Ita/196/2000 Of Yheyyamma Paul v. St.commr.of Income Tax Investigation

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN MONDAY, THE 4TH DECEMBER 2006 / 13TH AGRAHAYANA 1928 ITA.No. 196 of 2000() --------------------- ITA.4COCH/1998 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT -------------- MRS.THEYYAMMA PAUL,TRICHUR BY ADV. SRI.KMV.PANDALAI SRI.P.J.JACOB RESPONDENT: ---------------- THE ASSISTANT COMMISSIONER OF INCOME TAX,INVESTIGATIONCIRCLE I,DIVISION I, TRICHUR. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON04/12/2006, THE COURT ON THE SAME DAY DELIVERED THEFOLLOWING: ================================== ================== DATED THIS, THE 4TH DAY OF DECEMBER, 2006.J U D G M E N T Raman, J. The assessee is the appellant herein. This appeal is directed againstthe order passed by the Income Tax Appellate Tribunal, Cochin Bench, inIT (S&S) A No.4/Coch/98, dated 24.2.1999, confirming the assessmentmade by the Assistant Commissioner of Income Tax, under Section 158 BCof the Income Tax Act for the block period 1.4.1986 to 12.12.1986. 2. The facts of the case, in brief, is as follows: The authorized officer conducted a search under Section 132 of the IncomeTax Act at the residential premises of the appellant/ assessee and seizeddetails of unaccounted investments made by her in benami names. In thesworn statement under Section 132(4), the assessee admitted that she solda land and building at Mannuthy for a consideration of Rs. 40 lakhs and thatshe received Rs. 15 lakhs over and above the consideration recorded in theregistered deed and deposited the same in the names of very close relatives as Fixed Deposits in Banks. Since a prima facie case of evasion of incomeexisted, a notice under Section 158BC was issued, upon which the assesseefiled a return of income declaring an amount of Rs. 42,610/- as undisclosedincome. Rejecting the contentions raised by assessee, the assessisng officerproceeded to assess the sum of Rs. 15 lakhs received as part of saleconsideration and deposited in benami accounts as undisclosed income.The appellate authority also confirmed the decision of the assessingauthority. Aggrieved thereby, the assessee has preferred this appeal. 3. It was the specific contention of the assessee before the tribunalthat what was transferred is not only immovable properties but also thewhole of the business as a going concern and as such the amount of Rs. 15lakhs cannot be attributed towards consideration proceeded for immovableproperties and subject to capital gains. She also placed reliance on thepartnership deed executed on the same day and requested the tribunal totake these facts also into consideration. The tribunal, after referring to thepartnership deed found that 2% profit is payable by the assessee from out ofthe profit received from the business in the form of capital gain and she isalso liable to share the loss. Hence the contention of the assessee that whatwas sold was a going concern was rejected. According to the learnedcounsel appearing for the assessee other than the submission made by the assessee at the time of search, there is no other evidence to show that 15lakhs received is towards sale consideration. It is also his contention thatsince she was having a licence under the Abkari Act, partnership itself wasnecessitated so as to enable the firm to continue the business using the samelicence. We are afraid, this contention cannot be raised since the transfer ofa licence under the Abkari Act is clearly prohibited. Further, as per thepartnership the assessee retains his interest in the business. The contentionthat the whole of the business was transferred in such circumstances,cannot be accepted. If as a matter of fact, the amount of Rs. 15 lakhs wasreceived towards sale consideration of the movable properties which werenot the subject matter of the sale deed, nothing prevented the parties fromshowing this amount as separately received or at least this would have beenshown as her contribution towards the capital in the firm. By doing so,there is no disadvantage to the parties and the appellant is only stand to gainsince if this 15 lakhs received is consideration for movable properties thennecessarily, she will not be liable to be subjected to any tax. On the otherhand, the statement given at the time of search clearly shows that saleconsideration was shown as only 25 lakhs whereas she received an amountof 40 lakhs towards sale consideration. This submission along with theattendant facts clearly shows that the sale consideration received by the ITA.196/2000 assessee was 40 lakhs and not 25 lakhs. Both the parties stand to gain byshowing the reduced amount in the document. In the circumstances, theview taken by the Tribunal is correct. No interference is called for. Accordingly, the appeal is dismissed. P.R. RAMAN,(JUDGE)K.P. BALACHANDRAN,(JUDGE) knc/- ITA.196/2000 P.R. RAMAN & K.P. BALACHANDRAN, JJ.===================== I.T. APPEAL 196/2000 J U D G M E N T 4.12.2006.