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TMI Blog2016 (12) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr.DR ORDER Per GEORGE GEORGE K., JUDICIAL MEMBER This appeal at the instance of the assessee is directed against the order of the CIT(A)-IV, Kochi dated 03/02/2016. The relevant assessment year is 2007-08.. 2. The grounds raised by the assessee read as follows:- 1. The order of the learned Commissioner of Income Tax(Appeals)-IV, Cochin dated 03/02/2016 in I.T.A. No. C/230/CIT(A)-IV/13-14 dismissing the appeal filed by the appellant for the assessment year 2007-08 is infirm in law and contrary to facts and circumstances of the case. 2. The learned lower authorities erred in treating the sum of ₹ 15,51,400/- as the appellant s unexplained income. 3. The learned Commissioner of Income Tax (Appeals)-IV ought tohave found that the appellant had accounted the sum ofRs.15,51,400/- in the regular books of accounts of the appellant and as the Assessing Officer has accepted the books of accounts of the appellant by completing the assessment u/s. 143(3) of the I.T. Act, 1961 there is no justification to treat the above amount as unexplained investment of the appellant. 4. The learned Commissioner of Income Tax (Appeals)-IV is in error in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2007-08. However, on appeal, the CIT(A) deleted the addition in their hands. 4. The CIT(Central), Kochi passed order u/s. 263 of the Act and set aside the order passed by the Assessing Officer in assessee s case for the assessment year 2007-08 by holding as under: I have gone through the facts of the case and the objections raised by the assessee. I am of the considered opinion that the source for the seized amount of ₹ 15,51,400/- has not been properly explained by the assessee which has not been brought to tax. 4.1 On further appeal, the Tribunal upheld the revisionary order passed under section 263 of the Act for the reason that the Assessing Officer has not verified the source of the amount of ₹ 15,51,400/- in the hands of the assessee. With these observations, the Tribunal disposed of the appeal filed by the assessee. 5. Pursuant to CIT s order u/s. 263 of the Act, the assessment was completed by adding a sum of ₹ 15,51,400/- u/s. 69A of the Act. The relevant finding of the Assessing Officer in making the addition u/s. 69A of the Act reads as follows: 9. The submission of the assessee have been carefully considered. It cannot be acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that he sent ₹ 16,00,000/-- for purchase of Rubber cannot be accepted for following reasons. i. Answer to the Queslion No. 9 and 10 in statement recorded on 06- 05-2013, the assessee clearly admitted that while purchasing rubber sheets, usually payments were given through cheque or DO to the institutions, but cash purchase were made from farmers. Sometimes cash payments were given to traders also but never exceeds ₹ 20,000/-. Therefore, ₹ 16,00,000/- said to be given to Sri. Manoj is factually incorrect according to the business procedure followed by the assessee. ii. Answer to Question No.8 in statement recorded on 06-05-2013, assessee admitted that maximum purchase from a person or institution per day was about ₹ 2 lakhs only. Therefore, it is unbelievable that assessee sent ₹ 16,00,000/- for one day's cash purchase. The assessee also stated that he has not made any business with Sri. Manoj before or after 28-03- 2007. But, the amount of ₹ 48,600/- retained by Sri. Manoj is stated to be as the security for the business transaction. From the statement of the assessee it is clear that no business transaction was made between Sri. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Manoj by the assessee for the previous year relevant to the assessment year 2007-08 and not the money said to be sent for purchase of rubber. The assessee has failed to produce any evidence other than a mere entry in his books of account to prove that the seized cash is the money returned by Sri. Manoj. The assessee has no satisfactory explanation for the source of fund seized by Mahe Police from Sri. Abdul Rasheed and Sri. K.A. Sojumon which was own up by the assessee. Therefore, considering all the facts and circumstances, the details, explanations and statements available on records and furnished at the time of hearing by the assessee the amount of ₹ 15,51,400/- is treated as assessee's unexplained income and charged to tax. 6. Aggrieved by the addition made u/s. 69A of the Act, the assessee preferred appeal to the first appellate authority. The CIT(A) after extracting the finding of the Assessing Officer and the assessee s submission decided the issue against the assessee and dismissed the appeal. 7. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal. The Ld. Counsel for the assessee reiterated the submissions made bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mind. There is no reasoning appended in the asst. order. In fact, there is not even any discussion in the asst. order . . 8.3 Finally it was concluded by the Tribunal as follows:- 8. In view of the above discussion, the non application of mind by the assessing officer to the material available on record with regard to the amount recovered by the police amounts to an error which is prejudicial to the interest of the revenue. No doubt, the addition made in the hands of Shri Abdul Rasheed was deleted by the CIT(A). But this fact has to be examined by the assessing officer and whether the assessee has explained the source for the above said money or not has to be verified and reasons recorded in the assessment order itself. Since the assessing officer has not verified the source for the above amount, this Tribunal is of the considered opinion that the Administrative Commissioner has rightly exercised his jurisdiction u/s. 263 of the Act. Therefore, the impugned order of the Administrative Commissioner is confirmed. 8.4 From the above direction of the Tribunal, it is very clear that the issue that has to be examined is whether the assessee has sufficient source/cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heed and Shri K.A. Sojumon was deleted by the CIT(A). As mentioned earlier, in the original assessment, no addition was made by the Assessing Officer. The original assessment was completed after examining the books of account, the ledge copies etc. From the books of account maintained by the assessee, it is clear that the assessee has sufficient cash availability as on 27/03/2007. The Assessing Officer had made the addition of ₹ 15,51,400/- taking into account the fact that normally assessee does not make cash purchase of more than ₹ 2 lakhs etc., which according to me, is besides the point, when the Tribunal in its order dated 04/10/2013 (I.T.A. No. 178/Coch/2013) had clearly directed that the issue to be examined is regarding source of fund available with the assessee. In other words, the only issue for my consideration is with regard to the availability of funds as on 27/03/2007, and whether the assessee had sufficient cash balance for handing over ₹ 16 lakhs to Shri Abdul Rasheed and Shri K.A. Sojumon on 27-03-2007. On examination of the copies of books of account produced, the assessee has sufficient cash balances and limiting the examination to the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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