K.R.RASEENA vs. COMMISSIONER OF INCOME TAX

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ITA/72/2018HC KeralaKLHC01080920201814 March 2022Bench: HONOURABLE MR.JUSTICE S.V.BHATTI,HONOURABLE MR.JUSTICE BASANT BALAJI12 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the assessee's reply regarding the cash receipts was self-serving and not supported by any documentary evidence. The court noted that this gap in evidence could have been rectified before the CIT(A) or the Tribunal, but the assessee merely reiterated the same grounds. The High Court found no merit in the substantial questions of law raised, stating that the assessee failed to justify the details of the cash flow statement. The court concluded that the amounts of Rs. 11,78,300/- and Rs. 5,10,000/- in Assessment Years 2009-10 and 2010-11, claimed as receipts from Ziad through Fathima, were unexplained. Consequently, the question was answered in favor of the Revenue and against the assessee. The appeals were dismissed. No issue was expressly left undecided.

What were the facts?

The assessee, K.R. Raseena, is appealing against a common order dated April 23, 2018, passed by the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The appeals concern assessment years 2009-10 and 2010-11. The case originated from a search conducted under Section 132 of the Income Tax Act, 1961, on November 5, 2009, at the residence of the assessee's father, K.A. Rauf. Subsequently, notices under Section 153A read with Section 153C of the Act were issued to the assessee, who resided with her father. The dispute centers on the disallowance of certain cash receipts claimed by the assessee.

What were the issues?

The High Court had to decide the following substantial questions of law: 1. (ITA No. 68/2018) Whether the Appellate Tribunal was justified in rejecting the claim of receipt of amounts from the appellant's husband through the bank account of her mother? 2. (ITA No. 72/2018) Whether the authorities below committed an error of law by upholding assessment proceedings initiated under Section 153C read with Section 153A, notwithstanding that the search in the case of Sri Rauf did not result in the recovery of any cash, jewelry, or valuable documents relating to the appellant? 3. (ITA No. 72/2018) Whether proceedings initiated under Section 153A read with Section 153C on the mere ground that necessary facts were available to infer that the assessee's cases could be re-opened are legally sustainable? 4. (ITA No. 68/2018 & 72/2018) Whether the Appellate Tribunal was justified in rejecting the claim of receipt of amounts from the appellant's husband through the bank account of her mother? Assessee's Contentions: The assessee contended that the assessment proceedings under Section 153A/153C were not legally sustainable as the search did not yield any documents related to her. The primary issue for both appeals was the rejection of the claim of receiving amounts from her husband, Ziad, through her mother, Fathima. Revenue's Contentions: The revenue argued that the assessee failed to provide any evidence or satisfactory explanation for the cash inflows claimed, particularly the amounts received from Ziad through Fathima. The authorities below found the cash to be unexplained in the hands of the assessee.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 153C,Section 142(1),Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 14TH DAY OF MARCH 2022 / 23RD PHALGUNA, 1943 ITA NO. 68 OF 2018 AGAINST THE ORDER IN ITA 416/2016 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S:

K.R. RASEENA, AGED 36 YEARS SHELTER, JAYANTHI NAGAR, P.T.USHA ROAD, CALICUT.

BY ADVS. HARISANKAR V. MENON MEERA V.MENON

RESPONDENT/S:

COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOCHI - 682 013.

BY ADVS. SRI.P.K.RAVINDRANATHA MENON (SR.) SRI.JOSE JOSEPH, SC, FOR INCOME TAX

THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 14.03.2022, ALONG WITH ITA.72/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos.68 & 72/2018

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IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI MONDAY, THE 14TH DAY OF MARCH 2022 / 23RD PHALGUNA, 1943 ITA NO. 72 OF 2018 AGAINST THE ORDER IN ITA 415/2016 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S:

K.R.RASEENA AGED 39 YEARS SHELTER, JAYANTHI NAGAR, P.T.USHA ROAD, CALICUT.

BY ADVS. HARISANKAR V. MENON MEERA V.MENON

RESPONDENT/S:

COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, KOCHI, 682 013. SC JOSE JOSEPH THIS INCOME TAX APPEAL HAVING COME UP FOR HEARING ON 14.03.2022, ALONG WITH ITA.68/2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA Nos.68 & 72/2018

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J U D G M E N T

[ITA Nos.68/2018, 72/2018] S.V. Bhatti, J.

