Itr/222/1999 Of Latha S.nair v. The Commr. Of Income Tax,Tvm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 10TH JUNE, 2008 / 20TH JYAISHTA, 1930 ITR.No. 222 of 1999 (AGAINST THE ORDER IN ITA 542/COCH/94 IN RA.254/COCH/1996 OF I.T.A.TRIBUNAL, COCHIN BENCH) .................... APPLICANT: -------------- LATHA.S.NAIR,KOMALA VILAS, KARAMANA,TRIVANDRUM. BY ADV. SRI.KMV.PANDALAI SMT.PREETHA S.NAIR RESPONDENT: ----------------- COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON(SR.),SR.COUNSEL FOR IT THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 10/06/2008, ALONG WITH O.P.NO.27035 OF 1999, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. --------------------------------------------- I.T.R.No. 222 of 1999 &O.P.No. 27035 of 1999 --------------------------------------------- Dated this the 10[th] day of June, 2008 J U D G M E N T Ramachandran Nair,J: This tax reference arises from the order of theTribunal disposing of the appeal for the year 1990-91.Since the I.T.R. and the Original Petition pertain to thesame matter, we heard the matter together and proceed todispose of both the cases through this common judgment. 2.This I.T.R. arises from the order of the IncomeTax Appellate Tribunal, Cochin Bench disposing of theappeal filed by the revenue. Even though cross objectionwas filed by the assessee, the same was not noticed by theTribunal. Consequently, the appeal got disposed ofindependently, without reference to the assessee's crossobjection. Later, the cross objection was taken up and theTribunal dismissed this as infructuous because the appealarising from the same order of the Dy.C.I.T.(A) wasalready disposed of, after hearing both sides. In theappeal, the assessee has raised the question pertaining to :-2-: disallowance of loss confirmed by the Tribunal anddenial of depreciation which was also confirmed by theTribunal. In the O.P., the prayer is for restoring crossobjection along with appeal filed before the Tribunal andto decide the matter afresh. 3. We have heard the learned counsel appearing for the assessee and the Senior Standing Counsel for therespondent. 4.The main contention of the assessee is thatthe Tribunal had not considered the documentsproduced by the Department as well as the assessee,when the matter was taken up for hearing. According tocounsel, the Tribunal, without posting the cross-objection, passed final order. On going through theorders of the Tribunal and after hearing the parties, wedo not find any justification to restore the matter againto the Tribunal for reconsideration because of thefollowing facts:- :-3-: The assessee, the proprietrix of two shopsdealing in brass and metal articles, claimed transfer ofvessels to the value of Rs.2,21,059/- from herproprietory shop to the another business concern whichis a Kalyanamandapam maintained by the assessee.The Department conducted a survey in the assessee'spremises on 29.6.1992. The assessee's Manager gave astatement to the effect that the goods stated to havebeen transferred by the assessee to theKalyanamandapam were not in fact transferred and thearticles were not found there. Based on this evidence,the Assessing Officer verified the books of accounts.The assessee was found to be not maintaining properbills or vouchers for the purchase or sales.Consequently, the transfer value accounted by theassessee was taken as unaccounted sale and theassessing officer consequently disallowed the lossclaimed by the assessee. Even though in the first :-4-: :-4-: appeal, the assessee succeeded, the Tribunal on furtherappeal by the Department reversed the order of theappellate authority and restored the assessment. Thegoods stated to have been transferred from one businessconcern to another obviously did not reach or were notfound on inspection and the assessee's manager gavestatement confirming the same. In these circumstances,the assessing officer was perfectly justified in rejectingthe books of accounts. When the rejection of books ofaccount was proper and when the assessee's managergave a statement contrary to the assessee's statement,we do not think any further enquiry or evidence need betaken by the Tribunal. Therefore, we do not find anyjustification in remanding the case. Appeal to this Courtis maintainable against the order of the Tribunal underSection 260A of the Income Tax Act only on substantialquestion of law. We do not find any substantial questionof law arising against the order of Tribunal, upholding :-5-: the assessment which is based on facts found duringsurvey conducted by the Department and based onstatement of the appellant's manager. Above all, theassessee's claim for loss of Rs.1,19,694/- on anaccounted sales of Rs.1,82,675/- is prima facieunbelievable. In such circumstances and in the absenceof proper vouchers and bills reflecting businesstransaction, we do not think, the assessee can requestfor further opportunity to produce evidence in thesecond appellate stage before the Tribunal. Wetherefore find no ground to interfere with the Tribunal'sorder. Consequently, the Income Tax Reference isdisposed of answering the questions referred against theassessee and in favour of the Department. 5.Since the Tribunal has decided the appeal onmerits after hearing both sides and we upheld the samein the I.T.R.case and since the cross objection arisesfrom the same order of the appellate authority, against :-6-: which appeal was filed, we do not find any justificationto interfere with the order of the Tribunal dismissing thecross objection. Consequently, the Original Petition alsowill stand dismissed. C.N.RAMACHANDRAN NAIR, Judge V.K.MOHANAN, Judge MBS/ I.T.R.No.222/1999 & O.P.No.27035/1999 :-7-: C.N.RAMACHANDRAN NAIR &V.K.MOHANAN, JJ.-------------------------------------------- I.T.R.No.222/1999 & O.P.No.27035/1999 --------------------------------------------- J U D G M E N T DATED:10-6-2008 I.T.R.No.222/1999 & O.P.No.27035/1999