COMMISSIONER OF INCOME TAX, CALICUT vs. SHRI ESSA ISMAIL SAIT (LATE)

Whether, on the facts and in the circumstances of the case and in the light of the admission by the assessee in the sworn statement, the Tribunal is right in law and facts in interfering with the assessment -2- based on the admission in the sworn statement?

(a)Whether, on the facts and in the circumstances of the case and on a perusal of the sworn statement does not the sworn statement indicate ─ i. The assessee is aware of right and wrong with regard to his own thoughts and actions? ii. A clear and alert mind? (b)If the answer to question 2(a) is in the affirmative, the Tribunal is right at all in ignoring the admission in the sworn statement? (c)Should not the Tribunal have preferred admission by the assessee to the document relied on by the Tribunal and is not the order not preferring the admission absolutely perverse and against all canons of law? (d)Justified in interfering with the assessment?

Is not the Tribunal wrong to have relied on the decision in Varghese Case (131 ITR 597 (SC) which is altogether on a different issue.

Is not the order of the Tribunal against the principle laid down in 284 ITR 557?”

Insofar as the remaining appeals are concerned, the relevant facts are that, in the meanwhile, dividing the total income assessed at the hands of the assessee as that paid by the partners of the firm, assessment was completed against the partners which was set aside by the first appellate authority. The order of the first appellate authority was impugned by the Revenue before the Tribunal. These appeals were also heard along with ITA No.605/2005 filed by the assessee mentioned above. On the basis that the appeal filed by the assessee has been allowed, the Tribunal disposed of the appeals of the Revenue on the basis that the -5- appeals have become infructuous. It is this order that is challenged by the Revenue in the connected appeals filed.

We heard the learned Senior Counsel for the Revenue, Sri.Arun S. Raj, who was appointed to assist the court in ITA 1771 of 2009 on account of the absence of the assessee and Sri.Mohan, the learned counsel appearing for the assessees in the remaining cases.

In the course of the hearing, the order passed by the Tribunal was read out to us. A reading of the order shows that while fixing the sale consideration at the amount as returned by the assessee, the Tribunal was primarily relied on the documents executed by the assessee himself and without properly considering the case of the Revenue. Further, the Tribunal has also not properly appreciated that it was the assessee who himself in his sworn statement admitted that `6.5 crores was paid to him as the sale consideration. We are also not impressed with the inference -6- of the Tribunal on the medical condition of the assessee at the time when he gave the sworn statement which was relied on by the Department. According to us, it was without examining the cases pleaded by the Revenue and the assessee in its entirety that the Tribunal has allowed the appeal of the assessee and fixed the sale value at the rate as returned by the assessee.

Therefore, we are of the view that the matter requires to be reconsidered by the Tribunal and fresh orders shall be passed duly adverting to the entire materials of the respective cases pleaded by both sides. As a consequence of this conclusion, necessarily, the remaining appeals filed by the assessees also will have to be restored to the file of the Tribunal for reconsideration.

Accordingly, without answering the questions of law framed for the consideration of this Court, these appeals are disposed of setting aside the order passed by the Tribunal -7- and restoring the appeals to its files with a direction to consider the matters afresh and pass fresh orders in accordance with law. ANTONY DOMINIC