Shri M.Essaki Konar, Tiruchengode v. ACIT, Tuticorin

ITSSA 56/CHNY/2004 | misc
Pronouncement Date: 09-09-2010 | Result: Partly Allowed

Appeal Details

RSA Number 5621716 RSA 2004
Bench Chennai
Appeal Number ITSSA 56/CHNY/2004
Duration Of Justice 6 year(s) 4 month(s) 4 day(s)
Appellant Shri M.Essaki Konar, Tiruchengode
Respondent ACIT, Tuticorin
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 09-09-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 09-09-2010
Date Of Final Hearing 01-09-2010
Next Hearing Date 01-09-2010
Assessment Year misc
Appeal Filed On 05-05-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.(SS) A. NO. 56/MDS/2004 BLOCK PERIOD 01.04.1986 TO 04.10.1996 SHRI M. ESSAKKI KONAR 515 KARUNAKAIAMMAN KOIL STREET KULASEKARAPATTINAM TIRUCHENDUR TALUK. V. THE ASSISTANT COMMISSIONER OF INCOME-TAX TUTICORIN. (PAN/GIR NO. E-703/CIR.I/TN ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N. DEVANATHAN RESPONDENT BY : SHRI P.B. SEKAR AN O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ASSESSMENT ORDER DATED 30-03-2004 FOR THE BLOCK PERIOD 1-4-1986 TO 4-10-19 96 PASSED U/S 158BC READ WITH SECTION 143(3) READ WITH SECTION 250 OF THE IN COME-TAX ACT 1961. 2. SHRI N. DEVANATHAN ADVOCATE REPRESENTED ON BEHA LF OF THE ASSESSEE AND SHRI P.B. SEKARAN CIT-DR REPRESENTED ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL THE ASSESSEE HAS RAISE D THE FOLLOWING GROUNDS: 1) THE ORDER OF THE ASSESSING OFFICER IS AGAINST AND IS NOT IN CONFORMITY WITH THE DIRECTIONS OF ITAT. I.T(SS)A. NO.56/MDS/2004 2 2) THE ASSESSING OFFICER FAILED TO APPRECIATE T HAT WHERE THE INCOME DETERMINED IS BELOW THE TAXABLE LIMIT IT CA NNOT BE TAKEN AS UNDISCLOSED INCOME. (ASST. YR. 87/88 90/9 1 TO 92/93). 3) THE ASSESSING OFFICER ERRED IN NOT CARRIED F ORWARD THE ACCUMULATION OF CASH BALANCE REPRESENTING INCOME EA CH YEAR TO SUBSEQUENT YEAR. THIS IS AGAINST THE ORIGINAL A SSESSMENT ORDER (EXAMPLE PAGE 7 PARA 11). SO THE ASST. ORDE R REQUIRES RE LOOK. 4) THE ASSESSING OFFICER ERRED IN MAKING FOLLOW ING ADDITION ASST. YR. AMOUNT ( ) 1988/89 39 500 1989/90 23 000 1993/94 7 60 000 1994/95 11 248 1995/96 12 48 000 2 97 680 1996/97 53 400 5) THE ASSESSING OFFICER ERRED IN TAKING SALE CONS IDERATION AS 22 00 000/- IN ASST. YR. : 1995/96 AS PER SCHEDULE OF PAYMENT OF SALE DEED WHICH INCLUDES TAKE OVER THE L IABILITY 7 00 000 BORROWED FROM SBI. 6) THE ASSESSING OFFICER ERRED IN NOT CONSIDERING THE SOURCES OF CO-OWNERS FOR PURCHASE OF LODGE BUILDING IS CONT RARY TO EVIDENCE ON RECORDS. I.T(SS)A. NO.56/MDS/2004 3 7) THE NON CONSIDERATION OF RECEIPT FROM COCONUT F ARMERS IS INCORRECT. 4. