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TMI Blog2007 (8) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Archana Jewellery in the hands of the assessee. 2. Briefly stated facts are as under: The assessee is an abkari contractor and is assessed in the status of Individual. There was a search action under section 132 of the Income-tax Act, 1961, in the residential premises and business premises of the assessee on 29-1-1982. During the course of search action certain incriminating documents and books of account were seized by the search party. Based on the materials recovered in the said search, the Assessing Officer rejected the income declared in the returns filed by the assessee and completed the assessment for the assessment years 1979-80 and 1980-81. During the course of search no cash, jewellery or valuable article were found. As far as the assessment year 1979-80 is concerned, the assessee had filed the return of income declaring total income at Rs. 22,940 from different sources like income from house property, own business in prawn fishing and share of profits in which he was partner. As far as the assessment year 1980-81 is concerned, the assessee had declared the income of Rs. 16,340. After the search under section 132, the Assessing Officer rejected the income decla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13th August, 1982. To The Income-tax Officer, Special Circle, Ernakulam, Cochin-682 016. Sir, Income-tax assessment of Sri A.N. Chellappan Achari-Your letter PA No. 16014-PROVIDE-0735, dated 7-8-1982- As required vide your letter cited, the following particulars regarding Sri A.N. Chellappan Achari, Archana Jewellery, MG Road, Ernakulam, are furnished below: Mr. A.N. Chellappan Achari is the proprietor of M/s. Archana Jewellery, MG Road, Ernakulam. The party has availed an open cash credit facility from us in the name and style of Archana Jewellery. The account is operated by Mr. A.N. Chellappan Achari, as proprietor. The account is introduced by Mr. A.C. Mohan, Proprietor, Anupama Jewellery, Ernakulam. The limit of the open cash credit facility sanctioned is Rs. 2 lakhs which is secured by hypothecation of stock-in-trade and equitable mortgage of real estate. In 1978 when the advance was granted, it was also guaranteed by 19 persons namely (1) Mr. P.K Narayanan, (2) Mr. A.S. Gangadharan, (3) Mr. T.A. Premanandan, (4) Mr. K.A. Krishna Kumar, (5) Mr. P. Prakash, (6) Mr. K.K. Lokanathan, (7) Mr. P.K. Kumar, (8) Mr. K.P. Baburajan, (9) Mr. P.T. Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whom they were made and what information was obtained in connection with what account. Only general observations were passed. In these orders there was no reference to the bank account No. CD-14 which is alleged to have been opened and operated by the. assessee initially in the name of or on behalf of Archana Jewellery. The result was that the assessee could not effectively frame his defence before the authorities. The mention of this particular bank account No. CD-14 as having been opened and operated by the assessee appears to have been made only at the time of hearing before the Tribunal by the learned departmental representative. Copy of the communication from the Bank of Cochin regarding the operation of this particular bank account No. CD-14, if there was any, was not included in the list of papers furnished by the learned departmental representative before the Tribunal in the quantum appeal. However, the Tribunal has accepted the contention of the departmental representative on this issue. We do not find any material for this conclusion from the copies of the departmental paper book furnished at the time of quantum appeal. At this stage of the proceedings also, when the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have the effect that the jewellery business belonged to the assessee. At the worst it can only create suspicion. But suspicion, however great cannot, take the place of proof. 20. Yet another circumstance that was relied on in the assessment proceedings to hold that the ad was the real owner of Archana Jewellery and Shri Chellappan Achari was only a benami was that there were monetary transactions between the assessee and Shri Chellappan Achari. These transactions are found to have been reflected in the books of the assessee. The loans obtained by Shri Chellappan Achari from the assessee and his wife etc., and the repayments thereof, are found in the assessment records of Shri Chellappan Achari. In fact, the assessment of Shri Chellappan Achari of Archana Jewellery was made only after scrutiny and upon depositions made by him before the Income-tax Officer, B-Ward, Ernakulam. Such assessment was made prior to the search. From the records it is seen that Shri Chellappan Achari did not bring any capital of his own but had started the business with heavy borrowings or guarantees from several persons including the assessee and his wife as can be seen from his deposition and also in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the name of Sri Chellappan Achari, being a goldsmith. The fact that the assessee had given guarantee or offered securities for the loans taken by Shri Chellappan Achari or that he had advanced loans to Shri Chellappan Achari can also be viewed as a normal attitude of a friendly person. Therefore, we hold that even though the addition was sustained in the hands of the assessee with regard to the income from Archana Jewellery, the revenue has not discharged its onus that the business of Archana Jewellery really belonged to the assessee, even if these materials are taken into account cumulatively. For these reasons, we cancel the penalty on the income attributable to Archana Jewellery." 