High Court Of Kerala
C.K. Sudhakaran vs. ITO & Anr.
Section 69
Asst. Year 1998-99
K.S. Radhakrishnan & K.T. Sankaran, JJ.
IT Appeal No. 10 of 2005
9th September, 2005
Counsel Appeared
P. Balachandran, for the Appellant : P.K.R. Menon & George K. George, for the Respondents
JUDGMENT
K.S. Radhakrishnan, J. :
Appellant is a dealer in steel wares in Trichur under the name and style “Cherakulam Vessels”. Assessee filed return of income for the asst. yr. 1998-99 declaring a total income of Rs. 55,920 and agricultural income of Rs. 50,000. Return of income was accepted under s. 143(1) of the IT Act. Since survey under s. 133A of the Act was carried out at the business premises of the assessee on 8th Sept., 1997, the case was selected for scrutiny. During the course of survey under s. 133A, an agreement dt. 12th May, 1997 executed between the promoters of City Centre Shopping Complex, Round West, Trichur, and the assessee was obtained. As per that agreement, assessee had agreed to purchase shop room No. 115 measuring 688.53 sq. ft. with proportionate common facilities in City Centre, Trichur, for a sum of Rs. 49,91,842. Further, as per the agreement, assessee had paid Rs. 12,50,000 being the token value at the time of executing the agreement and the remaining amount of Rs. 37,41,842 was to be paid in five monthly equal instalments of Rs. 6,65,000 starting from 12th June, 1997 and the balance amount of Rs. 4,16,842 as the sixth and last instalment. Agreement also provided that if the second party fails to pay two consecutive instalments, the second party would lose their right to get possession of the shop room and the first party shall be at liberty to forfeit Rs. 2 lakhs being their loss from the amount paid by the second party and return back the balance, if any, without interest on completion of the work.
Assessing authority, therefore, noticed that the real value of investment made by the assessee in the construction/purchase of shop No. 115 admeasuring 688.53 sq. ft. with other common facilities in the City Centre was Rs. 49,91,842 as per the agreement dt. 12th May, 1997 and after giving credit to Rs. 12.5 lakhs admitted by the assessee and disclosed under the VDIS, the difference of Rs. 37,41,842 was taken as unexplained investment made by the assessee during the year and treated as income of the assessee for the asst. yr. 1998-99 under s. 69 of the Act. Aggrieved by the order of the assessing authority, assessee took up the matter in appeal before the CIT(A). Appeal was rejected. Consequently, matter was taken before the Tribunal and the Tribunal also rejected the appeal against which this appeal has been preferred.
Sri P. Balachandran, senior counsel appearing for the assessee reiterated the contentions made by the assessee before the lower authorities. Reliance was also placed on the decision of the apex Court in K.P. Varghese vs. ITO & Anr. (1981) 24 CTR (SC) 358 : (1981) 131 ITR 597 (SC) and also on the decision of this Court in CIT vs. Smt. K.C. Agnes & Ors. (2003) 183 CTR (Ker) 29 : (2003) 262 ITR 354 (Ker). Counsel submitted that the Revenue has not discharged the burden of showing that the assessee had paid Rs. 49,91,842 for the shop No. 115. Sri P.K.R. Menon, senior counsel appearing for the Revenue, on the other hand, contended that there is clinching evidence in this case to show that agreement dt. 12th May, 1997 was genuine and acted upon and, therefore, the Department is justified in treating the difference as income from unexplained source.
4. We have considered the contentions raised by both sides meticulously and have gone through the decisions referred to by the counsel. The terms and conditions mentioned in the agreement dt. 12th May, 1997 are revealing. Agreement clearly stipulates an amount of Rs. 49,91,842 as the value of shop room No. 115. The fact that the assessee had paid advance has also been mentioned in the agreement dt. 12th May, 1997. There is no dispute to that effect. Further, it is also clear that assessee had declared payment of Rs. 12,50,000 at the time of agreement under VDIS scheme. As held by the apex Court in K.P. Varghese’s case (supra) burden of proof is on the respondent to show that the assessee had actually paid more than what was actually disclosed. This burden has been discharged by the Revenue. Burden can be discharged by the Revenue by establishing the facts and circumstances from which reasonable inference can be drawn that the assessee had not correctly declared or disclosed the consideration received by him and there is understatement or concealment of consideration. On facts, we are in full agreement with the authorities below. In such circumstances, we find no reason to entertain this appeal. The same would stand dismissed.
I.A. 1657/05 is also dismissed.
[Citation : 279 ITR 533]
