COMMISSIONER OF INCOME TAX, TRIVANDRUM vs. A.SHAHUL HAMEED, P/O.M/S.CITY SHOE MART

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ITA/1643/2009HC KeralaKLHC01026404200913 October 2009Bench: HONOURABLE MR.JUSTICE V.K.MOHANAN,HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose from the order of the Tribunal. The Tribunal had cancelled the order passed by the CIT under Section 263. The reasoning provided was that in the appeal against the first round assessment, the CIT (Appeals) had already cancelled the addition made on account of cash credit, and the assessee's explanation for the deposit was accepted. Therefore, the High Court found no justification to interfere with the Tribunal's order and dismissed the appeal filed by the Commissioner of Income Tax. The operative direction was the dismissal of the appeal.

What were the facts?

The Commissioner of Income Tax (CIT), Thiruvananthapuram, filed an appeal against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The ITAT had cancelled an order passed by the CIT under Section 263 of the Income Tax Act. The CIT's order directed the Assessing Officer to verify the source of a bank deposit of approximately Rs. 2,35,000/-. The Assessing Officer had accepted this amount as the source for investment in a building. The ITAT's decision to cancel the CIT's order was based on the fact that in the appeal against the first round of assessment, the CIT (Appeals) had already cancelled an addition made on account of cash credit.

What were the issues?

1. Whether the Tribunal was justified in cancelling the order issued under Section 263 of the Income Tax Act by the CIT, which directed verification of the source of a bank deposit of around Rs. 2,35,000/-. Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's reasoning, as stated in the judgment, indicates that the assessee's explanation for the deposit was accepted in the appeal against the first round assessment, and the CIT (Appeals) had cancelled the addition on cash credit. Revenue's Contentions: The revenue, represented by the Commissioner of Income Tax, contended that the Tribunal was not justified in cancelling the order passed under Section 263. The core of the revenue's argument, implied by the appeal, is that the CIT's direction for verification was necessary and that the Tribunal erred in setting it aside.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 13TH OCTOBER 2009 / 21ST ASWINA 1931 ITA.No. 1643 of 2009() ---------------------- AGAINST THE ORDER DATED 31/12/2008 IN COCH IN ITA.654/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): APPELLANT ------------------------ A.SHAHUL HAMEED, P/O.M/S.CITY SHOE MART,CHALAI, TRIVANDRUM.

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 13/10/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I.T.A. No. 1643 OF 2009 -------------------------------------------- Dated this the 13th day of October, 2009 JUDGMENT Ramachandran Nair, J. Heard standing counsel for the appellant. The only issue raised is whether the Tribunal was justified in cancelling the order issued under Section 263 of the I.T. Act by the CIT directing the Officer to verify the source of deposit in a bank amounting to around Rs. 2,35,000/-. It is seen that the very same amount withdrawn from the Bank was accepted by the assessing officer as source for investment in a building. The Tribunal cancelled the order of the Commissioner because the Tribunal noticed that in the appeal against first round assessment, the CIT (Appeals) cancelled the addition on cash credit. We do not find any substantial question of law arising from the order of the Tribunal because in the appeal against first round assessment, the assessee's explanation was accepted. Consequently we dismiss the appeal. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk

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