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRE SENTATIVE THAT THERE WAS A SEARCH IN THE PREMISES OF THE ASSESSEE ON 04-10-1 996 AND CONSEQUENT TO THE SEARCH BLOCK ASSESSMENT HAD BEEN COMPLETED U/S. 15 8BC ON 29.10.1997 WHEREIN THE UNDISCLOSED INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT 56 44 722/-. THIS ORDER WAS SUBJECTED TO RECTIFICA TION U/S. 154 ON 30-07-1998 WHEREBY THE UNDISCLOSED INCOME OF THE ASSESSEE WAS ASSESSED AT 56 71 722/-. AS A CONSEQUENCE OF THE APPEAL FILED BY THE ASSESSE E BEFORE THE TRIBUNAL THE TRIBUNAL IN ITS ORDER IN IT(SS) A NO. 363/MDS/97 DA TED 23-10-2002 HAD DELETED VARIOUS ADDITIONS AND HAD ALSO SET ASIDE THE ISSUE IN REGARD TO THE INVESTMENT MADE BY THE ASSESSEE AND HIS FAMILY MEMBERS IN A LO DGE BY THE NAME OF M/S. GOWRI SHANKAR BOARDING & LODGING . IT WAS SUBMITT ED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT AS A CONSEQUENCE OF THE ORDER OF THE TRIBUNAL SETTING ASIDE VARIOUS ISSUES TO THE FILE OF THE ASS ESSING OFFICER FOR RECONSIDERATION THE ASSESSMENT WAS COMPLETED WHERE THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT . 43 32 488/-. 5. IT WAS THE SUBMISSION THAT IN REGARD TO THE GR OUND NO.2 THE ASSESSING OFFICER TREATED THE INCOME FOR THE ASSESSMENT YEARS 1987-88 1990-91 1991-92 I.T(SS)A. NO.56/MDS/2004 4 AND 1992-93 WHICH WAS BELOW THE TAXABLE LIMIT AS TH E UNDISCLOSED INCOME OF THE ASSESSEE. IT WAS THE SUBMISSION THAT WHERE THE INC OME OF THE RELEVANT ASSESSMENT YEAR WAS BELOW THE TAXABLE LIMIT THE AS SESSEE HAD NO OBLIGATION TO FILE HIS RETURN OF INCOME AND CONSEQUENTLY THE SAME COULD NOT BE TREATED AS THE UNDISCLOSED INCOME OF THE ASSESSEE JUST BECAUSE A S EARCH HAD BEEN CONDUCTED IN A SUBSEQUENT ASSESSMENT YEAR. THE LEARNED AUTHORIS ED REPRESENTATIVE RELIED UPON THE DECISION OF THE HON'BLE MADHYA PRADESH HIG H COURT IN THE CASE OF CIT V. SMT. MAYA CHOTRANI REPORTED IN 288 ITR 175 WHERE IN IT HAS BEEN HELD THAT IF THE INCOME OF PARTICULAR YEAR WAS BELOW THE TAXABLE LIMIT AFTER CALCULATING DEDUCTION UNDER SECTION 80L THE SAME WAS NOT INCLU DIBLE FOR THE PURPOSE OF BLOCK ASSESSMENT. HE ALSO RELIED UPON THE DECISIO N OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT V. DR. SANGE ETHA VERMA REPORTED IN 294 ITR 334 WHEREIN IT HAS BEEN HELD THAT WHERE INCOME WAS BELOW THE TAXABLE LIMIT SUCH INCOME IS NOT TAXABLE IRRESPECTIVE OF W HETHER THE SAME WAS DISCLOSED AFTER OR BEFORE THE SEARCH AND SEIZURE. IT WAS THE SUBMISSION THAT FOR THE ASSESSMENT YEAR 1987-88 THE INCOME HAS BEEN CONSIDE RED AT 16 500/- WHICH WAS BELOW THE TAXABLE LIMIT. SIMILAR IS THE CASE F OR THE ASSESSMENT YEAR 1990-91 AT . 18 000/- FOR ASSESSMENT YEAR 1991-92 AT R 21 000 /- AND FOR ASSESSMENT YEAR 1992-93 AT 21 500/-. IT WAS THE SUBMISSION THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER WAS LIABLE TO BE DELETED. I.T(SS)A. NO.56/MDS/2004 5 6. