Ita/66/2012 Of The Commissioner Of Income Tax v. M/S.chekkattu Chitty Funds, Ramanchira, Thiruvalla

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY, THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA,1940 ITA.No. 66 of 2012 AGAINST THE ORDER/JUDGMENT IN ITA 79/COCH/1999 OFI.T.A.TRIBUNAL, COCHIN BENCH DATED 25-11-2011 APPELLANT/S: THE COMMISSIONER OF INCOME TAX,KOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S.CHEKKATTU CHITTY FUNDS, RAMANCHIRA, THIRUVALLA,PIN-689 101. BY ADVS.SRI.ANIL D. NAIRSMT.NIVEDITA A.KAMATHSRI.J.R.PREM NAVAZSRI.R.SREEJITH THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH ITA.70/2012, ITA.212/2012, ITA.214/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ..2.. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY, THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA,1940 ITA.No. 70 of 2012 AGAINST THE ORDER/JUDGMENT IN ITA 160/COCH/2000 OFI.T.A.TRIBUNAL, COCHIN BENCH DATED 25-11-2011 APPELLANT/S: THE COMMISSIONER OF INCOME TAXKOTTAYAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S.CHEKKATTU CHITTY FUNDS RAMANCHIRA, THIRUVALLA-689 101. BY ADVS.SMT.NIVEDITA A.KAMATHSRI.ANIL D. NAIRSRI.J.R.PREM NAVAZSRI.R.SREEJITH THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH ITA.66/2012, ITA.212/2012, ITA.214/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ..3.. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY ,THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA,1940 ITA.No. 212 of 2012 AGAINST THE ORDER/JUDGMENT IN ITA 79/COCH/1999 OFI.T.A.TRIBUNAL, COCHIN BENCH APPELLANT/S: M/S CHEKKATTU CHITTY FUNDS, THIRUVALLAGIR NO.FT-1971 BY ADVS.SRI.ANIL D. NAIRSMT.NIVEDITA A.KAMATHSRI.J.R.PREM NAVAZSRI.R.SREEJITH RESPONDENT/S: THE ASST.COMMISSIONER OF INCOME TAXCIRLCE -I, THIRUVALLA - 689 101. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH ITA.70/2012, ITA.66/2012, ITA.214/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ..4.. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON TUESDAY, THE 13TH DAY OF NOVEMBER 2018 / 22ND KARTHIKA,1940 ITA.No. 214 of 2012 AGAINST THE ORDER/JUDGMENT IN ITA 160/COCH/2000 OFI.T.A.TRIBUNAL, COCHIN BENCH APPELLANT/S: M/S. CHEKKATTU CHITTY FUNDSTHIRUVALLA, GIR NO.FT-1971. BY ADVS.SRI.ANIL D. NAIRSMT.NIVEDITA A.KAMATHSRI.J.R.PREM NAVAZSRI.R.SREEJITH RESPONDENT/S: THE ASSISTANT COMMISSIONER OF INCOME TAXCIRCLE-1, THIRUVALLA-689101. OTHER PRESENT: SRI JOSE JOSEPH SC THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 13.11.2018, ALONG WITH ITA.70/2012, ITA.66/2012, ITA.212/2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A. No.66/2012 & con.cases ..5.. K.VINOD CHANDRAN & ASHOK MENON, JJ. --------------------------I.T.A. Nos. 66, 70, 212 & 214 of 2012--------------------------Dated this the 13[th] day of November, 2018 J U D G M E N T Ashok Menon, J. The four appeals are filed for the assessmentyears (AY) 1992-93 and 1993-94, two by theassessee and two by the Revenue from thecommon order of the Tribunal. 2. For the year 1992-93, the assessee having notfiled a return of income voluntarily, a noticeunder Section 148 of the Income Tax Act (forshort, “the Act”) was issued, pursuant towhich, after some delay, the assessee filed areturn showing an adjusted total income ofRs.17,140/-. Similarly, for the year 1993-94,pursuant to a notice issued under Section I.T.A. No.66/2012 & con.cases ..6.. 142(1) of the Act, the assessee filed a return disclosing an income of Rs.770/-. On 17.08.1992, a search was conducted under J U D G M E N T Ashok Menon, J. The four appeals are filed for the assessmentyears (AY) 1992-93 and 1993-94, two by theassessee and two by the Revenue from thecommon order of the Tribunal. 2. For the year 1992-93, the assessee having notfiled a return of income voluntarily, a noticeunder Section 148 of the Income Tax Act (forshort, “the Act”) was issued, pursuant towhich, after some delay, the assessee filed areturn showing an adjusted total income ofRs.17,140/-. Similarly, for the year 1993-94,pursuant to a notice issued under Section I.T.A. No.66/2012 & con.cases ..6.. 