Ita/1771/2009 Of Commissioner Of Income Tax, Calicut v. Shri Essa Ismail Sait (Late)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU FRIDAY, THE 20TH DAY OF OCTOBER 2017/28TH ASWINA, 1939 ITA.No. 1771 of 2009 ------------------------- AGAINST THE ORDER IN ITA 605/2005 of I.T.A.TRIBUNAL,COCHIN BENCHDATED 13-03-2009 -------- APPELLANT/RESPONDENT: ----------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAXSRI.PKR.MENON, SC RESPONDENT/APPELLANT:---------------------------- SHRI ESSA ISMAIL SAIT (LATE) REP. FARHANA SAIT, 170, FARHANA MANZIL, CLUB ROAD,OTTACAMUND-1, TAMILNADU. BY SRI.S.ARUN RAJ THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 20-10-2017, ALONG WITH ITA. 1801/2009 & CON. CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, & DAMA SESHADRI NAIDU, JJ. ------------------------------------------------ I. T.A. Nos.1771, 1801, 1804 of 2009, 7,13, 14, 34, 45 & 50 of 2010 ------------------------------------------------ Dated this the 20[th ]day of October, 2017 JUDGMENT Antony Dominic, J. 1. aIn these batch of appeals, the main case is ITA No.1771 of 2009. 2. This appeal is filed by the Revenue impugning theorder passed by the Income Tax Appellate Tribunal, CochinBench in ITA No.605 of 2005 concerning the AssessmentYear 1999-00. By the said order, the appeal filed by therespondent assessee was allowed by the Tribunal and thisorder is impugned by the Revenue framing the followingquestions of law for the consideration of this Court: "1.Whether, on the facts and in thecircumstances of the case and in the light ofthe admissionby the assessee in the swornstatement, the Tribunal is right in law andfacts in interfering with the assessmentcircumstances of the case and in the light ofthe admissionby the assessee in the swornstatement, the Tribunal is right in law andfacts in interfering with the assessment ITA.1771/09 & con. cases based on the admission in the swornstatement? 2. (a)Whether, on the facts and in thecircumstances of the case and on a perusalof the sworn statement does not the swornstatement indicate ─circumstances of the case and on a perusalof the sworn statement does not the swornstatement indicate ─ i.The assessee is aware of right andwrong with regard to his ownthoughts and actions?wrong with regard to his ownthoughts and actions? ii. A clear and alert mind? (b)If the answer to question 2(a) is in theaffirmative, the Tribunal is right at all inignoring the admission in the swornstatement?affirmative, the Tribunal is right at all inignoring the admission in the swornstatement? (c)Should not the Tribunal have preferredadmission by the assessee to the documentrelied on by the Tribunal and is not the ordernot preferring the admission absolutelyperverse and against all canons of law?admission by the assessee to the documentrelied on by the Tribunal and is not the ordernot preferring the admission absolutelyperverse and against all canons of law? (d)Justified in interfering with the assessment? 3.Is not the Tribunal wrong to have relied onthe decision in Varghese Case (131 ITR 597(SC) which is altogether on a different issue.the decision in Varghese Case (131 ITR 597(SC) which is altogether on a different issue. 4.Is not the order of the Tribunal against theprinciple laid down in 284 ITR 557?”principle laid down in 284 ITR 557?” (c)Should not the Tribunal have preferredadmission by the assessee to the documentrelied on by the Tribunal and is not the ordernot preferring the admission absolutelyperverse and against all canons of law?admission by the assessee to the documentrelied on by the Tribunal and is not the ordernot preferring the admission absolutelyperverse and against all canons of law? (d)Justified in interfering with the assessment? 3.Is not the Tribunal wrong to have relied onthe decision in Varghese Case (131 ITR 597(SC) which is altogether on a different issue.the decision in Varghese Case (131 ITR 597(SC) which is altogether on a different issue. 4.Is not the order of the Tribunal against theprinciple laid down in 284 ITR 557?”principle laid down in 284 ITR 557?” 