3. While deciding the present appeals, the Tribunal was of the opinion that the decision of the Tribunal in the appeal against the levy of penalty was based on appreciation of all the materials placed before it and submissions made before it, some of which were not available before the Tribunal when it decided the quantum appeal. Tribunal was of the further view that the Assessing Officer had not brought on record any new material or additional material to substantiate his view that the business of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchana Jewellery is assessable in the hands of the assessee. There was a search action in the residential as well as business premises of the assessee and this controversy for the first time arose in the assessment year 1979-80. It is relevant here to refer to the decision of the Hon'ble High Court of Kerala in assessee's own case for the assessment years 1979-80 and 1983-84. As far as the assessment year 1979-80 is concerned it become final since the assessee did not take up the matter under reference to the Hon'ble High Court and the said fact was stated by the assessee, before the Hon'ble High Court. The Tribunal followed the said decision in the assessment years 1980-81, 1981-82, 1982-83 and 1983-84. In respect of the references in the appeals relating to the assessment years 1980-81 and 1983-84 are concerned, the matters were taken up by way of references to the Hon'ble High Court on the issue whether the income from M/s. Archana Jewellery is assessable in the hands of the assessee. The Hon'ble High Court was of the opinion that the question referred for the decision as to whether the income from M/s. Archana Jewellery run by Shri A.N. Chellappan Achari can be assessed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come to the finding that the business belonged to him. It cannot be said that the various materials considered by the Tribunal for arriving at the above finding are inadmissible in evidence or irrelevant materials. The fact that the Tribunal did not consider the holding of licence by Sri A.N. Chellappan Achari, which is necessary for the conduct of jewellery business will not in any way affect the conclusion reached by the Tribunal. Sri A.N. Chellappan Achari has been introduced only for the purpose of enabling the assessee to start the business of Jewellery in the name of Archana Jewellery, for, under the provisions of the Gold (Control) Act, a licence is required for the conduct of the said business and the assessee did not have a licence for the same. The fact that the business stands in the name of Chellappan Achari and that even the assessments were completed under the Income-tax Act, in respect of Archana Jewellery in the hands of Chellappan Achari are irrelevant for determining the ownership of business." In short the Hon'ble High Court affirmed the findings of the Tribunal on the fact that the assessee is the only real owner of M/s. Archana Jewellery and hence the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noteworthy that an assessment in regard to the business of Archana Jewellery had been completed by the Income-tax Officer, B Ward, Ernakulam, on September 18, 1981. The contention of the assessee was that Chellappan Achari who carried on business of Archana Jewellery, desired to take the premises of Ramesh - a neighbour of the assessee - on rent and that since the latter wavered in relying on the former, the good offices of the assessee was utilized. The assessee contended that he being a neighbour intervened in the matter and got the lease agreement settled. Sathyan, the nephew of the assessee, was not examined by the revenue. The Tribunal held that no adverse inference could be drawn simply on account of the monetary transactions, the assessee, admittedly, had with Chellappan Achari. The Tribunal took note of the fact that Chellappan Achari was assessed in respect of Archana Jewellery business and, therefore, the revenue could not turn around now and say that Chellappan Achari was binomial of the assessee. The licence to run the jewellery business was in the name of Chellappan Achari. No account books relating to this business were seized from the house of the assessee. On these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee relied on the decision of the Apex Court in the case of CIT v. Brij Lal Lohia Mahabir Prasad Khemka [1972] 84 ITR 273 and submitted that if the new facts has come to the light of the appellate authority, then the different conclusions can be arrived at from that of the one taken earlier. The learned senior counsel also referred to the order of the Tribunal in ITA Nos. 401/Coch./88 and 114/Coch./91 relating to the levy of penalty and submitted that the assessee's nephew Shri Sathyan was in the employment of M/s. Archana Jewellery and he had entrusted the papers to him which were seized by the search party. He further argued that in spite of clear disclosure of this fact by the assessee, Shri Sathyan, was not examined by the Assessing Officer. He further argued that there were 19 guarantors to Shri A.N. Chellappan Achari when he started his jewellery business and it is not the case of the revenue that the assessee was the only guarantor to Shri A.N. Chellappan Achary. Moreover, Shri A.N. Chellappan Achari is the neighbour of the assessee and nothing is wrong on the part of the assessee to help him which normally happens in the social relations. Merely because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly. It is well-settled principle that it is open to the assessee to raise different contentions or to repeat the same contentions in the succeeding year without the bar of estoppel or res judicata though in a previous conduct or admission to the form of a piece of evidence to be considered. In the case of Brij Lal Lohia Mahabir Prasad Khemka; the question for the consideration was whether the gifts, which had been held to be non-genuine in an earlier year were genuine gifts on the basis of additional evidence, adduced by the assessee and after taking into consideration the decision rendered by the Tribunal in the previous proceedings, the Tribunal came to the conclusion that the gifts in question were genuine gifts. Merely because different view is taken in the subsequent proceedings, it cannot be said that it was an erroneous view. The Hon'ble Supreme Court held the fact that in the earlier proceedings the Tribunal took a different view that those gift deeds are not a conclusive circumstance, the decision of the Tribunal reached in those proceedings did not operate is res judicata. In our opinion the said principles are equally applicable to the facts of the present appeals. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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