142(1) of the Act, the assessee filed a return disclosing an income of Rs.770/-. On 17.08.1992, a search was conducted under Section 132 of the Act in the business premises of the assessee at Thiruvalla. At the time of search, Sri.Alex C. Joseph, theex-managing partner of the firm, in whose name the authorization was issued, was present in the premises. He was the brother of the present partners. His statement on oath was recorded and certain books of accounts and other documents were seized in addition tounaccounted cash of Rs.2,89,500/- and an imported Benz Car. 3. The assessee had been carrying on asister-concern by name, M/s ChekkattuFinanciers in the very same premises. From therecords and all the available information, the assessing officer found that the firm isactually managed by Sri.Alex C. Joseph. I.T.A. No.66/2012 & con.cases ..7.. Admittedly, the assessee had not been carryingon any chitty business in the subject yearsand was involved only in the business ofselling imported cars brought to the country in the name of Non Resident Indians (NRI). Forboth the years, the status of the assessee wasfound to be an Association of Persons. 4. For AY 1992-93, the following additions weremade: (i)Cash credits amounting to Rs.1,48,450/-were assessed under Section 68 of the Act asunexplained cash credit. (ii)Rs.7,16,254.95 as unexplained creditbalance available in the books of accounts,was added on as income. (iii)The assessee's Cash Book showed a creditof Rs.35,000/- as withdrawal from the accountof Sri.Alex C. Joseph, which, however, onverification with the bank, was found to be acheque paid by clearing to one Hindusthan I.T.A. No.66/2012 & con.cases ..8.. Engineering Co. This amount was also added onas unexplained cash credit under Section 68 ofthe Act. (iv)A deposit of Rs.22,000/- on 31.03.1992 andcash withdrawal of Rs.21,750/- as available inthe current account maintained by the assesseewith the Union Bank of India were found tohave been not disclosed in the cash bookseized from the assessee's premises. There washence an addition made of Rs. 22,000/- (v)An expenditure amounting to Rs.7,50,000/- claimed to have been paid in cash was notsubstantiated and hence, the same wasdisallowed under Section 40A(3) of the Act. 5. The assessee filed first appeal, in which thevalidity of the search carried out in thepremises of the assessee on a warrant issuedin the name of Alex C. Joseph, as also theadditions were challenged. The assesseecontended that there was an application in the I.T.A. No.66/2012 & con.cases ..9.. preceding AY, i.e., 1991-92, under Form No.11A for registration of the partnership firm, which had not been declined till date. However, there was no evidence submitted to substantiate the said contention and there being no application in the current year, the claim of the assessee of the status of a partnership firm was declined. 6. On the unexplained cash credit of Rs.1,48,450/-, a remand report was called for from the assessing officer. The addition based on the remand report was confirmed. The other additions of Rs.35,000/-, Rs.22,000/- and Rs.7,16,255/- were also confirmed. The disallowance under Section 40A(3) of I.T.A. No.66/2012 & con.cases ..9.. preceding AY, i.e., 1991-92, under Form No.11A for registration of the partnership firm, which had not been declined till date. However, there was no evidence submitted to substantiate the said contention and there being no application in the current year, the claim of the assessee of the status of a partnership firm was declined. 6. On the unexplained cash credit of Rs.1,48,450/-, a remand report was called for from the assessing officer. The addition based on the remand report was confirmed. The other additions of Rs.35,000/-, Rs.22,000/- and Rs.7,16,255/- were also confirmed. The disallowance under Section 40A(3) of Rs.7,50,000/- also stood confirmed. The assessee filed a further appeal before the Tribunal, in which all the grounds taken before the first appellate authority were reiterated. The Tribunal found the status of I.T.A. No.66/2012 & con.cases ..10.. the assessee to be an Association of Persons being an unregistered firm as held by theassessingofficer.Theadditionof Rs.1,48,450/- under Section 68 of the Act was confirmed. On the unexplained credit of Rs.7,16,255/-, the Tribunal remanded the issuefor fresh consideration to the assessing officer. The addition of Rs.35,000/- was confirmed, but that of Rs.22,000/- was deleted. The deletion was on account of thedeponent, Sri.M.K.A.Gerge, having not beenallowedtobecross-examined.The dis-allowance under Section 40A(3) of the Actwas also set aside. 