Heard Adv. Meera V Menon and Adv. Jose Joseph for the parties. 2. One K R Raseena, Calicut/assessee is the appellant in both appeals. Commissioner of Income Tax, Central Circle, Kochi/Revenue is the respondent. The assessee, aggrieved by the common order dated 23.04.2018, is in appeal before this Court under Section 260A of the Income Tax Act 1961 (for short ‘the Act’). The details of orders of assessment etc. are stated in the following table:

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Sl. No. Assessment Year & Date of Assessment Order Order of Commissioner of Income Tax (Appeals) Income Tax Appellate Tribunal ITA No. 1 2010-11; 30.12.2011 ITA C-147-151/Cent/CIT(A)/ IV/ 2011-12 dt.31.03.2016 ITA 416/C/2016 dt.23.04.2018 68/2018 2 2009-10; 30.12.2011 ITA C-147-151/Cent/CIT(A)/ IV/ 2011-12 dt.31.03.2016 ITA 415/C/2016 dt.23.04.2018 72/2018

2.1 The assessee is the daughter of one K A Rauf and a proprietor of M/s. K A Treads. On 05.11.2009, a search of the K A Rauf's residence (i.e., assessee’s father) and his associates was carried out under Section 132 of the Act. On 03.05.2010, based on the documents, details, accounts seized from the premises of K A Rauf, and also that the assessee herein is residing in the same residence of her father K A Rauf, notice under Section 153A read with Section 153C of the Act was issued to assessee. On 17.02.2011, a notice under Section 142(1) of the Act was issued to the assessee.

ITA Nos.68 & 72/2018

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3.

Substantial questions of law raised in the appeals are thus: “ITA No.68/2018 WHETHER the Appellate Tribunal was justified in rejecting the claim of receipt of amounts from the appellant's husband through the bank account of her mother? ITA 72/2018 A: WHETHER authorities below did not commit an error of law when they upheld the assessment proceedings initiated against the Appellants u/s 153C r/w Sec. 153A NOTWITHSTANDING the fact that the search instituted in the case of Sri Rauf did not result in the recovery of "any cash, jewellery or valuable documents" relating to the appellant? B: WHETHER the Proceedings initiated against the Appellant u/s 153A r/w Sec. 153C on the mere ground that "it is enough to hold that there have been necessary facts available to have inferred that the cases of the assessee be re-opened for the purpose of assessment and it could not have been done unless notice u/s 153A r/w Sec. 1534C is issued" is legally sustainable? C: WHETHER the Appellate Tribunal was justified in rejecting the claim of receipt of amounts from the appellant's husband through the bank account of her mother?

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As is evident the common substantial question of law in both the appeals is cash receipt from Ziad, husband of assessee, through her mother Fathima. 4. The Assessing Officer, after giving notice and opportunity to the assessee and looking at the reply given, held as follows: “In the Cash flow statement submitted by the assessee at the time of hearing the assessee has shown an inflow of Rs.11,78,300/- by Ziad through Fathima. No evidence or satisfactory explanation was given by the assessee at the time of hearing. It is pertinent to note that the assessee is proposing to buy a flat at Bangalore and the amount earned by the assessee's husband in abroad is transferred to assessee's/in laws' account for the purpose of purchase of flat. But the assessee is utilizing it as source for her investment which is evidenced by the noting made by her in the seized material, CHN/14/Nilambur/14 & 15. When this was pointed the assessee has not offered any comments. The assessee also confirmed in the statement taken on 16/12/2011 that the probable cost is estimated to Rs.68 lakhs and the acquisition was made for Rs.48.5 lakhs. Therefore, the same is also disallowed. 8. Considering all facts and circumstances of the case the assessment is completed as under:

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Total income retuned by the assessee

Rs. 3,08,330 Sales suppression

Rs. 20,78,089 Receipt from Fathima (as per para 9)

