Ita/259/2013 Of K.t.joseph v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE MONDAY, THE 16TH DAY OF DECEMBER 2013/25TH AGRAHAYANA, 1935 ITA.No. 259 of 2013 --------------------- AGAINST THE ORDER IN ITA 604/COCH/2011 of I.T.A.TRIBUNAL,COCHIN BENCHDATED 28-03-2013 APPELLANT/RESPONDENT:---------------------------- SHRI.K.T.JOSEPH 50/1772, YUVAJANA SAMAJAM ROAD, KADAVANTHRA KOCHI - 20. BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH SMT.NIVEDITA A.KAMATH RESPONDENT/APPELLANT: ----------------------------- THE DEPUTY COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL CIRCLE - 2, ERNAKULAM. BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16-12-2013,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: MANJULA CHELLUR,C.J. & A.M.SHAFFIQUE, J. = = = = = = = = = = = = = = = = I.T.A No.259 of 2013 = = = = = = = = = = = = = = = = = = = = Dated this the 16 th day of December, 2013 JUDGMENT Manjula Chellur,CJ This appeal pertains to the assessment year 2003-2004.The dispute raised in the above appeal pertains to alleged loantaken by the assessee from one Mr.Vinod who was examined bythe officer before whom Mr.Vinod said to have demonstratedthat he was managing the affairs of the company on commissionbasis and that he along with his family members owned 50 acresof land from where he earned money which was lent to theassessee herein. 2. According to the assessee, though Mr.Vinod was a PAN Card holder, since agricultural income was exempted fromIncome Tax, he was not offering the same to tax. This fact wasnot taken note of by the Assessing Officer apart from failing toconsider that the assessee owned agriculture land as well. So far as this controversy, the assessing officer rejected the case ofthe appellant and added 7,50,000/- as the income of the₹assessee. However, CIT (Appeals) placing reliance on theremand report allowed the claim of the assessee and this came tobe challenged by the Revenue before the Tribunal. The Tribunal,after referring to the report in detail, opined that the AssessingOfficer was justified in rejecting the statement of Mr.Vinod forthe reasons mentioned in the remand report. The Tribunalfurther at paragraph 10 of the order clearly indicate thereasoning to disbelieve the statement of Mr.Vinod. 3. If agricultural income being the only source of incomefor Mr.Vinod, we fail to understand why though holding a PANCard did not disclose his income from commission as allegedby the appellant in I.T.A.No.270 of 2013. In I.T.A No.270/2013,this very Vinod is the Commission Agent, according to theassessee company, to whom several lakhs of rupees were paid asagent by the company. In the above appeal ManagingDirector of the same company is the assessee to whom said loanwas given by Mr.Vinod. In the absence of Vinod maintainingproper accounts, when he places reliance on the landed property for the source of income, we fail to understand how a person who has received lakhs of rupees as commission was not anincome tax assessee. Therefore, the appellate authority wasjustified in considering the statement of Mr.Vinod regardingboth the transactions i.e. alleged commission paid to Mr.Vinodand alleged loan lent by Mr.Vinod. The reasoning of the Tribunal at paragraphs 9 and 10 of the order are based on material placed on record, especially theremand report during the appeal proceedings. Hence the appealis rejected. MANJULA CHELLUR, CHIEF JUSTICE A.M.SHAFFIQUE, JUDGE. sj 17/12