7. The questions of law arising in the appeal ofthe assessee for the year 1992-93, as available in the memorandum of appeal, are asfollows; “(i)In the facts and circumstances of thecase, ought not the Tribunal have held thatthe search conducted on 17.08.1992 in the partnership firm on the basis of warrantissued in the name of stranger was illegal? (ii)In the facts and circumstances of thecase, ought not the Tribunal have held thatthe addition under Sec.68 of the Act wasunwarranted, more so, when it wasdemonstrated that these were chitty amountreceived from subscribers? (iii)In the facts and circumstances of thecase, ought not the Tribunal have set asidethe addition of unexplained cash credit, moreso after appreciating other evidence adducedby the appellant.” 8. The Department in their appeal has raised the following questions of law; “1.Whether, on the facts and in thecircumstances of the case and in the lightof the reasons noted in the assessmentorder, the Tribunal is right in law and factin interfering with the addition ofRs.7,50,000/- made under Sec.40A(3) of theIncome Tax Act? 2.Whether, on the facts and in thecircumstances of the case and also in thelight of the evidence found in Annexures A,B and C, the Tribunal is justified ininterfering with the addition of Rs.22000/-for the reason stated in order of the ITAT? 3.Whether, on the facts and in thecircumstances of the case;- a)did the assessee discharge the burden of proof? b)Should not the assessee be put to proof? I.T.A. No.66/2012 & con.cases 4.The Tribunal is right in law in placingthe burden of proof on the Revenue?” 9. Regarding the illegality of the search made under Section 132 of the Act, we are in 2.Whether, on the facts and in thecircumstances of the case and also in thelight of the evidence found in Annexures A,B and C, the Tribunal is justified ininterfering with the addition of Rs.22000/-for the reason stated in order of the ITAT? 3.Whether, on the facts and in thecircumstances of the case;- a)did the assessee discharge the burden of proof? b)Should not the assessee be put to proof? I.T.A. No.66/2012 & con.cases 4.The Tribunal is right in law in placingthe burden of proof on the Revenue?” 9. Regarding the illegality of the search made under Section 132 of the Act, we are in perfect agreement with the finding of theappellate authority and the Tribunal. TheTribunal has found that it cannot go into thevalidity of the search proceedings and that,at best, the Tribunal can examine whetherthere was a warrant of authorisation forconduct of the search. It was rightlyconcluded that there was a warrant in the nameof Sri.Alex C.Joseph, who was physicallypresent at the premises of the firm when thesearch was conducted. It has also come out inevidence that despite, this person being notshown as a partner of the firm, he wasactively involved in the affairs of the firmand continued to manage its affairs. Also theassessee was not registered as a partnershipfirm and it was assessed as an Association of I.T.A. No.66/2012 & con.cases Persons. That apart, materials were seizedfrom the premises, which would substantiate the allegations made against the firm, so asto proceed against the firm under the provisions of the Act. We find the Tribunalhaving rightly relied on the judgment of theHon'ble Supreme Court inPooran Malv. Director of Inspection[1974] 93 ITR 505. Even if the search is illegal, the Departmentcould use the material seized against theperson from whose custody it was seized. Onboth counts, we find absolutely no reason tointerfere with the findings of the Tribunalwith regard to the legality of the search. 10.As regards the additions made under Section 68of the Act also, the claim of the assessee that the amounts were received as chittyinstallments is not credible, especially sincethe assessee in the subject year had not beencarrying on chitty business. Further, the I.T.A. No.66/2012 & con.cases ..14.. identity of persons, who had paid the amounts,were not revealed. The issue has beenconsidered by the Assessing Officer (A.O.),appellate authority and the Tribunal and thereis no cause shown for interference by us. Theappeal filed by the assessee as I.T.A.No. 212of 2012 for 1992-93 is, therefore, rejectedand the questions of law are answered infavour of the Revenue. 