Ita/340/2009 Of The Commissioner Of Income-Tax v. Samurai Techno Trading Co (P) Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU MONDAY, THE 20TH DAY OF JUNE 2016/30TH JYAISHTA, 1938 I.T.A.No.340 of 2009 AGAINST THE ORDER IN ITA 881/2009 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 15-10-2003 APPELLANT/APPELLANT: THE COMMISSIONER OF INCOME-TAX, COCHIN. BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT: SAMURAI TECHNO TRADING CO (P) LTD. OS 59, G.C.D.A. COMMERCIAL COMPLEX, MARINE DRIVE, COCHIN 682 031. R,R1 BY ADV. SRI.V.PHILIP MATHEW R,R BY ADV. SRI.GIBI.C.GEORGE R,R1 BY ADV. SRI.S.ARUN RAJ THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 20-06-2016, THE COURTON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A.No.340 of 2009 APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A: COPY OF ASSESSMENT ORDER UNDER SECTION 143(3)DATED 26.3.1997 ISSUED BY THE ASSESSING OFFICER FOR THE ASST.YEAR 1994-95. ANNEXURE B: COPY OF THE ORDER DATED 19.5.1999 OF THECOMMISSIONER OF INCOME TAX (APPEALS). ANNEXURE C: CERTIFIED COPY OF THE ORDER DATED 15.10.2003 OFTHE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH IN ITANO.381/COCH/1999. // TRUE COPY // P.A. TO JUDGE ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A.No.340 of 2009 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 20[th] day of June, 2016 Antony Dominic, J. JUDGMENT The order passed by the Income Tax Appellate Tribunal in I.T.A. No.381/99 concerning the assessment year 1994-1995 is called inquestion. 2. Briefly stated, the facts that are relevant for the disposal ofthis appeal is that the respondent assessee was engaged inconsultancy and contract works covering acqua culture and marineproducts. Their returned income consisted of income from contractwork consultancy and other income forming interest on deposits andservice charges. It would appear that the business income from thecontract for the assessment year was estimated in the assessmentproceedings. There was also an addition of Rs.6,44,383/- shown asinterest accrued on fixed deposit and Rs.9 lakhs shown as servicecharges. This addition made by the Assessing Officer was confirmed I.T.A.No.340 of 2009 : 2 : by the First Appellate Authority. In the further appeal filed beforethe Tribunal, the Tribunal set aside the addition by holding thus: “ 11. But we find that the estimation of profit at 10%made by the assessing officer is on the higher side. Tobe fair and reasonable, we modify the income fromcontract at 10% of the total contract receipts.Likewise, we do not find any justification in making aseparate addition of Rs.15,44,353/- as “other income”.The assessee had showed interest accrued on FixedDeposit at Rs.6,44,383/- and service charges toRs.9,00,000/-. It is to be seen that all these incomearose to the assessee out of the activities carried on inthe course of contract work and also on the fundsblocked in the said business. Therefore, while theincome from contract business is computed on thebasis of estimate, there is no justification in making aseparate addition in the above manner. Therefore, theaddition of Rs.15,44,353/- is deleted. The appeal forthe assessment year 1994-95 is disposed off in theabove line.” 3. It is aggrieved by this order of the Tribunal, the Revenue has filed this appeal, and the main question of law raised iswhether the Tribunal was right in law and fact in deleting theaddition of Rs.15,44,353/- assessed under the head 'other sources'. I.T.A.No.340 of 2009 : 3 : 4. We heard the Senior Counsel for the Revenue and thelearned counsel for the assessee. 5. Having considered the submissions made by both sides, we 3. It is aggrieved by this order of the Tribunal, the Revenue has filed this appeal, and the main question of law raised iswhether the Tribunal was right in law and fact in deleting theaddition of Rs.15,44,353/- assessed under the head 'other sources'. I.T.A.No.340 of 2009 : 3 : 4. We heard the Senior Counsel for the Revenue and thelearned counsel for the assessee. 5. Having considered the submissions made by both sides, we are of the view that the Tribunal has not given any justifiablereasons for deleting additions in question. The fact that incomefrom contract works has been estimated does not mean that theAssessing Officer cannot add income from other sources, such asinterest on fixed deposit and service charges. Therefore, we set aside the order of the Tribunal in I.T.A.381/99. The question of law raised is answered in favour of theassessee and against the Revenue. Sd/- ANTONY DOMINIC JUDGE jes Sd/-DAMA SESHADRI NAIDU JUDGE