Ita/1259/2009 Of The Commissioner Of Income Tax, Cochin v. T.m.kruvilla

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 3RD DECEMBER 2009 / 12TH AGRAHAYANA 1931 ITA.No. 1259 of 2009() ---------------------- ITA.1046/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- T.M.KURUVILLA, PADATH HOUSE, KADUNGAMANGALAM, ERNAKULAM. ADV. SRI.A.KUMAR FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 03/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N. RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. ---------------------------------------- ITA. No.1259 OF 2009 ---------------------------------------- Dated, the 3rd day of December, 2009 JUDGMENT Ramachandran Nair, J. Heard the Standing Counsel appearing for theappellant and Sri A.Kumar appearing for the respondent. 2. The question raised is whether the Tribunal wasjustified in confirming the order of the first appellateauthority in accepting the income returned by the assesseeand books of account produced in support thereof. Onfacts, it is seen that the assessee filed original returndeclaring income of Rs.2,40,638/-. Revised return was fileddeclaring total income of Rs. 4,01,013/-. The assessee'scase was that the revised return was required to be filedbecause of the omission to include income from houseproperty amounting to Rs.1,60,375/-. During the previousyear relevant for 2003-04, the assessee declared loss fromcontract receipts of over Rs.69 lakhs. Similarly the assesseehas hotel business where turnover declared was Rs.25 lakhs and result is a loss. The result of the assessee'sbusiness in restaurant led to a nominal profit of Rs.23,558/-,where turnover was over Rs.23 lakhs. The assessee claimeddepreciation on two imported cars which were not allowed bythe assessing officer. We find from the assessment order thatthe assessing officer has found that expenses on various itemswere covered by self prepared vouchers and some of theexpenditure were not covered even by vouchers. Sinceaccounts are found unacceptable for many reasons, theassessing officer estimated income under various heads ofbusiness. Even though in first appeal, the appellate authoritydirected acceptance of book figures, the department filedappeal before the Tribunal which was also dismissed. It isagainst the Tribunal's order this appeal is filed by theDepartment. 3. After hearing both sides and on going through theTribunal's order, we find that they have not even consideredassessment order where the assessing officer has statedseveral reasons for rejecting the books of accounts. When the first appellate authority reversed the finding of the assessingofficer, it was the duty of the Tribunal as fact finding authorityto examine as to which authority's finding is correct. We areobliged to interfere with the Tribunal's order because theTribunal has not exercised it's jurisdiction properly and fairly.We therefore set aside the order of the Tribunal and remitted thematter to the Tribunal to reexamine the appeal after givingopportunity to the parties. We make it clear that the Tribunalshould call for books of accounts and examine whetherinadequacies of the accounts and the reasons stated byassessing officer for rejection of it exist and then decide theappeal. C.N.RAMACHANDRAN NAIR JUDGE kvm/- V.K.MOHANAN JUDGE -:4:- V.K.MOHANAN, J.O.P.No. JUDGMENT