11.As regards the appeals filed by theDepartment, the challenge is regarding dis-allowance under Section 40A(3) of the Act ofRs.7,50,000/-, which was interfered with bythe Tribunal. Rs.7,50,000/- was allegedly paidto one Sri.Balan Pillai by the assessee forpurchase of a car brought to India. The A.O.found from the books of accounts, includingthe ledger produced at the time of hearing,that the income derived from the dealing ofvehicle was not commission as claimed by the I.T.A. No.66/2012 & con.cases ..15.. assessee. The A.O. also found that an amountof Rs.46,785/- was credited to the Profit & Loss Account as commission on vehicletransaction, which includes a sum of Rs.25,000/- relating to the dealings in a car, which had been imported in the name of oneSri.Balan Pillai. The car was sold by theassessee for Rs.18,25,000/-, out of which thevalue of car included Rs.10,50,000/- paid ascustoms duty. The learned Standing Counselappearing for the Department submits that theassessee failed to respond to the letters or at least produce the confirmation fromSri.Balan Pillai regarding cash payment ofRs.7,50,000/- made to him and therefore, itwas disallowed under Section 40A(3). I.T.A. No.66/2012 & con.cases ..15.. assessee. The A.O. also found that an amountof Rs.46,785/- was credited to the Profit & Loss Account as commission on vehicletransaction, which includes a sum of Rs.25,000/- relating to the dealings in a car, which had been imported in the name of oneSri.Balan Pillai. The car was sold by theassessee for Rs.18,25,000/-, out of which thevalue of car included Rs.10,50,000/- paid ascustoms duty. The learned Standing Counselappearing for the Department submits that theassessee failed to respond to the letters or at least produce the confirmation fromSri.Balan Pillai regarding cash payment ofRs.7,50,000/- made to him and therefore, itwas disallowed under Section 40A(3). 12.That apart, there was also an unexplained deposit of Rs.22,000/- in the current accountof the assessee with Union Bank of India,Thiruvalla Branch on 31.03.1992, which remained unexplained. The amount was allegedlydeposited by one Sri.M.K.A.George, who hadfiled an affidavit stating that he had handedover a draft for that amount to the assesseefor encashing the same since he did not havean account at Thiruvalla. Thereafter, hisstatement was recorded by the AD(I),Ernakulam, in which he has withdrawn thestatement in the affidavit and stated that theaffidavit was actually prepared by Sri.Jose,the brother of Sri.Alex C.Joseph and he hasjust signed it, without understanding thecontents of the affidavit. Subsequently, thestatement given by the aforesaid George to theAD(I) was also withdrawn by him and he wentback to his earlier version. The Tribunal hasheld that in view of the statements and thewithdrawal of the affidavit, the version ofGeorge could not have been relied upon, unlesshe was subjected to cross-examination by the I.T.A. No.66/2012 & con.cases ..17.. assessee and therefore, the addition wasdeleted by the Tribunal. 13.With respect to the dis-allowance underSection 40A(3) of the Act of Rs.7,50,000/-, the same was not a payment made by the assessee. The payment was related to thetransaction of sale of imported car by oneShri.Balan Pillai to one Sri.Arun Choksi. Theassessee is said to have acted as a middle man. The customs duty was also paid for the imported car as reflected in the accounts ofthe assessee, on which there was an assumptionmade that the clearance of the vehicle fromthe customs authorities had been made by theassessee and hence, the registration of thecar should also be in the name of theassessee. However, the registration of the carwas made in the name of one Sri.Balan Pillaiand the copy of the Registration Certificatewas available in the files. The Tribunal then I.T.A. No.66/2012 & con.cases ..18.. found that since the vehicle was registered inthe name of Sri.Balan Pillai and the transferof the vehicle was also effected in the nameof one Sri.Arun Choksi, there was no reason tofind the payment of Rs.7,50,000/- as havingbeen made by the assessee. If at all a dis-allowance had to be made under Section 40A(3)of the Act, then necessarily, the same shouldhave been in the name of Sri.Arun Choksi, wasthe finding. 14.Admittedly, the car was imported to India ontransfer of residence (T.R) of a Non-ResidentIndian (NRI). There are certain conditions tobe complied with on such transfer beingeffected one of which is the vehicle beingcontinued in the name of the importer for aspecific period. It is also not clear as towhen the import was made and the transfer waseffected in the name of Sri.Arun Choksi. Ifthe import had been made by the NRI, then, ..19.. 14.Admittedly, the car was imported to India ontransfer of residence (T.R) of a Non-ResidentIndian (NRI). There are certain conditions tobe complied with on such transfer beingeffected one of which is the vehicle beingcontinued in the name of the importer for aspecific period. It is also not clear as towhen the import was made and the transfer waseffected in the name of Sri.Arun Choksi. Ifthe import had been made by the NRI, then, ..19.. necessarily, the customs duty would also havebeen paid by the NRI itself. There is noexplanation as to why the assessee firm paidthe customs duty for clearance of the importedcar. The assessee's role, hence, cannot besaid to be of a mere middle man. There aremore details to be looked into as to when theimport was made and the transfer was effectedbased on the Registration Certificate, if atall, issued in the name of Sri.Arun Choksi,who is said to be the purchaser. If thecustoms duty had been paid by the assesseefirm or by the subsequent registered owner,then, necessarily, there is violation of theconditions of import and there could also be apresumption of the import being made by theassessee itself, for the purpose of sale ofthat car, in the name of the NRI. In suchcircumstance, the entire price of the car andthe customs duty would have been borne by the I.T.A. No.66/2012 & con.cases ..20.. assessee and on subsequent transfer being made, it would have been on payment bySri.Arun Choksi to the assessee. Even in such a circumstance, there could not be a dis-allowance made under Section 40A(3) of the Act. The assessing officer having notattempted to view it in that perspective, wedo not think that there need be a remand.However if as held by the Tribunal there couldnot be a dis-allowance under Section 40A(3) ofthe Act since the payment was not from the assessee to the registered owner of thevehicle; then there is no scope for allowingan expenditure, since that was not an amountreceived by the assessee from Arun Choksi andthen passed on to Balan Pillai. The saidamount was merely shown as an expenditure, byvirtue of the payment made to Balan Pillai,without explaining the same. We, hence, findthe ground of dis-allowance under Section I.T.A. No.66/2012 & con.cases 40A(3) to be improper but still find thedis-allowance to be apt for no explanation ofthe source of such funds. 15.The next question is with respect to theaddition of the unexplained deposit ofRs.22,000/- for the AY 1992-93 in the currentaccount of the assessee with Union Bank ofIndia, Thiruvalla Branch. There is no recordof transaction made in the Cash Book seizedfrom the assessee and despite the request ofthe A.O. to explain the nature and source ofthe deposit and the purpose of cash withdrawalon the same day of Rs.21,750/-, there has beenno explanation forthcoming. The A.O. has, onfacts, found that even though in the firstinstance, Sri.M.K.A.George accepted the factthat he handed over the Demand Draft forRs.22,000/- to the assessee. But later hestated that the affidavit pertaining to suchacceptance was actually prepared and brought I.T.A. No.66/2012 & con.cases to him by Sri.Jose, brother of Sri.AlexC.Joseph, and that he had simply signed it andthe contents of that affidavit were deniedwhen he was examined by the AD(I).Consequently, the affidavit was rejected andadditionofRs.22,000/-wasmade. Sri.M.K.A.George had later filed a letterbefore the A.O. stating that he did not giveany statement to the AD(I) voluntarily andthat he had handed over the draft and the samewas encashed through the bank account of theassessee. The Tribunal has held that withoutany cross-examination by the assessee in thisregard, the statement before the AD(I) cannotbe a basis for making such an addition. Weagree with that. We answer the said questionof law also in favour of the assessee andagainst the Revenue. I.T.A. No.66/2012 & con.cases to him by Sri.Jose, brother of Sri.AlexC.Joseph, and that he had simply signed it andthe contents of that affidavit were deniedwhen he was examined by the AD(I).Consequently, the affidavit was rejected andadditionofRs.22,000/-wasmade. Sri.M.K.A.George had later filed a letterbefore the A.O. stating that he did not giveany statement to the AD(I) voluntarily andthat he had handed over the draft and the samewas encashed through the bank account of theassessee. The Tribunal has held that withoutany cross-examination by the assessee in thisregard, the statement before the AD(I) cannotbe a basis for making such an addition. Weagree with that. We answer the said questionof law also in favour of the assessee andagainst the Revenue. 16.The third question is on the very sameaddition on the onus of proof having been cast I.T.A. No.66/2012 & con.cases ..23.. on the Department. We do not think that thesaidquestionarisessincewhen Sri.M.K.A.George was examined by the AD(I),there should have been an opportunity to theassessee to cross-examine the said person. The same having been denied, there is violation ofprinciples of natural justice. We do not thinkthat there should be a remand in the issue forreason of the minimal addition, which was setaside by the Tribunal. The appeal of theDepartment for the year 1992-93 is partiallyallowed interfering with the order of theTribunal and sustaining the addition ofRs.7,50,000/- made by the A.O, on groundsstated herein. 17.In the year 1993-94, the very same issue ofthe validity of search and the additions madeunder Section 68 of the Act have been raisedin the appeal of the assessee. Further in theyear 1993-94, receipts of Rs.28,70,000/-, I.T.A. No.66/2012 & con.cases ..24.. Rs.10,00,000/-, Rs.5,08,867, Rs.10,00,000/- & Rs.5,35,000/- were added on as unaccountedbusiness receipts. An unexplained credit wasadded rejecting a confirmation letter filed bySri.M.K.A.George confirming that he has entrusted a jeep for sale to the assessee,which has been sold for Rs.8,75,000/-. Theunexplained cash found of Rs.2,89,500/- was seized, which was again assessed in the nameof the assessee. Unexplained cash credits amounting to Rs.35,000/- were also madeaddition under Section 68 of the Act. 18.In the first appeal, as in the other case,there was a remand report called for from theassessing officer. The additions of thebusiness receipts and the cash credit andunexplained credit were confirmed in firstappeal except an addition of Rs.10,00,000/-,which was with respect to a transaction ofsale of a car from one Sri.O.S.Shaduly to one I.T.A. No.66/2012 & con.cases ..25.. Sri.L.K.Bagla, which was remanded to theassessing officer. The unexplained cash asalso the cash credit and additions madethereon were also confirmed in first appeal.Before the Tribunal, the assessee raised thevery same contentions, which were answered bythe Tribunal as in the earlier year withrespect to the unexplained cash credit and thevalidity of the search, which are the onlyquestions raised in the appeal by the assesseefor the year 1993-94. The question of validityof search, as upheld by the Tribunal, in the earlier years appeal, has found ouracceptance. With respect to the unexplainedcash credit as in the earlier year, the claimwas chitty transaction, which, admittedly, theassessee had not been carrying on in thesubject years. Hence, both the questionsraised are to be answered against the assessee I.T.A. No.66/2012 & con.cases 2012 is, hence, rejected. following questions: 1.Whether, on the facts and in thecircumstances of the case, the Tribunal isright in law and fact in deleting theadditions of - i)Rs.28,70,000/- on account of import and sale of car; ii)Rs.30,43,887/- on account ofunaccounted business receipts; earlier years appeal, has found ouracceptance. With respect to the unexplainedcash credit as in the earlier year, the claimwas chitty transaction, which, admittedly, theassessee had not been carrying on in thesubject years. Hence, both the questionsraised are to be answered against the assessee I.T.A. No.66/2012 & con.cases 2012 is, hence, rejected. following questions: 1.Whether, on the facts and in thecircumstances of the case, the Tribunal isright in law and fact in deleting theadditions of - i)Rs.28,70,000/- on account of import and sale of car; ii)Rs.30,43,887/- on account ofunaccounted business receipts; iii)Business receipts of Rs.8,75,000/- on account unverifiable and unconfirmed credit on sale of jeep; iv)Rs.2,89,500/- on account ofunexplained cash found and seized duringsearch? 3.Are not the findings of the Tribunalhighlighted and challenged in the groundsraised or as grounds raised perverse andagainst law, logic and human conduct? 4.Whether, on the facts and in thecircumstances of the case;- a)did the assessee discharge the burden of proof? b)Should not the assessee be put to proof?” 20.The unaccounted business receipts were totally reasoning was that the transactions were, infact, those carried out by Sri.Alex C. Joseph,who was not even a partner of the business.Here we have to notice that there was nopartnership firm registered as per the Income-tax Act and the assessment was carried out asan AoP. Alex C. Joseph, in whose name thewarrant was issued was also present in personin the premises when the search was conducted.It was then found that the identical issuecame up for consideration before the Tribunalon import of vehicles from various countriesin the name of NRI's, in which Sri.Alex C.Joseph was found involved in the sale of thosevehicles within India. Sri.Alex C. Joseph wasfound to have carried out the transactions byhimself in other people's names, who actuallymerely lend their names for the purpose ofimport of vehicles. The Tribunal assessed theprofits of the transaction in the hands of I.T.A. No.66/2012 & con.cases ..28.. Sri.Alex C. Joseph, which was confirmed bythis Court in ITA No. 92 of 2008. 21.We find that the unaccounted business receipts were all seen accounted in the accounts of Sri.Alex C. Joseph. In such circumstances, wedo not find any reason to interfere with theTribunal's order except with respect to Rs.9,00,000/-, wherein two demand drafts ofRs.9,00,000/- and Rs.6,50,000/- were found to be credited to the accounts of Sri.Alex C. Joseph, out of which an amount of Rs.9,00,000/- was reflected in the accounts of the assessee. The Tribunal's order isinterfered with to the limited extent ofmaking an addition of Rs.9,00,000/- being the amounts reflected in the accounts of theassessee with respect to a transaction betweenSri.Bagla and Sri.Alex C. Joseph. All theother business proceeds are seen to have beenthose found in the accounts of Alex C. Joseph. I.T.A. No.66/2012 & con.cases Only on information received of the same beingthat of the assessee itself the additions wereproposed. There was nothing recovered insearch to substantiate such information andconfirm its veracity. We hence concur with theTribunal except on the limited additionsustained herein above. 22.On the question of addition of Rs.8,75,000/-,which was said to be received from the sale ofa jeep belonging to Sri.M.K.A.George, there isan affidavit proffered of that person, inwhich he admitted the transaction. But, beforethe Additional Director (Investigation), hedenied the same. Later, again a confirmationletterwassubmitted.Whatassumessignificance is the fact that there was nocross-examination permitted of the person whenhe appeared before the AD(I). Hence, we cannotinterfere with the deletion made by theTribunal on that account. I.T.A. No.66/2012 & con.cases ..30.. 22.On the question of addition of Rs.8,75,000/-,which was said to be received from the sale ofa jeep belonging to Sri.M.K.A.George, there isan affidavit proffered of that person, inwhich he admitted the transaction. But, beforethe Additional Director (Investigation), hedenied the same. Later, again a confirmationletterwassubmitted.Whatassumessignificance is the fact that there was nocross-examination permitted of the person whenhe appeared before the AD(I). Hence, we cannotinterfere with the deletion made by theTribunal on that account. I.T.A. No.66/2012 & con.cases ..30.. 