Ita/133/2001 Of The Commissioner Of Incometax v. M/S.quilon Agro Agencies, Kollam

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR MONDAY, THE 21ST JANUARY 2008 / 1ST MAGHA 1929 ITA.No. 133 of 2001() --------------------- ITA.87/1997 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT : ----------------- THE COMMISSIONER OF INCOME TAX, CHENNAI. BY ADV. SRI.P.K.R.MENON(SR.),SC FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS/RESPONDENT: ------------- M/S.QUILON AGRI AGENCIES, KOLLAM. BY ADV. SRI.K.G.ANIL BABU THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 21/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & T.R.RAMACHANDRAN NAIR, JJ. ------------------------- I.T.A. No. 133 of 2001 --------------------------------- Dated, this the 21[st] day of January, 2008 J U D G M E N T C.N.Ramachandran Nair Heard learned standing counsel appearing for the Income TaxDepartment and learned counsel appearing for respondentassessee. 2.Pursuant to search, block assessment was made for theperiod from 01/04/1986 to 06/11/1996. The assessee contestedonly addition made for the assessment year 1997-98. While oneitem of addition i.e. income from lorry is sustained, the Tribunaldeleted the addition pertaining estimation of profit from timberbusiness. Learned standing counsel referred to the assessmentorder and submitted that immediately during the preceding year, ie.1996-97, the Assessing Officer estimated profit at 15% of the netcost as against 12.05% returned by the assessee. He submittedthat the Assessing Officer has just followed same pattern ofestimation for the next year also. However, the Tribunal found thatno estimation could be made in a block assessment. We find forcein the order of the Tribunal because the date of search was on06/11/1996 i.e. during the middle of the previous year that neither ITA 133/2001 the previous year was not over nor the time for filing return for1997-98 was over when estimation of income was made. Eventhough higher rate of estimation of profit may be justified, theDepartment cannot estimate profit by taking into account thebusiness transactions up to middle of the financial year. It wasopen to them to test the genuineness of income while consideringthe regular assessment for the year 1997-98 i.e. beyond the periodof the block assessment. We, therefore, do not find any ground tointerfere with the order of the Tribunal. The appeal is, therefore,dismissed. (C.N.RAMACHANDRAN NAIR, JUDGE) (T.R.RAMACHANDRAN NAIR, JUDGE)