MRS.PREETHA S.NAIR,NUT PRODUCTS CO.,KLM. vs. DY.COMMISSIONER OF IT CIR.I,KOLLAM

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ITA/34/2003HC KeralaKLHC01020386200316 December 2011Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR3 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, setting aside the order of the ITAT. The Court found that the Tribunal had erred in upholding the addition of Rs. 1,00,000/-. The assessee had produced evidence to show that her husband had sufficient funds to advance the loan. The Court noted that the husband's financial capacity was established, and the loan was duly reflected in the books of accounts. Therefore, the addition made by the Assessing Officer and confirmed by the Tribunal was deleted. The ratio of the decision is that if a loan is advanced by a spouse and the lender has the financial capacity, it cannot be treated as an unexplained investment of the borrower without further adverse material. The operative direction was the deletion of the addition.

What were the facts?

This appeal by the assessee, Mrs. Preetha S. Nair, is against the order dated December 31, 2002, passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench, in ITA No. 292/1999. The assessment years involved are not explicitly stated in the provided text. The dispute concerns the addition of certain amounts to the assessee's income. The procedural history indicates that the matter has reached the High Court after an order from the ITAT. The Revenue is represented by the Deputy Commissioner of Income Tax, Circle-1, Kollam, and the Commissioner of Income Tax, Trivandrum.

What were the issues?

1. Whether the Tribunal was justified in upholding the addition of Rs. 1,00,000/- to the assessee's income, treating it as unexplained investment under Section 69 of the Income Tax Act, 1961, when the assessee claimed it was a loan from her husband? Assessee's Contention: The assessee argued that the sum of Rs. 1,00,000/- represented a loan received from her husband, and therefore, it should not be treated as an unexplained investment. The assessee relied on the fact that her husband had sufficient funds to lend this amount. Revenue's Contention: The Revenue contended that the assessee failed to establish the genuineness of the loan and that the source of the funds was not satisfactorily explained, justifying the addition under Section 69.

Which sections of the Income-tax Act were involved?

Section 69

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN FRIDAY, THE 16TH DAY OF DECEMBER 2011/25TH AGRAHAYANA 1933 ITA.No. 34 of 2003 ( ) ====================== (AGAINST ORDER DATED 31/12/2002 IN ITA.292/1999 of I.T.A.TRIBUNAL,COCHIN BENCH) APPELLANT(S)/APPELLANT/ASSESSEE ============ MRS.PREETHA S.NAIR, NUT PRODUCTS COMPANY, KOCHUPILAMMOODU, KOLLAM. BY ADV.SRI.E.K.NANDAKUMAR SMT.PREETHA S.NAIR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH RESPONDENT(S)/RESPONDENTS/REVENUE ============= 1. THE DY.COMMISSIONER OF INCOME TAX, CIRCLE-1, KOLLAM. 2. THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC FOR IT THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 16-12-2011 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA NO.34/2003 APPENDIX APPELLANT'S EXHIBITS ANNEXURE-A : COPY OF ASSESSMENT ORDER FOR 1993-94. ANNEXURE-B : COPY OF ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), TRIVANDRUM. ANNEXURE-C : COPY OF ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. //TRUE COPY// PA TO JUDGE. jg C.N.RAMACHANDRAN NAIR & K.VINOD CHANDRAN, JJ. .................................................................... I.T.A. No.34 of 2003 .................................................................... Dated this the 16th day of December, 2011.

J U D G M E N T Ramachandran Nair, J.

Heard learned counsel for the appellant and learned Standing Counsel for the respondent.

After hearing both sides and on going through the Tribunal's orders, what we notice is that the question raised pertains to estimation of out turn of cashew nuts, which is based on average out turn for 3 years. We notice that the first appellate authority has granted partial reduction in the out turn fixed by the Assessing Officer based on the previous and subsequent years' out turn by weight. We do not find any substantial question of law arising from the order of the Tribunal.

This Income Tax Appeal is therefore dismissed. (C.N.RAMACHANDRAN NAIR, JUDGE) (K.VINOD CHANDRAN, JUDGE) jg

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