23.The further contention is with respect to unexplained cash found and seized of Rs.2,89,500/-. The Tribunal found that there was no enquiry carried out to find the actualowners of the cash. Sri.Alex C. Joseph, whowas found to have been managing the affairs ofthe firm, also was present at the time ofsearch and seizure. The specific contention taken up by Sri.Alex C. Joseph was that thecash was withdrawn from the account of the assessee firm. However, the accounts of the assessee firm do not show such a withdrawalhaving been effected. Whatever withdrawal was effected, it could not have led to thepresence of the cash with the specific date slips of the bank, was the clear factual finding. However, there was a duty on theassessee to explain the cash. The assesseecannot merely contend that the cash belongedto Sri.Alex C. Joseph without any confirmation I.T.A. No.66/2012 & con.cases ..31.. from him; especially when he declined to ownup the same in his statement. The cash havingbeen found from the assessee's premises, theassessee has a duty to reveal and substantiatethe source, which was not done. In suchcircumstances, we do not think that theTribunal was right in deleting the addition ofincome with respect to the cash recovered fromthe assessee's premises, which was notaccounted by the assessee. We, hence set asidethe deletion of the said addition by theTribunal, restoring that made by the A.O. 24.With respect to the first question, we answerthe question partly in favour of the Revenueand partly in favour of the assessee. Wesustain the addition of Rs.9,00,000/- onaccount of the import and sale of car asunaccounted business receipts. We also restorethe order of the assessing officer insofar asthe addition of cash of Rs.2,89,500/-. The I.T.A. No.66/2012 & con.cases ..32.. other additions as deleted by the Tribunal arenot interfered with by us. We do not find anyperversity in the appreciation of the factualaspects. We hence partly allow the appeals of theDepartment, ITA Nos. 66 of 2012 & 72 of 2012.ITA Nos. 212 of 2012 & 214 of 2012 by theassessee stand rejected. Sd/-K.VINOD CHANDRAN JUDGE Sd/- ASHOK MENONJUDGE Bka/01.03.2019 APPENDIX OF ITA 66/2012 PETITIONER'S/S EXHIBITS: ANNEXURE A: TRUE COPY OF THE AFFIDAVIT FILED BY M.K.A.GEORGE DATED 26.02.1997. ANNEXURE B:TRUE COPY OF THE EXAMINATION REPORT OFTHE ADDITIONAL DIRECTOR OF INCOME TAX,ERNAKULAM DATED 19.03.1997.ANNEXURE C:TRUE COPY OF THE LETTER WRITTEN BY M.K.A.GEORGE TO THE ASSESSING OFFICER DATED 11.03.1997. ANNEXURE D:TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.1996.ANNEXURE E:TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 11.01.1999. ANNEXURE F: TRUE COPY OF THE ORDER OF THE TRIBUNALDATED 25.11.2011. APPENDIX OF ITA 70/2012 PETITIONER'S/S EXHIBITS: ANNEXURE ATRUE COPY OF THE ASSESSMENT ORDER DATED 29/03/1996. ANNEXURE A1TRUE COPY OF THE ASSESSMENT ORDER DATED 27/03/2002.ANNEXURE BTRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 01/02/2000. ANNEXURE B1TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 24/02/2005.ANNEXURE CTRUE COPY OF THE ORDER OF THE TRIBUNALDATED 25/11/2011. ..35.. APPENDIX OF ITA 212/2012 PETITIONER'S/S EXHIBITS: ANNEXURE-A ANNEXURE D:TRUE COPY OF THE ASSESSMENT ORDER DATED 29.03.1996.ANNEXURE E:TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 11.01.1999. ANNEXURE F: TRUE COPY OF THE ORDER OF THE TRIBUNALDATED 25.11.2011. APPENDIX OF ITA 70/2012 PETITIONER'S/S EXHIBITS: ANNEXURE ATRUE COPY OF THE ASSESSMENT ORDER DATED 29/03/1996. ANNEXURE A1TRUE COPY OF THE ASSESSMENT ORDER DATED 27/03/2002.ANNEXURE BTRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 01/02/2000. ANNEXURE B1TRUE COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 24/02/2005.ANNEXURE CTRUE COPY OF THE ORDER OF THE TRIBUNALDATED 25/11/2011. ..35.. APPENDIX OF ITA 212/2012 PETITIONER'S/S EXHIBITS: ANNEXURE-A TRUE COPY OF ASSESSMENT ORDER DATED 29.3.1996 FOR THE YEAR 1992-93 ISSUED TO THE APPELLANT ANNEXURE-BTRUE COPY OF THE APPELLATE ORDER DATED11.1.1999 FOR THE YEAR 1992-93 ANNEXURE-C TRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL & PHOTOCOPY ..36.. APPENDIX OF ITA 214/2012 PETITIONER'S/S EXHIBITS: ANNEXURE ATRUE COPY OF ASSESSMENT ORDER DATED 29.3.1996 FOR THE YEAR 1993-94 ISSUED TO THE APPELLANT. ANNEXURE BTRUE COPY FO THE APPELLATE ORDER DATED1.2.2000 FOR THE YEAR 1993-94. ANNEXURE CTRUE COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL.