Ita/42/2010 Of The Commissioner Of Income Tax v. Sri.a.v.madhavan

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY THURSDAY, THE 30TH JUNE 2011 / 9TH ASHADHA 1933 ITA.No. 42 of 2010() -------------------- AGAINST THE ORDER DATED 23/07/2009 IN IT(S& S)A.42/COCH/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/APPELLANT --------------------------------------- THE COMMISSIONER OF INCOME TAX, KANNUR. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): RESPONDENT ------------------------- SRI.A.V.MADHAVAN, AST ROLOGER, SRUTHI, P.O.ANNUR, PAYYANNUR. ADV. SRI.T.M.SREEDHARAN FOR R SRI.V.P.NARAYANAN FOR R SMT.C.K.SHERIN FOR R THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 30/06/2011, ALONG WITH ITA NOS. 63, 125 & 126 OF 2010 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO.42/2010 APPENDIX APPELLANT'S EXHIBITS ANNEXURE A :COPY OF ORDER UNDER SECTION 158BC(c) READ WITH SECTION143(3) DATED 30/07/2001. ANNEXURE B : COPY OF ORDER OF THE CIT(A) IN ITA 46/CNR/CIT(A)-III/04-05 DATED09/11/2004. ANNEXURE C :COPY OF ORDER OF THE TRIBUNAL IN ITA NO.42/COCH/2005DATED 23/07/2009. ANNEXURE D :COPY OF SWORN STATEMENT (IN MALAYALAM) ANNEXURE E : FREE ENGLISH TRANSLATION OF MALAYALAM SWORN STATEMENT. //TRUE COPY// jg PA TO JUDGE. C.N.RAMACHANDRAN NAIR & BHABANI PRASAD RAY, JJ. ---------------------------------- I.T.A. Nos.42, 63, 125 & 126 of 2010---------------------------------Dated, this the 30[th] day of June, 2011J U D G M E N T Ramachandran Nair, J. The connected appeals filed by the Revenue relate to the very same assessee, who is an Astrologer by profession.During the search conducted in the residence of therespondent assessee on 06/07/1999 the Department seizedcash, Fixed Deposit receipts and particulars of Savings Bankaccounts relating to undisclosed income of the assessee. Theassessee had given a detailed statement admitting that theinvestments are from professional income received frompractice of Astrology. However, in the course of assessment,the assessee put forward a case that substantial amount ofdeposit though held in the name of himself, wife and childrenbelongs to a Trust by name Jyothi Sadanam engaged inrunning coaching centre for teaching Astrology and Sanskrit. ITA Nos.42, 63, 125 & 126/2010 In the statement recorded at the time of search, the assesseenever had such a case. However the assessee's explanationthat funds belonged to the Trust was accepted in first appeal,even though the Trust itself was registered nearly two yearsafter the search i.e. on 01/01/2001. This order was confirmedin second appeal by the Tribunal against which the Revenuehas come up with these appeals. 2.During hearing of the appeal filed against blockassessment, we felt there is a strong case for the Departmentbecause the subsequent case built up by the assessee byintroducing the Trust, namely Jyothi Sadanam, does not haveany reference in any of the documents seized or the swornstatement recorded by the assessee which was not retracted.We, therefore, suggested the learned counsel whether theassessee is willing to come forward with some kind ofsettlement so that unnecessary remand and repeated appealscould be avoided. Learned counsel after taking instructionsinformed us that the assessee is willing to agree for a further ITA Nos.42, 63, 125 & 126/2010 2.During hearing of the appeal filed against blockassessment, we felt there is a strong case for the Departmentbecause the subsequent case built up by the assessee byintroducing the Trust, namely Jyothi Sadanam, does not haveany reference in any of the documents seized or the swornstatement recorded by the assessee which was not retracted.We, therefore, suggested the learned counsel whether theassessee is willing to come forward with some kind ofsettlement so that unnecessary remand and repeated appealscould be avoided. Learned counsel after taking instructionsinformed us that the assessee is willing to agree for a further ITA Nos.42, 63, 125 & 126/2010 addition of Rs.10,00,000/- (Rupees ten lakhs only), which is asacrifice from the relief granted by the first appellate authorityas well as the Tribunal. Learned Standing Counsel left thematter for our decision i.e. whether to accept the assessee'soffer for settlement or not. Considering the partial reliefgranted in the assessment itself and the offer made by theassessee, we feel the offer made by the assessee isreasonable. Further, if at all we accept the argument of theDepartment, we have to only remand the matter to the firstappellate authority, which will lead to another round oflitigation. We, therefore, accept the offer made by theassessee and allow ITA No.42/2010 filed by the Department inpart by modifying the orders of the Income Tax AppellateTribunal and the first appellate authority by making a furtheraddition of Rs.10,00,000/- (Rupees ten lakhs only) in theblock assessment. The Assessing Officer will modify therevised orders issued by limiting the relief granted by the CIT(Appeals), which is confirmed by the Tribunal in respect of ITA Nos.42, 63, 125 & 126/2010 -4- investment in FD receipts as relatable to Trusts fromRs.30,18,092/- to Rs.20,18,092/-. All other reliefs grantedby the first appellate authority and the Tribunal in revisedorders will stand confirmed. Revised orders will be issued atthe earliest after notice to the assessee. ITA Nos.63, 125 and 126 of 2010 pertain to follow up assessments based on interest and other income in respect ofinvestments assessed in block assessment. In view of theabove, these appeals are allowed by vacating the orders of theTribunal and that of the first appellate authority and byremanding the matter to the Assessing Officer for makingrevised assessment based on the revision in block assessmentcompleted by him based on our directions above. These Appeals are allowed as above. (C.N.RAMACHANDRAN NAIR, JUDGE) (BHABANI PRASAD RAY, JUDGE)