Itr/111/1999 Of M/S.michael Joseph & Co., Palai v. The Commissioner Of Income Tax, Cochin

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 23RD JUNE 2008 / 2ND ASHADHA 1930 ITR.No. 111 of 1999() --------------------- AGAINST THE ORDER IN RA 26/COCH/97 IN ITA.330/COCH/1991 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPLICANT: ----------- M/S.MICHAEL JOSEPH & CO.,PALAI. RESPONDENTS: ------------- THE COMMISSIONER OF INCOME TAX,COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 23/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ. .................................................................... ....................................................................Dated this the 23rd day of June, 2008. JUDGMENT Ramachandran Nair, J. This reference case arises from the order of the Tribunal disposing of the appeal for the assessment year 1987-88. The only question referred iswhether the disallowance of Rs.65,500/- under Section 40A(3) of theIncome Tax Act is justified or not. We have gone through the Tribunal'sorder and have heard Standing Counsel appearing for the department. Itwas the contention of the assessee that after rejection of books of accountsand after estimation of gross profit, there was no justification for makingdisallowance under Section 40A(3) of the Income Tax Act. We do notthink this argument can be accepted because the payment in cash in excessof Rs.2,500/- during the relevant assessment year calls for disallowanceunder the Act, which has nothing to do with estimation of profit or adoptionof profit from accounts. We, therefore, reject this contention. So far asquantum of addition is concerned, we find the Tribunal has grantedsubstantial reduction in terms of the prayer. We, therefore, find no groundto interfere on this aspect of the question also. Accordingly I.T.R. is disposed of answering the questions referred in favour of the Revenue andagainst the assessee. A copy of this judgment under the seal of the High Court andsignature of the Registrar shall be forwarded to the Income Tax AppellateTribunal, Cochin Bench. C.N.RAMACHANDRAN NAIRJudge pms V.K.MOHANANJudge