LATHA S.NAIR vs. THE COMMR. OF INCOME TAX,TVM.

This I.T.R. arises from the order of the Income Tax Appellate Tribunal, Cochin Bench disposing of the appeal filed by the revenue. Even though cross objection was filed by the assessee, the same was not noticed by the Tribunal. Consequently, the appeal got disposed of independently, without reference to the assessee's cross objection. Later, the cross objection was taken up and the Tribunal dismissed this as infructuous because the appeal arising from the same order of the Dy.C.I.T.(A) was already disposed of, after hearing both sides. In the appeal, the assessee has raised the question pertaining to :-2-: disallowance of loss confirmed by the Tribunal and denial of depreciation which was also confirmed by the Tribunal. In the O.P., the prayer is for restoring cross objection along with appeal filed before the Tribunal and to decide the matter afresh.

We have heard the learned counsel appearing for the assessee and the Senior Standing Counsel for the respondent.

The main contention of the assessee is that the Tribunal had not considered the documents produced by the Department as well as the assessee, when the matter was taken up for hearing. According to counsel, the Tribunal, without posting the cross- objection, passed final order. On going through the orders of the Tribunal and after hearing the parties, we do not find any justification to restore the matter again to the Tribunal for reconsideration because of the following facts:- :-3-: The assessee, the proprietrix of two shops dealing in brass and metal articles, claimed transfer of vessels to the value of Rs.2,21,059/- from her proprietory shop to the another business concern which is a Kalyanamandapam maintained by the assessee. The Department conducted a survey in the assessee's premises on 29.6.1992. The assessee's Manager gave a statement to the effect that the goods stated to have been transferred by the assessee to the Kalyanamandapam were not in fact transferred and the articles were not found there. Based on this evidence, the Assessing Officer verified the books of accounts. The assessee was found to be not maintaining proper bills or vouchers for the purchase or sales. Consequently, the transfer value accounted by the assessee was taken as unaccounted sale and the assessing officer consequently disallowed the loss claimed by the assessee. Even though in the first :-4-: appeal, the assessee succeeded, the Tribunal on further appeal by the Department reversed the order of the appellate authority and restored the assessment. The goods stated to have been transferred from one business concern to another obviously did not reach or were not found on inspection and the assessee's manager gave statement confirming the same. In these circumstances, the assessing officer was perfectly justified in rejecting the books of accounts. When the rejection of books of account was proper and when the assessee's manager gave a statement contrary to the assessee's statement, we do not think any further enquiry or evidence need be taken by the Tribunal. Therefore, we do not find any justification in remanding the case. Appeal to this Court is maintainable against the order of the Tribunal under Section 260A of the Income Tax Act only on substantial question of law. We do not find any substantial question of law arising against the order of Tribunal, upholding :-5-: the assessment which is based on facts found during survey conducted by the Department and based on statement of the appellant's manager. Above all, the assessee's claim for loss of Rs.1,19,694/- on an accounted sales of Rs.1,82,675/- is prima facie unbelievable. In such circumstances and in the absence of proper vouchers and bills reflecting business transaction, we do not think, the assessee can request for further opportunity to produce evidence in the second appellate stage before the Tribunal. We

Since the Tribunal has decided the appeal on merits after hearing both sides and we upheld the same in the I.T.R.case and since the cross objection arises from the same order of the appellate authority, against :-6-: which appeal was filed, we do not find any justification to interfere with the order of the Tribunal dismissing the cross objection. Consequently, the Original Petition also will stand dismissed.