R1 By Adv. Sri.harisankar v. Menon

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU THURSDAY, THE 6TH DAY OF JULY 2017/15TH ASHADHA, 1939 ITA.No. 198 of 2010 ( ) ------------------------ AGAINST THE ORDER/JUDGMENT IN IT(SS)A 155/COCH/2004 DT. 12.06.2009 ofINCOME TAX APPELLATE TRIBUNAL,COCHIN BENCH APPELLANT/RESPONDENT: ---------------------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX SRI P.K.R. MENON, SC RESPONDENT(S)/APPELLANT: --------------------------------- SRI.SUDHIR GOPI, UNIVERSAL EMPIRE INTERNATIONAL BLDG., S.R.M.ROAD,, KOCHI - 18. R1 BY ADV. SRI.HARISANKAR V. MENON R1 BY ADV. SMT.MEERA V.MENON THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 06-07-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: : 2 : APPENDIX PETITIONER'S ANNEXURES: ANNEXURE A:COPY OF ASSESSMENT ORDER 158BC DT. 26.06.2004 FORTHE BLOCK PERIOD 01.04.1996 TO 11.06.2002. THE BLOCK PERIOD 01.04.1996 TO 11.06.2002. ANNEXURE B :COPY OF ORDER DATED 25.10.2004 OF THE COMMISSIONEROF INCOME TAX (APPEALS).OF INCOME TAX (APPEALS). ANNEXURE C:COPY OF THE ORDER DATED 12.06.2009 OF THE INCOMETAX APPELLATE TRIBUNAL, COCHIN BENCH IT(SS)A NO.155/COCH/2004. TAX APPELLATE TRIBUNAL, COCHIN BENCH IT(SS)A NO.155/COCH/2004. RESPONDENTS' ANNEXURES:NIL //TRUE COPY// P.A. TO JUDGE. ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. ------------------------------------------- ------------------------------------------ Dated this the 6[th] day of June, 2017. JUDGMENT Antony Dominic,J. In this appeal filed by the Revenue, it impugns the order ofthe Tribunal in I.T (SS) A. No. 155/Coch/2004 dated 12.06.2009. 2. We heard the learned Senior Counsel for the Revenue andthe learned counsel appearing for the assessee. 3. It is seen that on 11.06.2002, a search was carried out in theresidential premises of the assessee as well as in the businesspremises of M/s. Universal Institute of Advanced Studies andResearch (P) Ltd. The search resulted in the seizure of documents aswell as materials, which included gold ornaments. The assessee filedreturn pursuant to the notice under Section 158BC and accordinglythe assessment was completed determining the undisclosed incomeof the assessee. 4. Among various other items, one of the addition was`12,29,074/- towards the investment in gold. That addition was sustained by the Commissioner of Income Tax (Appeals). However,the Tribunal deleted the addition and its reasoning contained inparagraphs 35 and 36 of the order reads thus: 35. The next ground raised by the assessee is against theaddition of Rs.12,29,074/- sustained by the CIT (Appeals) inrespect of investment in gold. It is the case of the assessee that theassessee is settled with family in Dubai since 1997 and has travelledto India frequently and brought gold ornaments and the source forthe purchase of the gold ornaments were the earnings in Dubai. Itis the case of the assessee that the salary certificate supported thecontention of the assessee regarding the availability of funds inDubai and there was no reason to sustain an addition ofRs.12,29,074. The lower authorities have rejected the contention ofthe assessee on the ground that the assessee did not produceevidences. 35. The next ground raised by the assessee is against theaddition of Rs.12,29,074/- sustained by the CIT (Appeals) inrespect of investment in gold. It is the case of the assessee that theassessee is settled with family in Dubai since 1997 and has travelledto India frequently and brought gold ornaments and the source forthe purchase of the gold ornaments were the earnings in Dubai. Itis the case of the assessee that the salary certificate supported thecontention of the assessee regarding the availability of funds inDubai and there was no reason to sustain an addition ofRs.12,29,074. The lower authorities have rejected the contention ofthe assessee on the ground that the assessee did not produceevidences. 