Ita/3/2004 Of Sri.r.ramachandran Nair v. The Dy.commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU FRIDAY, THE 6TH DAY OF JANUARY 2017/16TH POUSHA, 1938 ITA.No. 3 of 2004------------------AGAINST THE ORDER IN ITA 10/2002 of I.T.A.TRIBUNAL,COCHIN BENCHDATED 28-11-2003 APPELLANT/APPELLANT:-------------------- SRI. R. RAMACHANDRAN NAIR, "MAIDAN VILLA" HINDU MISSION ROAD, THIRUVANANTHAPURAM. BY ADVS.SRI.T.M.SREEDHARAN SRI.DEEPAK JOY.K. SMT.M.S.KIRAN RESPONDENTS:------------ 1.THE DY.COMMISSIONER OF INCOME TAX, CIRCLE I (1), RANGE-I, INCOME TAX OFFICE, THIRUVANANTHAPURAM. 2. THE COMMISSIONER OF INCOME TAX, AYAKKAR BHAVAN, KOWDIAR, THIRUVANANTHAPURAM. R, BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT R, BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON06-01-2017, ALONG WITH ITA. 119/2007, THE COURT ON THE SAME DAYDELIVERED THE FOLLOWING: APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A: TRUE COPY OF THE ASSESSMENT ORDER UNDERSECTION 143(3) DATED 27.3.2002. ANNEXURE B: CERTIFIED COPY OF THE APPELLATETRIBUNAL'S ORDER IN ITA NO.10/COCH/2002/B.P. 1.4.1986TO 15.10.1996 DATED 28.11.2003. ANNEXURE C: TRUE COPY OF THE MISCELLANEOUS PETITIONDATED 2.3.2004 SUBMITTED TO THE APPELLATE TRIBUNAL. ANNEXURE D: TRUE COPY OF THE ASSESSMENT ORDER DATED27.3.2002 U/S 158 BD r.w.s.158 BC. ANNEXURE E: TRUE COPY OF THE ASSESSMENT ORDER DATED29.10.1997 PASSED BY THE ASSISTANT COMMISSIONER OFINCOME TAX. ANNEXURE F: TRUE COPY OF THE APPELLATE ORDER DATED29.3.2000 IN IT (S&S)A.NO.76/COCH/97. ANNEXURE G: TRUE COPY OF THE JUDGMENT DATED 28.3.2011IN CRL. APPEAL NO. 792 OF 2011 OF THE HOB'BLE SUPREMECOURT. ANNEUXRE H(1): TRUE COPY OF THE SWORN STATEMENT OFTHE APPELLANT GIVEN BEFORE THE AUTHORISED OFFICER ON15.10.1996. ANNEXURE H(2): TRUE COPY OF THE FINANCIAL STATEMENTOF THE APPELLANT AS ON 1.4.1986 AND 15.10.1996. ANNEXURE H(3): TRUE COPY OF THE FINANCIAL STATEMENTOF SMT.LAKSHMI R. NAIR, W/O THE APPELLANT AS ON1.4.1986 AND 15.10.1996. ANNEXURE H(4): TRUE COPY OF THE FINANCIAL STATEMENTOF SHRI.HEMANT KUMAR, S/O THE APPELLANT AS ON 1.4.1986AND 15.10.1996. ANNEXURE H(5): TRUE COPY OF THE FINANCIAL STATEMENTOF SHRI.AJAY KUMAR, S/O THE APPELLANT AS ON 1.4.1986AND 15.10.1996. ANNEXURE H(6): TRUE COPY OF THE FINANCIAL STATEMENTOF SMT.ANJALI DEVI, D/O THE APPELLANT AS ON 1.4.1986AND 15.10.1996. ANNEXURE H(7): TRUE COPY OF THE FINANCIAL STATEMENTOF SMT.CHINMAYI DEVI, MOTHER IN LAW OF THE APPELLANTAS ON 1.4.1986 AND 15.10.1996. ANNEXURE H(8): TRUE COPY OF THE STATEMENT SHOWING THEAMOUNTS RECEIVED BY SMT.LAKSHMI R.NAIR FROM THEAPPELLANT. ANNEXURE H(9): TRUE COPY OF THE STATEMENT SHOWING THEAMOUNTS RECEIVED BY SMT.LAKSHMI R NAIR FROMSMT.CHINMAYI DEVI. ANNEXURE H(10): TRUE COPY OF THE STATEMENT SHOWINGTHE AMOUNTS RECEIVED BY SHRI.HEMANT KUMAR, S/O THEAPPELLANT FROM THE APPELLANT, LAKSHMI R. NAIR ANDGRADPARENTS. ANNEXURE H(11): TRUE COPY OF THE STATEMENT SHOWINGTHE AMOUNTS RECEIVED BY SHRI.HEMANT KUMAR, S/O THEAPPELLANT FROM SHRI.AJAY KUMAR. ANNEXURE H(12): TRUE COPY OF THE STATEMENT SHOWINGTHE AMOUNTS RECEIVED BY SHRI.HEMANT KUMAR, S/O THEAPPELLANT FROM SMT.ANJALI DEVI. ANNEXURE H(13): TRUE COPY OF THE CERTIFICATE DATED16.3.1998 ISSUED UNDER VDIS TO SMT.CHINMAYI DEVI. ANNEXURE H(14): TRUE COPY OF THE CERTIFICATE FROMV.O.POONHAR FOR THE AGRICULTURAL INCOME OF LATEPARENTS OF R.R.NAIR DATED 2.6.2003. ANNEXURE H(15): TRUE COPY OF THE AFFIDAVIT DATED16.6.2003 OF SHRI.R.MADHAVAN NAIR, BROTHER OF THEAPPELLANT @ ABHAYANANDA THIRTHAPADA M.SWAMI. ANNEXURE H(16): TRUE COPY OF THE AFFIDAVIT DATED16.6.2003 OF SMT.CHINMAYI DEVI, EXPLAINING THE FACTSSTATED IN THE EARLIER AFFIDAVITS. ANNEXURE H(17): TRUE COPY OF THE STATEMENT SHOWINGRECONCILIATION OF THE INVESTMENTS CONSIDERED IN THEASSESSMENT OF THE APPELLANT. ANNEXURE H(18): FAMILY TREE OF THE APPELLANT AND HISWIFE. ANNEXURE H(13): TRUE COPY OF THE CERTIFICATE DATED16.3.1998 ISSUED