED INCOME OF RS.2 82 433/- FOR THE ASSESSMENT YEAR 200 1-02 RS.5 34 212/- FOR THE ASSESSMENT YEAR 2002-203 AND RS. 3 30 000/- FOR THE ASSESSMENT YEAR 2003-04. THE CIT(APPEALS) OUGHT TO HAVE CONSIDERED THE DETAILED WORKING IN THE ASSESSMENT ORDER WHICH EXPLAINS HOW THE BOOKS SEIZED SHOWS THE SIPHONING OUT OF THE UNDISCLOSED INCOME B Y THE ACTUAL OWNERS VIZ. SHRI C.P.DAVID AND SHRI N.C.THOM AS. THUS THE GROUND AS SUCH RAISED BY THE REVENUE WILL SUPPORT THE FINDINGS OF THE LD. CIT(APPEALS) WHEREIN IT WAS ALSO HELD THAT THE ACTUAL OWNERS ARE SHRI C.P. DAVID AND SHRI N.C. THOMAS. THESE TWO ARE AOPS IS NOT DISPUTED BEFORE US. THIS FINDING IS PLACED AT PAGE 3 OF THE ASSESSMENT ORDER THE PARTICULARS COLUMN SCHEDULE AND THE LAST COLUMN TOT AL INCOME OF SOUTHERN AUTO FUELS (ASSESSEE) WHEREIN THE ASSES SING OFFICER HAS MENTIONED (AOP) OF C.P.DAVID AND NC THO MAS. THAT BEING THE CASE THIS ASSESSMENT WILL NOT STAND TO TEST. AS THE GROUND OF APPEAL OF THE REVENUE ALSO CLEARLY MENTIONS THAT THE ACTUAL OWNERS ARE C.P.DAVID AND N.C.THOMAS WHO ARE AOPS WE AGREE WITH THE FINDING OF THE LD. CIT(APPEALS) WHICH IS IN ACCORDANCE WITH LAW A ND AS IT(S&S)A NO. 48/COCH/2006 M/S. SOUTHERN AUTO FUELS 6 SUCH NO INTERFERENCE IS CALLED FOR. THEREFORE THE DEPARTMENTAL APPEAL DESERVES TO BE DISMISSED AND ACCORDINGLY DISMISSED. 7. IN THE RESULT REVENUES APPEAL IS DISMISSED. SD/- SD/- (T.R. SOOD) (N.VIJAY KUMARAN) ACCOUNTANT MEMBER JUDICIAL M EMBER ERNAKULAM DATED THE 05 TH AUGUST 2010. PM. COPY FORWARDED TO: 1. THE ACIT. CENTRAL CIRCLE-II ERNAKULAM. 2. M/S. SOUTHERN AUTO FUELS THANKALAM KOTHAMANGALAM . 3. CIT(A)-I KOCHI. 4. CIT CENTRAL KOCHI. 5. D.R.