36. On an examination of the issue, we find that thecontention of the assessee cannot be brushed aside. The assesseehas worked in Dubai and he has been staying in Dubai with hisfamily. The passports of the assessee and his family have provedthat he had visited frequently India from Dubai. The AssessingOfficer does not have a case that the assessee did not have anyincome earned in Dubai. The Assessing Officer himself has statedin page 29 of the assessment order that the earnings of the assesseein Dubai could be worked out at Rs.52.5 lakhs approximately. It isa different fact that the entire amount of Rs.52.5 lakhsapproximately. It is a different fact that the entire amount ofRs.52.5 lakhs have been appropriated by the Assessing Officertowards assessee's family expenses, children education expenses, etc.But the fact that the assessee had earned income in Dubai issupported by the assessment order itself. We find that the assesseehad substantial earnings in Dubai and he had been staying with hisfamily in Dubai and had been visiting India frequently. It is quiteobvious and natural to come to a conclusion that the assessee would be bringing gold ornaments from time to time to India.The explanation of the assessee satisfies the reasoning of theordinary humane prudence. The balance of probability is infavour of the assessee. Taking into consideration the inter-nationalcharacter of the activities carried on by the assessee and hisfinancial status, we do not find that there is anything to besuspected in the explanations offered by the assessee. Therefore, wefind that the addition of Rs.12,29,074/- is not justified. It isdeleted.” 5. In this appeal, the challenge is limited to the aforesaid deletion as ordered by the Tribunal and the questions of law framedare as follows: 1. Whether on the facts and in the circumstances of thecase: (a) the Tribunal is right in law and fact in deleting theaddition of Rs.12,29,074/- towards investment in gold holdingthat the balance of probability is in favour of the assessee? (b) should not the conclusion based on balance ofprobability be one in favour of the Revenue, the onus being onthe assessee? 2. (a) Whether on the facts and in the circumstances of thecase should not the Tribunal have put the assesee to proof? (b)did the assessee discharge the burden of proof that lay onhim? (c) is not the order of the Tribunal based on presumptionsand conjunctures and hence absolutely perverse and vitiated? 6. While, according to the learned Senior Counsel, the Tribunalhas misdirected itself by putting the onus on the Revenue, the learnedcounsel for the assessee, who in his endeavour to sustain the order ofthe Tribunal, contended that admittedly the assessee was living inDubai for several years and has having substantial earnings.According to him, it was only natural that the Tribunal has inferredthat the gold in question was acquired by the assessee from out of hisearnings abroad. 2. (a) Whether on the facts and in the circumstances of thecase should not the Tribunal have put the assesee to proof? (b)did the assessee discharge the burden of proof that lay onhim? (c) is not the order of the Tribunal based on presumptionsand conjunctures and hence absolutely perverse and vitiated? 6. While, according to the learned Senior Counsel, the Tribunalhas misdirected itself by putting the onus on the Revenue, the learnedcounsel for the assessee, who in his endeavour to sustain the order ofthe Tribunal, contended that admittedly the assessee was living inDubai for several years and has having substantial earnings.According to him, it was only natural that the Tribunal has inferredthat the gold in question was acquired by the assessee from out of hisearnings abroad. 7. Having considered the rival submissions made, we areinclined to agree with the learned counsel for the Revenue. A readingof the order of the Tribunal itself would show that while it was theburden of the assessee to prove the source of his acquisition of thegold ornaments, the Tribunal has proceeded putting the onus on theRevenue. That apart, the Tribunal has also ignored the fact that theassessee did not explain or produce any material substantiating hiscontention that the gold was acquired outside the country or that theacquisition was from out of his earnings. In the absence of anyevidence to that effect, according to us, the Tribunal has misdirected itself in appreciating the case of the Revenue and has arrived at theimpugned conclusions, which to say the least, are perverse. Therefore, the order of the Tribunal to the extent it is impugnedis liable to be set aside. Accordingly, answering the questions of law in favour of theRevenue and against the assessee, this appeal is disposed of. ANTONY DOMINIC, JUDGE. DAMA SESHADRI NAIDU, JUDGE. Rv