IN THE HIGH COURT OF KERALA AT ERNAKULAM
ITA.No. 1792 of 2009()
1. EDAKKANDAKANDY PRAVEEN
... Petitioner
Vs
1. THE INCOME TAX OFFICER, WARD
... Respondent
For Petitioner :DR.K.B.MUHAMED KUTTY (SR.)
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice P.S.GOPINATHAN
Dated :10/02/2010
O R D E R
C.N.Ramachandran Nair & P.S.Gopinathan, JJ.
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I.T.A.1792 of 2009
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Dated this the 10th day of February, 2010.
JUDGMENT
Ramachandran Nair, J.
1.This appeal is filed against the orders of the
Tribunal confirming the assessment on the
appellant for the assessment years 1998-99. We
heard the senior counsel appearing for the
appellant assessee and standing counsel for the
respondent.
2.Even though senior counsel raised objection
against the status adopted as Assocation of
Persons for assessment, we do not find any merit
because, the appellant, along with five others,
was the licensee. The members of the appellant
AOP were the licensees, who are entitled to carry
on business in the toddy shop. It is seen that
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the business was in fact carried on by all the
members. In our view, since the members of the
AOP carried on business, pursuant to the licence
obtained by them for the 52 toddy shops in
Thalassery, the assessment in their names as AOP
is perfectly justified. The next contention,
namely, assessment of income in toddy shops
confirmed by the Tribunal also does not call for
any interference, because, admittedly, assessee
did not keep any books of accounts. The last
ground is with regard to the addition of
Rs.4,57,520/- under Section 68 for the reason
that the three creditors in whose name amount was
credited did not prove the transaction as
genuine. The senior counsel appearing for the
appellant rightly pointed out that when accounts
were rejected and business income estimated, such
income itself would account for the unexplained
cash, which was shown as the source for the
ITA 1792/09 -:3:-
payment of kist amount. Since assessee did not
maintain any books of accounts, obviously he was
generating black money and that is what is
assessed through estimation. The funds shown as
credit in the name of bogus persons obviously
were the assessee’s own funds and so much so, we
do not find any justification for any addition
over the estimated income. We, therefore, allow
the appeal in part by reversing the order of the
Tribunal and that of the lower authorities by
deleting the addition of Rs.4,57,520/- made under
Section 68 of the Act. The order of the Tribunal
confirming the addition under Section 68 would
stand cancelled. Even though counsel for the
assessee pointed out that huge amount of interest
is levied on the assessee under Section 234, we
feel that, recourse open to the assessee is to
make application before the Chief Commissioner
for waiver in the light of the circular issued by
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the Board of Revenue. If arrears of tax are paid
by the assessee, his request to give him time for
remitting the interest should be considered
favourably.
C.N.Ramachandran Nair, Judge.
P.S.Gopinathan, Judge.
sl.