Ita/177/2001 Of The Commissioner Of Income Tax,Kottayam v. M/S.nirmala Finance, Kanjirappally

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN THURSDAY, THE 2ND JUNE 2011 / 12TH JYAISHTA 1933 ITA.No. 177 of 2001() --------------------- AGAINST ORDER IN ITA.277/COCH/1998 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 11/07/2001 .................... APPELLANT / APPELLANT -------------------- THE COMMISSIONER OF INCOME TAX,KOTTAYAM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT(S): / RESPONDENT --------------- M/S.NIRMALA FINANCE,KANJIRAPPALLY. ADV. SRI.E.K.NANDAKUMAR FOR R SRI.A.K.JAYASANKAR NAMBIAR THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 02/06/2011, ALONG WITH ITA NOS. 206, 211 OF 2001 & 9 OF 2003 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. ....................................................................I.T.A. Nos.177, 206, 211 of 2001& 9 of 2003 .................................................................... Dated this the 2[nd] day of June, 2011. J U D G M E N T Ramachandran Nair, J. Heard learned Standing Counsel for the Department andShri.Jayasankar learned counsel appearing for the respondentassessee. 2.These connected appeals arise from the revisedincome tax assessments completed under Section 147 of theIncome Tax Act on the respondent assessee for the years1989-90 to 1992-1993. The issue involved is addition of cashcredit / unexplained investment in respect of various depositsretained in the account of the respondent assessee in thename of various persons. Even though, the depositors werenot traced out or identified, two sister concerns of therespondent assessee came forward offering interest income onthese deposits as undisclosed income, and the settlement ITA Nos.177, 206, 211 of 2001 & 9 of 2003 Commission accepted the claim of those two sister concerns,namely Nirmala Trust and Amala Finance, and allowedsettlement in their cases. 3. Even though, learned Standing Counsel contended that the amounts held in the account of the respondent arecompletely assessable as cash credit because the credits werenot proved, learned counsel for the respondent assesseecontended that once the income from deposits is assessed inthe hands of two others, the credits ceased to be unexplainedand in fact stands explained as amounts deposited by thoseconcerns. It is this explanation that was acted by the Tribunalfor allowing the appeals. We do not think a different view thanwhat is taken by the Tribunal is possible because once thesister concerns are assessed on the interest income from thevery same deposits, the deposits cannot be treated asunexplained cash credit or unexplained investment on therespondent assessee. In view of the above factual position, based on which the ITA Nos.177, 206, 211 of 2001 & 9 of 2003 3 Tribunal allowed the appeals, we decline to interfere with the orders of the Tribunal. Accordingly, these Income Tax Appeals are dismissed. (C.N.RAMACHANDRAN NAIR, JUDGE) (P.S.GOPINATHAN, JUDGE) jg