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PROVISIONS OF SECTION 158BB(1) SHOWS THAT WHERE THE DUE DATE FOR FILING THE RETURN HAS EXPIRED AND NO RETURN HAS BEEN FILED THE AMOUNT THAT IS TO BE REDUCED FROM THE AGGREGATE OF THE TOTAL INCOME OF THE PREVIOUS YEARS FALLING WITHIN THE BLOCK PERIOD COMPUTED IS AS PER CLAUSE (C) (B). AS PER THE SAID PROVISION THE WORDS ARE VERY CLEAR AND SAY THAT WHERE SUCH INCOME DOES NOT EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX FOR ANY PREVIOUS YEAR FALLING IN THE BLOCK PERIOD. THIS CLEARLY SHOWS THAT THE INTENTION OF THE SAID P ROVISION IS TO EXCLUDE THE INCOME OF THE PREVIOUS YEAR WHERE SUCH INCOME DOES NOT EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX DURING SUCH PREVIOUS Y EAR FALLING IN THE BLOCK PERIOD. THIS VIEW OF OURS ALSO FINDS SUPPORT FROM THE DECISIONS OF THE HON'BLE MADHYA PRADESH HIGH COURT REFERRED TO SUPRA. IN THE CIRCUMSTANCES RESPECTFULLY FOLLOWING THE DECISIONS OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASES OF CIT V. SMT. MAYA CHOTRANI AND DR. SAN GEETA VERMA REFERRED TO SUPRA THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITION MADE TOWARDS THE UNDISCLOSED INCOME BEING THE INCOME OF THOSE ASSESS MENT YEARS WHERE INCOME DOES NOT EXCEED THE MAXIMUM AMOUNT NOT CHARGEABLE T O TAX. IN THE CIRCUMSTANCES THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIONS REPRESENTING THE INCOME FOR THE ASSESSMENT YEAR 198 7-88 TO THE EXTENT OF . 16 500/- FOR THE ASSESSMENT YEAR 1990-91 TO THE EX TENT OF . 18 000/- FOR THE I.T(SS)A. NO.56/MDS/2004 6 ASSESSMENT YEAR 1991-92 TO THE EXTENT OF . 21 000/- AND FOR THE ASSESSMENT YEAR 1992-93 TO THE EXTENT OF . 21 500/-. ACCORDINGLY GROUND NO. 2 IN THE ASSESSEES APPEAL STANDS ALLOWED. 8. IN REGARD TO GROUND NO.4 IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT THE ASSESSING OFFICER HAD TREAT ED THE DEFICIT IN THE HANDS OF THE ASSESSEES WIFE AND SONS IN RESPECT OF THEIR IN VESTMENT IN PROPERTIES AS THE UNDISCLOSED INCOME OF THE ASSESSEE. IT WAS THE SUB MISSION THAT THE TRIBUNAL HAD IN ITS ORDER IN IT(SS)A NO. 363/MDS/97 REFERRED TO SUPRA DELETED SUCH ADDITIONS MADE IN PAGE 9 PARA 14 OF ITS ORDER WHEREIN IT HA S BEEN HELD AS FOLLOWS: 14. ONE OTHER ISSUE IS WITH REGARD TO THE AMOUNT O F INVESTMENTS WITH REGARD TO LAND AND OTHER PROPERTIE S. THIS WAS MOSTLY WITH REFERENCE TO THE PROPERTIES INVESTE D IN THE NAMES OF HIS WIFE AND SONS. THE ADDITION THAT IS C ONSIDERED IN THE HANDS OF THE ASSESSEE IS WITH REFERENCE TO T HE VALUE ADOPTED BY THE STAMP DUTY AUTHORITIES FOR LEVY OF S TAMP DUTY. THE CLAIM OF THE ASSESSEE WAS THE ADDITION MADE OVER AND ABOVE WHAT WAS