Ita/1128/2009 Of M/S.mannarkkad Wines, Hotel Highway v. The Commissioner Of Income Tax, Trichur

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 17TH DECEMBER 2009 / 26TH AGRAHAYANA 1931 THE HONOURABLE MR. JUSTICE V.K.MOHANAN ITA.No. 1128 of 2009() ---------------------- ITA.473/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: -------------------- M/S MANNARGHAT WINES, BY ADV. SRI.T.M.SREEDHARAN HOTEL HIGHWAY, MANNARGHAT, PALAKKAD DISTRICT. SRI.V.P.NARAYANAN SMT.C.K.SHERIN RESPONDENT(S): --------------- TAX, TRICHUR. THE COMMISSIONER OF INCOME ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 17/12/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -------------------------------------------- -------------------------------------------- Dated this the 17th day of December, 2009 JUDGMENT Ramachandran Nair, J. Heard Sri. T.M. Sreedharan, counsel appearing for the appellant,and standing counsel appearing for the department. The questionraised is whether the Tribunal was justified in sustaining addition ofRs. 15 lakhs as against Rs. 6 lakhs sustained by the first appellateauthority. The case of the assessee is that when in the course ofassessment, the assessing officer noticed gross profit returned at belowthe rate returned for the previous year, the assessee agreed for a totaladdition of Rs. 15 lakhs which includes Rs. 9 lakhs shown in theProfit and Loss Account under miscellaneous income. Thereforeassessee's contention is that addition should have been limited to onlyRs. 6 lakhs. However, standing counsel for the department brought toour notice the proposal in the assessment order which is as follows: Sri. S. Ramachandran, Chartered Accountant, has agreed tothe proposal of lumpsum addition, but requested that nopenalty proceedings under section 271(1)(c) or 271B are initiated in the circumstances of the case. These requestsare accepted and the assessment is completed making alumpsum addition of rs. 15,00,000/- to the incomedisclosed, as proposed above. From the above, it is clear that addition of Rs. 15 lakhs is not includingmiscellaneous income credited by the assessee in the Profit and LossAccount which is Rs. 9 lakhs. On the other hand, condition was that nopenalty should be levied either under Section 271(1)(c) or underSection 271B of the I.T. Act for the agreed addition. In fact theassessee has no case that the assessing officer has in violation of thecommitment levied any penalty. In our view, the Tribunal rightly heldthat the assessment is an agreed assessment and the amount of additionagreed was Rs. 15 lakhs and not Rs. 6 lakhs as claimed by the assessee.We do not find any merit in the appeal and the same is dismissed. Counsel appearing for the appellant brought to our notice thehuge amount of interest levied under Sections 234B and 234C of theAct which is essentially attributable to additions. In our view, it is forthe assessee to seek for remedy against interest by filing waiverapplication before the Chief Commissioner stating the circumstances which led to the default for him to consider waiver under the normsprescribed by CBDT. (C.N.RAMACHANDRAN NAIR)Judge. (V.K. MOHANAN) Judge. kk