EDAKKANDAKANDY PRAVEEN vs. THE INCOME TAX OFFICER, WARD

JUDGMENT Ramachandran Nair, J. 1.This appeal is filed against the orders of the Tribunal confirming the assessment on the appellant for the assessment years 1998-99. We heard the senior counsel appearing for the appellant assessee and standing counsel for the respondent. 2.Even though senior counsel raised objection against the status adopted as Assocation of Persons for assessment, we do not find any merit because, the appellant, along with five others, was the licensee. The members of the appellant AOP were the licensees, who are entitled to carry on business in the toddy shop. It is seen that the business was in fact carried on by all the members. In our view, since the members of the AOP carried on business, pursuant to the licence obtained by them for the 52 toddy shops in Thalassery, the assessment in their names as AOP is perfectly justified. The next contention, namely, assessment of income in toddy shops confirmed by the Tribunal also does not call for any interference, because, admittedly, assessee did not keep any books of accounts. The last ground is with regard to the addition of Rs.4,57,520/- under Section 68 for the reason that the three creditors in whose name amount was credited did not prove the transaction as genuine. The senior counsel appearing for the appellant rightly pointed out that when accounts were rejected and business income estimated, such income itself would account for the unexplained cash, which was shown as the source for the payment of kist amount. Since assessee did not maintain any books of accounts, obviously he was generating black money and that is what is assessed through estimation. The funds shown as credit in the name of bogus persons obviously were the assessee's own funds and so much so, we do not find any justification for any addition over the estimated income. We, therefore, allow

the appeal in part by reversing the order of the Tribunal and that of the lower authorities by deleting the addition of Rs.4,57,520/- made under Section 68 of the Act. The order of the Tribunal confirming the addition under Section 68 would stand cancelled. Even though counsel for the assessee pointed out that huge amount of interest is levied on the assessee under Section 234, we feel that, recourse open to the assessee is to make application before the Chief Commissioner for waiver in the light of the circular issued by the Board of Revenue. If arrears of tax are paid by the assessee, his request to give him time for remitting the interest should be considered favourably. C.N.Ramachandran Nair, Judge. P.S.Gopinathan, Judge.

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