DEPICTED IN THE DOCUMENT WA S NOT BASED ON ANY EVIDENCE. THIS HAS BEEN CONSIDERED BY THE ASSESSING OFFICER FOR ASSESSMENT YEARS 1993-94 TO 1 995-96. IN OUR OPINION THE CLAIM OF THE ASSESSEE IS JUSTIFI ED. THE ADDITION DESERVES TO BE DELETED WHICH WE DO. THE A SSESSING OFFICER IN ORDER TO SUSTAIN THE ADDITION MUST HAVE SHOWN THAT HE HAD MADE ENQUIRY FROM THE VENDORS AND THE VENDOR HAD AGREED THAT HE HAD RECEIVED THE DIFFERENCE BETWEEN THE I.T(SS)A. NO.56/MDS/2004 7 AMOUNT SHOWN IN THE DOCUMENT AND THE AMOUNT VALUED BY THE STAMP DUTY AUTHORITIES IN CASH. IN THE ABSENCE OF SUCH EVIDENCE THE ADDITION DESERVES TO BE DELETED WHICH WE DO. IT WAS THE SUBMISSION THAT THIS ORDER OF THE TRIBUN AL HAS BECOME FINAL AND THE ADDITION AGAIN MADE ON THE SAME BASIS WAS LIABLE TO BE DELETED. 9. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A P ERUSAL OF THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE S OWN CASE IN IT(SS)A NO 363/MDS/97 DATED 23-10-2002 REFERRED TO SUPRA OF WHICH PARA 14 HAS BEEN EXTRACTED ABOVE CLEARLY SHOWS THAT THE ADDITIONS R EPRESENTING THE INVESTMENT WITH REGARD TO THE LAND AND OTHER PROPERTIES IN THE NAMES OF THE ASSESSEES WIFE AND SONS HAVE BEEN DELETED BY THE TRIBUNAL. A PERU SAL OF THE ASSESSMENT ORDER WHICH IS THE SUBJECT MATTER OF APPEAL BEFORE US CLE ARLY SHOWS THAT THE ADDITION OF 39 500/- FOR THE ASSESSMENT YEAR 1998-89 REPRESENTS THE DEFICIT IN THE CASH FLOW STATEMENT IN RESPECT OF THE INVESTMENTS IN THE LANDS IN THE NAMES OF THE ASSESSEES SONS. SIMILARLY RS. 23 000/- FOR THE AS SESSMENT YEAR 1989-90 REPRESENTS THE INVESTMENT IN LAND AS ALSO . 7 60 000/- FOR THE ASSESSMENT YEAR 1993-94 REPRESENTS THE INVESTMENT MADE BY THE ASSES SEES WIFE IN THE PURCHASE OF LODGE BUILDING. AS THESE ADDITIONS REPRESENT TH E INVESTMENTS IN THE LAND AND I.T(SS)A. NO.56/MDS/2004 8 PROPERTIES WHICH STAND IN THE NAMES OF THE ASSESSEE S WIFE AND SONS AND THE SAME HAVE BEEN DELETED BY THIS TRIBUNAL VIDE ITS OR DER REFERRED TO SUPRA IN IT(SS) A NO. 363/MDS/97 AND AS THE SAID ORDER HAS B ECOME FINAL RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL THE ABOVE MENTIONED ADDITIONS STAND DELETED. 11. IN RESPECT OF THE ADDITION OF 11 248/- FOR THE ASSESSMENT YEAR 1994-95 12 48 000/- AND 2 97 680/- FOR THE ASSESSMENT YEAR 1995-96 AND 53 400/- FOR THE ASSESSMENT YEAR 1996-97 IT WAS SUBMITTED THAT THE SAME WAS CONNECTED WITH GROUNDS NO. 5 & 6 OF THE ASSESSEES APPEAL BEI NG AGAINST THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF 22 LAKHS AND AN AMOUNT OF 7 LAKHS TOWARDS THE PURCHASE OF THE LODGE BUILDING. IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE AMOUNT OF 22 LAKHS REPRESENTS THE SALE CONSIDERATION OF THE LODGE WHICH INCLUDED AN