3. Briefly stated the facts of the case are that, therespondent assessee was the proprietor of Kavitha Theatre,Ernakulam, till 14.08.1998. On 14.08.1998, the assesseeconverted the proprietory concern into a partnership firmM/s Kavitha Theatre, Ernakulam, and retired from the firmon 18.10.1998. The assessee filed return of income for theAssessment Year 1999-00 declaring loss of `2,65,320/- andclaimed a refund of `24,000/-. The return was processedunder Section 143(1)(a) of the Act and refund was alsoallowed. Subsequently, the assessment was re-openedunder Section 147 of the Act on the ground that theassessee had shown sale consideration for the sale of theproperty at `2,74,95,000/- only while the actual saleconsideration was `6.5 crores. The Assessing Officercompleted the assessment under Section 143(3) read withSection 147 on the differential total income of`3,88,83,800/-. The assessee carried the matter in appeal ITA.1771/09 & con. cases before the Commissioner of Income Tax (Appeals), whoconfirmed the order of assessment. The matter was carriedin appeal to the Tribunal and by the impugned order, theTribunal allowed the appeal of the assessee, accepting thesale value as returned by the assessee. It is this order whichis impugned by the Revenue. 4. Insofar as the remaining appeals are concerned, the relevant facts are that, in the meanwhile, dividing the totalincome assessed at the hands of the assessee as that paidby the partners of the firm, assessment was completedagainst the partners which was set aside by the firstappellate authority. The order of the first appellate authoritywas impugned by the Revenue before the Tribunal. Theseappeals were also heard along with ITA No.605/2005 filedby the assessee mentioned above. On the basis that theappeal filed by the assessee has been allowed, the Tribunaldisposed of the appeals of the Revenue on the basis that the ITA.1771/09 & con. cases appeals have become infructuous. It is this order that ischallenged by the Revenue in the connected appeals filed. 5. We heard the learned Senior Counsel for theRevenue, Sri.Arun S. Raj, who was appointed to assist thecourt in ITA 1771 of 2009 on account of the absence of theassessee and Sri.Mohan, the learned counsel appearing forthe assessees in the remaining cases. 6. In the course of the hearing, the order passed bythe Tribunal was read out to us. A reading of the ordershows that while fixing the sale consideration at the amountas returned by the assessee, the Tribunal was primarilyrelied on the documents executed by the assessee himselfand without properly considering the case of the Revenue.Further, the Tribunal has also not properly appreciated thatit was the assessee who himself in his sworn statementadmitted that `6.5 crores was paid to him as the saleconsideration. We are also not impressed with the inference ITA.1771/09 & con. cases of the Tribunal on the medical condition of the assessee at 6. In the course of the hearing, the order passed bythe Tribunal was read out to us. A reading of the ordershows that while fixing the sale consideration at the amountas returned by the assessee, the Tribunal was primarilyrelied on the documents executed by the assessee himselfand without properly considering the case of the Revenue.Further, the Tribunal has also not properly appreciated thatit was the assessee who himself in his sworn statementadmitted that `6.5 crores was paid to him as the saleconsideration. We are also not impressed with the inference ITA.1771/09 & con. cases of the Tribunal on the medical condition of the assessee at the time when he gave the sworn statement which wasrelied on by the Department. According to us, it was withoutexamining the cases pleaded by the Revenue and theassessee in its entirety that the Tribunal has allowed theappeal of the assessee and fixed the sale value at the rateas returned by the assessee. 7. Therefore, we are of the view that the matterrequires to be reconsidered by the Tribunal and fresh ordersshall be passed duly adverting to the entire materials of therespective cases pleaded by both sides. As a consequence ofthis conclusion, necessarily, the remaining appeals filed bythe assessees also will have to be restored to the file of theTribunal for reconsideration. 8. Accordingly, without answering the questions of law framed for the consideration of this Court, these appeals aredisposed of setting aside the order passed by the Tribunal ITA.1771/09 & con. cases and restoring the appeals to its files with a direction toconsider the matters afresh and pass fresh orders inaccordance with law. Sd/- ANTONY DOMINIC JUDGE kns/- Sd/- DAMA SESHADRI NAIDU JUDGE //TRUE COPY// P.S. TO JUDGE