Ita/24/2014 Of The Commissioner Of Income Tax-Ii v. Sri Harri Joseph

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR.JUSTICE ASHOK MENON WEDNESDAY,THE 21ST DAY OF NOVEMBER 2018 / 30TH KARTHIKA, 1940 I.T.A.No.24 of 2014 AGAINST THE ORDER IN ITA NO.518/COCH/2011 OF I.T.A.TRIBUNAL,COCHIN BENCH, COCHIN DATED 30-08-2013 APPELLANT: THE COMMISSIONER OF INCOME TAX-II,COCHIN. BY ADVS.SRI.P.K.R.MENON, SR.COUNSEL, GOI(TAXES)SRI.JOSE JOSEPH, SC FOR INCOME TAX. RESPONDENT: SHRI HARRI JOSEPH,ROSE VILLA, KALATHIPARAMBIL, ALAPPAT CROSS ROAD, KOCHI-682016. PAN. . BY ADVS.SRI.ANIL D. NAIRSMT.O.A.NURIYASMT.ROSIE ATHULYA JOSEPHSRI.R.SREEJITH THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 21.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A.No.24 of 2014 Vinod Chandran, J: JUDGMENT The question of law raised in the appeal isre-framed by us as follows: Whether the additions made to the income of theassessee can be set aside on the mere premise thatwith respect to the major addition of Rs.60 lakhs themother of the assessee had filed a return of incomeconceding a capital gain on a property, the sale ofwhich resulted in the deposit of Rs.60 lakhs in thebank account of the assessee? 2. The assessee was in appeal before the Tribunal and the Tribunal on the ground of the assessee's motherhaving filed a return conceding capital gains, set aside theaddition of Rs.60 lakhs as against the assessee. ByAnnexure-A, the assessment of the assessee was completedtaking as undisclosed income, various credits in the bankaccount between 08.08.2005 and 23.11.2005. Out of the totalamount of Rs.98,18,244/-, Rs.60,00,000/- according to theassessee represented the unaccounted receipt on the sale ofthe property by his mother. The property is said to haveactually fetched Rs.74,00,000/- and the mother, the owner of the property, deposited Rs.60,00,000/- in the account of theassessee. The document of conveyance, however, showed a valueof only Rs.14,00,000/-. This was admitted by the assessee. Aletter produced from the purchaser also confirmed the same.The Tribunal merely on the ground of a return having beenfiled, reversed the addition with respect of Rs.60,00,000/-.3. The assessment year is 2006-07. The sale of theproperty was in the previous year of the assessment year.The return of income filed by the mother was on 27.08.2013.Though the return was filed, there was nothing done by theDepartment on the same especially since six years had elapsedby the time the return was filed. If at all, the Departmentcould take up proceedings, for the assessment year 2006-07,it could have been only prior to 31.03.2013. The return wasfiled by the mother, on 27.08.2013. In such circumstance, itcannot be said that the income that was added on to theassessee had already suffered capital gains tax at the handsof the mother. The fact remains that the amounts werecredited to the account of the assessee and it remained asundisclosed income insofar as the assessee having returnedonly Rs.1,17,830/- in the subject assessment year. - 4 - - 4 - 4. The learned Counsel for the assessee would infact point out an order issued under Section 271(1)(c) of theIncome Tax Act, 1961 wherein the Income Tax Officer had foundthat since there was an explanation offered for the source ofRs.60,00,000/-, the assessee could be absolved from penaltyto that extent. It is, hence, the submission of the assesseethat the explanation could be taken note of for the purposeof assessment also. It is to be noticed that the mother, whowas the owner of the property who sold the property, did notreturn the income from the sale of the property. The amountsalso were credited to the accounts of the assessee, who alsodid not disclose the income before the Assessing Officer. Insuch circumstances, there cannot be said to be a doubletaxation on the very same income. The mother obviously didnot file any return within time for the assessment year2006-07. The return filed on 27.08.2013 could not also beprocessed by the Department for reason of expiry of sixyears. In such circumstances, the assessee having admitted tothe credit of the amounts, it has to be taken as incomeearned in the said year and assessed accordingly. We setaside the order of the Tribunal to that extent and restore that of the first appellate authority, answering the questionof law in favour of the Revenue and against the assessee.The appeal would stand allowed. No costs. Sd/-K.VINOD CHANDRANJUDGE Vku/- Sd/-ASHOK MENONJUDGE APPELLANT'S ANNEXURES: ANNEXURE A ANNEXURE B ANNEXURE C ANNEXURE D ANNEXURE E APPENDIX TRUE COPY OF THE ASSESSMENT ORDR U/S.143(3) DATED 31.12.2008 PASSED BY THE ASSESSING OFFICER FOR ASST. YEAR 2006-07. TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX, (APPEALS) DATED 21.1.2011.CERTIFIED COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL IN ITA.518/COCH/2011 DATED 30.8.2013 FOR THE ASST. YEAR 2006-07. TRUE COPY OF THE RETURN. TRUE COPY OF THE STATEMENT OF INCOME. Vku/- [true copy]