Ita/1733/2009 Of Commissioner Of Income Tax, Kottayam v. Kuruvilla Augustine

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE THURSDAY, THE 16TH DAY OF JANUARY 2014/26TH POUSHA, 1935 ITA.No. 1733 of 2009 ---------------------AGAINST THE ORDER IN IT(S&S)A 83/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 13-03-2009 .............. APPELLANT/APPELLANT : ---------------------------- THE COMMISSIONR OF INCOME TAX, KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/RESPONDNT : -------------------------------- SHRI.KURUVILA AUGUSTINE, KOCHI. BY ADV. SRI.P.BALAKRISHNAN (E) THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 16-01-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Manjula Chellur, C.J. & A.M. Shaffique, J.- - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A. No. 1733 OF 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 16[th] day of January, 2014 Manjula Chellur, C.J. JUDGMENT So far as the respondent/assessee in this case the total amount of undisclosed amount of income was fixed at`66,22,000/- of which `26,72,000/- is the cash credit(unexplained) by the respondent/assessee and `38,50,000/- isthe undisclosed investment in M/s.Chola Huts. The FirstAppellate Authority deleted the cash credit of `26,72,000/- andthe same came to be confirmed by the Second AppellateAuthority. According to the Tribunal, the details of creditorsfurnished before the Deputy Director of Inspection at the timeof search and before the assessing officer along with thesubmissions made by the representative of the assesseeindicate that at the time of search it was only a rough ideaabout the loans and assessee did not have the benefit ofrecords to verify the details. Subsequent to the assessmentproceedings being completed, he could secure the details fromthe records and filed cash flow statement based on which the ITA No. 1733 of 2009 details of loan/creditors were furnished. The First AppellateAuthority accepted the said explanation of the assessee anddeleted the same opining that the primary onus in proving thegenuineness of the cash credit has been discharged by theassessee and if at all any clarification was required, it was for theappellate authority to conduct necessary enquiries so far asresourcefulness of creditors. This opinion of the First AppellateAuthority was confirmed by the Tribunal. 2. In order to explain the cash credit in the hands of the assessee, if he refers to the amounts given to him by thecreditors, he must be able to prove the said loan transactionbetween him and the third parties apart from the resourcefulnessof creditors and the genuineness of the transaction. 3. The First Appellate Authority and the Tribunalconsidered this aspect with reference to the above principle butbased on the confirmation letters, without further verification,have simply accepted the statement of the assessee which iserroneous. Therefore there has to be reconsideration by the First Appellate Authority regarding the genuineness of the transactionand the resourcefulness of the creditors. So far as `38,50,000/-his unaccounted investment in M/s.Hotel Chola Hut statement ofSri.A.C.Joseph indicates how the figures were reflected byshowing 1/100[th] figure as the investment, though actualinvestment is much more than the statement of the Sri.A.C.Joseph. Other material reflected the concealment and only1/100[th] of the actual amounts are declared. The assessee havingstakes of 1/3[rd] in Hotel Chola, which is reflected in thepartnership documents, so far as the investment `38,50,000/-,his portion of the investment as in the case of Sri.A.C. Josephand also Devasia Devasia, this person also had an opportunity toexplain the same and if it is reflected in the books of accountswhich could be taken into consideration as contemplated underSection 158BB of the Act. Therefore, the orders of the Tribunal at Annexure E is set aside remitting back the matter to the First AppellateAuthority for reconsideration in the light of above observations. ITA No. 1733 of 2009 -:4:- In this case also we are of the opinion, there is no question ofremitting back the matter so far as the travel expenses of theassessee having regard to the nature of business he isconducting. Manjula Chellur, Chief Justice. A.M. Shaffique, Judge. ttb/18/01