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TMI Blog2022 (10) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... in Tristar Investments by pointing out how the findings recorded from the admitted and undisputed documents are unavailable. The converse of the situation is the findings are rendered from the documents seized from the associates of the assessee, where the assessee's investments in undisclosed in regularly maintained accounts are dealt with. In our considered view, these are the simple findings of the fact recorded by the authorities from the circumstances noted and documents considered by them. We see no reason to disturb the findings recorded on this behalf. Therefore, the question is answered in favour of the Revenue and against the assessee. Amounts credited in the bank accounts of the assessee s employees - Whether the Assessing Authority was right in law in holding that the credits in the bank accounts of the employees represent a share of profit of the appellant in the above partnership concern when the firm itself had not made profits, as per assessment orders passed in its case? - The recipient of the amount explained his nature and circumstance in which substantial amounts are transferred to the credit of those employees. The genuineness or otherwise of the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant : Harisankar V. Menon and Meera V. Menon , Sreejith R. Nair And K. Krishna For the Respondent : P. K. R. Menon , Senior Counsel, Government of India (Taxes), Jose Joseph , Standing Counsel for Income-tax JUDGMENT S.V. BHATTI, J. We have heard Adv. Meera V. Menon and Standing Counsel Mr Jose Joseph for parties. 2. K.A. Rauf, resident of Calicut/assessee, is the appellant, and the Commissioner of Income Tax, Cochin/Revenue, are the parties in the batch of appeals. The assessee, being aggrieved by the common order dated 23.04.2018, filed appeals under Section 260A of the Income Tax Act, 1961 (for short, the Act ). 3. The assessee is engaged in the production of centrifugal latex and the manufacturing of tread rubber. He was stated to have been running a few businesses along with his wife and two daughters. On 05.11.2009, the Revenue carried out a search under Section 132 at the residence or business premises of the assessee. Steps under Section 133A were undertaken at the residences of the employees or individuals concerned with the assessee and the businesses of the assessee/associates. The Revenue, basing upon and/or referring to the documents/mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... X X X X X 2 2005-06 ITA No. 502/Coch/2015 I.T.A No.52/2018 X X X X X X 3 2006-07 ITA No. 503/Coch/2015 I.T.A No.58/2018 X X X X 4 2007-08 ITA No. 504/Coch/2015 I.T.A No.55/2018 X X X 5 2008-09 ITA No. 505/Coch/2015 I.T.A No.60/2018 X X X X 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the lease arrangement and also stated that the notarized lease agreements are not meant to be presented before any authorities. For distinct and separate reasons, the Assessing Officer rejected the details in the cash flow statement on agricultural income in Maharashtra and treated the same as income from other sources. The Tribunal examined each one of the circumstances in para 19 and found that the xerox copy and self-serving statements do not discharge the onus for accepting the claim of the assessee. 6.2 Under the same head, the Assessing Officer examined income from agricultural income amounting to Rs.5,76,000/- from the agricultural land in Malappuram district. The assessee claimed Rs.5,76,000/- as having been earned from the agricultural land in Malappuram district. The assessee was given the opportunity to establish the agricultural income receipts amounting to Rs.5,76,000/. - Except for the assertion, the assessee could not discharge the onus of establishing that the assessee earned Rs. 5,76,000/- from the land situated in the Pang, Malappuram district. The Assessing Officer, therefore, restricted the claim to Rs.2,00,000/- and added the balance amount of Rs.3,76,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the business premises of M/s. Nilambur traders, a document regarding an investment made by the assessee in Tristar Investments and the amount received back were found. The discovery leads to a survey under section 133A of the business activities of M/s. Tristar Investments and recovered. The Department recorded the statement of one Thomas Perincherry, and in the statement, Thomas Perincherry disclosed the cash investment of Rs.70,00,000/- made by the assessee and the assessee has a 35% share in the said business. Therefore, from the documents seized both from Nilambur Traders and Tristar Investments, the Revenue proposed to add the said Rs.70,00,000/- to the computation of assessment. The assessee denied the investment or involvement with Tristar Investments. The reply was rejected, and the amount has been added to the computation of the assessment. 11. The Advocate appearing for the assessee contends that except for the statement of Thomas Perincherry, extracted books of accounts discovered from the business premises of the Nilambur Traders/Tristar Investments, there is no evidence attributing un- disclosed investments by the assessee. On mere conjuncture and surmise, a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -08 is Rs. 3,00,000/- and the same is added to the total income of the assessee. The findings of the Tribunal held as follows: 13.4 We have heard the rival submissions and perused the material on record. The main contention of the Ld. AR is that there was seized material in page no. 40, 45, 48 referred as CHN-14/28. It also showed that the assessee has contributed toward Tristar Investments, Bangalore based on an agreement which was known to the assessee and Shri Thomas Perinchery only. Further in the sworn statement recorded from the employee of the assessee Shri K. Jaffar, it was stated that Shri Suraj Rangappa, Shri Paul Tom Suraj and the assessee were the partners of this firm and the profit shared in the ratio 2%, 40% and 35% respectively. Certain documents relating to this firm collected from Bangalore which were available in this office were seized by the Department during the course of search marked as CHN-14/28. Certain accounts copied from their office at Bangalore were available in computer. The name shown as Paul-2 was actually the assessee. The total investment made by the assessee in this firm was Rs.70,00,000/- during the financial year 2005-06 and 2006-07. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atements from these employees. The employees said that the amounts credited in their personal bank accounts belong to the assessee. The head under which the amounts are received profits from Tristar Investments, Bangalore. Confronted with the documents and the statements of his employees, the reply given by the assessee is that, at the distance of the time, when an enquiry was taking place, he was unable to recollect the details. He was also stated that the amount represents proceeds suppressed by M/s. K.A Treads, and the amounts have been received back/ for the use of the assessee. The assessee offered these amounts and claimed to take the peak of the amounts and apply the gross profit. The Assessing Authority rejected the alternative explanation by the assessee and treated Rs. 10,00,000/- as an unproven loan and added to the assessee's total income. The Tribunal rejected the assessee's case on the grounds that there is no evidence in support of the information offered by the assessee. The addition of Rs.10,00,000/- is justifiable. They have precisely summed up that the assessee gave an evasive reply and alternatively desired to calculate the peak of the amounts and apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited signed cheques for an amount of Rs. 2.3 crores in the name of the assessee. The assessee paid in cash to Mohanraj, and the agreed rate of interest was 10%, and in default of payment of interest, penal rate of 20% per month on the balance outstanding amount. Mohanraj, by cash, repaid Rs.2.5 crores. In October 2007, the assessee informed Mohanraj s liabilities as Rs. 1.6 crores. Mohanraj, who reconciled the payments made to the assessee in cash, relied on the withdrawals made by him from his bank accounts. The statement was put before the assessee, and the assessee explained that civil and criminal cases are pending against the Mohanraj in the court of competent jurisdiction. The assessee sought for cross-examination of Mohanraj. Two developments noted in the assessment order are also narrated viz. on 22.12.2011 an affidavit of Mohanraj allegedly retracted the statements given by him on 10.11.2009 is introduced. On 23.12.2011, another letter is produced confirming the statement on 10.11.2009 and denying that any affidavit is given retracting the statement made on 10.11.2009. 20. From the above, it is clear that the assessee did not pursue the objection raised for adding t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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