Rs. 11,78,300 Total income assessed

Rs. 35,64,719/- Rounded off to

Rs. 35,64,720/-

The said finding is confirmed by the Commissioner of Income Tax (Appeals) and the Tribunal. We are of the view that the reasons for sustaining the findings recorded by the Tribunal are stated by excerpting the operative portion. “27. The next common ground in ITA Nos. 415 & 416/Coch/2016 is with regard to refusal of the assessing authority to accept the claim of receipt of the assessee of Rs.11,78,300/- and 5,10,000/- from Shri Ziad in AY 2009-10 and 2010-11. 27.1 The facts of the case are that in the cash flow statement submitted by the assessee at the time of hearing the assessee had shown an inflow of Rs.5,10,000/-by-Ziad through Fathima. No evidence or satisfactory explanation was given i è assessee at the time of hearing. It is pertinent to note that the assessee was proposing to buy a flat at Bangalore and the amount earned by the assessee's husband in abroad was transferred to assessee's in laws'

ITA Nos.68 & 72/2018

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account for the purpose of purchase of flat. But the assessee was utilizing it as source for her investment which is evidenced by the noting made by her in the seized material, CHN/14/Nilambur/14&15. When this was pointed out the assessee had not offered any comments. The assessee also confirmed in the statement taken on 16/12/2011 that the probable cost was estimated to Rs.68 lakhs and the acquisition was made for Rs.48.5 lakhs, therefore the same was allowed. 27.2 On appeal, the CIT(A) observed that the assessee had received Rs.5,10,000/- from her husband Shri Ziad through her mother which means that the assessee's husband sent the money of Rs.5,10,000/- during the AY 2009-10) mother-in-law and the assessee's mother in turn gave this money to the assessee. However, it was observed that other than this subjective logic and argument, no documentary evidence has been given which could establish the source of Rs.5,10,000/- in AY 2009-10 and Rs.11,78,300/- in A.Y. 2010-11 in the form of cash, in the hands of the assessee as explained. Since the cash stand unexplained in the hands of the assessee, the CIT(A) confirmed the addition made by the Assessing Officer. 27.3 We have heard the rival submissions and perused the record. In this case, the assessee has not brought on record cogent evidence to show that the said amount has been received from Shri Ziad. In the absence of specific evidence, we are not in a position to accept the genuineness of the claim of the assessee. Hence, this ground of

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appeals for both the years is rejected. The appeals in ITA Nos. 413 to 416/Coch/2016 are dismissed.” In the above background, we have examined the substantial questions of law raised for our consideration. 5. The reply of the assessee is self-serving. The reason for not accepting the statement is that it is not supported by semblance of documents or material. This gap in the case of the assessee could have been made good before the Commissioner of Income Tax (Appeals) or before the Tribunal. Except reiterating the same ground nothing more is brought out to set aside the disallowance made by the Assessing Officer. In other words, the amount is Rs.11,78,300/- and Rs.5,10,000/- in Assessment Years 2009-10 and 2010-11, from the cash flow statement given by the assessee, it is for the assessee to justify the details of the cash flow statement. The assessee since failed, we are of the view that there is no merit in the question much

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less the same constitutes a substantial question of law for consideration. Hence, the question is answered in favour of the Revenue and against the assessee. The appeals stand dismissed. No order as to costs.

Sd/- S.V.BHATTI JUDGE

Sd/- BASANT BALAJI JUDGE

jjj

ITA Nos.68 & 72/2018

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APPENDIX OF ITA 72/2018

PETITIONER ANNEXURES ANNEXURE A PHOTOCOPY OF ASSESSMENT ORDER DT.30/12/2011. ANNEXURE B PHOTOCOPY OF ORDER OF CIT(A) DT.31/03/2016 IN ITA- C-147-151/CIT(A)-IV/11.12 (COMMON ORDER). ANNEXURE C PHOTOCOPY OF ORDER OF ITAT DT.23/04/2018 IN I.T.A.NO.413-416/C/2016 (COMMON ORDER).

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APPENDIX OF ITA 68/2018

PETITIONER ANNEXURES ANNEXURE A PHOTOCOPY OF ASSESSMENT ORDER DATED 30.12.2011 ANNEXURE B PHOTOCOPY OF ORDER OF CIT(A) DT.31.3.2016 IN ITA-C- 147-151/CIT(A)IV/11.12 (COMMON ORDER) ANNEXURE C PHOTOCOPY OF ORDER OF ITAT DT.23.4.2018 IN I.T.A. NO.413-416/C/2016 (COMMON ORDER)

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