AMOUNT OF 7 LAKHS REPRESENTING THE LIABILITY BEING THE LOAN BORROWED FROM SBI. THE ASSESSEE HAS ALSO PLACED BE FORE US THE COPY OF THE SALE DEED WHICH CLEARLY SHOWS THAT THE SALE IS FOR 22 LAKHS. PAGE 6 OF THE SALE DEED REPRESENTING THE PAYMENT DETAILS ALSO SHOWS THAT TH E SALE CONSIDERATION IS ONLY 22 LAKHS AND THE SUM OF 7 LAKHS REPRESENTS THE OUTSTANDING MORTGAGE LOAN F ROM BHARATH STATE BANK TIRUCHENDUR. CONSEQUENTLY WE ARE OF THE VIEW THAT ONLY I.T(SS)A. NO.56/MDS/2004 9 22 LAKHS REPRESENTING THE SALE CONSIDERATION FOR TH E PURCHASE OF THE LODGE NEEDS TO BE EXPLAINED BY THE ASSESSEE. 12. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPR ESENTATIVE THAT FOR THE PURCHASE OF THE LODGE THE ASSESSEE HAD TAKEN JEWEL LOAN OF 3 45 000/- THE DOCUMENTS OF WHICH WAS ALSO FOUND IN THE COURSE OF SEARCH IN ES/AND/S SHEET NO.14 TO 28 AND SHEET NO. 35. IT WAS FURTHER SUBMI TTED THAT THE SAME DOCUMENTS HAD ALSO BEEN QUESTIONED IN QUESTION NO.1 3 OF THE STATEMENT RECORDED FOR WHICH THE ASSESSEE HAD EXPLAINED THAT THE JEWEL LOAN WAS TAKEN FOR THE PURPOSE OF PAYMENT TOWARDS THE PURCHASE OF THE LODGE. IT WAS THE FURTHER SUBMISSION THAT 5 LAKHS WAS THE ADVANCE RECEIVED BY THE ASSESSEES WIFE SMT. MUTHULAKSHMI AND THIS WAS ALSO MENTIONED IN THE SEI ZED DOCUMENT NO.11. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD DISCLOSED ADVANCE FROM COCONUT GROWERS TO AN EXTENT OF . 4 LAKHS WHICH HAD NOT BEEN ACCEPTED BY THE TRIBUN AL. IT WAS THE SUBMISSION THAT CONSEQUENTLY THIS AMOUNT OF 4 LAKHS HAVING BEEN ASSESSED AS THE INCOME OF THE ASSESSEE WAS LIABLE T O BE TREATED AS BEING THE SOURCE AVAILABLE FOR THE PURCHASE OF THE LODGE. IT WAS THE SUBMISSION THAT THE WIFE AND SONS OF THE ASSESSEE HAD ALSO INVESTED IN THE PURCHASE OF THE LODGE AND IT WAS ALSO REPRESENTED IN THEIR RESPECTIVE CASH FL OW STATEMENT WHICH WAS ALSO RECAST BY THE ASSESSING OFFICER AND WHICH WAS PART OF THE ASSESSMENT ORDER AS I.T(SS)A. NO.56/MDS/2004 10 PER WHICH THE ASSESSEES SON ESAKKI MUTHU HAD INVES TED 1 50 000/- DURING THE ASSESSMENT YEAR 1994-95 SHRI E. CHINNA DURAI HAD I NVESTED 1 85 000/- SHRI E. RAVI SUNDARAM HAD INVESTED 1 50 000/- AND SMT. MUTHULAKSHMI HAD INVESTED 1 50 000/- DURING THE ASSESSMENT YEAR 1994-95. IT WAS THUS THE SUBMISSION THAT THE TOTAL OF ALL THESE CAME TO 18.6 LAKHS. IT WAS THE FURTHER SUBMISSION THAT TH E ASSESSING OFFICER HIMSELF HAS ACCEPTED THAT THE ASS ESSEE HAS A LIABILITY OF 3.48 LAKHS BEING LOAN REPAYMENT MADE BY THE ASSESSEE TO SBI AS PER PAGE 8 OF THE ASSESSMENT ORDER. THUS THE TOTAL CAME TO 22.08 LAKHS WHICH REPRESENTED THE INVESTMENT IN THE LODGE ALONG WITH THE INTEREST ON THE LOAN OF 7 LAKHS. IT WAS THUS SUBMITTED THAT NO ADDITION WAS CALLED FOR IN T HE HANDS OF THE ASSESSEE. 13. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED T HE ORDER OF THE ASSESSING OFFICER. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE SUBMISSIONS MADE BY THE LEARNED AUTHORISED REPRESENTATIVE CLEAR LY SHOWS THAT THE AMOUNT OF 3 45 000/- REPRESENTING THE JEWEL LOAN AS ALSO THE AMOUNT OF 5 LAKHS REPRESENTING THE ADVANCE GIVEN BY SMT. MUTHULAKSHMI ARE ON THE BASIS OF SEIZED MATERIAL WHICH OBVIOUSLY CANNOT BE DISBELIEVED. TH E INVESTMENTS MADE BY THE ASSESSEES WIFE AND CHILDREN ARE ALSO ON THE BASIS OF THE RECAST CASH FLOW I.T(SS)A. NO.56/MDS/2004 11 PREPARED BY THE ASSESSING OFFICER AND ANNEXED TO TH E ASSESSMENT ORDER WHICH ALSO SHOWS THE SOURCE FOR THE INVESTMENT. THE AMOU NT OF 3 45 000/- HAS ALSO BEEN ACCEPTED BY THE ASSESSING OFFICER AS REPAYMENT OF THE LOAN TO SBI AND THE EXPLANATION OF WHICH HAS BEEN ACCEPTED BY THE ASSES SING OFFICER IN PARA 5 OF HIS ORDER. THE AMOUNT OF 4 LAKHS REPRESENTING THE ADDITION OF THE ADVANCE F ROM COCONUT GROWERS HAS BEEN DISBELIEVED AND CONSEQUENT LY THE AMOUNT OF 4 LAKHS WOULD BE AVAILABLE WITH THE ASSESSEE TO CLAIM AS SO URCE FOR THE INVESTMENT. THE TOTAL OF THESE COMES TO 22.08 LAKHS WHICH VERY WELL COVER THE INVESTMENT O F 22 LAKHS IN THE PURCHASE OF LODGE. CONSEQUENTLY WE AR E OF THE VIEW THAT NO ADDITION ON ACCOUNT OF INVESTMENT IN THE PURCHASE OF LODGE I S LIABLE TO BE MADE IN THE HANDS OF THE ASSESSEE. SIMILARLY THE ADDITION MA DE BY THE ASSESSING OFFICER OF .2 97 680/- TOWARDS THE STAMP DUTY CANNOT BE MADE I N THE HANDS OF THE ASSESSEE AS THE SAME HAS BEEN BORNE BY SRI GOPAL AN D ADMITTED BY HIM. . 12 48 000/- CANNOT BE CONSIDERED AS IN THE HANDS OF THE ASSESSEE AS IT IS A LIABILITY BORNE AND DEALT WITH BY SRI GOPAL AS ADMI TTED BY GOPAL HIMSELF. CONSEQUENTLY GROUNDS 4 5 & 6 IN THE ASSESSEES AP PEAL STAND ALLOWED. 15. IN RESPECT OF GROUND NO.7 IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ASSESSEE HAD DISCLOSED 1 62 000/- AS AGRICULTURAL INCOME FOR THE ASSESSME NT I.T(SS)A. NO.56/MDS/2004 12 YEAR 1996-97. IT WAS ALSO AGREED THAT THE ASSESSIN G OFFICER HAD ALSO ACCEPTED THE AMOUNT OF 1 62 000/- DISCLOSED AS AGRICULTURAL INCOME BY THE ASSESSEE IN PAGE 9 OF THE ASSESSMENT ORDER. IT WAS THE SUBMISS ION THAT FOR THE ASSESSMENT YEAR 1997-98 THE ASSESSING OFFICER HAD NOT GRANTED THE ASSESSEE AGRICULTURAL INCOME. IT WAS THE SUBMISSION THAT . 80 000/- MAY BE ACCEPTED AS THE AGRICULTURAL INCOME OF THE ASSESSEE FOR THE BROKEN PERIOD OF THE ASSESSMENT YEAR 1997-98 I.E. UPTO 4-10-1996 BEING THE YEAR OF SEAR CH. 16. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED T HE ORDER OF THE ASSESSING OFFICER. