THE COMMISSIONER OF INCOME TAX,TRICHUR vs. SRI.P.M.ABBOBACKER,CHAVAKKAD,TRICHUR

ITA/201/2011HC KeralaKLHC01026549201120 March 2014Author: HONOURABLE MR.JUSTICE A.M.SHAFFIQUE,HONOURABLE THE CHIEF JUSTICE DR. MANJULA CHELLUR12 pages
AI SummaryAllowed

What were the facts?

The Revenue appealed against an order of the Income Tax Appellate Tribunal (Tribunal) for Assessment Year 2006-2007. The assessee, owner of a shopping complex, had his total income determined at Rs. 1,05,85,935/- by the Assessing Officer (AO), which included an undisclosed investment of Rs. 54,20,000/-. This addition was based on information from Mr. P.A. Noushad, who stated he sold land to the assessee for Rs. 78,20,200/-, though the sale deed showed Rs. 24,00,000/-. Mr. Noushad also stated he purchased the property for Rs. 66,20,000/-, with the sale deed showing Rs. 21,75,000/-. The Commissioner of Income-tax (Appeals) deleted the addition, and the Tribunal dismissed the Revenue's appeal. The High Court is considering the Revenue's appeal against the Tribunal's order.

What did the High Court hold?

The High Court held that the Tribunal and the first appellate authority erred in deleting the addition made by the Assessing Officer. The Court found that Mr. Noushad's statement under Section 132(4), his affidavit, and his sworn statement during cross-examination, all consistently indicated that the property was sold for Rs. 78,20,000/- and purchased for Rs. 66,20,000/-, despite the sale deeds showing lower values. The Court noted that Mr. Noushad had declared the income and paid tax on the higher amounts. The Court distinguished the case from K.P. Varghese's case, stating that the Revenue had sufficiently proved undervaluation and higher payment by the assessee. The Court relied on its own decision in CIT v. Medical Trust Hospital & Ors., observing that undervaluation is common due to stamp duty. The Court concluded that the findings of the appellate authorities were perverse, as the uncontroverted evidence of Mr. Noushad supported the AO's conclusion. The appeal was allowed, setting aside the orders of the CIT(A) and the Tribunal, and confirming the AO's order.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and the receipt of on-money having been admitted by the assessee in the sworn statement, the examination in cross, the affidavit, the tax return, the Tribunal is right in law and fact in relying on the consideration shown in the sale deed; and whether the Tribunal is right in law and fact in interfering with the assessment order, and if the reliance on the sale deed and interference with the assessment order is perverse and against law and logic. 2. Whether, on the facts and in the circumstances of the case and considering the distinguishing features, the Tribunal is right in law and fact in relying on the decisions of the Hon'ble Supreme Court in K.P. Varghese v. Income-tax Officer and P.V. Kalyanasundaram; and whether the Tribunal should not have relied on the decision of the Hon'ble Kerala High Court in CIT v. Medical Trust Hospital & Ors. Assessee's Contentions: The judgment does not record specific contentions from the assessee's counsel, other than the fact that the assessee preferred an appeal before the CIT(A) and the Tribunal dismissed the Revenue's appeal. The assessee's counsel appeared before the High Court. Revenue's Contentions: The Revenue contends that the Tribunal erred in relying on the sale deed consideration and interfering with the assessment order, arguing these findings are perverse. The Revenue argues that the Supreme Court's decision in K.P. Varghese's case is not applicable and that the Tribunal should have relied on the Kerala High Court's decision in CIT v. Medical Trust Hospital & Ors. The Revenue relies on the sworn statement, affidavit, and tax return of Mr. P.A. Noushad as evidence of on-money payment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 132(4),Section 52(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE THUR AY, THE 20TH DAY OF MARCH 2014/29TH PHALGUNA, 1935 ITA.No. 201 of 2011 () ----------------------- ITA. NO.267/COCH/2009 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. ...... APPELLANT/APPELLANT.: -------------------------------------- THE COMMISSIONER OF INCOME TAX, THRISSUR. BY SRI.P.K.R.MENON, SENIOR COUNSEL, GOI (TAXES), ADV. SRI.JOSE JOSEPH, SC, INCOME TAX. RESPONDENT/RESPONDENT: -------------------------------------------- P.M. ABOOBACKER, PANICKAVEETTIL MARACKAPARAMBIL, ORUMANAYOOR P.O., CHAVAKKAD, TRICHUR- 680 512. BY ADV. SRI.P.BALAKRISHNAN. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 11-02-2014, THE COURT ON 20-03-2014 DELIVERED THE FOLLOWING: rs.

ITA.No. 201 of 2011 APPENDIX PETITIONER'S ANNEXURES:- ANNEXURE A COPY OF THE SWORN STATEMENT DATED 10/12/2008 RECORDED ROM SHRI P.A. NOUSHAD. ANNEXURE B COPY OF THE AFFIDAVIT EXECUTED ON 6TH NOVEMBER 2008 BY SHRI P.A. NOUSHAD. ANNEXURE C COPY OF THE RETURN OF INCOME (FORM NO.2D-SARAL) ALONG WITH DOCUMENTS ATTACHED FILED

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 132(4)

All 3,708 judgments and leading authorities on Section 132(4) →

Recent GST High Court judgments

Search GST case law →