UNDER VDIS TO SMT.CHINMAYI DEVI. ANNEXURE H(14): TRUE COPY OF THE CERTIFICATE FROMV.O.POONHAR FOR THE AGRICULTURAL INCOME OF LATEPARENTS OF R.R.NAIR DATED 2.6.2003. ANNEXURE H(15): TRUE COPY OF THE AFFIDAVIT DATED16.6.2003 OF SHRI.R.MADHAVAN NAIR, BROTHER OF THEAPPELLANT @ ABHAYANANDA THIRTHAPADA M.SWAMI. ANNEXURE H(16): TRUE COPY OF THE AFFIDAVIT DATED16.6.2003 OF SMT.CHINMAYI DEVI, EXPLAINING THE FACTSSTATED IN THE EARLIER AFFIDAVITS. ANNEXURE H(17): TRUE COPY OF THE STATEMENT SHOWINGRECONCILIATION OF THE INVESTMENTS CONSIDERED IN THEASSESSMENT OF THE APPELLANT. ANNEXURE H(18): FAMILY TREE OF THE APPELLANT AND HISWIFE. ANNEXURE H(19): TRUE COPY OF THE STATEMENT OFSHRI.AJAY KUMAR EXPLAINING THE INVESTMENT IN HIS NAME. ANNEXURE H(20): TRUE COPY OF THE STATEMENT OFSMT.ANJALI DEVI DATED 15.10.1996 EXPLAINING THE SOURCEFOR PURCHASE OF MARUTI ZEN CAR. ANNEXURE H(21): TRUE COPY OF THE STATEMENT OFSMT.LAKSHMI R. NAIR DATED 15.10.1996. ANNEXURE I: TRUE COPY OF THE LETTER DATED 11.3.2002GIVEN BY THE APPELLANT TO THE DY.COMMISSIONER OFINCOME TAX, CIRCULE 1 (1) THIRUVANANTHAPURAM. ANNEXURE J: TRUE COPY OF THE LETTER DATED 26.3.2002GIVEN BY THE APPELLANT TO THE DY.COMMISSIONER OFINCOME TAX, CIRCULE-1(1), THIRUVANANTHAPURAM. ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A.Nos.3 of 2004 & 119 of 2007 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -Dated this the 6[th] day of January, 2017 Antony Dominic, J. JUDGMENT The assessee has filed I.T.A.No.3/04 and the Revenue has filedI.T.A.No.119/07, both aggrieved by the order passed by the Income Tax Appellate Tribunal, Cochin Bench in I.T.(S&S)A.No.10/02concerning the block period 1.4.1986 to 15.10.96. 2. Briefly stated, the facts of the case are that the assessee,the appellant in I.T.A.No.3/04, is a former Chief Secretary to theGovernment of Kerala. There was a search and seizure actionunder Section 132 of the Income Tax Act in the residentialpremises of the assessee on 15.10.96 and 16.10.96. Consequenton the search, notice under Section 158-BC was issued on 3.4.97and was served on the assessee on 7.4.97 for the block period1.4.1986 to 15.10.96. Assessment under Section 143(3) read withSection 158-BC was completed on 29.10.97. In the said assessment, the undisclosed income of the assessee was fixed atRs.1,14,94,610/-. 3. In I.T.(S&S)A. No.76/97 filed by the assessee, the Tribunalpassed order dated 29.3.2000 setting aside the order of assessmentand directing that appropriate orders shall be passed afresh, incompliance with the principles of natural justice. Accordingly, thematter was reconsidered, assessment order dated 27.3.2002 waspassed. In the said order, total undisclosed income of the assesseefor the block period was determined at Rs.1,11,42,021/-. Thisorder was impugned by the assessee by filing I.T.(S&S)A.No.10/02before the Income Tax Appellate Tribunal. By the impugned order,the appeal filed by the assessee was partly allowed and some of theadditions made in the assessment order were deleted.I.T.A.No.3/04 is filed by the assessee aggrieved by the order to theextent some of the additions were sustained by the Tribunal whileI.T.A.No.119/07 is filed by the Revenue challenging the order of theTribunal to the extent some of the additions were deleted. 4. In ITA 3/04, the following are the questions of law framed by the assessee for the consideration of this court: “ i) Whether on the facts and in the circumstances of thecase, the Appellate Tribunal was justified in upholdingthe validity of the search, u/s 132, and the Blockassessment made in pursuance thereto for the Blockassessment years? 