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. UNDIS PUTEDLY THE ASSESSING OFFICER HAS ACCEPTED THE AGRICULTURAL INCOME TO THE EXTENT OF 1 62 000/-. IT WAS ALSO ACCEPTED THAT THE SOURCE OF AGRICULTURAL INCOM E IS BASICALLY COCONUT. THUS IT CANNOT BE SAID THAT THE AGRICULTURAL INCOME WOULD V ARY SUBSTANTIALLY AS A COCONUT TREE WOULD CONTINUE TO YIELD COCONUTS AT LEAST TO T HE SAME NUMBERS DURING THE SUBSEQUENT YEARS. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT 50% OF THE AGRICULTURAL INCOME DISCLOSED FOR THE IMMEDIATELY P RECEDING ASSESSMENT YEAR CAN BE CONSIDERED AS THE AGRICULTURAL INCOME FOR THE BR OKEN PERIOD. AS THE BROKEN PERIOD IS UPTO 4-10-1996 THE ASSESSING OFFICER IS DIRECTED TO GIVE THE ASSESSEE I.T(SS)A. NO.56/MDS/2004 13 THE BENEFIT OF AGRICULTURAL INCOME TO THE EXTENT OF 80 000/-. ACCORDINGLY GROUND NO.7 IN THE ASSESSEES APPEAL STANDS ALLOWED . 18. IN RESPECT OF GROUND NO.3 IT WAS SUBMITTED BY T HE LEARNED AUTHORISED REPRESENTATIVE THAT IN THE ORIGINAL ASSESSMENT ORDE R THE ASSESSING OFFICER HAD GRANTED THE ASSESSEE THE BENEFIT OF THE CASH BALANC ES FOR EACH OF THE ASSESSMENT YEARS TO THE SUBSEQUENT ASSESSMENT YEAR. IT WAS THE SUBMISSION THAT WHILE COMPLETING THE SET ASIDE ASSESSMENT ORDE R THE ASSESSING OFFICER HAD NOT DONE SO FOR ALL THE YEARS. IT WAS THE SUBMISSI ON BY THE LEARNED AUTHORISED REPRESENTATIVE THAT HE HAD NO OBJECTION IF THIS ISS UE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR VERIFICATION AND RE-COMPUTATI ON. 19. IN REPLY THE LEARNED DR SUBMITTED THAT EVEN IN THE SET ASIDE ASSESSMENT THE ASSESSING OFFICER HAS GIVEN THE BENEFIT OF CARR Y FORWARD OF THE ACCUMULATION OF THE CASH BALANCES FOR EACH OF THE YEARS. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING OFFICER HAS TAKEN INTO CONSIDERATION THE INCOME OF EACH YEAR AND THE AGGREGATE OF WHICH HAS BEEN USED FOR SETTING OFF AGAINST THE INVESTMENT IN THE SUBSEQUENT YEARS ALSO . WHEN THIS IS DONE OBVIOUSLY THE EXCESS OF THE CASH BALANCES AVAILABLE FOR EACH OF THE YEARS WOULD GET AUTOMATICALLY AVAILABLE FOR THE SUBSEQUENT ASSE SSMENT YEARS. FURTHER THE LEARNED AUTHORISED REPRESENTATIVE HAS NOT BEEN ABLE TO SPECIFICALLY POINT OUT WHERE THE ASSESSING OFFICER HAS NOT GIVEN THE BENEF IT OF CARRY FORWARD OF THE I.T(SS)A. NO.56/MDS/2004 14 ACCUMULATION OF THE CASH BALANCES REPRESENTING THE INCOME OF EACH YEAR TO THE SUBSEQUENT YEAR. IN THE CIRCUMSTANCES WE FIND NO ERROR THAT REQUIRES ANY INTERFERENCE ON THIS COUNT. IN THE CIRCUMSTANCES GROUND NO.3 IN THE ASSESSEES APPEAL STANDS DISMISSED. 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. 22. THE ORDER WAS PRONOUNCED IN THE COURT ON 9/9/20 10. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 9 TH SEPTEMBER 2010. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE