Ita/94/2015 Of A M Aboobacker v. The Income Tax Officer, Ward 2,Ernakulam

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC &THE HONOURABLE MR. JUSTICE SHAJI P.CHALY THURSDAY, THE 21ST DAY OF MAY 2015/31ST VAISAKHA, 1937 ITA.No. 94 of 2015 ------------------------ AGAINST THE ORDER IN ITA 282/2014 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 20-10-2014 APPELLANT/APPELLANT in ITA:------------------------------------------- A M ABOOBACKER AGED 58 YEARS S/O.A.K.MOIDEEN HAJI, ANJIKKATH HOUSE, TRIKKAKARA PO, KOCHI-682 021 BY ADVS.DR.K.B.MUHAMED KUTTY (SR.) SRI.SAKIR.K.H. SRI.V.H.UBAIDHULLA SRI.K.M.FIROZ SMT.M.SHAJNA SRI.S.KANNAN RESPONDENT/RESPONDENT IN ITA: ------------------------------------------------ THE INCOME TAX OFFICER, WARD 2 (2) ERNAKULAM - 682 018. R BY SRI.KMV.PANDALAI SRI.CHRISTOPHER ABRAHAM, SENIOR STANDING COUNSEL FOR INCOME TAX. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 21-05-2015, THECOURT ON THE SAME DAY DELIVERED THE FOLLOWING: I.T.A.No. 94 of 2015 APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A: A true copy of the Assessment order dated 30.12.2009 passed bythe respondent. ANNEXURE B: A true copy of the Appellate order dated 16.1.2014 passed by theCommissioner of Income Tax (Appeals) - II, Kochi in ITA 97/R-2/E/CIT(A)-II/09-10. ANNEXURE C: A true copy of the order dated 19-9-2014 passed by the IncomeTax Appellate Tribunal, Cochin Bench, Cochin in ITA No.282/Coch/2014. ANNEXURE D: A true copy of the original cash flow statement (withoutenclosures) for the assessment year 2006-07. ANNEXURE E: A true copy of the revised cash flow statement (withoutenclosures) for the assessment year 2007-2008. //True Copy// ANTONY DOMINIC & SHAJI P. CHALY, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - I.T.A.No.94 of 2015 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 21[st] day of May, 2015 JUDGMENT Antony Dominic, J. Heard Senior Counsel for the appellant and the Standing Counselappearing for the respondent. 2. This appeal arises from the order of the Income Tax Appellate Tribunal, Cochin Bench in ITA No.282/2014. By this order, the Tribunalhas confirmed addition of unexplained investment of Rs.69,00,000/-under Section 69 of the Income Tax Act. 3. Briefly stated, the facts of the case are that the appellant hadpurchased 35.137 cents of land in the Thrikkakkara North Village for aconsideration of Rs.60 lakhs. The property was purchased jointly with hisbrother. The appellant was called upon to explain and furnish the source ofthe said investment since the cash flow statement did not show thisinvestment. During the assessment proceeding, the appellant filed arevised cash flow statement explaining the investment of Rs.69 lakhstowards cost of acquisition, registration charges, stamp duty paid, etc. The : 2 : assessing officer was not satisfied with the explanation given by theappellant and treated the sum of Rs.69 lakhs as unexplained investmentunder Section 69 of the Income Tax Act. This order was confirmed bythe Appellate Authority and the Tribunal. It is aggrieved by thisproceedings, this appeal is filed under Section 260A of the Income TaxAct with the following questions of law for the consideration of thisCourt: “Whether on the facts and in the circumstances of the case: 1. the Appellate Tribunal is justified in dismissing the appealagainst the impugned orders for the reasons stated by it inthe impugned appellate orders regarding documents such asthe revised cash flow statement supported by bank loan,proceeds from sale of land and other sources andsubmissions made by the appellant with supportingdocuments? “Whether on the facts and in the circumstances of the case: 1. the Appellate Tribunal is justified in dismissing the appealagainst the impugned orders for the reasons stated by it inthe impugned appellate orders regarding documents such asthe revised cash flow statement supported by bank loan,proceeds from sale of land and other sources andsubmissions made by the appellant with supportingdocuments? 