Ita 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 FRIDAY, THE 18TH DECEMBER 2009 / 27TH AGRAHAYANA 1931 ITA.No. 1552 of 2009() ---------------------- ITA.120/COCH/2004 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: ------------------------------ M.A.ANTO, MALIAKKAL KOONAN HOUSE, PUTHENCHIRA, TRICHUR DISTRICT. BY ADV. SRI.P.BALAKRISHNAN (E) RESPONDENT(S): --------------- THE COMMISSIONER OF INCOME TAX, TRICHUR. ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 18/12/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ON 18/12/2009, THE COURT ON THE SAME DAY DELIVERED C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. ....................................................................I.T. Appeal No.1552 of 2009 ....................................................................Dated this the 18th day of December, 2009. JUDGMENT Ramachandran Nair, J. Heard counsel appearing for the appellant and Standing Counselappearing for the respondent. Both the questions raised for ourdecision relate to additions made in block assessment, which thoughdeleted by the first appellate authority, were restored by the Tribunal.Counsel contended that there was no justification for the Tribunal tosustain the addition of Rs.5.85 lakhs which was assessed asunexplained investment made by the assessee in a firm. Even thoughassessee tried to prove source towards loan taken from brother, sister,nephew and other close relatives, the Assessing Officer found there isunexplained time lag between the alleged loan and the actualinvestment. In any case loans were allegedly taken in cash which isagainst the provisions of the Income Tax Act. We are of the view thatwhen the Income Tax Act provides that taking of loan and repaymentsin excess of Rs.20,000/- should be only through Account Payee Cheques or Demand Drafts, cash transaction can be justified only inemergencies. Admittedly there is substantial time lag between thealleged loan in cash and later investment. Therefore, in our view, theAssessing Officer rightly disbelieved the transaction and the Tribunalconfirmed it. We do not find any substantial question of law arisingfrom the order of the Tribunal on this issue for our decision. 2. The next question also pertains to the addition of Rs.1,43,660/-for the year 1997-98. Even though assessee contended that time forfiling return was not over as on date of search i.e. 30.7.1998, it is thefinding of the Tribunal that there was no evidence to prove that incomewas accounted, which is the requirement under Section 158B(b) of theIncome Tax Act, for exclusion from assessment as undisclosed income.Assessee has no case that assessee has paid advance tax on this amountor has accounted the share income from the firm as on the date ofsearch. Even though counsel for the assessee contended that accountsmaintained by the firm is sufficient for exclusion under Section 158B(b), we are unable to accept this contention because it is the assesseewho gets the salary income from the firm and as and when income is received, the assessee should account the same and should pay advancetax which is not done here. In the circumstances, the Tribunal rightlyheld that the share income from the firm was not accounted by theassessee. Consequently we dismiss the appeal on this issue as well. C.N.RAMACHANDRAN NAIRJudge pms V.K.MOHANANJudge