×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
01-03-2019, St. Antony’s Timber, Section 132, 271, Tribunal Cochin
This appeal filed by the Revenue is directed against order of the CIT(A)-III, Kochi dated 28/03/2018 for the assessment year 2008-09. The assessee has filed Cross Objection in C.O. No. 63/Coch/2018 against the Revenue appeal.
2. The facts of the case are that the assessee is a fi m with four partners and engaged in the business of Timber Trading. In this case, a search u/s. 132 of the Act was conducted on 23/10/2008. Post search, a notice dated 18/02/2010 u/s. 153A(a) was issued and served upon the assessee. In response to the notice the assessee filed its return declaring a total income of Rs.1,28,32,920/-. Theassessment was completed u/s.143(3) r.w.s 153A and the total income was assessed at Rs.2,15,59 239/ The main addition made was of an amount of Rs. 81.60 lacs on account of investment in immovable property being land admeasuring 30.5 cents at Chembukavu Thrissur. The Assessing Officer held this investment as made out of its undisclosed income of the assessee.
2.1 The said land had been purchased by an agreement dated 24/04/2007 for a recorded consideration of Rs.18.30 lacs. However, during the search, one of the seized documents viz. page no. 10 of SJ-3 seized from the residence of Shri Babu John, Managing Partner of the firm, contained notings that indicated that the actual cost of purchase of the said land at Chembukavu was Rs. 99.90 lakhs. In addition to this fact, Shri Babu John admitted in his statement recorded u/s. 132(4), that the purchase consideration of the land at Chembukavu was indeed Rs.99.90 lakhs. The notings on the seized paper were also deciphered by him. The A.O. pointed this to the assessee's authorised representative but as he had no convincing and satisfactory explanation, the difference between 99.90 lakhs and 18.30 lakhsamounting to Rs.81.60 lakhs was added to the total income as assessee's investment out of undisclosed income.
2.2 Penalty proceedings u/s. 271(I)(c) were initiated and notice dated 31.12.2010 u/s 274 r.w.s 271(l)(c) was duly issued alongwith the assessment order and served upon the assessee. The penalty proceedings were kept in abeyance since appeal had been filed by the assesse.
3. On appeal, the CIT(A) confirmed the addition of Rs.81.60 lakhs . Thereafter, the assessee filed appeal to the ITAT who agreed with the finding of the CIT(A) and confirmed the ev dentiary value of the seized document and that of the statement given by the partner. However, it was observed that although the registration of the property had been done only in the firm's name, the assessee had put an alternative claim that two other persons named Shri David and Shri Pavunny whose names also appeared on the seized document (page 10 of SJ-3) contributed equally with the assessee in the investment and the said contention had not been verified by lower authorities- If it was correct, the addition in assessee's hands would have