4. In ITA 3/04, the following are the questions of law framed by the assessee for the consideration of this court: “ i) Whether on the facts and in the circumstances of thecase, the Appellate Tribunal was justified in upholdingthe validity of the search, u/s 132, and the Blockassessment made in pursuance thereto for the Blockassessment years? ii) Whether on the facts and in the circumstances of thecase, the Appellate Tribunal was justified in confirmingthe estimate of 'undisclosed income' for the Block Period,when such amounts did not fall within the definition of“undisclosed income” as per Section 158B(b) of the Act? iii) Whether on the facts and in the circumstances of thecase, the authorities below are justified in makingestimate of undisclosed income, dehors the documentsseized at the time of search? iv) Whether inclusion of the undisclosed income, whichare already considered in the Block assessment u/s158BD, in the appellant's assessment order, is legal, validand sustainable in law? v) Whether the Block assessment order u/s 158BC madeon the appellant, and the income considered therein arelegal, valid and sustainable in law?” 5. In ITA 119/07, the following are the questions of law framed by the Revenue for the consideration of this court: “1. Whether, on the facts and in the circumstances of thecase and also in view of the fact that the deal being in thename of two institutions of repute and stature, i. the Tribunal is justified in holding that the gainfrom the transactions causing loss to the institutionsshould be assessed in the head of the institutions andshould not be assessed in the hands of the assessee whowas directly or indirectly responsible in entering indealings causing loss to the institutions where thematerials clearly shows that the transactions involvedwere fraudulent in nature and the institution was notgaining in the transactions. 2. Whether on the facts and especially in thecircumstances of the case and the finding that theSamajam had pocketed some substantial amount by wayof profit and indirectly it might have gone to the assessee,was the Tribunal correct in insisting on direct evidence tosubstantiate that the assessee received the benefit? 3. Whether, on the facts and in the circumstances of thecase the Tribunal is right in law and fact in holding thatthe undisclosed income from the purchase of land for theSree Sankarachayra University of Sanskrit could not beassessed at the hands of the assessee? 4. Whether, on the facts and in the circumstances of thecase and considering the preponderance of probabilitiesand the onus that is required to be discharged by theassessee and the failure of the assessee to discharge hisburden the Tribunal is right in law and fact in holdingthat there is nothing on record to show that the assesseehas received any amount from this deal”, this amountcannot be taxed in the hands of the assessee and are not the findings wrong, against facts considering the proofrequired of and possible of? 5. Whether, on the facts and in the circumstances of thecase; i. Did the assessee discharge the burden of proof? ii.The Tribunal is right in law and fact in deletingthe two additions of undisclosed income in theabsence of the assessee being put to proof and hisfailure to prove the same?” 6. We heard the Senior Counsel for the assessee and thelearned Senior Standing Counsel appearing for the Revenue. 7. The first issue that was raised by the counsel for theassessee was with respect to the finding of the Tribunal regardingthe gold ornaments. According to counsel, the Tribunal shouldhave accepted the claim of the assessee that the quantity of goldbelonged to the other members of his family. We have consideredthis contention and find from paragraphs 27 and 28 of the orderthat the case of the assessee was that his wife had inherited goldfrom her deceased father, that his wife had about 200 sovereigns ofher own, his wife's mother had about 400 sovereigns, the most of 6. We heard the Senior Counsel for the assessee and thelearned Senior Standing Counsel appearing for the Revenue. 