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2019 Supreme(Ker) 106
IN THE HIGH COURT OF KERALA AT ERNAKULAM
K.VINOD CHANDRAN, ASHOK MENON, JJ.
The Commissioner of Income Tax, Thrissur - Appellant
Vs.
Shri. K.P. Ummer, Prop. Star Rolling Mill Kalladipatta, Pattambi - Respondent
ITA Nos. 156, 171, 174, 175, 178, 183, 188 of 2013
Decided On : 19-02-2019
For the Appellant : Sri. P.K.R. Menon, Senior Counsel, Goi (Taxes) Sri. Jose Joseph Sc For Income Tax
For the Respondent: Smt. Divya Ravindran, Sri. T.M. Sreedharan (Sr.), Sri. V.P. Narayanan
IMPORTANT POINTS :
• The Tribunal was of the opinion that such re-assessments with respect to concluded assessments has to be only on the basis of some incriminating material received on search, which can be related to the relevant previous years of such 'concluded assessment' years.
Headnote:The Income Tax Act, 1961- Section 132 - The Assessing Officer is empowered to issue notice to such person requiring him to furnish return of income in respect of each assessment year following within six assessment years referred to in clause (b). Section 139- The returns filed in pursuance to a notice under Section 153A is also to be treated as a return filed under Section 139-Section 143(2).
Statement of facts :
The assessee had indicated depreciation claimed on two vehicles as cash in-flow for the respective years from 2002-03 to 2008-09. The Assessing Officer refused to accept the same as a cash in-flow rightly so. The Tribunal found that, though the cash flow statement cannot be accepted, since it is depreciation, the same can be allowed as a deduction by the Assessing Officer. The modified order indicates that the Assessing Officer has allowed the said amounts as deduction from income as permissible for depreciation. The one other issue arising is with respect to sale of trees carried out in the assessment year 2002-03 which survives and will be noticed a bit later.
Finding of the court :
The surviving issues in the year 2002-03 with respect to the gifts or loans received from relatives coming to Rs.13,18,500/- and the sale of trees amounting to Rs.75,000/-. With respect to 2003-04 the gift claimed by the assessee from relatives is Rs.10,000/-. The question of law arise only in the said years, which we answer in favour of the Revenue and against the assessee. ITA Nos.156 & 175 of 2013 are allowed, restoring the order of the Assessing Officer, confirming the additions on issues as specified herein above. With respect to the other appeals, we find that no question of law arises from the order of the Tribunal since the issues are already dealt with by the Assessing Officer in the order giving effect to the order of the Tribunal.
Result : Appeals rejected.
K.VINOD CHANDRAN, J.
These appeals arise from the order of the Tribunal, which dealt with an assessment under Section 153A of the Income Tax Act, 1961(hereinafter referred to as 'the Act') for six plus one years, the last year being the year in which the search was conducted under Section 132. There were a number of issues arising before the Tribunal all of which except two, does not survive as of now, for reason of the revenue having not challenged certain issues before the Tribunal as also on the basis of the order passed giving effect to the order of the Tribunal. We would first look at the issues which do not survive for finalization of the assessment for completeness.
2. One of the issues raised was on gifts received from friends for the assessment years2003-04 to 2004-05. The Tribunal had remanded the matter to be considered by the Assessing Officer. The learned counsel for the assessee submits that the said individual gifts were considered and those which were proved were allowed by the Assessing Officer and others were added back to the income.
3. The next question is with respect to the deficiency in cash flow statement. The assessee had indicated depreciation claimed on two vehicles as cash in-flow for the respective years from 2002-03 to 2008-09. The Assessing Officer refused to accept the same as a cash in-flow; rightly so. The Tribunal found that, though the cash flow statement cannot be accepted, since it is depreciation, the same can be allowed as a deduction by the Assessing Officer. The modified order indicates that the Assessing Officer has allowed the said amounts as deduction from income as permissible for depreciation. The one other issue arising is with respect to sale of trees carried out in the assessment year 2002-03 which survives and will be noticed a bit later.
4. Then there is the issue of expenditure incurred for foreign travel. The C.I.T. Appeals made some modifications, which was accepted by the Tribunal. The revenue having not challenged the issue before the Tribunal, it does not survive for consideration. Yet another issue is the addition made on account of difference in valuation of house property. There, the dispute raised was, whether the CPWD rates have to be applied or the Kerala PWD rates. The assessee had relied on some judgments of the jurisdictional High Court finding the rates applicable to be those in the Kerala PWD Rules. It is submitted by the learned counsel for the assessee that in the modified order, the judgments of this Court were produced and in accordance with that, the valuation reports as per the Kerala PWD rates were accepted. On the addition made on account of amount received from son, there was a remand made to the Assessing Officer. The assessee was not able to prove the source of such income and hence the same has been added back.
5. One another issue that has been settled by the Tribunal is, the estimation of business income. The assessee had adopted a method by which the undisclosed turnover was determined by reference to the power consumption for one metric tonne production. The Assessing Officer had also adopted a gross profit of 31.3% as disclosed from the books of the assessee for the subject year. The C.I.T. Appeals made some modification. The Tribunal found that there was no substantial evidence relied on to determine the production. Hence, the Tribunal found that the statement of the assessee that there was 8% suppression has to be accepted across the board for all the years. With respect to the gross profit, the Tribunal found that it has to be accepted in each year at the rate disclosed in the accounts of the assessee. The issue being on estimation, we would not interfere with it, in an appeal under Section 260A.
6. What survives is the addition on gifts or loans received from relatives for the assessment years 2002-03 and 2003-04 and that of sale of trees in one year.
7. The Tribunal found that Section 153A makes a classification in so far as 'conclude
