K.V. Mathew v. Income Tax Officer, Ward-2(3), Range-2, Ernakulam

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE** **FRIDAY, THE 4TH DAY OF OCTOBER 2013/12TH ASWINA, 1935** ## **ITA.No. 95 of 2012 ()** **---------------------I.T.A. NO.48/COCH/2010 OF INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH. .........** **APPELLANT/APPELLANT:** **-------------------------------------** **K.V. MATHEW, PROP. PHOENIX ENTERPRISES, 40/8084, MULLASSERY CANAL ROAD, ERNAKULAM, PAN : AEBPM 4915KJ.** **BY ADVS.SRI.ANIL D. NAIR, SRI.J.R.PREM NAVAZ, SMT.NIVEDITA A.KAMATH.** **RESPONDENT/RESPONDENT: --------------------------------------------** **THE INCOME TAX OFFICER, WARD-2(3), RANGE - 2, ERNAKULAM.** **BY ADV. SRI.JOSE JOSEPH, SC, INCOME TAX.** **THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 04-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **rs.** ## **ITA.No. 95 of 2012** ## **APPENDIX** ## **PETITIONER'S ANNEXURES:-** **ANNEXURE A COPY OF THE ORDER OF ASSESSMENT DATED 31/12/2007 FOR THE YEAR 2005-2006 ISSUED TO THE APPELLANT. ANNEXURE B COPY OF THE ORDER OF THE COMMISSIONER OF INCOME TAX DATED 30/11/2009 FOR THE YEAR 2005-2006 ISSUED TO THE APPELLANT. ANNEXURE C COPY OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 06/01/2012.** ## **RESPONDENT'S ANNEXURES:NIL.** ## **//TRUE COPY//** ## **P.S. TO JUDGE** **rs.** ## **MANJULA CHELLUR, C.J. & A.M. SHAFFIQUE, J. = = = = = = = = = = = = = = = = = = = I.T.A. NO. 95 OF 2012 = = = = = == = = = = = = = = = = = = = Dated this the 4[th] day of October 2013** ## **JUDGMENT** ## **A.M.Shaffique,J.** This appeal is filed by the assessee against the order in I.T.A.No.48/Coch/2010 of the Income Tax Appellate Tribunal, Cochin Bench. The issue relates to the assessment year 2005-06. 2. The appellant is a dealer of Art and Craft paper and he filed his return of income declaring the total income at Rs.2,19,730/-. A scrutiny notice under Section 143(2) of the Income Tax Act was issued on 18.10.2006. After hearing the asessee, it was found that in computing the total income the assessee has not considered the personal elements involved in expenditure under the head of vehicle maintenance, hire purchase interest on car and depreciation on car. Further it was found that on verification of the account, the total sundry creditors of Rs.74,34,966/- and Rs.64,57,129/- is styled as payable (Account - K.V.Mathew). Further it was seen that an I.T.A. NO. 95/2012 2 amount exceeding Rs.10 lakhs was deposited in the Savings Bank Account. The assessing officer found that there are numerous transactions of credits and debits in the account. Though the assessee took up a contention that the amount deposited in the Savings Bank Account is the money received from his sister, the assessing officer formed an opinion that the assessee was not able to prove that the amount came through fund transfer from Italy and it was credited to the Post Office Savings Bank Account of his brother. The assessing officer found that the assessee failed to prove the onus of the transaction and having relied upon the judgment of the Supreme Court in **Commissioner of Income Tax v. P.Mohnakala (291 ITR 278(SC)** held that the explanation offered by the assessee about the nature and source of sums found in the credit is not satisfactory and prima facie evidence was available against the assessee. Accordingly, an amount of Rs.22,51,000/- as cash credit in S.B. account was treated as unexplained money under Section 69A of the Income Tax Act. That apart 1/4th disallowance out of vehicle maintenance and hire purchase interest as attributable to I.T.A. NO. 95/2012 3 personal user was also added as business income. 3. The assessee filed an appeal before the Commissioner of Income-tax, who after going through the entire matter in detail, dismissed the appeal. On a further appeal filed by the assessee before the Tribunal, the Tribunal also agreed with the view expressed by the assessing officer as well as the first appellate authority. In the appeal, learned counsel for the appellant, inter alia, contended that if the unexplained money is the amount received from a close relative and it would reflect in the account of that person, the proper course would be to call upon that person to explain regarding the unexplained money. It was further contended that the assessee had produced necessary declaration and the person from whom he received the amount also sworn an affidavit regarding the source of income which was not appreciated by the authorities below. The appellant raised the following substantial question of law in the memorandum of appeal: “i)In the facts and circumstances of the case, ought not the Tribunal have held that there is no scope for addition under Sec.69A of the Act on the credits I.T.A. NO. 95/2012 4 which are received from Sister of the appellant who is NRI?” 4. First of all, we think that such a question of law does not arise for consideration. The assessing officer came to the conclusion that the petitioner was not in a position to explain the credit. It is not in dispute that an amount of Rs.22,51,000/- was seen as deposit in the Savings Bank Account of the appellant. He was under obligation to satisfy the receipt of the amounts. The assessing officer found that the appellant was not in a position to produce any proof for the funds that he had received from Italy. No cash flow statement was filed. In a letter dated 14.12.2007, as reply to the request of the department, the assesseee had only reiterated the earlier deposit stating that the funds were withdrawn from the Savings Bank Account to advance to his brother and when such amounts were returned by his brother, the same were deposited in the account. It is also contended that the funds have also been received from the sister when she was in station. He also sought for time to obtain details of the remittance from Italy. He was granted time upto I.T.A. NO. 95/2012 5 27/12/2007, on which date he had given a letter dated 26.12.2007 making a declaration stating that his brother Mr.Thomas K.George had received amounts from his sister in Italy through Western Union Money Transfer which was credited to the Post Office Savings Bank Account of Sri Thomas Geroge and Raji Thomas. The amounts that were received by them from his sister in 2003-04 were used as temporary fund adjustments which got routed in his Savings Bank Account. The assessee did not furnish any proof regarding his claim other than producing a copy of the Post Office Savings Bank Accounts pass book. In that view of the matter, the assessing Officer found that there was no proof to substantiate such contention. When the amounts in the Savings Bank account of the appellant remained unexplained, definitely the assessing officer was justified in passing the impugned order. This is purely a question of fact which has been found against the petitioner and therefore when the other fact finding authorities, namely the first appellate authority and the second appellate authority did not care to interfere with the said factual findings, we do not think that any I.T.A. NO. 95/2012 6 question of law arises for consideration in the present appeal. The authorities have on facts held against the appellant which cannot be countenanced by the question of law now raised by the appellant. In the result, there is no merit in the appeal and the same is dismissed. Sd/- **MANJULA CHELLUR, CHIEF JUSTICE** **Sd/A.M. SHAFFIQUE JUDGE** **ks.** **TRUE COPY** ## **P.S. TO JUDGE**