Ita/179/2000 Of M/S.hotel Vrindhavan, Punalur v. The Commissioner Of Income Tax, Tvm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN WEDNESDAY, THE 21ST MAY 2008 / 31ST VAISAKHA 1930 ITA.No. 179 of 2000() --------------------- ITA.144/COCH/1996 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT: ----------------- M/S.HOTEL VRINDHAVANAM, PUNALUR. BY ADV. SRI.C.KOCHUNNY NAIR SRI.S.ARUN RAJ RESPONDENTS: ------------- THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. BY ADV. SRI.GEORGE K. GEORGE, SC THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 21/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. .................................................................... I.T.Appeal No.179 of 2000 ....................................................................Dated this the 21st day of May, 2008. JUDGMENT Ramachandran Nair, J. The question raised in the appeal filed by the assessee pertains to the addition of Rs.3,57,970/- made in the assessment for the year 1990-91. WEhave heard counsel appearing for the appellant and Standing Counselappearing for the respondent. The assessee was running a bar hotel duringthe previous year relevant for the assessment year. During verification ofbooks of accounts, the Assessing Officer noticed that assessee has madepayments through cash and cheque to three firms, names of which are givenin all the orders including that of the Tribunal. When details were calledfor, assessee explained that the amount paid represents sale price payablefor purchase of liquor from the three concerns. However, on cross-verification and after collecting information from the Bank, the AssessingOfficer noticed that payments were made partly through cash and partlythrough bearer cheques which were encashed by Managing Director of theappellant and not by the firms in whose names the payments were shown inthe accounts. On contacted by the officer, all the payees denied receipt of any amount from the appellant and has also denied any transactions with theappellant during the previous year. In fact it was noticed that with one ofthe parties, assessee had no transaction after 1985. The findings in theorder of the Tribunal and that of the authorities prove beyond doubt that thecredit shown in the name of parties and subsequent payments shown to havebeen made are only bogus transactions and therefore, addition wassustained. Even though counsel submitted that trade credits were shown inthe earlier year's accounts and during the previous year relevant for thisassessment year assessee has made payments, we do not think there is anyscope for considering this contention because since payments were found tobe bogus, credit entries shown in the name of parties are obviously bogus.We, therefore, dismiss the appeal. C.N.RAMACHANDRAN NAIRJudge pms V.K.MOHANANJudge