2. The Appellate Tribunal is justified in affirming the orderspassed by the authorities below in regard to the investmentof Rs.34,50,000/- towards the construction of buildingduring the next assessment year only for the reason that therent was received for a completed portion of the buildingduring the previous year? 3. The Appellate Tribunal is justified in refusing to reckonthe value of the existing building, namely Rs.24,00,000/- andapproving the valuation done in other aspects withoutreferring to approved valuer to arrive at correct valuation? 4. Is not the decision of the Appellate Tribunal erroneousinsofar as the impugned assessment order was passedwithout following the principles of natural justice andwithout fairness inaction insofar as even personal hearingwas not afforded to the appellant before finalising theassessment?” 4. Although various contentions impugning the orders wereraised before the Tribunal and were reiterated before us, from the orderof the Tribunal we find that the issue has been dealt with in thefollowing manner: “We have heard both the parties and perused the record.In this case, the assessee purchased land and buildingsituated at Thrikkakkara North Village for a considerationof Rs.60 lakhs jointly with his brother, Shri K.M.Kareem.During the course of assessment proceedings, the assesseefiled cash flow statement explaining the source of the same.Since the source of the above investment was notsatisfactorily explained, the Assessing Officer treated theamount of Rs.69 lakhs as unexplained investment. Beforethe CIT(A), the assessee relied on revised cash flowstatement. Firstly, to explain the source once again, theassessee has shown the loan from his brother,Shri.K.M.Kareem at Rs.46,00,820/- in the revised cash flowstatement which was only Rs.1000/- in the original cashflow statement. For this source also, there is no supportingevidence. Secondly, the assessee has taken out investmentof Rs.34,50,000/- towards construction of building to thenext assessment year so as to reduce the investment in thisassessment year. However, it was noticed by the Assessing Officer that the actual construction of the building wascompleted in the previous year relating to the assessmentyear 2007-08 and the assessee has been deriving rentalincome from the said property. Hence, when the assesseewas getting income from the said building in thisassessment year, the construction was already completedand this is only the devise adopted by the assessee toexplain the investment by reducing the same which cannotbe accepted. Further, though the assessee made a plea thatthere was an existing building valued at Rs.24,00,000/-which was included in the total cost of construction of thebuilding, there was no evidence to suggest the same in thisassessment year. Considering all these facts, we are of theopinion that the assessee has failed to explain the source ofinvestment to the extent of Rs.69,00,000/-. Hence, we areinclined to confirm the order of the CIT(A) on this issue.” 5. The above factual finding of the Tribunal shows that theTribunal was fully justified in upholding the conclusion of the lowerauthorities that the explanation of the appellant in so far as theinvestment in question was totally unsatisfactory and in such factualcircumstances, we do not find any question of law arising considerationof this Court and, in our view, even the questions of law framed by theappellant also disclose only factual issues. 5. The above factual finding of the Tribunal shows that theTribunal was fully justified in upholding the conclusion of the lowerauthorities that the explanation of the appellant in so far as theinvestment in question was totally unsatisfactory and in such factualcircumstances, we do not find any question of law arising considerationof this Court and, in our view, even the questions of law framed by theappellant also disclose only factual issues. 6. However, learned Senior Counsel for the appellant submits thatmany of the contentions raised before the Tribunal, were not dealt with I.T.A.No.94 of 2015 : 5 : by the Tribunal. If that be so, it is for the appellant to move before theTribunal afresh and if any such application is filed, the same shall beconsidered by the Tribunal in accordance with law.We do not find any merit in this appeal. Appeal is dismissed. Sd/- ANTONY DOMINIC JUDGE jes Sd/- SHAJI P. CHALY JUDGE //True Copy//P.A. to Judge