7. The first issue that was raised by the counsel for theassessee was with respect to the finding of the Tribunal regardingthe gold ornaments. According to counsel, the Tribunal shouldhave accepted the claim of the assessee that the quantity of goldbelonged to the other members of his family. We have consideredthis contention and find from paragraphs 27 and 28 of the orderthat the case of the assessee was that his wife had inherited goldfrom her deceased father, that his wife had about 200 sovereigns ofher own, his wife's mother had about 400 sovereigns, the most of : 6 : which was given to his married daughter and that his daughter hadat the time of her marriage received about 67 sovereign of gold, asgift. In paragraph 28, these contentions were examined and theTribunal rejected the plea mainly for the contradictory contentionsurged. Thereafter, in paragraph 29 of its order Tribunal acceptedthe plea of the assessee to the extent of 1500 gram of gold, byconcluding thus: “29. Considering the family back ground of theassessee, i.e. one of the eldest brother of the assesseeretired from the Central Government as a Dy.Accountant General, three brothers are Advocates, onebrother is an officer in State service and the other is aBank Officer and from the side of his wife, father-in-lawwas an eminent Economist, was a Professor in theUniversity of Kerala and Member of Second PayCommission for Central Government Employees, twobrother-in-laws are Doctors, two brother-in-laws are atMumbai, one brother-in-law is in the United States andanother brother-in-law is an Electrical Engineer, doingcontract work, and social status of the family, smallergifts from individuals as mentioned above and also giftsfrom the side of assessee and his wife cannot be ruledout. Therefore, we are of the view that the assessingofficer has not considered the case in its entirety, i.e. Thegifts received other than the details given by the assesseebecause the assessee was asked to give the details ofpersons those who have gifted five or more sovereigns of gold, a reasonable estimation of 1500 grams of goldcannot be ruled out. Therefore, we allow the claim ofthe assessee to this extent. The difference is to betreated as assessee's undisclosed income.” These conclusions are purely factual and no question of lawcan arise from these findings. 8. The other issue that was raised by the counsel for theassessee was regarding the order of the Tribunal upholding theconclusion of the Assessing Officer that the source of income ofRs.3,00,000/- was not properly explained by the assessee and,therefore, the said income is the undisclosed income of theassessee. Insofar as this issue is concerned, reading of theimpugned order show that the Tribunal, on appreciation of thefacts, came to the following conclusion in paragraph 52 of its order: “52. Hearing rival submissions, we are of theview that the addition is to be confirmed. First of all itis to be seen that the letter written by Smt.Kalavathywas seized from the residence of the assessee, in whichshe express thanks to 'Sir' and Smt.Lakshmi. There isno reason to say that the conclusion of the assessingofficer that the word 'Sir' appearing in the letter isnone other than the assessee himself. Smt.Kalavathystated before the revenue authorities that she received “52. Hearing rival submissions, we are of theview that the addition is to be confirmed. First of all itis to be seen that the letter written by Smt.Kalavathywas seized from the residence of the assessee, in whichshe express thanks to 'Sir' and Smt.Lakshmi. There isno reason to say that the conclusion of the assessingofficer that the word 'Sir' appearing in the letter isnone other than the assessee himself. Smt.Kalavathystated before the revenue authorities that she received the money from the assessee's wife and she was notknown to Shri.Suresh. Smt.Lakshmi R.Nair 's claim isthat she had not received Rs.3 lakhs from Shri Suresh.If she has not received it is her responsibility to explainfrom where she received the said sum. There is noevidence to show that she had independent source ofincome. In her letter dated 20.2.1997 she discloses thatthe person who arranged the loan was Shri.N.KrishnanNair, a close friend of Shri.Suresh and Smt.LakshmiR.Nair only appealed to Shri Krishnan Nair to helpSmt.D.K.Kalavathy, an old classmate. Shri Sureshdenied advancing the money. There was nowithdrawal by Shri Suresh from his account. In theabsence of any independent source to be explained bythe wife of the assessee, Smt.Lakshmi R.Nair, it is to betreated as the undisclosed income of the assessee. Thepayment was made in the residence of the assessee.Either the assessee or his wife could not explain thesource of payment. Considering the facts andcircumstances of the case, we are of the view that thisaddition is to be confirmed. It is confirmed.” 9. The conclusions of the Tribunal sustaining the finding ofthe Assessing Officer that the assessee could not explain the sourceof Rs.3,00,000/- is entirely based on the factual materials whichwere available before him. Therefore, the Tribunal was fullyjustified in treating Rs.3,00,000/- as the undisclosed income of theassessee. : 9 : 10. The second issue that was canvassed before this court was with respect to the purchase of Maruti Zen Car. Thecontentions of the assessee were considered by the Tribunal and the Tribunal concluded the issue by holding thus: “55. Hearing the rival submissions, we are of theview that this addition is to be confirmed. The moneyhas gone from the assessee's bank account. The carstood purchased and registered in the name of theassessee. The circumstances explained and given by theassessing officer to show that there was no clear sourcefor assessee's mother (grandmother of Smt.Anjali Devi)to give Rs.3 lakhs also especially considering the factthat his mother was staying with his elder brother whowas relatively not as source full as by the assessee andthis led to the conclusion that if anything left behind, itshould have gone to the brother, who cared, protectedand looked-after the father at that particular point oftime. There is no case that other brothers of theassessee had received anything similar to the giftsequivalent for the purchase of car. Considering thefacts brought out on record and the explanations of theassessee, we are of the view that the additions weremade by the assessing officer only after applying hismind. The mere fact that it has been reproducedverbatim of the previous assessment order does notmean that the assessing officer had not applied hismind. It is the duty of the assessee to explain the sourceof the money that came into his account. The onlyexplanation of assessee's daughter that the demanddrafts were purchased in the name of her father because it was easy to get the car on priority basis if itwas booked in her father's name, of course, is anexplanation to be accepted provided the source of themoney was properly explained with such precision. Ithas not been done so. In the facts and circumstances ofthe case, we are of the view that this addition made bythe assessing officer is to be confirmed. Orderedaccordingly.” because it was easy to get the car on priority basis if itwas booked in her father's name, of course, is anexplanation to be accepted provided the source of themoney was properly explained with such precision. Ithas not been done so. In the facts and circumstances ofthe case, we are of the view that this addition made bythe assessing officer is to be confirmed. Orderedaccordingly.” 11. These findings again are also completely factual and byno stretch of imagination can it be said that these findings give riseto any question of law for the consideration of this court within thescope of an appeal filed under Section 260A of the Income Tax Act. 12. Lastly, it was contended by the learned counsel for theassessee that many of the items of income which were assessed inthe hands of the assessee were already assessed in the hands of hiswife Smt.Lekshmi R. Nair, in an assessment under Section 158BD. Counsel contended that such assessment was on the basis of thesatisfaction recorded by the Assessing Officer that the assetsunearthed in the search action belong to the assessee’s wife. Therefore, counsel contended that having recorded suchsatisfaction and completed assessment treating the assets as those belonging to the assessee’s wife, the same set of assets cannotagain be assessed in the hands of the assessee herein. Tosubstantiate this contention, counsel referred us to Section 158BDand also to the principles laid down by the Apex Court inCommissioner of Income Tax v. Calcutta Knitwears (2014) 362ITR 673. 13. Though this submission would sound attractive, on acloser examination, we find that this contention is only to berejected for the reason that the assessment completed against theassessee's wife is only protective assessment. It is well settled thatwhere there is a doubt as to the assessment of a person amongsttwo, parallel proceedings can be taken against both and alternativeassessment may also be completed. Therefore, the fact that aprotective assessment has been completed against the assessee’swife does not ipso facto mean that assessment of such items ofassets at the hands of the assessee is unsustainable. On the otherhand, if the assessment at the hands of the assessee is sustained, the assessment of the very same assets at the hands of theassessee’s wife, would have to necessarily fail. In suchcircumstances, we reject the contention now raised before us bythe learned Senior Counsel for the assessee. 14. Insofar as the appeal filed by the Revenue is concerned, inthis appeal, the grievance raised is confined to deletion of twoadditions. The first addition is in respect of profit from land deal atPalakkad by Sree Sankaracharya University amounting toRs.20,87,200/-. According to the Assessing Officer, the assessee inhis capacity as the Vice Chancellor of the University entered intoagreement with one Smt.Santhakumari on 4.3.96 for the purchaseof 5.63 acres of land for a total consideration of Rs.30,000/-. It isalso seen that agreement dated 3.4.96 for the purchase of 87 centsof land for a total consideration of Rs. 2,39,250/- was entered intowith one Suresh Babu and an advance of Rs.2,00,000/- was paid on2.4.96. Another agreement was also entered into on 3.4.96 withSmt.Dakshayani for the purchase of 1.29 acres of land for a total consideration of Rs.3,54,750/- and an advance of Rs.3,00,000/- waspaid. Yet another agreement was also entered into on the same daywith Sri.Manikandan for the purchase of 1.31 acres of land forRs.3,60,250/- and an advance was paid on 3.4.96. Similarly, onemore agreement was entered into on the same day withSri.Rammohan for the purchase of 3.95 acres of land for a totalconsideration of Rs.10,86,250/-. Advances of Rs.5,00,000/- eachwere paid on 4.3.96 and 4.4.96. It is found by the Assessing Officerthat on the day when these agreements were entered into, thevendors were not the actual owners of the properties agreed to besold and the vendors acquired the properties much later and for farlower prices. It is on that premise alone the Assessing Officer hasarrived at a conclusion that the differential amount (the differencebetween the agreed sale consideration and the actual amount paidby the vendor) has reached the assessee’s hands, the AssessingOfficer has treated the said amount as the undisclosed income ofthe assessee and taxed at his hands. 15. The second deletion ordered by the Tribunal, which isobjected by the Revenue, is with respect to certain items ofproperties purchased by the Sree Sankaracharya University atAttukal in Thiruvananthapuram district. Insofar as theseproperties are concerned, it is seen that the Sree VidhyadhirajaVidya Samajam, a trust of which the assessee is the patron,purchased 128 cents of land by different sale deeds. The first saledeed was executed on 4.9.93 for about 30 cents of land and theprice paid is Rs.1,000/- per cent. The second and third purchaseswere effected in April 1994 for about 25 cents of land forRs.3,000/- per cent. The fourth sale deed was executed on25.7.1994 for about 9 cents of land for Rs.5,000/- per cent and thefinal purchase was on 1.8.94 for about 14 cents of land atRs.6,500/- per cent. On 3.10.94, Samajam through its Secretaryentered into an agreement with Sree Sankarachayra University ofSanskrit for the sale of 100 cents of land out of the 128 cents ofland at a sale price of Rs.50,000/- per cent. It is seen that though the agreement was as above, the University finally purchased only59 cents of land for a total consideration of Rs.27,50,000/-.According to the Assessing Officer, the assessee played a doublerole being the patron of the Samajam and the Vice Chancellor of theUniversity. Here again, the difference between the purchase costand expenses and the sale price of 55 cents coming toRs.16,99,500/- was treated as the undisclosed income of theassessee and was taxed in the hands of the assessee. 16. These two additions were deleted by the Tribunal on thebasis that the conclusions of the Assessing Officer were purelybased on surmises and without any evidence. Although the learnedSenior Counsel appearing for the Revenue contended that theassessee, being a former Chief Secretary of the State of Kerala andthe Vice Chancellor of the University, should not have entered intoshady deals and relied on the principles laid down by the ApexCourt in its judgment in McDowell and Co. Ltd. v. Commercial TaxOfficer (1985) 154 ITR 148to argue that the conclusions of the 16. These two additions were deleted by the Tribunal on thebasis that the conclusions of the Assessing Officer were purelybased on surmises and without any evidence. Although the learnedSenior Counsel appearing for the Revenue contended that theassessee, being a former Chief Secretary of the State of Kerala andthe Vice Chancellor of the University, should not have entered intoshady deals and relied on the principles laid down by the ApexCourt in its judgment in McDowell and Co. Ltd. v. Commercial TaxOfficer (1985) 154 ITR 148to argue that the conclusions of the Tribunal are perverse, having considered the matter in its totality,we confess our inability to accept the contention. While thebonafides of the aforesaid transactions entered into by theassessee, during his tenure of the Vice Chancellor of the Universityare open to doubt, there is no evidence whatsoever to conclude forthe Assessing Officer or the Tribunal or this court to arrive at aconclusion that the differential amounts mentioned above haveactually reached the hands of the assessee to be treated as hisundisclosed income to be taxed at his hands. In this case, althoughthere are communications which are sufficient to suspect thebonafides of the deals that cannot take the place of all principles tosaddle the assessee with the tax liability which requires proof ofundisclosed income at the hands of the assessee. 17. In such circumstances, we are of the view that the findingof the Tribunal deleting the additions made in respect of Palakkadand Attukal properties are well found both factually and legally.Therefore, the findings entered by the Tribunal on these two issues : 17 : which alone are objected being purely factual do not give rise to any question of law to be considered by this court. We, therefore,confirm the order of the Tribunal. Appeals are dismissed. SD/- ANTONY DOMINIC JUDGE jes SD/- DAMA SESHADRI NAIDU JUDGE