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TMI Blog2012 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... arried forward loss from the assessment year 1999-2000 - Assessing Officer as well as the 1st appellate authority treated the same as undisclosed income for the assessment year 2000-01 - assessee failed to file a return in the assessment year 2000-01 and only after the search on 4.10.2001 and notice under Section 158BC dated 9.10.2002 filed a return of income in Form No.2B for the block period 1.4.1995 to 4.10.2001 that too on 19.2.2003 - Decided against the assessee - IT APPEAL NOs. 18, 72, 73, 77, 83, 102 & 103 OF 2010 - - - Dated:- 11-1-2012 - C.N. RAMACHANDRAN NAIR AND K. VINOD CHANDRAN, JJ. P.K.R. Menon and Jose Joseph for the Appellant. Smt. Nisha John, V.P. Narayanan and Smt. Boby M. Sekhar for the Respondent. JUDGMENT K. Vinod Chandran, J .- The above appeals arise from a common order of the Tribunal in the appeal of the assesse firm, its three partners and also the Revenue. ITA No.18/2010 is against the order of the Tribunal in the assessee firm's appeal. The other six appeals arise from the orders in the appeals filed by the three partners as also the appeals of the Revenue from the modified order of the first appellate authority. 2. We shall fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also a statement of the husband of Smt. Thenrajam and Sri. Nandakumar, two of the purchasers; found that the agreement dated 23.5.2000 is to be considered as a genuine one. On the basis of such finding the sale consideration was taken to be Rs. 2 crores as per the agreement dated 23.5.2000 and the profit on sale of business was computed at Rs. 81,33,546/-. The Assessing Officer also made additions coming to 20% of expenditure incurred violating the provisions of Section 40A(3) of the Act. The amount of Rs. 90,101/- shown in the block return of income for the year 2000-01 though sought to be treated as regular return for the year allowing set off of carried forward loss; was treated as undisclosed income for the year 2000-01 since no set off is permissible for block assessments. 4. The assessee filed first appeal which was disallowed. On further appeal before the Tribunal, the Tribunal on esoteric principles purportedly based on the Contract Act interpreted the concept of "agreement" and found that the seized agreement dated 23.5.2000 has no binding value and hence deleted the said addition on the finding that the agreement and balance sheet recovered on search contained "boost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement. Sri. David George Vettath, one of the erstwhile partners, would contend that Sri. George Paul, another partner, was handling the affairs of the business as also the sale transactions and he is not aware of the amounts passed by way of sale. The ignorance displayed by Sri. David George Vettath assumes significance in the context of his wife being one of the purchasers. Sri George Paul also does not have a consistent stand on the actual amounts passed. It is evident that the wife of David George Vettath has no independent source of income to make the investment/purchase and the ignorance displayed by David George Vettath only would lend to an adverse inference in the matter of the actual consideration of sale. 6. On the veracity of the agreement dated 1.6.2000, the Assessing Officer has noticed in Annexure A order that the advance of Rs.75 lakhs as per the said agreement is categorically stated to be by pay order from Peoples Urban Co-operative Bank Thripunithura; while the application for loan itself was made to the Bank only on 24.6.2000. As noticed earlier the glaring absence of Rs. 5.5 lakhs as per the first agreement also raises valid doubts about the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return in the assessment year 2000-01 and only after the search on 4.10.2001 and notice under Section 158BC dated 9.10.2002 filed a return of income in Form No.2B for the block period 1.4.1995 to 4.10.2001 that too on 19.2.2003. It was in the block assessment that set off was claimed and we are of the view that the Tribunal was not correct in presuming a regular assessment; which was not there. The question raised by the Revenue is answered in their favour and against the assessee. The addition made by the Assessing Officer as confirmed by the 1st appellate authority is restored. 9. We are now confronted with the appeals of the Revenue filed against the order of the Tribunal in the appeals filed by the Revenue as well as the assessee against the 1st appellate order modifying the assessments made against the individual assessees. One common ground in the Revenue's appeals before the Tribunal was with respect to surcharge under Section 113 which is decided in favour of the Revenue by the Tribunal. There is no appeal of the assessee to this Court on the said issue. The individual assessments have to be dealt with separately. 10. ITA 73 and 77 of 2010 are the appeals relating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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